DeSantis Is Serious About Ending Property Taxes in FL—but Will It Work and Who Will Pay the $40 Billion Difference?

[wmheel1287]

I don’t disagree with you there.

There are lots of ways to tax rich people more besides just trying to tax their unrealized gains, which has all kinds of pitfalls involved. I’m unclear if you even think taxing unrealized gains is a good idea or not, so I’m not saying you advocated for it.

I don't think unrealized gains need to be taxed if the collateralization of those gains is taxed. That way any liquidity event is taxable.

If the money stays invested totally and not touched, it doesn't need to be taxed. Gonna be hard for the billionaires to eat on invested money though. Tax the earnings, tax rhe dividends, and tax any loan events against that equity.

 

[wmheel1287]

FTR: I'm pretty sure that making collateralization a realization event originated with me. It was definitely my idea on the ZZL. Surprisingly, it was sort of my idea among law professors as well. I attended a talk given by one of these two authors below, and my question sparked about 20 minutes of commentary and then there was some email/listserv activity after that. I very much doubt that I was the first to think of it or talk about it (it's not a complicated idea), but the attendees at that talk seemed surprised by it. I was surprised that it was a surprise.

I only say that because the idea has not really picked up steam outside of some academic circles, to the best of my knowledge. It's possible that's because the idea has problems associated with it that I haven't seen. I didn't actually write in this area, and I didn't read broadly -- I'm not a tax guy, so it was never more than an idle interest. So there might be some literature that casts some amount of cold water on the idea.

From my perspective, it seems perfectly intuitive.

No More Tax-Free Lunch for Billionaires: Closing the Borrowing Loophole

In this article, Fox and Liscow propose a tax on billionaires that would impose a tax on borrowing against assets and explain how it could be designed and how i

papers.ssrn.com

I have no idea where I saw it first but it's a good idea whomever it originated with.

 

[HintonJamesHeel]

Property taxes are unfair. You pay them every year and have no say in the valuation.

 

[superrific]

I have no idea where I saw it first but it's a good idea whomever it originated with.

Well, my point was that you and I think it's a good idea, but there might be some hidden drawbacks we aren't aware of. Something is preventing the idea from becoming a part of national discourse. You'd think Elizabeth Warren would talk about it -- rather than only talking about unrealized capital gains -- given that it seems like a perfect compromise.

Maybe the problem is that it wouldn't raise much money so isn't all that worth doing. I actually have no idea how much money is borrowed against untaxed collateral. $100B a year, for instance, is a lot of that activity by our standards, but taxing that $100B at 20% raises very little money.

 

[Calheel]

Property taxes are unfair. You pay them every year and have no say in the valuation.

You could go the California method and just have the increase capped at 2% a year (other states do similar for seniors)

The problem is that tends to lock people into the same house and has negative externalities on the real estate market.

 

[HintonJamesHeel]

You could go the California method and just have the increase capped at 2% a year (other states do similar for seniors)

The problem is that tends to lock people into the same house and has negative externalities on the real estate market.

Not sure the answer but you buy a home with an expectation and then they jump your house up 30-40% and just hand you a bill. I’m ok with it for certain things but homes have to be treated differently. Just too important to folks.