First I would like to provide some context for my question. I live in a suburb in a “flyover state” and also see wealth inequality as the problem to solve for. For more information on why I feel this way, see just about any video by Gary Stevenson: https://youtube.com/playlist?list=PLXuOBKrmFYbKytq9mkcd62sJPb6w12vpU.
I think it is safe to assume that in the next 4 years, wealth inequality will not be addressed even verbally at the national level. I suspect most states will not attempt to address this issue either. I think suburban city councils are absolutely an option for near term changes and could even be a perfect place to start. I think the odds of a major company or billionaire showing up to protest any local changes in a smaller town are relatively small.
I propose that we as a society should be able to attend a city council meeting and suggest legislation similar to the following:
Any single family home owned by either a company or an individual who does not live in the same state should have a large property tax applied to it.
My thinking is that no company should ever own a single family home (if you’re a builder making a new home give them a window of like 1 year to sell it or something similar). If there are companies owning homes, they would be incentivized to sell the property. Large numbers of properties being dumped by businesses would lower housing costs locally. This would in turn lead to more locals having money to spend (hopefully locally, but you never know). I think the locality of their spending should probably be emphasized in a sales pitch to a city council. Businesses who refuse to sell will be paying large local taxes that the city could spend on the countless things that a city needs to operate but is currently underfunded. I guarantee you the local government has projects they want to do but can’t afford. Here is their solution. I do think that if businesses are refusing to sell, that means they are charging tenants the increased tax, and the property tax was set too low. The tax has to be high enough that businesses sell the property or else I don’t think this works.
The number of businesses or individuals affected by this new tax is probably really low for any given city. If you imagine a small town there are only going to be so many companies owning single property homes (less than 10?) same story with wealthy out of state home owners (less than 20?) The total number of homes in the area is going to be much larger though so there should be a sizeable and noticable impact. I use out of state as the qualifier for individuals as it is pretty easy to ask for a local driver’s license as proof you live in the state, and to my knowledge states don’t let you carry IDs from multiple states. You only live in 1, you only have 1 ID, and you always have it with you so it should be easy enough to enforce.
People/businesses who don’t comply could have their property foreclosed on, then auctioned off to a state resident with proceeds again going to the city. I think the pushback would be that this is anti business. To which I would agree and say yes, businesses have no business owning single family homes, that is what citizens do. These citizens will have more money to spend locally which will attract more businesses and pay more local taxes. Money from local citizens going to major businesses who pass earnings on to investors is how local money gets exported out of the community and is not business we want owning our homes. It also diminishes the ability of locals to spend at local businesses.
My hopes is that Lemmy can help poke holes in this plan and provide solutions to the holes. Perhaps you see a better way to present this idea. Perhaps better ideas are proposed. Perhaps you see a smarter solution. Something needs to change, and I want the best odds of successfully bringing about change for the better. I want my kids to be able to buy a house some day. At this rate, that won’t happen. We need a solution, and maybe this is a start.
I think severe rent control would go a long way to solving the problem here in the UK.
Make it unprofitable to exploit the fundamental need for shelter. It would allow people to build up savings and have more disposable income, so they can compete properly in the market.
It would lift up the people at the bottom at the same time as curtailing those at the top = less inequality.
It’s not like millionaires can take all the houses with them if decide to leave the country.
Rent control tends to decrease the supply of housing by making it unprofitable to build more. It turns into a lottery, massively helping the few who can find a good place but massively hurting those who can’t.
I’ve seen this argument made by right wing economic ‘think tanks’ like the IEA and I’m not convinced, either by the reasoning or the quality of the data that’s supposed to support it. If being able to charge extortionate rent was the only way to make a profit from building houses then house building would have correlated negatively with affordable rents, which AFAIK is the opposite to the historic reality, at least here in the UK. As long as there are people who need a house to live in there will be always be demand for housing; it’s just a question of who gets to own the houses. Is it people who are living in them or people who are charging others to live in them? Right now there is a rich minority who are able to buy more and more houses because a poor majority are paying them such high rent and are thus prevented from ever saving enough for a deposit and competing in the property market. That’s why inequality is compounding.
