patrick.net

Strategist says

No one would buy property, and no one would build any property. We would end up in a permanent severe depression.

Let's put that theory to the test. I'll bet your damn wrong.

Everyone will still want to live in a house rather than an apartment. Everyone will rather pay less to own than more to rent. Everyone will still build useful structures to sell or to do business in. There is absolutely no reason to believe you are correct.

Dan8267 says

Let's put that theory to the test. I'll bet your damn wrong.

No thanks. We aren't stupid.

In other words, you're not man enough to have your ideas tested against the real world.

Dan8267 says

In other words, you're not man enough to have your ideas tested against the real world.

They are not my ideas. They are simply the laws of economics and common sense.

Strategist says

They are not my ideas. They are simply the laws of economics and common sense.

You are just making shit up. There is no law of economics that says taxing appreciation of land would destroy an economy. That's just plain silly. How can anyone respect any of your opinions when you pull shit like that out of your ass?

Dan8267 says

Strategist says

They are not my ideas. They are simply the laws of economics and common sense.

You are just making shit up. There is no law of economics that says taxing appreciation of land would destroy an economy. That's just plain silly. How can anyone respect any of your opinions when you pull shit like that out of your ass?

Allow me to remind you of what you really said:

The only solution to this problem is 100% capital gains tax on all real estate.

b...b...but it's the only solution!!
Strategist says

Dan8267 says

The only solution to this problem is 100% capital gains tax on all real estate

Strategist says

No one would buy property, and no one would build any property. We would end up in a permanent severe depression.

Dan said...."Everyone will still build useful structures to sellor do business in"

While I think the volume of transactions would be way down, but if we could live with that, I guess this would work. Perhaps I am missing something but the one flaw I may see to your theory is if they cannot earn money from selling it, why would they build it?

Dan8267 says

There is no law of economics that says taxing appreciation of land would destroy an economy.

Agreed actually. But there are two problems.

1) There's no way your system could ever be implemented. There's zero political will or ability to do it. Maybe over time. My guess is it would take hundreds of years for it to happen in the US with tiny steps over generations. Maybe bump cap gains 5% every decade or something. You can't just implement this overnight. You'd destroy probably 90% of peoples wealth in one fell swoop. Remember, outside of government workers (pensions), very few people have savings outside their home equity. Your plan would tax that equity at 100% if they sold, and well, they'd be fucked. So while it technically could be done, you're better off trying to win the lottery.

2) Assuming properties would still appreciate, which is suspect, what other tax would you cut? This is again assuming properties continue to appreciate in the same way. That would be a massive windfall for the federal government assuming other tax policies stay. You couldn't just keep current tax policies, you'd have to cut something else to at least appease certain parts of the population. Any net tax increase will be met with resistance. And then any other place you cut, the savvy will figure out the loopholes and then that becomes the new real estate game. You're just moving the chairs around the deck. Money has to come from somewhere to support the basics of what the federal government was set up to do. And anytime the government is asking people for money, they want to find ways to get around it.

Is our system perfect? Obviously not. I personally don't think it works that bad. There are always going to be flaws in any form of government and taxation. I'm open to ideas and think most of yours are good ones. But many would only work in a pre-fabricated society where these rules are set from day one. Say you buy yourself a private island, turn it into a country and invite 100,000 of your closest friends. Otherwise this idea of 100% cap gains tax would require a revolution. And there ain't the numbers here in the US for that to happen.

Dan8267 says

The only solution to this problem is 100% capital gains tax on all real estate.

Says the guy who doesn't OWN any property. It's nice when a Bernie Socialist wants other people's money and gains.

Strategist says

Allow me to remind you of what you really said:

The only solution to this problem is 100% capital gains tax on all real estate.

Yes, and I have not deviated on that. All real estate appreciation is appreciation of land. Buildings themselves only depreciate.

me123 says

Says the guy who doesn't OWN any property.

I own lots of property and my family owns lots of houses. I love my family. I know the idea of your family loving you is so foreign you cannot image what it's like, but my personal self-interest would be the opposite of what I proposed because my family's interests are my own. You are a dumb ass.

WookieMan says

There's no way your system could ever be implemented. There's zero political will or ability to do it.

One doesn't argue in favor of change because the change isn't already popular. If you followed that philosophy, you would never argue for change ever because if a change were popular, it would have already happened.

