5 ms·

Two things: 1) "In particular, the taxes on property ownership are supposed to capture the entire value of renting the property." Not true. Only the unimprove

Two things: 1) "In particular, the taxes on property ownership are supposed to capture the entire value of renting the property." Not true. Only the unimproved value of land is meant to be taxed. This amounts to a complete exemption on taxes on buildings. The current proposal that is often on the table is not to go for classical 100% Georgist LVT, but to simply collect the exact same amount of property taxes we do now, but to shift the burden off of buildings and onto land. This can be done right now with existing property tax regimes. The burden would fall mostly on underutilized land, parking lots, and vacant lots in city centers, where the lion's share of land value is concentrated. Proposals for this sort of reform are in the works right now in various US cities. If you'd like to see a practical policy paper on the subject see here by Tideman, Kumhof, Hudson, and Goodhart (the Goodhart of Goodhart's Law, by the way): https://voxeu.org/article/post-corona-balanced-budget-fiscal-stimulus-case-shifting-taxes-land https://voxeu.org/article/post-corona-balanced-budget-fiscal... 2) Georgism is not just about real estate. It's about properly dealing with scarce economic assets that can't be created and which invite speculation Norway's sovereign wealth fund is an extremely successful example of applying Georgist principles to natural resources, for just one example: https://progressandpoverty.substack.com/p/norways-sovereign-wealth-fund?s=w https://progressandpoverty.substack.com/p/norways-sovereign-...

TimPC 4y ago
My default reaction to 1) is that I dislike it. I feel like the incentive to labour to accept the tax of unimproved land value instead of property tax is the removal of income and sales taxes that accompany it. Taxing unimproved land value instead of improved land value in a system as close as possible to the current one feels like a massive wealth transfer from homeowners to condo developers. As it is, condos represent a problem for many communities in that they are often taxed at lower percentage rates and have a lower market value than houses. This means communities consisting of more condos have lower tax revenue per capita compared to communities consisting of more houses. Suburbs resist densification because the decreased revenue per capita generally means declining services. I think this a fundamental cause of NIMBY that largely gets ignored.
- geocon 4y ago
  I think you have a mistaken view of who is actually making money in this equation. Developers do not make all that much money from building housing, which is actually a productive contribution to society. Homeowners, on the other hand, make hand over fist by simply sitting on land absorbing rents: https://pbs.twimg.com/media/EyJN_g3UUAIW0f0?format=jpg&name=900x900 https://pbs.twimg.com/media/EyJN_g3UUAIW0f0?format=jpg&name=... https://www.wsj.com/articles/homes-earned-more-for-owners-than-their-jobs-last-year-11647518400 https://www.wsj.com/articles/homes-earned-more-for-owners-th... Secondly, suburbs are drastically subsidized by denser development. They resist densification because they don't want to pay their fair share. https://www.strongtowns.org/journal/2020/4/16/when-apartment-dwellers-subsidize-suburban-homeowners https://www.strongtowns.org/journal/2020/4/16/when-apartment...
  - TimPC 4y ago
    I think it's misleading to measure things in revenue per square foot. Most government services aren't provided based on the number of square feet but rather based on the number of people. The per capita revenue for denser developments is lower than the per capita revenue for single family housing. When you get to rural densities you have issues of providing services because of the lack of scale of communities but suburbs are generally dense enough to afford services like police, fire, community centres and hospitals.
    - adgjlsfhk1 4y ago
      the counter examples are things like roads, pipes, wires, and Public transit which make to up a high percent of city and state budgets and scale with density.
      - TimPC 4y ago
        These examples are fair. At the provincial level Transport, Pipes and Wires all are small enough expenditures to not warrant their own category breakdown in the budget and are lumped into a 14.6% of budget other category. At the city level it's tricky because the breakdown my city provides in the budget separates into capital and operating rather than other categories. From what I can tell from the 50 page report, water pipes cost approximately 25% of budget and transport costs approximately 5%. Wires aren't listed in enough details to get an estimate. My best sense from the numbers in the breakdown is the expenses for my suburb breakdown into roughly 60% per capita items, and 40% per area items. So 60% of our budget gets more expensive as you add people with low per capita taxation and 40% gets cheaper as you add more density.
anamax 4y ago
A shopping center without parking is almost always less valuable than one with parking. Yet, Georgists think that a shopping center without parking, one with parking, and a parking lot should all be taxed the same.
- colinmhayes 4y ago
  Taxing people for doing good things disincentivizes people from doing good things. Taxes shouldn't be a punishment for being successful. Georgists think real estate should be taxes based off the unimproved value of the land, what the owners do with the land is up to them, but if they don't use it well their taxes will put them underwater and someone else will make better use of it.
  - anamax 4y ago
    My point is that parking lots can easily be the best use.
    - colinmhayes 4y ago
      If parking lots are the best use the LVT will be low enough to be negligible. If the LVT is causing the owner to not be able to afford parking lots the area needs more buildings and less parking lots, even if that's just a parking structure.
      - anamax 4y ago
        > If the LVT is causing the owner to not be able to afford parking lots the area needs more buildings and less parking lots, even if that's just a parking structure. In what universe is "fewer parking lots" the solution to "not enough parking lots"? As Orwell wrote, “There are some ideas so absurd that only an intellectual could believe them.”
        colinmhayes 4y ago
        I mean tbh we just have a paradigm difference. IMO there is no such thing as not enough parking lots. They're wasteful eyesores that encourage a horrible externality.

