Wealth taxation

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Chen
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Re: Wealth taxation

Postby Chen » Tue Jul 11, 2017 6:22 pm UTC

CorruptUser wrote:Because they don't produce, in much the same way that nuclear subs don't produce. You could make the argument that living in a home results in better grades and health for kids than an apartment, except then you have to calculate the extra gasoline used to travel around a suburb, the increased obesity from being unable to walk anywhere, etc.


But the vast majority of any consumer purchases don't produce anything by that reasoning. How is that any type of reasonable metric for "growing the economy"

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Re: Wealth taxation

Postby ucim » Tue Jul 11, 2017 7:17 pm UTC

CorruptUser wrote:No? Why would you think I'd blame the depositor for that?
Because you made the comment in the context of "saving money is bad because it doesn't grow the economy, so stop saving money". If you didn't mean it that way, fine, but then what was the point of your comment? The bank can't decide anything about money not deposited therein.

"Expanding the economy" is not, a priori, a Good Thing. It's only a good thing in certain contexts, up to a point, and balanced against other externalities such as the destruction of the environment, the destruction of privacy, the destruction of autonomy, the encouragement of overpopulation, and the very real risk inherent in violating the angle of repose.

Building homes contributes very much to the economy: it employs carpenters, loggers, refineries, electricians, plumbers, retail stores, lumber yards and mills, and employs the people that these people will spend their money on and the places they will spend their money at, several levels deep before it's lost in the noise. However, building homes willy nilly to be left to rot is wasteful, as nobody gets to enjoy the end product, and it is the enjoyment of that end product that end product that is truly the output of the economy. And logging the rainforest in order to build these homes is more than wasteful, it's destructive. This reasoning can be applied to every economic activity, be it homes, cars, transistors, steelmaking, espionage (governmental, commercial and consumer), motion picture creation, music performances, and anything else you can think of, and things we haven't thought of yet.

As for the downsides of living in a home, there are upsides too, including the decreased obesity from being able to walk around the neighborhood without getting mugged or run over by a city bus, the lowered stress from being in a quiet environment surrounded by trees rather than brick, and the ability to have one's own private {pool, basketball hoop, yard, deck, whatever} making it so much easier to partake in the activities it facilitates... and to do so in whatever nonconformist way one likes.

Jose
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Re: Wealth taxation

Postby CorruptUser » Tue Jul 11, 2017 8:03 pm UTC

Chen wrote:
CorruptUser wrote:Because they don't produce, in much the same way that nuclear subs don't produce. You could make the argument that living in a home results in better grades and health for kids than an apartment, except then you have to calculate the extra gasoline used to travel around a suburb, the increased obesity from being unable to walk anywhere, etc.


But the vast majority of any consumer purchases don't produce anything by that reasoning. How is that any type of reasonable metric for "growing the economy"


Y=G+I+C+(X-M).

GDP = Government spending + Investment + Consumption + (Export - Import).

Homes are consumption, not investment. Yes, subsidizing homes 'expands' consumption in the housing sector, but at the cost of other forms of consumption or worse, investments, which means less consumption in the long term. When you tear down a factory or farm to build a home, it's because the invisible hand says it's more valuable as a home. But if you are skewing the measure of that value through subsidies, you are going to get an invisible bitchslap.

Yes I know about externalities, so yes it's government's job to help the market reflect the "correct" value, but the homes are, well... When you give someone 100,000 dollars in tax breaks to buy a new home, either 1) a new home is built (often on a farm) or 2) the price of existing homes goes up by exactly 100,000 dollars. So yeah, fuck the home mortgage deductiom.

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Re: Wealth taxation

Postby ucim » Wed Jul 12, 2017 2:25 am UTC

CorruptUser wrote:GDP =
Why should I care about GDP? (Specifically GDP, not the idea of economic growth)
CorruptUser wrote:GDP = Government spending + Investment + Consumption + (Export - Import).
Homes are consumption, not investment.
... and in any case, whether homes are consumption or investment, they add to GDP the same way, so I don't get the point of the equation as support for your point.
CorruptUser wrote: Yes, subsidizing homes 'expands' consumption in the housing sector, but at the cost of other forms of consumption...
Ever heard of a loss leader? Even if I accept your premises that there are costs (to the nation) to home ownership, there are also costs (to the nation) to education, military spending, science grants, and many other things. That there are costs is not damning; each has to be argued on its specific merits.

Society, at least American society, is not grounded in achieving the maximum "efficiency"... (of, what?). Efficiency is useful when a goal is involved; what is the goal for which the "inefficiency" of housing is a problem, that is also greater than the benefits of having a nation of people grounded in their own home, and not dependent on the whims of a landlord?

Jose
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Re: Wealth taxation

Postby CorruptUser » Wed Jul 12, 2017 2:58 am UTC

ucim wrote:
CorruptUser wrote:GDP =
Why should I care about GDP? (Specifically GDP, not the idea of economic growth)


Because that's a "good" approximation of the economy?


ucim wrote:
CorruptUser wrote:GDP = Government spending + Investment + Consumption + (Export - Import).
Homes are consumption, not investment.
... and in any case, whether homes are consumption or investment, they add to GDP the same way, so I don't get the point of the equation as support for your point.


Investment improves the economy in the long term, and generally includes the sort of things that banks are supposed to allocate money to; expanding businesses, building factories, upgrading equipment, etc etc. Consumption is just what individuals use right now. If you can't see anything wrong with shifting money away from investments into consumption, please do not win any elections.

CorruptUser wrote: Yes, subsidizing homes 'expands' consumption in the housing sector, but at the cost of other forms of consumption...
Ever heard of a loss leader?[/quote]

That's in sales, where you sell at a loss in order to get more business. Your point?

ucim wrote:Even if I accept your premises that there are costs (to the nation) to home ownership, there are also costs (to the nation) to education, military spending, science grants, and many other things. That there are costs is not damning; each has to be argued on its specific merits.


Yes everything has a cost. But when you are subsidizing something, you are distorting the economy, and if that distortion is done for anything other than more accurately representing the externalities of a good/service, you harm society. Go ahead, ask any economist, you will get the same damn answer.

ucim wrote:Society, at least American society, is not grounded in achieving the maximum "efficiency"... (of, what?).


