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> have driven up prices to an extreme. So your land, through no effort of your own, has hugely gone up in value; don't you think there's something wrong with y

> have driven up prices to an extreme. So your land, through no effort of your own, has hugely gone up in value; don't you think there's something wrong with you benefiting from other people's labour that increased the value of your land?

deleted 4y ago
[deleted]
c22 4y ago
You only benefit if you sell.
natpalmer1776 4y ago
Except he doesn't benefit any more from the increased value unless he sells or rents the property. In fact, as his tax liability went up he is actually paying more to accommodate the inevitable increase in spending on municipal amenities that the wealthy newcomers are likely to petition for, given how much they pay in property taxes. If we imagine he did not desire these things in the first place, and was on fixed income like many thousands of individuals, he would be forced to sell his home as a result of the whims of the market. The escalating cost of property in his area should leave him with a tidy sum of money to ease the transition, but that is little consolation for potentially being forced out of the home you raised your children in, met your grandchildren in, spent hundreds or thousands of hours maintaining and improving, among many other sentimental attachments. To a homeowner who values their home and doesn't intend to sell, the increased value of land is an apology. It is a meagre recompensation for second order consequences of the market's capriciousness. But at least the value went up right?
- Guvante 4y ago
  Lets take the example above as being too much money (as "too much" is hard to pin down). In exchange for losing a home due to the $2k payment you will receive $80k. Generally speaking 40 years worth of "I couldn't afford it" is a pretty decent apology. This is working of NJ which has the highest rate at 2.5%, most states are lower. Sure it sucks that you are paying $1k instead of $2k because your house is worth $200k instead of $100k but you know... You could sell your house for a profit of $100k.
  - teakettle42 4y ago
    Consider the cost to the community, not just the people being priced out. The first people we lose are often those who have been here the longest, contributed greatly to the community, but are on a fixed income and cannot afford the tax increase. Case in point, we’re losing our volunteer fire department’s rookie coordinator and training captain because he’s been priced out of the area. He’s elderly, been a member of the department for decades, is hugely valuable and has a trove of institutional knowledge. I’m glad he’s able to move elsewhere with the payout he’s getting from his home, but the loss to our community is enormous. How is arbitrarily forcing people out of the communities they’ve built the moral (or constructive!) thing to do?
    - TimPC 4y ago
      Taxes can have negative consequences but a single anecdote of negative consequence doesn’t prove that overall tax is net negative. Every household that moves out of a neighbourhood is replaced by the household moving into a neighbourhood. A society where the most valuable neighbourhoods for working families aren’t disproportionately occupied by retirees paying a tiny fraction of the true cost of living there has benefits. Some households in the Bay Area are being undercharged in property tax by over $50,000/year at current rates. That’s $50,000 a year less for schools and services. It also means other, newer home owners have to pay a disproportionate amount more since if property taxes were based on market rates the percentage rate of the tax would go down.
      - teakettle42 4y ago
        Your arguments for social engineering are based in ignoring the true individual human cost, and the true cost to the communities you’d happily destroy in pursuit of your bland generalized vision of how things should be. That seems immoral to me, and I’m not convinced you’ve actually thought through the implications of your idealized grand vision. “Your lost decades-long community members will be replaced by brand new people” is not the argument you seem to think it is, and could only be made by someone who had no experience building a functioning community.
- pydry 4y ago
