Hacker News Reader

Comment by koolba | Hacker News Reader

> Most proposals allow deferment for retirees until sale of the property, though, so it's kinda a non-issue.

Ah more carve outs for boomers. I knew it had to be in there somewhere.

You realize that democratic government requires compromise, right? Scoff all you want, but this is the sort of measure which is required to get people to accept policies which directly cost them (but benefit everyone else).

I think deferment is reasonable. Especially if it makes the difference in getting real LVT over the line, politically.

My grandmother (greatest generation) built her house in the 50s and lives on a fixed income. Should she be forced to sell (assuming she couldn’t afford LVT) for an investment she took all the risk to develop?

We’re so addicted to spending that anything that leads to generational wealth is fair game for governments to loot?

Does she not already pay property tax on her home? And sales tax on her purchases?

Where did the value of your grandmother's "generational wealth" come from?

It came from renters and first time home owners putting money into the housing market.

Your grandma is doing the looting.

She (and my grandfather) invested in building in an undeveloped area with their own money. They earned it by working and paying for their house and land.

Now public spenders think she owes them what she spent her life building.

The only world in which grandma cannot afford her LVT is if the value of her land has grown so high that she can make a disproportionately large gain by selling the house. This is very unlikely. And if it is the case, it’s not like the government is stealing her house, they’re just saying she has to realize some of her enormous unrealized gains.

I think that it's less about being addicted to spending and more about people being able to meet their basic needs. With the gap between those with and without wealth growing and income falling behind cost of living, the only way to address people's desire to meet their basic needs is with plans like this.

A much better option would be to target the wealth inequality that is driving a lot of these problems (e.g. by ensuring basic needs like medical care, encouraging unionization, etc.). However, there isn't the political will to do that.

The responses here are all assuming your grandmothers taxes would go up. But bear in mind LVTs are intend to replace the existing property tax regime (at least in the US). If your grandmother lives in a quiet suburb or rural area, it's likely that her taxes would decrease under an LVT if the LVT was trying to extract roughly the same amount of overall money as a property taxes regime.

If she lives in the middle of a city, then yes her taxes may increase.

> My grandmother (greatest generation) built her house in the 50s

I'd love to build my own house, but it's practically impossible for my generation because of the policies those older generations have voted for.

> and lives on a fixed income. Should she be forced to sell (assuming she couldn’t afford LVT)

Yes. There aren't enough places for the rest of us to live, at least not anywhere where there's work, so those of us who are doing something productive (i.e. not lucky enough to be paid a "fixed income" out of other people's taxes) should get priority. If the older generation doesn't like it, they should make it legal to build more housing so that there's enough for everyone.

> for an investment she took all the risk to develop?

Part of the point of LVT is that it mitigates the risk. If the place where she built it becomes popular, she doesn't just get to trouser all the gains. But if the place where she built it becomes unpopular, her taxes drop.

A deferment should be allowed for anyone on one primary residence. Then it isn't a carve out just for boomers. Also, the deferment doesn't mean the taxes don't get paid- they just don't have to be paid until the person moves out or transfers the property (or dies, which triggers a transfer).

A deferment isn't necessary. Banks are happy to do that kind of financial transformation for you via a reverse mortgage.

(However, it might still be a vote winner. Voters aren't exactly the brightest.)

Reverse mortgages are generally only available in the US after you reach a certain age.

Interesting. Is that due to federal or state regulation? Or a choice by the banks?

I am not sure, it seems to be a combination. The FHA requires the homeowner to be 62 or older for an FHA reverse mortgage. I have never seen a private reverse mortgage advertised, but apparently they exist and from what I have read online, are offereed to those as young as 55- but apparently are marketed to those with fairly expensive homes.

Most people I know who are younger than Boomers plan to someday retire, and so they too will benefit when that time comes.

Reply on news.ycombinator.com