Single family homes in California are under attack by State Senator Scott Wiener and his supporters who claim that single family homes remove affordable housing for people of color and poor people because they cannot live in single family homes. Moms 4 Housing just proved him wrong. Photo by zrants
By Richard Colman, in response to the material that appeared in The Economist on Jan. 18, 2020, titled "Home ownership is the West's biggest economic-policy mistake"
In addition, The Economist (same issue) also provided a very long article on housing.
Basically, The Economist argued that America's gross domestic product (the total output of good and services) would be higher if housing were not given such favorable treatment by government.
The Economist gave examples of housing policies in Germany, Singapore, and Switzerland. The magazine wrote favorably of the housing policies in these nations.
The Economist argued that an individual could earn more income by investing in stocks than in home ownership.
In America, the problem is this: A renter is subject to the whims of a landlord.
We have seen too many Americans lose their places to live because of landlords and other eviction-related factors.
Personally, I know of too many Americans who became homeless or almost homeless because they were renters, not owners.
The property tax in America is really a wealth tax. Normally, there is no tax on an asset unless and until the asset is sold. However, in America, the property tax is levied on residential property (and commercial property) while the property is still in the owner's possession.
Presidential candidate Sen. Elizabeth Warren (D-Massachusetts) has called for a wealth on high-income people. Sen. Warren has not acknowledged that existing American property taxes are a wealth tax.
Sen. Warren has proposed a two percent tax on household net worth between $50 million and $1 billion. She has also proposed a four percent tax (a six percent tax overall) on households net worth above $1 billion.
Here is a key question: If Sen. Warren's plans become law, how much time will elapse before her wealth tax is applied to lower levels of income?
In 1913, the United States adopted the personal income tax. Initially, the rates were very low. Now, more than 100 years later, the income-tax rates are much higher.
Perhaps the time has come to eliminate the property tax and replace it with some other form of taxation (or no taxation at all).
If you want my personal opinion, I feel better about Sen. Amy Klobuchar (D-Minnesota) and former Vice President Joe Biden (D-Delaware) than I do about Sen. Warren.