  >Except he doesn't benefit any more from the increased value Thats the same for literally any product or service in the world which you like which goes up in price due to increased demand. Is that immoral? The only difference is that if LVT goes up it does mean you can charge more rent so you potentially could benefit even if you choose not to. While renters in the same area are exposed to the same market forces. Theres no potential benefit to them they just need to pay more money.
  - teakettle42 4y ago
    > Thats the same for literally any product or service in the world which you like which goes up in price due to increased demand. I already own the home. Imagine that sales tax was assessed yearly on every item you already own, based on the current market value if you were to chose to sell it that year. > The only difference is that if LVT goes up it does mean you can charge more rent so you potentially could benefit even if you choose not to. How does that help me if I’m not a rent-seeking landlord? How does that help the community that you want to forcibly dismantle?
    - pydry 4y ago
      >I already own the home. A privileged position the poorer half of the population doesnt share. They have to deal with rising rents along with rising gas prices. >Imagine that sales tax was assessed yearly on every item you already own, based on the current market value Imagine instead that it was limited just to the roof over your head. Voila youve just imagined rent. Something the poorer half of the population HAS to deal with. Im just proposing leveling the playing field between renters and owners by limiting owners' right to capitalize on land value increases. That is, taking away what are effectively handouts given to you. Free money. Wealth you didnt earn because the land value isnt about you or your house. >How does that help me if I’m not a rent-seeking landlord 1. The option is always there. Whether you exercise it or not having the option of an additional stream of income DOES help you. 2. Your net worth literally goes up. You can easily convert that net worth into cash if you choose. Reverse mortgages, etc. >How does that help the community that you want to forcibly dismantle? With a higher land value tax land would HAVE to be used more efficiently. Denser housing etc. That means lower rents. That means renters who were priced out of their homes, forcibly dismantling their community, get to stay. Some people think forcibly dismantling communities of renters is fine. Perhaps they dont think they matter coz theyre typically less white communities. Perhaps this is what they really want.
- TimPC 4y ago
  Forced to sell is quite ridiculous he could take out a small loan against the increased property value without having to sell. He would lose less money from the loan than the unrealized gain on the property even if he paid the increase in property taxes this way for 50 years. The idea that homeowners need to maintain 100% ownership of their home no matter what their finances are and no matter how much their home goes up is a bad one.
- BirdieNZ 4y ago
  He does benefit from the increase in value, because land increases in value due to increased services and amenities. If you put a train station nearby someone's house, their property hugely increases in value, and they benefit from the nearby train (or school, or fire station, or port, or whatever else). Now, we could certainly defer the payment of the tax until sale of the property for, say, pensioners, as no one wants to be kicking out retirees from their homes. However, the issue of people losing their homes due to increases in value already exist for a massive section of the population: those who rent. As rents increase, many renters are forced to move. They don't even get to benefit from an increase in land value, from the community they helped build and improve. A fantastic way to solve this issue would be a land value tax that taxes the economic rent of the land, in conjunction with removing all income and sales tax. This means that land sale prices are low, renters have more income to spend on things besides rent, and people sitting on land don't benefit enormously without returning that value to society. The tax can be deferred until sale of the property for pensioners, for their primary residence.
Dracophoenix 4y ago
That's basically the argument for gentrification. i.e. "If you're too poor, why are you here?"

