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> For instance, say I live in a very expensive city and I can no longer afford the land tax. One of the major reasons that our cities become expensive in our "

> For instance, say I live in a very expensive city and I can no longer afford the land tax. One of the major reasons that our cities become expensive in our "modern" society is that we don't have land value taxes. If we have a land value tax, then when someone decides they can't afford to keep paying the tax, they sell it to someone who can OR they find a way to make the things built on that property much more valuable so that the tax is affordable. It provides a very strong incentive for property owners to do things like tearing down single family homes and building multi-unit condos in their place. Because there are multiple units where there was previously only one, the cost of living actually goes down. This is why it's considered a very beneficial tax: it promotes efficient use of land from economic perspectives. (This also applies to businesses: if a business isn't able to afford the land value tax for their property, they have strong incentives to find a way to make the use of their land more valuable or to sell it to someone who can. And if the value of their land is going up more than they can afford, that implies that there likely are potential buyers who could make better use of it.) For us to go from where we currently are to a land value tax would require a transition period, because it takes time to tear things down and build new things. But a society that was implementing a land value tax would see new properties opening up like I described above on a regular basis. So if you couldn't afford the land value tax, you would still be able to stay in the same city (and probably more cheaply and in a nicer, newer condo) unless you absolutely required a single family home or similar low-density housing.

valenterry 5y ago
All you say is interesting and probably true, but you did not address OP's specific point at all.
- djokkataja 5y ago
  The OP's specific point was based on a misunderstanding: that being unable to pay the land value tax would mean they would have to move to a different city because the cost of living in their original city would be too high. This might be a reasonable concern during a transition to a land value tax system, but once the land value tax has been in place long enough to see more efficient use of land actually happening, the cost of living would be going down. So the premise of their argument doesn't hold. Put another way, their concern was based on them specifically paying more taxes on land while society stays the same in regards to use of land. But that doesn't make sense because they're not the only person who would be paying land taxes; everyone who owns land would be, and that changes everyone's incentives for how they use land. If you mean the part about "how could this ever overcome NIMBY" / tradeoffs between people who already live somewhere and people who want to live somewhere, then yeah, that wasn't what I was talking about.
  - valenterry 5y ago
    > because the cost of living in their original city would be too high No! That's not what OP said. He talked about the problem of _a change_ in the height of the tax on the same land over time and this making it become too expensive. That's not the same thing, because while the land tax would not cause such a problem (as you correctly said) but rather improve the situation due to more efficient use, the problem of _change_ stays.
    - mikem170 5y ago
      The absence of something like a land value tax, and/or the current zoning/tax regime, can cause distortions in the market when things change, also. San Fransisco is a good example, where new housing is not being built to satisfy demand, causing property values to increase, and property taxes are prevented from increasing. Children can't afford to live in the neighborhood where they grew up because housing costs too much, older people can't downsize because they'll loose their tax breaks, teachers and police officers can't afford to live in the neighborhoods they service, the character of the neighborhood changes as it gentrifies as only the rich can afford to move there, increasing income inequality as the rentier class grows richer through their subsidized investments, etc.
      - valenterry 5y ago
        So, how exactly does "the absence of something like a land value tax (...) cause distortions in the market when things change", all other factors being equal? I fail do get that point and in your example, you don't explain how property value increases would have not happened in the existance of a land value tax.
        mikem170 5y ago
        My assumption was that density would be allowed to increase as part of a land value tax regime, since that is what it is meant to encourage. More supply of housing. The OP mentioned concerns about changing to a land value tax. I was throwing out there the fact that there are also problems under the current zoning regime, like those I mentioned in San Fransisco, a drastic example.
- Game_Ender 5y ago
  The answer is that he could still afford to live there just no longer as an owner of that much land. In a city with a land value tax the rental or condo market would be much more dynamic so he would be able to find and affordable option their.
  - valenterry 5y ago
    I don't think that's how it works. Maybe in the beginning that's true, but once things have settled, an increase in land tax also means an increase of rents. Even though for high buildings this increase is split, it still has an effect. And, if the building is really tall and the tax split across many parties, it also means that the tax will be very high, since you wouldn't build such a tall building on land that isn't very valuable. In the end the OP has a point. And even if this point alone is certainly not major and would ve a reason to drop the concept of a land tax, it's also relevant enough to warrant a serious discussion about it imho.

valenterry 5y ago

All you say is interesting and probably true, but you did not address OP's specific point at all.

djokkataja 5y ago
The OP's specific point was based on a misunderstanding: that being unable to pay the land value tax would mean they would have to move to a different city because the cost of living in their original city would be too high. This might be a reasonable concern during a transition to a land value tax system, but once the land value tax has been in place long enough to see more efficient use of land actually happening, the cost of living would be going down. So the premise of their argument doesn't hold. Put another way, their concern was based on them specifically paying more taxes on land while society stays the same in regards to use of land. But that doesn't make sense because they're not the only person who would be paying land taxes; everyone who owns land would be, and that changes everyone's incentives for how they use land. If you mean the part about "how could this ever overcome NIMBY" / tradeoffs between people who already live somewhere and people who want to live somewhere, then yeah, that wasn't what I was talking about.
- valenterry 5y ago
  > because the cost of living in their original city would be too high No! That's not what OP said. He talked about the problem of _a change_ in the height of the tax on the same land over time and this making it become too expensive. That's not the same thing, because while the land tax would not cause such a problem (as you correctly said) but rather improve the situation due to more efficient use, the problem of _change_ stays.
  - mikem170 5y ago
    The absence of something like a land value tax, and/or the current zoning/tax regime, can cause distortions in the market when things change, also. San Fransisco is a good example, where new housing is not being built to satisfy demand, causing property values to increase, and property taxes are prevented from increasing. Children can't afford to live in the neighborhood where they grew up because housing costs too much, older people can't downsize because they'll loose their tax breaks, teachers and police officers can't afford to live in the neighborhoods they service, the character of the neighborhood changes as it gentrifies as only the rich can afford to move there, increasing income inequality as the rentier class grows richer through their subsidized investments, etc.
    - valenterry 5y ago
      So, how exactly does "the absence of something like a land value tax (...) cause distortions in the market when things change", all other factors being equal? I fail do get that point and in your example, you don't explain how property value increases would have not happened in the existance of a land value tax.
      - mikem170 5y ago
        My assumption was that density would be allowed to increase as part of a land value tax regime, since that is what it is meant to encourage. More supply of housing. The OP mentioned concerns about changing to a land value tax. I was throwing out there the fact that there are also problems under the current zoning regime, like those I mentioned in San Fransisco, a drastic example.
Game_Ender 5y ago
The answer is that he could still afford to live there just no longer as an owner of that much land. In a city with a land value tax the rental or condo market would be much more dynamic so he would be able to find and affordable option their.
- valenterry 5y ago
  I don't think that's how it works. Maybe in the beginning that's true, but once things have settled, an increase in land tax also means an increase of rents. Even though for high buildings this increase is split, it still has an effect. And, if the building is really tall and the tax split across many parties, it also means that the tax will be very high, since you wouldn't build such a tall building on land that isn't very valuable. In the end the OP has a point. And even if this point alone is certainly not major and would ve a reason to drop the concept of a land tax, it's also relevant enough to warrant a serious discussion about it imho.