Then HELOC would be taxed which many middle class people rely on. Also its a loan so it need to be paid back. Will payments on private loans be deducted from income then?
This is not on topic, but to me it's ridiculous that something like HELOC exists and is somehow widely accepted. Like dude, you'll never pay down that debt. Your house is not an ATM machine.
The underlying assumption that prices only go up. It's so deep in the culture you don't even see the absurdity of not building any equity except for what's generated by upwards price momentum.
Well, population growth has been a constant throughout that culture and that nation's entire history, so all of the consequences of that are to be expected, no?
Housing prices always reverts back to CPI over multiple decades, i.e they offer no real capital gain. Robert Shiller wrote a lot about this.
Also I don't understand how a growing population leads to increasing prices, while there's so damn much unused land? Either there is enough new land, then people eventually spread out (and prices revert to the CPI, to the cost of construction), or there isn't enough land and homelessness increases as more and more people are completely priced out. Right now nearly every country is in the first situation.
> Either there is enough new land, then people eventually spread out (and prices revert to the CPI, to the cost of construction), or there isn't enough land and homelessness increases as more and more people are completely priced out.
It's not binary. People like to live near other people in cities. Demand to live close to one's job, friends, activities, and loved ones drives up prices in dense areas even with unlimited room to expand elsewhere.
Desirable locations are desirable even on an infinitely-sized map.
Solutions to taxation do not need to be black and white simple rules. The US tax code is already purported to be 70,000 pages. It would be perfectly reasonable to write one tax code for middle class people below a certain net worth that encourages wealth creation, family wealth, credit and investment. It would be perfectly reasonable to have a separate tax code for the ultra wealthy that curtails loopholes, tax shelters, dynastic wealth and offshore accounting. For example, some countries tax net worth over a certain number of millions.
