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I 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'

I 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 ago
A very high real estate tax with huge discounts for a single primary homestead makes investment less profitable.
- idontpost 4y ago
  That's just a less efficient, and less accurate land tax.
- giantg2 4y ago
  That 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 ago
High 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 ago
  Thats 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 ago
    They 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 ago
    Only residents who own tons of land they aren't doing anything productive with.
    - deleted 4y ago
      [deleted]
    - boringg 4y ago
      The 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.
      - JamesBarney 4y ago
        It does because taxes don't disappear. Say we tax land at 4% and the value of all the land in the US is 100k per person. That means the average person pays an extra 4k and each person receives a $4,000 check. If you own an average amount of land you aren't any worse off.
        giantg2 4y ago
        But what is considered average can change. This is especially true since the land value is not uniform like your hypothetical example. Any system like this can be manipulated for one group to use against a minority group.
    - giantg2 4y ago
      That might be how it starts, but history shows rates balloon over time. We already have senior being kicked out because of property tax. Your definition of "tons" of land is vague and may be used against people who have moderate amounts of land (.5-1ac).
- twoodfin 4y ago
  At the levels where an LVT is effectively coercive, it’s functionally indistinguishable from rent paid to the government for land you don’t actually own. I expect most citizens would recognize this and any effective LVT would be politically DOA.
  - travisathougies 4y ago
    I mean property tax is already rent.
    - twoodfin 4y ago
      Property tax is rent like a condo fee is rent: It at least approximates a (progressively, in most tax schemes) assessed user fee for community services. The size of the fee is proportional to services rendered. The LVT as envisioned by its advocates isn’t like that. It’s a fee—largely determined by market forces—to continue to occupy and make use of “your” land. If the government can insist you pay some market-set cost to remain on a plot of land, you don’t own it in the way we classically think about land title ownership. You’re not the market participant, the government is.
  - tomjakubowski 4y ago
    > At the levels where an LVT is effectively coercive, it’s functionally indistinguishable from rent paid to the government for land you don’t actually own. I don't see how this follows. Would you mind explaining?
  - deleted 4y ago
    [deleted]
  - patrick451 4y ago
    The fact that property taxes exist at all, combined with the fact that failure to pay property taxes means the government takes "your" land means you are in fact renting the land from the government. The size of these taxes is irrelevant.
    - 4y ago
fshbbdssbbgdd 4y ago
Land 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.

I 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 ago

A very high real estate tax with huge discounts for a single primary homestead makes investment less profitable.

idontpost 4y ago
That's just a less efficient, and less accurate land tax.
giantg2 4y ago
That 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 ago

High 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 ago
Thats 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 ago
  They 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 ago
  Only residents who own tons of land they aren't doing anything productive with.
  - deleted 4y ago
    [deleted]
  - boringg 4y ago
    The 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.
    - JamesBarney 4y ago
      It does because taxes don't disappear. Say we tax land at 4% and the value of all the land in the US is 100k per person. That means the average person pays an extra 4k and each person receives a $4,000 check. If you own an average amount of land you aren't any worse off.
      - giantg2 4y ago
        But what is considered average can change. This is especially true since the land value is not uniform like your hypothetical example. Any system like this can be manipulated for one group to use against a minority group.
  - giantg2 4y ago
    That might be how it starts, but history shows rates balloon over time. We already have senior being kicked out because of property tax. Your definition of "tons" of land is vague and may be used against people who have moderate amounts of land (.5-1ac).
twoodfin 4y ago
At the levels where an LVT is effectively coercive, it’s functionally indistinguishable from rent paid to the government for land you don’t actually own. I expect most citizens would recognize this and any effective LVT would be politically DOA.
- travisathougies 4y ago
  I mean property tax is already rent.
  - twoodfin 4y ago
    Property tax is rent like a condo fee is rent: It at least approximates a (progressively, in most tax schemes) assessed user fee for community services. The size of the fee is proportional to services rendered. The LVT as envisioned by its advocates isn’t like that. It’s a fee—largely determined by market forces—to continue to occupy and make use of “your” land. If the government can insist you pay some market-set cost to remain on a plot of land, you don’t own it in the way we classically think about land title ownership. You’re not the market participant, the government is.
- tomjakubowski 4y ago
  > At the levels where an LVT is effectively coercive, it’s functionally indistinguishable from rent paid to the government for land you don’t actually own. I don't see how this follows. Would you mind explaining?
- deleted 4y ago
  [deleted]
- patrick451 4y ago
  The fact that property taxes exist at all, combined with the fact that failure to pay property taxes means the government takes "your" land means you are in fact renting the land from the government. The size of these taxes is irrelevant.
  - 4y ago

fshbbdssbbgdd 4y ago

Land 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.