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The OP doesnt even know that people can sell and asset, and still not recognize gains from it, simply by locking away the profits in escrow and rebuying something else withing a certain period of time..
You don't seem to understand the point of the thread and velocity. I have posted some articles for you to read if you are interested. "Rebuying", I am assuming you mean buying something else would be the whole point. That is what you need to have velocity...Continual buying. You are also stuck in the tax system paradigm that we have now. Obviously what I am advocating would be a change in the tax laws to encourage velocity. Locking away profits would be the antitheses of what I am suggesting.
Please read this article. If you have another answer to the problem that we are in, I would like to know what you come up with.
In the short term this is true, but eventually it will have to be realized. It would certainly would be better to count the net increase or decrease on a yearly basis and tax on that so there would not be such a lag.
The unintended consequences of that idea are massive. Assume people are forced to book and tax "profit" annually (the appraisal business would love this) what if the only asset they own is the asset in question, the about of force sales would be incredible, driving down values and tax revenue.
You can't force utopia.
Quote:
Originally Posted by pghquest
You clearly need to learn about things like 1031 tax exchanges before you go around touting suggestions like this again.. Its quite embarassing..
Quote:
Originally Posted by pghquest
The OP doesnt even know that people can sell and asset, and still not recognize gains from it, simply by locking away the profits in escrow and rebuying something else withing a certain period of time..
I am sure in his plan 1031 exchanges would be baned.
You don't seem to understand the point of the thread and velocity. I have posted some articles for you to read if you are interested. "Rebuying", I am assuming you mean buying something else would be the whole point. That is what you need to have velocity...Continual buying. You are also stuck in the tax system paradigm that we have now. Obviously what I am advocating would be a change in the tax laws to encourage velocity. Locking away profits would be the antitheses of what I am suggesting.
Please read this article. If you have another answer to the problem that we are in, I would like to know what you come up with.
Selling raw land in CA and buying raw land in AZ does nothing to help the economy. Not all velocity is positive, some are neutral.
You really need to read up on consumer spending by age, we can't force old people to spend like 45 year olds, no matter what schemes you can come up with.
The unintended consequences of that idea are massive. Assume people are forced to book and tax "profit" annually (the appraisal business would love this) what if the only asset they own is the asset in question, the about of force sales would be incredible, driving down values and tax revenue.
You can't force utopia.
I am sure in his plan 1031 exchanges would be baned.
This is the way property tax is handled now. And yes, any device or law that would allow billions to be put away for long periods of time would have to be made illegal.
Think of it as Property taxes. Property taxes encourages use of property. A person cannot afford to hold on to large holdings of property unless they do something with the property. This tax encourages usage of property to gain income and more importantly it decrease hoarding of property.
There are those like Ted Turner (largest landowner in the country) who try this, but he is losing money on the idea, although he is trying to offset the loss by raising buffalo on the land and then selling it through a new chain of resturaunts. This is at least creates velocity.
This is the way property tax is handled now. And yes, any device or law that would allow billions to be put away for long periods of time would have to be made illegal.
Think of it as Property taxes. Property taxes encourages use of property. A person cannot afford to hold on to large holdings of property unless they do something with the property. This tax encourages usage of property to gain income and more importantly it decrease hoarding of property.
There are those like Ted Turner (largest landowner in the country) who try this, but he is losing money on the idea, although he is trying to offset the loss by raising buffalo on the land and then selling it through a new chain of resturaunts. This is at least creates velocity.
Property tax is very small and it is higher on developed land (should be the opposite BTW). If you want to go that direction you need to look into the Georgist Single Tax theory.
You are trying to create activity that can only be created organically. You are ignoring how and when people spend and assuming all people consume the same.
Property tax is very small and it is higher on developed land (should be the opposite BTW). If you want to go that direction you need to look into the Georgist Single Tax theory.
You are trying to create activity that can only be created organically. You are ignoring how and when people spend and assuming all people consume the same.
Assume this. Jon inherits 10,000 acres of unimproved land. The state and local govt has no property taxes. Jon is a hermit and loves living out in the woods. He has no disincentive for keeping the land. The county where he lives has only 10,010 acres including Jon's land. The county can not grow because it has limited places to grow because of all of Jon's land.
