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.
The problem is that if you raise real estate taxes on your residential owner-occupiers, a number of them becomes insolvent (because this tax is discounted in the market value).
If their mortgage goes underwater, it does not mean they are insolvent, if their other wealth increases. You cannot decide a household wealth only from the balance sheet of their mortgage.
And anyway, this is an issue of politics. That is a very poor starting point for seeking remedies. Politics must follow policy, not the other way around.
Inasmuch as taxes crowd out amortisations, they don't matter to demand. Taxes destroy money, amortisation destroys money - either way, the money is destroyed.
No. This is the central point. Property tax destroys economic rent. Labour tax destroys wealth. A whole different thing.
Inasmuch as taxes crowd out interest payments, you reduce banker income, which ceteris paribus reduces demand.
It is not ceteris paribus at all. When banker incomes are economic rent (created interest charges over existing wealth, like land, real estate, shares etc.) these "incomes" are the actual "the beef" that destroy demand. This is exactly what property tax helps to get rid of.
by gmoke - Apr 20
by marco - Apr 22 1 comment
by Cyrille - Apr 20 21 comments
by DoDo - Apr 21 5 comments
by Cyrille - Apr 18 32 comments
by Cyrille - Apr 12 35 comments
by ARGeezer - Apr 18 7 comments
by DoDo - Apr 6 39 comments
by marco - Apr 221 comment
by DoDo - Apr 215 comments
by gmoke - Apr 20
by Cyrille - Apr 2021 comments
by ARGeezer - Apr 187 comments
by Cyrille - Apr 1832 comments
by Oui - Apr 163 comments
by Cyrille - Apr 1235 comments
by Cyrille - Apr 86 comments
by DoDo - Apr 639 comments
by aquilon - Apr 3158 comments
by ARGeezer - Mar 3110 comments
by Zwackus - Mar 2910 comments
by DoDo - Mar 279 comments
by Xavier in Paris - Mar 275 comments