17 ms·

Why a land-value tax is inevitable

• cleansy 6y ago
  Maybe add a (2018) to the title
• ed25519FUUU 6y ago
  > At the top of an economic cycle, governments are collecting their peak tax revenues — yet even so, many are still running large fiscal deficits and have large existing public debts. They’re also spending more than they ever have before in history. > The LVT is not the same as a property tax, as it does not punish those who put the land to use; it taxes only the land, not the structure built on top of it. I’m not convinced this is that different than what’s happening now. For a $1m house in the Bay Area, only a quarter or a third of that value is the structure. > However, most of all, it is one of the rare taxes that does not diminish economic activity, and in fact stimulates it. How do they arrive at this conclusion? A bakery that’s been around for 100 years finds itself in a hip part of town (which maybe it helped foster), and then has to move out because the only type of business that can support the LVT in the area is luxury apartments. The higher the LVT, the more risk of a monoculture in land usage, not the other way around.
  • solidsnack9000 6y ago
    Governments do, indeed, spend significantly more than they used to. The problem in the Bay Area is simply that taxable value assessed only at sale.
    • dragonwriter 6y ago
      > The problem in the Bay Area is simply that tax is not reassessed regularly. No, tax-basis value is assessed annually. However, increases in assessed value are limited to a maximum of 2% per year outside of certain events qualifying for full-value assessment of the property or particular improvements. (And this is statewide, not Bay Area specific).
    • fortran77 6y ago
      That's not true. Every year it can be raised 2%.
      • solidsnack9000 6y ago
        Ah, okay -- that I did not know. The effect of the policy over the past decades has still been to allow the value to dramatically increase relative to the taxation.
        • fortran77 6y ago
          > The effect of the policy over the past decades has still been to allow the value to dramatically increase relative to the taxation. No. The problem is they're not building enough housing. Not that taxes aren't high enough.
          • solidsnack9000 6y ago
            No, that's not right. Poor tax policy leads to poor land use.
  • Ericson2314 6y ago
    > For a $1m house in the Bay Area, only a quarter or a third of that value is the structure. So the first problem is zoning, but imagine if zoning is fixed. Now the taller the building is, the smaller the portion of the taxable value derives from the land itself. The fact of the matter is single family suburbia is a scourge, and we need redevelopment not more development. We can subsidize affordable housing, or we can structure the taxes such that the only economical thing to do is massively denser buildings immediately. The latter is better because it is simpler and less subject to regulatory capture.
    • AnthonyMouse 6y ago
      > So the first problem is zoning, but imagine if zoning is fixed. Now the taller the building is, the smaller the portion of the taxable value derives from the land itself. Which is sort of the problem, right? You have an area which is, say, two story buildings, in an area where you really need an average of three story buildings to satisfy local demand. Implement LVT and everyone gets the bright idea to build twelve story buildings, because why wouldn't they? Three story buildings would have four times the tax per unit. But then you get the opposite problem. Real estate prices crash, because there are suddenly twelve story buildings going up everywhere and the prices need to fall to the level that building more of them isn't viable even against the tax advantage. Which is well before you're saturated with tall buildings. But now you have a thousand plots of land and 10% of them have new tall buildings while 90% have existing single family homes. Now the owners of the single family homes are paying a disproportionate amount of the taxes. They abandon their properties, which have already declined in value, because the tax is more than the newly lowered cost of buying space in one of the tall buildings. The government is now receiving no tax from 90% of the lots because they've been abandoned, so the land tax amount has to increase by ten fold per plot. But that makes it profitable to build 25 story buildings instead of twelve story ones, to amortize the tax over more units, and the cycle repeats. It seems obvious that this only works if the amount of the land tax isn't large enough to cause these behavioral changes.
      • CyberDildonics 6y ago
        What are you basing your predictions here on? Do you have an example where this has happened?
  • kevinpet 6y ago
    A charming bakery in a now expensive part of town is in fact an economic inefficiency. You can argue against it on non-economic grounds, but living in a luxury apartment is a good that people consume, just like madeleines.
