Also, we don't tax the capital gains of sold additional homes enough. We should tax those gains to the extent that it isn't profitable to own and sell additional property.
Renting shelter is an important piece of flexibility for many people. I was in no position to buy an entire shelter nor tie myself down long-term right after college (and in fact, moved 6 times in the first 8 years, all but one of those being based entirely on my evolving preferences [one was my landlord selling and moving away]).
If you agree that renting shelter is important to many people for valid reasons, someone or something has to be able to own that property that you call "additional" and others call "the place I live".
I agree with this argument, but it's unrelated to taxing capital gains.
Landlords should make money for the services they provide: upkeep of the building, providing living space, etc. But real estate capital gains do not come from productive investment such as in a productivity-boosting new company. Capital gains in real estate are unproductive rentierism, and are a drain on the economy.
One thing that all economists can agree on, from Adam Smith to Ricardo to Marx, is that land rent is bad and should be taxed away. Capital gains on real estate sales are a great way to do that, while preserving profit for those who productively improve land and rent it out to others.
I would agree with you on the capital gains point iff we indexed the basis of properties to inflation.
Because we don't, much of what we call "capital gains" are "return of capital, measured in a greater number of now less valuable dollars". Return of capital should not be taxed.
As someone who rents and is hoping to buy a home eventually, I think both sides are somewhat right. No, I'm not in a position to buy, so I have to rent. However, I think that there's too many single-family homes that are owned simply to rent out right now. I'm okay with multi-family homes (apartments, townhomes, etc) being rented out more than I am with houses. Taxing additional single-family homes that aren't acquired through inheritance or similar means wouldn't affect apartment rentals and would still have the desired effect on single-family homes (which I think was the intent).
If you agree that renting shelter is important to many people for valid reasons, someone or something has to be able to own that property that you call "additional" and others call "the place I live".