Mostly remove tax cuts of the last several decades. They mostly cut taxes on the highest owners: let’s not. Imagine if wealthy people had to pay at least the same tax rates as everyone else!
Obviously limit inheritence and gifts to family. Nobody should be inheriting a billion dollars.
Income tax, capital gains tax, wealth tax, VAT on purchases over the median value increasing with price, property tax, inheritance tax, corporate taxes, etc
Firstly, I think your focus on housing is too narrow to solve wealth inequality.
Second, if landlords are handed a $100 monthly tax bill they tend to increase their tenants rent by $100 a month.
Third, you ignore the effects this will have on new home construction, which will be SEVERE.
Fourth, and this is a minor thing, I think when discussing housing policy we should always be trying to disincentivize suburban sprawl snd incentivize density. Having more people own single family homes is not necessarily a great thing, maybe better than having corporations rent them out but not as good as having more dense walkable transit filled urban cores. I’d even go so far as to say that while having people own condos is best, having people rent apartments is still better (on a large scale) than having people own single family houses.
By adjusting the social security threshold.
My personal thoughts are:
- Close carried interest loop holes
- Tax loans against unrealized gains on securities and physical property (excluding ones primary residence). You should not be able to take a billion dollar loan out to avoid capital gains taxes. I’m fine that this raises the basis for when the asset is sold. Well, someone do the math if there’s a loophole this creates? But hopefully my intent is clear.
- Social security and Medicare tax applies to all income. Shares granted as part of compensation should also have social taxes payable on grant.
- Increase the tax brackets above the current max of 37% for income above $609k… Every 250kish above should increase by 2% until you reach 50% (about 2.5m)
That money should then be used for:
- Increasing social security payouts
- Expanding medicare access
- Increasing the limits for the tax brackets on the progressive scale for incomes below 250k
To boost the bottom:
- Stock buybacks are illegal except for the purposes of distributing stock to employees. This counts for executives but cannot exceed some multiple of their cash salary
- 20% of money flagged as dividend payments to shareholders should be distributed to employees as profit sharing into their retirement account. There needs to be rules around the max differential between the highest and lowest disbursement.
I’m with you on all of this, but there’s no need to stop at 50% with a marginal tax. Keep going up until 99%, and then start adding .9s.
Social security and Medicare tax applies to all income.
This alone would be HUGE. It’s ridiculous we have a cap above which income isn’t taxed.
Tax the practices, not the existence.
Wealth Inequality on it’s own, is a problem almost nobody but the middle, lower-middle and the poor will address. It has to start here. Nobody should amass the amount of money we see individuals possess. If someone understands how far a single million could stretch for someone (provided they’re responsible that is), they would understand how pointless it’d be for someone to have even 10 million or 100 million or even a single billion.
And if anyone gave two shits about the seven deadly sins, the idea of accumulating more money should be a more frowned-upon thing. But instead, gaining more money equals to you being more powerful than most. That’s not how things should ever be. There should be a cap of how much money you should realistically earn up to. We’ve already seen the damage and continuing to see the damage afflicted, by incredibly rich people. They’re too dangerous to be wielding that much.
That’s cool and all but you’re addressing the WHY and not the HOW.
A progressive wealth tax where at some amount of money your are taxed down to that amount. Billionaires shouldn’t exist.
Practically that is impossible unless the rest of the world agrees, otherwise they will just hide their wealth overseas.
This is why assets should be taxed in some way - like how government gets a cut on every share transaction or like by government owning ports leasing operations
I’d like to preface my comment by stating that I’m not American and have never lived in the US, so my knowledge of how stuff works (IDs and whatnot) is null.
That being said, surely there’s records for these things. I really don’t think that there needs to be a check for IDs at any point, on a personal level, because this information should be available either in the deed, and everyone’s IDs are in the electronic systems at the state and federal level. So it’s not that what you said about IDs is wrong, more so likely unnecessary, in a practical sense.
However, I do think there are a few problematic things here.
- Your definition of “live in the state,” which you didn’t provide.