County puts a tax on land $100 per acre per year. Jon can't afford this. He sells most of his land, which is then used to build houses businesses etc. You have growth, transactions etc. This is the benefit of the tax. Of course could decide to cut trees down and sell them, lease part of it out, or otherwise make use of it. Either way you are creating transactions.
This of course is an analogy because this is what is already occurring with property tax. The same thing could be used to free the money from the hoarders so that it can be used to provide growth.
Selling raw land in CA and buying raw land in AZ does nothing to help the economy. Not all velocity is positive, some are neutral.
You really need to read up on consumer spending by age, we can't force old people to spend like 45 year olds, no matter what schemes you can come up with.
The government already has forced old people to spend what they could not afford to when banks started only giving 1% returns or less.
They went into the stock market making it high, the big boys got out and the old people took it in the shorts.
Then they've had to spend principal because there is no interest because the low rates were buying young people homes they'd eventually get foreclosed out of.
Isn't life wonderful?
This is the way property tax is handled now. And yes, any device or law that would allow billions to be put away for long periods of time would have to be made illegal.
Think of it as Property taxes. Property taxes encourages use of property. A person cannot afford to hold on to large holdings of property unless they do something with the property. This tax encourages usage of property to gain income and more importantly it decrease hoarding of property.
There are those like Ted Turner (largest landowner in the country) who try this, but he is losing money on the idea, although he is trying to offset the loss by raising buffalo on the land and then selling it through a new chain of resturaunts. This is at least creates velocity.
Wow, really? Owning property is now illegal in your world? You're going to force by law someone to DO something? That will go down in flames, just as ObamaCare is. You can't punish non-action.
Speaking of Property Tax - they should be ended as well. As it is, someone that owns a home is NEVER free. They always have the threat of having their home taken away from them, even if they own that home free and clear.
Assume this. Jon inherits 10,000 acres of unimproved land. The state and local govt has no property taxes. Jon is a hermit and loves living out in the woods. He has no disincentive for keeping the land. The county where he lives has only 10,010 acres including Jon's land. The county can not grow because it has limited places to grow because of all of Jon's land.
County puts a tax on land $100 per acre per year. Jon can't afford this. He sells most of his land, which is then used to build houses businesses etc. You have growth, transactions etc. This is the benefit of the tax. Of course could decide to cut trees down and sell them, lease part of it out, or otherwise make use of it. Either way you are creating transactions.
This of course is an analogy because this is what is already occurring with property tax. The same thing could be used to free the money from the hoarders so that it can be used to provide growth.
The government could always move away from privately held land.
They do tax especially older folks onto the streets often. People who have their property paid off often bought when the wages were $4 an hour. How does a $4 an hour wage earner from 20 years ago keep up with the governments thirst for social programs and sucking taxes from everywhere? You give them 1000% in tax increases and then the government needs 3000% more. Nobody ever wants to restrain government spending (where the real cancer is).
That is why CA had prop 13. This is the disaster of tax you are talking about. Also don't forget many times the government steals half the property of the dead who's estate already paid when they were alive. Government taxes you to death, literally.
Assume this. Jon inherits 10,000 acres of unimproved land. The state and local govt has no property taxes. Jon is a hermit and loves living out in the woods. He has no disincentive for keeping the land. The county where he lives has only 10,010 acres including Jon's land. The county can not grow because it has limited places to grow because of all of Jon's land.
County puts a tax on land $100 per acre per year. Jon can't afford this. He sells most of his land, which is then used to build houses businesses etc. You have growth, transactions etc. This is the benefit of the tax. Of course could decide to cut trees down and sell them, lease part of it out, or otherwise make use of it. Either way you are creating transactions.
This of course is an analogy because this is what is already occurring with property tax. The same thing could be used to free the money from the hoarders so that it can be used to provide growth.
There it is, folks. The underlying motivation: OP is jealous of those that are "lucky" enough to inherit something of worth. It's all about being "fair".
FYI - this is America. We're free to own, buy and sell property.
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