California's Wealth Tax Proposal Would Likely Backfire

[pamak]

Yes, Calif BLESSED in Natural resources, ports, weather etc....

Again, Rome was once a power house too(wink)

The exact same argument can be made for the US compared to Europe.

There is way less population density in the US and much more availability of natural resources (Germany and most Europe have to count on foreign oil and gas). In short, more land and less people is an advantage for the people exploiting the land. And the US is the new Rome these days...

 

[Luther]

The exact same argument can be made for the US compared to Europe.

Way less population density and much more availability of natural resources (Germany and most Europe have to count on foreign oil and gas). In short more land and less people is an advantage for the people exploiting the land

The exact same argument can be made for the US compared to Europe

Yep, especially with a "socialistic" supporting citizenry(wink)

 

[pamak]

Trying to overcome insomnia and finally feel sleepy lol

 

[Fledermaus]

Now you make no sense....

An IRA is not a burden, It is an investment and like all investments the idea is that you spend money now in order to get a much bigger profit later. So, when people want to mourn about the California homeowners, they must take in consideration the benefits that only California and a few other states offer to people who invest in home equity. That is why international investors from all over the world invest mostly in the housing markers in CA, NY or FL and not in the housing markets in Idaho, Kansas or Alabama. Now, is the above bad for the renters and those who do not have a house? Sure, at least for low to mid wage earners! The influx of money from real estate investors (including international investors) is one of the reasons why demand and housing prices are up which in turn affects also rents. But the homeowners in California are actually benefitted from such activities because the value of their property goes up. The renters, especially in the range of the low to mid wage jobs see a big part of their income going towards paying the rent without getting some long-tern benefit . Only the workers of roughly mid-to up wage (better say salary) jobs earn enough to both pay their rent and get enough money aside to eventually buy a house and join the homeownership class.

Do you pay annual property tax on your IRA?

Did your IRA need termite Inspection?

When did you replace the roof on your IRA?

Money out. No profit realized until sold.

 

[skeptic llc]

Do you pay annual property tax on your IRA?

Did your IRA need termite Inspection?

When did you replace the roof on your IRA?

Money out. No profit realized until sold.

Again, you can live in or rent out your house. You can't do that with an IRA.

 

[Fledermaus]

Again, you can live in or rent out your house. You can't do that with an IRA.

You can. But for the vast majority?

 

[pamak]

Do you pay annual property tax on your IRA?

Did your IRA need termite Inspection?

When did you replace the roof on your IRA?

Money out. No profit realized until sold.

I am talking about the cost that one pays in any way even when the taxes are deferred. The whole idea of not paying taxes in certain financial instruments is to help you grow your nest and pay taxes only at the end when you are old and start withdraw money. But with the housing cases, there is no need to help people grow the value of their investment. In general, property values at least in CA and similarly developed (in real estate terms) states growth at a high rate. maintenance cost actually helps the value of the investment. No serious person will let his house deteriorate. Also unlike IRAs, a homeowner can always cash in his house and downgrade without paying penalties.

 

[Fledermaus]

I am talking about the cost that one pays in any way even when the taxes are deferred. The whole idea of not paying taxes in certain financial instruments is to help you grow your nest and pay taxes only at the end when you are old and start withdraw money. But with the housing cases, there is no need to help people grow the value of their investment. In general, property values at least in CA and similarly developed (in real estate terms) states growth at a high rate, and obviously maintenance cost actually helps the value of the investment. No serious person will let his house deteriorate. And unlike IRAs, a homeowner can always cash in his house without paying penalties.

Wow.

Homes and property deteriorates all the time. Today's hot new designer suburb is tomorrow's slum.

And... Upside down mortgage. Or if you are forced to sell in a down market.

Add to that "improvements" often do not recoup construction costs.

Keep putting money in and you profit only from the sale.

You don't profit prior.

 

[pamak]

Wow.

Homes and property deteriorates all the time. Today's hot new designer suburb is tomorrow's slum.

And... Upside down mortgage. Or if you are forced to sell in a down market.

Add to that "improvements" often do not recoup construction costs.

Keep putting money in and you profit only from the sale.

You don't profit prior.

This is not the general trend. I am not saying that there are no periods that home values deteriorate which of course applies to financial investments too and IRAs, but even now with the pandemic the housing market is pretty stable in CA. Again, you do not profit when you invest and this applies for every investment. You also do not profit from IRAs when you just put money in and do not take out money (which if you do it before certain age will also trigger penalties).

 

[Fledermaus]

This is not the general trend. I am not saying that there are no periods that home values deteriorate which of course applies to financial investments too and IRAs, but even now with the pandemic the housing market is pretty stable in CA. Again, you do not profit when you invest and this applies for every investment. You also do not profit from IRAs when you just put money in and do not take out money (which if you do it before certain age will also trigger penalties).

Until a home is sold one does not see a profit. If it does.

 

[skeptic llc]

Until a home is sold one does not see a profit. If it does.

Unless you rent it out for a profit. Or value the ability to live in it, perhaps at less cost than a comparable rental. Or cash out equity as it appreciates. Homes are an "investment" that also has current utility, which is a different category from those that just sit there on paper (like non-dividend stocks) until you sell.