When arguing the pros and cons of any policy, fiat is irrelevant. Argue the merits of the policy itself. Only after most people realize the policy is good try to get the votes. We are still on the first step.

There is no reason to not argue a topic and to find out whether or not a policy is good before the public is convinced to vote for it. The former must be done first.

WookieMan says

You'd destroy probably 90% of peoples wealth in one fell swoop

Not a penny of wealth is destroyed by my plan. What is destroyed is the ability of one person to take wealth from another person through economic coercion. The transference of wealth nether creates nor destroys wealth. It just benefits one person by harming another.

Since the population is rising and housing is already the number one expense for Americans, increasing housing costs is a terrible, terrible thing for society as a whole. Again, my family comes out ahead. We own five house and there are only six of us, and I'm making just as much in the stock market, so I'm actually proposing what's better for society even though it's worse for me.

The ability to us your house as a retirement plan comes at the cost of enslaving the next generation.

WookieMan says

Assuming properties would still appreciate

Buildings do not appreciate. Land appreciates because the population increases.

WookieMan says

what other tax would you cut?

My tax plan would only increase taxes enough to end deficit. This is how I would tax land.

1. Call T the total spending by local government.
2. Call L the total value of privately owned land measured in dollars as accessed by the existing tax authorities.
3. Call Sx the total value of land owned by person X.
4. Let E be an easing function which we can decide on later.
5. Your taxes on your land would be t = E(Sx, L, T).

The purpose of the easing function is to tax people gradually as they accumulate more land value. A person owning $100k of land should be taxed, say, four times as much as someone owning $50k of land.

The total tax collected by government is a constant, T, the same as the total spending. People vote for less taxes by voting for less spending. All budgets are balanced by design and the government cannot accrue debt or run out of money. It is completely unnecessary to productive tax income at the local level. Using similar approaches, I can eliminate taxes on productive income from the state and federal level as well. Nothing you do that produces actual wealth would be taxed. Only consumption of scarce natural resources like land, the EM spectrum, the roads, etc. would be taxed.

The result of aligning everyone's personal financial interest in this way would be a far more productive economy and more wealth for everyone except rich parasites who are less than 0.1% of the population. There are a number of reasons for this including elimination of the waste of resources by hoarding and sub-optimal use and the elimination of zero-sum games that generate systemic inter-generational poverty and the need for mass spending on social safety nets. The very welfare the rich bitch about is only necessary because of the parasitic behavior of the rich.

WookieMan says

Any net tax increase will be met with resistance.

My plan isn't an increase in taxes when you factor that government debt is tax with interest. My reform is about how we are taxed, not how much. How is just as important. Mechanism that create conflicts of interest result in waste. Mechanism that align the self-interest of individuals with those of everyone else produce more wealth and well-being.

WookieMan says

Is our system perfect?

"Nothing is perfect" is a cop-out. No one has ever argued that a counter-plan was perfect, only that it is better than the status quo, and that is all that matters.

Self-driving cars won't be perfect, but they will be vastly better than human drivers. Hell, they already are vastly better. That means the number of fatalities will plummet when human drivers are replaced. The technology does not have to be perfect to justify its immediate deployment.

WookieMan says

Say you buy yourself a private island

America is not a private island nation. Your example does not apply.

Dan - a sincere question is asked of you at post no. 22. Regards

anonymous says

Dan - a sincere question is asked of you at post no. 22. Regards

Sorry, there are so many trolls on this site, many posting anonymously, that I frequently look over anonymous posts. That was not intentional. I will now address your question.

anonymous says

Dan said...."Everyone will still build useful structures to sellor do business in"

While I think the volume of transactions would be way down, but if we could live with that, I guess this would work. Perhaps I am missing something but the one flaw I may see to your theory is if they cannot earn money from selling it, why would they build it?

You are indeed missing something important. Capital gains is, by definition, the real amount after currency depreciation of the price a good sells for above the cost basis of the previous purchase of the good. That means that new construction isn't subject to capital gains tax. It also means that if you buy a $200,000 house and add $50,000 of improvements and sell it for $260,000, then you are only taxed $10,000 on the transaction because your cost basis is $250,000.

If a house is torn down and replaced by another, then the new house is appraised by tax authorities and compared against the appraisal of the old house to calculate the cost basis of the new house. Thus tearing down a house and replacing it to recapture the appreciation of the land will not work.

