5 Comments
Oct 7, 2022Liked by Lee R. Nackman

Lee, this discussion is so clear and your solutions so obvious that I am sharing this article with my real estate students and others. Thank you!

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Oct 7, 2022Liked by Lee R. Nackman

Some very good points in your analysis, Lee. Some additional points might be considered. First, there are at least two alternatives to your proposal for subsidies. One is to replace most (but not all) existing subsidies with a Universal Basic Income that is income tax financed. This could produce a progressive overall incidence (taxes and subsidies combined). A different but similar alternative is to use a refundable Negative Income Tax (a la Friedman), which is politically more feasible than a UBI because it has lower revenue requirements to finance it. Second, I agree that it makes no sense to tax capital gains at a different rate than other income; however, fairly long-term nominal gains can represent much lower real (inflation-adjusted) capital gains. If, for example, a person owned an asset that appreciated at exactly the same rate as inflation, they would have a tax obligation on an asset that had not appreciated at all in real terms -- since it's nominal gains that are taxed. This also makes no sense. A solution would be to deflate the gains with a price index for purposes of taxation.

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Oct 1, 2022Liked by Lee R. Nackman

Great read. My summary - simpler is fairer for all. Complexity benefits - you guessed it :-)

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