"Efficiency" has multiple meanings. Generally, it means getting the most "value" out of the various forms of "raw inputs" that we have, whether that's ores, fisheries, oil, or human labor. One particular type of efficiency, Pareto Efficiency, has special meaning to economists; the point curve at which nothing more can be produced without producing less of something else.


ucim wrote:...that is also greater than the benefits of having a nation of people grounded in their own home, and not dependent on the whims of a landlord?


1) For the most part, the housing subsidies do not put people into homes. When you have inelastic supply, artificially increasing demand only increases the price without increasing supply; all the subsidies do is raise the existing price of homes by exactly as much as the new homeowners "save". It's a wealth transfer from the taxpayers to rich people and the banks. And when you do have the ability to build new homes in an area, you are effectively tearing down farms to build suburbs, which have a plethora of problems including causing obesity and global warming, the massive trade deficit, oh and let's just throw in wars in the Mid-East because probably. What, you think sticking people in places you need a car to get to anywhere you want to be wont be a problem? What do you not understand about this?

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Re: Wealth taxation

Postby ucim » Wed Jul 12, 2017 4:43 am UTC

CorruptUser wrote:Because that's a "good" approximation of the economy?
That's arguable, but why should I care about the economy? (at least in the sense of what I choose to do with my own personal assets?) Sure, if I'm a policy maker, the economy may be one of the things I ought to consider when making policy, but as an ordinary person, I see nothing wrong with saving my own money, putting it in a bank, or even burying it in a box in my backyard (for which, by the way, I would need to own a back yard).


CorruptUser wrote:Investment improves the economy in the long term...
Not if there's nobody to consume what is being created. You need to make things people want, and those people have to actually buy them. People want homes. This creates the demand for the requisite investment, ensuring that it's not wasted. After all, if we're going to cut down the forest, we should get some benefit from it.

CorruptUser wrote:[A loss leader is] in sales, where you sell at a loss in order to get more business. Your point?
You're selling at a loss. You're losing money on the sale. You're being inefficient. Except that there's a benefit elsewhere in the system; in this case it accrues to marketing. The same is true here; focusing on costs and efficiencies alone (even if I were to agree with you on them) misses important externalities. You touched on a few before dismissing them. I would say they are not so easily dismissed.

CorruptUser wrote:...and if that distortion is done for anything other than more accurately representing the externalities of a good/service, you harm society.
Owning (a home) is often better than renting (an apartment) and being at the mercy of a landlord. This is especially true in the long term. This helps society. The theory (as I know it) behind the mortgage deduction is that the resulting distortion is worth it for the benefit to society that home ownership entails, and that for this reason home ownership should be encouraged. As with anything that involves the tax code, it's complicated, and not perfectly implemented. It probably cannot be perfectly implemented. But it (and other programs) make it easier for middle class people who might otherwise not have home ownership within reach, to buy their own homes.

I know what "efficiency" is, my question was just what is supposed to be optimized, and why. Reading into what you wrote I infer that you are trying to maximize production of goods and services.

I do not see that as a Good Thing. Production of goods and services entails a lot of damage - to the environment, to society, to privacy, to lots of things, including basic freedoms. That's not calculated in an economic view of maximum efficiency.

As for not putting people into homes due to inelastic supply, people still have to live somewhere. Whether they rent or own, the same amount of housing still has to exist.

You seem to be coming from the POV that we have a moral obligation to cram ourselves in as tightly as we can stand, in the name of some efficiency rating. You don't think overcrowding isn't a problem already?

And in any case, people could choose to purchase their own apartments instead of a private home. I don't think anything prevents that. It's about owning or renting, not about houses or apartments.

And in any case, we seem to have strayed from the idea of wealth (as opposed to income or sales or {whatever else} taxation.

Jose
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Re: Wealth taxation

Postby CorruptUser » Wed Jul 12, 2017 3:11 pm UTC

Can we please agree on some of the basics?

1) If the supply doesn't increase, increasing the money available only increases the price

2) Densely packed cities use fewer resources per person than spread out suburbs, while providing more services

3) One of the goals we should have is protecting the environment, and that means being more efficient with the resources we do use, in whatever meaning of the term efficient you use; they should all fit.

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Re: Wealth taxation

Postby ucim » Wed Jul 12, 2017 4:24 pm UTC

... all things being equal. But they are not. Making it easier for prospective homeowners to buy lowers rents, thus lowering the incentive for landlords to buy homes, thus freeing up supply and lowering the price of housing. Densely packed cities lower the quality of life in many ways for people who live there. There are advantages to cities, sure, but it's not a slam dunk by any means. The number of services provided is not a good measure of quality of life; in fact, the number of services needed is an indication that maybe there's something amiss. Cities cause problems too.

And yes, one of the goals we should have is protecting the environment, and one of the best ways to do this is to stop breeding. Most of the problems you're addressing arise simply because there are just too many people. Everything else is secondary.

Jose
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Re: Wealth taxation

Postby KnightExemplar » Wed Jul 12, 2017 6:54 pm UTC

CorruptUser wrote:Can we please agree on some of the basics?

1) If the supply doesn't increase, increasing the money available only increases the price

2) Densely packed cities use fewer resources per person than spread out suburbs, while providing more services

3) One of the goals we should have is protecting the environment, and that means being more efficient with the resources we do use, in whatever meaning of the term efficient you use; they should all fit.


I do believe the home mortgage interest deduction applies to a small Condo in the city. So the question now is Condo vs Apartment if you're talking about city.

Otherwise, people choosing Urban Sprawl out in the suburbs ain't got nothing to do with the home mortgage interest deduction. City-folk will live in the city, rural folk out in the rural areas, and families move to the suburbs. All zones have rental properties available, all zones have ownership properties available.... from Condos, to Townhomes / Rowhomes, to separate single-family homes.

I think its a good idea to encourage home-ownership inside of a city or otherwise more urban zone. A neighborhood full of renters will not care about schools or other local services, because you can always "move out" to a better area when you get kids. If you're a home-owner of an inner-city Rowhome, you give a huge damn about the quality of education, even if you're a single bachelor. In particular, the quality of education plays into the value of your home, so you have a direct financial incentive to care about your local school.

