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It's weird though I hear all my middle class friends complain about property tax. Is there a difference?
by isthisthingon99 4y ago
It's weird though I hear all my middle class friends complain about property tax. Is there a difference?
- yellowapple 4y agoProperty tax taxes both the land and the house on it. Land value tax only taxes the land. For most middle-class homeowners, the house itself constitutes the majority of the overall property value; replacing property tax with land value tax (such that the tax revenue remains the same) would accordingly result in a lower tax burden for most of the middle class. Replacing sales and income taxes with land value tax in the same vein would in turn reduce middle-class tax burdens further and entirely eliminate lower-class tax burdens. Additionally, one of the side effects of property tax is that it penalizes development; development increases the overall property value, so expanding an apartment complex or what have you results in a higher tax burden. Land value tax doesn't have that issue, and instead does the opposite: you're encouraged to develop your properties as much as possible to cover the land value tax. This in turn helps address housing supply shortages (apartment complexes are motivated to amortize their LVT across as many tenants as possible - and can't price LVT into rents without hurting profit margins, due to land having inelastic supply and therefore land value being driven entirely by demand).
- isthisthingon99 4y agoAh this was very helpful to understand. Maybe after the next civil war...