Here comes a story that highlights the nonsense of much economic thinking...
I watched interest rates drop from 9% to 6%. People who could afford payments on a $200,000 home at 9% could afford the same payments on a $300,000 house at 6%. Did they buy a $300,000 house? No. They paid $300,000 for a $200,000 house. What did they care? payment the same. Except their tax bill just went up 50%, for nothing. That realization comes later.
It's like the $15 an hour minimum wage. With 30% in taxes, who wins? Not the workers, who find less openings. I personally know family businesses that will shut down over this, they simply cannot stay in business paying those wages. The person who manages to keep a job? Well, the go from making $10, $7 net after taxes to $15, $10 net after taxes. Better? No, because those who can raise their prices and stay in business will do so, needfully. So when the person now "making" $15 an hour, net $10, goes to buy groceries at Safeway, so long wage increase benefit.
But hey, recall the government that was mulcting $3 and hour is now getting $5 an hour off the workers back. Kaching! The communists in the USA city governments know this, and it is always their goal: destroy small, independent business as they make it harder to find work outside the state corporations, like Google, Starbucks and Boeing.
There is a simple solution to "mark-to-market" problems, and that is
1. No one owns land. No real reason in an economy to have real estate property rights. We could learn from the American Indians, and Hong Kong. No one in Hong Kong can own land, neither before under the King of England nor presently under the ChiComs (the only exception is the ChiComs respect the Church of England's title to the land under its Cathedral in Hong Kong.) Nonetheless, four of the top ten billionaires in Hong Kong (Hong Kong has five times the billionaires per capita of billionaires then the USA) made their money in real estate. It is leases of land and development thereof, not ownership of land, that is where the money is. Also, relatively little of Hong Kong is paved over. Who wants to own land when you don't really need it? Build up.
In the USA many tribes do the exact same thing, lease land productively rather than mess around with "real property rights."
2. All is for sale... if we are going to be as barbaric as to have government, and real property rights, and we are going to pick losers by taxing their property, then to be fair tax it based on what the owner says the property is worth. A declaration of what the property is worth is also an offer to sell at that price. That is to say if I say my house is worth a million dollars to me, my next door neighbor may say his property is worth $5000. We both pay 5% taxes. I pay $50,000 a year, he pays $250. Fair enough. But anyone can come in and buy either property at the value stated.
No more eminent domain lawsuits. if the government wants to take property to give to another private party, as they always do, then they have to pay what the seller says it is worth, not some "appraisal" company.
Feel free to forward this by email to three of your friends.
The world’s superrich own around $3 trillion worth of owner-occupied residential properties, more than the gross domestic product of the U.K., France or India.Well, yes... we tend to undervalue production, because it is closest to transaction value, and we tend to overvalue assets, because we can get away with it. We have a system when someone overpays for a house, all of the other houses in that class are likewise re-assessed in value, as if every house would sell for that immediately. Banks want to loan as much of their EZCredit as possible, and demand an "appraisal." Since the banks are the heart of government, this over-pricing is the base of the taxes collected. It is a nasty combine.
I watched interest rates drop from 9% to 6%. People who could afford payments on a $200,000 home at 9% could afford the same payments on a $300,000 house at 6%. Did they buy a $300,000 house? No. They paid $300,000 for a $200,000 house. What did they care? payment the same. Except their tax bill just went up 50%, for nothing. That realization comes later.
It's like the $15 an hour minimum wage. With 30% in taxes, who wins? Not the workers, who find less openings. I personally know family businesses that will shut down over this, they simply cannot stay in business paying those wages. The person who manages to keep a job? Well, the go from making $10, $7 net after taxes to $15, $10 net after taxes. Better? No, because those who can raise their prices and stay in business will do so, needfully. So when the person now "making" $15 an hour, net $10, goes to buy groceries at Safeway, so long wage increase benefit.
But hey, recall the government that was mulcting $3 and hour is now getting $5 an hour off the workers back. Kaching! The communists in the USA city governments know this, and it is always their goal: destroy small, independent business as they make it harder to find work outside the state corporations, like Google, Starbucks and Boeing.
There is a simple solution to "mark-to-market" problems, and that is
1. No one owns land. No real reason in an economy to have real estate property rights. We could learn from the American Indians, and Hong Kong. No one in Hong Kong can own land, neither before under the King of England nor presently under the ChiComs (the only exception is the ChiComs respect the Church of England's title to the land under its Cathedral in Hong Kong.) Nonetheless, four of the top ten billionaires in Hong Kong (Hong Kong has five times the billionaires per capita of billionaires then the USA) made their money in real estate. It is leases of land and development thereof, not ownership of land, that is where the money is. Also, relatively little of Hong Kong is paved over. Who wants to own land when you don't really need it? Build up.
In the USA many tribes do the exact same thing, lease land productively rather than mess around with "real property rights."
2. All is for sale... if we are going to be as barbaric as to have government, and real property rights, and we are going to pick losers by taxing their property, then to be fair tax it based on what the owner says the property is worth. A declaration of what the property is worth is also an offer to sell at that price. That is to say if I say my house is worth a million dollars to me, my next door neighbor may say his property is worth $5000. We both pay 5% taxes. I pay $50,000 a year, he pays $250. Fair enough. But anyone can come in and buy either property at the value stated.
No more eminent domain lawsuits. if the government wants to take property to give to another private party, as they always do, then they have to pay what the seller says it is worth, not some "appraisal" company.
Feel free to forward this by email to three of your friends.
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