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Million Dollar Shack


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2016 Sep 1, 7:47pm   23,219 views  117 comments

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1   Dan8267   2016 Sep 1, 9:09pm  

The solution to real estate bubbles is simple.

1. 100% capital gains tax on all real estate. You buy a house for $100,000 and sell it for a million, then you have a $900,000 tax that is collected from the sales price.

2. 100% tax on all rental income. If it's impossible to rent seek from real estate, all landlords will sell a liable that cannot generate revenue and there will be plenty of houses for people, and thus housing prices will be based on actual demand rather than artificial demand created by rent seeking.

3. Tax land, not buildings. And tax land proportional to the square of the total land owned by each individual.

Do this and you'll have lots of happy home owners building stable communities and getting the most house for their money. Of course, there would be no landlords, but most landlords are going to be foreigners sucking the blood out of the American economy. And rent seekers contribute nothing to the national or worldwide GDP.

Ultimately the housing bubbles and the wasted time and economic productivity caused by them is a failure of capitalism and the result of letting positive feedbacks concentrate wealth in the hands of a few. It's an inherently unsustainable system that eventually must collapse either through great economic devastation or revolt. The mere existence of bubbles, particularly for necessities, strangles economic productivity by siphoning excessive amounts of wealth from the productive and giving it to the non-productive. This breaks the virtuous cycle of production and consumption.

The one problem with the video in the original post is that it's not the tech companies' fault. It's the tax laws that encourage owning assets rather than producing goods and services. No economy based on rent seeking is sustainable. Having two economies, one of rent seekers and one of workers, creates tension between two incompatible classes that ultimately leads to war, as either economic warfare or civil unrest.

Fix the tax laws and this will fix the problem.

2   Patrick   2016 Sep 1, 9:31pm  

Ironman says

the money earned by selling assets is used to buy those goods and services

Money earned by actually doing something productive is far better for the economy than simply sucking rent out of people by doing nothing but owning land.

So I agree with Dan. The gain from selling land at least is purely stolen from other people. Owning land is not a productive activity in any respect.

Building and/or maintaining a house is productive, so that activity should not be taxed.

3   Rew   2016 Sep 1, 10:00pm  

rando says

Money earned by actually doing something productive is far better for the economy ...

No picture of himself here, so he probably won't see it but ... Logan, if you are reading. ;)

4   Ceffer   2016 Sep 1, 11:04pm  

Another Big One earthquake will resolve all these thorny real estate issues.

5   Dan8267   2016 Sep 1, 11:05pm  

Greed and stupidity are no basis for a productive economy. Zero sum games do not create wealth. They merely transfer it from wealth creators to parasites and in the process such games destroy some of that wealth as mandated by the Second Law of Thermodynamics.

When you live in a capitalistic economy, you have to play by its rules, but that does not mean that you should not advocate a better system. People like CIC are selfish and short-sighted. If he were in charge, we'd still be living in the Dark Ages.

6   Shaman   2016 Sep 2, 3:52am  

Or cannibal anarchy. We can't forget cannibal anarchy!

7   bob2356   2016 Sep 2, 6:14am  

Dan8267 says

2. 100% tax on all rental income. If it's impossible to rent seek from real estate, all landlords will sell a liable that cannot generate revenue and there will be plenty of houses for people, and thus housing prices will be based on actual demand rather than artificial demand created by rent seeking.

That has to be the dumbest thing I've ever seen written. So either you have enough income to buy a house or you live in a cardboard box since there will be zero rental units. If you want to do a consulting job somewhere for 3 months you need to buy a house or live in your car? How does that work? Or are you saying the allgovernment will provide the exact correct number of rental units need through careful central planning. After all governments have done such a great job at that around the world.

Just plain stupid.

8   Strategist   2016 Sep 2, 6:24am  

bob2356 says

Dan8267 says

2. 100% tax on all rental income. If it's impossible to rent seek from real estate, all landlords will sell a liable that cannot generate revenue and there will be plenty of houses for people, and thus housing prices will be based on actual demand rather than artificial demand created by rent seeking.

That has to be the dumbest thing I've ever seen written. So either you have enough income to buy a house or you live in a cardboard box since there will be zero rental units. If you want to do a consulting job somewhere for 3 months you need to buy a house or live in your car? How does that work? Or are you saying the allgovernment will provide the exact correct number of rental units need through careful central planning. After all governments have done such a great job at that around the world.