A renter's financial situation is inverted. A renter wants to move into locations with shitty schools for a lower price / lower property values. Low-education areas don't necessarily mean high crime btw.
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Re: Wealth taxation

Postby trpmb6 » Wed Jul 12, 2017 7:34 pm UTC

KnightExemplar wrote:
A renter's financial situation is inverted. A renter wants to move into locations with shitty schools for a lower price / lower property values. Low-education areas don't necessarily mean high crime btw.



Couldn't have said it better myself. I consider these factors when researching new areas for my rental property portfolio. There is a very thin niche where property values are low enough to make them profitable as a rental, but not so low that the area is riff with crime (also noting that crime also directly influences property values and thus rental rates, It's a very complex interaction of numerous factors).

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Re: Wealth taxation

Postby sardia » Mon Jul 17, 2017 6:38 pm UTC

ucim wrote:... all things being equal. But they are not. Making it easier for prospective homeowners to buy lowers rents, thus lowering the incentive for landlords to buy homes, thus freeing up supply and lowering the price of housing. Densely packed cities lower the quality of life in many ways for people who live there. There are advantages to cities, sure, but it's not a slam dunk by any means. The number of services provided is not a good measure of quality of life; in fact, the number of services needed is an indication that maybe there's something amiss. Cities cause problems too.

And yes, one of the goals we should have is protecting the environment, and one of the best ways to do this is to stop breeding. Most of the problems you're addressing arise simply because there are just too many people. Everything else is secondary.

Jose

Isn't this a rehash of your unabashed support for a yard plus two car garage sized house lifestyle?
You went pretty far in your support too. Not only do the home owners defend their house, that can and should defend anything that threatens their property values(like a nearby dense housing complex).
You also think that renters have no voting rights for the town they live in. Lastly you have a financial interest in maintaining the status quo of housing shortages (to increase your home value for later selling).


https://www.nytimes.com/2017/07/17/us/c ... risis.html
Lawmakers are cracking down on communities that are derailing construction projects. Delays are at the behest of local neighborhood groups, which means everyone else has to suffer.

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Re: Wealth taxation

Postby trpmb6 » Mon Jul 17, 2017 7:49 pm UTC

sardia wrote:
https://www.nytimes.com/2017/07/17/us/c ... risis.html
Lawmakers are cracking down on communities that are derailing construction projects. Delays are at the behest of local neighborhood groups, which means everyone else has to suffer.


This is happening more often than people realize. Similar issues in Colorado and Austin Texas.

I know some people who are living in extended stay hotels in the Denver area because rent is so damn high.

I was going to contract at a company in the dallas/fort worth area and considered buying a cabin cruiser boat and living on the boat at a local marina instead of renting an apartment or room. The financials of it made it work out to being about the same, plus I would come away from it with a bad ass boat. Wife kind of shot it down though. Apparently the idea of me bacheloring it up on a big boat wasn't appealing.

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Re: Wealth taxation

Postby morriswalters » Mon Jul 17, 2017 10:23 pm UTC

sardia wrote:Isn't this a rehash of your unabashed support for a yard plus two car garage sized house lifestyle?
I don't have a garage and my house is less than 1000 square feet. In a neighborhood that is politely called lower middle class. And I agree with him wholeheartedly.

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Re: Wealth taxation

Postby sardia » Mon Jul 17, 2017 11:14 pm UTC

morriswalters wrote:
sardia wrote:Isn't this a rehash of your unabashed support for a yard plus two car garage sized house lifestyle?
I don't have a garage and my house is less than 1000 square feet. In a neighborhood that is politely called lower middle class. And I agree with him wholeheartedly.

You go around and prevent developers from building more homes in your neighborhood? Is your motivation to prevent your housing from losing value? (As supply rises for homes, prices fall to meet demand) And you live in a town that's clamoring for more housing?

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Re: Wealth taxation

Postby ucim » Tue Jul 18, 2017 12:29 am UTC

sardia wrote:Isn't this a rehash of your unabashed support for a yard plus two car garage sized house lifestyle?
I suppose to the same extent that you are rehasing your unabashed support for cramming everyone together willy nilly so that more people can procreate until there just isn't any more room on the planet, and the entire population collapses catastrophically.

And why shouldn't people defend their property values? Flipped around, why should people have to give their housing choices (and their ability to play the drums at 3am without waking anybody up) away, just so that somebody's idea of "efficient living" is satisfied. I don't live to be efficient, I live to be happy, productive, fulfilled, and the same for my family, to whom I have the first obligation.

For that matter, my car sits out in the garage when I'm not using it. Wouldn't it be more efficient if it were taken from me so that people who don't have cars could "borrow" it whenever they wanted? I should cry that I can't leave my stuff in the trunk? What's the key difference here?

And yes, somebody tries to come into my town and mow us down with housing complexes, I'll be on the front lines fighting it. Let them go to Beverly Hills if they want to build high-rises.

sardia wrote:You also think that renters have no voting rights for the town they live in.
That is false. Please stop telling me what I think, and where I have told you what I think, please read more carefully. (What you are doing is akin to an ad hominum attack - you are not even engaging with the point you claim I made; just stating that I made it seems to be sufficient for your purposes, which are.... what exactly?)

sardia wrote:Lastly you have a financial interest in maintaining the status quo of housing shortages (to increase your home value for later selling).
I may have a "financial interest" in doing so, but it is not what I am doing. First, I'm not interested in later selling. I live in my home; I'm not investing with it and its value is not a business I'm in. Second, I have no interest in maintaining shortages. I have interest in maintaining the options in life that I have worked hard to get, one of them being the ability to live surrounded by quiet, clean air, and my own greenery, and it's because I like that. If other people can't have what I have because I have it, so be it. If I decide to give away what I have, it will be my decision, and I will choose who to benefit by it. Third, renting vs owning is a different axis from wealth vs poverty. Yes, it costs money to own stuff. That's what money is for. And Fourth, building more homes doesn't solve the housing problem. Yeah, that's a great sound byte if you want to make me sound stupid, but the "housing problem" isn't lack of housing, it's lack of housing in the right places, which ultimately translates to where the economy is going. People want to live where the action is, but there's plenty of (decaying) housing where the action isn't. It's not the housing, it's the action. What will people do once they live there (no matter where the "there" is)? Because if there's a good answer for that, then housing will not be a problem. And if there's not a good answer for that, then housing is the least of the problems.

