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Not in the long term. Also land is super low risk. Speculation in land is very dangerous as it creates world-wide crashes.
A good deal of economic rents are disguised as equity. Sears was a finance, real estate and insurance company since the 70s. Walmart is a REIT. GE capital is a finance company. GM is GMAC and da guberment bailout co.
McDonalds is half REIT. Then of course we have all the patent trolling. JC Penny would have been dead meat long ago were it not for financial injections with da guberment backed real estate.
Certainly a lot of real estate helps to finance business operations. It certainly affords a tactical advantage to have a business. However many a business is benefiting from a rent. Mediocre pizza on a busy corner can compete with good pizza in an industrial park. Yet it all can look like pure equity and pure competition to the uninitiated. The good pizza will not drive the mediocre so easily out of business so long as the the corner is allowed to be a strategic asset for bad pizza. Not taxing the labor and capital and shifting it onto the good spot will make the good pizza's job much easier on getting the prime spot, not to mention increasing tax revenues since the spot is more productive.
However more often it allows the those with the strategic wealth storing capacity to simply buy up the technology. Microsoft has long just bought up their competition. So have pharmaceutical companies etc. Certainly wealth will be stored somewhere, but why do we allow real estate and other economic rents to rise in value while raising other taxes? Why create such attractive alternatives to plant money like real estate and treasury bonds? Why did Xerox create the PARC facility to drive forward technology, employ labor and create capital? Why bother if you can just sink it into Treasuries and real estate? They are effectively nothing other than debt instruments to the rest of the society.
The only potential problem is to the extent that no long term gain may be a disincentive to some extent. Psychologically one owning a guaranteed set for life defensive asset might make for a better slice of pizza. However I see this to little effect when this is passed on from generation to generation. Its just back to land owning royalty.
Wait, land is super low risk and gives the best gains...but doing so is very dangerous and causes world wide crashes...
Both of those statements being true doesn't make any sense. Without risk you can't have danger or worldwide crashes.
They don't make any sense if you have no sense of secular and cyclical markets. Real estate is a long term, low risk asset. Its almost always in a secular bull unless the society collapses. In the short term it is subject to volatility in the credit markets.
For example if interest rates are jacked up to 20% over 10 yeas, a housing bear market is a cinch. Then lowering it back to 5% over 10 years will cause a cyclical bull. At the end, real estate will be higher. Why? Because real estate is a permanent secular bull market.
Property taxes hurt the poor the most, and contribute to environmental destruction to get the money to pay them. The best way to fund government is by increasing the money supply to match economic growth. If government gets too big it kills innovation and the economy shrinks. Deficits should be outlawed and if they need more money they have to let the economy grow through innovation.
So taxing the poor, who often rent, with income taxes helps the poor?
Though I have no problem with a progressive real estate value exemption. Small land owners are good and often improve the property that is theirs. I like land ownership, but not defined as more land, just more land owners. There never can be more land ownership. There can only be more land owners or fewer land owners owning more land.
The Bureau of Reclamation had an acreage limit per person from water project and irrigation farms. That was the progressive past of government infrastructure, small land proprietors, and competition. So I would certainly prefer more of that than just taxing away rents.
Now there is no effective limit and the large , monopolistic estate dominates the West.
They do exactly the opposite, when only the land is taxed via its value and building is not taken into account. Look at this. This will explain it for you....
They do exactly the opposite, when only the land is taxed via its value and building is not taken into account. Look at this. This will explain it for you....
I'm not watching 36 minutes of video. If you have a point then make it.
The video will make you look at matters very differently from now on. Well worth watching. A must watch.
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