If you're looking for a rough overview of how US business income taxation works -- and who isn't really -- this is an interesting article by Matt Levine . He has a knack for making this stuff a lot more interesting. The real purpose of the article, though, is as a lead up to talking about Biden's proposed "billionaire minimum tax". At the highest level, here's the idea :
His most recent budget would require taxpayers worth more than $100 million to pay a minimum of 25% on their capital gains each year, whether they sold assets for a profit or continue to hold them.
The way things work today is that unrealized capital gains are not taxed. Meaning you can own something like a stock for a really long time and not pay any capital gains on it, until of course you sell or realize the gains. So this is a philosophical kind of change. And in Matt's words, it is both "jarring" and "possibly unconstitutional".
But I guess it doesn't affect that many people. There are, according to CNBC , somewhere around 10,660 centi-millionaires in the US. I wonder why it's not called a centi-millionaire minimum tax, though. (I know why.)
Last week was "forum week" in Toronto. (That is, it was the Toronto Real Estate Forum.) And as is the case every year, Benjamin Tal , deputy chief economist of CIBC, opened up the event with his usual macro view of the world. For those of you who missed it (as I did), here are some of his key points ( via RENX ):
The Bank of Canada's overnight rate will ultimately/likely settle into the 2.75-3% range (currently it sits at 5%). He expects rates to start coming down this summer.
Inflation is down, but we're not yet at the 2% target. The "last mile" is always the toughest.
But as we know, the BofC will take a recession over high inflation, any day.
The mortgage market has fallen faster than in the early 90s recession. Tal said that the residential real estate market in Canada is right now facing "the biggest test" since then.
Canada is in what he calls a "per capita recession". But for the million or so immigrants that the country accepted over the last year, we'd be in a full-blown official recession.
Finally, he called this correction in the housing market both "real" and "healthy"; he spoke about normalcy returning in 1-2 years; and he posited that the market will be "crazy" when it does return because of a supply deficit.
This last point is an important one. New housing supply is mostly shut off right now. I say mostly because there are obviously still projects under construction, and there have been and there will continue to be some successful launches. But by and large, most developers are waiting right now, principally because the absorption isn't there. They have no other choice.
But Canada continues to grow. People from around the world continue to want to move here. And there continues to be a need for a lot more new housing. So when the market does return -- and it, of course, will -- there is going to be a supply-demand imbalance. And as is always the case in real estate, there will be a lag in responding to this imbalance.
There are many ways to describe one of the prevailing urban forms emerging across the Greater Toronto Area. You could call it spiky urbanism. You could call it a collection of peaks and plains . Or -- as it is referred to in this recent article by Alex Bozikovic about "turning the suburb into the city" -- you could call it cruise ship urbanity:
These megaprojects are where Toronto has chosen to cram much of its new growth – “cruise ships of urbanity,” as Mr. Giannone told me, in a sea of houses. As such they provide an opportunity to create citylike density and activity.
What we are talking about is a dichotomous form of urbanism: high-density mixed-use nodes surrounded by low-rise car-oriented communities. And on many levels, this makes a lot of sense, especially if the cruise ship happens to be docked on top of a transit station. This is where density needs to go. If you have a transit station without much density, that should be addressed immediately.
But it also presents a great challenge. If transportation planning is necessarily land use planning, then we are dealing with two very different kinds of land use patterns and, therefore, two very different kinds of mobility demands. You can address this by making the cruise ship as self-sufficient and pleasant as possible, but eventually someone will want or need to get off the ship.
Does that mean they will then need a car?
You don't have this same problem with more consistent forms of urbanism. Consider, for example, cities like Paris and Barcelona. These are dense cities, but more importantly they are, for the most part, uniformly dense. Or at least, uniformly dense enough . Meaning that you can probably apply a more uniform transportation strategy. What works in one part of the city is likely to work in other parts too.
Of course, we could also apply a uniform transportation strategy to our urban cruise ships. Given that they exist in a sea of low-rise houses, we could simply say that each urban cruise ship resident should also have their own parking space (1:1 ratio). The solution: everyone drives! But this, to me, seems like an insane long-term solution.
In my view, the most impactful solution lies not in the ships themselves, but in the seas surrounding them. We need to look holistically at our entire city region and determine what it will take to turn suburb into city. And that likely means a whole host of things, ranging from leveraging the infrastructure we already have (i.e. upzoning around transit stations) to embracing autonomous vehicles.
In the end, I don't think we want cruise ships of urbanity. We need more density, everywhere.
