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How do you implement B) without causing a disproportionately negative impact on existing homeowners? For example, would you just tax "new" purchases more heavi
by bumby 5y ago
How do you implement B) without causing a disproportionately negative impact on existing homeowners?
For example, would you just tax "new" purchases more heavily? Or scale it into existing homes? Give caveats for fixed-income (elderly and disabled)?
Politically, this seems like a tough road, even if it's the best choice. You have to essentially convince people to vote against their own economic self-interest. I think current tax policy around homes is curious because it's one of the few areas that there is a rather clear consensus around economists that it's bad policy that incentivizes the wrong actions, yet we can't seem to change them.
- pydry 5y agoLand value tax. It could be made palatable to regular people by making a high tax free threshold. Most homeowners could be left unaffected. That leaves 50% of land owned by the 1%. A fair chunk. Additionally the money could be funneled initially into pensions for the impoverished elderly. Capital/billionaires would fight back by arguing that it would hit the elderly the hardest just as the howard jarvis taxpayers foundation did with prop 13 but if it was very obvious how many elderly people were helped, crying about grandmothers having to sell multimillion dollar mansions would probably backfire. They would throw immense resources at trying to discredit and kill this, though. They would use every character assassination trick in the book to stop those pushing it. Some would probably also resort to violence if that failed. It would be an uphill battle the whole way.
- giantg2 5y ago"That leaves 50% of land owned by the 1%." Is a lot of that farm land, like with Gates? I thought a lot of the investors are involved with apartments, which don't take up much land?
- bumby 5y agoMaybe somebody can clarify, but wouldn't that land also be much less taxable per acre because the value is lower?
- giantg2 5y agoThat's part of what I'm missing here. How is that value calculated?
- lurgburg 5y agoLVT is generally conceptualised as proportional to the value of the land, not it's area.
- giantg2 5y agoAnd how do you set that if excluding the type of property that's on it?
- ClumsyPilot 5y agoI fail to see the relevance, land is zoned for farming or reaidential, that sets it value You could reform zoning, but its not a requirement
- mrep 5y agoWithout reforming zoning, it is largely useless. Sure it might cause some improvements in places underutilizing their land but I think most places are using their land for the highest value thing it is zoned for. If I have a SFH zoned for SFH in the heart of manhattan next to skyscrapers, the value of the land isn't based on the skyscrapers, it is based on what you can put on it and you can prove that by selling it for which nobody is going to pay as if you could put a skyscraper there.
- giantg2 5y ago"underutilizing their land but I think most places are using their land for the highest value thing it is zoned for." In urban or higher density suburban areas, I think you're mostly right. But in lower density areas, a lot of the land is multi purpose or has few restrictions. So technically, you could build apartments or homes on land that is used as agriculture. However, there might not be demand for it in that area. Essentially, the tax-by-zoning works well in the situations where zoning is restrictive and demand is high. But in low density areas where the actual use is not well defined with a single zoning use, the value would be potentially arbitrary or inaccurate (making property tax a better measure of value).
- 5y ago
- anonAndOn 5y agoHomestead exemption. If it's your primary residence you get a tax exemption on the first $[geographically_appropriate_median_goes_here].
- giantg2 5y agoThey did that with the casino money in PA. It's a joke, like a couple hundred bucks, if that.
- paulryanrogers 5y agoHomestead exemptions for older folks already exist. Perhaps a higher tax rate for those not living in a property?
- giantg2 5y agoI would love to see no tax on primary home property at all. Just for commercial/investment properties. Unfortunately, a lot of that would be passed on to renters unless income taxes were assessed differently. But that would also mean drastically changing school funding, which could be a good opportunity but would likely turn this into every more of an impossible shitshow.
- bumby 5y agoI think one argument is this incentivizes in the wrong way regarding home buying. It seems similar to the mortgage interest rate deduction argument: it incentivizes larger homes, it's regressive because it benefits those with more wealth in property than those with less, increases the likelihood of defaults due to people being incentivized towards more expensive homes, and potentially distorts housing prices, related to excessive borrowing.
- giantg2 5y agoMaybe. My idea is to shift property tax to income/capital gains tax. In theory (depending on the structure) that should provide less net income because the number of working years should be lower than the number of years living in any property, and it should impact the higher earners more. This lower net income should lower the amount one is approved for (and hopefully stay the same towards the lower income range). This should reduce the burden on people who are on a fixed income while keeping houses a similar size. Maybe even smaller since the tax is taken off the top rather than perpetually taken off the back end - people tend to notice a smaller paycheck more.
- bumby 5y agoThis is an interesting perspective, thanks for clarifying. I think it would also be interesting if it leads to a more equitable method of funding schools.