This loophole only works if you don't tax large company real estate holdings. Which would be dumb.
Of course this scheme would require for real estate taxes to also be applied to companies holding real estate. And why wouldn't they?
>The wealthy sell their second homes with only a small impact on house pieces.
This is not only about second homes. It is also about tens of thousands of rental properties. It is about commercial properties that are useful investment vehicles and thus get preference during rezoning, but which push housing further and further from the city center (except for exclusive luxury apartments). etc. etc. If the top 10% own close to 50% of the real estate, there are a lot of potential taxable assets if you target the super rich.
>Or maybe the housing market collapsed under all these forced sales and the wealth is gone
That doesn't make any sense. For the person living in it, a house does not become less useful if its nominal value drops by 50%. But it makes that house much more accessible to people looking for a new home.
>a load of normal people are in negative equity
How would that work? If I force a billionaire to either pay 8% p.a. tax on his real estate holdings or sell it, how exactly does this impact "normal" people? A "normal" homeowner would maybe have to mark down the theoretical value of his house, but he'd still have the same income with which to pay down his mortgage. And if he is forced to sell for whatever reason, potentially even at a loss, he'd still not suffer tremendously, because he'd pay much less for his next home.
>but you've also trapped a bunch of mortgage holders with expensive unsecured debt.
This can be solved through banking regulations, i.e. by forcing banks to offer repayment moratoriums if the equity of a normal home owner goes down without any fault of their own (i.e. because of market turbulence). At the same time you can force banks to hold more capital in reserve to reduce the chance of this kind of regulation leading to a banking crisis.
>It's not simple and I'm a bit tired of pretending it is.
Of course the solutions are not "simple", but the root problem certainly is (wealth inequality) and there are some clear guiding principles that you can use to develop new approaches.
>it's just that I'd really like to see a specific workable plan rather than hand waving.
Here in Germany, I know of at least three different NGOs that have been pointing to this problem for more than a decade now and have developed detailed policy recommendations, both on a national and E.U. level. I'd be astonished if there aren't similar proposals being offered in the U.S. The "how" is almost never the problem. It's more the commitment to actually go through with this. Usually this lack of commitment is covered up by (falsely) claiming that there is no workable solution.
