Comment by Plasmoid | Hacker News Reader

Comment by Plasmoid | Hacker News Reader

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> For example, people get a lot of tax breaks as a landlord

As a landlord that is wrong. You get to deduct the expenses you have for running the property against the rental income, but that's just how business works. Landlords have enormous deductions because operating a property is really expensive.

In fact, you pay higher taxes in a lot of cases. It is very common to give people a property tax deduction/reduction if it's a person's primary residence. Landlords don't get that. Many places also impose direct revenue taxes. So your city/county/state will take several percent of your revenue off the top.

Finally, after higher input taxes, paying all those business expenses, you get to pay income tax on what's left over.

Also, primary residences are subject to a $250k/$500k capital gains exclusion that rental properties do not get.

Pointing out that primary residents get great breaks does not mean that landlords do not also get tax breaks. They just don’t get those. And of course you pay tax on the income left over after expenses.

About the direct revenue tax. Government can impose a tax on a producer or consumer, but that doesn’t matter. The proportion of who pays that tax is purely based on the elasticities of both the demand and supply curve. Because demand is inelastic, that tax probably is paid mostly by the consumer through rent prices. I don’t live in a place where there is a direct revenue tax on rental income.

There are still breaks landlords get like the 20% pass-through deduction, 1031 exchanges, and interest rate deductions (similar to small business loans - which the government also wants to promote). Keep in mind that if some of these tax breaks apply to other types of businesses, they are still tax breaks for landlords incentivizing people to be landlords vs deciding not to enter the market. That is not a normative statement. I kept deductions for depreciation (which is huge), repairs, employee fees, etc out of the list since they are the expenses you mention.

Ignore the plight of renters at your own peril.

Do you think that Mao had the right idea w.r.t landlords?

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