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> There is something fundamentally wrong with taxing an absence of income. I'd argue the other way, that taxing income is discouraging production. We should be

> There is something fundamentally wrong with taxing an absence of income. I'd argue the other way, that taxing income is discouraging production. We should be taxing consumption more than we are. If you see deeded property as a non-renewable resource, then ensuring good use through taxation seems essential, not just a good idea. Now, land is not exactly non-renewable since we can build up, as you point out, but in densely developed urban areas, it's pretty close to non-renewable. We just had a land bubble, and many think the bubble is reinflating, at least in some areas. Putting a check on irrational pricing by adding a consumption tax here seems like a plan worth discussing to me.

cm2187 11y ago
If you agree that there will be no further densification of already developped urban area (whether because of planning restrictions or physical constraints), then adding taxes isn't an incentive to better using the land. Which was the point of this tax. Preventing bubbles is another problem. I think in London the problem is that brits have this curious obsession with owning property and be willing to bid as much as they legally can, burrying themselves into debt, in order to achieve that. This is compounded with the lack of supply and foreigners using London property as a safe. But unless this obsession ceases, adding taxes or limits to borrowing isn't going to prevent bubbles. In fact the recent increase in stamp duty on expensive properties does not seem to have any effect.
- twic 11y ago
  > If you agree that there will be no further densification of already developped urban area (whether because of planning restrictions or physical constraints), then adding taxes isn't an incentive to better using the land. This is key. A land value tax would have to go hand-in-hand with measures to allow density to increase. That would mean changes in planning laws, and also building of infrastructure like transport, doctors' surgeries, schools, etc. The former can be done at the stroke of a pen, the latter can be funded from the increased tax receipts that come with higher density.
  - cm2187 11y ago
    I agree but I don't think a tax would be needed where there is a strong housing supply crisis if planning restrictions are relaxed. Property developpers are already frenetically building residential skycrappers where they can in London.
    - mrec 11y ago
      You're not seriously holding up London as an example of a functioning housing market, are you?
      - cm2187 11y ago
        I am merely suggesting that in the areas where there are little planning restrictions, the developpers do build the much needed housing supply.
        twic 11y ago
        My point was that it's not enough to just build housing - you need to make sure the supply of public infrastructure increases accordingly. This is an existing problem in London, hence section 106 agreements and all that: https://en.m.wikipedia.org/wiki/Planning_gain https://en.m.wikipedia.org/wiki/Planning_gain
- biehl 11y ago
  [if no densification]...then adding taxes isn't an incentive to better using the land. Which was the point of this tax. You seem to equate "densification" and "better using the land". That is a narrow definition of "better using the land". In strictly utilitarian terms any change that increases total utility would be "better using the land", so if a tax increase on land makes some current residents reprioritise their money and decide to move, giving space to other people who value the location more, then that is "better using the land".
  - cm2187 11y ago
    Because substituting people does nothing to the housing supply. The only thing that will increase the supply is increasing the density or expanding. The later being very challenged by the TFL infrastructures.
- eru 11y ago
  If the government gets to reap some of the benefits that densification brings to the value of land, it would be harder for NIMBYs to argue in favour of use restrictions. Thus the land value tax might help with densification. But only indirectly.
ZenoArrow 11y ago
To me, it's tackling the wrong problem. The issue with property is that they are being used as an investment opportunity, which undermines the purpose that most people want property for, which is as an affordable place to live. What we want to discourage is people using property to invest, but without penalising those who want somewhere to live. Therefore, if we're going to have a land use tax it should be based on how someone uses it. If a property is your only home anywhere in the world, then it should be exempt, but anything outside your main home could be taxed. That should discourage those people who buy property but barely live there from driving up prices for the people who want to live there.
- humanrebar 11y ago
  So why not aggressively tax profits from property sales then? Tax-free primary residences causes at least two problems: 1. People want places to work and shop, too. 2. You end up having to regulate what counts as a primary residence so that Mr. O'Billionaire doesn't get an entire city block tax free. How does working from home affect your tax rate, etc.
  - ZenoArrow 11y ago
    1. Taxes on companies could be adjusted to compensate for the introduction of a land use tax. 2. A primary residence is where you live most of the year. To have any property qualify you would need to spend more than 6 months in a year within a country, and would also need to specify which of the properties you own in that country is your primary residence. Problem solved.
    - jrs235 11y ago
      *2b and only .25 acres of land would be exempt. (Of some other generally agreed amount)
      - eru 11y ago
        No exemption necessary. Just eg pay out all the land value tax as a basic income. And automatically anyone sitting on less than the average amount of land (in terms of value, not size), will get a net income. People sitting on more, will make a net payment.