BlueSardine says

b...b...but it's the only solution!!

The above is an example of one of the trolls I was referring to above. The idiot ads nothing to the conversation and cannot make an intelligent, adult argument. So he childishly mocks his opponent like a toddler throwing a tantrum. This is why PatNet has so few users. If you are going to tolerate trolls, you might as well at least go to a popular site like Reddit.

Dan8267 says

My tax plan would only increase taxes enough to end deficit. This is how I would tax land.

1. Call T the total spending by local government.
2. Call L the total value of privately owned land measured in dollars as accessed by the existing tax authorities.
3. Call Sx the total value of land owned by person X.
4. Let E be an easing function which we can decide on later.
5. Your taxes on your land would be t = E(Sx, L, T).

Does anyone understand you formula?
E(Sx, L, T) = C
C = Communism.

FIFY, Idiot.
Gawd I love it when the pompous posters self-destruct in the same post they bloviate in...

Dan8267 says

The idiot ads ADDS nothing to the conversation

I typically respond in kind to the originating post as demonstrated below.
If you are ignorant enough to believe that there is only one solution to the problem then you deserve the kind of response I provided.

Dan8267 says

So he childishly mocks his opponent like a toddler throwing a tantrum.

BlueSardine says

Dan8267 says

The only solution to this problem is 100% capital gains tax on all real estate

Dan8267 says

You are indeed missing something important. Capital gains is, by definition, the real amount after currency depreciation of the price a good sells for above the cost basis of the previous purchase of the good. That means that new construction isn't subject to capital gains tax. It also means that if you buy a $200,000 house and add $50,000 of improvements and sell it for $260,000, then you are only taxed $10,000 on the transaction because your cost basis is $250,000.

Warren Buffet purchased a house somewhere in Laguna Beach for $100,000 decades ago. It was recently put up for sale for $11 million.
Based on your rules, I should be able to buy it for $100,000. It should rent for $40,000 per month. Gosh, I would be rich like hell.
I love you Dan. I'm beginning to love your idea.

Look, all trolling aside, if you are unable to spell "adds" correctly, you have no reason to even own a computer. This is 3rd grade shit...

BlueSardine says

Dan8267 says

The idiot ads ADDS nothing to the conversation

Strategist says

Does anyone understand you formula?
E(Sx, L, T) = C
C = Communism.

That is truly retarded.

BlueSardine says

Look, all trolling aside, if you are unable to spell "adds" correctly, you have no reason to even own a computer. This is 3rd grade shit...

BlueSardine says

Dan8267 says

The idiot ads ADDS nothing to the conversation

You are also truly retarded if you can't tell the difference between the rare typo and not being able to spell adds, a word that I have used and spelled correctly many times on this site. Are you really that petty? If so, then you are also a complete fucking hypocrite as Tim Aurora pointed out.

Tim Aurora says

BlueSardine says

If this is what passes for "masters of science" these days, we might as well sell the whole fucking thing to the chinese...

Well , you again validated my point that those 31000 scientist, unless they are expert, count for nothing.

And if you are criticizing others for grammar, please make sure you are correct, "chinese" should be spelled with a capital "C"

Check. Mate.

Check and mate indeed.

Strategist says

Warren Buffet purchased a house somewhere in Laguna Beach for $100,000 decades ago. It was recently put up for sale for $11 million.
Based on your rules, I should be able to buy it for $100,000. It should rent for $40,000 per month. Gosh, I would be rich like hell.
I love you Dan. I'm beginning to love your idea.

You clearly don't understand my idea, but yes, if it cost a mere $100k or less to build that house decades ago then adjusted for currency debasement it would cost even less to build that house today. So it's the land, not the house, that appreciated. Why should Buffet reek in the profits of the appreciation of land he did not create and did not make better? Land is fundamentally a public and fixed resource. Why should anyone profit at the expense of society for the appreciation of a public resource that no one has a legitimate first owner claim on?

Go on, explain that.

me123 says

If you truly owned a house like you claim, you would know the building can appreciate also, not just the land.

That's bullshit, but feel free to hang yourself with that rope by explaining exactly how a building, rather than the land, appreciates.

