Private equity again? It has driven companies out of business to line greedy pockets. It has ruined nursing homes and hospitals to line greedy pockets. Now it make affordable housing unaffordable to line greedy pockets. Seems to me the problem is obvious and one that brave politicians could solve if they were so motivated.
It's also in PE's interest to slow or block any increases in the housing supply, in order to increase the value of their existing rental unit portfolios. As long as demand for rental units exceeds available supply, PE will continue to make serious bank.
It would be most interesting to learn what, if anything, Private Equity has lobbied for to slow or block new housing starts. Color me overly skeptical, but I'd be surprised if at least some PE players haven't worked to contain increases in housing supply. Especially in PE-saturated markets like Atlanta and parts of FL.
No question. Frankly we see it here in Syracuse as well. No one fights new affordable housing like existing greedy (mostly downstate) landlords and the developers who are converting old factories, etc. to luxury lofts or putting up luxury student housing for SU students. (Whatever happened to dorm life????)
Yeah, it seems like Builders, nationally, have a serious allergy to producing Starter Homes and Efficiency Apartments. And usually only do when *forced* by local or state governments.
The builders who specialize in residential have also been consolidating market share. Today, there are something like ten (10) Builders that utterly dominate that sector of the economy.
Residential builders build what they can make a profit on. The cost of buildable land has skyrocketed. If it is remote and affordable, add the cost infrastructure. Greedy landowners play a large part in this. Families who inherit farmland that they have no interest in farming sell to the highest bidder, further compounding the problem of high end housing as well as diminution of locally produced food. Banks play into the farce by prefering to
Finance large projects undertaken by large, known builders who build cheap, poorly constructed houses , then sell a portion of the homes to these REITS and move on to another market.
It is all about profit. It is the result of unregulated , unbridled capitalism that has skewed our economy so far out of balance. The Federal Government is the only entity with the power to enact regulation that will rectify this problem. It is going to hurt a lot of people, both investors and individuals who will end up underwater with their mortgages. We can blame the politicians in both parties who have ignored the few, like Bernie Sanders and Elizabeth Warren who have been screaming about this for years.
I've never done a deep dive into the residential building industry, a predominantly Republican constituency. But it seems their universal resistance to producing anything other than 3B/2Ba and luxury homes, or adding fire-resistant or Green materials, is simply because they *don't want to.* As in, laziness, and aversion to innovation. They're just spoiled brats.
Whoa! Let’s not make so many assumptions! I happen to be a Licensed Residential Contractor with over 40 years in the trade. I have been and am a Liberal, and I have worked with both right wingers and liberals like myself. I built one house at a time on contract with owners and Architects. The problem is the giant firms that make a profit by cutting corners, so called production building,where you hire any warm body who has a hammer, and who produce houses that will be money pits inside of 15 years. They can buy large tracts of land and throw up a bunch of mini-mansions in six weeks, get their money quick with the flashy slums-to-be, and leave the problems for the hapless people who unknowingly bought lemons. Like Banking,the Stock Market, and too many manufacturing concerns, the object became to make your money and run.
We no longer have people who take pride in producing a quality product that will serve the customers who relied on your promise to do the right thing. I know so many of my fellow builders who built homes that will be here for generations and will stand the test of time. I have retired now, but it is now my mission to teach the public how to build or buy a quality home so that the biggest investment they make will not become the problem that bankrupts them.
I was watching 'The Greatest Night in Pop' about the making of "We are the World" and was touched by how these people donated their time and talent to help those in need.
The people who run Private Equity feel that literally anything they do that earns an extra $1 in profit is justifiable and they would never think of doing something to help others if it couldn't earn them money or because it was the right thing to do.
That attitude is what is ruining schools and healthcare. "You have to run schools like a business." No you don't. They aren't a business, they are a service to the community you serve or, if you are profit driven, think of it as an investment.
Healthcare is the same way. GLP-1 drugs work and companies love them because they earn them billions. You know what also works, teaching people and incentivising exercise and healthy diets at a young age. But you can't monetize that so why do it?
