4 ms·

Why are property taxes even connected to property values? Does it get more expensive to supply public services when property values go up? A flat tax per squar

by beojan 8y ago

Why are property taxes even connected to property values? Does it get more expensive to supply public services when property values go up? A flat tax per square foot would make more sense, perhaps with a rate ray varies based on locality.

FuriouslyAdrift 8y ago
Land value taxation is about the only method of taxation that is fair and reasonable... https://en.m.wikipedia.org/wiki/Land_value_tax https://en.m.wikipedia.org/wiki/Land_value_tax
- danieltillett 8y ago
  Yes that is why it is doomed. Do you really think those that write the laws want to pay tax?
- beojan 8y ago
  Land value taxation makes even less sense for funding local public services. You could build a 500 unit high rise apartment block on a piece of land and pay the same tax as if you had built 10 houses on it. For schools and policing and the like a poll tax is fair, but regressive. A local income tax on the other hand would rise as the cost of public services rose (since labor is a significant portion of that cost) without being regressive. That would still suffer from richer municipalities collecting more tax and hence having better schools etc. though this could be alleviated with larger (and hence more diverse) municipalities.
  - cocoablazing 8y ago
    Assuming this lot is located in a high-rent, heavily regulated area like SF or NY, why would you assume that a lot zoned for SFR would be assessed at the same rate as MFR, and especially high-rise development?
    - beojan 8y ago
      That's not a pure LVT anymore is it? Nevertheless my point stands that if you build a larger development on the same land you would put a greater strain on public services without contributing more. Now you probably want to encourage building more housing on the same land to alleviate the lack of housing (which is why an LVT is so often proposed) but local taxation first and foremost has to fund local public services, or there really is no point. You can additionally penalize leaving land undeveloped, but that should be a secondary tax (or penalty) on top of a basic one that scales with the cost of providing those services, not the primary source of funding for local government.
  - TheCoelacanth 8y ago
    Land value and property taxes are fair if you look at it from the perspective of value received from local services rather than cost to provide local services. A lot of the value of a property comes from how good the schools are, how effectively policed the area is, how good the transportation infrastructure is, etc. It's only fair that the community be able to capture some of the value that it is creating.
    - beojan 8y ago
      Unfortunately, this just leads to areas that are well-run already (generally rich ones) getting more and more funding, and areas that are already poorly run (generally poor ones) having to work with even more restricted funding. With a property tax system, it would be impossible to rehabilitate a municipality where property prices have dropped to ~0 (e.g. parts of the North of England, and Detroit).

by beojan 8y ago

FuriouslyAdrift 8y ago

Land value taxation is about the only method of taxation that is fair and reasonable... https://en.m.wikipedia.org/wiki/Land_value_tax https://en.m.wikipedia.org/wiki/Land_value_tax

danieltillett 8y ago
Yes that is why it is doomed. Do you really think those that write the laws want to pay tax?
beojan 8y ago
Land value taxation makes even less sense for funding local public services. You could build a 500 unit high rise apartment block on a piece of land and pay the same tax as if you had built 10 houses on it. For schools and policing and the like a poll tax is fair, but regressive. A local income tax on the other hand would rise as the cost of public services rose (since labor is a significant portion of that cost) without being regressive. That would still suffer from richer municipalities collecting more tax and hence having better schools etc. though this could be alleviated with larger (and hence more diverse) municipalities.
- cocoablazing 8y ago
  Assuming this lot is located in a high-rent, heavily regulated area like SF or NY, why would you assume that a lot zoned for SFR would be assessed at the same rate as MFR, and especially high-rise development?
  - beojan 8y ago
    That's not a pure LVT anymore is it? Nevertheless my point stands that if you build a larger development on the same land you would put a greater strain on public services without contributing more. Now you probably want to encourage building more housing on the same land to alleviate the lack of housing (which is why an LVT is so often proposed) but local taxation first and foremost has to fund local public services, or there really is no point. You can additionally penalize leaving land undeveloped, but that should be a secondary tax (or penalty) on top of a basic one that scales with the cost of providing those services, not the primary source of funding for local government.
- TheCoelacanth 8y ago
  Land value and property taxes are fair if you look at it from the perspective of value received from local services rather than cost to provide local services. A lot of the value of a property comes from how good the schools are, how effectively policed the area is, how good the transportation infrastructure is, etc. It's only fair that the community be able to capture some of the value that it is creating.
  - beojan 8y ago
    Unfortunately, this just leads to areas that are well-run already (generally rich ones) getting more and more funding, and areas that are already poorly run (generally poor ones) having to work with even more restricted funding. With a property tax system, it would be impossible to rehabilitate a municipality where property prices have dropped to ~0 (e.g. parts of the North of England, and Detroit).