Ruben Gallego Asks Expert About Cutting Capital Gains Tax On Profit From Home Sales

2 days ago

During a Senate Banking Committee hearing last week, Sen. Ruben Gallego (D-AZ) spoke about capital gains tax from home sales.

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Transcript

00:00Thank you so much. Thank you, Mr. Chair. Thank you, Senator Gallego.

00:04Thank you, Mr. Chair. Ms. Willis, Arizona experienced significant population growth

00:07in recent years, which, as you know, brings unique housing challenges. Despite being the

00:11fifth largest city in the U.S., Phoenix receives about 7,400 vouchers, far fewer than Philadelphia,

00:16the sixth largest city, which receives over 22,000 vouchers. This is why I introduced the

00:21Housing Voucher Fairness Act to allocate additional housing choice vouchers in our

00:25fastest-growing cities, which assists families in affordable rental housing.

00:29Can you talk about the unique challenges that fast-growing cities face and solutions

00:33that you have seen actually work?

00:36Thank you for the question, and thank you for the Housing Voucher Fairness Act. So we're happy

00:45to look into this issue, but I think it raises some significant issues, because right now only

00:51one out of four eligible households for housing assistance really gets any help. The others have

00:59to essentially fend for themselves, and that's three out of four. And Congress certainly should

01:04be working to ensure that rental assistance is available universally to all eligible households.

01:12Well, thank you. And one of the things that we discovered, the reason why there is a disparity,

01:17is that the housing voucher allocation is based off the 2000 census. So if you're fast-growing

01:24cities like Houston, Dallas, Las Vegas, you're actually going to be disproportionately penalized

01:32for having good policies and growing, versus some of these older cities that are essentially

01:38atrophying, but yet we're being punished. So even an update just on using the most recent census

01:46would actually be more accurate. And I hope that we'll be working on that legislation too, and I

01:51hope that my colleagues will help join us there. Sure. And I can just add to that too, and I think

01:56it is important you mentioned data, you know, in terms of the data that HUD collects, because we

02:03certainly do, again, going back to wanting to protect those programs and the staff at HUD,

02:09because 76% in the office in HUD is being threatened to cut the staff there. And it

02:20is important to have that data to understand the housing issue and how we can correct it.

02:26Right. And one of the things, since you were talking about cuts, you know, Arizona's unique,

02:30one of the unique states where we have 22 federally recognized tribes, we have the largest

02:34tribal enrollment in the country, you know, lots of land, but of course we have a housing

02:39challenge. So the firing, obviously, of and closing down of some of our tribal Bureau of Indian

02:45Affairs offices makes things difficult, especially when we're trying to apply for housing grants for

02:51some of these tribal nations. So I'm going to introduce as a record a letter that myself and

02:55Senator Kelly wrote about our opposition to the closing of this, of these offices, which again,

03:01will exasperate a housing crisis that's actually on, people don't understand,

03:04we actually have a tribal, on tribal lands, even a housing crisis even there.

03:08I have another question, Mr. Glasser, and this is something that I've noticed, is that many

03:13Californians are moving to Arizona and instead of downsizing their homes, right, they're selling a

03:21pretty valuable property for 1.5 million in California, and then they're just coming to

03:25Arizona and they're buying nearly that amount. What is the, why are they doing that? Explain the

03:30tax implication of why they're doing that. Well, I think, you know, it's the, the, thank you,

03:38thank you, Senator, for that question. I think the, the appeal of Arizona should be obvious to

03:45anyone. Great, I can go on and on. The, and certainly. But the reason they're selling their

03:51house at 1.2 million, and it's a paid-off house, and instead of going and getting, you know, this

03:57retired couple, couple, you know, a man and a woman, partner, whatever it is, instead of going

04:03getting a nice house, a condo, and pocketing the rest of the money, they're not doing that. They're

04:07buying a house almost of equivalent value. What is the reasoning for that? It's not a trick question,

04:11I could answer that. No, no, well, you know, the first order thing is you go to a place where

04:14housing is cheaper, you buy more house, right? We believe as economists that people respond to,

04:18respond to prices, and if price, if housing is cheaper, and, you know, you could easily, you

04:21wouldn't be surprised if you say they said they spent 1.8 million dollars on the house, because

04:25they could get so much more house for their money. Right. In California, in Arizona than in California.

04:28All right, well, the, the reason also is because if that family sells that house, and they don't

04:37buy a house of equivalent or close to equivalent value, they're going to end up paying capital gains

04:42on that house. So a retired couple, instead of trying to just pay the government the money,

04:48which I actually agree with them, they shouldn't pay that, we should figure out a way to actually

04:51give them a capital gains tax cut. Because what actually ends up happening is that then they would

04:56come to Arizona, buy a smaller place, and then they could keep that money, that capital gains

05:02for their own retirement. Instead, what they're doing is they're buying an equivalent house,

05:06at least keep some value. And so I, one of the things I'd love to think about is like, how are

05:11we, you know, basically incentivizing these well-to-do retirees into buying houses that they

05:17don't need to buy, because that's the only thing that actually brings up some level of economic

05:21value and stability. So with that, I apologize, Mr. Chair, because I complained about going over

05:24time, and I yield back my time. Sounds like an opportunity for us to work together. The TCJA

05:31relates to increasing the

Ruben Gallego Asks Expert About Cutting Capital Gains Tax On Profit From Home Sales

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