Re: OT: The Best Way Out Of This Mess

On Feb 24, 10:22 am, Wollybird <wollyb...@xxxxxxxxxxxxxxx> wrote:
The elite don't hold dollars, they hold land; they make their hay from
rentier payments and interest (unearned income) and capital gains.
That explains the mind-boggling fact that you can depreciate land

No, you can't. Not for taxes. Only inprovements and depletion

"Everyone recognized the absurdity of calculations depicting all the
corporate land in America as having a negative value in 1993."

"For real estate owned by households and partnerships (the latter
being the preferred legal instrument for holding residential apartment
buildings and office buildings), the Fed has estimated much higher
proportions of land to buildings, but these estimates also overvalue
buildings relative to land. Every time a property changes hands at a
higher price, building assessments are raised proportionally – and
begin to be re-depreciated for these higher valuations, regardless of
how often the buildings already have been written off!"

"Another factor also comes into play when real estate investors seek
to maximize their returns by minimizing their federal income taxes and
local property taxes. Their political lobbying toward this end is
backed by the financial and insurance industries, which recognize that
the revenue collected as rent tends to be paid out as interest. The
FIRE sector hires lobbyists to depict property values as residing in
buildings, not the land, and hence to qualify for depreciation
allowances. Also, the FIRE sector has led the campaign to lower
capital gains tax rates below normal income-tax rates."

"The real estate industry depicts rising property prices simply as
enabling real estate investors to break even after adjustment for the
impact of inflation. According to this logic, property values rise not
because of asset-price inflation or rising rental charges, but because
of the rising replacement costs for structures already built. Thus,
the return to real estate investment is not an unearned “free lunch,”
such as land-value gains are often depicted. Their logic is that
capture of the replacement value is not a real profit and hence should
not be taxed. An investor should be permitted to recoup the original
investment’s replacement cost, and pay interest only on the gain. This
view explains asset-price inflation of land values not by the supply
of mortgage credit on the “demand” side of the equation, but rather by
the old-fashioned wage and commodity-price cost inflation on the
“supply” side.

This is the same logic that the oil industry put forth for
many years in arguing for its notorious depletion allowance. Assuming
diminishing returns for mineral reserves as low-cost supplies were the
first to be exploited, oil and gas producers argued (speciously) that
it would cost more and more to find new sources of supply. They were
allowed to deduct about 25 percent of their revenue as a depletion
allowance, to provide them with the income to go out and find new
supplies. The effect was to make the oil and gas industry tax-exempt,
along with mining. To the extent that real estate and stock market
investors would be able to “index” the cost of their investment to a
construction-price index, their capital gains would be rendered tax-
exempt."

http://www.michael-hudson.com/
.

Relevant Pages

  • Re: OT: The Best Way Out Of This Mess
    ... rentier payments and interest (unearned income) and capital gains. ... That explains the mind-boggling fact that you can depreciate land ... buildings and office buildings), the Fed has estimated much higher ...
    (rec.music.classical.guitar)
  • Re: OT: The Best Way Out Of This Mess
    ... rentier payments and interest (unearned income) and capital gains. ... That explains the mind-boggling fact that you can depreciate land ... buildings and office buildings), the Fed has estimated much higher ...
    (rec.music.classical.guitar)
  • Re: OT: The Best Way Out Of This Mess
    ... rentier payments and interest (unearned income) and capital gains. ... That explains the mind-boggling fact that you can depreciate land ... buildings and office buildings), the Fed has estimated much higher ...
    (rec.music.classical.guitar)
  • Re: OT: The Best Way Out Of This Mess
    ... rentier payments and interest (unearned income) and capital gains. ... That explains the mind-boggling fact that you can depreciate land ... buildings and office buildings), the Fed has estimated much higher ...
    (rec.music.classical.guitar)
  • Re: Land tax (Re: better tax code: no income tax, head tax (&| ppty t)
    ... rent with economic rent, ... Land rent is not easy to hide. ... Buildings are even more difficult to hide. ... value of real estate to the buildings on it and away from the land. ...
    (sci.econ)
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