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That is still a tax on capital and like to cause a lot of social issues. Property taxes tend to drive people out of their homes and out of business too easily.

That is still a tax on capital and like to cause a lot of social issues. Property taxes tend to drive people out of their homes and out of business too easily. Plus then you taxing inflationary effects probably more than anything else. Real estate for example is very inflation sensitive and your tax bill would be all over the place if you taxed the capital gain on that. Then what do you do when the land falls in value? Do you really think the government would give a rebate? And then when it rises again, hopefully they wouldn't tax it again (the basis for the last taxation should have been raised), but I wouldn't put it past legislators grabbing for money by saying you can only back back 5 years or something to determine the tax basis.

ZenoArrow 11y ago
> "That is still a tax on capital" What's your definition of capital? "and like to cause a lot of social issues." Which parts of this article on land-value tax do you disagree with? https://en.m.wikipedia.org/wiki/Land_value_tax https://en.m.wikipedia.org/wiki/Land_value_tax
- sokoloff 11y ago
  That the methods proposed for valuing are good enough. https://en.m.wikipedia.org/wiki/Land_value_tax#Assessment.2Fappraisal https://en.m.wikipedia.org/wiki/Land_value_tax#Assessment.2F... In particular, the "Value can be computed by capitalizing rental streams." (Is someone renting the land, or are they renting the office skyscraper that's on the land?) "Further, valuators in the home-and-contents insurance industry do so in order to calculate an insurance premium, separating the value of the home from the value of the land." My experience is that's done in a straight-line percentage method ("the land is 20% of the purchase price in this area"), which doesn't distinguish adequately enough for taxation valuation purposes, IMO, but does provide some basis for insurance company purposes. "Another approach is the residual method: the value of the site is the property's total value minus the depreciated value of buildings and other structures." So, the land I own under a rental property gets more and more valuable each year (as I depreciate the buildings and structures)? Then, I sell it to another investor and the land value drops again to a low baseline and starts to rise as THEY depreciate the buildings? That doesn't make any sense to me. The article admits that the whole valuation topic is a hard problem and I agree with that.

ZenoArrow 11y ago

> "That is still a tax on capital" What's your definition of capital? "and like to cause a lot of social issues." Which parts of this article on land-value tax do you disagree with? https://en.m.wikipedia.org/wiki/Land_value_tax https://en.m.wikipedia.org/wiki/Land_value_tax

sokoloff 11y ago
That the methods proposed for valuing are good enough. https://en.m.wikipedia.org/wiki/Land_value_tax#Assessment.2Fappraisal https://en.m.wikipedia.org/wiki/Land_value_tax#Assessment.2F... In particular, the "Value can be computed by capitalizing rental streams." (Is someone renting the land, or are they renting the office skyscraper that's on the land?) "Further, valuators in the home-and-contents insurance industry do so in order to calculate an insurance premium, separating the value of the home from the value of the land." My experience is that's done in a straight-line percentage method ("the land is 20% of the purchase price in this area"), which doesn't distinguish adequately enough for taxation valuation purposes, IMO, but does provide some basis for insurance company purposes. "Another approach is the residual method: the value of the site is the property's total value minus the depreciated value of buildings and other structures." So, the land I own under a rental property gets more and more valuable each year (as I depreciate the buildings and structures)? Then, I sell it to another investor and the land value drops again to a low baseline and starts to rise as THEY depreciate the buildings? That doesn't make any sense to me. The article admits that the whole valuation topic is a hard problem and I agree with that.