Jose
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Re: Wealth taxation

Postby morriswalters » Tue Jul 18, 2017 1:24 am UTC

sardia wrote:You go around and prevent developers from building more homes in your neighborhood? Is your motivation to prevent your housing from losing value? (As supply rises for homes, prices fall to meet demand) And you live in a town that's clamoring for more housing?
I live here because I can afford to. Finding comparable housing would be all but impossible at any price I could afford. They can have the house if they will get me another exactly like it, that's in the neighborhood. I am not out to make any persons life easier by making mine harder.

Any city that is growing will sooner or later end up at the same place as say San Fransisco. But you can plan around it, assuming that your growth isn't to fast. Don't expect to overturn property rights because California didn't plan for success. Piss poor prior planning on California's part doesn't indicate to me that there is a crisis that I need to speak to.

If you build a high rise that I can afford, and assure me the same level of safety as the high end condominium I worked in, we can talk business. I'll move in tomorrow. But we have good examples of how that works in real life, don't we?

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Re: Wealth taxation

Postby sardia » Tue Jul 18, 2017 1:57 am UTC

morriswalters wrote:
sardia wrote:You go around and prevent developers from building more homes in your neighborhood? Is your motivation to prevent your housing from losing value? (As supply rises for homes, prices fall to meet demand) And you live in a town that's clamoring for more housing?
I live here because I can afford to. Finding comparable housing would be all but impossible at any price I could afford. They can have the house if they will get me another exactly like it, that's in the neighborhood. I am not out to make any persons life easier by making mine harder.

Any city that is growing will sooner or later end up at the same place as say San Fransisco. But you can plan around it, assuming that your growth isn't to fast. Don't expect to overturn property rights because California didn't plan for success. Piss poor prior planning on California's part doesn't indicate to me that there is a crisis that I need to speak to.

If you build a high rise that I can afford, and assure me the same level of safety as the high end condominium I worked in, we can talk business. I'll move in tomorrow. But we have good examples of how that works in real life, don't we?

The power dynamics rarely work out in a way that's equitable for everyone. Either nobody wants it, the developers tell you that nobody wants it in order to kick you out for cheap, or you don't let any developers buy anything because you hold all the cards.

Ucim, what do you think of the government (the people of california)'s decision to take away from the home owners and make it easier for the developers in the face of housing shortages(where people want them)? At some point, enough people are gonna get motivated enough to force the homeowners to give up. It's entirely possible for the government to make it unfair as well, like taking indian land style. Does a emergency (housing shortage) make it OK to take away land from home owners? (taking away their legal rights/cracking down is pretty equivalent to eminent domain).

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Re: Wealth taxation

Postby ucim » Tue Jul 18, 2017 3:01 am UTC

sardia wrote:Ucim, what do you think of the government (the people of california)'s decision to...
Eminent domain is a sledgehammer. It can be used when the problems are so severe that they require a sledgehammer. But the fact that a tool exists does not make it appropriate for every case where it's tempting.

The rest spoilered; we're getting far afield of wealth taxation.
Spoiler:
The fact that rich people have more money is not a problem that requires a sledgehammer - certainly not that one.

I can't speak specifically to the issue in California; I don't live there and do not know enough of the background of what is actually going on to make intellegent specific responses. So my remarks will be general, though informed by my own local and firsthand experiences with similar issues which, btw, include developers trying to shut down airports (Oh me yarm, the noise!) in order to obtain prime flat real estate to profit from building on. As a pilot, I have firsthand experience with the impact aviation has on the local (and sometimes not-so-local) community and economy.

Eminent domain is based also on the idea of a fair market value. In practice, it's an adversarial procedure in which fairness depends on your lawyer, but at least in theory, the idea is that the government can take your home only if they replace it with enough money so that you can purchase an equivalent home elsewhere. So, eminent domain is not (in theory) a way for government to seize value from stakeholders. You seem to be leaning on the side of seizing value from stakeholders because, well, they are rich (and therefore "inefficient" for enjoying their wealth).

A housing shortage is not an emergency. High home prices are not an emergency. Lack of fodder for developers is not an emergency. People wanting to live where they can't afford to is not an emergency. All these issues were years in the making. Sometimes they get hidden so that they can seem like an emergency in order to get legislation passed, but that does not make it so.

Sometimes there are big overarching social goals that government intervention might be appropriate for. If people are simply left alone, their attitudes may not change, and if an attitude change is needed (hatred of Muslims? Blacks? Irish?) a larger hand may be warranted. People don't change on their own; changing the environment can sometimes be helpful. However I'm not at all convinced that "it's more efficient for everyone to live in a one-bedroom apartment on the seventy-fifth floor" is such a big overarching goal to warrant the kind of government intervention you propose, nor am I convinced that your idea will solve (or even address) the problem you present, as its roots are elsewhere.

The underlying problem is multifaceted. People need to live "near" where they work, or work near where they live, which means there have to be appropriate jobs available in or near the neighborhood, which means that there have to be appropriate consumers near those jobs, and those jobs have to pay enough for housing in or near the neighborhood. And this is the crux of it - where are the jobs going?

It's not Mexico. It's not China. It's robotics, in its myriad . It's efficiency, the very thing you're aiming for. It's a killer if you're on the wrong end of it.

Also, the argument (as I recall) is between owning and renting. In either case, the same amount of housing is created. The difference is who profits from it - the dweller, or a landlord. Being a renter is a slow way to end up on the short end of the stick, unless you are savvy enough to not need this discussion in the first place. Making it easier for qualified people to own rather than have to rent is a Good Thing on many levels. Whether you own as far as you can see, or as far as the primer on the walls around you doesn't matter. What ownership means matters.
Jose
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Re: Wealth taxation

Postby Netreker0 » Thu Aug 10, 2017 5:30 pm UTC

CorruptUser wrote:Can we please agree on some of the basics?

...

2) Densely packed cities use fewer resources per person than spread out suburbs, while providing more services


Umm, have you ever lived in a densely packed city? Yes, in many respects, decreasing travel distance and what are essentially the benefits of economies of scale increase the efficiency of living in a densely packed city. In other areas, the driving force is less economies of scale and more the law of diminishing returns.

There are reasons cost of living is generally higher in densely packed urban areas. Yes, one reason is generally higher taxes and utilities, which are in some respects an artificial cost imposed by fiat--however, they also reflect the reality of the increased costs (per person) of providing such a densely packed group of people with an acceptable place to live. Another reason is that high prices and rents for homes and commercial spaces are passed along to the customer, which is partly a result of scarcity, but also a reflection of the fact that having large, comfortable living spaces are a thing that people value.

