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There are ways to disincentivize toxic forms of investment (especially speculation) without banning it. A high land value tax, for example, would simultaneously
by ethanbond 4y ago
There are ways to disincentivize toxic forms of investment (especially speculation) without banning it. A high land value tax, for example, would simultaneously increase investment and decrease speculation.
- boringg 4y agoI don't see how a high land value tax increase investment & decrease speculation? If your talking about flipping homes that's one thing but REIT ownership isn't home flipping for the most part...
- pwinnski 4y agoA very high real estate tax with huge discounts for a single primary homestead makes investment less profitable.
- idontpost 4y agoThat's just a less efficient, and less accurate land tax.
- giantg2 4y agoThat won't fix the current problem. That would only potentially prevent it from reoccurring to the current levels. Landlords pass tax onto renters. Renters may seek to buy a home, but if supply is locked up by landlords, they may just be stuck.
- ethanbond 4y agoHigh LVT means you pay a high tax on the land itself and little or no tax on what you do on top of that land. It encourages highly efficient land development which means increased supply of commercial and residential units (thus reducing rents), and it makes lots of speculation prohibitively expensive. Since holding undeveloped land is just as expensive as holding developed land, you’re going to want to put it to productive use sooner rather than later.
- boringg 4y agoThats sounds a solution for undeveloped land in urban areas though REITs are buying up the housing stock which is different. If I understand your solution correctly it also puts a higher burden on the rest of the population who then have to pay higher land taxes each year (politically unpalatable) and I would argue that REITs probably have more capital to be able to pay off higher taxes where cranking up land taxes on the population makes home ownership more challenging.
- allemagne 4y agoThey are fundamentally the same problem -- profiting off of owning something fundamentally scarce that you did not produce, i.e. rent-seeking. When the taxes are proportional to the most productive use of the land you own it is less profitable or sustainable to manipulate the housing market. The strictest Georgist philosophy would hold if you happened to homestead in the heart of Manhattan your family will eventually have to choose between paying the price for holding that piece of land hostage from the rest of society or letting someone else make use of it. In practice, places like Denmark and Estonia make exemptions for owner-occupied dwellings.
- giantg2 4y ago... and pricing out existing residents in low density housing by taxing them to oblivion.
- JamesBarney 4y agoOnly residents who own tons of land they aren't doing anything productive with.
- deleted 4y ago[deleted]
- boringg 4y agoThe whole argument is how to make housing more affordable to live in. Your argument is ... pay more for land tax to avoid speculation however if you live somewhere in order to pay for it you need to consistently be more productive than the speculators (who would just charge the land tax to the renters anyways). Which doesn't solve the problem in any way shape or form.
- fshbbdssbbgdd 4y agoLand value tax means you don’t pay any extra tax for developing your property, but you do pay extra tax if the neighborhoods get more expensive. Ergo, incentive for investment and disincentive for speculation. Suppose you do a “buy and hold” strategy on a neighborhood that is gentrifying. The increased taxes you pay each your will eat into your profits. If you sell, the buyer will have have to pay those taxes too, so the value will be lower.
- Salgat 4y agoThe solution is high property taxes offset by high homestead tax exemptions.