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I think the solution to this is an incremental shift towards property taxes + away from income taxes. Doing so would nullify the investment arms race that’s tur

I think the solution to this is an incremental shift towards property taxes + away from income taxes. Doing so would nullify the investment arms race that’s turning home ownership into a sick financial game. If you’re paying 6%/year in property taxes, a home is no longer an “investment”, and the house hoarding (especially by the likes of investors buying single-family housing) will cease. People will buy homes to have a place to live, and the market will cool off. This comes with the additional benefit of progressively taxing wealth instead of solely income. Wealth discrepancy is orders of magnitude worse than income discrepancy, and currently we’re doing almost nothing about that.

BirdieNZ 3y ago
The even better variation on this is land taxes (see Henry George's Progress and Poverty, or the summary here: https://gameofrent.com https://gameofrent.com). There are heaps of advantages to this approach, like no capital flight (can't take land overseas with you), no economic inefficiencies (taxing land doesn't get rid of land, whereas taxing pretty much anything else reduces the supply of that thing, taxing land doesn't reduce house-building the way property taxes do).
Ckirby 3y ago
Nonono, no more of these halfbaked tax reform ideas. There's nothing in society that says we need to "compensate" new taxes by getting rid of older ones. If we as a society decide that someone's speculative actions are harmful, there is no good reason not to tax them into oblivion
- mrangle 3y ago
  There is no "we as a society decide". No one in their right mind would argue that the government widely acts in the favor of those who elect it, especially in terms of revenue collecting and spending. The government decides and the government mostly has its own agendas. Yet now the correct choice is supposed to be made in regard to property ownership social "harm", using taxes as the specific tool to correct it? If the government, or "we as a society", can't directly justify their goal being enforced via restrictive law then enforcing the goal via taxation isn't democratically justified (ie: an incentive provided for the tax collecting gov). >no more of these halfbaked tax reform ideas. Why would US citizens be in favor of tax reform? What a crazy idea that has zero historical precedent.
  - purplerabbit 3y ago
    How should the government decide which taxes to implement, then?
  - Ckirby 3y ago
    I have an even crazier idea, what if we just voted for straight up expropriation? But I don't feel like having this discussion with someone who by all likely hood wouldn't be affected by this issue since they don't own any rental properties to begin with, wouldn't be affected by this in any way, and is just making an argument from an ideological reflex Not every country is a corrupt failed state and plenty of western representative democracies have acted on behalf of their constituents best interests If you dont make a good faith argument but instead throw your hands up saying "they're all crooks anyway" then what's the point of even trying?
trilbyglens 3y ago
I'm all in favor of progressive property taxes than ratchet up with the more properties you own. Generational home ownership is a good thing, and blanket taxing everyone basically ensures that poorer people who inherit properties can't afford to stay in them when prices go up.
jjav 3y ago
> If you’re paying 6%/year in property taxes, a home is no longer an “investment”, and the house hoarding (especially by the likes of investors buying single-family housing) will cease. It wouldn't accomplish that. The big investors would just shrug, keep buying houses and renting them out, passing your 6% to the renter to pay. Meanwhile regular people would be priced out of their home by taxes, reducing home ownership even further and those big investors would snap up those homes. Repeat cycle until those corporations own 100% of all properties. You want to incentivize owning and living a home, so I would do 0% tax on primary residence (up to some value limit), maybe 5% on a second home and ratcheting steeply up from there on each additional property owned by a person or entity. That would wipe out the corporations owning hundreds of homes since they would not be able to profitably rent them out if they're paying 100+% tax on each. Meanwhile regular people can live in the only home they own without tax.
- DylanDmitri 3y ago
  Check out land value tax: https://www.astralcodexten.com/p/your-book-review-progress-and-poverty https://www.astralcodexten.com/p/your-book-review-progress-a...
  - jjav 3y ago
    I have, many times, since it always comes up. I'm still convinced LVT hurts the small individual homeowner the most, so it's basically the opposite of what I'd want which is to incentivize owning and living a single home instead of corporations hoarding them to rent out.
    - DylanDmitri 3y ago
      I would be happy extending these incentives to single homeowners, if we also extend similar or greater incentives to people living in condos or apartment buildings.
- nojvek 3y ago
  100% agree on this. Can’t just property tax a fixed amount. We want most people to affordably own a primary home (their primary address) may be have a vacation or side rental at higher property tax and heavily discourage investors sitting on an array of homes primarily for rent seeking.
snapplebobapple 3y ago
You have the right idea of fixing the problem of housing appreciating faster then inflation and being an investment but you are proposing the wrong solution. The correct solution is crush nimbyism and zone land and speed permitting to fulfill need rather than to create artificial scarcity. Japan and Germany, among other provide various flavors of this working. I prefer japans method of moving zoning to a national body (in north america this would be at stae or province level) and zoning for national interest, which means allowing lots more density than we have now and allowing substantially faster, easier, and cheaper permit approval. On the demand side we can get rid of subsidy programs like cmhc that provide a naive backstop to allow 5% or no money down buying.