Something else to keep in mind--while densely packed cities are "efficient" in terms of some resources, particularly gasoline, they are not necessarily efficient in terms of time or even other resources. Yes, it's great that the closest dentist is a quarter-mile away, rather than five miles away. It's less great when you consider that it might take me less than ten minutes to drive five miles to the suburban dentist, and more than ten minutes to either walk a quarter mile, drive or take a taxi through dense traffic, or rely on public transportation. It's less great when you have to pay more to reflect your dentist's overhead of renting a small space in an area where hundreds of businesses are trying to set up shop.

3) One of the goals we should have is protecting the environment, and that means being more efficient with the resources we do use, in whatever meaning of the term efficient you use; they should all fit.


Funny you should mention the environment, because water usage and wastewater management are two areas in which we often substantially decreasing efficiency once we start packing too many people together. In suburban and rural areas, the main wastewater issue is runoff--something primarily caused by social norms and what is often an abundant and inexpensive supply of fresh water in these areas. When comparing suburbs to urban areas, it's not really fair to include water waste and runoff from lawns: Lawns are not a necessity, but an indulgence that occur more in suburbs because they are cheap and practical, and less in urban areas, because they are expensive and not. However, even if you include the impact of lawns and golf courses, getting water and dealing with wastewater still tends to be cheaper in less crowded areas. When you're dealing with far smaller amounts per area, you tend to be able to use less intensive water treatment methods to get waste to a state where it can be (relatively) safely absorbed by the environment, and you can often serve the population's needs for fresh water primarily by tapping the low hanging fruit in terms of fresh water supply.

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Re: Wealth taxation

Postby sardia » Thu Aug 10, 2017 6:58 pm UTC

Netreker0 wrote:
CorruptUser wrote:Can we please agree on some of the basics?

...

2) Densely packed cities use fewer resources per person than spread out suburbs, while providing more services


Umm, have you ever lived in a densely packed city? Yes, in many respects, decreasing travel distance and what are essentially the benefits of economies of scale increase the efficiency of living in a densely packed city. In other areas, the driving force is less economies of scale and more the law of diminishing returns.

There are reasons cost of living is generally higher in densely packed urban areas. Yes, one reason is generally higher taxes and utilities, which are in some respects an artificial cost imposed by fiat--however, they also reflect the reality of the increased costs (per person) of providing such a densely packed group of people with an acceptable place to live. Another reason is that high prices and rents for homes and commercial spaces are passed along to the customer, which is partly a result of scarcity, but also a reflection of the fact that having large, comfortable living spaces are a thing that people value.

Something else to keep in mind--while densely packed cities are "efficient" in terms of some resources, particularly gasoline, they are not necessarily efficient in terms of time or even other resources. Yes, it's great that the closest dentist is a quarter-mile away, rather than five miles away. It's less great when you consider that it might take me less than ten minutes to drive five miles to the suburban dentist, and more than ten minutes to either walk a quarter mile, drive or take a taxi through dense traffic, or rely on public transportation. It's less great when you have to pay more to reflect your dentist's overhead of renting a small space in an area where hundreds of businesses are trying to set up shop.

3) One of the goals we should have is protecting the environment, and that means being more efficient with the resources we do use, in whatever meaning of the term efficient you use; they should all fit.


Funny you should mention the environment, because water usage and wastewater management are two areas in which we often substantially decreasing efficiency once we start packing too many people together. In suburban and rural areas, the main wastewater issue is runoff--something primarily caused by social norms and what is often an abundant and inexpensive supply of fresh water in these areas. When comparing suburbs to urban areas, it's not really fair to include water waste and runoff from lawns: Lawns are not a necessity, but an indulgence that occur more in suburbs because they are cheap and practical, and less in urban areas, because they are expensive and not. However, even if you include the impact of lawns and golf courses, getting water and dealing with wastewater still tends to be cheaper in less crowded areas. When you're dealing with far smaller amounts per area, you tend to be able to use less intensive water treatment methods to get waste to a state where it can be (relatively) safely absorbed by the environment, and you can often serve the population's needs for fresh water primarily by tapping the low hanging fruit in terms of fresh water supply.

Do you have some studies that say cities are inefficient? Especially if they say cities are less efficient than a comparable suburbs or rural land.

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Re: Wealth taxation

Postby reval » Sat Aug 12, 2017 5:34 pm UTC

Also beware of externalized costs. The loss of natural habitat to surburbs and agriculture isn't easy to quantify in a dollar-based discussion of housing density, but the loss of pollinators could easily affect our food supply in very dollar-relevant ways.

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Re: Wealth taxation

Postby Netreker0 » Sat Aug 12, 2017 7:23 pm UTC

Unfortunately, I have no studies to draw from, only my own anecdotal experiences living a month or two at a time in a pretty wide variety of places, but in my defense, I wasn't aware that this debate was at the point where studies were needed. The arguments in favor of the efficiency of cities are largely logical inferences drawn from factual generalizations.

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Re: Wealth taxation

Postby dg61 » Sun Oct 01, 2017 5:48 pm UTC

FWIW's homeownership=! detached suburban houses with two-car garages. People do buy condos/apartments/rowhouses/terraced houses, after all.

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Re: Wealth taxation

Postby roflwaffle » Sat Nov 11, 2017 5:47 pm UTC

bigglesworth wrote:Inheritance tax is already a wealth tax - which gets around the issue of when to value the items that make up that wealth.

Why is an annual wealth tax better than an inheritance tax?

Someone can place assets in an irrevocable trust to avoid paying estate tax in the US, although that amount needs to be $14k/year or less per person to avoid paying gift taxes. On the flip side, the income tax rate for trusts is much higher, so that may offset not having an estate tax to some degree.

I think the capital gains tax rate being dependent on earned income is a coup. Capital gains from a sale are only taxed at 0% to 20% depending on earned income, compared to the 10% to 40% on earned income. If I have a capital loss from a sale, I can deduct $3k/year of that loss from my earned income until the loss is exhausted, which lowers the tax liability associated with earned income and it's much higher rates. When I win, I win big, and when I lose, I lose small, especially if I have the luxury of making sales on my own schedule.