Big Pharma likes all kinds of drugs because it makes them billions. Not every condition can be treated with lifestyle changes early in life but most every condition can be treated with some drug that they advertise heavily on TV or gouge cancer patients for. Worst of all in that space, most drugs were developed by researchers at NIH or CDC at our expense before Trump, Musk and RFK Jr. drove them out.
Deficit spending supports corporate profits and asset prices, which disproportionately benefits the top 10%. Deficit spending is socially justified when it offsets recession, underinvestment, or genuine public need. But deficit spending during a strong economy becomes an upward wealth-transfer mechanism: public debt is socialized, while the resulting profits and stock gains are privatized.
Government deficits are a major source of corporate profits. By accounting identity, one sector’s deficit is another sector’s surplus. When the federal government borrows and spends, that spending, in part, becomes private-sector income and corporate revenue. This explains why deficits correlate strongly with high margins and rising stock prices.
But the distributional point is key: stock ownership is highly concentrated. The Fed’s Distributional Financial Accounts track household wealth distribution, and research using those accounts shows the top 10% hold the overwhelming majority of corporate equity.
Deficit spending can be economically justified during recessions, financial crises, wars, or periods of major national investment. In those situations, government borrowing can stabilize demand, preserve employment, and prevent economic contraction. However, when large deficits are created during already-strong economic conditions—particularly through broad corporate tax cuts—the effect is often less about economic rescue and more about boosting asset values and corporate profitability. The benefits become concentrated among shareholders and executives, while the long-term debt obligations are socialized across the broader public.
Both major tax-cut packages enacted under Donald Trump were passed during relatively strong economic periods rather than severe recessions. These policies significantly increased deficits while disproportionately benefiting corporations and wealthy investors through higher profits, stock buybacks, and rising equity valuations.
The GOP and Trump have continued to tout debunked supply-side theories politically to justify those outcomes.
One response to this dynamic would be a steeply progressive corporate income tax combined with a market-capitalization tax floor rather than simply higher taxes on individuals. Under such a system, small and moderately profitable firms would pay relatively modest tax rates, while extremely large and highly profitable corporations would face progressively higher marginal rates. In addition, corporations would pay the greater of a traditional income tax or a tax tied to their market capitalization, preventing dominant firms from minimizing taxable income through accounting strategies while still generating enormous shareholder wealth and market power.
As corporations grow larger, they often accumulate advantages that go beyond productive efficiency: monopoly or oligopoly power, political influence, regulatory capture, labor leverage, network dominance, and the ability to acquire or suppress competitors. A progressive corporate tax system could therefore function as a market-balancing mechanism by discouraging excessive concentration while preserving room for entrepreneurship and competition. It is well argued that the Supreme Court is a case of regulatory capture, which with decisions that have allowed "dark money" further tilted the economic power.
The broader principle is that if modern governments and central banks play a substantial role in supporting corporate profits and financial markets through fiscal deficits, monetary policy, infrastructure, legal protections, and public institutions, then society has a legitimate claim to share more directly in the resulting gains. The central question is not whether markets should exist, but whether the benefits of modern capitalism should remain highly concentrated or be distributed more broadly across the citizens whose economic system makes those profits possible.
Reminder that the right to housing is recognized as a universal human right, regardless of what these parasitic private equity landlords using AI to collude against investors would suggest.
Hmm, I tried doing that in the app and it only gave me the options to share, hide, or delete. Maybe I'm missing something? I like Substack, but not the mobile app.
Name names. Tell us who these people are and do not let them hide behind their company's names. Human beings are affecting other human beings. I need not know the name of the single mother trying to get by, I know her. I want to know the names of private equity dealers who make her and her children's lives miserable for profit.
Collusion, loopholes, cost-cutting, victimizing low-income renters. The rent is too damn high because the greed is too damn big and the regulation is too damn lax. Since PE has added $3.6 billion to renters bills, they are essentially funding the campaign donations that enable their own misery…
Private equity should be banned from being able to invest in anything related to basic services, utilities, etc. Let them strip mine corporations then sell the bones, fine, but stay out of human beings basic services.