    • paconbork 6y ago
      Charming bakery with five stories of apartments above it > charming bakery by itself
      • throwaway201103 6y ago
        Bakery in a retail slot in the ground floor of a 5-story apartment building is by definition not charming. It's cookie-cutter (pardon the pun). It's the sort of place that opens, struggles for nine months, and goes bankrupt. We see so much about wanting "walkable" neighborhoods where we have shops and markets all steps away from our door. Well, if the land is so valuable that it will only support dense apartment towers, small businesses like that will not be able to afford to be close by.
        • Ericson2314 6y ago
          77 Rue Galande, 75005 Paris, France Tell me that's not charming as hell.
        • OldHand2018 6y ago
          The idea behind the LVT is that the tax is based on the best and highest use of the land. But zoning is a component. If the market is begging for a 100-floor tower on a piece of land, but the zoning says you can only build a single house, the LVT would be based on a house sitting there. So, if you had a historic or otherwise significant structure, you’re going to have to downzone the land to prevent the loss of the structure. Naturally, that’s going to be abused. Connected people are going to get their property zoned for smaller structures, while unconnected people will get their property zoned for huge structures.
        • paconbork 6y ago
  • paconbork 6y ago
    It's not too different to what's happening now in low density neighborhoods because single-family houses are not an efficient use of million-dollar lots. In the current system, an empty lot is taxed less than a house, which is taxed less than say a small apartment building. IMO this is completely backwards: the tax code should reward productive usage of limited resources.
• seanalltogether 6y ago
  LVT has to be mixed with an occupancy tax however. If I own a large field capable of supporting 10 homes right in the middle of the suburbs, I shouldn't be paying the equivalent taxes that 10 households should be paying. You have to separate out the taxes used to pay for services like trash from the taxes meant for ownership of the land. (although you could argue that large parts of the government are needed to service, protect, and legislate ownership of land)
  • deleted 6y ago
    [deleted]
  • kevinpet 6y ago
    That's the whole point. If you want to sit on an acre of land in a dense area, you should be taxed at the highest and best value of that land. You make a valid point about services that can be measured, but the point of a Georgist land value tax is that land is the thing that is least distortionary to tax. I'm not fully bought in and think a transition would be very difficult, but this is one of the reasons I don't like California's Prop 13 (even if I think all the proposed reforms would leave us in a worse state).
    • mmglr 6y ago
      > If you want to sit on an acre of land in a dense area, you should be taxed at the highest and best value of that land. Isn't that what property tax already codifies? Also aren't market forces already essentially doing this? If I sit on an acre of land in a dense area I will have developers knocking at my door and everyone has a price.
      • notahacker 6y ago
        This is true (though since land is a finite resource, market forces can also encourage landowners not to sell the land to someone wanting to put it to efficient use now if the shortage of suitable development land in the area is likely to grow worse) The theory behind LVT is that the increase in a land's value from it becoming the centre of a bustling city should accrue to funds the government spends on the city's population (which helps make land more valuable) and not the person that's sitting on the land
• Ericson2314 6y ago
  1. UBI 2. LVT 3. Environmental externality taxes That's all we need to fix the 21st century. Simple as hell so basically immune to regulatory capture, and will usher in a rate of progress we haven't seen in 100 years, if ever.
  • DeonPenny 6y ago
    We went from riding horses to computer and space ship so I don't know if those will have the same impact capitalism has especially if we have less money for innovation
    • tomp 6y ago
      Which of these would result in “less money for innovation”? Carbon tax can be made revenue neutral and will net benefit innovative companies and/or customers buying their products. LVT is literally taxing non-productive, limited, legally hereditary but actually “common heritage” capital. No damage there. I’m quite opposed to UBI myself but I think there’s plenty of other ways to improve the social safety net with less opportunity of abuse, the net benefit being that people are less concerned with staying alive (low Maslow need) and free to be creative (high Maslow need).
