Nobody can gain wealth with their home. Home equity makes up the majority of most people’s wealth today. All those people no longer have that wealth. Where is money coming from to pay for ever increasing house values?
The vast majority of people who buy a bigger more expensive home do so by selling their first home and using the increased equity to upgrade.
Are these people just saving from their salary now I guess?
An organized band of extortionists pay people in IOUs and then exacts tribute in the form of those very IOUs. People have to trade goods and services to the people who hold the IOUs in order to pay their tribute. This spawns markets in which these IOUs are passed around as a medium of exchange.
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So the time, effort, and money people put into properties they own is worth something? I agree completely!
Of course no one will invest in anything if they are not allowed to beat inflation. Again, your argument is about investing as a whole.
Yeesh that doesn’t sound impossible to calculate or exploitable at all.
Yes, the insane overleveraged, utterly corrupt and wasteful boom and bust housing market may have to change the way it operates. Some sacrifices have to be made in the name of progress.
Of course. When someone generates value they should usually get to keep it imo.
Staying level with inflation >>> holding cash. Again yes maybe the insane and corrupt world of wall street would have to change some practices. More sacrifices.
You are back to stating goals not actual actions to achieve them.
You are ruler of the world and have instituted your system of 100% tax on all increased home equity.
Where are people getting the money to buy new homes?
Seems to me only the richest people, who have very high salaries and other investments, will be buying homes. Poor people are screwed.
Impossible to calculate? How do you think you currently pay taxes on the gains when you sell a house? (especially when you flip a house - there are exclusions for profits from selling a primary residence)
This doesn’t follow at all. If there is a demand for houses the market will supply it. Architects and builders and surveyors and whoever else add value to a plot of land and receive recompense based on that extra value added. You just can’t get paid for sitting on land anymore.
Like I get that getting free money for no effort is cool. I like the fact that I get it from the house I own. I’m just saying it’s legalised theft.
Great, so whatever real estate tax fraud occurs currently will just get multiplied now that we’re dealing with direct profits instead of tax deductions.
If someone buys a house for $200k and knows that its present market value is $500k, you better believe they’re going to find a couple hundred thousand dollars in “improvements” to account for.
The other thing that makes no sense is why would anyone, rich or poor, own a home in this model? You would just rent. If everyone is renting who owns all the homes? The state?
The answer to that would be people want to own their home so they don’t pay rent and so they could do whatever they like - paint it whatever color - add on and such - be guaranteed to be able to stay.
If eliminating speculation had a big effect on the market it would lead to lower prices and make it easier for people to buy a home.
Why do you care if you are paying rent or a mortgage if you don’t get the benefit of equity?
Like I said - maybe I want to make changes, maybe I want a guarantee that I can stay there for years and years. Maybe it’s cheaper in the long run? Why do I own a car instead of lease one?
You get to hedge against inflation and it acts like a savings account for people who can’t save otherwise. You spend 20K deposit and 180K mortgage when you come to sell you still get 200K X compound inflation in cash so whatever mortgage you paid off is yours.
That is a fair point.
I do think any such plan would require a significant change to how people gain personal wealth.
See all of @Sabo’s posts about economic theory. If you asked Milton Friedman or Adam Smith they would say it would redirect investment toward something more productive than just owning land.
Sounds good but the same people who want to do this don’t like investing or people owning a business. We are quickly running out of ways for wealth creation.
Maybe wealth creation should be less of a priority.
That’s only possible for those with it already.