If your own 401K or other investment portfolio includes even a small amount of stocks from these companies, you are complicit, and part of the problem.
Rental housing is an attractive investment because the market doesn’t supply enough, so returns continue to rise. And big investors with strategy and forecasting departments can easily see that a combination of forces will continue to keep supply well behind demand: anti-development sentiment in cities and suburbs resists increased density; escalating building codes that ensure buildings are safer increase the cost and time needed for permitting and the technical skill needed to design and build; construction materials costs go up with tariffs and fuel costs; immigration enforcement reduces the available workforce for construction….
Owners - individuals or corporations - can get away with shirking on maintenance or cleaning because renters are already competing for substandard units.
So what can we do? What should we demand of politicians? What changes to tax law will make the playing field more level? Longer depreciation periods? Raising capital gains rates? Penalties for violations of rental covenants like ignoring repairs, mold, rats? New or raised transfer taxes based on sales prices? Where are the lobbyists or advocates who will present legislation to elected officials to defend the other 98%?
I agree but can builders be compelled or incentivized to build long-term AFFORDABLE housing? Around here (Western NC) it seems all the new apartments are promoted as "luxury".
Only with subsidies. It is economically impossible to build affordable housing when the cost of land, the cost of materials, and the cost of labor make it a losing endeavor.
You're absolutely right but then it's political agony to approve the funding and more wrestling with "loopholes". Sigh. How can we govern ourselves to balance the common good with the pursuit of profit?
This is right up the alley of Jeremy Ney's work with American Inequality. If you like this work from Judd and team, check him out: https://americaninequality.substack.com/
Deficit spending supports corporate profits and asset prices, which disproportionately benefits the top 10%. Deficit spending is socially justified when it offsets recession, underinvestment, or genuine public need. But deficit spending during a strong economy becomes an upward wealth-transfer mechanism: public debt is socialized, while the resulting profits and stock gains are privatized.
Government deficits are a major source of corporate profits. By accounting identity, one sector’s deficit is another sector’s surplus. When the federal government borrows and spends, that spending, in part, becomes private-sector income and corporate revenue. That helps explain why deficits correlate strongly with high margins and rising stock prices.
But the distributional point is key: stock ownership is highly concentrated. The Fed’s Distributional Financial Accounts track household wealth distribution, and research using those accounts shows the top 10% hold the overwhelming majority of corporate equity.
Deficit spending can be economically justified during recessions, financial crises, wars, or periods of major national investment. In those situations, government borrowing can stabilize demand, preserve employment, and prevent economic contraction. However, when large deficits are created during already-strong economic conditions—particularly through broad corporate tax cuts—the effect is often less about economic rescue and more about boosting asset values and corporate profitability. The benefits become concentrated among shareholders and executives, while the long-term debt obligations are socialized across the broader public.
Both major tax-cut packages enacted under Donald Trump were passed during relatively strong economic periods rather than severe recessions. These policies significantly increased deficits while disproportionately benefiting corporations and wealthy investors through higher profits, stock buybacks, and rising equity valuations.
The GOP and Trump have continued to tout debunked supply-side theories politically to justify those outcomes.
One response to this dynamic would be a steeply progressive corporate income tax combined with a market-capitalization tax floor rather than simply higher taxes on individuals. Under such a system, small and moderately profitable firms would pay relatively modest tax rates, while extremely large and highly profitable corporations would face progressively higher marginal rates. In addition, corporations would pay the greater of a traditional income tax or a tax tied to their market capitalization, preventing dominant firms from minimizing taxable income through accounting strategies while still generating enormous shareholder wealth and market power.
As corporations grow larger, they often accumulate advantages that go beyond productive efficiency: monopoly or oligopoly power, political influence, regulatory capture, labor leverage, network dominance, and the ability to acquire or suppress competitors. A progressive corporate tax system could therefore function as a market-balancing mechanism by discouraging excessive concentration while preserving room for entrepreneurship and competition. It is well argued that the Supreme Court is a case of regulatory capture, which with decisions that have allowed "dark money" further tilted the economic power.