    • Ericson2314 6y ago
      As the other responder says, LVT is good no matter what the basis of the economy is. But also, we absolutely have problems specific to today around automobile use and suburbia that ultimately go back to inefficient land use. Trying to keep society progressing without improving land use and suburbia is like trying to improve CPUs while not improving upon 1980s processes/chip density.
  • kashkhan 6y ago
    Add MMT to the list. LVT is good for state governments that don't have their own currency.
    • Ericson2314 6y ago
      Modern Monetary theory is theory not policy. The jobs guarantee that goes with it I really don't like. It's stupid in 2020 to not be trying to reduce the total labor per person. Sure, some infrastructure projects are really important, not profitable, and might even require the training of new labor to get it done. They should definitely still happen. But I see no good reason to hitch that to jobs guarantee.
• shaggyfrog 6y ago
  I would much rather read an article about land value tax from a site that doesn't also have an article suggesting COVID-19 is a hoax.
  • GavinMcG 6y ago
    So would I, but that really doesn't have anything to do with the article. Let's judge it on its own merits.
    • deleted 6y ago
      [deleted]
    • cortesoft 6y ago
      How do you judge an article by its merits when it involves something complex that you don’t already fully understand? I don’t have the time or desire to become an expert in tax policy, so I have to use some other signal to measure the merits of this article. At some point, that signal will come down to reputation of SOMEBODY or SOMETHING, and looking at the other articles posted by this site is a good starting point.
      • centimeter 6y ago
        You can determine if the article is internally self-consistent and externally consistent with your priors.
        • cortesoft 6y ago
          Those two things are necessary, but not sufficient, to prove something is credible. The best propaganda will meet those two requirements.
          • GavinMcG 6y ago
            Well, you can give up and not read anything you don't already understand, I suppose.
• mr_cyborg 6y ago
  I’m struggling to envision how this would impact homeowners differently than the current property tax paradigm. If I have a house and the value of the property goes up, my property taxes increase. If I were to sell a house at market rate, theoretically it would be reflective of what rate it was being taxed at. How would this same situation play out with a land-value tax?
  • bryanrasmussen 6y ago
    Perversely, if it was based on what the value of the property would be without any building on it, in lots of popular areas it would be more than the cost of the property tax because people will pay a premium for land where they can build what they want if the area is popular. So I guess it can't be that way, as it would piss a lot of people off.
    • thebradbain 6y ago
      LVT, in its most pure form, isn’t based on any improvements (or lack thereof) to the land — the tax would be based purely based on the land itself, as if the home were NOT there. Most likely, it would be heavily based on zoning, neighborhood, and proximity to jobs and transit. Take Los Angeles, for example. I would imagine you could actually see taxes in predominantly SFH enclaves like Calabasas or Malibu 1hr+ from job centers go _down_ while taxes on similar single family homes in West Hollywood or Beverly Hills, being much more incorporated into the urban framework of LA, would go up. Wealthy people can still have their expansive estates elsewhere, but the incentive is to move them off of land that would have a better use serving more people: just as it doesn’t make too much sense for the Empire State Building to be built in Aspen, CO, it doesn’t make much sense for a single-family, detached vacation home with a white picket fence and yard to be built in the financial district of Manhattan.
      • bryanrasmussen 6y ago
        So, you're saying it is the way I described but thought must be wrong?
  • 6y ago
• Rickvst 6y ago
  Land-value tax doesn't have huge inefficiencies like some other taxes. But the hard part is assessing "value". How should land value be decided? The book "Radical Markets" has some good insights on how to find the value of every plot of land by using markets.
  • yenwodyah 6y ago
    Most societies already levy property taxes on real estate, including on unimproved land. I don't know how they assess the value of that land, but they must have a working method for it.
    • throwaway201103 6y ago
      Typically it's assessed value inferred from market sales data from similar properties.
  • Ericson2314 6y ago
    The properties on adjacent lots affect the land value of your lot. It's only in trying to resist the above that the difficulties arise.
  • mullingitover 6y ago
    > But the hard part is assessing "value" Insurers have no problems assessing land value and have been doing it for centuries.