Just plain stupid.

Extremely stupid, even for Dan.

9   Dan8267   2016 Sep 2, 10:58am  

bob2356 says

That has to be the dumbest thing I've ever seen written. So either you have enough income to buy a house or you live in a cardboard box since there will be zero rental units.

It only sounds dumb to you because you are not intelligent enough to think of alternative ways of fulfilling rental needs or intelligent enough to ask questions about my proposal to fill in the blanks of your mind.

Under the system I envision, people rent apartments and townhouses from a non-profit GO that charges rent proportional to the land use, including share of common areas, of the rental. The rent is just enough to cover the upkeep of the property and payment of land taxes in proportional to the land use. So instead of paying $1000/month for a one-bedroom 700 sq. ft. apartment in Springfield, you would pay $100/month for the exact same apartment. That 90% savings is the result of removing profit taking from housing.

Saving all this money allows people to spend more on other things and to save up for a house, and those house would cost less than half of what they currently cost, and less than a quarter of what they cost in hot markets like Silicon Valley.

Furthermore, no tax dollars would have to be wasted on assisted housing because the non-profit GO rents are so small. Yet, this system is completely sustainable and wastes far less wealth than our current system.

I don't expect you to have the intelligence or imagination to come up with innovative solutions. However, you should be embarrassed for going into full blown attack mode before you even asked a single question about the idea. That shows a complete lack of thinking on your part. Anyone who even remotely thought about the proposal before having a knee-jerk reaction would have asked questions about it. You simply aren't putting the effort into understanding ideas before attacking them. That makes your opinion worthless regardless of what your opinion actually is. An opinion without thought behind it holds no value.

10   Dan8267   2016 Sep 2, 11:00am  

You can tell that an idea has merit when the only objections to it are baseless attacks by the three stooges. It's like when the KKK opposes a bill, it's probably a good bill.

11   junkmail   2016 Sep 2, 11:00am  

It is the classic conundrum. Is Real Property a homestead or is it collateral?
It's both and that's part of the problem.

I'd say the view of RE is too heavily weighted as collateral and the laws and taxes create an environment where property becomes more of an asset class and less of a dwelling.

Right now my home office is next to an 8 year permanent SFR construction zone. No one has lived in the house for more than 6 months. The house sits on the market (then who knows, I haven't researched it) for about a year. The sign comes down and they repaint the house, change the garden, update the pool. Then back on the market for another year. Another agent changes the sign, then back on the market. Gets bought and another flipper tries his luck for 4 months, then back on the market. This has been going on FOR 8 YEARS!

Look I don't live next door to a house, I live next door to a flippers wet dream.

12   Dan8267   2016 Sep 2, 11:16am  

junkmail says

I'd say the view of RE is too heavily weighted as collateral and the laws and taxes create an environment where property becomes more of an asset class and less of a dwelling.

No one has ever come up with a moral, an economic, or a practical reason why the possession of land itself should be a profit generator for the possessor at the expense of future users of the land. Land itself is inherently a public resource that nature, not man, provided to us. Land itself produces nothing. You can produce things on land such as food and products, and so it makes sense that you own those things, but land itself does not produce wealth so there is no rational justification for a system that allows land owners to profit at the expense of future land owners merely for possessing the land.

In fact, it is impossible to come up with any kind of objective economic justification for this, nonetheless a moral, practical, or philosophical justification. This is why no one even bothers to try to make such an argument. Instead, low-intelligence and greedy assholes like CIC, Strategist, and Bob try to invoke the religious dogma of capitalism that ownership is a godlike state of being. The only attacks they can muster are ad hominems against anyone proposing a new idea. Instead of making anything resembling a counter-argument against the idea, they simply call the idea and the proposer stupid and hope the audience is stupid enough to buy this. Their entire objection can be summed as "you are a poopyhead". This alone should demonstrate how weak the objection to the new idea is.

The fact is that everything that makes modern life comfortable and enjoyable has come from actual wealth production, specifically the advancement of technology and production created by innovators especially those in STEM fields. Rent seeking has never made life better, has never increased productivity, has never promoted growth. In fact, rent seeking drags down economic efficiency and growth while increasing social costs ultimately paid with your taxes and also discourages innovation as the parasites living off rent do nothing to benefit society.

