It is easy to pick an example like this to show the “bad” sides. But what is the alternative? If people had to pay inheritance tax on their family home, how many could not afford such a tax bill and would have to get rid of their family home to please the tax man.
Regarding the cost basis rest that is so people can upgrade their house without having to pay a tax bill. This is just deferring the tax not avoiding it. Without this it would be much harder to get a bigger house once you have kids. Most people would have a harder time moving and removing this would lower our quality of life.
> If people had to pay inheritance tax on their family home, how many could not afford such a tax bill and would have to get rid of their family home to please the tax man.
so if they can't afford to pay tax on the windfall, they'd have to sell the house and buy a smaller one. is that the end of the world?
> Regarding the cost basis rest that is so people can upgrade their house without having to pay a tax bill
what they have in many european countries is that you can do this only on your primary residence. so you let people upgrade their homes, but not their rental properties
If you had to pay the tax you could probably just finance it anyway instead of paying it all at once so it would be just like having a new (small) mortgage.
Now the US is way ahead of the game here compared to Europe. There are no property taxes in most of Europe and families hang on to their homes for generations.
I know for a fact (through living here) that Denmark and probably the rest of Scandinavia has property tax and inheritance tax -- holding on to family property is almost as expensive as buying new property.
Which part of Europe are you referring to? I once had Greek colleague who complained about having to maintain three generations worth of houses, so that might be one place where things are as you describe?
Right, Europe is bound to be diverse on this point. I have exposure to Balkan countries and the UK (which, while they do have non-zero rates, still have them far lower what I'm used to in New England).
I think you can argue migration (forced) through history is tied to this. The US was a recent star in growth due to free land. But there is no more free land. And Mars does not fill that role. We need to disempower rentiers.
Wouldn't this just reduce land entitlement for those who aren't wealthy enough to afford the new taxes? I think something like taxes that apply for people who own more than 1 property would be better.
I mean, we can solve that problem by a 100% inheritance tax so they don't leave an obligation. No? Then maybe let's skip arguing in sound bites.
Personally, I think the answer here is a continued and ongoing land tax. Occupying land should come with an expectation you contribute to the common good, because you don't "own" land. It's a shared good, just like air and water, and you should pay for use.
Primary residences should indeed not be subject to an inheritance tax - if they are continued to be used as a primary residence. Providing an ongoing home for a family unit[1] is a societal good, we shouldn't punish it.
[1] Definition of family is a hairy problem for another, longer post.
I know reasoning skills are hard, but here, let me help you: OP posted a snarky comment. I proposed a policy. Feel free to bring arguments debating the policy.
So a family on hard times should be forced to leave their grandmothers home when she dies and hope they can find a new one? Gentrification can easily push a property in the place they've lived their whole lives out of their price range. And the family home might not have been super well kept up so the "windfall" isn't as big as the property values in the area may reflect. This happens now with gentrification in big cities, it would get worse with what you are saying.
Being able to leave something to your descendants is a critical part of society. If people know they cant leave anything behind they start acting differently (and not in a good way). I understand a key part of communism is you and your family own nothing, but trust me you don't want people to have a use it or lose it attitude towards everything.
Yes, if you can't afford your house you need to find a new one. The family will come out well ahead here because the tax would only be on a percentage of the houses value, they can use the proceeds to buy a new, cheaper house. No one has the right to live anywhere just because their grandma did.
>Private property, to a communist, is not your shoes or toothbrush, or even your house.
>Those things are called personal property and under socialism and under communism they continue to belong to workers in much the same manner as they do now.
Criticize people for what they actually believe, not what you imagine they believe.
I can't defend any particular policy of any particular place. I don't think I would call myself a communist, either. But restricting land ownership is a common feature of technocracy in dense urban environments. I seem to recall that the UK does something similar. Even in the US, when you "own" a condo, you are subject to various liens and easements, and can under certain circumstances be forced to sell. China, being rather crowded, likely has created policies to manage land availability.
Communism is, primarily and essentially, about the end of money. Other features of socialist countries are largely the result of how some theorists planned to achieve communism, although they invariably fail. (Some people insist on adding "so far".) Some communists on Quora directly addressed the question of homeownership here:
Somehow, all kinds of unrelated policies get called "communism" or "Marxism", even when they directly contradict what Marx said (e.g. restrictions on gun ownership). I don't think it's helpful to policy debates to have this syncretistic demon hanging around appropriating the bad name of communism.