    • throwaway201103 6y ago
      Insurers assess improvement value. Land is not insured, because it really can't be destroyed. If you house burns down, the land is still there. The only thing you lost is the house.
      • mullingitover 6y ago
        Exactly! So when you get a mortgage, you're paying for land plus house in the mortgage. Insurers have to know the value of the land alone so they can know the difference and insure just the house.
• kart23 6y ago
  I think an LVT only works if property tax is removed. And getting every state to have less taxes will be rough. http://savingcommunities.org/issues/taxes/landvalue/ http://savingcommunities.org/issues/taxes/landvalue/
  • Ericson2314 6y ago
    That is a needless dichotomy. For a variety of reasons we want a smooth transition. Today: c(land value) + c(building value) = tax eventually: big(land value) + small(building value) = tax Just interpolate between those the obvious way.
  • wmf 6y ago
    An LVT at a high enough rate could generate the same revenue as current property taxes.
  • ip26 6y ago
    LVT can levy the same amount of net revenue. It's just a different way of determining valuation. Large buildings in the desert come to pay less. Empty lots in the middle of downtown come to pay more.
    • dragonwriter 6y ago
      LVT isn't a way of determining valuation, it's a restriction of what things you need to determine the value of.
  • pydry 6y ago
    LVT essentially is a property tax, except it's designed to be fairer, harder to evade and more economically efficient (doesnt tax productive activity) than other forms of property tax. It would make little sense to have two kinds of property tax.
• nathanvanfleet 6y ago
  > The LVT is not the same as a property tax, as it does not punish those who put the land to use; it taxes only the land, not the structure built on top of it. This sounds regressive. So someone with a bungalow on their property pays the same tax as someone with a 40 story apartment building?
  • lostapathy 6y ago
    If they're next to each other, yes. If the bungalow is out in the suburbs and the apartment building is downtown next to the transit station, the apartment will pay MUCH more tax as that land is much more valuable.
  • cortesoft 6y ago
    It isn’t regressive, because poor people don’t typically own valuable property.
  • paconbork 6y ago
    If someone is hoarding land on which a 40 story apartment building would be profitable, yes, they should be taxed for it
  • Ericson2314 6y ago
    It's only sounds that we because there is so much yeoman farmer -> suburban everyman stuff in our heads. The land is our collective inheritence, so someone with 1 story bungalow on highly desireable land is actually extremely selfish and decedent in their misuse of the commons. To get less moral and more mathematical, developers can lessen their tax only to the extent that the flood the market with floors pace, devaluing the good they are selling (floor space, not land space). This forces and equilibrium where the vast majority of people do better than today.
    • jelliclesfarm 6y ago
      Are people who have more than one child (or 2.1, if you’d like for monogamous couples) selfish too?
• DeonPenny 6y ago
  This makes a lot of unsubstantiated claims. Like the bond market is saturated that seems the opposite of true. This also claims theres been a high inflation but that doesn't seem to be true either based on any metric. I think the one thing is clear and I agree with is taxes increases capital outflow. But my biggest issue is with the central premise that is taken at face value. That the government needs more money. I don't think it does. The US government especially has far to much money and waste most of it. So I'd say instead of trying to find sneaky ways of taking more of the citizen money maybe incentive it to be use to create more opportunities. Instead of taking from some to give to other incentive opportunities so those who have will willingly give opportunities to those who don't
  • mullingitover 6y ago
    > Instead of taking from some to give to other incentive opportunities so those who have will willingly give opportunities to those who don't What does this even mean? This is not a sentence :)
    • dang 6y ago
      It's great to ask what someone means but please don't do it in a nasty way, such as by cross-examining them. That costs more than it benefits. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
      • mullingitover 6y ago
        My bad, I have edited my comment to make it friendlier.
  • CyberDildonics 6y ago
    I think you mean unsubstantiated. True or not, the claims you are making are also unsubstantiated.
    • DeonPenny 6y ago
• supernova87a 6y ago
  There was a convincing op-ed in WSJ a few years ago about how in all the states that are facing public sector defaults, the ultimate payer of these debts will be homeowners. Since basically the only place left for most governments to go is property value (unless they have huge businesses they can tax). And it is worse in the poorer states, because they don't have high home values to cushion the blow to the individual taxpayer.
