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Housing is at the root of many of the rich world’s problems (2020)

economist.com

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Re: Housing is at the root of many of the rich world’s problems (2020)

#281

Post by huevosabio »

mminer237 wrote: post #192
idkyall wrote: post #122

Housing in the US has gotten to where it is due to horrible laws effectively allowing total tax avoidance for landlords. Take some investment property. You buy it at some basis price, let's say 500k. You rent it out for 15k a year. Each year you can offset your rental income against deprecation of the property and property taxes - meaning, you pay no income tax on your rental income. ~30 years later, you've deprecate…

You don't write off your rental income. You depreciate the rental property over 27½ years and write that off against your rental income. Few rental properties will have under a 3.7% ROI where depreciation would cover all the income. At best you might be paying half tax. In your example, you'd pay no tax, but you'd lose out on the potential income you could have had with better investments (and lose about 6 years' wor…

You fix it by deprecating only the improved value.

The land beneath a building does not deprecate, whereas the value of the building should.

Since for most properties the majority of the value is in the land itself, your basis to deprecate would be much lower, and more realistic.

Re: Housing is at the root of many of the rich world’s problems (2020)

#282

Post by megaman821 »

wyre wrote: post #271
throwaway6734 wrote: post #70

Earlier quoted context omitted.

I think a lot of young people just are ignorant about the situation coupled with the rise of populists on the left and the right, there's always some abstract other to blame without a focus on concrete problems and possible solutions. Whenever I talk to my young friends about Social Security's trust running dry in a decade they just handwave it away with stuff like: the government will just print more money or blame…

As a young person (28), I think it’s because we feel powerless in the face of what is to come. Young people have no power because we largely are in the renter and working classes; while the home and business owners fight against every mention of renter protections, increased housing, worker protections, etc. Not to mention we see the world we are growing up into is quickly becoming more and more inhabitable while liv…

The millennials are the largest voting block in the US. What is everyone else supposed to do when the group with the most voting power "feels" powerless? I sure hope millennials are just late bloomers. Where are the great political leaders, engineers, scientists, artists and writers from the millennial generation? All these future problems are hard but solvable when there are people working to solve them.

Re: Housing is at the root of many of the rich world’s problems (2020)

#283

Post by ROTMetro »

namdnay wrote: post #267
namelessoracle wrote: post #216

Earlier quoted context omitted.

So a family on hard times should be forced to leave their grandmothers home when she dies and hope they can find a new one? Gentrification can easily push a property in the place they've lived their whole lives out of their price range. And the family home might not have been super well kept up so the "windfall" isn't as big as the property values in the area may reflect. This happens now with gentrification in big c…

In what universe does paying tax on what you inherit equate to communism?

When you effectively take someone's home for government benefit. People think that when they buy property they own it. You're model is more the China version. You don't own property, you only lease it from the government. Hence, your model looks more like the communist model than the traditional Western one.

Re: Housing is at the root of many of the rich world’s problems (2020)

#284

Post by valarauko »

Loughla wrote: post #180
jimbob45 wrote: post #79

Earlier quoted context omitted.

1 - No national election day holiday, so wage-earners often have to forgo income to vote. PSA: You can register as a poll worker and work election day to guarantee you have time to vote. There's a high chance that your work will give you the time off to go work as a poll worker without it eating into your PTO (and you get paid to boot!).

Holy cow, not even a little bit. This is so, so middle- to upper-middle income centered it's not even funny. 1st you are assuming people have one employer to worry about, not multiple. 2nd you are assuming people have a set schedule daily or weekly. 3rd you are assuming people have PTO. 4th you are assuming the employer will give any amount of shit about volunteerism. 5th you are assuming they won't be given a point…

I'm curious as to what the solution in this case is then. If election days were holidays, wouldn't the same people still have the same issues with employers? Do shift workers not work on holidays?

Re: Housing is at the root of many of the rich world’s problems (2020)

#285

Post by kaibee »

mminer237 wrote: post #192
idkyall wrote: post #122

Housing in the US has gotten to where it is due to horrible laws effectively allowing total tax avoidance for landlords. Take some investment property. You buy it at some basis price, let's say 500k. You rent it out for 15k a year. Each year you can offset your rental income against deprecation of the property and property taxes - meaning, you pay no income tax on your rental income. ~30 years later, you've deprecate…

You don't write off your rental income. You depreciate the rental property over 27½ years and write that off against your rental income. Few rental properties will have under a 3.7% ROI where depreciation would cover all the income. At best you might be paying half tax. In your example, you'd pay no tax, but you'd lose out on the potential income you could have had with better investments (and lose about 6 years' wor…

> I'm not sure how you'd "fix" that without penalizing non-rental companies for expanding.