Rent seeking is welfare imposed by private individuals rather than by government. Rent seekers are welfare queens with the power to largely set their own welfare income. It is utter hypocrisy for a person to oppose welfare yet advocate rent seeking of any kind. And like all welfare queens who do nothing to earn their income, their greatest fear is people getting tired of supporting these lazy ass parasites.

The three stooges demonstrate this fear acutely in this thread.

It is also utter hypocrisy to oppose a universal basic income while advocating rent seeking and objecting to systems that prevent rent seeking.

13   Ceffer   2016 Sep 2, 11:29am  

The vile, preening, pandering, bullshitting real estate agent on the make in the vid makes you want to strangle him with his own intestines. Such creatures only exist like maggots in cesspools of greed.

14   OneTwo   2016 Sep 2, 4:23pm  

Ceffer says

The vile, preening, pandering, bullshitting real estate agent in the vid makes you want to strangle him with his own intestines. Such creatures only exist like maggots in cesspools of greed.

I was especially thinking that when he was saying people needed to get themselves highly educated in order to have a chance... or luck out by being a real estate agent in a booming market and in a country that gives real estate agents a ridiculous percentage of the sales price by simply driving a RR and opening a front door. Not to mention, there's something very wrong when the person driving the RR is a real estate agent.

15   Ceffer   2016 Sep 2, 6:17pm  

I especially liked the way he tries to flatter the intelligence of his sucker clients by saying that being a buyer means your IQ is 30 or 40 points higher than the seller. He bullseyes the stromping pretentiousness of the peninsula ASSHOLES.

The sellers aren't the smart ones by selling into a grossly inflated market?

16   Ironworker   2016 Sep 2, 8:04pm  

This time it's different!!!

17   BayArea   2016 Sep 3, 7:59am  

that realtor makes my skin crawl

18   Allah the devil   2016 Sep 3, 9:17am  

Dan8267 says

You can tell that an idea has merit when the only objections to it are baseless attacks by the three stooges.

Your idea has no merit. you dont have an understanding of basic economics. That idea of yours is not practical.

19   Dan8267   2016 Sep 3, 12:31pm  

Allah the devil says

Dan8267 says

You can tell that an idea has merit when the only objections to it are baseless attacks by the three stooges.

Your idea has no merit. you dont have an understanding of basic economics. That idea of yours is not practical.

Congratulations, you made it to the second level of the pyrmaid. Call me when you get up to level five.

www.youtube.com/embed/dtZuhMJiaxg

20   mell   2016 Sep 3, 1:29pm  

This time is different! ;)

21   MMR   2016 Sep 3, 1:39pm  

Ironman says

If people didn't make money on assets (think your 401K),

Agreed, if you're going to have 100% cap gains tax on real estate, regardless of if its a primary residence or not, why not tax all capital gains?

Somehow, I doubt he supports that despite his ability to buy a home in a place like boca assuming he is an engineer/contractor earning 140k....

22   MMR   2016 Sep 3, 1:42pm  

Dan8267 says

you made it to the second level of the pyrmaid. Call me when you get up to level five.

I'd say he's at level 4 though

23   MMR   2016 Sep 3, 1:45pm  

Ceffer says

The sellers aren't the smart ones by selling into a grossly inflated market?

They are only smart if they can afford to trade up, which is unlikely, unless they are moving somewhere else where they can trade up to a better home

24   Ceffer   2016 Sep 3, 1:51pm  

You mean, like, to the horrors of the East Bay suburbs?

25   Blurtman   2016 Sep 3, 2:13pm  

Perhaps folks should move to where they can afford to buy.

26   Dan8267   2016 Sep 3, 2:43pm  

MMR says

I'd say he's at level 4 though

He would be if his response wasn't all about me.

27   Dan8267   2016 Sep 3, 2:45pm  

MMR says

Agreed, if you're going to have 100% cap gains tax on real estate, regardless of if its a primary residence or not, why not tax all capital gains?

Land is a fixed, public resource. Businesses are not.

28   turtledove   2016 Sep 3, 3:01pm  

I don't understand why we allow non-nationals to purchase without paying seriously stiff premiums. The "tax" could go to the community... Or fund healthcare... They should be further penalized for non-owner occupied, then further penalized for leaving a property idle. What's that all about? "The house is appreciating so much, so fast, that they'd rather not bother with tenants, even at over $4k/month..." or something like that. "10-20% of international investor purchased homes are UNoccupied." (summary). I just don't understand why that is being allowed. It's clearly causing harm.