  • ocdtrekkie 6y ago
    There are big huge businesses we aren't adequately taxing: Big tech. When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more. And Jeff Bezos does not need more money.
    • dehrmann 6y ago
      Which jurisdiction to tax large companies in, even without doing the double Irish trick, is complicated. The question was talking about state income, and taxing all of Amazon's profits in Washington doesn't really make sense. Amazon also doesn't make that much money; its profit margin is 5%; Apple's is more like 21%. It's also not like the money is never taxed. If Jeff Bezos wants to turn his AMZN shares into dollars, he'll federal capital gains on the appreciation. He pays nothing in Washington state because it has no income or capital gains tax, and that's Washington's choice. Corporate taxes are also a form of double taxation for this reason; the profits are taxed when the company makes the money, and taxed when investors realize gains. Amazon also indirectly pays taxes in ways you're not thinking about. There's sales tax on sales, taxes on all the supplies it buys, property tax on all the land it owns, payroll tax for employees, and its employees also pay income tax (except in Washington), property tax, etc. Taxes are actually getting collected pretty much everywhere along that chain. The usual criticism is with tax inversions, and even those mostly defer taxes, and because dividends and capital gains are taxed, I'm not convinced it makes sense to tax corporation.
      • OldHand2018 6y ago
        > Which jurisdiction to tax large companies in, even without doing the double Irish trick, is complicated Certainly, but many of the tricks involve licensing IP between subsidiaries in different tax regimes. So create an IP tax. Declare the value of your IP and pay an annual tax on it. If you ever go to court to claim infringement, this is the maximum value you can claim.
• hourislate 6y ago
  The only thing inevitable will be that eventually Land-Value taxes will not be enough (if implemented) and then what? There is no end or limit to the amount of money a Government can squander.
  • lilgreenland 6y ago
    This is a really good example of the slippery slope logical fallacy. https://en.wikipedia.org/wiki/Slippery_slope https://en.wikipedia.org/wiki/Slippery_slope
    • syrrim 6y ago
      It's a slippery slope argument. Logicians demand perfect rigour, and label reasoning that fails to attain that a "fallacy". Humans are satisfied with heuristical arguments, which the slippery slope is an example of. Pointing out that it fails to achieve perfect rigour is meaningless; no argument reaches that bar, and demands to pursue it will only result in obfuscation. Instead, try to explain why the heuristic doesn't apply in this case - if you can. The general response to a slippery slope argument is to explain why one step, once achieved, won't lead to any further steps. You will have great difficulty demonstrating that in this case, since government expenditures regularly rise to the level of their budgets (and indeed beyond).
      • comex 6y ago
        Why would a government not raise expenditures to the level of its budget? Perhaps to pay off debt, but that's only useful in limited circumstances. On the other hand, certain parts of the political spectrum are very emphatic about wanting to reduce both budget and expenditures, and sometimes manage to do so.
  • Ericson2314 6y ago
    While I don't agree with your premise that private sector is magically more efficient, let's just accept it. The government can also hand out cash raised from the LVT as a UBI. Problem solved.
• bjarneh 6y ago
  There are so many ways to tax the wealthy that would "work". But as long as the rich have way more influence on how society is organized than than the poor or middle class, it's just very difficult to do anything about it.
  • Ericson2314 6y ago
    Absolutely, but their best defense is complexity and regularity capture, so the masses don't even know they're getting fucked. If one can, by some miracle, pass simple policies like LVT and UBI, the resulting fronts and battlegrounds are a hell of a lot clearer.
• ichbinwiederda 6y ago
  I detest property taxes. What ends up happening is that people who are on the brink of poverty keep losing their (inherited) land because the government deems it an income generating asset, even though it is not (it's either their home or some dilapidated piece of land without much actual income generation prospects). Often they also get screwed on the selling because they are under pressure and because they are not experienced in selling property, and end up losing money in the process. So it's like crabs on the brim of the bucket being kicked back to the bottom.
