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Comment by dbingham | Hacker News Reader

> Do we force people to sell pieces of their property to pay the taxes on that property?

You answered your own question, but to add more context the answer isn't "For many types of property" but for most people the answer is an emphatic yes. For the vast majority of people the only piece of property they own in this sense is their home, and if they cannot pay the property taxes on that, the state sells it on tax sale. So yes, absolutely, we already do this.

The fact that ownership of businesses is exempt from this is part of the inequitable structure of our laws that benefits the wealthy at the expense of everyone else. Because the primary property of the wealthy is currently exempt from property taxes (we only tax the gains, not the assets themselves), but the primary property of the middle class is taxed.

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I have an LLC. Taxing it (more) would be catastrophic. Why should we tax the assets and not the gains?

I actually don't like property tax on homes/land. I dont like the idea of the government forcing people out of their homes (usually the elderly). I prefer taxing based on income/gains because they actually have money coming in and largely removes the government seizure aspect.

Taxing unutilized assets is the key idea of Georgism. We don't do that in the US, rather we give tax incentives to farmers to underutilize their land.

But taxing resources, whether utilized or not, will increase consumption, right? That doesn't seem like a sustainable option.

It depends. In areas where home prices have risen or are relatively high, home improvement activities increase the home value and so that is generally reserved for sales preparation periods. Consumption is delayed until it is untaxed.

Otherwise, I am not sure how taxing land will increase consumption, unless you're saying people will make land productive in order to offset tax liability? In some cases maybe, but certainly not on low-density residential plots.

You're talking about Georgism and taxing unutilized assets. If you have trees on your land, those could be utilized for lumber and you would be taxed on them if if they were unutilized. The same for oil, minerals, even raw land with agricultural potential. The main premise of Georgism is tha the resources belong to everyone and that people should be charged rent for access/ownership of them, whether used or not. This provides incentive for the owner to consume the resource to pay the tax.

> So yes, absolutely, we already do this.

Just because something is already being done doesn't make it right. Kick someone out of their house which they bought with their hard earned work and money is immoral and abusive and abhorrent.

And means that even once one manages to buy a house, one is still just renting from the government, and property taxes can be quite high, equivalent to a mortgage in some cases (sleep tight knowing they'll only increase, to boot)

>The fact that ownership of businesses is exempt from this is part of the inequitable structure of our laws that benefits the wealthy at the expense of everyone else.

This will hurt the middle class who have 401ks or pensions. I get wanting to tax the rich, but this is absolutely going to hurt more than just the wealthy.

I think it will only hurt 401k's if they have over a billon in assets, or pull out $100M/annual. In which case... I think I'm still ok with it. I remember someone has a billon+ Roth IRA, and at some point that is just getting really lucky and then abusing the structure.

Income tax was originally only applied to the wealthy. Now look where we are. Even if they do pass the bill with those limits it is only a matter of time until they lower it more and more and it applies to everyone.

Yep, it's a strategy to divide opposition and get people used to the idea of it

401k already have a slew of different rules and exemptions and it would make sense to continue to exempt them from regular taxes.

Seeing how they are talking about unrealized gains, I wouldn't count on an exemption.

Well that's clearly not the intent of the bill and regardless:

> The tax proposal would apply to just about 700 taxpayers, Democrats say — people who earn more than $100 million per year or who have more than $1 billion in assets for three straight years.

If you have $1 billion in your 401k, you can probably afford the taxation.

Looks like you missed part of the article

>Most of the gains on tradeable assets like stocks would be taxed at the existing capital gains rate, which is currently 20% for individuals earning over $445,850.

That quote is putting the 20% rate in context, it's not saying that anyone earning over $445,850 would pay it. The legislation still only applies to the ultra-rich, but they'd be using the existing capital gains rate, which is currently 20% for individuals earning over $445,850.

> For the vast majority of people the only piece of property they own in this sense is their home

I agree with what you said, and just wanted to make a minor(ish) correction: if you exclude homes bought w/ a mortgage which is still ongoing, probably the "vast majority" part does not hold, anymore.

They're still considered to own their home, even when they have a mortgage on it. Though, I'm not sure how many people do own their home at all - so I probably should have said "For the vast majority of people who own any property at all in this sense, the only piece of property they own is their home". I think the majority probably own no property in the sense of assets.

One difference is that you benefit directly and personally from owning your home in that you live in it and don't pay rent. Owning equity in a business doesn't yield the same direct personal benefits.

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