Rant on housing

So my jerk of a neighbor, who bought about 3 years ago at around the market peak (I had that hono about 2.5 years ago), goes and walks away from his house (laughing all the way to the bank, having just re-fi'd for 30K more than he paid for the stupid house (and they say mortgage originators are supposed to be paying attention now!)... and I just found out that in the foreclosure sale, his house went for nearly $200G's below market. OK, no problem, right... new family will move in and we'll have business as usual, right? It was a foreclosure, so it won't affect valuations on the street as long as there aren't any more in foreclosure, right?
NOPE... sold to a freaking flipper who is going to spend a couple grand on paint and landscape, and then probably sell it off for a quick $100G... leaving the rest of us screwed for the foreseeable future on our home valuations.
First I'm thinking - isn't there a country where they cut off your fucking head for doing shit like this!
Now I'm the first guy who doesn't care for taxes, but then I'm thinking there's a simple way to fix this. Homes are not commodities. Homes are not capital investments any more than a car is (actually they are both depreciating non-performing assets... you just sink enough money into the house to constantly extend it's usable life semi-indefinitely). Right now, if you hold a house long enough, you get capital gains rates on the sale. Otherwise its ordinary income. Seems to me the missing piece of this puzzle is a tax on short term sales - short term being long enough to keep flippers from waiting it out, of course. Say you don't live in a house, and you sell within two years, I think ordinary income + penalty of 30% on the net profit (after costs I guess). 2-6 years... tax as ordinary income. 6+ years, capital gains. If you actually live in the house as primary residence, then current regime would still apply.
Tax increase would drive a wedge between sellers and buyers, increasing the market price but decreasing the price to sellers. This would help prop up valuations of long term homeowner properties (as well as tax based, if you live in that kind of area), and at the same time reduce the number of homes on the market. WIN WIN WIN.
Now some of my fellow anti-tax folks take the opportunity to convince me I'm wrong before I write to dear old Mr. Paulson.
NOPE... sold to a freaking flipper who is going to spend a couple grand on paint and landscape, and then probably sell it off for a quick $100G... leaving the rest of us screwed for the foreseeable future on our home valuations.
First I'm thinking - isn't there a country where they cut off your fucking head for doing shit like this!
Now I'm the first guy who doesn't care for taxes, but then I'm thinking there's a simple way to fix this. Homes are not commodities. Homes are not capital investments any more than a car is (actually they are both depreciating non-performing assets... you just sink enough money into the house to constantly extend it's usable life semi-indefinitely). Right now, if you hold a house long enough, you get capital gains rates on the sale. Otherwise its ordinary income. Seems to me the missing piece of this puzzle is a tax on short term sales - short term being long enough to keep flippers from waiting it out, of course. Say you don't live in a house, and you sell within two years, I think ordinary income + penalty of 30% on the net profit (after costs I guess). 2-6 years... tax as ordinary income. 6+ years, capital gains. If you actually live in the house as primary residence, then current regime would still apply.
Tax increase would drive a wedge between sellers and buyers, increasing the market price but decreasing the price to sellers. This would help prop up valuations of long term homeowner properties (as well as tax based, if you live in that kind of area), and at the same time reduce the number of homes on the market. WIN WIN WIN.
Now some of my fellow anti-tax folks take the opportunity to convince me I'm wrong before I write to dear old Mr. Paulson.