Say I work in NYC, NY State, but I’m originally from Vermont. I own a home in NYC and a home in Vermont. Where do I live? Mostly in NY, but I spend my summers in Vermont. What if my husband is from Maine, so I also own a home in Maine that we go to every couple of years to meet his family? What if my son lives in South Carolina, so I own a home there to go visit him? What if I own the home, never go there, but my son does live there?
These questions — and other questions in a similar vein that I couldn’t even think of — need to have a clear answer, if you want this sort of legislation to be applicable.
- Living in the state and owning several homes as an individual.
If I live and work in Vermont, but own a whole neighborhood, what then? I’m a citizen of the state, I live in the state, I do it as an individual and not through a company. I don’t see anything in what you wrote that indicates this would be a problem, but I think it is a problem and should be encompassed by legislation of the sort you suggest.
These two points, I believe, highlight the fact that living in a state is a really bad indicator of whether home ownership is beneficial. I think the primary indicators should be legal status — company vs individual — and maybe something like the percentage of available homes. As in, a certain percentage of available homes is allowed to be owned by companies or individuals for non-living purposes. That could work as a sort of cap on how the market can be manipulated by speculative real-estate investment.
- Not everyone’s a buyer.
Not everyone wants or needs to buy a home. You want your children to be able to buy a home, great, but what if they simply don’t want to? What if they want to rent? If they move to a different state but don’t think of it as a long-term or life-long place for them, they might not want to buy. They need to be able to rent from somewhere, then. Of course, if more people can buy, more people will own, and more people will be open to renting it out. However, this is a difficult proposition, I’d imagine. Renting isn’t a bad thing, it’s about how controlled it is, how regulated it is, and who ultimately benefits from the system.
If you’re gonna force large rental companies to sell their properties, you need to have a clear plan as to how the tenants can find other places to rent from. Again, there are a lot of people that rent not because they can’t afford to buy, but because they find that to be the best option for their particular situation. I think some kind of state or local buyback program could be good, and would allow the state to offer low-cost housing for many people, effectively flipping the rampant market speculation into a social service. Another thing could be to cap rent, I believe rent-control is a measure that already exists in some places. For example, if companies don’t want to pay the extra taxes, they would need to fulfill a certain quota of rent-controlled tenants. Something like that.
I’m just spitballing here, but I hope my input could be of some use to you!
First, thank you for the thoughtful and detailed comment. It was really well thought out and really hit on some excellent points. This is the feedback I was hoping for. I’m a software developer by profession, not someone who writes legislation, so the whole proposition is basically spitballing until something usable comes out.
You make some really good points and I agree with them for the most part. I’m going to sit and think on this some and get back to you after I’ve had some time to digest it more.
nothing will work, The wealthy will just raise prices of their products and services to cover any expenses, tax and etc. it is the consumers that will pay indirectly.
Unless there is a cap on how much wealth, property, income or salary anyone can have. People will probably find loopholes.
Hold a silent reverse auction. Whichever billionaires agree to the highest tax rate don’t get eaten. The new billionaire tax rate is whatever the uneaten billionaires agreed to.
Edit: Also, roll 4d10+50 and add it as a secret bid. If it happens to be the highest bid, eat all of the billionaires. This roll is the “public option” to prevent the billionaires from colluding to cheat the system.
Another discussion point that always comes up is “Jeff Bezos can’t pay that tax rate, it’s all tied up in shares of Amazon. He would have to sell huge portions of Amazon to keep up with the taxes.”
And yes. That is the intent.
But I’m not upset if folks would rather just eat him than deal with the logistics of it.
The one related semi reasonable complaint I’ve heard is if Bezos has say $20 billion in wealth, mostly stocks and other non-monetary assets, and gets assessed a wealth tax based on it, and then Amazon stock craters and he’s only worth $10 billion, he still has to pay tax as if his wealth is still $20 billion. Assessing taxes on assets is just tricky that way.
To which I counter: we already have a similar solution to a similar problem. Payroll tax withholding (or quarterly estimated taxes for the self-employed). Require Bezos to make deposits throughout the year based on his projected wealth, and then if his wealth drops and he over-contributed, he gets a refund.
See how they did it in the 1950s. There’s your blueprint.
But also with better building regulations. Some of those houses were flimsy, asbestos filled pieces of crap.
