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> kind of tax, versus increasing a percentage that already exists I mean, most places currently have a Land Value Tax, it's just included within the Property T

> kind of tax, versus increasing a percentage that already exists I mean, most places currently have a Land Value Tax, it's just included within the Property Tax that we pay. Conceptually all we are looking to do is raise this percentage and lower the building percentage. This has been done already in Pennsylvania[0]. We're just looking to continue this process. You can do it all at once, and that would be better, but I think most LVT advocates are fine with phasing it in, and trying to find out the best way to phase it in. Once we get that change then we can look to change other things, and the podcast rightfully points out that in places like Texas that has no income tax and has a property tax, if they went to a LVT system they would start to out-produce the rest of the country. Other states and cities would then quickly try to catch up. > We can tax the purchase, ongoing renting and time of sale. If we move to just ongoing renting, that's all you need. And that's a Land Value Tax. See the annuity point below. > if we get price growth due to lack of sellers, this will encourage builders to build. When you have an elastic good and the supply of it goes down, the price goes up. We get price increases BECAUSE there is less supply. This is not a contradiction. Builders will not build more when you discourage trading. Liquid goods are worth more. > LVT is that it is not direct enough. If you want to reduce demand for homes, remove the people buying 2-5 from the market The LVT directly taxes the misuse of land at a just rate. We don't want to remove the demand for homes, we want to remove speculation. We want to make it unprofitable to waste land. We want the supply of homes to meet demand. We want people to be forced to pay to the community for being a NIMBY, and we want the community to be able to take those funds and build elsewhere to be able to meet demand. Under a LVT, we want and like landlords. Landlords who need to compete on the quality of the homes that they have, that have to compete on the quality of services that they give, that's what we want. The issue now is that they are fat bloodsuckers who don't have to do those things because as the city grows around them they accrue value for doing nothing. You see this now in how even mobile home land is being bought up and rents are increasing, as brought up in the podcast. > see if I can square the circle. When you win the lottery, you can choose to take the lump sum or you can choose to take the monthly check. There is a certain value in how that calculation gets done that we call the capitalization rate. In that same way, anyone at any time can choose to spend their million dollars and get something like a $50k/year annuity. What the Land Value Tax really is to Georgists is seeing that the combined positive externalities of the city is worth say that $50k/year to the location. So what we want to do is to tax away that $50k. If we don't do this, then through the capitalization of that annuity on the land, the price of the land would be worth 1 million. Once we tax that value however, the land price drops from a million to zero. So in Manhattan(although I suspect Manhattan has higher than $1m land values, adjust accordingly) you would have a $250k house with a $50k/year tax, and in middle of nowhere you would have a $250k house with a $0/year tax. What economists know is that taxes on elastic goods cause dead-weight losses. Similar to what I mentioned above, when you tax something you get less of it, and that less ends up raising the price. Land is a special case in that it is inelastic, and thus it is the best thing to tax. When you tax income, that means you get less of it. By reducing the income tax, by reducing the sales tax, by reducing the capital gains tax, the economy will grow. We'll have more outputs. And that growth will then be captured by the land. So what this means is that for every $1 we reduce in other taxes, the value of the land value tax grows by more than $1. This is why we're called 'Single Taxers', and why we need to quickly mention that we are also for carbon taxes and the like. If you take this to its extremes, what you would find is that the vast majority - certainly greater than 90% of the population - would be better off under a LVT world. [0]: https://www.strongtowns.org/journal/2019/3/6/non-glamorous-gains-the-pennsylvania-land-tax-experiment https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...

