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 Frank Schnittger - May 23 20 comments
by gmoke - May 19 3 comments
by redstar - May 12 18 comments
by redstar - May 14 15 comments
by redstar - May 6 50 comments
by Luis de Sousa - May 1 13 comments
by talos - Apr 29 49 comments
by In Wales - May 3 1 comment
by Frank Schnittger - May 2320 comments
by gmoke - May 193 comments
by redstar - May 1415 comments
by redstar - May 1218 comments
by redstar - May 650 comments
by In Wales - May 31 comment
by Luis de Sousa - May 113 comments
by gmoke - Apr 292 comments
by talos - Apr 2949 comments
by ManfromMiddletown - Apr 245 comments
by afew - Apr 2056 comments