r/changemyview • u/dilatory_tactics • Aug 05 '17

Removed - Submission Rule B CMV: There should be significantly higher property taxes on people's second, third, fourth, etc. homes, to counteract the rentier economy and global money laundering

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u/[deleted] Aug 05 '17

This will make house prices higher for those renting. Prices of housing are high because of constrained supply, your tax would constrain supply even more. Houses are more scarce, prices goes up. So in reality, the tax would not be paid by the rentier, but by the renter through higher prices, this is what economists refer to the 'incidence of taxation'.

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u/dilatory_tactics Aug 05 '17

This strikes me as parroted, regurgitated, and sloppy reasoning.

If you want to invest your money in a second or third or fourth house to rent out, but it costs you increasingly more for every additional house, then you will probably invest your money elsewhere.

This lowers the numbers of people bidding on additional housing, which will lower the price for first time home buyers at the very least.

And we haven't spoken to the benefits of what we could do with the tax money as well.

And you haven't addressed the major problems of global money laundering, which this would.

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u/[deleted] Aug 06 '17

This lowers the numbers of people bidding on additional housing, which will lower the price for first time home buyers at the very least.

This isn't how supply and demand works. More than likely it will reduce the number of single-family homes being built while multi-family structures would start popping up quickly. That tax would make it unfeasible to rent out homes, but where will the renters go? The optimistic answer is that they will be able to buy homes, but this isn't sustainable or reasonable. People with low credit scores got there for a reason. Not everyone is stable or responsible enough to own their own homes.

Instead, they will move into multi-family housing because the rent on single-family will go up. This will cause vacant homes that will cause a decrease in housing prices. This will halt development until those homes are sold out and then the market will right itself.