The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
You dismiss this with some hand-waving about lowering other taxes to compensate.
First, that won't work. The reason real estate taxes are less upwardly flexible than other taxes is that they make real estate lose value as mortgage collateral. If you make a revenue-neutral shift in the tax share from income to real estate, real estate prices are going to drop. Which may cause homeowners to become insolvent even though they are still able to make their monthly payments.
And second, even if it did work, it would build a general tax-cut bias into your political economy, because every time a wingnut government lowered taxes on real estate, the next responsible government would have to limit itself to revenue-neutral tax reforms in order to prevent a housing panic. Over a full cycle, this causes a net drop in tax rates. Thus, a built-in tax-cut bias.
Austerity can only be implemented in the shadow of a concentration camp.
by ManfromMiddletown - Oct 20 44 comments
by gmoke - Oct 7 3 comments
by ARGeezer - Oct 7 60 comments
by DoDo - Oct 3 10 comments
by Frank Schnittger - Sep 29 19 comments
by Crazy Horse - Sep 29 25 comments
by ManfromMiddletown - Oct 2044 comments
by gmoke - Oct 73 comments
by ARGeezer - Oct 760 comments
by DoDo - Oct 310 comments
by Crazy Horse - Sep 2925 comments
by Frank Schnittger - Sep 2919 comments
by Frank Schnittger - Sep 274 comments
by Cyrille - Sep 24136 comments
by afew - Sep 2240 comments