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The thought-out version of this is called Georgism. It proposes a (close to) 100% tax on the unimproved value of land. Economists agree the tax can't be passed

The thought-out version of this is called Georgism. It proposes a (close to) 100% tax on the unimproved value of land. Economists agree the tax can't be passed on to renters, for reasons I can't articulate. https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty https://astralcodexten.substack.com/p/your-book-review-progr...

dnautics 5y ago
How do you define and evaluate unimproved value?
- deelowe 5y ago
  You can’t and that’s why such a program is popular with politicians. The bigger issue is with vacant properties being used as cash stores.
  - hpkuarg 5y ago
    > You can't Sure you can. Unimproved value of the land is simply the value of the lot as a whole minus the value of building that sits atop (well, improvements aren't always buildings, but that's a simple example). You can approximate it by comparing it against the transaction prices of nearby lots that aren't improved, or by taking the construction cost out of the purchase price of the lot. > is popular with politicians Land value tax in general isn't that popular around the world, and Henry George's version of it, where all tax is replaced with just a land value tax, even less so. As far as I'm aware, there is literally no jurisdiction in the world whose sole tax revenue is from LVT. Economists and idealists like land value tax; politicians, who derive a lot of power from the wealthy landowning class (who in turn would be the most hurt by LVT), not so much. > The bigger issue is with vacant properties being used as cash stores. Land value tax would be an excellent way to curb real estate speculation.
    - dnautics 5y ago
      So a unit that abuts the el should have the same per acre value as a unit a block and a half away?
      - zip1234 5y ago
        Clearly you need comps to figure it out. It is certainly possible especially in the data driven world we have today.
        dnautics 5y ago
        How did that work out for Zillow?
      - rthomas6 5y ago
        What would the unit cost if it were an empty lot? That is the tax.
        dnautics 5y ago
        Until you get the capability of temporarily creating a parallel universe and rolling it back, It's an unanswerable question, that's the point. Also you are confusing cost for price.
        rthomas6 5y ago
        Denmark must be capable of creating parallel universes then. https://en.wikipedia.org/wiki/Taxation_in_Denmark#Land_value_tax https://en.wikipedia.org/wiki/Taxation_in_Denmark#Land_value...
      - alistairSH 5y ago
        That’s no more true under LVT than it is today.
- BoiledCabbage 5y ago
  I'm assuming by that they mean the value of the land. And if it's done similar to an appraisal they see what market price is for a sale (which combines the value of the building + land). Then they can estimate how much it would cost to rebuild that building if it were completely destroyed. That's the value of the improvements. The remainder is the amount someone implicitly paid for the land.
  - dnautics 5y ago
    This is not great because suppose it cost relatively little to physically build a house but you sold it for a huge amount because it's in some chic architectural style that hasn't arrived yet in this city. So your house was in a crazy seller market and unexpectedly sold for crazy tons. Now you are being seriously penalized for your boldness.
    - rthomas6 5y ago
      No, because the tax is only on the price someone would pay for the lot.
      - dnautics 5y ago
        Restating the definition does not magically conjure a sensible strategy for arriving at that value.
        rthomas6 5y ago
        So far, our comments have boiled down to "Yes you can assess unimproved value of improved land", and "No, you can't, there is no way to get that number separate from the value of improvements." So I'm going to try to say something different. 1. Here is the article that convinces me it is very possible to assess land separate from improvements. It details several strategies for doing so. Also properties are assessed in these ways already in many places. https://astralcodexten.substack.com/p/does-georgism-work-part-3-can-unimproved https://astralcodexten.substack.com/p/does-georgism-work-par... 2. Accuracy of assessment does not need to be super high for this idea to work. You just need an assessment with the intent of assessing unimproved land. The tax does not need to be literally 100% of unimproved land value, it just has to be a high percentage. Let's say there is a +/- 30% accuracy of unimproved land value assessment. We can have a 70% tax on that assessed value. Some people would in actuality be taxed at 97.5% of land value, and some people at 52.5% of land value. Perhaps the unfairness of this discrepancy is a true downside. However, one could argue the same about property taxes now.