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Re: Wealth taxation

Postby ucim » Sat Nov 11, 2017 7:52 pm UTC

roflwaffle wrote:especially if I have the luxury of making sales on my own schedule.
...which you don't. In a buyout, for example, you get what's offered. If it's a cash buyout, you pay taxes on money you would prefer to have remained invested. Further, it's a windfall that can't be spread out over several years, so you get pushed up (momentarily) into top brackets and lose your deductions if you have enough in that one stock.

If you have a significant capital loss, $3000/year doesn't do much for you, and gives you headaches on your tax forms every year until you use it up. A $30,000 loss takes ten years to eat, for example. And if you have a short term loss and a long term gain, you lose the benefit of the long-term-ness of your gain.

But both of these examples are taxes on income, not on wealth. You are taxed at the end. A tax on wealth would work differently. Say, you buy some shares for $10,000, and they climb steadily to $100,000 over ten years, and then in the next two years, drop back to $10,000 before you sell it in disgust. Meanwhile, inflation has been steady, so that the buying power of that $10,000 is equivalent to $8000. Over these 12 years, on an income-tax basis, you've broken even and owe no taxes, even though you've lost buying power. On a wealth tax basis (say, a 10% annual flat tax on wealth), you would have paid $61,000 in taxes for the privilege of holding those shares (assuming you could afford it... I'll presume you don't have to sell the shares to pay the taxes on them), ending up with a buying power $2000 lower than you started, and having paid $61,000 for this loss.

A 1% wealth tax would yield different numbers: $6,100 in taxes ultimately taking a $2000 loss on top of this, but still, this doesn't seem right to me.

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Re: Wealth taxation

Postby roflwaffle » Sun Nov 12, 2017 8:14 pm UTC

ucim wrote:
roflwaffle wrote:especially if I have the luxury of making sales on my own schedule.
...which you don't. In a buyout, for example, you get what's offered. If it's a cash buyout, you pay taxes on money you would prefer to have remained invested. Further, it's a windfall that can't be spread out over several years, so you get pushed up (momentarily) into top brackets and lose your deductions if you have enough in that one stock.

If you have a significant capital loss, $3000/year doesn't do much for you, and gives you headaches on your tax forms every year until you use it up. A $30,000 loss takes ten years to eat, for example. And if you have a short term loss and a long term gain, you lose the benefit of the long-term-ness of your gain.

But both of these examples are taxes on income, not on wealth. You are taxed at the end. A tax on wealth would work differently. Say, you buy some shares for $10,000, and they climb steadily to $100,000 over ten years, and then in the next two years, drop back to $10,000 before you sell it in disgust. Meanwhile, inflation has been steady, so that the buying power of that $10,000 is equivalent to $8000. Over these 12 years, on an income-tax basis, you've broken even and owe no taxes, even though you've lost buying power. On a wealth tax basis (say, a 10% annual flat tax on wealth), you would have paid $61,000 in taxes for the privilege of holding those shares (assuming you could afford it... I'll presume you don't have to sell the shares to pay the taxes on them), ending up with a buying power $2000 lower than you started, and having paid $61,000 for this loss.

A 1% wealth tax would yield different numbers: $6,100 in taxes ultimately taking a $2000 loss on top of this, but still, this doesn't seem right to me.

Jose

I can see situations where there isn't the luxury of time, but I can choose to sell stock purchase through ESPP when I want. Granted, there's always some "risk" insofar as I don't know how the market will behave, and there could be a buyout or the company could fail, but I can still choose to sell stock to generate tax liability or hold it to avoid tax liability depending on my situation.

Buying an EV and (hopefully) getting the $7500 tax credit is a great example. If I purchase this year and only have about $6000 in taxes to pay, I can sell the stock I've purchased to create an extra $1,000 in tax liability, capturing more of the credit. I can also do the same thing by reducing contributions to my 401k, but that isn't as flexible, and at some point (after July in my case) I don't have enough time to net the $4000 in income I need to create the same $1000 in tax liability.

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Re: Wealth taxation

Postby ucim » Sun Nov 12, 2017 8:41 pm UTC

roflwaffle wrote:I can see situations where there isn't the luxury of time
and those are some of the things that makes the proposal (and the current tax system also) unfair. Back in the old days, income averaging was a thing one could do - if you had a windfall or a down year, you could elect to spread it out over several years for tax purposes. That was done away with... probably in the name of "tax simplification".

Be careful what you wish for.

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Re: Wealth taxation

Postby roflwaffle » Sun Nov 12, 2017 9:49 pm UTC

I think it's also because the federal government favors taxing "consumption" as opposed to assets/investments. Hopefully they won't move away from that, since IMO it encourages prudent/restrained consumption and disciplined wealth management, but we'll see...

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Re: Wealth taxation

Postby ucim » Sun Nov 12, 2017 10:08 pm UTC

roflwaffle wrote:I think it's also because the federal government favors taxing "consumption" as opposed to assets/investments. Hopefully they won't move away from that, since IMO it encourages prudent/restrained consumption and disciplined wealth management, but we'll see...

I don't see how doing away with income averaging accomplishes this. A windfall is huge income, not huge consumption.

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Re: Wealth taxation

Postby Pfhorrest » Tue Nov 14, 2017 3:04 am UTC

This latest topic makes me realize that my proposed tax scheme has an advantage in this regard. It is progressive in net effect but that is achieved by a flat tax offset by a fixed tax credit, so the further above or below a certain threshold you are, the greater or lower percentage you pay (or get back) in effect.

The reason that has an advantage with regard to windfalls and such is thus. Say for example that the tax credit is $12k/year and the tax rate is 60%, so people making $20k/year pay no taxes and the effective tax rate grows toward a limit of 60% as income goes to infinity. Now imagine two scenarios:

Scenario 1: You make a windfall of $1M, and then have no income for nine years. You pay $(1M*0.6-12k)=$588k in taxes that first year, then get $(12k*9)=$108k in tax refunds over the next nine years, for a total tax of $480k, or $48k/year on average over those ten years.

Scenario 2: You make $100k/year for ten years. You pay $(100k*0.6-12k)=$48k/year for each of those ten years.

It's like automatic income averaging. It doesn't matter when you make the money, you end up paying the same one way or another.
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Re: Wealth taxation

Postby ucim » Tue Nov 14, 2017 4:05 am UTC

Pfhorrest wrote:This latest topic makes me realize that my proposed tax scheme has an advantage
Where is this posted?

