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>>recall that central LA currently lacks the large stock of high-rise apartments that you see in cities like New York and Chicago. The author entirely overlook

by toss1 10mo ago

>>recall that central LA currently lacks the large stock of high-rise apartments that you see in cities like New York and Chicago. The author entirely overlooks that NYC and Chicago are not in earthquake-prone areas and LA is right next to a major geologic fault system. Yes, skyscrapers can be safely built to withstand earthquakes, but it tends to be at least expensive, which is counter to solving affordability issues. >>I favor a steeply progressive consumption tax. This is generally pointing in the right direction, but a progressive transaction tax on every transaction, including finance and investments would be far better. Easier to track, harder to evade, far less intrusive into peoples' lives required by income tax. and the rate and difference between rates would be so low that structuring deals to 'optimize' taxation brackets would be pointless. Just the volume of Equities + TRACE fixed income/structured + munis + real estate is over $200Trillion. A mere 3% tax on those would put the $6T US budget in large surplus. Add $1.7 Quadrillion of ovrerall payments and a 0.3% tax on transactions (yes, $3 per $1000) would also put the US budget in surplus. Make it progressive by setting tax rate tables based on transaction size, e.g., transaction <$10=0.01, <$100=0.1%, <$10k=0.2%, <$100k=0.3%, <$1MM=0.4%, =>$1MM=0.5% (plus big penalties for 'structuring' transactions to lower brackets). Not impressed with the article

