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Good catch! I didn't mean to say the landowners would be forced to earn rent on their idle land. I meant that if they didn't want to pay the tax themselves (equ

by kspaans 11y ago

Good catch! I didn't mean to say the landowners would be forced to earn rent on their idle land. I meant that if they didn't want to pay the tax themselves (equivalent of charging the tax to their tenants), they would have to do something economically productive with the land. This is the theorized win-win with LVT: there is encouragement to develop otherwise-idle land. I think you're right that introducing LVT could lower the already low values of unused land. Perhaps its introduction would mean a glut of sales of land: fire sale! (Win-win again, according to my armchair-economics analysis. :P)

dublinben 11y ago
I guess I still don't grasp how this aspect of LVT is any different or better than property taxes, as currently designed. If you own undeveloped land, you still have to pay the standard property tax rate on that land, according to its assessed value.
- mahyarm 11y ago
  LVT implicitly incentivizes density. Assessors can determine your $1mm single family home close to a very dense business & housing district could potentially represent 12 $250k condos, which is $3mm of value and tax you as such. LVT would also not be based on the actual structures on the land, so it all about what the potential value of the usage of the land would be.
  - hawkice 11y ago
    > LVT implicitly incentivizes density. Not necessarily, although that is certainly how it works in many residential situations. The general idea is removing the marginal disincentive for high-value _use_ of the land. Property taxes mean for every dollar you spend making something more awesome, you get taxed more. Instead, we should encourage awesomeness on the margin, and discourage people who use land that could be awesome in the least awesome ways.
majewsky 11y ago
> This is the theorized win-win with LVT: there is encouragement to develop otherwise-idle land. That's only a win-win if you don't value nature very highly. LVT sounds like it would force even faster destruction of invaluable biospheres like rainforests.

by kspaans 11y ago

dublinben 11y ago

I guess I still don't grasp how this aspect of LVT is any different or better than property taxes, as currently designed. If you own undeveloped land, you still have to pay the standard property tax rate on that land, according to its assessed value.

mahyarm 11y ago
LVT implicitly incentivizes density. Assessors can determine your $1mm single family home close to a very dense business & housing district could potentially represent 12 $250k condos, which is $3mm of value and tax you as such. LVT would also not be based on the actual structures on the land, so it all about what the potential value of the usage of the land would be.
- hawkice 11y ago
  > LVT implicitly incentivizes density. Not necessarily, although that is certainly how it works in many residential situations. The general idea is removing the marginal disincentive for high-value _use_ of the land. Property taxes mean for every dollar you spend making something more awesome, you get taxed more. Instead, we should encourage awesomeness on the margin, and discourage people who use land that could be awesome in the least awesome ways.

majewsky 11y ago

> This is the theorized win-win with LVT: there is encouragement to develop otherwise-idle land. That's only a win-win if you don't value nature very highly. LVT sounds like it would force even faster destruction of invaluable biospheres like rainforests.