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> This is backwards. Such a tax will be a strong incentive to never ever sell since the seller would hand off all gains to the tax man. Who would want to sell?

> This is backwards. Such a tax will be a strong incentive to never ever sell since the seller would hand off all gains to the tax man. Who would want to sell? Good point, thanks for the criticism. There are many ways to solve this problem. > Instead, you'd want to actually incentivize selling if you're not living on the property. Make the capital gain tax very low, that makes selling it off the most attractive option. No. First, that incentivizes treating property as an appreciating asset. Second, fuck low taxes on capital gains, period. The tax rate on any capital gain should not be lower than the highest rate on labor. Ever.

jjav 4y ago
> First, that incentivizes treating property as an appreciating asset. The capital gain tax can't be both very high and very low and you seem to have agreed that very high is the wrong incentive. So what remains? A low capital gain has the benefit of making it easy to sell so more people will sell. Not perfect, perhaps, but an incentive to keep unused/unwanted properties on the market is better than pushing people to hold on to them forever which a high capital gain tax will do.
dragonwriter 4y ago
The tax on income should be consistent irrespective of the source. The best argument for favorable LTCG taxes is that naive taxation of long-term capital gains as current-year income in a progressive tax system overtaxes income that takes an extended period to generate and isn't repeatable, but allowances for advance recognition and/or deferral of recognition of income for tax purposes solve that and are also usable for non-capital income that is concentrated over a shorter time than the work to generate it (as is often the case for creative work.) If you want to encourage sales of idle assets of a particular class, tax the asset, don't lower the capital gains tax.

jjav 4y ago

> First, that incentivizes treating property as an appreciating asset. The capital gain tax can't be both very high and very low and you seem to have agreed that very high is the wrong incentive. So what remains? A low capital gain has the benefit of making it easy to sell so more people will sell. Not perfect, perhaps, but an incentive to keep unused/unwanted properties on the market is better than pushing people to hold on to them forever which a high capital gain tax will do.

dragonwriter 4y ago

The tax on income should be consistent irrespective of the source. The best argument for favorable LTCG taxes is that naive taxation of long-term capital gains as current-year income in a progressive tax system overtaxes income that takes an extended period to generate and isn't repeatable, but allowances for advance recognition and/or deferral of recognition of income for tax purposes solve that and are also usable for non-capital income that is concentrated over a shorter time than the work to generate it (as is often the case for creative work.) If you want to encourage sales of idle assets of a particular class, tax the asset, don't lower the capital gains tax.