bluGill 10mo ago
Sky scrappers are expensive. A single story building is the cheapest thing you can build anywhere - only when land is expensive is it worth going up instead of out. There is value in density so we build skyscrapers anyway, but for nobody is it the most economical way to get square feet.
- SecondHandTofu 10mo ago
  Land IS somewhat expensive in LA though. Plus, you are looking at it purely from a construction cost of the building point of view. If you build more densely, you don't need as many roads and other services, which also cost money, and once you have enough density, agglomeration means that it's economical to have local businesses nearby, fewer people need cars etc.
  - bluGill 10mo ago
    Roads are cheap. I know we spend billions on them, but they are still cheap compared to adding another floor. I'm not arguing with your other points. Density is often worth the monetary costs, but don't try to pretend it isn't more expensive. (Indeed I would value the time density can save high, but there is no objective way to value a large part of my time)
zozbot234 10mo ago
> The author entirely overlooks that NYC and Chicago are not in earthquake-prone areas and LA is right next to a major geologic fault system. Maybe you should visit Japan sometime. Does downtown Tokyo look more like NYC/Chicago or LA?
- toss1 9mo ago
  I'd love to visit Japan! Are those Tokyo skyscrapers mostly residential or office space? What is the relative cost of land (per unit area) in Tokyo vs LA?
SecondHandTofu 10mo ago
If we put a $10k tax on beards, that's $600 billion right there! What's that, people might change their behaviour in response to it, in possibly unintended and negative ways? Nah we can just hand wave that away, who needs liquidity or investment.
- toss1 10mo ago
  So your claim is eliminating the massive overhead and personal/corporate intrusion of income tax will have no effect, benefits, or positive behavior change in response? And on top of that a $5000 difference in a $1,000,000 transaction is do onerous that it will kill liquidity? Yikes! Maybe run some numbers before posting? Seriously, at any wealth level I'd trade income tax for a pennies-on-$1000 transaction tax any day.
  - zozbot234 10mo ago
    Yes. Transaction taxes are a huge incentive for assets to stay put, which is quite inefficient. Income/consumption taxes are a burden on new production, but let you trade existing assets freely so as to direct them towards their highest and best use. That's usually a better arrangement, though of course less tax is preferable to more other things being equal.
    - toss1 10mo ago
      >>Transaction taxes are a huge incentive for assets to stay put I'm sure that is true at high rates. But we can look at several scenarios and see how sensitive people actually are to a transaction tax. But have you ever bought or sold a house? In most states there is a Real Estate transfer tax, which is essentially the same thing as I'm proposing for all transactions. These range from zero in TX and WY up to 5%. In Massachusetts it is $4.28/$1000 of valuation or 0.428% [0], while in adjacent New Hampshire it is over 3X the rate at $1.50/$100 or 1.5% [1]. I've lived in one state or the other for several decades, bought and sold houses in both, and been adjacent to friends/family buying/selling there. Yet I have NEVER heard even a single word in any discussion about hesitating to make a transaction on either side because of the transfer tax, or any difference in rates. I've never even read of anyone expressing any such hesitation, or heard of anyone even expressing theoretical hesitation. Stockbroker fees in the 1990s were in the $40-$100/trade or /100 shares. So with a mean price of a DJI share of ~$56, a $70 fee would be a rate of 1.25% for a round lot. But to buy 20 shares, the $70/trade would be $6.25. These fees did not slow down investing and any significant investor, but they certainly prevented day-trading of small lots, which became more prevalent after fees went to zero. Similarly, the common practice in auctions for antiques, estate sales, or industrial goods is to charge a "buyers' premium", which is basically the income for the auctioneer, behaving exactly as a transfer tax. You win the auction at $100, and the buyers' premium is 18%, so you pay $118. These premiums were typically closer to 10-12% a few decades ago and are now in the 18-20% range. At the newer higher rates, I have heard people express hesitation when considering bidding on an item they don't much care about. In municipalities which have both state and local sales taxes like LA total 9.5% and NYC at 8.875%, people complain a lot, but it doesn't stop them buying, but may shift buying at the borders. Similarly, in Massachusetts there is a 6.25% sales tax but zero in neighboring New Hampshire, there are a surplus of stores right on the NH side of the border people nearby will drive to NH to purchase large items but surprisingly little; a wholesale club <15min south of an identical store across the border still does very strong volume of large TVs etc, with people not willing to bother driving another 15min to save 6.25% So, yes, people are sensitive to significant fees approaching double digits. High-frequency traders would also be sensitive to low rates, but that is because they are in a high-transaction/low margin business of shaving pennies off every transaction, so that would be an issue for them, but if HFT disappeared it would be a net positive for the markets as they are basically front-running transactions and shaving profit from real investors. But for most transactions, as long as the rates are sub-1%, a transaction tax will make zero practical difference, which is why the base needs to be across all transactions. [0] https://massrealestatenews.com/transfer-tax/ https://massrealestatenews.com/transfer-tax/ [1] https://legalclarity.org/new-hampshire-transfer-tax-what-buyers-and-sellers-should-know/ https://legalclarity.org/new-hampshire-transfer-tax-what-buy...
tptacek 10mo ago
A "high-rise" is anything over 6 stories; they aren't skyscrapers. The argument generally is for upzoning, not for setting height records, and that argument isn't impacted by seismology.

by toss1 10mo ago

bluGill 10mo ago

Sky scrappers are expensive. A single story building is the cheapest thing you can build anywhere - only when land is expensive is it worth going up instead of out. There is value in density so we build skyscrapers anyway, but for nobody is it the most economical way to get square feet.

SecondHandTofu 10mo ago
Land IS somewhat expensive in LA though. Plus, you are looking at it purely from a construction cost of the building point of view. If you build more densely, you don't need as many roads and other services, which also cost money, and once you have enough density, agglomeration means that it's economical to have local businesses nearby, fewer people need cars etc.
- bluGill 10mo ago
  Roads are cheap. I know we spend billions on them, but they are still cheap compared to adding another floor. I'm not arguing with your other points. Density is often worth the monetary costs, but don't try to pretend it isn't more expensive. (Indeed I would value the time density can save high, but there is no objective way to value a large part of my time)

zozbot234 10mo ago

> The author entirely overlooks that NYC and Chicago are not in earthquake-prone areas and LA is right next to a major geologic fault system. Maybe you should visit Japan sometime. Does downtown Tokyo look more like NYC/Chicago or LA?

toss1 9mo ago
I'd love to visit Japan! Are those Tokyo skyscrapers mostly residential or office space? What is the relative cost of land (per unit area) in Tokyo vs LA?

