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Of course it's possible. No one said it wasn't. I said it will be gamed. Which it will. Sell the land under your 90-story building to an offshore trust in t

Of course it's possible. No one said it wasn't. I said it will be gamed. Which it will. Sell the land under your 90-story building to an offshore trust in the Caymans for $1, now you have a firm data point that the land is worth exactly 1 dollar. What's the taxation authority going to do with that? The point is to lower property taxes on the rich, raise them on the poor. LVT will have that effect, and that's the primary intent of most backers. In developed cities, the taxable property base will shift heavily from the city center toward the outskirts of the city. Easy way to approach thinking about it: "large commercial buildings should be exempted from property tax, but as the city still needs funding, that lost revenue will be made up by raising everyone else's property taxes". It's a straight subsidy from the edges of the city to the center.

klipt 9y ago
> Sell the land under your 90-story building to an offshore trust in the Caymans for $1, now you have a firm data point that the land is worth exactly 1 dollar. What's the taxation authority going to do with that? "You say your central NYC land is worth $1? Unfortunately we have to acquire it under eminent domain, but we'll pay you 1000x the value, a whole $1000!"
xyzzyz 9y ago
> Of course it's possible. No one said it wasn't. I said it will be gamed. Which it will. Sell the land under your 90-story building to an offshore trust in the Caymans for $1, now you have a firm data point that the land is worth exactly 1 dollar. What's the taxation authority going to do with that? You can already attempt this with current property tax system. Somehow you never hear about people doing this one weird trick to avoid paying any property taxes. I guess it must be not so easy as you claim. > Easy way to approach thinking about it: "large commercial buildings should be exempted from property tax, but as the city still needs funding, that lost revenue will be made up by raising everyone else's property taxes". It's a straight subsidy from the edges of the city to the center. If that large commercial building is in the city center, then the land underneath it is valuable, and therefore owner will pay large tax bill just the same. And if you are concerned that in LVT system, you can build huge building and pay as much taxes as if you built a single family house, well, encouraging efficient use of land is the whole point. Also, the current system is a subsidy from the dense neighborhoods, where the tax base is at, to edges of the city, where the city spends more of public funds per inhabitant. If people had to pay for their own road, water and power line, there would have been much less sprawl.
quesera 9y ago
Property taxes are based on assessed value, not sale price.

klipt 9y ago

> Sell the land under your 90-story building to an offshore trust in the Caymans for $1, now you have a firm data point that the land is worth exactly 1 dollar. What's the taxation authority going to do with that? "You say your central NYC land is worth $1? Unfortunately we have to acquire it under eminent domain, but we'll pay you 1000x the value, a whole $1000!"

xyzzyz 9y ago

> Of course it's possible. No one said it wasn't. I said it will be gamed. Which it will. Sell the land under your 90-story building to an offshore trust in the Caymans for $1, now you have a firm data point that the land is worth exactly 1 dollar. What's the taxation authority going to do with that? You can already attempt this with current property tax system. Somehow you never hear about people doing this one weird trick to avoid paying any property taxes. I guess it must be not so easy as you claim. > Easy way to approach thinking about it: "large commercial buildings should be exempted from property tax, but as the city still needs funding, that lost revenue will be made up by raising everyone else's property taxes". It's a straight subsidy from the edges of the city to the center. If that large commercial building is in the city center, then the land underneath it is valuable, and therefore owner will pay large tax bill just the same. And if you are concerned that in LVT system, you can build huge building and pay as much taxes as if you built a single family house, well, encouraging efficient use of land is the whole point. Also, the current system is a subsidy from the dense neighborhoods, where the tax base is at, to edges of the city, where the city spends more of public funds per inhabitant. If people had to pay for their own road, water and power line, there would have been much less sprawl.

quesera 9y ago

Property taxes are based on assessed value, not sale price.