  • Ericson2314 6y ago
    Sorry, they should sell. Truely cash-poor land-rich people are an insignificant class that's been held up as the boogieman for 100+ years. You're not a "temporarily embarrassed billionaire", and if owning land one can no longer afford seems commonplace, it is entirely because the current real estate speculation scheme we prop up (CA especially). Any realistic LVT would be phases in slowly, and give the prop 13 petit gentry plenty of time to sell and live a fine remainder of their life in a very fashionable condo.
  • civilized 6y ago
    The solution is clear: an, ummm, income-based land value tax
  • jvvlimme 6y ago
    Only that doesn’t happen in real life. People on the brink of poverty don’t inherit property. And if they do, they can always sell it and put that money to better use.
    • wyre 6y ago
      Source? What is a better use than property? I though property was the best investment one could make. The government taking property because of a lack of income to pay taxes is heinous.
    • ichbinwiederda 6y ago
      I am talking from experience. You are wrong on both counts. What makes you think that poor people don't inherit property? There are lots of people with very low incomes but who own a house. And no they don't just sell it. Why sell the only house you have? Or maybe it is not their house but it is a piece of property that they have always owned and which they use as a garden or a yard or storage. They don't sell it because they'd rather have a piece of land to enjoy then some money in the bank. It might be their only luxury in an otherwise frugal life.
• mlinksva 6y ago
  Plainly not inevitable. Crises can continue to get worse instead, and surely that's much more likely. However, I'd love to be pleasantly surprised, and occasionally am, e.g., apparently Baden-Wurttemburg (the German state that includes Stuttgart) has recently passed a LVT scheduled to be implemented in 2025 https://libdemsalter.org.uk/en/article/2020/1382897/germany-lander-to-introduce-a-land-value-tax https://libdemsalter.org.uk/en/article/2020/1382897/germany-...
• teddyh 6y ago
  The idea of land-value tax strongly reminds me of the often cited, and much maligned, so-called fiduciary duty to shareholders which CEOs and/or board members reportedly have. This duty creates, it is said, an incentive towards naked short-term greed, which is often described as a bad thing. Now, even though this duty is also usually derided as fictional, the argument, if this duty did exist, is reasonable. But does not a LVT create the same incentives in landowners – in essence forcing landowners to always use the land in a way which extracts the maximum amount of money from it? Why then is a LVT a good thing while the duty thing would be bad?
  • roenxi 6y ago
    > ... in essence forcing landowners to always use the land in a way which extracts the maximum amount of money from it ... That incentive already exists, landholders typically use their land in a high-value way. If you cast your eye on Europe there are a large contingent of undeserving people who have generations of wealth that they secure through owning land, which does not degrade over time. The big win of a land tax is about breaking ultra-low-risk inter-generational wealth transfer. If wealth is transferred between generations there at least has to be some level of competent management demonstrated by each new layer of the family tree.
    • teddyh 6y ago
      The general incentive to make money always exists, yes, but if LVT is implemented, there would, I assume, be an almost insurmountable force compelling landowners to do so. I compared LVT with the idea of “fiduciary duty” with intentional precision; CEOs are also, in general, incentivized to make money, but the idea behind decrying the alleged fiduciary duty is that a CEO is supposedly more or less forced to do whatever makes the most money, regardless if they feel it would be bad in the long run, inhumane, or even unethical. The same principle seem to apply to LVT: A landowner would, it seems, be forced, by the taxes extracted from them, to generate a matching (or larger) income by the land, regardless if they might feel that the community would be better served by using the land for something which would, incidentally, make less money for them personally. If the object of LVT is to prevent inter-generational wealth transfer, I would assume that there would be vastly more effective ways to accomplish this more directly. Or there could at least be some carve-out which limits the effect of a LVT to those instances.