Dan8267 says

You clearly don't understand my idea, but yes, if it cost a mere $100k or less to build that house decades ago then adjusted for currency debasement it would cost even less to build that house today. So it's the land, not the house, that appreciated. Why should Buffet reek in the profits of the appreciation of land he did not create and did not make better? Land is fundamentally a public and fixed resource. Why should anyone profit at the expense of society for the appreciation of a public resource that no one has a legitimate first owner claim on?

Go on, explain that.

Philosophically, I believe all land and natural resources belong to all the people of the world. The first piece of land sold, was stolen property, and as per law it still belongs to the original owner. Even natural resources like oil, gold, copper etc belongs to every human being on the planet, who deserve to be paid every time something is extracted from THEIR LAND. But we don't live in that kind of world. So I just go with the tide, buy residential parcels, and hope to get rich one day. I am just a selfish human being, like all normal human beings. You may call me a Capitalist Peeg.

me123 says

the smartest guy (according to you) on the site.

Where did I say that? I will go on the record as stating that you are the dumbest guy on this site.

me123 says

It's probably swamp land in Florida.

Once more you are wrong and clearly jealous.

Strategist says

The first piece of land sold, was stolen property, and as per law it still belongs to the original owner.

Yes, but just because that's the way things have been for the past ten thousand years does not mean we need to continue doing things the wrong way when there is a far better alternative that can easily be transitioned to and that would vastly improve our economic system in a many ways.

Strategist says

Even natural resources like oil, gold, copper etc belongs to every human being on the planet, who deserve to be paid every time something is extracted from THEIR LAND.

Exactly what Patrick and I have been saying for years. The wealth created by mining should be paid. The public wealth seized by mine owners who make shady deals with politicians to embezzle from the public should not be allowed. The people doing the business work like accounting, surveying, preparing documents, etc. should also be paid according to the work they create. Ownership of former public resources should not.

Strategist says

But we don't live in that kind of world.

Irrelevant. A mere 10 years ago we didn't live in a world with smartphones. A mere 20 years ago, few people had mobile phones. A mere 40 years ago, few people had computers. A mere 60 years ago, few people had televisions. A mere 80 years ago, few people had cars. A mere 100 years ago we had just invented flight.

Have you noticed a pattern? The world changes for the better. If we followed your philosophy, we would never make any progress. "We're not doing that now" is not an argument that we should not start doing that.

Strategist says

So I just go with the tide, buy residential parcels, and hope to get rich one day. I am just a selfish human being, like all normal human beings. You may call me a Capitalist Peeg.

If you are going to be greedy, at least be smart and greedy. You're line of thinking would have kept us literally in the Dark Ages where you would be a peasant. The entire reason Europe got out of the Dark Ages and into the Renaissance is because the peasants left alive after the Black Death had enough bargaining power over the owner class to demand higher wages. This created the economic boom that brought about every bit of wealth and opportunity you were born into.

Concentrating wealth, especially wealth obtained by zero-sum games and siphoning from other people's productivity, does not create new wealth and does not create a good economy. I really don't understand why this principle is so difficult for you to accept. You would be financially better off if everything I proposed was implemented.

Dan8267 says

Strategist says

But we don't live in that kind of world.

Irrelevant. A mere 10 years ago we didn't live in a world with smartphones. A mere 20 years ago, few people had mobile phones. A mere 40 years ago, few people had computers. A mere 60 years ago, few people had televisions. A mere 80 years ago, few people had cars. A mere 100 years ago we had just invented flight.

Have you noticed a pattern? The world changes for the better. If we followed your philosophy, we would never make any progress. "We're not doing that now" is not an argument that we should not start doing that.

For that nirvana to happen we would need to:
1. Eliminate all kings dictators and non democracies.
2. Political borders would need to fall. Countries would cease to exist.
3. A philosophical change in thinking would need to occur.
All this could easily happen within 200 years, as the rate of change on this planet is accelerating at an accelerating rate.


Dan8267 says

If you are going to be greedy, at least be smart and greedy. You're line of thinking would have kept us literally in the Dark Ages where you would be a peasant. The entire reason Europe got out of the Dark Ages and into the Renaissance is because the peasants left alive after the Black Death had enough bargaining power over the owner class to demand higher wages. This created the economic boom that brought about every bit of wealth and opportunity you were born into.

I believe it was the industrial revolution in England that set off a sustained economic boom.



