Posted on 04/04/2025 1:52:45 PM PDT by NoLibZone
A new analysis from UCLA’s Lewis Center for Regional Policy Studies authored by Michael Manville and Mott Smith claims that the so-called “mansion tax” has slowed down sales, especially for commercial properties
Measure ULA was passed in 2022 and took effect in April 2023, bringing a 4% charge to all L.A. property sales above $5 million and a 5.5% charge to sales above $10 million. The proceeds fund affordable housing and homelessness prevention initiatives; roughly two years in, the transfer tax has raised more than $632 million.
But the report — published Tuesday and titled “The Unintended Consequences of Measure ULA” — suggests the tax has chilled a once-robust market in L.A., while sales above $5 million have remained steady in other markets across L.A. County not affected by the tax.
(Excerpt) Read more at latimes.com ...
Aka stupidity.
A couple of decades ago France decided that they’d tax the sale of art because people were selling paintings for millions of dollars that had been bought for almost pocket change in the early part of the twentieth century. It was something small, less than three percent if recall. Overnight, the art market moved from Paris to London and New York. The idea was to give the money to the descendants of the artists. (Ridiculous. How could you prove who was related to who when the original died without leaving DNA.) The thing is they thought it was so small it wouldn’t affect anything, and it ruined the art market in Paris literally overnight. Any tax, no matter how small, will have an impact.
Next thing you know, UCLA will announce that bears poop in the woods.
Not stupidity, it’s a deliberate scam.
I bet not even one cent of every dollar taken in went to it’s actual purpose.
In 1990 a 10% luxury tax was applied to boats in the U.S. and the results were disastrous. Over 25,000 boating industry jobs were lost and a tax that was supposed to generate millions of additional government revenue actually cost the government revenue. Fortunately, Congress was quick to acknowledge the damage they were causing, and the tax was repealed. Unfortunately, before the repeal was enacted it severely damaged many American families.
The reason luxury taxes don’t work is that they change the behavior of those who would normally be buying boats. Boat buyers don’t want to pay the tax, so they don’t make a boat purchase. This hurts working folks in the factories and dealerships who count on boat sales to support their families. This isn’t just theory, whenever a country enacts a luxury tax it happens, Every. Single. Time!
This is why countries want the value added tax. Every step of the process generates tax revenue. The consumer never knows how much tax he’s paying. This is the primary reason countries put tariffs on US goods. Let’s say that the European thingy has 50 percent actual value and 50 percent tax. The American thingy, the same in all regards, has about 90% value and ten percent tax. It sells for significantly less than the European thingy. The tariff reciprocity Trump wants would mean the European countries would be forced to give up the VAT in order for their thingies to compete with America’s. Talk to visitors from foreign countries. They are astonished at how cheap everything is in America. Cars, houses, appliances, gas, electricity...everything is cheaper here.
The thing about luxury goods is they’re optional. If the government puts an additional tax on them, it feels like robbery and people just forgo the luxury. I’m in Florida and I remember all those tiny family boat manufacturers going out of business. Not only that, everyone but the government knew it would happen.
The best part is that nobody knows where the $632 Million Dollars went to.
In other news, water wet, fire hot.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.