Problem is that the relation of asset values to realized returns (that they will equalize between assets with fixed returns), means that any tax on asset returns immediately reflects in the valuations. But that is not the end of the world, since if you hold assets, paine would argue, you can afford a haircut.
You would need to make sure that this change in asset values does not wipe out highly leveraged players. But that is also a thing that has been done in the past. (see 2023 banking failures for what happens).
Yes, I would see falling valuations as an additional solution rather than a problem. Paine’s proposal would absolutely affect housing prices, correcting their inflation rate to that of other goods (rather than being 5-10x higher). Housing would cease to be a threshold for runaway wealth accumulation (and inequality), and would become affordable for ordinary people.
I say this as a person who owns two houses, this is not technically in my individual interest right now, but it’s a fairer system. As you say, I’ll still be able to afford a haircut.
I agree measures would need to be taken to protect people who are over-leveraged, and would have to be implemented gradually so as not cause massive instability. Paine benefitted from the fact that his economy was only just beginning (well, at least amidst a revolution), while ours is in full swing.
Problem is that the relation of asset values to realized returns (that they will equalize between assets with fixed returns), means that any tax on asset returns immediately reflects in the valuations. But that is not the end of the world, since if you hold assets, paine would argue, you can afford a haircut.
You would need to make sure that this change in asset values does not wipe out highly leveraged players. But that is also a thing that has been done in the past. (see 2023 banking failures for what happens).
Yes, I would see falling valuations as an additional solution rather than a problem. Paine’s proposal would absolutely affect housing prices, correcting their inflation rate to that of other goods (rather than being 5-10x higher). Housing would cease to be a threshold for runaway wealth accumulation (and inequality), and would become affordable for ordinary people.
I say this as a person who owns two houses, this is not technically in my individual interest right now, but it’s a fairer system. As you say, I’ll still be able to afford a haircut.
I agree measures would need to be taken to protect people who are over-leveraged, and would have to be implemented gradually so as not cause massive instability. Paine benefitted from the fact that his economy was only just beginning (well, at least amidst a revolution), while ours is in full swing.