Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

economist.com

Post reply on HN
Print view View original

801–810 of 817 posts

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

#801

Post by namlem »

edmcnulty101 wrote: post #768
namlem wrote: post #714

Earlier quoted context omitted.

Immigration is good for the economy.

What about Immigrants staying and benefiting their OWN countries economy? Things will never get better in their original countries if everyone want's to go to a few very small parts of the world. And things will eventually be undesirable in the places everyone is trying to immigrate to. Whatever happened with staying in one place and making it better?

This sounds like a bullshit post-hoc rationalization for xenophobia. There's no valid reason to deny entry to any and all immigrants who are willing to work and have clean criminal records. Which side of an imaginary line someone is born on shouldn't determine whether they are doomed to poverty and oppression.

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

#802

Post by mminer237 »

rory wrote: post #434
mminer237 wrote: post #192

Earlier quoted context omitted.

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're skipping over the (extremely important) part where you take out a mortgage on property. So you buy the $500k property with $125k in cash and a $375k mortgage (25-30% down is typical for investment mortgages). Depreciation *plus mortgage interest expense* leads you to (for tax purposes) more or less break even on this investment after 10 years and so you pay no tax. After those 10 years are up, you've now paid…

The deduction of business mortgage interest payments is still always less than the money you lose by having to pay interest. Paying cash will always make you more money than a mortgage unless you have something else to do with the cash.

That doesn't change my point that the only way you can pay no tax is to have less than a 3.7% ROI before mortgage principal payments.

Again, that's a bad investment. If they put the money in the stock market or a better real estate market and got a 7% return, that would be 60% higher, even after taxes.

Sure, you build equity in the properties, but you'll have to pay all those taxes you've been putting off if you ever try to use that equity. I guess the kids could sell it before they depreciate it, but I can't imagine who would intentionally waste the potential of their money so they don't have to pay the (low) capital gains tax. Again, you'd make more money paying taxes on any almost investment making over 4.3%.

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

#803

Post by lkbm »

jjav wrote: post #716
lkbm wrote: post #191

Earlier quoted context omitted.

> If you are free and able to vote but won't do it, it's hard for me to feel too much pity for your situation. What if I vote, but people with interests aligned with mine tend not to? What if those people not voting are acting as rationally as the people who vote frequently? Consider these two groups, who get the same number of votes, live under the government for the same amount of time, but rationally have differen…

> so maybe it's okay that Bob ends up more represented In this example, I'd say it is very legitimate that the Bob has over time more influence how local things are run, since he's a long-time local that has to live with it. All the others are transients that come and go.

Collectively, the others live with it for the same amount of time. Their incentives are lower to improve things locally, but the impact on them is the same.

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

#804

Post by wikitopian »

nerfhammer wrote: post #449
wikitopian wrote: post #425

Let's surround single family urban homes with high density apartment complexes and low income housing, and then act big mad when those people paying all the taxes and propping up the local public schools up and leave. All of these trendy YIMBY schemes are great. All they need is a proviso requiring all the targets of the schemes to stick around while their neighborhoods and schools go downhill.

the alternative is the system we're evolving to where the landless class will owe the landowning class most of their productivity, forever

Then we incentivize and encourage homestead ownership. YIMBY does the opposite of that, and is favored by landlords and tenants.

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

#805

Post by groby_b »

l33t2328 wrote: post #438
groby_b wrote: post #317

Earlier quoted context omitted.

I mean, we can solve that problem by a 100% inheritance tax so they don't leave an obligation. No? Then maybe let's skip arguing in sound bites. Personally, I think the answer here is a continued and ongoing land tax. Occupying land should come with an expectation you contribute to the common good, because you don't "own" land. It's a shared good, just like air and water, and you should pay for use. Primary residence…

You make an extremely compelling point. I was arguing in sound bites and your final paragraph is entirely reasonable.

I know reasoning skills are hard, but here, let me help you: OP posted a snarky comment. I proposed a policy. Feel free to bring arguments debating the policy.

Or, you know, keep posting oneliners.

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

#806

Post by coxmichael »

ThrustVectoring wrote: post #649
coxmichael wrote: post #564

Earlier quoted context omitted.

Again, there’s the idea that wages and businesses produce nothing. They don’t.

Yes, businesses produce actual value. The problem is in what you're diverting from , the ground rents extracted by artificial housing supply constraints. Whether you pay your landlord $X or $Y has zero direct effect on the total amount of real goods and services produced and consumed by the economy as a whole, it's purely redistributive. So if you reduce the total amount of rents paid to landlords, you are enriching…

Apologies here, my previous comment was a little flippant (I was at the pub…).

