42 ms·

Tax the Land

• nukemaster 4y ago
  No matter what we do on the supply side it will be eaten up by the unlimited demand from people coming here. Unless we slow down immigration housing will always be too expensive. This only further hurts people living here by chasing them out of their homes and taking control of their communities away from them. We can't solve the problems of every country in the world by destroying our own. That only makes things worse for everyone.
  • bwestergard 4y ago
    Current immigration is a strong positive contributor to GDP growth. All things equal, it should allow for more construction and lower (real) housing prices under the right regulatory regime.
    • nukemaster 4y ago
  • andrepd 4y ago
    If your thesis is true then increases with immigration should be correlated with increases in housing prices, right? But this is not at all what is empirically verified. It's not a supply-side problem (or not only or even majorly a supply-side problem). We can see this because the housing bubble is occurring in widely different places with widely different construction rules: both very restrictive and very lax. This is fundamentally a finance bubble.
  • jjitz 4y ago
    Or maybe just like, build more houses
  • JRGC1 4y ago
    You're half way there... no matter what we do on the supply side, it will be eaten up by the unlimited demand from investors. while housing outperforms other investments or until regulators curtail the activity, housing will remain expensive.
  • refurb 4y ago
    This isn't true in the least. Housing is entirely local. The US has plenty of cheap land to build housing. People choose to live where the jobs are or where QOL is high. High prices reflect that. And that's good - it's a signal we should be building housing and opening new businesses elsewhere.
  • lom 4y ago
    I think we would have an a lot larger issue if the 2.8 million immigrants who work in construction[1] suddenly fell away. Even if it would potentially (but probably not) relieve demand a tiny bit. [1] https://eyeonhousing.org/2021/03/immigrants-in-construction-rising-numbers-falling-share/ https://eyeonhousing.org/2021/03/immigrants-in-construction-...
  • ekianjo 4y ago
    > Unless we slow down immigration housing will always be too expensive. Tokyo has a huge demand in accommodation and guess what, they keep building a lot of apartment buildings and it works.
    • nukemaster 4y ago
  • bigtex88 4y ago
    Have you driven around America? It is absolutely massive, and the amount of empty land is mind-boggling. Chill out with the racist "we're running out of room" diatribes. We are decidedly not running out of room.
• newaccount2021 4y ago
• andrepd 4y ago
  There is something deeply wrong with the fact that you can buy-to-rent a property and immediately turn up a profit, essentially inserting yourself as a parasitic middleman in the process, providing no service, and extracting an economic rent.
  • refurb 4y ago
    Anyone who has been a landlord can attest "providing no service" isn't true at all.
    • rapind 4y ago
      Subjective. When I used to rent, I never saw my landlord after signing the lease. I was renting a house and taking care of small maintenance issues myself. I'd say it was far less effort to rent to me, then it would have been to live there himself. Of course there are bad tenants, but I suspect, like most things, we focus on those negatives and ignore all the low maintenance tenants when thinking about it.
      • boredumb 4y ago
        a new roof is over 20,000$ a new floor in a modest home is over 10,000$ a burst pipe will be over 1,000$ interest payments are thousands a year property taxes are thousands of dollars a year all are guarantees even with the lowest maintenance tenants.
        • rapind 4y ago
          Agreed. Home maintenance, property tax, mortgage interest, is a cost of owning regardless of whether you are renting or living in it. So that needs to always be part of your calculation, and I would hope most landlords are considering that. I was just hypothesizing that the "Bad Tenant tax" is potentially overblown. Sure it can be an absolute nightmare if you're unlucky (or bad at screening), but on average I suspect it's pretty minor. I honestly don't have anything but anecdotal data to back that up though. I just suspect, like a lot of things where exceptional horror stories are propagated, we could be over-weighting the negatives.
• endtime 4y ago
  Lars Doucet made a series of posts to ACX (formerly SlateStarCodex) about Georgism last year; https://astralcodexten.substack.com/p/does-georgism-work-is-land-really https://astralcodexten.substack.com/p/does-georgism-work-is-...
• mdorazio 4y ago
  Not really stated in the article are three caveats: 1) Zoning laws have to change as well to actually allow development of the land being taxed toward more productive ends. 2) The land tax amount needs to be high enough that the pain of the tax effectively forces owners to improve what's on the land. A homeowner sitting on a million dollar piece of property in California taxed at ~1% is still unlikely to build an apartment complex if they like their single family home just fine and are making $200k+/year in income. 3) It could be personal bias, but a lot of LVT arguments seem to implicitly assume that more rental units is a good thing, which I don't really agree with. Personally, I'd rather see 2nd homes taxed into absolute oblivion, and I say that as someone who was a landlord for several years. Affordable housing to me means "affordable housing you can actually buy" as much as it means "affordable rent". The two do not go hand-in-hand if rental income is incentivized enough that people buy as many properties as they can get loans for (California today).
  • bombcar 4y ago
    The average single-family dwelling landlord is subsidizing someone; rents are usually below actual carrying costs (maintenance, etc) and most landlords would be better off selling. It’s one of the reasons banks and companies aren’t in the single family rental business. The main thing that covers for it is property appreciation - the rent is used to just offset carrying costs while you wait for the property to go up in value.
    • mdorazio 4y ago
      I'm strongly going to need a source to back up your claim.
      • bombcar 4y ago
        Find banks or real-estate companies that invest in single family homes for the purpose of renting them. If you can find one, you often find that they'd rather let the property sit empty than renting it. Or just look at the cost of buying a house vs renting a similar house, account for maintenance, and see if the numbers line up.