The broader principle is that if modern governments and central banks play a substantial role in supporting corporate profits and financial markets through fiscal deficits, monetary policy, infrastructure, legal protections, and public institutions, then society has a legitimate claim to share more directly in the resulting gains. The central question is not whether markets should exist, but whether the benefits of modern capitalism should remain highly concentrated or be distributed more broadly across the citizens whose economic system makes those profits possible.
I am a small hold landlord in a small city here in Cleveland. I've notice a large number of apartment buildings going up. My understanding is that much of these are tax-abated. This allows lower rent than would otherwise be possible (drawing potential tenants away from people like myself) as well as higher taxes (our taxes have increased enormously over the past ten years.) While the article didn't mention it, I wonder what role this "sweetheart" tax deals play in private equity's schemes.
The central problem is not PE - but why is housing such a good investment????
Housing prices should stop rising then private groups won't want to own housing.
The absolute best punishment for these PE firms would be to build a massive amount of housing and lower housing prices nationally - then they'd be left holding the bag.
I live in liberal Seattle and owned a condo I wasn't living in, but due to renter protection ordinances in the city, I left it empty except for the occasional friend or family visitor to town. Seattle landlords are unable to choose their own tenants or evict them in a timely manner if they, for example, trash the place or simply stop paying rent. Being liberal myself, I felt guilty for keeping this very nice studio unavailable for a renter in a city with a housing crisis, but the potential costs for leasing the unit (when I wanted to sell it eventually) were too high for an individual landlord. This is another way that rental markets become skewed to corporate ownership and control.
Private equity again? It has driven companies out of business to line greedy pockets. It has ruined nursing homes and hospitals to line greedy pockets. Now it make affordable housing unaffordable to line greedy pockets. Seems to me the problem is obvious and one that brave politicians could solve if they were so motivated.
It's also in PE's interest to slow or block any increases in the housing supply, in order to increase the value of their existing rental unit portfolios. As long as demand for rental units exceeds available supply, PE will continue to make serious bank.
It would be most interesting to learn what, if anything, Private Equity has lobbied for to slow or block new housing starts. Color me overly skeptical, but I'd be surprised if at least some PE players haven't worked to contain increases in housing supply. Especially in PE-saturated markets like Atlanta and parts of FL.
No question. Frankly we see it here in Syracuse as well. No one fights new affordable housing like existing greedy (mostly downstate) landlords and the developers who are converting old factories, etc. to luxury lofts or putting up luxury student housing for SU students. (Whatever happened to dorm life????)
Yeah, it seems like Builders, nationally, have a serious allergy to producing Starter Homes and Efficiency Apartments. And usually only do when *forced* by local or state governments.
The builders who specialize in residential have also been consolidating market share. Today, there are something like ten (10) Builders that utterly dominate that sector of the economy.
Residential builders build what they can make a profit on. The cost of buildable land has skyrocketed. If it is remote and affordable, add the cost infrastructure. Greedy landowners play a large part in this. Families who inherit farmland that they have no interest in farming sell to the highest bidder, further compounding the problem of high end housing as well as diminution of locally produced food. Banks play into the farce by prefering to
Finance large projects undertaken by large, known builders who build cheap, poorly constructed houses , then sell a portion of the homes to these REITS and move on to another market.
It is all about profit. It is the result of unregulated , unbridled capitalism that has skewed our economy so far out of balance. The Federal Government is the only entity with the power to enact regulation that will rectify this problem. It is going to hurt a lot of people, both investors and individuals who will end up underwater with their mortgages. We can blame the politicians in both parties who have ignored the few, like Bernie Sanders and Elizabeth Warren who have been screaming about this for years.
I've never done a deep dive into the residential building industry, a predominantly Republican constituency. But it seems their universal resistance to producing anything other than 3B/2Ba and luxury homes, or adding fire-resistant or Green materials, is simply because they *don't want to.* As in, laziness, and aversion to innovation. They're just spoiled brats.
