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Actually, in a previous article in the Economist on taxes, they claimed taxing land and real estate is a very good non-distorting way to levy tax, and urged wes

Actually, in a previous article in the Economist on taxes, they claimed taxing land and real estate is a very good non-distorting way to levy tax, and urged western governments to do it more. My country (the Netherlands) has an estate tax of sorts and at least one problem with it is that the legal system is getting clogged by hordes of people challenging the government over the valuation of their property (you pay a percentage of the property value).

netcan 8y ago
Good point. Iirc correctly, they suggest taxing land value, excluding the buildings on it. So, a parking lot is taxed like the skyscraper beside it. This is "non-distorting" and efficient in an economst-ey sort of way. It will however, strongly affect land use and make certain uses immediately unviable. Golf courses, amusement parks... The efficiency of moving to such a system is premised on encouraging underdeveloped land to be immediately developed. Say a skyscraper is 80% building, 20% land. That's tax efficient in that world. It'd be a hard transition.
- isostatic 8y ago
  Not sure why a golf course or amusement park would be unviable. Alton Towers' 910 acres is worth at most 3.8 times that of this 240 acre £2.2m farm [1], or £8.4m. Total UK land is worth £5394b [2], and total budget revenue is £800b, requiring a 15% land value tax to cover total spending. At 15% LVT, Alton Towers would attract taxation of £1.2m a year, spread over 2 million visitors, or about 64p on the ticket price. Currently tickets are in the £30-60 range, so already attract £5-10 of vat. A land value tax will actually mean that Alton Towers tickets would be cheaper, and as they wouldn't be paying things like national insurance contributions, overheads would be cheaper. [1] https://www.rightmove.co.uk/commercial-property-for-sale/property-68170718.html https://www.rightmove.co.uk/commercial-property-for-sale/pro... [2] https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/bulletins/nationalbalancesheet/2018 https://www.ons.gov.uk/economy/nationalaccounts/uksectoracco...

netcan 8y ago

Good point. Iirc correctly, they suggest taxing land value, excluding the buildings on it. So, a parking lot is taxed like the skyscraper beside it. This is "non-distorting" and efficient in an economst-ey sort of way. It will however, strongly affect land use and make certain uses immediately unviable. Golf courses, amusement parks... The efficiency of moving to such a system is premised on encouraging underdeveloped land to be immediately developed. Say a skyscraper is 80% building, 20% land. That's tax efficient in that world. It'd be a hard transition.

isostatic 8y ago
Not sure why a golf course or amusement park would be unviable. Alton Towers' 910 acres is worth at most 3.8 times that of this 240 acre £2.2m farm [1], or £8.4m. Total UK land is worth £5394b [2], and total budget revenue is £800b, requiring a 15% land value tax to cover total spending. At 15% LVT, Alton Towers would attract taxation of £1.2m a year, spread over 2 million visitors, or about 64p on the ticket price. Currently tickets are in the £30-60 range, so already attract £5-10 of vat. A land value tax will actually mean that Alton Towers tickets would be cheaper, and as they wouldn't be paying things like national insurance contributions, overheads would be cheaper. [1] https://www.rightmove.co.uk/commercial-property-for-sale/property-68170718.html https://www.rightmove.co.uk/commercial-property-for-sale/pro... [2] https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/bulletins/nationalbalancesheet/2018 https://www.ons.gov.uk/economy/nationalaccounts/uksectoracco...