TimPC 4y ago

My default reaction to 1) is that I dislike it. I feel like the incentive to labour to accept the tax of unimproved land value instead of property tax is the removal of income and sales taxes that accompany it. Taxing unimproved land value instead of improved land value in a system as close as possible to the current one feels like a massive wealth transfer from homeowners to condo developers. As it is, condos represent a problem for many communities in that they are often taxed at lower percentage rates and have a lower market value than houses. This means communities consisting of more condos have lower tax revenue per capita compared to communities consisting of more houses. Suburbs resist densification because the decreased revenue per capita generally means declining services. I think this a fundamental cause of NIMBY that largely gets ignored.

geocon 4y ago
I think you have a mistaken view of who is actually making money in this equation. Developers do not make all that much money from building housing, which is actually a productive contribution to society. Homeowners, on the other hand, make hand over fist by simply sitting on land absorbing rents: https://pbs.twimg.com/media/EyJN_g3UUAIW0f0?format=jpg&name=900x900 https://pbs.twimg.com/media/EyJN_g3UUAIW0f0?format=jpg&name=... https://www.wsj.com/articles/homes-earned-more-for-owners-than-their-jobs-last-year-11647518400 https://www.wsj.com/articles/homes-earned-more-for-owners-th... Secondly, suburbs are drastically subsidized by denser development. They resist densification because they don't want to pay their fair share. https://www.strongtowns.org/journal/2020/4/16/when-apartment-dwellers-subsidize-suburban-homeowners https://www.strongtowns.org/journal/2020/4/16/when-apartment...
- TimPC 4y ago
  I think it's misleading to measure things in revenue per square foot. Most government services aren't provided based on the number of square feet but rather based on the number of people. The per capita revenue for denser developments is lower than the per capita revenue for single family housing. When you get to rural densities you have issues of providing services because of the lack of scale of communities but suburbs are generally dense enough to afford services like police, fire, community centres and hospitals.
  - adgjlsfhk1 4y ago
    the counter examples are things like roads, pipes, wires, and Public transit which make to up a high percent of city and state budgets and scale with density.
    - TimPC 4y ago
      These examples are fair. At the provincial level Transport, Pipes and Wires all are small enough expenditures to not warrant their own category breakdown in the budget and are lumped into a 14.6% of budget other category. At the city level it's tricky because the breakdown my city provides in the budget separates into capital and operating rather than other categories. From what I can tell from the 50 page report, water pipes cost approximately 25% of budget and transport costs approximately 5%. Wires aren't listed in enough details to get an estimate. My best sense from the numbers in the breakdown is the expenses for my suburb breakdown into roughly 60% per capita items, and 40% per area items. So 60% of our budget gets more expensive as you add people with low per capita taxation and 40% gets cheaper as you add more density.

anamax 4y ago

A shopping center without parking is almost always less valuable than one with parking. Yet, Georgists think that a shopping center without parking, one with parking, and a parking lot should all be taxed the same.

colinmhayes 4y ago
Taxing people for doing good things disincentivizes people from doing good things. Taxes shouldn't be a punishment for being successful. Georgists think real estate should be taxes based off the unimproved value of the land, what the owners do with the land is up to them, but if they don't use it well their taxes will put them underwater and someone else will make better use of it.
- anamax 4y ago
  My point is that parking lots can easily be the best use.
  - colinmhayes 4y ago
    If parking lots are the best use the LVT will be low enough to be negligible. If the LVT is causing the owner to not be able to afford parking lots the area needs more buildings and less parking lots, even if that's just a parking structure.
    - anamax 4y ago
      > If the LVT is causing the owner to not be able to afford parking lots the area needs more buildings and less parking lots, even if that's just a parking structure. In what universe is "fewer parking lots" the solution to "not enough parking lots"? As Orwell wrote, “There are some ideas so absurd that only an intellectual could believe them.”
      - colinmhayes 4y ago
        I mean tbh we just have a paradigm difference. IMO there is no such thing as not enough parking lots. They're wasteful eyesores that encourage a horrible externality.