I bought my home from my pal for a dollar, and sold him my old house for a dollar too.

Then you end up with preposterous situations like California boomers hanging onto property where the value (and thus the property tax) was last assessed in the 70s.

this is a far better situation than rich neighbors moving in next to a lower-middle-class family and driving them out of the neighborhood by bringing up the assessed value.

Since rich people are rare, by definition this wouldn't happen very often. Unlike with the current situation in California where it happens _everywhere_. And such a lower middle class family would still be selling their house at a higher value than for which they bought it, so it's hard to see how they are being robbed.

And don't you think it's funny: we can't have rich people moving here because that would drive up land taxes, and we can't have poor people moving here because that would drive down the total resale value. I guess people should only be allowed to live among their exact socioeconomic equals ...

you're neglecting the important asymmetry. If we fail to tax a rich person, it doesn't actively hurt someone, it may passively prevent some people (who would have wanted to move in) from having an easier time with certain life-paths. If you eject a middle class person from their home, you are actively forcing them to find a new life-path. Suppose that lower-middle class person is a mobility-challenged elderly person on a fixed income that is already being eaten away by inflation. Yes, sure, they get to sell their house at a high mark to market, but they have to suffer the hassle of finding a new place, which at best is equivalent quality minus income tax on LTCG, on an eroding deadline. That is a really shitty situation to be in.

> this wouldn't happen very often

Then, I suppose we would have no reason for the term "gentrification", if it's that damn rare.