4 ms·

There's a lot of analysis out there showing that LVT is the one kind of tax that is not transferred into rent. On the contrary, it's expected that rents would d

There's a lot of analysis out there showing that LVT is the one kind of tax that is not transferred into rent. On the contrary, it's expected that rents would drop under LVT, since land would become less scarce where people are willing to pay rents.

s1artibartfast 4y ago
It sounds like a perpetual motion machine. 100% of Revenue comes from land but somehow this isn't passed on to those occupying the land. It also ignores entire segments of the economy that don't have significant land requirement: Finance, services, digital Commerce. Google on Googlers pay no taxes but plumbers and homeowners in urban areas pick up the slack. Sounds highly regressive
- xvedejas 4y ago
  The landowners pay the tax. Because of the vertical supply curve (land supply is fixed), it does not get passed on. This is true for any good that has fixed supply when the tax is equal to the gain in having exclusive rights to that good.
  - s1artibartfast 4y ago
    But the Assumption of a vertical supply curve is absurd. Land quantity is fixed but desirable land is flexible. From the outside this sounds like crazy cult thinking. May be applicable for a but Island like Singapore or Hong Kong but not the United States with vast swathes of usable land. Someone can go from Prime real estate in downtown San Francisco to rural Montana. As I said before, this ignores the fact that a remote googler can buy 100 acres with near 0 alternative land use value. It also ignores the regressive nature of the tax. Many places have a vertical Supply for water, but that doesn't mean raising tax revenue based on water consumption isn't regressive
- imtringued 4y ago
  The reason for that is that the renter's are already paying economic rents and taxing those economic rents does not increase them. Ground rent is a residue that is left over after everyone else took their cut (income taxes reduce land value taxes for example).

s1artibartfast 4y ago

It sounds like a perpetual motion machine. 100% of Revenue comes from land but somehow this isn't passed on to those occupying the land. It also ignores entire segments of the economy that don't have significant land requirement: Finance, services, digital Commerce. Google on Googlers pay no taxes but plumbers and homeowners in urban areas pick up the slack. Sounds highly regressive

xvedejas 4y ago
The landowners pay the tax. Because of the vertical supply curve (land supply is fixed), it does not get passed on. This is true for any good that has fixed supply when the tax is equal to the gain in having exclusive rights to that good.
- s1artibartfast 4y ago
  But the Assumption of a vertical supply curve is absurd. Land quantity is fixed but desirable land is flexible. From the outside this sounds like crazy cult thinking. May be applicable for a but Island like Singapore or Hong Kong but not the United States with vast swathes of usable land. Someone can go from Prime real estate in downtown San Francisco to rural Montana. As I said before, this ignores the fact that a remote googler can buy 100 acres with near 0 alternative land use value. It also ignores the regressive nature of the tax. Many places have a vertical Supply for water, but that doesn't mean raising tax revenue based on water consumption isn't regressive
imtringued 4y ago
The reason for that is that the renter's are already paying economic rents and taxing those economic rents does not increase them. Ground rent is a residue that is left over after everyone else took their cut (income taxes reduce land value taxes for example).