• giantg2 4y ago
  "The big question land value taxes help answer is: How can a government raise funds without distorting choices and possibly leaving people worse off? If you tax income, it provides a disincentive to work. If you tax property, it provides a disincentive to improve the physical buildings on top of the land." Of course it will distort choices and leave some people worse off. If the author can't see that, then they have a serious bias problem. The whole point of the land value tax is to tax land to encourage higher density and higher cost use. This is especially damaging to people who hold land that is developed around. If I have .75 acres with a single family home and 30 years later the area around me is developed, them I will be financially forced off of my land because I could theoretically put an apartment building on it. We already see standard property tax forcing the elderly out of their homes in many areas. Please, show me how an appropriately set income tax disincentivizes work. I'm guessing they can't and are equally uneducated on that subject. Income tax would only provide a disincentive to work if the alternative (assistance programs) is more attractive. Which doesn't seem to be the case. The people at that lowest level of income aren't paying (or gets refunded) income tax. Most of the tax at that level on income is for programs like social security and Medicare.
  • deleted 4y ago
    [deleted]
  • trgn 4y ago
    >If I have .75 acres with a single family home and 30 years later the area around me is developed I think this is exactly the framework. The idea is that that person right now is benefitting from increased community wealth (which would be realized in actual moneys upon sale of their property), and hence, should be taxed more. Maybe there are some sophisticated ways to strike a balance, to avoid the situation you are describing. For example, people could pay less tax, but then they (or their estate) cannot pocket the capital gain upon sale of their property. In any case, I think a land tax is much more equitable, because it punishes landholding, rather than punishes improving land. It's the poor use of land right now that I believe is the main driver of poor affordability of housing.
    • giantg2 4y ago
• 2Gkashmiri 4y ago
  in india,it has been a tradition of "you sold a piece of land and this happens: you get capital gains and there is not a lot of exemptions (another house, agri land) so you pay your taxes at indexed cost of acquisition. the "price" set between buyer and seller at the time of registration is added 5-7% "stamp duty". so $ 1 mil + 5 % to govt= paid by buyer. this is true for all subsequent sales so when the next buyer wants to see it at 1.5 mil, 5% is taken on 1.5 with no adjustment. this increases the cost of property but the government gets a huge chunk of tax revenue. then there is area wise "property tax" which is an annual tax paid to local municipalities, small but it adds up. when you are building a house, you pay "GST" or indirect tax on all consumables, wood, steel, cement, sand, bricks, glass, appliances, tiling, roofing, electricals, every darn thing and you cannot "claim" this tax as input so the government gets this. what more do you want them to impose?
  • tome 4y ago
    > what more do you want them to impose? The point of land value tax is to remove all those other taxes (at least, I wouldn't support introduction unless it did).
    • 2Gkashmiri 4y ago
      would that result in less collection of taxes or more? because current implementation of cascading effect means more and more taxes are incurred, which while increases the price of property, gives taxes to government which is just that
      • tome 4y ago
        Whether the overall tax take is more or less depends on the LVT rate! But I think proponents of LVT say that when introducing the tax the rate should be set so that the overall tax take is the same.
• bitshiftfaced 4y ago
  In my mind, LVT only works properly when you've ripped out every other tax: income, sales, capital, you name it. Absolutely no more friction and warped incentives. Divide the government budget by the weighted land values and tax accordingly. But that could never work in our world. There would be too much temptation to add a small tax here for this other thing, and then it snowballs, and then we're back to where we started but this time LVT plus numerous other taxes.
  • Schroedingersat 4y ago
    For consistency you also have to tax accumulated past labour and intellectual property. I'm very fond of self-declared valuations with enforced sale back to the commons if anyone is willing to front the value. Add a tax free threshold a bit above the mean wealth so anyone can declare their 100k house is worth $1m or whatever without risking paying the costs of moving due to someone maliciously forcing sale.
  • Spooky23 4y ago
    So return to medieval England? Do we burn witches too?
    • bitshiftfaced 4y ago
      I didn't make perfect grades in history, but I was under the impression that medieval England was a monarchy.
  • pyradius 4y ago
    If you accept the ATCOR concept (All Taxes Come out of Rent) then the presence of existing taxes diminishes land rent by the amount of those taxes. You can read more on this subject in Taxation: The Lost History in the following section: All Taxes Indirectly Fall on Land Values - https://www.jstor.org/stable/43817496?read-now=1&refreqid=excelsior%3A1fdec839759eca6c835ee932ed7750c7&seq=128 https://www.jstor.org/stable/43817496?read-now=1&refreqid=ex... and in the "Trickle-Up Economics" report - https://www.prosper.org.au/wp-content/uploads/2018/04/TrickleUp22.pdf https://www.prosper.org.au/wp-content/uploads/2018/04/Trickl... Of course, we should first replace the existing bad taxes for multiple reasons. Nonetheless, as a matter of economic and social justice, -any- amount of land rent that exists should be publicly collected and distributed on a per-capita basis. This does not increase the user-cost of land as land has no cost of production. Of course as a transitional issue there will be net winners and net losers (for which we could create policies to address the transitional effects). The ultimate effect of the full public collection of land rent would be to bring the selling price of land down to $0, while the rental value would remain the same (not counting the dynamic effects). In reality, land value taxation isn't really a tax when properly understood. You either pay a previous owner in selling price or you pay the public the annual rental value. Most people don't properly consider that the selling price is simply the capitalized ability to capture future rents. In an ethical society, this privilege would not exist.
• flenserboy 4y ago
  This would be a great way to destroy (privately held) farms and significantly, permanently raise food prices.
  • throwaway894345 4y ago
    While incentivizing denser factory farms over free range. Similarly, it incentivizes higher-yield GMOs over organic/local. I’ve been seeing a lot of this pro-density stuff pop up and it seems like urbanites trying to solve for urban problems on a national level despite that much of the nation doesn’t have urban problems. See also the various anti-car/everyone-should-bike-everywhere debates.
    • Spooky23 4y ago
      It’s not even that. LVT is one of these magical solutions to problems similar to the gold standard for goldbugs. The reality is that it’s a highly regressive tax. Taxes shouldn’t be a prime driver of economic activity.