• joe_the_user 6y ago
  I think the problem with land-value taxes is that objective valuation of raw land value is actually difficult and even arbitrary. If you say a parcel of land is valuable because there's a building on it, you wind-up with just a real estate tax. If you value all land the same, people will just abandon ownership of large parcels, probably with paradoxical results. Almost automatically, the assessment of just land has to be harder than the assessment of land plus the property that's there. And assessing land for taxes tends to be politically hard. For example, the overall process of real estate taxation in California was politicized into a disastrous mess years ago with proposition 13. Just undo prop 13 would be a simpler matter and even that likely isn't going to happen. Further consider, the objective land value of a parcel in Mountain View is probably less than the assessed value a lot of homeowners pay their taxes based on. I'd be in favor of measures that force more intensives use of that land but taking on home-owners with vast political influence is going to be a challenge.
  • Retric 6y ago
    You don’t need a great deal of precision with a land value tax. If the closest properties where sold at X$/ acre that’s a solid suggestion of the actual value of that land. The goal is essentially to separate the value of land based on local infrastructure like subway systems from the amount of effort put into improving the property. An empty lot that’s worth 10,000$ per acre may physically look the same as an empty lot worth 10,000,000$ per acre, but it’s clear society not the property owner generated that value is. That said, there are a lot of edge cases like beach front property vs having another house in front.
    • joe_the_user 6y ago
      You don’t need a great deal of precision with a land value tax. You need a ball park figure for land value to work and even that is going to depend on the philosophy used for valuation. If Walmart buys the cheapest land it can find and builds a distribution center on that land, how much is that land worth? What they paid for it? What someone else would pay for it now? How bought all the parcels around it that now would be useful for housing? Either paradigm is real estate valuation (at which point it become real estate tax) or the paradigm is something else with that something else up for grabs.
• mythrwy 6y ago
  LVT is a great idea. I'd also like to see more general resource use taxes (i.e taxes on raw materials like water, oil, aluminum etc.). They could be adjusted based on economic conditions (instead of playing shell games with interest rates) and adjusted for external effects. Make it formulaic. Open source, everyone can see how it works and who adjusted and how and it's not a closed door XX party with input from lobbyists. Among other good effects I see this encouraging efficient use and recycling.
  • AnimalMuppet 6y ago
    I'm not sure that LTV is a great idea. But if it is, why stop at land? Take Google, for instance. Google owns some buildings on some land. But, in proportion to how valuable Google is, they don't own much land. What they own is a mountain of code, and multiple mountains of data. The single most valuable thing they own is the google.com domain. And out of all of that, we're going to tax... the land? Huh? If all money came from land, then LTV would make sense. When it was devised, that was more or less true. But it's not the 1800s any more, and that is a long way from true today.
• throwawaysea 6y ago
  The big moral problem I have with a recurrent tax on assets like land or improvements on land (buildings) is that it erodes the fundamental right to private ownership. What does it mean to own anything if policies can retroactively apply taxes to it or continually extract taxes and ultimately take that asset away from you? That’s simply not compatible with a free society and it amounts to theft in my opinion.
  • dbcurtis 6y ago
    Exactly. It's the feudal system implemented with different accounting methods. Landowners are turned into sharecroppers working for the government.
  • arrosenberg 6y ago
    Seeing as land is limited, it's logical for governments to charge a rent on the most productive plots in order to maintain itself. I don't see how that erodes the fundamental right to private ownership. You can certainly find land with very low or no property or land taxes on it. You won't be anywhere near infrastructure, culture, food, or higher education, but your taxes will be very, very low. You are paying to participate in all the value-adding parts of society. It would only follow that improvements to the public common increases the value of your privately owned asset, and you should continue to pay your share of the upkeep based on the productive value of the land.
• tekkk 6y ago
  I think this has been implemented already in Finland. The tax administration evaluates the property's value (both land and infrastructure) and taxes it accordingly, eg 0.5%. For unused land the municipality can set an extra tax to coerce the land owner to develop the land, for example 1 to 3 percent. But I wouldn't say it is a miracle maker, just a part of an effective taxation system. What I personally would do, if I could, is to target the unscrupulous rich by banning companies located in tax havens from operating in the country, unless they can prove that they have proportionally high enough of employees working full-time in the said tax haven compared to their assets. That, I would say, is very achievable goal that would affect mostly just tax-dodgers and give a strong signal that those practices should come to an end. I think it is just unfair that normal people have pay taxes up to 50% on their earnings (depending on the country of course) while millionaires and billionaires can just bypass the whole system by incorporating a holding company in Cayman Islands. Or mega corporations that can even negotiate special tax privileges.
