25% flipping tax??? Not cool.
Let's not get into politics but since we're all like minded-ish investors, read this and let us know what do you think of forcing market changes, area changes, affordability, excessive taxing etc?
https://theweek.com/speedreads/865930/bernie-sanders-proposes-25-percent-house-flipping-tax-new-housing-plan
Originally posted by @Chris Kdjdfjb:@Isaac S. Cool it with the personal attacks. It's not about you, it's not about me, it's about the people trying to live their finite lives in a nice part of the continent. You can be there too, the goal should be to make room for everyone. Maybe land is a finite resource, but housing isn't. And so Survival of the Fittest doesn't need to apply to it as much as you imply it does. If supply is too low, the long term solution isn't to lower demand (make people leave or be homeless) but to raise supply. California clearly has a problem. Nobody here thinks they're solving it the right way. But the victims are the ones at risk of having to move or become homeless, not the ones who are going to pass along the added costs anyway because bargaining power in CA is that one-sided.
Now about avoiding the 25% flipping tax if you don't want to go into the land lording business... Could you say, join a partnership where you do the flip and the partner(s) landlord and contribute capital to keep the buying going? You'd need enough partners to have enough capital to keep yourself busy through the five year rolling buffer. This plan would mostly fall apart if the bubble bursts within five years. But you believe in your buys because you operate on fundamentals and not speculation or worse, a pump and dump strategy, right?
Wow...I'm realizing why this hits a nerve with me. Your intentions are honorable and a great ideal to work towards. Everybody gets a beach front house in Malibu, or beautiful mansion in Beverly Hills.
Are you a bigot? Why do you generalize all homeless or all landlords as single consistent homogeneous group?
Do you realize that about 50-70% of homeless refuse shelters because they have restrictive policy regarding drug and alcohol use? Of that group most would qualify for housing assistance but they wouldn't be able to spend their discretionary money on drugs, so they refuse the programs because the programs hold them accountable and expect them to use their income towards housing, food, and daily needs, before heroin or vodka.
There are close to 50k homeless in the greater Los Angeles area...even if you built 100k apartments in the next week, there would still be 30-40k homeless in Los Angeles.
The real irony of this all...is that 30% of homeless that are extremely vulnerable mentally disabled population and truly need our help. People that test on the extreme low end of the IQ bell curve and were raised in foster care and then dumped on the street at 18 years old, with no work or life skills, after being overlooked by the school system and barely surviving the foster care system or they just simply have a severe mental disability.
In the 1980's Reagan closed down all the sanitariums(the places like mental hospitals, for non-criminals and non-violent) to save on budget and reduce deficits, blah, blah, blah, but unfortunately when other politicians(from both partys) later jacked up the same budgets and taxes and even increased spending far past the Reagan cuts, eliminating any savings from the cuts, nobody thought to replace the eliminated services for the truly needy, the ones that wouldn't be able to get an apartment or a job(or would be limited in their options) even with supervision and training in doing.
The reason I get so angry at you and your comments is because your solution and perspective is constantly blaming and vilifying the competent and productive of our society. You are considering all homeless as the "victim" class and all landlords and investors as the "oppressor" class. As if somehow all people in each group are the same based on that criteria. It's textbook Marxism identity politics.
You think that by taxing the oppressor group you will heroically save the victim group, with our all knowing parents, the government, supervising this hyper efficient transfer of wealth. I got news for you, it doesn't work that way, ever...you will never(in our lifetimes) be able to show me an example where it does work. It would require a total shift in human nature.
With 8 billion people on the planet there are no more simple solutions. Just raising taxes does not help if politicians pork barrel the money or just waste it because they are not held accountable. You can't just expect to provide everybody that wants to live in Malibu, a chance to live in Malibu, or all of Los Angeles for that matter.
Do you understand that any given geographic location has a maximum capacity for the amount of poop it can process, the amount of water it can provide, the amount of resources it can exploit. Who decides how many people is enough? What quality of life should the more productive sacrifice for the less? Why not let a competence hierarchy naturally sort out?
If we could of taxed our way out of this problem, we would have already. I am at close to 50% combined tax rate and when you factor in taxes like, property taxes, gas taxes, sales taxes, etc. How much more would you have me pay?
Best of luck trying to find the answers! Just realize life is not as simple as homeless people are good and righteous and real estate investors are greedy and evil.
Got to pay for the green new deal. Or Bernie's new Mercedes.
@Isaac S.
"Everybody gets a beach front house in Malibu, or beautiful mansion in Beverly Hills."
No, everybody gets a kitchen, a bedroom, a couch, a bathroom, and a dining table in Malibu or Beverly Hills. We demolish the mansions because they are an inefficient use of land in an area where land is prohibitively expensive."There are close to 50k homeless in the greater Los Angeles area...even if you built 100k apartments in the next week, there would still be 30-40k homeless in Los Angeles."
People don't need to be homeless to need relief from being house-poor. For every homeless person, there's many times more people who work 60+ hour weeks (in good high-paying technical jobs, not just low level service work) to get by, or who have given up and left the area. If 100k apartments isn't enough, build another 100k.
"The reason I get so angry at you and your comments is because your solution and perspective is constantly blaming and vilifying the competent and productive of our society."
The whole reason for the bad PR on people who buy and sell land professionally is because making money in this industry isn't always connected to producing value. Even then, producing value isn't always connected to competence. But in general, luck > value > skill. If you safeguard and improve the beauty, safety, and functionality of a piece of land and its surrounding area, you've produced value. If said characteristics would've fared just fine without you over a given period of time (maybe the local police are top notch), you've produced no value during that period of time. There is value in simply managing the risk of owning expensive assets, but don't mistake that to always equal competence. If you have to err on the side of being too harsh on the weak (even if it is their own fault) or on the strong, you should pick the latter.
"You think that by taxing the oppressor group you will heroically save the victim group, with our all knowing parents, the government, supervising this hyper efficient transfer of wealth."
Nope, I am acknowledging the benefits of an attempt to help with an issue that is currently spiraling out of control in a specific state. Somebody on this thread has to. The tax was designed with an avoidance mechanism in mind: hold properties for five years. If the market doesn't crash in that time then all is good, but if it does then at least the hardship falls on someone who can take it rather than someone who can't.
"Do you understand that any given geographic location has a maximum capacity for the amount of poop it can process" - Lol, then expand the sewers.
"The amount of water it can provide" - This one's an actual quasi-finite resource so I'll agree with this one. Filtering the ocean is hella expensive, and importing water also gets more and more costly. Did you know that Arizona requires a property to have a water source good for the next 100 years before you can build residences on it?
"The amount of resources it can exploit." - That's more of a global issue, due to modern shipping. When Cali hits this wall, so do the rest of us.
"Who decides how many people is enough?" - Certainly not you. People have been asking this for over a century and they've all been wrong so far.
"What quality of life should the more productive sacrifice for the less?" - I would have them sacrifice the mansion and the SFH located in downtown, in exchange for an upscale penthouse also located in downtown.
"Why not let a competence hierarchy naturally sort out?" - This is more complicated than you imply. Do you agree with existing laws controlling antitrust, electricity and natural gas providers, and media outlet ownership? If the land industry plays its hand too forcefully, it'll find itself in the same boat."How much more would you have me pay?" - None, just don't pump and dump a property you think will crash within a few years. That is the goal of the proposed tax.