    • larsiusprime 4y ago
      Have you actually run the numbers? Land value tax would most likely reduce the taxes on most farms, the vast majority of land value is concentrated in urban spaces. The majority of farmland is almost certainly getting a tax break under a land value tax regime, especially if its used to offset existing sales and income tax. Further, while land value tax would reduce the average tax burden on the average farmer, it would change the incentives because it would make passively holding onto land less valuable of an activity on the margin even if there's a net savings to the average farmer. I'm not a fan of factory farming either, but the point you're missing is that the kind of agricultural strategy you and I don't like optimizes NOT for highest yield per acre, but highest yield per dollar of input. Efficiency is not mono-dimensional, it's not about "more efficiency" it's about "more efficient AT WHAT." And what industrial farming is efficient at is not using money and not using human labor. One of the chief ways it does this is externalizing most of its costs (pesticides, herbicides, runoff, erosion, antibiotics, etc), and grabbing up more land to make up for its lower per-acre efficiency.
• boredumb 4y ago
  Wait! We voted for more taxes on land owners not renters, why are the rents going up!?! Vox is a dumpster fire and the owners have been hyperbolic rage bait farmers for over a decade.
  • andrepd 4y ago
    You need to read books on LVT and Georgism, it's been around for going on 150 years with praise from such diverse figures as Einstein or Tolstoy. Hardly invented by Vox, but judging from your tone you have pre-existing qualms about this particular news outlet.
    • boredumb 4y ago
      I absolutely do have qualms with the entire organization and find ezra klein to be a snake. The idea that a self proclaimed anarchist who spoke against the state as being an exploitative entity, promoting increased state taxes on land, is amusing until you realize the context of him living in the period of Russian aristocracy.
      • andrepd 4y ago
        Anarchist thought has a long tradition of seeing certain things as "commons" which are illegitimately appropriated by private concerns. This includes things as land, air, natural resources, cultural heritage, etc. But more importantly, the part where you speak of "state taxes" makes me think you have no idea what you're talking about, since the original idea of Henry George was to distribute the LVT in the form of a citizen's dividend, equally among every person regardless of any criteria. A prescient form of UBI if you will.
        • boredumb 4y ago
          If the state is coercing you to pay taxes for the land you live on, it is a state tax. We can all collectively start referring to chickens as horses, we can even refer to aviaries as a prescient form of stables, but it is not going to change the nature of the bird. The naive idea that exchanging all the taxes for a single land tax will result in anything but all of the current taxes with an additional state tax on land is ahistoric to put it kindly. As of the time of writing we do pay taxes on land as well as taxes on labor, taxes on commerce, taxes on investments, taxes on inheritance, taxes on imports, taxes on value added to goods, sin taxes, tax stamps for government services, taxes on energy, taxes on roadways, taxes on gifts, taxes to enter or leave airports, and even taxes to live in certain cities. In the US these did not exist until after the civil war and since then they've become the rule and not the exception, to repeal all of them and replace them with a LVT is great, but to expect the modern state to not feature creep every single one of the current taxes back in place within a few decades gives me a huge pause.
• derbOac 4y ago
  I don't think the issue is taxing land per se, or even property, it's making illegal and taxing practices that are seen as immoral or not in societys best interest. This gets dangerously vague, but it has always been puzzling to me why actually blighted properties, essentially abandoned by owners not living anywhere near the area, werent taxed at ridiculously high rates. The other side of the coin is municipalities abusing power to disenfranchise legitimate landowners. It seems like rules around all of this could be made clearer. Sometimes it seems like you can go so far in avoiding a slippery slope that you're nowhere near one, but also nowhere near where you need to be.
  • s1artibartfast 4y ago
    > it has always been puzzling to me why actually blighted properties, essentially abandoned by owners not living anywhere near the area, werent taxed at ridiculously high rates. Because the governments don't want to take possession o the houses. If you tax them high, the owners default, because taxes exceed the property value. Then the government is the owner of a low value deteriorating asset that nobody wants. This is beside the point that such high taxes would essentially be justifying government taking property from those unable to pay because of aesthetics.
    • derbOac 4y ago
      Yes that has crossed my mind. However, I'm also aware of very publicized cases in my area where there was serious interest in a property from several serious, large buyers, it was sitting unused, like as an empty unused parking lot, but the owner, out of state and region, wouldn't sell and also wouldn't develop it (why this is the case no one could tell). These cases went on for decades, with the government eventually attempting to take over the property by eminent domain (there were concerns about economic effects of the property, which actually has relevance to some nationally publicized news stories the last couple of years), only to have them rebuked in court. I don't even remember how they resolved anymore because I got tired of trying to pay attention. Anyway, to be clear, I'm not advocating for land taxes per se. I have also seen many, many examples of corrupt seizure of, or valuation of, property by the government and that's its own set of problems. What I'm saying is it should be possible to codify into law some "red line" circumstances where properties do get taxed or seized. Someone who is living on the property would be exempt, for example. Neglected property in an area that is targeted for renewal, with multiple serious offers that economists agree are more than fair, being refused by a party who resides in another region, over long periods of time, seems like a different issue. Maybe this is all more difficult than I think. It just seems to me there are some cases that are so clearly egregious that the vast majority of the population agrees there are problems (in either direction: with government overreach or private overreach) that you could define those circumstances. Right now it seems to me a lot of time is wasted on controversial land use issues and not enough on addressing things where there is more consensus.