Whoa! Let’s not make so many assumptions! I happen to be a Licensed Residential Contractor with over 40 years in the trade. I have been and am a Liberal, and I have worked with both right wingers and liberals like myself. I built one house at a time on contract with owners and Architects. The problem is the giant firms that make a profit by cutting corners, so called production building,where you hire any warm body who has a hammer, and who produce houses that will be money pits inside of 15 years. They can buy large tracts of land and throw up a bunch of mini-mansions in six weeks, get their money quick with the flashy slums-to-be, and leave the problems for the hapless people who unknowingly bought lemons. Like Banking,the Stock Market, and too many manufacturing concerns, the object became to make your money and run.
We no longer have people who take pride in producing a quality product that will serve the customers who relied on your promise to do the right thing. I know so many of my fellow builders who built homes that will be here for generations and will stand the test of time. I have retired now, but it is now my mission to teach the public how to build or buy a quality home so that the biggest investment they make will not become the problem that bankrupts them.
I was watching 'The Greatest Night in Pop' about the making of "We are the World" and was touched by how these people donated their time and talent to help those in need.
The people who run Private Equity feel that literally anything they do that earns an extra $1 in profit is justifiable and they would never think of doing something to help others if it couldn't earn them money or because it was the right thing to do.
That attitude is what is ruining schools and healthcare. "You have to run schools like a business." No you don't. They aren't a business, they are a service to the community you serve or, if you are profit driven, think of it as an investment.
Healthcare is the same way. GLP-1 drugs work and companies love them because they earn them billions. You know what also works, teaching people and incentivising exercise and healthy diets at a young age. But you can't monetize that so why do it?
Big Pharma likes all kinds of drugs because it makes them billions. Not every condition can be treated with lifestyle changes early in life but most every condition can be treated with some drug that they advertise heavily on TV or gouge cancer patients for. Worst of all in that space, most drugs were developed by researchers at NIH or CDC at our expense before Trump, Musk and RFK Jr. drove them out.
"The GOP borrow and soend grift."
Deficit spending supports corporate profits and asset prices, which disproportionately benefits the top 10%. Deficit spending is socially justified when it offsets recession, underinvestment, or genuine public need. But deficit spending during a strong economy becomes an upward wealth-transfer mechanism: public debt is socialized, while the resulting profits and stock gains are privatized.
Government deficits are a major source of corporate profits. By accounting identity, one sector’s deficit is another sector’s surplus. When the federal government borrows and spends, that spending, in part, becomes private-sector income and corporate revenue. This explains why deficits correlate strongly with high margins and rising stock prices.
But the distributional point is key: stock ownership is highly concentrated. The Fed’s Distributional Financial Accounts track household wealth distribution, and research using those accounts shows the top 10% hold the overwhelming majority of corporate equity.
Deficit spending can be economically justified during recessions, financial crises, wars, or periods of major national investment. In those situations, government borrowing can stabilize demand, preserve employment, and prevent economic contraction. However, when large deficits are created during already-strong economic conditions—particularly through broad corporate tax cuts—the effect is often less about economic rescue and more about boosting asset values and corporate profitability. The benefits become concentrated among shareholders and executives, while the long-term debt obligations are socialized across the broader public.
Both major tax-cut packages enacted under Donald Trump were passed during relatively strong economic periods rather than severe recessions. These policies significantly increased deficits while disproportionately benefiting corporations and wealthy investors through higher profits, stock buybacks, and rising equity valuations.
The GOP and Trump have continued to tout debunked supply-side theories politically to justify those outcomes.
One response to this dynamic would be a steeply progressive corporate income tax combined with a market-capitalization tax floor rather than simply higher taxes on individuals. Under such a system, small and moderately profitable firms would pay relatively modest tax rates, while extremely large and highly profitable corporations would face progressively higher marginal rates. In addition, corporations would pay the greater of a traditional income tax or a tax tied to their market capitalization, preventing dominant firms from minimizing taxable income through accounting strategies while still generating enormous shareholder wealth and market power.
