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So what about capital gains/income tax? AIUI - and I have not really studied LVT's closely, but since they have been bandied about quite a bit, I know only enou

So what about capital gains/income tax? AIUI - and I have not really studied LVT's closely, but since they have been bandied about quite a bit, I know only enough to be dangerous - LVT's are supposed to pretty much eliminate other taxes, correct? If your property doubles in value, and you sell to get out from under the tax, but you lose 25-40% of that increase to income tax, you just took a big hit. Or am I completely off-base here?

solidsnack9000 5y ago
I don't think you're representing the situation fairly, because profiting 60% to 75% is definitely not a loss -- it's not taking a "big hit" -- and the problem there has nothing to do with LVTs, anyways. If your property doubles in value in and you sell it and pay 25% to 40% of the increase: the gross profit is: 200 - 100 = 100 the tax is: 25% to 40% of 100 which is 25 to 40 the profit post tax is: 100 minus 25 to 40 or, in other words, 75 to 60
- devilbunny 5y ago
  It's a big hit, not a complete erasure of profit (setting aside simple inflation, because that's a big elephant in the room here). When you rewrite the tax laws so that I can effectively be forced to sell because other people would make more productive use of my land, well, regardless of how I feel about the idea, that's a reasonable argument. But if you tax me for the increase in the value of my land while I still own it, and then tax me on the profit I made from selling it when I decided I didn't want to pay those taxes anymore, that just seems like double-dipping. Isn't the whole point of the LVT that it makes buy-and-hold speculation unprofitable via the LVT itself? So if someone pays their LVT until it becomes so high that the expense of moving is less than the expense of saving, haven't they already effectively paid for their share of the increased value? I think LVT's are interesting, but the practical considerations involved are enormous.
  - solidsnack9000 5y ago
    There are several problems with your line of argument here. The biggest one is that you don't pay capital gains tax on the sale of your primary home. Some other problems with your thinking: * Property tax is, in general, much lower than capital gains. * Taxes paid to a state can not cover your federal tax bill (the lion's share of capital gains taxes are federal). In other words, it's not the same "you" in all cases listed above.

solidsnack9000 5y ago

I don't think you're representing the situation fairly, because profiting 60% to 75% is definitely not a loss -- it's not taking a "big hit" -- and the problem there has nothing to do with LVTs, anyways. If your property doubles in value in and you sell it and pay 25% to 40% of the increase: the gross profit is: 200 - 100 = 100 the tax is: 25% to 40% of 100 which is 25 to 40 the profit post tax is: 100 minus 25 to 40 or, in other words, 75 to 60

devilbunny 5y ago
It's a big hit, not a complete erasure of profit (setting aside simple inflation, because that's a big elephant in the room here). When you rewrite the tax laws so that I can effectively be forced to sell because other people would make more productive use of my land, well, regardless of how I feel about the idea, that's a reasonable argument. But if you tax me for the increase in the value of my land while I still own it, and then tax me on the profit I made from selling it when I decided I didn't want to pay those taxes anymore, that just seems like double-dipping. Isn't the whole point of the LVT that it makes buy-and-hold speculation unprofitable via the LVT itself? So if someone pays their LVT until it becomes so high that the expense of moving is less than the expense of saving, haven't they already effectively paid for their share of the increased value? I think LVT's are interesting, but the practical considerations involved are enormous.
- solidsnack9000 5y ago
  There are several problems with your line of argument here. The biggest one is that you don't pay capital gains tax on the sale of your primary home. Some other problems with your thinking: * Property tax is, in general, much lower than capital gains. * Taxes paid to a state can not cover your federal tax bill (the lion's share of capital gains taxes are federal). In other words, it's not the same "you" in all cases listed above.