Dan8267 says

Concentrating wealth, especially wealth obtained by zero-sum games and siphoning from other people's productivity, does not create new wealth and does not create a good economy. I really don't understand why this principle is so difficult for you to accept. You would be financially better off if everything I proposed was implemented.

This is where I completely disagree. It's a form of communism, and does not help mankind. We need more and more technology, discoveries and inventions to better our lives, and only countries that practice capitalism have been able to deliver it.
Please refer to the 3 points I made above.

You know, this would be an interesting topic to discuss, sadly I leave very earl Monday morning, and return just in time for Halloween.

Dan - no worries on the trolls, but I'm still not understanding what motivation one would have to build structures to sell.

In your example a guy purchases land for 200k, adds 50k in improvements. And gets 250 back when he sells (the 10k excess price being taxed). I get that.

However I'm not understanding WHY he would do that? Say he spends 3 months building this house to sell, but his earnings during that time were $0. Why wouldn't he just work at McDonald's instead?

Because dan hates his job and realizes other people would not want to work there...

anonymous says

However I'm not understanding WHY he would do that? Say he spends 3 months building this house to sell, but his earnings during that time were $0. Why wouldn't he just work at McDonald's instead?

me123 says

Hey Dan, have you figured out yet how a building can appreciate? Since you own so much property, that question should be easy for you to answer

Why don't you tell us?

Strategist says

For that nirvana to happen we would need to:

Who's talking about Nirvana? I'm talking about a simple, direct improvement to the existing system that can be phased in gradually.

Strategist says

This is where I completely disagree. It's a form of communism

There is nothing remotely communistic about my plan. You clearly don't understand what communism is.

I'm proposing that we shift from taxing productivity to taxing consumption of scarce public resources. How the flying fuck is that communistic?

Strategist says

We need more and more technology, discoveries and inventions to better our lives, and only countries that practice capitalism have been able to deliver it.

Empirically false. The Soviet Union got to both space and the moon first. Today most things are made in China including all advancements in clean energy.

Strategist says

I believe it was the industrial revolution in England that set off a sustained economic boom.

The industrial revolution started around 1760. The Renaissance started in 1350, a few years after the Black Death. The industrial revolution did not take Europe out of the Dark Ages. The increase power of labor, peasants, after the Black Death did. This is well understood and accepted by historians.

https://dailyhistory.org/How_did_the_Bubonic_Plague_make_the_Italian_Renaissance_possible%3F

The social consequences of the plague on society came to be profound. The high mortality rate resulted in a drastic decline in the labour force.[7]. Wages rose for both agricultural and urban workers. The survivors of the Black Death generally had a higher standard of living than before the plague.[8] This was a phenomenon that occurred in both urban and rural areas. The crisis caused by the Black Death led to many changes in the economy, in response to the fall in the population. Because of the labour shortages there was a move from labour intensive farming such as cereal to livestock and increasingly both in industry and agriculture more labour saving devices employed.[9]

Where labor is cheap, life is cheap. Where wealth and power is concentrated into the hands of the few, the economy falters. Your inability to see this is due to thorough brainwashing during the Cold War. Well, the Cold War is over. It's time to think again.

anonymous says

Dan - no worries on the trolls, but I'm still not understanding what motivation one would have to build structures to sell.

My tax plan does not at all decrease the profitability of building. In fact, since land rather than buildings are taxed, by tax plan greatly incentives the most efficient use of land and disincentives hording land and letting it sit idle.

anonymous says

In your example a guy purchases land for 200k, adds 50k in improvements. And gets 250 back when he sells (the 10k excess price being taxed). I get that.

However I'm not understanding WHY he would do that? Say he spends 3 months building this house to sell, but his earnings during that time were $0. Why wouldn't he just work at McDonald's instead?

Buying a house just to flip it would no longer happen. When a person buys a house just to fix it up and then sell it, he is essentially performing a less efficient version of being hired by a homeowner to fix up a house. The contractor is speculating that he will pick the right amenities, the right kind of cabinet wood, the right kind of flooring that will appeal to buyers. This is guesswork which decreases the effeciency of the work, that is the value added for the time, material, and labor. it would be better if the person who will live in the house chooses mahogany or maple wood.