hardwaresofton 4y ago
> I mean, most places currently have a Land Value Tax, it's just included within the Property Tax that we pay. Conceptually all we are looking to do is raise this percentage and lower the building percentage. This has been done already in Pennsylvania[0]. We're just looking to continue this process. You can do it all at once, and that would be better, but I think most LVT advocates are fine with phasing it in, and trying to find out the best way to phase it in. > > Once we get that change then we can look to change other things, and the podcast rightfully points out that in places like Texas that has no income tax and has a property tax, if they went to a LVT system they would start to out-produce the rest of the country. Other states and cities would then quickly try to catch up. These movements are going to take years and decades, where I think we could reasonably measure getting something through congress in months to years. > When you have an elastic good and the supply of it goes down, the price goes up. We get price increases BECAUSE there is less supply. This is not a contradiction. Builders will not build more when you discourage trading. Liquid goods are worth more. You get price increases, and then new people who want to make money become home builders. Builders will build to make money if the price is right, they will build taking into account the expense of trading. You're suggesting that builders will not start building under any price and we'll see price appreciation with no end. That doesn't make sense. Also, this whole point is a bit off because the point is to tax homes after the first one. It's more likely that what I proposed leads to a frenzied search for new home buyers, and a boom in building and lending. If the only way to avoid the increased targeted taxes is to find new home owners, industries will start optimizing for that. > If we move to just ongoing renting, that's all you need. And that's a Land Value Tax. See the annuity point below. See this is the problem -- it feels like you're just focused on LVT! It's not the only solution. There is value in taxing the purchase more heavily, or sale, or renting. These are all levers to be pulled. They may be inferior to a starting situation where LVT was adopted, but they are valuable right now, in the world we live in today. > The LVT directly taxes the misuse of land at a just rate. We don't want to remove the demand for homes, we want to remove speculation. We want to make it unprofitable to waste land. We want the supply of homes to meet demand. We want people to be forced to pay to the community for being a NIMBY, and we want the community to be able to take those funds and build elsewhere to be able to meet demand. > > Under a LVT, we want and like landlords. Landlords who need to compete on the quality of the homes that they have, that have to compete on the quality of services that they give, that's what we want. The issue now is that they are fat bloodsuckers who don't have to do those things because as the city grows around them they accrue value for doing nothing. You see this now in how even mobile home land is being bought up and rents are increasing, as brought up in the podcast. But I do want to remove the demand from homes. Specifically, I want to remove the demand from people buying a second, third or 100th home. I want it to be easy for first home buyers to get in a primary residence, and harder for someone to buy a second/third/100th home. I want the supply of homes to meet demand, but LVT is not the only way to get there, and IMO it's not the most expedient way. > What the Land Value Tax really is to Georgists is seeing that the combined positive externalities of the city is worth say that $50k/year to the location. So what we want to do is to tax away that $50k. If we don't do this, then through the capitalization of that annuity on the land, the price of the land would be worth 1 million. Once we tax that value however, the land price drops from a million to zero. So in Manhattan(although I suspect Manhattan has higher than $1m land values, adjust accordingly) you would have a $250k house with a $50k/year tax, and in middle of nowhere you would have a $250k house with a $0/year tax. > > What economists know is that taxes on elastic goods cause dead-weight losses. Similar to what I mentioned above, when you tax something you get less of it, and that less ends up raising the price. Land is a special case in that it is inelastic, and thus it is the best thing to tax. Thanks for the in-depth explanation and example of LVT. I want to point out that yes, when you tax something you get less of it, but that's sometimes exactly what we want. For example, if the share of corporate profits (and value retained in other parts of the economy) is out of control, then tax corporate profits how much you can safely tax corporate profits is hard to figure out, but it's not rocket science. We could juice growth by removing lots of regulation, but we as a society choose to restrain growth in exchange for clean waterways for example. > ... would be better off under a LVT world. I don't disagree, but I think where we differ is that I'm OK going with an incremental patch, but you'd like the patchset that includes LVT and I think it's too large! We'll have to agree to disagree here!