• pyradius 4y ago
  I'd recommend reading "Taxation: The Lost History" for a deeper dive into why rent as public revenue is the most logical, ethical, and efficient tax base. It is book length, but worth it if you want to understand some of the deeper/intricate concepts. Some useful sections include: Excess Burden https://www.jstor.org/stable/43817496?read-now=1&refreqid=excelsior%3A1fdec839759eca6c835ee932ed7750c7&seq=88 https://www.jstor.org/stable/43817496?read-now=1&refreqid=ex... The Incidence of Taxation https://www.jstor.org/stable/43817496?read-now=1&refreqid=excelsior%3A1fdec839759eca6c835ee932ed7750c7&seq=94 https://www.jstor.org/stable/43817496?read-now=1&refreqid=ex... Neutrality and Super-Neutrality https://www.jstor.org/stable/43817496?read-now=1&refreqid=excelsior%3A1fdec839759eca6c835ee932ed7750c7&seq=101 https://www.jstor.org/stable/43817496?read-now=1&refreqid=ex... Can Land Value Taxation Prevent Monopolistic Behavior? https://www.jstor.org/stable/43817496?read-now=1&refreqid=excelsior%3A1fdec839759eca6c835ee932ed7750c7&seq=159 https://www.jstor.org/stable/43817496?read-now=1&refreqid=ex... Capital Formation https://www.jstor.org/stable/43817496?read-now=1&refreqid=excelsior%3A1fdec839759eca6c835ee932ed7750c7&seq=196 https://www.jstor.org/stable/43817496?read-now=1&refreqid=ex... I would add that while zoning reform is something that all Georgists should get behind, land rent as public revenue is really a separate issue. It is worth doing even with the present zoning in place. Consider a scenario where society is at a technological level where the only type of development possible is a single-family home. Rent as public revenue is still the most efficient and ethical tax base for society. Land assessment is based upon the highest and best legally-permitted use. If it is -only- possible to build single-family homes, this does not diminish the case for land rent as the tax base.
• 0xbadc0de5 4y ago
  Increasing taxes is never an ideal solution. The money rarely makes it to your pet cause - and often ends up funding programs you (strongly) disagree with. Instead, maybe try to reduce the size of government, reduce regulatory overreach and disincentivize government waste so that taxes need not be so high in the first place and it becomes easier and less expensive to build more housing.
  • orthecreedence 4y ago
    Proponents of LVT generally want it to replace all other taxes.
• readthenotes1 4y ago
  It's kinda funny they start off mentioning parking lots which are a problem generally mandated by city zoning regulations.
• paxys 4y ago
  In California at least new construction is held back by zoning laws and prop 13. A land tax does nothing to fix either of those.
• anamax 4y ago
  "It's the poor use of land right now that I believe is the main driver of poor affordability of housing." The assumption that everyone who wants to live in {place} should be able to do so is interesting. It's quite likely that {place} is a good place to live because there aren't too many people who live there. If that's true, we either come up with some way to limit the number of people or we destroy {place}. As to the "but what about the poor people who provide services?" - sorry - I don't have have any sympathy for rich people who don't pay the help enough. Said rich people can do without.
  • beebmam 4y ago
    >It's quite likely that {place} is a good place to live because there aren't too many people who live there. Citation needed. Intuitively to me, it seems that {place} is a good (or bad) place to live because of a lot of reasons, not just one, as you suggest.
    • anamax 4y ago
      "because" was the wrong word as {place} isn't good just because there aren't too many people. ("not too many" is necessary, not sufficient.) However, "{place} won't be a good place to live if there are too many people there" is intuitively obvious. Consider Yosemite Valley. Do you really think that it would still be a good place if 1M people lived there? Okay - how about 100k? (There are easily 100k people who would love to live in YV.) Heck - consider Disneyland. Too many people is a horrible experience.
      • pertymcpert 4y ago
        Consider London.
        • anamax 4y ago
          Note that "{place} is not good because of too many people" happens at different numbers for different people. Some people think that YV already has too many people while others would be happy with 1M people. That said, it's not true that every place can remain good with an arbitrarily large number of people. More to the point, it's not true that every {good} place can remain good with as many people who would like to live there.
• throwaway0a5e 4y ago
  I busted my ass over many years to make my (nominally) single family home lot into an under the radar industrial site doing industrial things. I'd do a lot of fucked up things to prevent that from being taxed into oblivion.
  • tome 4y ago
    What?
    • throwaway0a5e 4y ago
      I have a side business, being run out of my home. This is the "mixed use development" that is fetishized by the people who want to tax me out of my home. I will do a lot of fucked up things to protect that income stream if it comes down to it. I can't "just move" because my business and processes are highly refined for my location. It would take me a long time to make a new operation equally efficient. And I would lose my network.
• eric4smith 4y ago
  Vox needs a spanking. (As always). Just imagine. I have some land. Lots of people would love to buy it it for different things. But for now, I just want to hang onto it until I'm ready to use it. And my house is sitting right next to it. Yeah, nimby blah, blah blah. But it's my house and my backyard and my land so... I have to be forced to sell it? Brah. Just another socialist redistribution scheme.
  • rnk 4y ago
    I don't want you to have to leave your land or be forced to sell it. But you should be paying taxes based on the actual value of it. Not on what it was 30 years ago when someone built it. California's proposition 13 is hiding actual values of many wealthy people's homes from the tax man; being able to transfer them without triggering new valuations used in taxes is a key problem.
    • eric4smith 4y ago
      Are you even listening to yourself? Of course I would be forced to sell it because the taxes would be too high. That's the whole point. Because of tax policy I would be forced to sell the land that I want to keep and sell later for appreciation value. Sometimes we forget that this is a capitalist free market country. I'm free to do what I want with my own land and my own capital. Sometimes it is not optimal, but if you take that part away, what incentive do people have to do business anymore?
      • thematrixturtle 4y ago
        > I would be forced to sell the land that I want to keep and sell later for appreciation value. This is the literal point of the LVT: to make it more expensive to hold land unused for speculative purposes, and thus incentivize doing something productive with it instead.