Assuming that's true (I have no knowledge of how Chinese real estate works), then that's because China is an authoritarian country that has decided it wants to control every aspect of citizens' lives. That can be a feature of any economic system, if the government is powerful enough, and has nothing to do with communism.
> I understand a key part of communism is you and your family own nothing
As I understand, a key part is coming to the realization you and your family have already been robbed (or evicted to go back to your example), and then to ask what's next? At least as I understand Marx, particularly in Capital v. III, the point is to construct a world in which poor & working class regain collective control of resources like food, shelter, health that sustain life. The abolition of transfer of private property is intended to end the cycle of extracted (stolen) life-sustaining resources ending up in the hands of the same family (or dominant group).
As a case in point, the theft of Black farm land has been well documented https://www.reuters.com/world/us/us-black-farmers-lost-326-b.... The point of communist organizing in Alabama during the 1930's -- detailed in Robin DG Kelley's "Hammer and Hoe" -- was to protect Black small farm owners from theft of their meager lands, and to take actions so that sharecroppers (tenant farm workers) could collectively control enough land to sustain themselves.
No. The estate tax doesn't start until the inheritance is over $12 million.
So they have to inherit a $12m estate before they're taxed, if it's less, no estate tax.
And they don't pay taxes on that $12m if they're over the $12m, only the amount that it's over that $12m. If it's worth $12,000,001, they pay taxes on only $1.
When you effectively take someone's home for government benefit. People think that when they buy property they own it. You're model is more the China version. You don't own property, you only lease it from the government. Hence, your model looks more like the communist model than the traditional Western one.
It's basically the American model - if somebody isn't improving their land, you take it from them by force and sell it at cheap prices to people who will.
That's why it's a bunch of white people with title now, rather than all being native americans
> It is easy to pick an example like this to show the “bad” sides.
You're saying this as if the example is a cherrypicked outlier rather than ubiquitous.
> If people had to pay inheritance tax on their family home, how many could not afford such a tax bill and would have to get rid of their family home to please the tax man.
At some point in the value of a home, we're not really worried about that. We do not sympathize when someone can't keep their parent's $50 million dollar home tax-free. We've set that cap at around $12 million. It's a very high cap.
edit: we're happy to grab the estates of working people who end their lives in intensive care, nursing homes and hospices, before the Medicare kicks in.
I think inheriting property should absolutely force children out of their home unless they plan to actually live in it as their primary home immediately, and even if they do, they should be paying the same taxes as the rest of the neighborhood.
> Regarding the cost basis rest that is so people can upgrade their house without having to pay a tax bill. This is just deferring the tax not avoiding it.
I think it's fine to allow this treatment for a home used as a primary residence for the exact reasons you mention, but I don't understand the logic of allowing it for an investment property
> Without this it would be much harder to get a bigger house once you have kids. Most people would have a harder time moving and removing this would lower our quality of life.
If the goal is to help people consume more of <x>, then give them cash.
Giving assistance via tax rules is a way to discriminate who gets to benefit from government subsidized while maintaining plausible deniability. It also helps obfuscate the costs.
>If people had to pay inheritance tax on their family home, how many could not afford such a tax bill and would have to get rid of their family home to please the tax man
If your family is leaving you a house worth more than $12 million, you can afford to pay the tax man.
> But what is the alternative? If people had to pay inheritance tax on their family home, how many could not afford such a tax bill and would have to get rid of their family home to please the tax man.
This is absolutely normal in the rest of the world, and there's nothing wrong with it. People don't go bankrupt over inherited property. The tax-free inheritance part is also ridiculous, in my humble opinion inheritance should be fully taxed.
a tax per square feet on residential properties where the owner doesn't live in for more than half a year, irregardless of wheter it's rented out or not, and independent from the tax from rent income. since "promoting good behaviour" trough taxation didn't work the last idk 50 years, it's time to be back to "punish bad behaviour"
How high would that tax bill be? 50-60%? Still would be lot under fair value of property and thus should be able to get loan against that tax amount. So I really see no reason not to have it taxed.
There's an argument that for inherited property, the cost basis should be zero since you didn't pay anything for it; you got it for free.
Although, that's effectively a tax on inheritance that's due at sale, which would probably be a fairly big incentive against ever selling, and instead structuring it as a long-term lease.
Regarding the cost basis rest that is so people can upgrade their house without having to pay a tax bill. This is just deferring the tax not avoiding it. Without this it would be much harder to get a bigger house once you have kids. Most people would have a harder time moving and removing this would lower our quality of life.