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I agree with this argument, but it's unrelated to taxing capital gains. Landlords should make money for the services they provide: upkeep of the building, prov
by epistasis 3y ago
I agree with this argument, but it's unrelated to taxing capital gains.
Landlords should make money for the services they provide: upkeep of the building, providing living space, etc. But real estate capital gains do not come from productive investment such as in a productivity-boosting new company. Capital gains in real estate are unproductive rentierism, and are a drain on the economy.
One thing that all economists can agree on, from Adam Smith to Ricardo to Marx, is that land rent is bad and should be taxed away. Capital gains on real estate sales are a great way to do that, while preserving profit for those who productively improve land and rent it out to others.
- sokoloff 3y agoI would agree with you on the capital gains point iff we indexed the basis of properties to inflation. Because we don't, much of what we call "capital gains" are "return of capital, measured in a greater number of now less valuable dollars". Return of capital should not be taxed.
- epistasis 3y agoIs there any other capital gains asset that has an inflation indexed tax basis? I'm not aware of any. Real estate land gains tend to dwarf any inflation effect, so it's a pretty minor tweak to include, anyway. Tax treatment of depreciation of buildings is also a big factor here.
- dclowd9901 3y agoPerfectly put. My thoughts exactly.