  • no_wizard 4y ago
    You're not "forced" to sell it. You just have to pay a tax relative to its actual market value, as opposed to paying a tax on only the value you purchased it for plus negligible increases in your property tax percentage based on that rate. Just pay the tax, and you're good to go, even if you never develop it. The idea of a LVT is to make it less palatable to let the land go unused or under-utilized.
• teddyh 4y 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, would be 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 (if it did exist)? Note: I am making an analogy not with what fiduciary duty actually is, but instead with the idea of it which people usually argue against. People usually say that fiduciary duty creates and even enforces thoughtless short-term greed, and argue that is bad for society and also the company in the long run. Regardless of what fiduciary duty actually is in reality, how is then LVT any different from creating the same short-term enforced greed? A LVT would tax a plot of land by what use it could theoretically be put to in order to make the most money. And this is evaluated individually for each plot of land, with no regard for what would actually happen in reality if every single plot of land would actually be put to use in the most money-making way. Would a LVT not force a monoculture of, say, only lofts, where previously each landowner might have opted to allow things like nightclubs or the occasional park or other forms of variation and whimsy? If you tax every land owner as if they have the maximum possible income, do you not essentially force every landowner to implement that way in order to acquire it? (Adapted from texts originally written here:) • https://news.ycombinator.com/item?id=25319095 https://news.ycombinator.com/item?id=25319095 • https://news.ycombinator.com/item?id=25324577 https://news.ycombinator.com/item?id=25324577 • https://news.ycombinator.com/item?id=25319594 https://news.ycombinator.com/item?id=25319594
  • brians 4y ago
    The Georgist land tax taxed the unimproved value of the land. The tax remains the same whatever you build on it. Sale price already nudges you to preserve, improve, or augment the value of the land. So I think your concern either already would have happened, or if not, a Georgist land value tax makes it no more likely. Thanks for the opportunity to think this through this far; what am I missing?
• SnowHill9902 4y ago
  Tax on land goes against the right to property. If all you have is illiquid land, how are you supposed to pay? You would be forced to sell which ends up being an indirect expropriation.
  • why_only_15 4y ago
    Property taxes already exist in many states, so this isn't fundamentally different.
  • reducesuffering 4y ago
    Atleast deferred payments due on sale. That's the actual feasible political solution to California's prop 13 conundrum. Ok, it's impossible to raise effective property taxes to 1% (which causes some of the insane housing prices due to low carrying costs for speculation), because it would reduce the ability for some retirees to pay because they didn't budget for it, and they'll always vote against it. Then at least defer those taxes until time of sale.
  • bluquark 4y ago
    One of the key arguments in favor of enforcing private property rights when this idea was taking shape during the Enlightenment is that they are a powerful incentive to develop. So an additional incentive to either generate revenue from the land, or sell to someone who is willing to, is very much in the spirit of modern property rights.
    • SnowHill9902 4y ago
      Developed land does not have to bring revenue (or even profit). May I not have just an illiquid house on a plot of land and no other assets?
      • chii 4y ago
        > I not have just an illiquid house if you live in it, then a land value tax is equivalent to the state charging you a tax on the imputed rent you receive from owning your own abode. If you don't live in it, but rent it out, then that's self explanatory - you use the rental income to pay the tax. If you don't rent it out, then it's your loss as you have to pay the tax out of pocket. This means you will need to rent it out.
• atlgator 4y ago
  Isn’t that what property taxes are at the local level?
  • joshjob42 4y ago
    The major, important difference is that LVT only taxes the site-value of a property, not the value of the buildings etc on it. More or less you'd be charged property taxes as if your lot was a blank empty lot. So for instance if you buy some land and redevelop it into an apartment building or a stadium etc your LVT would hardly change (it might a bit because your building might increase the value of properties nearby, but that's generally a pretty weak effect so it would have a small impact on your taxes). On the other hand, say that over the course of a decade your area gets gentrified, lots of new businesses open up, a new metro line gets put in and the area is booming, while you didn't do anything at all to your property but it's now worth 2-3x as much as you bought it for, well your tax bill will go up a lot (technically speaking, the LVT would go up to such a point that your property should be only worth about as much, accounting for inflation, as it was when you bought the property, since your building isn't worth any more innately).
    • gravypod 4y ago
      > it might a bit because your building might increase the value of properties nearby, but that's generally a pretty weak effect so it would have a small impact on your taxes That sounds like a fantastic way for a developer to force out all of "the poors" around them by developing an area and making the value of their land skyrocket. Since they cant hold it they have to sell which kicks them out of their home for less than what their property would be worth. Might work fine for NYC where no one actually owns anything. Sounds like a hard deal for a majority of the country where people can conceivably own land.
      • bombcar 4y ago
        This already happens in the midwest, where taxes are based on appraised value and someone from New York buying 160 acres of hunting land for some overpriced amount causes the small landholder next door to have to pay triple taxes.
• causality0 4y ago
  Local governments, which have been granted near unchecked authority by state governments, are entirely captured by homeowners. I'm not fully clear on this statement. Is it putting forth that local governments shouldn't be controlled by the people who are local, or is it saying that homeowners hold more power than renters? If the former, that's just silly. If the latter, renters get the same one vote per person as everybody else. If they don't care enough to vote that's their problem. Homeowners, like everybody else, vote in their own best interest. If you want higher-density housing figure out a way that it makes a place better for its inhabitants, not worse. Personally I've never lived in a city that got better as it got bigger and I vote accordingly.
  • CryptoPunk 4y ago
    In Tokyo, zoning is controlled by the national government.
    • mikem170 4y ago
      I like the way that Japan handles zoning. It's based on population densities. Localities can designate industrial and commercial areas, but can't deviate from federal guidelines to prevent growth. Instead of single family homes they allow triplexes where a percentage of space can be used for a low-impact business, like a barber shop or something. They have setbacks geared towards making sure that you don't build three stories on top of your neighbor's house. They have neighborhoods. They don't have a housing shortage. They don't have a system that doesn't empower developers who want to clear-cut cheap land on the outskirts of town and build sprawling anti-social subdivisions of oversized identical houses. Here's some more information: https://www.youtube.com/watch?v=wfm2xCKOCNk https://www.youtube.com/watch?v=wfm2xCKOCNk
      • nine_k 4y ago
        The interesting thing is that the value of a typical home in Tokyo decreases with time. This idea would be terrifying for most of the US homeowners.