Very interesting. Thx for posting. I was so bored, I needed something to snap me out of it. Seriously, so bored we were doing celebslike.me to find our celebrity look alikes. Yes, I'm that lame. Mine are Lori Loughlin (62%) when I'm not smiling and Charisma Carpenter (77%) when I am smiling. I really needed something to kick my brain back into gear before I started loading pics of the dogs to see if they had celebrity look alikes. This was a really good video. Even my daughter enjoyed it.

29   Ceffer   2016 Sep 3, 3:07pm  

You're a Patnet celebrity, Turtle, isn't that enough for you?

30   turtledove   2016 Sep 3, 3:15pm  

Ceffer says

You're a Patnet celebrity, Turtle, isn't that enough for you?

We need a game area. No serious talk allowed. Maybe a poker corner... Or speed solitaire... Timed scrabble.... Or we could just make up our own games... like topical treasure hunts... and we could have a leaderboard. It would be fun on those days when you just don't want to do or talk about anything serious.

31   Allah the devil   2016 Sep 3, 3:16pm  

Dan8267 says

MMR says

I'd say he's at level 4 though

He would be if his response wasn't all about me.

You are only as good as your arguments. Just watch for the next myth you come up with.

Dan8267 says

Land is a fixed, public resource. Businesses are not.

I told you. :) A GM factory is a business and it's fixed.

32   Dan8267   2016 Sep 3, 4:22pm  

Still bored.

33   Dan8267   2016 Sep 3, 4:22pm  

turtledove says

I don't understand why we allow non-nationals to purchase without paying seriously stiff premiums.

Capitalism and the tax structure. The people who profit from high real estate prices, realtors, bankers, tax authorities want real estate prices to stay high and they have political power. Municipalities want the artificial demand from foreigners because it drives up taxes without costing services.

The tax plan I outlined would eliminate this perverse incentive because the total tax revenue would be determined by the total spending, not by real estate prices.

34   MMR   2016 Sep 3, 4:23pm  

DieBankOfAmericaPhukkingDie says

AMERICA! was founded on the timeless principals of FUCK! YOU! I got my house in 1974,

You mean California after prop 13

35   turtledove   2016 Sep 3, 4:37pm  

Dan8267 says

Still bored.

In my case, it appears to be combined with slothful indifference.

Good to see you survived the hurricane and you even have electricity, based on the fact that you are online. I was thinking about you. Glad you're okay.

36   anonymous   2016 Sep 3, 6:52pm  

turtledove says

I don't understand why we allow non-nationals to purchase without paying seriously stiff premiums. The "tax" could go to the community... Or fund healthcare... They should be further penalized for non-owner occupied, then further penalized for leaving a property idle. What's that all about? "The house is appreciating so much, so fast, that they'd rather not bother with tenants, even at over $4k/month..." or something like that. "10-20% of international investor purchased homes are UNoccupied." (summary). I just don't understand why that is being allowed. It's clearly causing harm.

You're so right. I actually also agree with creating incentives against landlording single family homes. Should we make water private too so that rich people can buy up all the water rights and then rent it out to everyone else at a premium? The supply of housing should be mostly for primary owners only. Neighborhoods would be less likely to go to shit.

37   Strategist   2016 Sep 3, 7:59pm  

just any guy says

You're so right. I actually also agree with creating incentives against landlording single family homes. Should we make water private too so that rich people can buy up all the water rights and then rent it out to everyone else at a premium? The supply of housing should be mostly for primary owners only. Neighborhoods would be less likely to go to shit.

So renters don't deserve anything better than cramped apartments? Whatever happened to free choice?

38   anonymous   2016 Sep 4, 8:24am  

Strategist says

So renters don't deserve anything better than cramped apartments? Whatever happened to free choice?

So renters don't deserve to buy a house they can afford? Whatever happened to free choice?

39   missing   2016 Sep 4, 9:27am  

So renters don't deserve the opportunity to be subsidized by dumb landlords?

40   Strategist   2016 Sep 4, 10:22am  

just any guy says

Strategist says

So renters don't deserve anything better than cramped apartments? Whatever happened to free choice?

So renters don't deserve to buy a house they can afford? Whatever happened to free choice?

They can do that now. No one is stopping renters from buying a house they can afford. They have a choice.

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