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The answer to this particular problem is Georgism and a Land Value Tax. It strongly disincenctivises speculation and incenctivises productive use. It ensures t

The answer to this particular problem is Georgism and a Land Value Tax. It strongly disincenctivises speculation and incenctivises productive use. It ensures that a person claiming ownership of land makes more productive use of it than the cost of depriving society of use of that land. As a cherry on top, the income from LVT can be used to reduce taxes on labour, or simply to be given back as a citizen's dividend.

worldsayshi 5y ago
I wonder if there's a good way to sell such a concept onto a political landscape. Anyone who already owns anything would want to keep things as they are. Feels like a very central political problem. Those that have accumulated wealth and power it would be in their interest to increase rather than decrease the scheme-ines of the political system. This concept has to have a name?
- timy2shoes 5y ago
  I think regulatory capture applies here (https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture)
- andrepd 5y ago
  > Anyone who already owns anything would want to keep things as they are. Feels like a very central political problem. Indeed, jt is perhaps the most central political problem: how does a class that doesn't have power wrestle it from those who already have power? As for the name, how about "human history"? :)
- asdff 5y ago
  What you are describing is status quo bias I believe. This political structure is also oligarchy.
bcrosby95 5y ago
It would only do this if LVT were significantly higher than property taxes. Because property taxes already includes the value of the land. E.g. my "house" is valued at 700k. But the appraisal puts that at $280k structure and $420k land. 1% of 700k is 7k, but 1% of 420k is 4.2k.
- andrepd 5y ago
  Indeed, the idea of LVT/Georgism is to charge, if not 100%, then close to that amount of the rent commanded by the (unimproved) land. The very idea of the whole thing is that, in order to claim a piece of land for your own usufruct, you need to compensate the public for taking that piece of the commons for yourself and walling it off and preventing the rest of the community from using it, i.e., you owe the community a market rent for that piece of land. We can fiddle around the edges, e.g. the tax being 50% of market rent rather than 100%. But the principle remains the same. Note also that houses used as main dwellings would be exempt or pay a heavily reduced rate. EDIT: So taking that example, let's say your house rents for 1000$ (I've no idea if this is reasonable or not). Land according to your appraisal is 60% of the property value, so land rent, that is, what you owe as LVT, is 600$/mo or 7200$/yr.
  - BirdieNZ 5y ago
    > Note also that houses used as main dwellings would be exempt or pay a heavily reduced rate. This isn't usually part of LVT proposals, and for good reason. LVT should apply to all land everywhere, or else it becomes much less effective.
    - photojosh 5y ago
      And the way to keep this reasonably neutral (ie not dump a massive tax out of nowhere on people), is that LVT replaces at least a portion of say, income tax. That makes it politically viable as well.
    - bcrosby95 5y ago
      I would imagine this would have a weird effect on land values if enacted. People couldn't afford such a large tax, so prices would generally go down. Since the value of the structure won't go down (because that's based upon cost to build) loss of value would 100% go to the land, which would lower the LVT. But the price to rent wouldn't necessarily go down, since the total ownership cost wouldn't go down. It obviously would hit an equilibrium at some point but I'm not sure where.
J253 5y ago
Would an idea like this but applied at increasingly higher rates as you own more homes work? For example, owning a single home, you pay a certain amount, if any. Want to buy a vacation house? Start paying n% LVT. A third vacation house? n*1.2% LVT etc. Are you a pension fund buying up 80,000 single family homes? Tax should be so high on owning this many homes you wouldn’t want to do it.
- dariusj18 5y ago
  In my state we already have this, it's called a homestead exemption, however it only applies to the first house.

worldsayshi 5y ago

I wonder if there's a good way to sell such a concept onto a political landscape. Anyone who already owns anything would want to keep things as they are. Feels like a very central political problem. Those that have accumulated wealth and power it would be in their interest to increase rather than decrease the scheme-ines of the political system. This concept has to have a name?

timy2shoes 5y ago
I think regulatory capture applies here (https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture)
andrepd 5y ago
> Anyone who already owns anything would want to keep things as they are. Feels like a very central political problem. Indeed, jt is perhaps the most central political problem: how does a class that doesn't have power wrestle it from those who already have power? As for the name, how about "human history"? :)
asdff 5y ago
What you are describing is status quo bias I believe. This political structure is also oligarchy.

bcrosby95 5y ago

It would only do this if LVT were significantly higher than property taxes. Because property taxes already includes the value of the land. E.g. my "house" is valued at 700k. But the appraisal puts that at $280k structure and $420k land. 1% of 700k is 7k, but 1% of 420k is 4.2k.

andrepd 5y ago
Indeed, the idea of LVT/Georgism is to charge, if not 100%, then close to that amount of the rent commanded by the (unimproved) land. The very idea of the whole thing is that, in order to claim a piece of land for your own usufruct, you need to compensate the public for taking that piece of the commons for yourself and walling it off and preventing the rest of the community from using it, i.e., you owe the community a market rent for that piece of land. We can fiddle around the edges, e.g. the tax being 50% of market rent rather than 100%. But the principle remains the same. Note also that houses used as main dwellings would be exempt or pay a heavily reduced rate. EDIT: So taking that example, let's say your house rents for 1000$ (I've no idea if this is reasonable or not). Land according to your appraisal is 60% of the property value, so land rent, that is, what you owe as LVT, is 600$/mo or 7200$/yr.
- BirdieNZ 5y ago
  > Note also that houses used as main dwellings would be exempt or pay a heavily reduced rate. This isn't usually part of LVT proposals, and for good reason. LVT should apply to all land everywhere, or else it becomes much less effective.
  - photojosh 5y ago
    And the way to keep this reasonably neutral (ie not dump a massive tax out of nowhere on people), is that LVT replaces at least a portion of say, income tax. That makes it politically viable as well.
  - bcrosby95 5y ago
    I would imagine this would have a weird effect on land values if enacted. People couldn't afford such a large tax, so prices would generally go down. Since the value of the structure won't go down (because that's based upon cost to build) loss of value would 100% go to the land, which would lower the LVT. But the price to rent wouldn't necessarily go down, since the total ownership cost wouldn't go down. It obviously would hit an equilibrium at some point but I'm not sure where.

J253 5y ago

Would an idea like this but applied at increasingly higher rates as you own more homes work? For example, owning a single home, you pay a certain amount, if any. Want to buy a vacation house? Start paying n% LVT. A third vacation house? n*1.2% LVT etc. Are you a pension fund buying up 80,000 single family homes? Tax should be so high on owning this many homes you wouldn’t want to do it.

dariusj18 5y ago
In my state we already have this, it's called a homestead exemption, however it only applies to the first house.