• Proven 4y ago
• CryptoPunk 4y ago
  I've long advocated a land value tax. I would suggest that any reform of this nature, that eliminates private capture of economic rent, accompany one-time compensation to the parties that lose that economic rent, so in this case, compensation to make up for the loss in property value that a LVT would incur. The same should apply to any other repeal of rent-seeking institutions: anti-labor-competitive laws privileging labor unions, licensure barriers privileging taxi medallion holders, etc. The British used this method to end slavery throughout their empire, which meant: 1. much more rapid end to slavery, due to less political opposition to its abolition, 2. no costly civil war and enduring sociopolitical grievances that emanated from it. Economic analyses indicate that compensating rent-seekers at an amount equal to the expected loss of economic utility over their lifetime from the elimination of their rent-seeking opportunity, as part of a reformation to end the institutions that enable their rent-seeking, leads to net economic gains, because the economic efficiency gains from expedited abolition of the rent-seeking far outweighs the cost of the compensation.
  • deleted 4y ago
    [deleted]
  • inter_netuser 4y ago
    I like Georgist taxes, but it's unclear that tax incidence will fall entirely on the rentier class. Important land is always unique, and therefore taxation would be have be incredibly dialed-in, no? A busy major international port would need to be taxed very differently than a sparsely attended beach just a mile away. This seems very difficult to get right. Have there been practical applications that show that's not a concern?
    • chii 4y ago
      > A busy major international port would need to be taxed very differently than a sparsely attended beach just a mile away. This seems very difficult to get right. you could imagine that the taxation is tied to the value of the land, which can be calculated as the rent income, minus the value of improvements upon the land (such as any buildings, which can be estimated by the cost of construction and maintenance over the useful life time, which is already a figure that is needed for depreciation purposes). This is the reason why LVT cannot be passed onto the renter, because if you increase the rent, you would pay more taxes as the value of the land must have increased if the renter accepts this higher rent without any changes to the building.
• DevKoala 4y ago
  > The LVT also has an appealing underlying moral framework: The luck to own a piece of land that happens to appreciate — say, you bought a house in San Francisco before the tech boom — should not come with it the ability to extract rents without providing value. This would put gentrification on overdrive. Did the author think this one through?
  • chii 4y ago
    > should not come with it the ability to extract rents without providing value. the owner of the land is part of a long transaction chain that started from the initial development and ownership of that land. They provide value. The value is in allowing the existing owner exit. The fact that this exit is possible makes investment in the land less risky and therefore, investments happen.
    • DevKoala 4y ago
      > They provide value. The value is in allowing the existing owner exit. So gentrification?
  • kiba 4y ago
    No? The rich gets rewarded for being the most productive, while also paying the highest costs for the most valuable lands.
    • DevKoala 4y ago
      A lot of poor families in the Bay Area have their house as their only asset. Take a drive through the Mission district for example and see how a lot of these people live; you’ll see a luxury house next to a house that was last maintained in the 80’s. Many of these families do want to sell their places at market price. However, with a land tax they would be forced to sell under market if they cannot afford the tax.
• bsedlm 4y ago
  I'm of the opinion that taxes are unnecessary in a state (meaning something closer to culture-civilization, i.e. taking "state" as far more than just government, at the least including private banks) were money is created by fiat and debt. I think this because, as far as I'm able to understand, the fiat currency system is a kind of "infinite money machine" (or something like it) which makes a certain high-enough level of government free from requiring being funded by taxes. this occurred to me after reading a bit about the book "how to pay for the war on terror". and I also recall reading how the USA government has been steadily de-funding the IRS, which would make no sense under the notion that taxes are necessary to fund the government.
  • ralph84 4y ago
    Taxes aren't about funding the government, they're about surveillance, control, and wealth redistribution.
    • deleted 4y ago
      [deleted]
• Mave83 4y ago
  In Germany, the major problem is buerocracy. There are so many rules, that changing land use or getting better allowance simply takes centuries. It's sometimes that absurde, that nearby lots have 3 times the building capacity. We already have a land tax called "Grundsteuer", but it's useless in the way it is.
• woojoo666 4y ago
  The Vox article says > The LVT also has an appealing underlying moral framework: The luck to own a piece of land that happens to appreciate — say, you bought a house in San Francisco before the tech boom — should not come with it the ability to extract rents without providing value. It seems a bit presumptious to say it is all luck - that somebody couldn't have predicted that the land would appreciate and thus bought early as a strategic move.
  • habosa 4y ago
    Successful speculation is still luck. The point is that the person who purchased the land may have gained value far in excess of the improvements they made or the capital they provided. Under a LVT the community and government which gave the land value will capture that.
    • xpe 4y ago
      Please define speculation. Do you define it as pure luck? If so, your claim is tautological.
    • xpe 4y ago
      Choosing how to spend money is a mixture of many things including desires, needs, awareness, understanding, planning, and luck.
  • surfmike 4y ago
    There’s a deeper point, which is that land didn’t appreciate because of anything you did. (Unless you developed it, and LVT leaves developed value tax free).
  • xpe 4y ago
    I agree. That said, there is a remaining question: should (by which I mean: is it socially desirable) the component of randomness leading to land value appreciation also multiply * the value of improvements? * I wrote 'multiply' without evidence, largely based on an educated guess. To what degree is this a reasonable claim?
  • 4y ago
• refurb 4y ago
  It would be easier to do what Singapore does. You get a 99 year lease on the land. When the lease it up, the government takes it back. Between those two time points you’re free to buy and sell.