As corporations grow larger, they often accumulate advantages that go beyond productive efficiency: monopoly or oligopoly power, political influence, regulatory capture, labor leverage, network dominance, and the ability to acquire or suppress competitors. A progressive corporate tax system could therefore function as a market-balancing mechanism by discouraging excessive concentration while preserving room for entrepreneurship and competition. It is well argued that the Supreme Court is a case of regulatory capture, which with decisions that have allowed "dark money" further tilted the economic power.
The broader principle is that if modern governments and central banks play a substantial role in supporting corporate profits and financial markets through fiscal deficits, monetary policy, infrastructure, legal protections, and public institutions, then society has a legitimate claim to share more directly in the resulting gains. The central question is not whether markets should exist, but whether the benefits of modern capitalism should remain highly concentrated or be distributed more broadly across the citizens whose economic system makes those profits possible.
It’s an absolute curse.
Reminder that the right to housing is recognized as a universal human right, regardless of what these parasitic private equity landlords using AI to collude against investors would suggest.
*tenants, not investors 🤦♂️
The three dots on the upper right corner. Easy to edit.
Hmm, I tried doing that in the app and it only gave me the options to share, hide, or delete. Maybe I'm missing something? I like Substack, but not the mobile app.
Oh, I am on a computer. I bet if you get near a laptop, you could go in and edit at any point during the day.
I don’t think you can edit from the app. Which is one reason I refuse to use it, even on an iPhone.
Perhaps, now hear me out, private equity firms shouldn't be ALLOWED to own housing. I know, crazy, right?
Name names. Tell us who these people are and do not let them hide behind their company's names. Human beings are affecting other human beings. I need not know the name of the single mother trying to get by, I know her. I want to know the names of private equity dealers who make her and her children's lives miserable for profit.
Collusion, loopholes, cost-cutting, victimizing low-income renters. The rent is too damn high because the greed is too damn big and the regulation is too damn lax. Since PE has added $3.6 billion to renters bills, they are essentially funding the campaign donations that enable their own misery…
Private equity should be banned from being able to invest in anything related to basic services, utilities, etc. Let them strip mine corporations then sell the bones, fine, but stay out of human beings basic services.
It shouldn’t exist at all. It’s the very definition of enshittification.
Ebenezer Scrooge, before the ghosts visited, would fit in nicely in the private equity firms.
If your own 401K or other investment portfolio includes even a small amount of stocks from these companies, you are complicit, and part of the problem.
Rental housing is an attractive investment because the market doesn’t supply enough, so returns continue to rise. And big investors with strategy and forecasting departments can easily see that a combination of forces will continue to keep supply well behind demand: anti-development sentiment in cities and suburbs resists increased density; escalating building codes that ensure buildings are safer increase the cost and time needed for permitting and the technical skill needed to design and build; construction materials costs go up with tariffs and fuel costs; immigration enforcement reduces the available workforce for construction….
Owners - individuals or corporations - can get away with shirking on maintenance or cleaning because renters are already competing for substandard units.
This is a sad situation. This should be added to the list of corporate creed. How do these people sleep at night.
When you have no conscience, this kind of greed will never interfere with your sleep.
So what can we do? What should we demand of politicians? What changes to tax law will make the playing field more level? Longer depreciation periods? Raising capital gains rates? Penalties for violations of rental covenants like ignoring repairs, mold, rats? New or raised transfer taxes based on sales prices? Where are the lobbyists or advocates who will present legislation to elected officials to defend the other 98%?
Build more housing!
I agree but can builders be compelled or incentivized to build long-term AFFORDABLE housing? Around here (Western NC) it seems all the new apartments are promoted as "luxury".
Only with subsidies. It is economically impossible to build affordable housing when the cost of land, the cost of materials, and the cost of labor make it a losing endeavor.
You're absolutely right but then it's political agony to approve the funding and more wrestling with "loopholes". Sigh. How can we govern ourselves to balance the common good with the pursuit of profit?
