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So what is the difference between a land tax and property tax? After all I looked at my tax assessment recently and there is a value for the land and a value fo

So what is the difference between a land tax and property tax? After all I looked at my tax assessment recently and there is a value for the land and a value for the house itself?

Lazare 11y ago
George advocated a land value tax; that is a tax on the unimproved value of the land. This might seem like a minor difference but it actually isn't, because taxes generally cause changes in behaviour. Sometimes those changes are desirable: Carbon taxes, "sin" taxes, etc. More often the change is undesirable (as when we tax investment, wages, or consumption). (And, very frequently, those changes in behaviour results in the actual burden of the tax shifting. Payroll taxes are levied on businesses, but nobody actually thinks they pay them.) Tax housing, and you'll get less housing. Since people like housing (that's why they build it), that's considered a Bad Thing. Tax land, and you'll...get the same amount of land. With a few very minor exceptions, the amount of land is fixed. No distortions, no deadweight costs, and no real ability to shift the economic burden of the tax.
- tomjen3 11y ago
  What? It is trivial to shift the economic burden. As en employer I only hire remote: my employees now have to waste space having a home office. As a home owner I want a garden, but I don't want to pay for it so I build it on top of my house and make a basement to put my car in - I now shifted something like 8/10 of my tax burden because I use less land.
  - vidarh 11y ago
    You have shifted the burden by giving up on a resource that is valuable to society around you. That may well be an equitable trade. The point is you won't get rid of the tax without giving something back to society in return. Now, I don't believe that this is sufficient as an alternative to all other taxes, but it does have many desirable properties, and your suggested behavioural changes are amongst them: Optimizing usage of land.
    - tomjen3 11y ago
      Yeah but I have done that by lowering my tax contribution too. In fact if I move into one of the new mega-super-skyscrapers that this will surely result in I may end up paying so little in taxes (because so many people will share the ground) that it won't be enough to pay for the police and fireservices, which surely will go up because it is more expensive and difficult to fight fires in so tall buildings. So in effect I have shifted most of my tax-burden off to others, land will have very little value (because it will have to be taxed more and more heavily). Of course you can mix it with older taxes, but then you have the problems you had with them too.
      - AngrySkillzz 11y ago
        It's relative to the value of the land though. The value of the small area your skyscraper occupies in downtown Manhattan or wherever is probably extremely valuable. Thus, high land taxes to be split among the occupants. It's hard to say whether your tax burden would go up or down without hard numbers, though.
      - vidarh 11y ago
        Keep in mind that the land value would be the factor determining your proportion of the the overall tax income. If tax receipts go down, then the amount of tax charged per unit of land value would go up. At some point you will be unable to use less land without incurring far higher costs - e.g. tacking on ten floors on that skyscraper will require complex enough construction methods to not be cost effective. That's before considering any kind of planning consent.

So what is the difference between a land tax and property tax? After all I looked at my tax assessment recently and there is a value for the land and a value for the house itself?

Lazare 11y ago

George advocated a land value tax; that is a tax on the unimproved value of the land. This might seem like a minor difference but it actually isn't, because taxes generally cause changes in behaviour. Sometimes those changes are desirable: Carbon taxes, "sin" taxes, etc. More often the change is undesirable (as when we tax investment, wages, or consumption). (And, very frequently, those changes in behaviour results in the actual burden of the tax shifting. Payroll taxes are levied on businesses, but nobody actually thinks they pay them.) Tax housing, and you'll get less housing. Since people like housing (that's why they build it), that's considered a Bad Thing. Tax land, and you'll...get the same amount of land. With a few very minor exceptions, the amount of land is fixed. No distortions, no deadweight costs, and no real ability to shift the economic burden of the tax.

tomjen3 11y ago
What? It is trivial to shift the economic burden. As en employer I only hire remote: my employees now have to waste space having a home office. As a home owner I want a garden, but I don't want to pay for it so I build it on top of my house and make a basement to put my car in - I now shifted something like 8/10 of my tax burden because I use less land.
- vidarh 11y ago
  You have shifted the burden by giving up on a resource that is valuable to society around you. That may well be an equitable trade. The point is you won't get rid of the tax without giving something back to society in return. Now, I don't believe that this is sufficient as an alternative to all other taxes, but it does have many desirable properties, and your suggested behavioural changes are amongst them: Optimizing usage of land.
  - tomjen3 11y ago
    Yeah but I have done that by lowering my tax contribution too. In fact if I move into one of the new mega-super-skyscrapers that this will surely result in I may end up paying so little in taxes (because so many people will share the ground) that it won't be enough to pay for the police and fireservices, which surely will go up because it is more expensive and difficult to fight fires in so tall buildings. So in effect I have shifted most of my tax-burden off to others, land will have very little value (because it will have to be taxed more and more heavily). Of course you can mix it with older taxes, but then you have the problems you had with them too.
    - AngrySkillzz 11y ago
      It's relative to the value of the land though. The value of the small area your skyscraper occupies in downtown Manhattan or wherever is probably extremely valuable. Thus, high land taxes to be split among the occupants. It's hard to say whether your tax burden would go up or down without hard numbers, though.
    - vidarh 11y ago
      Keep in mind that the land value would be the factor determining your proportion of the the overall tax income. If tax receipts go down, then the amount of tax charged per unit of land value would go up. At some point you will be unable to use less land without incurring far higher costs - e.g. tacking on ten floors on that skyscraper will require complex enough construction methods to not be cost effective. That's before considering any kind of planning consent.