3 ms·
I think this has been implemented already in Finland. The tax administration evaluates the property's value (both land and infrastructure) and taxes it accordin
by 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 agoSure, 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 agoPoorer folk in the countryside will be surrounded by land that is worth less and will be taxed less accordingly. Land value tax means a square meter in manhattan gets taxed the same as an acre in middle of nowhere wyoming. Rich folk hoarding higher value but physically smaller land/buildings in the city centres surrounded by amenities and transport infrastructure will be buried in taxes. Either they make that land work for its taxes or they yield it to somebody who will. It'll cause better development of land too since land speculation will be removed from the land development formula. Either you make buildings people like and want to rent and you make a profit or you don't. As a landlord you'll be both insulated from declines in an area's popularity and unable to profit from an area being suddenly fashionable.
- tekkk 6y agoOk, I see. But still, this boosted urbanization doesn't seem that great for building diverse cities. Just making as tall and densely-packed buildings as possible. Yeah, ok if you build villas in the city center I can see it being useful but it seems very similar to the current taxation.
- pydry 6y agoThe difference is going to be less what gets built and who gets to profit. Instead of land speculators like Donald Trump making profits off the backs of our hard work the unearned land wealth will be distributed more evenly. In both scenarios few people will build villas in downtown Manhattan because it is too profitable to build skyscrapers instead. The difference is that with LVT building a villa will be a massive tax burden whereas under our current system there is no tax burden.