deleted 4y ago

[deleted]

c22 4y ago

You only benefit if you sell.

natpalmer1776 4y ago

Except he doesn't benefit any more from the increased value unless he sells or rents the property. In fact, as his tax liability went up he is actually paying more to accommodate the inevitable increase in spending on municipal amenities that the wealthy newcomers are likely to petition for, given how much they pay in property taxes. If we imagine he did not desire these things in the first place, and was on fixed income like many thousands of individuals, he would be forced to sell his home as a result of the whims of the market. The escalating cost of property in his area should leave him with a tidy sum of money to ease the transition, but that is little consolation for potentially being forced out of the home you raised your children in, met your grandchildren in, spent hundreds or thousands of hours maintaining and improving, among many other sentimental attachments. To a homeowner who values their home and doesn't intend to sell, the increased value of land is an apology. It is a meagre recompensation for second order consequences of the market's capriciousness. But at least the value went up right?

Guvante 4y ago
Lets take the example above as being too much money (as "too much" is hard to pin down). In exchange for losing a home due to the $2k payment you will receive $80k. Generally speaking 40 years worth of "I couldn't afford it" is a pretty decent apology. This is working of NJ which has the highest rate at 2.5%, most states are lower. Sure it sucks that you are paying $1k instead of $2k because your house is worth $200k instead of $100k but you know... You could sell your house for a profit of $100k.
- teakettle42 4y ago
  Consider the cost to the community, not just the people being priced out. The first people we lose are often those who have been here the longest, contributed greatly to the community, but are on a fixed income and cannot afford the tax increase. Case in point, we’re losing our volunteer fire department’s rookie coordinator and training captain because he’s been priced out of the area. He’s elderly, been a member of the department for decades, is hugely valuable and has a trove of institutional knowledge. I’m glad he’s able to move elsewhere with the payout he’s getting from his home, but the loss to our community is enormous. How is arbitrarily forcing people out of the communities they’ve built the moral (or constructive!) thing to do?
  - TimPC 4y ago
    Taxes can have negative consequences but a single anecdote of negative consequence doesn’t prove that overall tax is net negative. Every household that moves out of a neighbourhood is replaced by the household moving into a neighbourhood. A society where the most valuable neighbourhoods for working families aren’t disproportionately occupied by retirees paying a tiny fraction of the true cost of living there has benefits. Some households in the Bay Area are being undercharged in property tax by over $50,000/year at current rates. That’s $50,000 a year less for schools and services. It also means other, newer home owners have to pay a disproportionate amount more since if property taxes were based on market rates the percentage rate of the tax would go down.
    - teakettle42 4y ago
      Your arguments for social engineering are based in ignoring the true individual human cost, and the true cost to the communities you’d happily destroy in pursuit of your bland generalized vision of how things should be. That seems immoral to me, and I’m not convinced you’ve actually thought through the implications of your idealized grand vision. “Your lost decades-long community members will be replaced by brand new people” is not the argument you seem to think it is, and could only be made by someone who had no experience building a functioning community.
pydry 4y ago
>Except he doesn't benefit any more from the increased value Thats the same for literally any product or service in the world which you like which goes up in price due to increased demand. Is that immoral? The only difference is that if LVT goes up it does mean you can charge more rent so you potentially could benefit even if you choose not to. While renters in the same area are exposed to the same market forces. Theres no potential benefit to them they just need to pay more money.
- teakettle42 4y ago
  > Thats the same for literally any product or service in the world which you like which goes up in price due to increased demand. I already own the home. Imagine that sales tax was assessed yearly on every item you already own, based on the current market value if you were to chose to sell it that year. > The only difference is that if LVT goes up it does mean you can charge more rent so you potentially could benefit even if you choose not to. How does that help me if I’m not a rent-seeking landlord? How does that help the community that you want to forcibly dismantle?
  - pydry 4y ago
    >I already own the home. A privileged position the poorer half of the population doesnt share. They have to deal with rising rents along with rising gas prices. >Imagine that sales tax was assessed yearly on every item you already own, based on the current market value Imagine instead that it was limited just to the roof over your head. Voila youve just imagined rent. Something the poorer half of the population HAS to deal with. Im just proposing leveling the playing field between renters and owners by limiting owners' right to capitalize on land value increases. That is, taking away what are effectively handouts given to you. Free money. Wealth you didnt earn because the land value isnt about you or your house. >How does that help me if I’m not a rent-seeking landlord 1. The option is always there. Whether you exercise it or not having the option of an additional stream of income DOES help you. 2. Your net worth literally goes up. You can easily convert that net worth into cash if you choose. Reverse mortgages, etc. >How does that help the community that you want to forcibly dismantle? With a higher land value tax land would HAVE to be used more efficiently. Denser housing etc. That means lower rents. That means renters who were priced out of their homes, forcibly dismantling their community, get to stay. Some people think forcibly dismantling communities of renters is fine. Perhaps they dont think they matter coz theyre typically less white communities. Perhaps this is what they really want.
TimPC 4y ago
Forced to sell is quite ridiculous he could take out a small loan against the increased property value without having to sell. He would lose less money from the loan than the unrealized gain on the property even if he paid the increase in property taxes this way for 50 years. The idea that homeowners need to maintain 100% ownership of their home no matter what their finances are and no matter how much their home goes up is a bad one.
BirdieNZ 4y ago
He does benefit from the increase in value, because land increases in value due to increased services and amenities. If you put a train station nearby someone's house, their property hugely increases in value, and they benefit from the nearby train (or school, or fire station, or port, or whatever else). Now, we could certainly defer the payment of the tax until sale of the property for, say, pensioners, as no one wants to be kicking out retirees from their homes. However, the issue of people losing their homes due to increases in value already exist for a massive section of the population: those who rent. As rents increase, many renters are forced to move. They don't even get to benefit from an increase in land value, from the community they helped build and improve. A fantastic way to solve this issue would be a land value tax that taxes the economic rent of the land, in conjunction with removing all income and sales tax. This means that land sale prices are low, renters have more income to spend on things besides rent, and people sitting on land don't benefit enormously without returning that value to society. The tax can be deferred until sale of the property for pensioners, for their primary residence.

Dracophoenix 4y ago

That's basically the argument for gentrification. i.e. "If you're too poor, why are you here?"