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Re: Wealth taxation

Postby Pfhorrest » Tue Nov 14, 2017 4:32 am UTC

Weird, I could swear I had posted it in this thread. I posted a complete writeup of it in the How would you change the US tax system? thread, and I've been discussing and describing it a lot in the Citizen's Wage thread too. Pretty sure you've commented on it in at least one of those places. It's the "credit everyone a percent of the mean income and then tax them that same percent of their personal income" scheme. (And of course you also have to tax them something on top of that to actually bring in revenue for the government, but that scheme provides automatic progressiveness to the effective tax rate, going to negative rates below a certain threshold and bottoming out in a basic income for people with zero income).
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Re: Wealth taxation

Postby roflwaffle » Wed Nov 15, 2017 2:24 am UTC

ucim wrote:
roflwaffle wrote:I think it's also because the federal government favors taxing "consumption" as opposed to assets/investments. Hopefully they won't move away from that, since IMO it encourages prudent/restrained consumption and disciplined wealth management, but we'll see...

I don't see how doing away with income averaging accomplishes this. A windfall is huge income, not huge consumption.

Jose

I think income averaging is great. By consumption I'm referring to post-tax income, which can be spent without incurring further taxes associated with it's generation. Taxing capital gains before they're collected, ala one of the versions of the current tax bill, is a bad idea, but I support unifying/simplifying the tax rates for capital gains and earned income.

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Re: Wealth taxation

Postby ucim » Wed Nov 15, 2017 2:43 am UTC

roflwaffle wrote:but I support unifying/simplifying the tax rates for capital gains and earned income.
Why? Things should be as simple as possible, but no simpler. Capital gains are (mistakenly) seen as free money, as opposed to earned income. But it's not ~ capital gains come with risk - sometimes risk of total and complete loss of all the money that was =earned= in order to buy the stock that was hoped to generate some capital gains but things went south. It's not clear at all that they should be taxed the same.

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Re: Wealth taxation

Postby SuicideJunkie » Wed Nov 15, 2017 4:45 pm UTC

I've got some investments, and I see them mostly as free money although I probably shouldn't.\
On reflection, I suppose it is about trading risk for effort. My job is no risk/high effort, my investments are variable risk / no effort.

In that light, I'd say capital gains ought to be taxed more progressively, since effort per person is finite and self-limiting but capital per person is unbounded.

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Re: Wealth taxation

Postby ucim » Wed Nov 15, 2017 5:38 pm UTC

But capital is nothing but condensed effort. And risk is what's generating the gains, not capital. Capital just sits there; it's only when I risk losing it (and all the effort that went into it) that I stand to possibly gain anything.

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Re: Wealth taxation

Postby SuicideJunkie » Wed Nov 15, 2017 6:35 pm UTC

There is risk, as I noted originally, but the whole operation has positive expected value and compounds.

I'm not suggesting that it should be taxed 100%, or even necessarily a higher % for the median investor.
I'm suggesting a steeper slope that exceeds normal income on the high end, to put some limiters on the otherwise exponential growth.

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Re: Wealth taxation

Postby Leovan » Wed Nov 15, 2017 7:07 pm UTC

I keep thinking of those cake sales where students found out that if they didn't set prices they ended up getting more on average... How about we just let everyone donate what they think is fair? There will be people who pay too much and people who pay too little, but maybe instead of campaign contributions people will donate to the state directly. And we'll end up getting more than before. Probably not since being an asshole usually gets you more money and the average cake sale buyer is middle class that's feeling generous and wants to help the students finance their trip... Nobody ever thinks of the roads when they pay taxes, only the military because they HAVE TO, so they dislike it. Honestly I'd probably pay more or about the same in taxes if I got to choose the fair value myself. My wife would pay MUCH more.
But wealth taxation is double taxation. If you spend less and save more you end up paying more taxes than the people who spend it all on shits and giggles. Increase income taxes and for God's sake tax investment income the same way you tax my income when I invest in a car so I can get to work(risking that I'll lose my job because the company tanks and I lose my investment because I don't need a car anymore but its value is lost by driving off the lot), but leave my saved wealth alone. Estate taxes are taking away my choice what happens with my wealth after I die so they're a no-go.
Speaking as someone in a country where they sometimes tax estates and always tax wealth... Though honestly your example figures of x% scare the shit out of me. I pay 0.2% usually. We also pay fewer taxes than you Americans... I'm not sure where you waste it but I assume it's on freedom (and I mean that seriously. We have a lot of social controls on behavior and that keeps people from being wastrels, but also limits freedom to do the unexpected, I envy you sometimes)

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Re: Wealth taxation

Postby Tyndmyr » Wed Nov 15, 2017 7:22 pm UTC

ucim wrote:
CorruptUser wrote:GDP =
Why should I care about GDP? (Specifically GDP, not the idea of economic growth)


Because it's probably one of the best ways of measuring economic growth. It is imperfect, sure, but all measurements tend to be. They remain useful all the same.

You should care about it for the same reason you care about the number on the scale when you weigh yourself. Oh sure, this scale might be off a bit, and weight does fluctuate a bit over time due to this and that, but it's a reasonable way to determine if you are gaining or losing weight overall.

ucim wrote:... all things being equal. But they are not.


Yes, life is complicated. However, sometimes one wishes to discuss one subsect, without discussing every element of life. So, one abstracts away the mostly uninvolved aspects with conceits such as "all else equal". This, like GDP, is imperfect, but it is useful.

ucim wrote:And yes, one of the goals we should have is protecting the environment, and one of the best ways to do this is to stop breeding. Most of the problems you're addressing arise simply because there are just too many people.


Well, by far the most successful way to reduce the birth rate is to make folks wealthy. So, if you want a lower birth rate, you want a solid, healthy economy.

In fact, just about all goals are more easy to pursue with a booming economy. Sure, tradeoffs exist, but money does appear to buy happiness for just about all values of "happiness". If you want more McMansions and bigger cars, well, that costs money. If you want to go to all natural energy production, that also costs money(argue all you want about tangential benefits, savings down the road, etc, but to start, it costs money). So, pretty much everyone, regardless of other values, ought to put significant value on a healthy economy.

morriswalters wrote:
sardia wrote:Isn't this a rehash of your unabashed support for a yard plus two car garage sized house lifestyle?
I don't have a garage and my house is less than 1000 square feet. In a neighborhood that is politely called lower middle class. And I agree with him wholeheartedly.


