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Fun fact -- if we were to tax non-produced assets like land -- which nobody made, and the value of which is created by its neighbors and surrounding community r

Fun fact -- if we were to tax non-produced assets like land -- which nobody made, and the value of which is created by its neighbors and surrounding community rather than its owner -- then we could LOWER taxes on things like income and sales. So we could make transit pay for itself by taxing land values, instead of bankrupting the city with unaffordable boondoggles through bond initiatives and income and sales taxes, all of which are drags on the economy in one way or another.

ejb999 4y ago
I don't know where you live, but I have never lived any place (all in the USA) that doesn't tax land already. I for one enjoy having open spaces that are not developed - raising taxes on vacant land so high, and thus, force the owners to sell to someone who will develop it seems like a really bad idea. Trees and open space provide a lot of value to everyone - those that live nearby, even if they don't own it, and to everyone that likes to breath fresh air.
- Retric 4y ago
  It’s not about undeveloped land. It’s about low value assets that take up a lot of space such as surface level parking lots or single level big box stores. The more of that stuff you condense into the same space the less traffic you have because everything is closer together and the more viable mass transit becomes. Not everything needs to be a mega city, but sprawl has massive externalities.
  - Dracophoenix 4y ago
    Who gets to determine what that low value is? Where do they get the numbers from?
    - Retric 4y ago
      The market determines what’s low value, more specifically peoples willingness to pay land taxes determines what’s low value. Suppose the annual tax is 100,000$/acre, a warehouse may or may not be worth it depending on how profitable owning it was. Similarly, a billionaire could decide spending 2 million every year for their 20 acre property is reasonable or a waste of money. Where such scheme’s fail is really the implementation. Few local governments could stick with such a system rather than carving out exclusions.
      - Dracophoenix 4y ago
        > The market determines what’s low value, more specifically peoples willingness to pay land taxes determines what’s low value. How does the market determine the value of something that isn't for sale as well as being relatively unique and difficult to compare? I would think the value of something like that to the market would be zero.
        Retric 4y ago
        If someone decides to sell then the market determines what a property is worth. If someone doesn’t sell then it’s clearly worth enough to pay the taxes on it. For a single property it doesn’t give much information, but across a city the market is providing a great deal of information.
        Dracophoenix 4y ago
        > If someone doesn’t sell then it’s clearly worth enough to pay the taxes on it. That's not a good argument. People don't sell the clothes they have in their closet when they're not using it and it would be laughable to argue for an annual tax on one's closet. Why should this be any different for land? Monetary value isn't the same as worth. There's much more to ownership of land that isn't reflected in "market worth" (however that would be assessed in the cases of purchased land). > For a single property it doesn’t give much information, but across a city the market is providing a great deal of information. Cities are few and far between. That wouldn't apply to someone who built a house in the middle of Montana or decided to squat in a ghost town.
        Retric 4y ago
        It’s easy to assume a dead means you “own” some land, but national borders also define ownership of land by nation states which need things like militaries to defend them but also systems to manage that land such as deed registries, road networks, police and court systems to handle trespassers, and so forth. Understanding what a deed actually is rather than what it seems like it should help clarify what’s going on here. It’s a landlord setting rent, however governments have more concerns than maximizing revenue. A government defining what an appropriate rent for land should be has real economic implications for nation states. Under charge and land ends up wasted, charge too much and it ends up abandoned. The sweet spot isn’t about maximizing income it’s about maximizing benefit for society. Often property taxes are based on total value of the land plus improvements on it which discourages improvements or even maintenance. Thus a sweet spot based on the lands inherent value Aka a land value tax. In the end land is a finite resource, any nation that wastes it runs into massive problems.
- larsiusprime 4y ago
  > I don't know where you live, but I have never lived any place (all in the USA) that doesn't tax land already. The issue is that we tax the land and the buildings together. We should tax only the land. And we're often not taxing it enough. > I for one enjoy having open spaces that are not developed I enjoy those spaces too! You know what we have right now? SPRAWL. For miles in every direction. Pavement that gobbles up more and more greenfield spaces, for low-density, low-value uses. Outlying wilderness land is not very valuable, but land in urban centers is very valuable. Because we don't tax that land appropriately, we just encourage people to sprawl out further and further, and because we tax buildings, we discourage people from building densely. This leads to more land consumption and less of the open undeveloped space you like. Those trees you love? They're being cut down to make way for parking lots and strip malls and self-storage units. Really wasteful uses of land. Denser building would make it so demand for housing, commerce, and amenities are fulfilled on a much smaller footprint. If we taxed land appropriately, we would have way more undeveloped land, and more appropriate density in the city, and you wouldn't have to commute nearly as far to get to the wilderness.
newaccount2021 4y ago
ROTMetro 4y ago
Aren't the surrounding owners the surrounding community? So aren't owners creating the value in your example?
- larsiusprime 4y ago
  Yes! The entire community together actually, not just the immediately nearby neighbors. Land in the heart of New York is valuable because it's in the heart of New York, one of the most valuable cities in the world, a feat achieved by many more people than just the 10 land owners surrounding that particular parcel.
RajT88 4y ago
Some places have extremely low property taxes. The combination of low tax rate and low property values is the sweet spot for people on a budget (example: A nearly-retired uncle of mine just moved to Alabama): https://www.rocketmortgage.com/learn/property-taxes-by-state https://www.rocketmortgage.com/learn/property-taxes-by-state If you're wondering if my wife and I are periodically looking at the economics of living in Hawaii for retirement, we sure as hell are. =)

ejb999 4y ago

I don't know where you live, but I have never lived any place (all in the USA) that doesn't tax land already. I for one enjoy having open spaces that are not developed - raising taxes on vacant land so high, and thus, force the owners to sell to someone who will develop it seems like a really bad idea. Trees and open space provide a lot of value to everyone - those that live nearby, even if they don't own it, and to everyone that likes to breath fresh air.