hardwaresofton 4y ago

> I mean, most places currently have a Land Value Tax, it's just included within the Property Tax that we pay. Conceptually all we are looking to do is raise this percentage and lower the building percentage. This has been done already in Pennsylvania[0]. We're just looking to continue this process. You can do it all at once, and that would be better, but I think most LVT advocates are fine with phasing it in, and trying to find out the best way to phase it in. > > Once we get that change then we can look to change other things, and the podcast rightfully points out that in places like Texas that has no income tax and has a property tax, if they went to a LVT system they would start to out-produce the rest of the country. Other states and cities would then quickly try to catch up. These movements are going to take years and decades, where I think we could reasonably measure getting something through congress in months to years. > When you have an elastic good and the supply of it goes down, the price goes up. We get price increases BECAUSE there is less supply. This is not a contradiction. Builders will not build more when you discourage trading. Liquid goods are worth more. You get price increases, and then new people who want to make money become home builders. Builders will build to make money if the price is right, they will build taking into account the expense of trading. You're suggesting that builders will not start building under any price and we'll see price appreciation with no end. That doesn't make sense. Also, this whole point is a bit off because the point is to tax homes after the first one. It's more likely that what I proposed leads to a frenzied search for new home buyers, and a boom in building and lending. If the only way to avoid the increased targeted taxes is to find new home owners, industries will start optimizing for that. > If we move to just ongoing renting, that's all you need. And that's a Land Value Tax. See the annuity point below. See this is the problem -- it feels like you're just focused on LVT! It's not the only solution. There is value in taxing the purchase more heavily, or sale, or renting. These are all levers to be pulled. They may be inferior to a starting situation where LVT was adopted, but they are valuable right now, in the world we live in today. > The LVT directly taxes the misuse of land at a just rate. We don't want to remove the demand for homes, we want to remove speculation. We want to make it unprofitable to waste land. We want the supply of homes to meet demand. We want people to be forced to pay to the community for being a NIMBY, and we want the community to be able to take those funds and build elsewhere to be able to meet demand. > > Under a LVT, we want and like landlords. Landlords who need to compete on the quality of the homes that they have, that have to compete on the quality of services that they give, that's what we want. The issue now is that they are fat bloodsuckers who don't have to do those things because as the city grows around them they accrue value for doing nothing. You see this now in how even mobile home land is being bought up and rents are increasing, as brought up in the podcast. But I do want to remove the demand from homes. Specifically, I want to remove the demand from people buying a second, third or 100th home. I want it to be easy for first home buyers to get in a primary residence, and harder for someone to buy a second/third/100th home. I want the supply of homes to meet demand, but LVT is not the only way to get there, and IMO it's not the most expedient way. > What the Land Value Tax really is to Georgists is seeing that the combined positive externalities of the city is worth say that $50k/year to the location. So what we want to do is to tax away that $50k. If we don't do this, then through the capitalization of that annuity on the land, the price of the land would be worth 1 million. Once we tax that value however, the land price drops from a million to zero. So in Manhattan(although I suspect Manhattan has higher than $1m land values, adjust accordingly) you would have a $250k house with a $50k/year tax, and in middle of nowhere you would have a $250k house with a $0/year tax. > > What economists know is that taxes on elastic goods cause dead-weight losses. Similar to what I mentioned above, when you tax something you get less of it, and that less ends up raising the price. Land is a special case in that it is inelastic, and thus it is the best thing to tax. Thanks for the in-depth explanation and example of LVT. I want to point out that yes, when you tax something you get less of it, but that's sometimes exactly what we want. For example, if the share of corporate profits (and value retained in other parts of the economy) is out of control, then tax corporate profits how much you can safely tax corporate profits is hard to figure out, but it's not rocket science. We could juice growth by removing lots of regulation, but we as a society choose to restrain growth in exchange for clean waterways for example. > ... would be better off under a LVT world. I don't disagree, but I think where we differ is that I'm OK going with an incremental patch, but you'd like the patchset that includes LVT and I think it's too large! We'll have to agree to disagree here!