• Gustomaximus 4y ago
  I feel what's missing from this article is there needs to be a tax free threshold for landtax, much the same how income tax tends to be organised so the first $X earnings are untaxed. Ideally a typical person shouldn't have to pay land tax on their home, otherwise they are effectively renting their own property. Morally I feel government shouldn't tax a home and generally should aim tax to be as small as possible on life essentials. E.g Things like the home, food goods and medical treatment should have as little tax placed on them as possible. Land tax would be best done at a cumulative value. Add up everything you own and apply a progressive rate against that. So a normal personal would be below the threshold while someone owning 100+ properties is at a rate likely to encourage them to divest to other asset classes or as the article suggests, extract more value. There'd need to be some rules about trust/company ownership at top value to reduce people obvfuscating ownership. And separate rules for residential, rural and industrial/commercial zones. Something like land tax isn't good or bad until you know the detail.
  • thematrixturtle 4y ago
    This is a solved problem, since many jurisdictions outside the US already have implemented land taxes. For example, in New South Wales (Sydney), Australia, the tax-free threshold is $550k and you pay land tax only for the portion in excess, with a higher tier kicking in at $3.3M. https://www.blgba.com.au/insights/nsw-land-tax-apply https://www.blgba.com.au/insights/nsw-land-tax-apply
• murphyslab 4y ago
  > A land tax can’t disincentivize anything — land will continue to exist regardless of any taxation scheme. It could and would disincetivize keeping lands in their natural state, since one is compelled to build in order to have the land not be a financial burden. Unless there is some kind of exclusion for that, it could result in sprawl.
  • dropit_sphere 4y ago
    Economically advantageous sprawl, though---or it would have to be, to meet the owner's goals of not being a financial burden. I think the idea is that in that situation the owner sells, though.
    • murphyslab 4y ago
      Sprawl isn't economically advantageous to cities, since low-density sprawl does not generate sufficient funds to cover the associated infrastructure. High-density urban cores end up subsidizing those infrastructure costs. [0] The end result is what Strong Towns refers to as the "Growth Ponzi Scheme". [1] [0] https://www.strongtowns.org/journal/2021/8/4/the-question-every-city-should-be-asking https://www.strongtowns.org/journal/2021/8/4/the-question-ev... [1] https://www.strongtowns.org/the-growth-ponzi-scheme https://www.strongtowns.org/the-growth-ponzi-scheme
      • dropit_sphere 4y ago
        I certainly sympathize, but I'm not sure what this has to do with land tax. If cities can't efficiently provide infra to certain building patterns, they should either reduce their guarantees ("You can build there, but you'll have to lay down wire yourself"), or prohibit building differently. Both seem compatible with an LVT.
• gorgoiler 4y ago
  Massive tax hikes please, for houses owned by people who don’t live there. Landlordism is out of control. Land value tax doesnt feel like a fair solution. The value of your land is what you sell it for, not what a realtor guesses it is worth. If you “buy a house in San Francisco before the tech boom” and never sell it, you shouldn’t have to pay some extra sour-grapes tax because everyone else is jealous of the perceived value of your land. How do they know you don’t have dry rot / radon / ghosts? Do you have to allow home inspections to “value” your property? Conversely, if you cash out at 20x the value you paid then we already have a tax for that: Capital Gains. All bets are off if you own land that isn’t the place where you live. If you own more than one home, neither is your permanent home, so enjoy being taxed on both.
• gameman144 4y ago
  I totally get the appeal of land taxes and restriction of land-use regulation at the local level, and by and large they seem like a reasonable approach to poor resource allocation and unequal ownership opportunities. One thing I've not seen addressed, though, is the apparent disincentive to improve communities in meaningful ways. For instance, say I live in a very expensive city and I can no longer afford the land tax. I decide to move to a less expensive city and set up roots there. This new city is crummier: the city government is inefficient, there are fewer amenities available, and local institutions are poorly organized and executed. I spend some time petitioning the local government to make reforms, I work with local groups to improve city amenities, and I vote for policies to revive local institutions. As I do this, the city becomes much nicer. However, it also becomes more attractive for other folks from the expensive city who can afford to buy up local property and drive up the value/taxes of my land. If this goes on, I'll once again be in a situation where I can't afford to live in my home because others want to live there too. Say if, after moving to my cheaper city, I had instead decided to keep the city as crummy as possible while meeting my own needs. I drive a car, so I vote against bike lanes. I don't have young kids, so I lobby against school levies. I don't swim, so I vote against a public pool. This is objectively worse for the city as a whole, but if I want to be able to afford to live in a city that meets my needs these are the actions I should take. There are always going to be tradeoffs between the opportunities of people who live in places and those who want to live in those places. Stringent local regulations weigh heavily in favor of those who currently live in places, and this is widely recognized (e.g. the term NIMBY is widely known). Land taxes and deregulated local zoning seem to weigh heavily in the opposite direction, but I rarely see this addressed or acknowledged. Moreover, land taxes in particular seem like they actively disincentivize pro-social or civically minded policies for existing residents (whereas local regulations allow communities to improve themselves without being priced out through other means). If I'm missing some context here let me know, but it's one of my main critiques when these proposals pop up that I've never seen satisfactorily addressed.
  • beambot 4y ago
    How is this concern not equally-relevant in the current status quo? At least for our locale: property taxes are still based on assessed value, sales tax is collected on purchases, and income tax & business permits still apply. All of these get more expensive if the community improves...
• EVa5I7bHFq9mnYK 4y ago
  76% of voters own land, so this idea is dead on arrival.
• bennysomething 4y ago
  "That crisis is caused, in part, by the failure to appropriately use valuable in-demand land for its best purpose. " So this is all based on the assumption that the government knows what the best use of your land is.