Retric 4y ago
It’s not about undeveloped land. It’s about low value assets that take up a lot of space such as surface level parking lots or single level big box stores. The more of that stuff you condense into the same space the less traffic you have because everything is closer together and the more viable mass transit becomes. Not everything needs to be a mega city, but sprawl has massive externalities.
- Dracophoenix 4y ago
  Who gets to determine what that low value is? Where do they get the numbers from?
  - Retric 4y ago
    The market determines what’s low value, more specifically peoples willingness to pay land taxes determines what’s low value. Suppose the annual tax is 100,000$/acre, a warehouse may or may not be worth it depending on how profitable owning it was. Similarly, a billionaire could decide spending 2 million every year for their 20 acre property is reasonable or a waste of money. Where such scheme’s fail is really the implementation. Few local governments could stick with such a system rather than carving out exclusions.
    - Dracophoenix 4y ago
      > The market determines what’s low value, more specifically peoples willingness to pay land taxes determines what’s low value. How does the market determine the value of something that isn't for sale as well as being relatively unique and difficult to compare? I would think the value of something like that to the market would be zero.
      - Retric 4y ago
        If someone decides to sell then the market determines what a property is worth. If someone doesn’t sell then it’s clearly worth enough to pay the taxes on it. For a single property it doesn’t give much information, but across a city the market is providing a great deal of information.
        Dracophoenix 4y ago
        > If someone doesn’t sell then it’s clearly worth enough to pay the taxes on it. That's not a good argument. People don't sell the clothes they have in their closet when they're not using it and it would be laughable to argue for an annual tax on one's closet. Why should this be any different for land? Monetary value isn't the same as worth. There's much more to ownership of land that isn't reflected in "market worth" (however that would be assessed in the cases of purchased land). > For a single property it doesn’t give much information, but across a city the market is providing a great deal of information. Cities are few and far between. That wouldn't apply to someone who built a house in the middle of Montana or decided to squat in a ghost town.
        Retric 4y ago
        It’s easy to assume a dead means you “own” some land, but national borders also define ownership of land by nation states which need things like militaries to defend them but also systems to manage that land such as deed registries, road networks, police and court systems to handle trespassers, and so forth. Understanding what a deed actually is rather than what it seems like it should help clarify what’s going on here. It’s a landlord setting rent, however governments have more concerns than maximizing revenue. A government defining what an appropriate rent for land should be has real economic implications for nation states. Under charge and land ends up wasted, charge too much and it ends up abandoned. The sweet spot isn’t about maximizing income it’s about maximizing benefit for society. Often property taxes are based on total value of the land plus improvements on it which discourages improvements or even maintenance. Thus a sweet spot based on the lands inherent value Aka a land value tax. In the end land is a finite resource, any nation that wastes it runs into massive problems.
larsiusprime 4y ago
> I don't know where you live, but I have never lived any place (all in the USA) that doesn't tax land already. The issue is that we tax the land and the buildings together. We should tax only the land. And we're often not taxing it enough. > I for one enjoy having open spaces that are not developed I enjoy those spaces too! You know what we have right now? SPRAWL. For miles in every direction. Pavement that gobbles up more and more greenfield spaces, for low-density, low-value uses. Outlying wilderness land is not very valuable, but land in urban centers is very valuable. Because we don't tax that land appropriately, we just encourage people to sprawl out further and further, and because we tax buildings, we discourage people from building densely. This leads to more land consumption and less of the open undeveloped space you like. Those trees you love? They're being cut down to make way for parking lots and strip malls and self-storage units. Really wasteful uses of land. Denser building would make it so demand for housing, commerce, and amenities are fulfilled on a much smaller footprint. If we taxed land appropriately, we would have way more undeveloped land, and more appropriate density in the city, and you wouldn't have to commute nearly as far to get to the wilderness.

newaccount2021 4y ago

ROTMetro 4y ago

Aren't the surrounding owners the surrounding community? So aren't owners creating the value in your example?

larsiusprime 4y ago
Yes! The entire community together actually, not just the immediately nearby neighbors. Land in the heart of New York is valuable because it's in the heart of New York, one of the most valuable cities in the world, a feat achieved by many more people than just the 10 land owners surrounding that particular parcel.

RajT88 4y ago

Some places have extremely low property taxes. The combination of low tax rate and low property values is the sweet spot for people on a budget (example: A nearly-retired uncle of mine just moved to Alabama): https://www.rocketmortgage.com/learn/property-taxes-by-state https://www.rocketmortgage.com/learn/property-taxes-by-state If you're wondering if my wife and I are periodically looking at the economics of living in Hawaii for retirement, we sure as hell are. =)