There's absolutely an argument here that rents, as a basic dead-weight cost of all people within a society, don't affect the real economy or productivity.

This could be true, but only if the access to finance is distributed across society relatively equally, with a positive effect on productivity. My understanding of, at least in the UK, is that it's not.

The relationship between financial capital and other forms is lossy at the moment — the purpose of financial capital is the creation of new goods and services, and we've spent 40-odd years making sure it goes largely into something that already exists (housing).

In that process, funding for new stuff, for non-rent economic activity, hasn't been properly funded.

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

#807

Post by edmcnulty101 »

namlem wrote: post #801
edmcnulty101 wrote: post #768

Earlier quoted context omitted.

What about Immigrants staying and benefiting their OWN countries economy? Things will never get better in their original countries if everyone want's to go to a few very small parts of the world. And things will eventually be undesirable in the places everyone is trying to immigrate to. Whatever happened with staying in one place and making it better?

This sounds like a bullshit post-hoc rationalization for xenophobia. There's no valid reason to deny entry to any and all immigrants who are willing to work and have clean criminal records. Which side of an imaginary line someone is born on shouldn't determine whether they are doomed to poverty and oppression.

> Which side of an imaginary line someone is born on shouldn't determine whether they are doomed to poverty and oppression.

Getting rid of the line turns both sides into places of poverty and oppression.

Make the bad side of the line better.

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

#808

Post by spiralx »

djbebs wrote: post #722
kelnos wrote: post #662

Earlier quoted context omitted.

This isn't hard: whatever a local assessor determines it to be, something they already have a lot of experience doing.

So this is basically a "your tax is whatever I deem it to be"?

Well yes but that's also the case with property taxes. A reasonable figure based on current market values seems simpler to calculate for unimproved land than it does for property tax, which includes the value of the unimproved land as well as everything else built or changed. And because it's the value of the _unimproved_ land it's based on, the value would be relatively stable over time as well as not varying much between one area and similar areas nearby, whereas property taxes are based on values that can change dramatically over time from one place to the next, which can lead to mis-valuations and general stress from constant changes.

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

#809

Post by robertlagrant »

toss1 wrote: post #800
robertlagrant wrote: post #797

Earlier quoted context omitted.

> Please point to the "boon". Sure. I said: > It's a boon to anyone whose job was created by it as well You then say: > If you mean people got to keep their jobs = boon No, I said the job in the first place is funded by investment. I couldn't have made it clearer. If investors don't invest in your startup/scaleup then there is no job in the first place. Nothing about being grateful for keeping your job. > The problem…

>> You will mislead casual readers by doing so. Your entire post is misleading. It contains the ASSUMPTION that the favorable capital tax rate (vs labor tax rate) is NECESSARY for the investment to happen. This is obviously not the case. People with capital will want to deploy it so that it grows, as long as the tax rate on the profits is What we do not have is the curve - how high can the tax rate be set relative to…

> The ACTUAL result was the opposite. Ratios of executive vs worker pay only increased from ~70x to over 300x, and the share of the total GDP going to labor declined to the lowest point ever.

You're assuming a cause effect relationship. The far more likely causes of this are automation (allowing more work done by machines than people) and globalisation (allowing reach of larger markets).

That's the mechanisms. As for the philosophy: I don't buy the idea that a CEO getting richer hurts me. What's important is that my standard of living is better than my parents', and my children's will be better still. If someone wants to risk it all for a big win then good for them. They will probably fail, and lose years off their life, but occasionally they will succeed. Only pointing at the people whose risk-taking paid off and saying "See!" is not a good way to understand (or communicate) the full picture of what's going on when people invest or run their own company.

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

#810

Post by robertlagrant »

toss1 wrote: post #634
robertlagrant wrote: post #558

Earlier quoted context omitted.

It's a boon to anyone whose job was created by it as well, and whose life was made cheaper by capital investments in automation and/or scale.

Yes, the question is how much of a boon it needs to be. The fact of the matter is that people with capital want to invest and grow that capital. It is absolutely false that if that activity is taxed, it will disappear. Just as obviously, if all capital gains are taxed at 100%, it will disappear. The question is the balance - how much to tax it so that the wealthy don't merely get wealthier at everyone elses' expense.…

If you get all of that just right you may even extract enough money to pay for all the many governmental systems required to administrate it. Sadly none of that will have done anything as useful as an investment in a company that makes people's lives cheaper or better.
Post reply on HN