A land value tax would be a pretty straight forward solution to most of the issues around this.

Re: Housing is at the root of many of the rich world’s problems (2020)

#286

Post by BoxOfRain »

kkfx wrote: post #60

There are many issues around housing, some derive from capitalism, like building apartments because doing so milk more money from a handkerchief on land, but some simply due to different evolution speed from human needs vs buildings lifecycle. I see at least two kind of schools on housing, one who talk about cheapness, typically from USA, Japan and few others. Another who talk about forever and ever duration, typical…

>We still do not have the '30s dream of flying homes or semi-autonomous starships that can be moved easily everywhere... So far we do not even have flying cars (while they might be there technically)...

There is a kind of home that can float anywhere though, I'm quite far long in my plans to move onto a sailing yacht. While my main motivation is a lifelong love of sailing and a desire for a nomadic lifestyle, I'd be lying if I said a small part of my motivation wasn't that shovelling money hand-over-fist into keeping a boat I own seaworthy is much more satisfying than shovelling money hand-over-fist into some random baby boomer's BTL portfolio every month!

Re: Housing is at the root of many of the rich world’s problems (2020)

#287

Post by ROTMetro »

2OEH8eoCRo0 wrote: post #234
idkyall wrote: post #122

Housing in the US has gotten to where it is due to horrible laws effectively allowing total tax avoidance for landlords. Take some investment property. You buy it at some basis price, let's say 500k. You rent it out for 15k a year. Each year you can offset your rental income against deprecation of the property and property taxes - meaning, you pay no income tax on your rental income. ~30 years later, you've deprecate…

> unless your estate is over 12 million dollars(and double that for a married couple), you pay no estate taxes. Why aren't estates just taxed as income to the entity who it goes to? If my father croaks and leaves me $1m it should count as an additional $1m of income to me that year.

Fine, as long as you tax based on what was paid for the property. The father is giving his invested money, no one chose to 'realize' at the current valuation, it is happening because of a traumatic family event.

Re: Housing is at the root of many of the rich world’s problems (2020)

#288

Post by rpastuszak »

throwaway22032 wrote: post #27

Our economic system is set up such that you either hit a bar at which you accumulate capital forever unless you make a mistake, or you're loss-making forever. Once you hit that bar, your job becomes buying up housing like it's a Monopoly board. As an individual you can either choose to win or lose this game. We're not going to change it, at least not within our lifetimes.

> Once you hit that bar, your job becomes buying up housing like it's a Monopoly board.

I agree with your comment, but I enjoy the irony of it even more: https://en.wikipedia.org/wiki/Lizzie_Magie#The_Landlord's_Ga...

TL;DR Monopoly was based on The Lanlord's Game--a board game demonstrating the issues with land monopolism.

> In 1906, she moved to Chicago. That year, she and fellow Georgists formed the Economic Game Co. to self-publish her original edition of The Landlord's Game.

Re: Housing is at the root of many of the rich world’s problems (2020)

#289

Post by 8note »

l33t2328 wrote: post #224
seiferteric wrote: post #218

Earlier quoted context omitted.

If you had to pay the tax you could probably just finance it anyway instead of paying it all at once so it would be just like having a new (small) mortgage.

That’s what every parent hopes to leave their kids with: an obligation

Aka, a house?

It's gonna be an obligation no matter what

Re: Housing is at the root of many of the rich world’s problems (2020)

#290

Post by defterGoose »

zhdc1 wrote: post #17
psi75 wrote: post #7

Housing is (along with healthcare in the US) a big part of why most people in the so-called "rich world" are in fact dismally poor, only one missed paycheck or turn of bad luck away from life becoming unlivable. For most of us poors, money is a tool we need to survive. For the people who have the bulk of it, it's a weapon. And we're the targets. They love blowing us up; it's what they do. They care more about making…

> Housing is (along with healthcare in the US) a big part of why most people in the so-called "rich world" are in fact dismally poor, only one missed paycheck or turn of bad luck away from life becoming unlivable. Not really. Let's set up a quick boundary condition. Since you mentioned most people, you're talking about the lower-middle and middle classes. Let's keep the discussion on them. The working poor have it ba…

| but it's not orders of magnitude higher.

It is about 2-3x higher, which is not an order of magnitude, but is less than an order of magnitude away from being an order of magnitude.

Not, in any way, comforting unless our outcomes are 2-3x better, which they are not.

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