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>What's best for society is if everyone who's wealth is tied up in property takes a hit to their wealth so that housing becomes affordable and loses it's status
by vannevar 2y ago
>What's best for society is if everyone who's wealth is tied up in property takes a hit to their wealth so that housing becomes affordable and loses it's status as primary wealth store, but that would be devastating in the short term to the middle class and therefore completely politically untenable.
This is true if the "hit" on wealth is linearly distributed. But since income growth is not linearly distributed (it goes up with wealth), it's reasonable that the tax (or whatever form it takes) should also be progressive, perhaps to the point where it excludes properties under $1M, for instance, thus sparing the bulk of the middle class.
- wan23 2y agoIf you only do something about homes priced higher than $1M it won't solve the problem that no one can afford a starter home any more.
- vannevar 2y agoIt's not about the individual homes, it's about the aggregate holdings. If people with large asset portfolios (and corresponding large incomes) stop buying homes because they have an incremental carrying cost to them due to taxes, the prices will drop for everyone. The problem we have now is that big PE firms are buying up single-family homes because they have the massive incomes to out-compete everyone else in the market. They then turn around and lease those homes to increase their income even more.