SecondHandTofu 10mo ago

If we put a $10k tax on beards, that's $600 billion right there! What's that, people might change their behaviour in response to it, in possibly unintended and negative ways? Nah we can just hand wave that away, who needs liquidity or investment.

toss1 10mo ago
So your claim is eliminating the massive overhead and personal/corporate intrusion of income tax will have no effect, benefits, or positive behavior change in response? And on top of that a $5000 difference in a $1,000,000 transaction is do onerous that it will kill liquidity? Yikes! Maybe run some numbers before posting? Seriously, at any wealth level I'd trade income tax for a pennies-on-$1000 transaction tax any day.
- zozbot234 10mo ago
  Yes. Transaction taxes are a huge incentive for assets to stay put, which is quite inefficient. Income/consumption taxes are a burden on new production, but let you trade existing assets freely so as to direct them towards their highest and best use. That's usually a better arrangement, though of course less tax is preferable to more other things being equal.
  - toss1 10mo ago
    >>Transaction taxes are a huge incentive for assets to stay put I'm sure that is true at high rates. But we can look at several scenarios and see how sensitive people actually are to a transaction tax. But have you ever bought or sold a house? In most states there is a Real Estate transfer tax, which is essentially the same thing as I'm proposing for all transactions. These range from zero in TX and WY up to 5%. In Massachusetts it is $4.28/$1000 of valuation or 0.428% [0], while in adjacent New Hampshire it is over 3X the rate at $1.50/$100 or 1.5% [1]. I've lived in one state or the other for several decades, bought and sold houses in both, and been adjacent to friends/family buying/selling there. Yet I have NEVER heard even a single word in any discussion about hesitating to make a transaction on either side because of the transfer tax, or any difference in rates. I've never even read of anyone expressing any such hesitation, or heard of anyone even expressing theoretical hesitation. Stockbroker fees in the 1990s were in the $40-$100/trade or /100 shares. So with a mean price of a DJI share of ~$56, a $70 fee would be a rate of 1.25% for a round lot. But to buy 20 shares, the $70/trade would be $6.25. These fees did not slow down investing and any significant investor, but they certainly prevented day-trading of small lots, which became more prevalent after fees went to zero. Similarly, the common practice in auctions for antiques, estate sales, or industrial goods is to charge a "buyers' premium", which is basically the income for the auctioneer, behaving exactly as a transfer tax. You win the auction at $100, and the buyers' premium is 18%, so you pay $118. These premiums were typically closer to 10-12% a few decades ago and are now in the 18-20% range. At the newer higher rates, I have heard people express hesitation when considering bidding on an item they don't much care about. In municipalities which have both state and local sales taxes like LA total 9.5% and NYC at 8.875%, people complain a lot, but it doesn't stop them buying, but may shift buying at the borders. Similarly, in Massachusetts there is a 6.25% sales tax but zero in neighboring New Hampshire, there are a surplus of stores right on the NH side of the border people nearby will drive to NH to purchase large items but surprisingly little; a wholesale club <15min south of an identical store across the border still does very strong volume of large TVs etc, with people not willing to bother driving another 15min to save 6.25% So, yes, people are sensitive to significant fees approaching double digits. High-frequency traders would also be sensitive to low rates, but that is because they are in a high-transaction/low margin business of shaving pennies off every transaction, so that would be an issue for them, but if HFT disappeared it would be a net positive for the markets as they are basically front-running transactions and shaving profit from real investors. But for most transactions, as long as the rates are sub-1%, a transaction tax will make zero practical difference, which is why the base needs to be across all transactions. [0] https://massrealestatenews.com/transfer-tax/ https://massrealestatenews.com/transfer-tax/ [1] https://legalclarity.org/new-hampshire-transfer-tax-what-buyers-and-sellers-should-know/ https://legalclarity.org/new-hampshire-transfer-tax-what-buy...

tptacek 10mo ago

A "high-rise" is anything over 6 stories; they aren't skyscrapers. The argument generally is for upzoning, not for setting height records, and that argument isn't impacted by seismology.