• yobbo 4y ago
  Land itself isn't "productive" in our time the way arable land once was the key to wealth. Persistently rising housing prices does not mean that land is productive, it means mortgage rates are persistently too low. Taxing land will not create more housing; if it was profitable it would happen regardless of tax. > “It doesn’t disappear — so you can lower taxes on things that do go away.” It absolutely goes away. The only value of land is its utility to humans - the infrastructure, buildings, utilities. Just look at all the ghost towns that lost their economic viability. That land now has negative value since old buildings need to be demolished before being developed. Measured in acreage, there is effectively infinite land, but without infrastructure and buildings it has no value to people. The value of land that is polluted and needs to be rehabilitated becomes negative.
  • onlyrealcuzzo 4y ago
    > Taxing land will not create more housing; if it was profitable it would happen regardless of tax. Completely false. Prop 13 is the reason you have parking lots that generate less than 1% per anum on the value of land in some of the most expensive pieces of real estate in CA. Prop 13 means the property tax is next to nothing - so the 1% is still cash-flow positive. It also artificially reduces supply since prices are high because no one wants to sell because buying something new would mean taxes 10-1000x higher. On the vast majority of lots in CA - you cannot buy from the owner and put enough additional stock on the market for it to make sense for anyone. It's just so much better for the existing owner who is paying 90% less property tax and getting all those unrealized gains they can HELOC out tax-free if they really want. So many major cities are moving the way of California and either passing laws to limit property tax increases (Michigan) or simply never re-assessing home values (Pittsburgh). In a market where prices are re-assessed and everyone pays the same taxes - I agree. But that's not the way it works in ~50% of the US.
• rm_-rf_slash 4y ago
  This is a worthy idea, although hardly groundbreaking. Over a hundred years ago[1] economist Henry George was advocating for a “single tax” on economic rents, from land to intellectual property. The idea being that those who own monopolistic rent extractors (only the owners of the land can use it to make money, etc) tend to be wealthier, and taxes on economic activity like income and sales tend to fall disproportionately on the poor. [1] https://en.m.wikipedia.org/wiki/Henry_George https://en.m.wikipedia.org/wiki/Henry_George
• feistypharit 4y ago
  I like the “land doesn’t disappear” quote. Here in the Great Lakes region the lakes have been up and there are absolutely people paying taxes on land that’s underwater. So sure, it may not disappear, but there are any number of ways for it to become useless. Unless zoning allows building on stilts and letting utilities run there. That being said, I think we want to do something to avoid becoming a nation of land barons
• hakfoo 4y ago
  What about the alternative: nationalize the land? Rather than treating it as an asset owned in perpetuity, it could be leased out both as a direct revenue source and as a means of maintaining control and achieving social/development objectives. In my city, we had a large shopping centre that had emptied out in the 90s/early 2000s. The landowner spent two decades playing chicken with the city over subsidies to redevelop it, and meanwhile it's crumbling and behind fences, probably hosting all sorts of vermin to infest neighbouring buildings. I'd be unsurprised if its abandonment dragged down the rest of the area (the main shopping mall for the area, directly across the street, declined and finally shuttered in 2018.) If the shopping centre developer had to lease the land from the city on a "renegotiated/renews every N years" basis, it would have gone differently. Either: 1. Once the centre stops covering its costs in rents, the developer simply abandons the lease, likely in the early 2000s, and the city has a still-in-decent-shape shopping centre they can re-lease or redevelop. It never becomes a crumbling wreck in the first place. 2. The developer can make grand promises of redevelopment, but after one or two renewal periods where no meaningful work is done, the city has a lever to respond to the BS, by refusing to renew the lease. Maybe they have to do some minor refurbishment, but the buildings are still usable. This is a much lower-friction process than having to declare eminent domain or a public hazard. 3. The developer tosses money into the void, keeping up with mandated maintenance and land rent, in the hopes that the neighbourhood gentrifies to the point where the complex is viable again. The city at least gets revenue and can enforce a minimum standard of maintenance to keep the lease. Careful tweaking of rent rates will likely eventually push them into one of the other options. 4. The developer has to actually deliver on his plans to justify continuing to pay the rent. Bear in mind, this is the a fairly benign model for this: using it primarily as a blight-prevention device. A more assertive government could say things like "we won't renew the lease under your Pollution Factory unless you comply with higher-than-national cleanliness standards" or even "we're discontinuing single-family leases here to enable the construction of higher-density housing." This also would allow redevelopment to take predictable and manageable waves. Rather than the comical scenarios where people get multi-million dollar paydays because they refuse to vacate the last square metre needed for a new development project, there would be a clear process where the new development could be negotiated in advance and existing leases would simply expire with no renewal option. Moving land ownership to the state also politicizes it in a good way. The famous "the rent is too damn high" guy now has a means to actually manage it. The state can acquire direct control over residential property by refusing to renew leases to landlords, or asking for untenable sums, and then flip around and direct rent them to the residents at more appealing prices. At the scale this would operate at, there's plenty of opportunities to rob Peter to pay Paul.
• throwaway14356 4y ago
  the fun of land tax imho is that the country belongs to everyone
• dusted 4y ago
  Wait what? There's no land value tax in USA ? We have it here in Denmark, and I believe it's very wrong. It effectively means that you cannot own land here. You can only buy the privilege to rent it from the state, it is never yours, and if your source of income goes away, and you cannot pay the rent, the land is taken away from you.
• icytrumpet 4y ago
  Taxes fix nothing.
• vonwoodson 4y ago
  “In other words, since people who own [property] aren’t actually responsible for it increasing or decreasing in value, it’s pretty absurd that they get to accrue all the benefits of owning [property] without having to do any work for it.” And, there you have it.
• silexia 4y ago
  The simplest and fairest tax is simply to have no tax collection mechanism and let the government print money it needs.
• JaceLightning 4y ago
  I don't own land but I'm 99% sure all three states I have lived in already tax land value as part of the property's assessment.