You might be OK with being taxed in the form of some of your stocks, but would you want to be taxed partial ownership of your real estate based on increase in its market value? What about private high-risk equity in a venture you started by risking all of your own money? It could go to zero (or millions) in a decade, but for now the government becomes an increasing shareholder because of its current YoY volatility...
Taxing non-income wealth increases by any means incentivizes the government to manipulate the prices of those assets -- and more than any other entity, the government possesses the power to do so through regulation and legislation.
It also makes the government the eventual largest capital owner, which could create all sorts of unintended consequences. It could sit on those assets indefinitely (like it does its liabilities) instead of selling and using the money to fund itself. There's a special kind of poverty that exists when the government owns almost everything.
Also, there's a big difference between legal worth at a given time and fungible value at that time. The difference (or lack thereof) between the two could itself create all sorts of opportunities for gaming the system when fungible value becomes a basis for being taxed.
Unless you mean a series of leins incurred once a year based on price increases. But then an asset with high YoY volatility but no long-term gain would cause the lein sum to approach the value of the asset over many years, despite no material increase in price at exit. That makes no sense - the government profiting off of volatility alone.
If that's not what you mean, how is what you mean different from standard capital gains tax?
OK. You seem to be agreeing that this would be a fine system with those caveats.
So:
Exemptions specifically covering residency already exist in finance law. If you go bankrupt, you can still live in your house (only if you owned it, mind).
The government, as soon as practical, can auction the stock it receives. Thus identifying its value and releasing the funds.
> You seem to be agreeing that this would be a fine system with those caveats.
I'm not advocating anything in particular. I'm only pointing out some potentially serious issues with the proposed system.
Sure, primary residence could be excluded. But that doesn't change anything about what I said, except perhaps blunt the initial impact on the middle class.
> The government, as soon as practical, can auction the stock it receives. Thus identifying its value and releasing the funds.
Perhaps that could be part of the tax law. I doubt it would stay that way... once the government can own stocks and portions of real estate, I'm sure it will seek to incrementally increase its benefit from doing so. I shudder to imagine politician-beaurocrats as the most powerful hedge fund managers of tomorrow.
> once the government can own stocks and portions of real estate, I'm sure it will seek to incrementally increase its benefit from doing so.
There's nothing stopping the government from owning these things already (governments own plenty of real estate, in particular), so this seems like undue cynicism.
There's a big difference between agencies owning buildings within which to do business (or the BLM owning vast swaths of land for environmental preservation) and the IRS maintaining a real estate asset class.
In fact there's almost no comparison to be made between the two.
I don't think I've moved goalposts -- maybe just failed to articulate my concern precisely. (And only skimmed the article you linked.)
If the government purchases real estate with its own money and later sells it--fine by me. They have business to take care of and need places to do it.
What bothers me specifically would be a growing federal or state government stake in assets owned by others by virtue of a tax law that grants them such ownership.
I imagine whole swaths of businesses, apartments, and other buildings in cities across the US that are >50% owned by the government 40 years from now.
It would push us a lot closer to a world where people don't own anything anymore besides their own houses (maybe not even that) and the government owns everything.
> It would push us a lot closer to a world where people don't own anything anymore besides their own houses (maybe not even that) and the government owns everything.
I'm really struggling to understand this point of view, given the article that you couldn't be bothered to read says the US government owns 15% of all real estate already.
In my country, the reason that a lot of people own their houses is because the government sold its housing stock to residents in the 1980s and 1990s. That created a majority of homeowners, for the first time.
The fact that the government didn't replace this housing stock has been the cause of a massive generational rift, with a reduction in owner-occupancy from that peak, down to the point that a plurality of people (the vast majority of people under 45 - almost all young families) are now private renters in insecure housing situations.
While that same housing stock - originally built by the people, for the people - is increasingly dominated by exploitative for-profit landlords.
Taxing non-income wealth increases by any means incentivizes the government to manipulate the prices of those assets -- and more than any other entity, the government possesses the power to do so through regulation and legislation.
It also makes the government the eventual largest capital owner, which could create all sorts of unintended consequences. It could sit on those assets indefinitely (like it does its liabilities) instead of selling and using the money to fund itself. There's a special kind of poverty that exists when the government owns almost everything.
Also, there's a big difference between legal worth at a given time and fungible value at that time. The difference (or lack thereof) between the two could itself create all sorts of opportunities for gaming the system when fungible value becomes a basis for being taxed.