dnautics 5y ago

How do you define and evaluate unimproved value?

deelowe 5y ago
You can’t and that’s why such a program is popular with politicians. The bigger issue is with vacant properties being used as cash stores.
- hpkuarg 5y ago
  > You can't Sure you can. Unimproved value of the land is simply the value of the lot as a whole minus the value of building that sits atop (well, improvements aren't always buildings, but that's a simple example). You can approximate it by comparing it against the transaction prices of nearby lots that aren't improved, or by taking the construction cost out of the purchase price of the lot. > is popular with politicians Land value tax in general isn't that popular around the world, and Henry George's version of it, where all tax is replaced with just a land value tax, even less so. As far as I'm aware, there is literally no jurisdiction in the world whose sole tax revenue is from LVT. Economists and idealists like land value tax; politicians, who derive a lot of power from the wealthy landowning class (who in turn would be the most hurt by LVT), not so much. > The bigger issue is with vacant properties being used as cash stores. Land value tax would be an excellent way to curb real estate speculation.
  - dnautics 5y ago
    So a unit that abuts the el should have the same per acre value as a unit a block and a half away?
    - zip1234 5y ago
      Clearly you need comps to figure it out. It is certainly possible especially in the data driven world we have today.
      - dnautics 5y ago
        How did that work out for Zillow?
    - rthomas6 5y ago
      What would the unit cost if it were an empty lot? That is the tax.
      - dnautics 5y ago
        Until you get the capability of temporarily creating a parallel universe and rolling it back, It's an unanswerable question, that's the point. Also you are confusing cost for price.
        rthomas6 5y ago
        Denmark must be capable of creating parallel universes then. https://en.wikipedia.org/wiki/Taxation_in_Denmark#Land_value_tax https://en.wikipedia.org/wiki/Taxation_in_Denmark#Land_value...
    - alistairSH 5y ago
      That’s no more true under LVT than it is today.
BoiledCabbage 5y ago
I'm assuming by that they mean the value of the land. And if it's done similar to an appraisal they see what market price is for a sale (which combines the value of the building + land). Then they can estimate how much it would cost to rebuild that building if it were completely destroyed. That's the value of the improvements. The remainder is the amount someone implicitly paid for the land.
- dnautics 5y ago
  This is not great because suppose it cost relatively little to physically build a house but you sold it for a huge amount because it's in some chic architectural style that hasn't arrived yet in this city. So your house was in a crazy seller market and unexpectedly sold for crazy tons. Now you are being seriously penalized for your boldness.
  - rthomas6 5y ago
    No, because the tax is only on the price someone would pay for the lot.
    - dnautics 5y ago
      Restating the definition does not magically conjure a sensible strategy for arriving at that value.
      - rthomas6 5y ago
        So far, our comments have boiled down to "Yes you can assess unimproved value of improved land", and "No, you can't, there is no way to get that number separate from the value of improvements." So I'm going to try to say something different. 1. Here is the article that convinces me it is very possible to assess land separate from improvements. It details several strategies for doing so. Also properties are assessed in these ways already in many places. https://astralcodexten.substack.com/p/does-georgism-work-part-3-can-unimproved https://astralcodexten.substack.com/p/does-georgism-work-par... 2. Accuracy of assessment does not need to be super high for this idea to work. You just need an assessment with the intent of assessing unimproved land. The tax does not need to be literally 100% of unimproved land value, it just has to be a high percentage. Let's say there is a +/- 30% accuracy of unimproved land value assessment. We can have a 70% tax on that assessed value. Some people would in actuality be taxed at 97.5% of land value, and some people at 52.5% of land value. Perhaps the unfairness of this discrepancy is a true downside. However, one could argue the same about property taxes now.