As someone at the earlier stages of building a real estate investment portfolio, I suspect that raising property taxes will in some ways just get passed onto renters (I assume that's what you mean by the first portion of your moment), but maybe not

I do agree that adjustments to the tax code are needed. I suspect most of the public would want sudden drastic changes unlikely to actually come into law. Instead I think that the changes need to be gradual. Most real estate investors (especially small to medium sized investors) build their wealth over decades through tax advantages. Sure some quickly flip homes but there's also a lot of risk in that.

Depending on the market, some get lucky with property appreciation but it often make very little cash month to month or even "loses" money. Others focus on markets that cash flow very well but don't appreciate much. Then of course there's the quality of neighborhood where the cash flow is inversely proportional to the quality of the area, quality (aka risks) of the tenants.

Anyways, most properties these days cash flow $150-300 per door per month after all expenses (and appropriate budgeting for repairs etc). It's not much. The power comes from limiting or not paying any income tax on that $150-300 per door per month. For example, you can sometimes write off property taxes. Other common write-offs include mortgage interest, property depreciation (that can be spread out over 27.5 years or accelerated for more write off in a short period), repairs, etc.

If the property appreciates and you want to sell it, in theory you should pay capital gains tax. Although the rate is fairly low, you also get hit with "repaying" the property depreciation that I mentioned above.

The loop hole is that you can do a 1031 exchange. Essentially you have a small window of time to sell the property, turn around, and reinvest that same amount of money into another property (or multiple properties adding up to that same amount). When you do this, you do not pay capital gains tax nor repay the property depreciation. These owed taxes get passed forward until the property is sold not using a 1031 exchange. However, you can apparently do this until you die and pass it onto your children who can indefinitely repeat this, deferring taxes. The owed taxes may even disappear when you die? Although that's so far ahead I haven't consulted an estate attorney yet.

I think that the tax code needs to slowly go after the 1031 exchange. There's been some talk about this for years but no government wants to truly commit since let's face it, they likely directly or indirectly benefit from this through their network.

Oh another fun loophole. If you have a full time W2 job but your spouse stays at home/works part time, you can potentially claim that the spouse runs your real estate portfolio. They can get this special status where they can pass up to 100% of the extra unused tax write offs from the properties onto the working spouses W2 to offset that income tax. Versus above where you still pay income tax from your W2 job but likely owe nothing on your real estate income.