  • pdonis 6y ago
    > The tax administration evaluates the property's value (both land and infrastructure) That's not what the article is proposing; it specifies a tax only on the land, not on whatever is built on the land. The point is to incentivize transferring ownership of the land to whoever can get the highest value use out of it; that only works if the tax itself is only on the land, so it makes sense to build higher value infrastructure on it since that raises the income from the land without raising the tax.
    • tekkk 6y ago
      Sure, but would that be the case either way? I am quite suspicious how it would work better than the property + undeveloped land tax. And I would say LVT would disproportionally affect the poorer folk who live in the country side with a lot of land without anything to build on it. But I guess these points have already been discussed in this thread.
      • pydry 6y ago
• technotarek 6y ago
  Anecdotally, I’ve been surprised by how Washington DC’s aggressive, punitive taxing of vacant properties has done little (in my observation) to free up these plots. $MM properties that just sit there.
• valuearb 6y ago
  The problem with this op-ed is that it's based on an entirely false premise, it completely ignores how much revenues governments need. Clinton was able to run a federal government spending less than 20% of GDP, since George Walker Bush federal spending has exploded to the 25 to 30% range. The reality is that 20% is plenty, and can solve all the problems government has the ability to solve. Need to start by NOT 1) serving as the worlds policeman 2) building double the aircraft carrier tonnage of the rest of the world combined. 3) spending a trillion dollars on newest latest fighters not ready for service when we aren't at war 4) staging US troops and ships in the Middle East or Europe when both are immensely wealthy and able to defend themselves. 5) pouring $40B into a launch system design based on obsolete technologies and an overweight deep space capsule that needs a year to replace a single bad power unit. 6) subsidizing professional sports leagues paying millions a year per employee. etc, etc. A good start would be requiring senators and congresspeople to recuse themselves from any legislation that specifically allocates funds for any projects in their states/districts. Get away from the thousand page earmarked pork funding bills and focus their responsibilities on legitimate national interests.
  • quotemstr 6y ago
    > Need to start by not 1) serving as the worlds policeman 2) building double the aircraft carrier tonnage of the rest of the world combined. 3) spending a trillion dollars on newest latest fighters not ready for service when we aren't at war, 4) staging US troops and ships in the Middle East or Europe when both are immensely wealthy and able to defend themselves. 5) pouring $40B into a launch system design based on obsolete technologies and an overweight deep space capsule that needs a year to replace a single bad power unit. 6) Not subsidizing professional sports leagues paying millions a year per employee. etc, etc. Have you looked at the federal budget? The expenditures you mention are insignificant. Social security and medical assistance programs make up 48% [1] of the federal budget. Defense only makes up 16%, and of that, only 27% goes to the navy. Another 8% is various assistance programs. 8% is interest on debt. 0.5% is all of NASA. You can't really reduce the government's expenditure levels by cutting a few high-profile programs that some consider wasteful. The majority of the budget goes to supporting the most vulnerable in society. Cutting these programs is politically impossible. > thousand page earmarked pork funding bills and focus their responsibilities on legitimate national interests. Earmarks are dead already. But they shouldn't be: earmarks let lawmakers swap favors in a way that promotes the smooth operation of government and compromise in lawmaking. Yes, there's some corruption, but that corruption was a small price to pay for decreasing the overall level of hostility in the legislature and promoting compromise. [1] https://www.cbpp.org/research/federal-budget/policy-basics-where-do-our-federal-tax-dollars-go https://www.cbpp.org/research/federal-budget/policy-basics-w...
• kristianp 6y ago
  (2018)
• throwawgler87 6y ago
  2018