> If there are no rich people to tax, then who owns the unaffordable real estate?
People like my mom who bought their place 20 years ago. Or like my grandparents who bought their house 50 years ago.
But there's not enough new investment to increase supply. In large part because there aren't enough people with liquid wealth to provide said supply.
And none of the people who bought decades ago are selling because they need somewhere to live and can't afford to buy at current prices. Any gains they've made would be immediately eaten away by the new purchase.
You couldn't do something like a wealth tax on these people because they have very little cashflow to pay those taxes with. And it's not like they aren't using their homes, so an under-use tax wouldn't work either. You could try a land value tax, but again there's no cashflow to collect that from and nowhere for these people to go if they're forced to sell.
That's how you make people lose interest in the country — exactly what OP is complaining about. If you want to stop brain and capital drain, taxation should be the last thing on your mind.
There's a tipping point though, right? I think the right question is, how do we find the correct threshold?
Otherwise, there will be an asymmetry in which the "brains and capital" will get all the benefits of taxes with little to no skin in the game. That implies society serves the economy and not the other way around.
> Whether the government wants to tax it is a different question. Usually they do not.
We're talking about a formerly socialist European country here. Not everywhere is USA :)
Income tax in Slovenia goes up to 50% and VAT (similar to sales tax) is an eyebleeding 22%. Capital gains taxes can be as high as 25%. Slovenia is not afraid to tax people don't worry.
People like my mom who bought their place 20 years ago. Or like my grandparents who bought their house 50 years ago.
But there's not enough new investment to increase supply. In large part because there aren't enough people with liquid wealth to provide said supply.
And none of the people who bought decades ago are selling because they need somewhere to live and can't afford to buy at current prices. Any gains they've made would be immediately eaten away by the new purchase.
You couldn't do something like a wealth tax on these people because they have very little cashflow to pay those taxes with. And it's not like they aren't using their homes, so an under-use tax wouldn't work either. You could try a land value tax, but again there's no cashflow to collect that from and nowhere for these people to go if they're forced to sell.