BirdieNZ 3y ago

The even better variation on this is land taxes (see Henry George's Progress and Poverty, or the summary here: https://gameofrent.com https://gameofrent.com). There are heaps of advantages to this approach, like no capital flight (can't take land overseas with you), no economic inefficiencies (taxing land doesn't get rid of land, whereas taxing pretty much anything else reduces the supply of that thing, taxing land doesn't reduce house-building the way property taxes do).

Ckirby 3y ago

Nonono, no more of these halfbaked tax reform ideas. There's nothing in society that says we need to "compensate" new taxes by getting rid of older ones. If we as a society decide that someone's speculative actions are harmful, there is no good reason not to tax them into oblivion

mrangle 3y ago
There is no "we as a society decide". No one in their right mind would argue that the government widely acts in the favor of those who elect it, especially in terms of revenue collecting and spending. The government decides and the government mostly has its own agendas. Yet now the correct choice is supposed to be made in regard to property ownership social "harm", using taxes as the specific tool to correct it? If the government, or "we as a society", can't directly justify their goal being enforced via restrictive law then enforcing the goal via taxation isn't democratically justified (ie: an incentive provided for the tax collecting gov). >no more of these halfbaked tax reform ideas. Why would US citizens be in favor of tax reform? What a crazy idea that has zero historical precedent.
- purplerabbit 3y ago
  How should the government decide which taxes to implement, then?
- Ckirby 3y ago
  I have an even crazier idea, what if we just voted for straight up expropriation? But I don't feel like having this discussion with someone who by all likely hood wouldn't be affected by this issue since they don't own any rental properties to begin with, wouldn't be affected by this in any way, and is just making an argument from an ideological reflex Not every country is a corrupt failed state and plenty of western representative democracies have acted on behalf of their constituents best interests If you dont make a good faith argument but instead throw your hands up saying "they're all crooks anyway" then what's the point of even trying?

trilbyglens 3y ago

I'm all in favor of progressive property taxes than ratchet up with the more properties you own. Generational home ownership is a good thing, and blanket taxing everyone basically ensures that poorer people who inherit properties can't afford to stay in them when prices go up.

jjav 3y ago

> If you’re paying 6%/year in property taxes, a home is no longer an “investment”, and the house hoarding (especially by the likes of investors buying single-family housing) will cease. It wouldn't accomplish that. The big investors would just shrug, keep buying houses and renting them out, passing your 6% to the renter to pay. Meanwhile regular people would be priced out of their home by taxes, reducing home ownership even further and those big investors would snap up those homes. Repeat cycle until those corporations own 100% of all properties. You want to incentivize owning and living a home, so I would do 0% tax on primary residence (up to some value limit), maybe 5% on a second home and ratcheting steeply up from there on each additional property owned by a person or entity. That would wipe out the corporations owning hundreds of homes since they would not be able to profitably rent them out if they're paying 100+% tax on each. Meanwhile regular people can live in the only home they own without tax.

DylanDmitri 3y ago
Check out land value tax: https://www.astralcodexten.com/p/your-book-review-progress-and-poverty https://www.astralcodexten.com/p/your-book-review-progress-a...
- jjav 3y ago
  I have, many times, since it always comes up. I'm still convinced LVT hurts the small individual homeowner the most, so it's basically the opposite of what I'd want which is to incentivize owning and living a single home instead of corporations hoarding them to rent out.
  - DylanDmitri 3y ago
    I would be happy extending these incentives to single homeowners, if we also extend similar or greater incentives to people living in condos or apartment buildings.
nojvek 3y ago
100% agree on this. Can’t just property tax a fixed amount. We want most people to affordably own a primary home (their primary address) may be have a vacation or side rental at higher property tax and heavily discourage investors sitting on an array of homes primarily for rent seeking.

snapplebobapple 3y ago

You have the right idea of fixing the problem of housing appreciating faster then inflation and being an investment but you are proposing the wrong solution. The correct solution is crush nimbyism and zone land and speed permitting to fulfill need rather than to create artificial scarcity. Japan and Germany, among other provide various flavors of this working. I prefer japans method of moving zoning to a national body (in north america this would be at stae or province level) and zoning for national interest, which means allowing lots more density than we have now and allowing substantially faster, easier, and cheaper permit approval. On the demand side we can get rid of subsidy programs like cmhc that provide a naive backstop to allow 5% or no money down buying.