I am very much in favor of him purchasing a yard and a garage if he so wishes. I am not in favor of denying others their dreams(be they for the same or different) via community obstructionism. Property rights cut both ways. If you wish to do what you want on your property, it is only fair that you not obstruct others to do as they wish on theirs.

Some folks enjoy smaller spaces. Some folks would like larger, but require a smaller space until they can afford the larger. The existence of these should not be a problem. If someone else prefers a short commute over a large home, why should I get involved with his choice? Unless it poses an actual risk to my home(fire safety, perhaps), my rights ought to end at my property line. If you desire to live in a rich neighborhood, where all the houses are large and impressive, and the values of homes are high, cool. Move there.

Anyway, to bring this back to property taxes, I have grown rather less fond of them after having purchased a property and running into mis-valuation. I bought a bit of land for 18k, and turns out, it's valued at 85k by the state. Clearly, the market does not value it at that price, as it was advertised for 20k for many months, and the neighboring plots, priced comparatively, still remain on the market. So, obviously in error, yes? Ah, but the state has yearly deadlines by which one must challenge the price. I purchased my plot exactly on the date(strictly speaking, on the weekend of the date, during which the appropriate government office was not open). So, I've got to pay on the higher, inaccurate number for this year. This is an issue with the process, rather than the idea in principle, but it's a problem all the same. Just as eminent domain should, in principle, not be used to enrich random business folk, but issues exist in practice, eh? If we were talking a similar scale error, but in proportion to the value of the average US home, the resulting tax bill would be quite annoying for most families. Property taxes, as they exist now, are one form of wealth taxation, and they end up hitting the middle class home owner significantly, and misvaluation can be a large concern(or even a correct valuation, for instance, gentrifying neighborhoods forcing low income families out). I'd rather not add to that.

A "pay what you think is fair" project varies greatly. Cards Against Humanity tried such an experiment at a convention, and were stripped clean, losing a significant chunk of money. I think social context greatly affects how this works out. Does someone feel sufficiently anonymous/free of shame to be a free rider, and not pay at all? I am not sure that the government is beloved enough to maintain it's current income via voluntary donation.

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Re: Wealth taxation

Postby sardia » Wed Nov 15, 2017 8:45 pm UTC

Tyndmyr wrote:
ucim wrote:
CorruptUser wrote:GDP =
Why should I care about GDP? (Specifically GDP, not the idea of economic growth)


Because it's probably one of the best ways of measuring economic growth. It is imperfect, sure, but all measurements tend to be. They remain useful all the same.
You should care about it for the same reason you care about the number on the scale when you weigh yourself. Oh sure, this scale might be off a bit, and weight does fluctuate a bit over time due to this and that, but it's a reasonable way to determine if you are gaining or losing weight overall.

Yes, life is complicated. However, sometimes one wishes to discuss one subsect, without discussing every element of life. So, one abstracts away the mostly uninvolved aspects with conceits such as "all else equal". This, like GDP, is imperfect, but it is useful.
Well, by far the most successful way to reduce the birth rate is to make folks wealthy. So, if you want a lower birth rate, you want a solid, healthy economy.

In fact, just about all goals are more easy to pursue with a booming economy. Sure, tradeoffs exist, but money does appear to buy happiness for just about all values of "happiness". If you want more McMansions and bigger cars, well, that costs money. If you want to go to all natural energy production, that also costs money(argue all you want about tangential benefits, savings down the road, etc, but to start, it costs money). So, pretty much everyone, regardless of other values, ought to put significant value on a healthy economy.

I am very much in favor of him purchasing a yard and a garage if he so wishes. I am not in favor of denying others their dreams(be they for the same or different) via community obstructionism. Property rights cut both ways. If you wish to do what you want on your property, it is only fair that you not obstruct others to do as they wish on theirs.

Some folks enjoy smaller spaces. Some folks would like larger, but require a smaller space until they can afford the larger. The existence of these should not be a problem. If someone else prefers a short commute over a large home, why should I get involved with his choice? Unless it poses an actual risk to my home(fire safety, perhaps), my rights ought to end at my property line. If you desire to live in a rich neighborhood, where all the houses are large and impressive, and the values of homes are high, cool. Move there.

Anyway, to bring this back to property taxes, I have grown rather less fond of them after having purchased a property and running into mis-valuation. I bought a bit of land for 18k, and turns out, it's valued at 85k by the state. Clearly, the market does not value it at that price, as it was advertised for 20k for many months, and the neighboring plots, priced comparatively, still remain on the market. So, obviously in error, yes? Ah, but the state has yearly deadlines by which one must challenge the price. I purchased my plot exactly on the date(strictly speaking, on the weekend of the date, during which the appropriate government office was not open). So, I've got to pay on the higher, inaccurate number for this year. This is an issue with the process, rather than the idea in principle, but it's a problem all the same. Just as eminent domain should, in principle, not be used to enrich random business folk, but issues exist in practice, eh? If we were talking a similar scale error, but in proportion to the value of the average US home, the resulting tax bill would be quite annoying for most families. Property taxes, as they exist now, are one form of wealth taxation, and they end up hitting the middle class home owner significantly, and misvaluation can be a large concern(or even a correct valuation, for instance, gentrifying neighborhoods forcing low income families out). I'd rather not add to that.

A "pay what you think is fair" project varies greatly. Cards Against Humanity tried such an experiment at a convention, and were stripped clean, losing a significant chunk of money. I think social context greatly affects how this works out. Does someone feel sufficiently anonymous/free of shame to be a free rider, and not pay at all? I am not sure that the government is beloved enough to maintain it's current income via voluntary donation.

Property rights gets since the people who currently live there set the rules for people who work there. For example, the stereotype of the homeowners blocking a high rise from being built or increasingly the cost of red tape. The homeowners get higher home values while prospective buyers get priced out.

There's a further inequality of property taxes. Apparently richer folks can hire lawyers to appeal home appraisals, while poorer people generally can't. The end result is poor people subsidizing richer people's property taxes.
http://www.chicagotribune.com/news/watc ... story.html

Welcome back to you forums. I thought you had moved to greener forums.


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