Homeowners. So says a nice WSJ op-ed past times Rob Arnott together with Lisa Meulbroek, together with a proposal past times Chicago Fed Economists Thomas Haasl, Rick Matton, together with Thomas Walstrum.
The latter was a small-scale proposal, inwards the Jonathan Swift tradition. Despite Crain's Chicago Business directly labeling it "foolish," "inhumane," together with "the dumbest solution yet, the starting fourth dimension article points out its inevitability. If indeed courts volition insist that benefits may non live on cut, therefore nation governments must heighten taxes, together with this is the alone 1 that tin exercise the trick.
U.S.A. tin endeavor to heighten income taxes. And people volition move. U.S.A. tin endeavor to heighten concern taxes. And businesses volition move. What tin states taxation that can't move? Only existent estate. If the nation drastically raises the holding tax, at that topographic point is no pick only to pay it. You tin sell, only the novel buyer volition live on willing to pay much less. Pay the taxation piece of cake over time, or lose the value of the holding correct away inwards a lower price. Either way, the possessor of the holding on the 24-hour interval the taxation is announced bears the burden of paying off the pensions.
There is a an economical regulation here, the "capital levy." Influenza A virus subtype H5N1 authorities inwards problem has an incentive to select grip of existing capital, once, together with hope never to exercise it again. The hope is important, because if people know that a uppercase levy is coming they won't invest (build houses). If the authorities tin line it off, it is a taxation that does non distort decisions going forward. Of course, getting people to believe the hope together with invest 1 time to a greater extent than afterwards the uppercase levy is... well, let's enjoin a tricky business. Governments that exercise it 1 time bring a style to exercise it again.
In sum, a holding taxation is essentially the same affair every bit the authorities grabbing one-half the houses together with selling them off to brand pension obligations. And unless a miracle happens, it is the alone agency out.
Update: We're at that topographic point already, enjoin Orphe Divounguy, Bryce Hill, together with Joe Tabor at Illinois Policy. The volume of recent increases inwards holding taxes bring gone to pay for pensions, non to a greater extent than teachers, police, etc.
Update 2: I should clarify, that I establish this an interesting slice of economic science to a greater extent than than anything else. I exercise non intend this is the correct solution, nor is it the alone one. Most other countries roughly the world, having made unsustainable pension promises, detect some agency roughly them together with trim pensions. It happens. Some form out of federal bailout is non unthinkable either. Moreover, the all of a precipitous announced surprise 1 time together with for all holding taxation increment is unlikely, encounter update 1. So the states are probable to reap many disincentive effects of expected increases inwards holding together with other taxes.
Finally, well-nigh importantly property taxation payers vote! They are unlikely to sit down nonetheless for such a mass expropriation of their wealth.
The latter was a small-scale proposal, inwards the Jonathan Swift tradition. Despite Crain's Chicago Business directly labeling it "foolish," "inhumane," together with "the dumbest solution yet, the starting fourth dimension article points out its inevitability. If indeed courts volition insist that benefits may non live on cut, therefore nation governments must heighten taxes, together with this is the alone 1 that tin exercise the trick.
U.S.A. tin endeavor to heighten income taxes. And people volition move. U.S.A. tin endeavor to heighten concern taxes. And businesses volition move. What tin states taxation that can't move? Only existent estate. If the nation drastically raises the holding tax, at that topographic point is no pick only to pay it. You tin sell, only the novel buyer volition live on willing to pay much less. Pay the taxation piece of cake over time, or lose the value of the holding correct away inwards a lower price. Either way, the possessor of the holding on the 24-hour interval the taxation is announced bears the burden of paying off the pensions.
There is a an economical regulation here, the "capital levy." Influenza A virus subtype H5N1 authorities inwards problem has an incentive to select grip of existing capital, once, together with hope never to exercise it again. The hope is important, because if people know that a uppercase levy is coming they won't invest (build houses). If the authorities tin line it off, it is a taxation that does non distort decisions going forward. Of course, getting people to believe the hope together with invest 1 time to a greater extent than afterwards the uppercase levy is... well, let's enjoin a tricky business. Governments that exercise it 1 time bring a style to exercise it again.
In sum, a holding taxation is essentially the same affair every bit the authorities grabbing one-half the houses together with selling them off to brand pension obligations. And unless a miracle happens, it is the alone agency out.
Update: We're at that topographic point already, enjoin Orphe Divounguy, Bryce Hill, together with Joe Tabor at Illinois Policy. The volume of recent increases inwards holding taxes bring gone to pay for pensions, non to a greater extent than teachers, police, etc.
Update 2: I should clarify, that I establish this an interesting slice of economic science to a greater extent than than anything else. I exercise non intend this is the correct solution, nor is it the alone one. Most other countries roughly the world, having made unsustainable pension promises, detect some agency roughly them together with trim pensions. It happens. Some form out of federal bailout is non unthinkable either. Moreover, the all of a precipitous announced surprise 1 time together with for all holding taxation increment is unlikely, encounter update 1. So the states are probable to reap many disincentive effects of expected increases inwards holding together with other taxes.
Finally, well-nigh importantly property taxation payers vote! They are unlikely to sit down nonetheless for such a mass expropriation of their wealth.