This is right up the alley of Jeremy Ney's work with American Inequality. If you like this work from Judd and team, check him out: https://americaninequality.substack.com/
Deficit spending supports corporate profits and asset prices, which disproportionately benefits the top 10%. Deficit spending is socially justified when it offsets recession, underinvestment, or genuine public need. But deficit spending during a strong economy becomes an upward wealth-transfer mechanism: public debt is socialized, while the resulting profits and stock gains are privatized.
Government deficits are a major source of corporate profits. By accounting identity, one sector’s deficit is another sector’s surplus. When the federal government borrows and spends, that spending, in part, becomes private-sector income and corporate revenue. That helps explain why deficits correlate strongly with high margins and rising stock prices.
But the distributional point is key: stock ownership is highly concentrated. The Fed’s Distributional Financial Accounts track household wealth distribution, and research using those accounts shows the top 10% hold the overwhelming majority of corporate equity.
Deficit spending can be economically justified during recessions, financial crises, wars, or periods of major national investment. In those situations, government borrowing can stabilize demand, preserve employment, and prevent economic contraction. However, when large deficits are created during already-strong economic conditions—particularly through broad corporate tax cuts—the effect is often less about economic rescue and more about boosting asset values and corporate profitability. The benefits become concentrated among shareholders and executives, while the long-term debt obligations are socialized across the broader public.
Both major tax-cut packages enacted under Donald Trump were passed during relatively strong economic periods rather than severe recessions. These policies significantly increased deficits while disproportionately benefiting corporations and wealthy investors through higher profits, stock buybacks, and rising equity valuations.
The GOP and Trump have continued to tout debunked supply-side theories politically to justify those outcomes.
One response to this dynamic would be a steeply progressive corporate income tax combined with a market-capitalization tax floor rather than simply higher taxes on individuals. Under such a system, small and moderately profitable firms would pay relatively modest tax rates, while extremely large and highly profitable corporations would face progressively higher marginal rates. In addition, corporations would pay the greater of a traditional income tax or a tax tied to their market capitalization, preventing dominant firms from minimizing taxable income through accounting strategies while still generating enormous shareholder wealth and market power.
As corporations grow larger, they often accumulate advantages that go beyond productive efficiency: monopoly or oligopoly power, political influence, regulatory capture, labor leverage, network dominance, and the ability to acquire or suppress competitors. A progressive corporate tax system could therefore function as a market-balancing mechanism by discouraging excessive concentration while preserving room for entrepreneurship and competition. It is well argued that the Supreme Court is a case of regulatory capture, which with decisions that have allowed "dark money" further tilted the economic power.
The broader principle is that if modern governments and central banks play a substantial role in supporting corporate profits and financial markets through fiscal deficits, monetary policy, infrastructure, legal protections, and public institutions, then society has a legitimate claim to share more directly in the resulting gains. The central question is not whether markets should exist, but whether the benefits of modern capitalism should remain highly concentrated or be distributed more broadly across the citizens whose economic system makes those profits possible.
I am a small hold landlord in a small city here in Cleveland. I've notice a large number of apartment buildings going up. My understanding is that much of these are tax-abated. This allows lower rent than would otherwise be possible (drawing potential tenants away from people like myself) as well as higher taxes (our taxes have increased enormously over the past ten years.) While the article didn't mention it, I wonder what role this "sweetheart" tax deals play in private equity's schemes.
The central problem is not PE - but why is housing such a good investment????
Housing prices should stop rising then private groups won't want to own housing.
The absolute best punishment for these PE firms would be to build a massive amount of housing and lower housing prices nationally - then they'd be left holding the bag.
I live in liberal Seattle and owned a condo I wasn't living in, but due to renter protection ordinances in the city, I left it empty except for the occasional friend or family visitor to town. Seattle landlords are unable to choose their own tenants or evict them in a timely manner if they, for example, trash the place or simply stop paying rent. Being liberal myself, I felt guilty for keeping this very nice studio unavailable for a renter in a city with a housing crisis, but the potential costs for leasing the unit (when I wanted to sell it eventually) were too high for an individual landlord. This is another way that rental markets become skewed to corporate ownership and control.