cm2187 11y ago

If you agree that there will be no further densification of already developped urban area (whether because of planning restrictions or physical constraints), then adding taxes isn't an incentive to better using the land. Which was the point of this tax. Preventing bubbles is another problem. I think in London the problem is that brits have this curious obsession with owning property and be willing to bid as much as they legally can, burrying themselves into debt, in order to achieve that. This is compounded with the lack of supply and foreigners using London property as a safe. But unless this obsession ceases, adding taxes or limits to borrowing isn't going to prevent bubbles. In fact the recent increase in stamp duty on expensive properties does not seem to have any effect.

twic 11y ago
> If you agree that there will be no further densification of already developped urban area (whether because of planning restrictions or physical constraints), then adding taxes isn't an incentive to better using the land. This is key. A land value tax would have to go hand-in-hand with measures to allow density to increase. That would mean changes in planning laws, and also building of infrastructure like transport, doctors' surgeries, schools, etc. The former can be done at the stroke of a pen, the latter can be funded from the increased tax receipts that come with higher density.
- cm2187 11y ago
  I agree but I don't think a tax would be needed where there is a strong housing supply crisis if planning restrictions are relaxed. Property developpers are already frenetically building residential skycrappers where they can in London.
  - mrec 11y ago
    You're not seriously holding up London as an example of a functioning housing market, are you?
    - cm2187 11y ago
      I am merely suggesting that in the areas where there are little planning restrictions, the developpers do build the much needed housing supply.
      - twic 11y ago
        My point was that it's not enough to just build housing - you need to make sure the supply of public infrastructure increases accordingly. This is an existing problem in London, hence section 106 agreements and all that: https://en.m.wikipedia.org/wiki/Planning_gain https://en.m.wikipedia.org/wiki/Planning_gain
biehl 11y ago
[if no densification]...then adding taxes isn't an incentive to better using the land. Which was the point of this tax. You seem to equate "densification" and "better using the land". That is a narrow definition of "better using the land". In strictly utilitarian terms any change that increases total utility would be "better using the land", so if a tax increase on land makes some current residents reprioritise their money and decide to move, giving space to other people who value the location more, then that is "better using the land".
- cm2187 11y ago
  Because substituting people does nothing to the housing supply. The only thing that will increase the supply is increasing the density or expanding. The later being very challenged by the TFL infrastructures.
eru 11y ago
If the government gets to reap some of the benefits that densification brings to the value of land, it would be harder for NIMBYs to argue in favour of use restrictions. Thus the land value tax might help with densification. But only indirectly.

ZenoArrow 11y ago

To me, it's tackling the wrong problem. The issue with property is that they are being used as an investment opportunity, which undermines the purpose that most people want property for, which is as an affordable place to live. What we want to discourage is people using property to invest, but without penalising those who want somewhere to live. Therefore, if we're going to have a land use tax it should be based on how someone uses it. If a property is your only home anywhere in the world, then it should be exempt, but anything outside your main home could be taxed. That should discourage those people who buy property but barely live there from driving up prices for the people who want to live there.

humanrebar 11y ago
So why not aggressively tax profits from property sales then? Tax-free primary residences causes at least two problems: 1. People want places to work and shop, too. 2. You end up having to regulate what counts as a primary residence so that Mr. O'Billionaire doesn't get an entire city block tax free. How does working from home affect your tax rate, etc.
- ZenoArrow 11y ago
  1. Taxes on companies could be adjusted to compensate for the introduction of a land use tax. 2. A primary residence is where you live most of the year. To have any property qualify you would need to spend more than 6 months in a year within a country, and would also need to specify which of the properties you own in that country is your primary residence. Problem solved.
  - jrs235 11y ago
    *2b and only .25 acres of land would be exempt. (Of some other generally agreed amount)
    - eru 11y ago
      No exemption necessary. Just eg pay out all the land value tax as a basic income. And automatically anyone sitting on less than the average amount of land (in terms of value, not size), will get a net income. People sitting on more, will make a net payment.