General Discussion

That means half of all homeowners live in something worth that or less than that.

The average is $512.8k.

What does it mean when the average is 25% higher than the median? It means there are outliers valued much higher than the median skewing the average higher. As in, say, $10m homes in San Francisco and New York. That means the average home below the median skews even less than the median implies.

While it does cost a lot more than the median to live in or near a great urban center, why is it right that those who can’t afford to do the same must subsidize those that can?

I understand that you bought low, invested in upkeep and updates, and won the lottery by being in the right place to win value via changing demographics and social norms. But, again, is it right that those who are not so lucky must subsidize those that are? (Do you not believe in the morality of progressive taxation?)

Joint filers do not pay taxes on gains until they exceed $500k, and then only on the amount exceeding $500k. The lucky couple is above the median anyway, so already essentially less than half of us.

Single filers pay taxes on gains above $250k. This could still be a home valued less than median. I suppose someone could have bought their home for $1 and now sell for, say, $411k, a pretty decent gain of $410k on their $1. $260k would be exposed to taxes. The tax would be $52k. A serious chunk of change on this highly unlikely scenario.

To still be amongst the unwashed masses, the sales price cannot exceed $410k. If the house was purchased for $150k way back when, then taxes would amount to $2k, an effective tax of just 0.7%. For those selling at or below the median, few if any will benefit from Trump’s EO, and the minuscule few will hardly benefit significantly.

Now if I bought a mansion in Palm Beach for $10 million 20 years ago and sold it for $30 million today, the tax savings for me is a big chunk of change; I’d save $3.9 million, just under 20% (after factoring in the $500k already not taxed), thanks to Trump’s generosity.

So the EO, like all things Trump, is regressive. It benefits the already-have by taking away some tax revenue that could instead go to something with wider social benefit. It’s called a “tax expenditure”, tax dollars not collected and instead going to the P&L or personal savings of those well above the means of most of us. Tax law is loaded with these expenditures. It’s why most of us can’t have nice things.

Note I didn’t factor in the time value of money, which the existing $500k/250k break is supposed to cover. Arguably, the latter doesn’t work well. I’d rather see COLA on the original purchase price (plus adjustments), then see the difference 100% subject to capital gains tax.

(PS/ I live in a home that’s valued above the median, but my point stands as-is regardless of my personal circumstances.)

(PPS/ I’m guessing we’ll just have to agree to disagree.)