Under the existing system, such speculation would be less likely, but actual home owners would be more likely to hire contractors after they purchase a cheaper house and have money to hire such contractors. The overall wealth creation would be greater due to both less incorrect guessing and less profit taking from land. Such profit taking from land comes directly from the buyer who then has less wealth. It's a zero-sum game.

BlueSardine says

Because dan hates his job and realizes other people would not want to work there...

Actually, I love my job. I have an awesome career. You are simply jealous.

Furthermore, the messenger is irrelevant. You clearly cannot find any faults in my plan, so you are resorting to an ad hom attack, and a childish one at that.

joeyjojojunior says

me123 says

Hey Dan, have you figured out yet how a building can appreciate? Since you own so much property, that question should be easy for you to answer

Why don't you tell us?

He won't. Piggy is too much of a coward to answer the question.

The fact is that buildings don't do anything more as time goes on. Buildings only deteriorate. Sure, you can add a wing to a building, in which case that gets included in the cost basis, but buildings are most valuable when they are first built or refurbished, and only deteriorate. Like cars, buildings only depreciate. It is only the land that appreciates, and land only does this because the population has been increasing. If immigrants are kicked out like Trump says he'll do, then the population and land and real estate all fall together.

Everyone should take note that no one has yet made either an economic or moral argument in favor of individuals being able to hoard scarce public resources and profit from their sales at the expense of everyone else. The only argument in favor of such a system is "I personally will profit at your expense, so fuck you". The economy as a whole is far better with individuals obtaining wealth by being productive than by swindling others out of wealth. Zero sum games NEVER produce wealth by definition.

Dan8267 says

Strategist says

We need more and more technology, discoveries and inventions to better our lives, and only countries that practice capitalism have been able to deliver it.

Empirically false. The Soviet Union got to both space and the moon first.

Reaching Space first with captured German scientists was probably their only achievement.

Dan8267 says

Today most things are made in China including all advancements in clean energy.

Most things are made in China because of cheap labor. To date, China has contributed very little to scientific progress. Nothing beats the scientific progress of the evil capitalist West.
Most scientific discoveries have been achieved in the biggest melting pot in the history of mankind.....good old USA. Imagine the achievements we could trigger if the whole world adopted our system.

Dan8267 says

Where labor is cheap, life is cheap. Where wealth and power is concentrated into the hands of the few, the economy falters. Your inability to see this is due to thorough brainwashing during the Cold War.

Hey, I agree. Examples of wealth and power concentrated in the hands of the few are kings, dictators, religious wackos, and communists. Not in democracies such as ours.
Why can't you see it?

Strategist says

Reaching Space first with captured German scientists was probably their only achievement.

America stole as much German tech and as many Nazi scientists. Are you saying that America did not earn it's place in history during the Space Age?

Strategist says

Most things are made in China because of cheap labor.

Which is a failure of capitalism. The bottom line is that the largest Communist country with the strongest Communist culture is kicking America's ass. This means your assertion is wrong.

Strategist says

To date, China has contributed very little to scientific progress.

Empirically false. You are simply sticking your head in the sand. China is rapidly owning all STEM and manufacturing infrastructure. It builds entire cities in less time it takes America to build a 9/11 memorial. It is at the forefront of many technological industries.

CNN: China is crushing the U.S. in renewable energy

The Guardian: China cementing global dominance of renewable energy and technology

CNBC: China emerging as a tech and innovation powerhouse

Tech World: Eight examples of high-tech innovation in China

Ignorance may be bliss, but it's also dangerous. You are letting your nationalism blind you to a very real economic and political threat to the U.S. Blind nationalism is stupid and dangerous.

Strategist says

Hey, I agree. Examples of wealth and power concentrated in the hands of the few are kings, dictators, religious wackos, and communists. Not in democracies such as ours.
Why can't you see it?

God, you are brainwashed.

First off, America is not and has never been a democracy. That is just factually wrong. There hasn't been a democracy on Earth since the ancient city-state of Rome degraded into a republic.

Second, political systems are not economic systems or vice versa. Democracy and capitalism have fucking nothing to do with each other.

Third, the tax proposal I made had nothing to do with kings, dictators, religious wackos, or communists.

Fourth, the current system concentrates wealth and power into the hands of the few. My proposed system does the exact opposite, allowing each individual to maximize his wealth by and only by maximizing his productivity.