9 ms·

Behold the rise of neofeudalism: you can already see it in California, thanks to Prop 13. Land value tax would fix this.

by geocon 4y ago

rightbyte 4y ago
> Land value tax would fix this. The banks decide what your house is worth and the gov then tax you based on that. Seems like a way to force people into a never ending grind and kicking out seniors. No thanks.
- geocon 4y ago
  Er, an LVT doesn't tax the house at all, that's precisely the point. It only taxes the land... It's literally just a property tax that doesn't tax the house.
  - tzs 4y ago
    So if I've got 10 acres that I'm keeping as an undeveloped wilderness to provide habitat for migratory birds to use during migrations and you've got 10 acres next to mine with a 200 unit apartment building on it we pay the same amount of tax? That doesn't seem fair since your 10 acres is using way more of nearly every government service property taxes fund and requires more of nearly every government infrastructure that property taxes pay for.
    - unusualmonkey 4y ago
      In that case, I'd imagine the solution would be to ask for a zoning change to the land (changing it's value), or put it in a non-profit which could have special tax treatment - or transfer ownership back to give under specific conditions.
- janalsncm 4y ago
  A LVT is a fixed tax per square foot of land. It incentivizes maximizing the property value on the land and building high density housing there.
  - geocon 4y ago
    To clarify, it's not a flat dollar amount per square foot, it's a flat percentage of value. An acre of land in Wyoming is not taxed the same $/sqft as an acre of land in NYC.
    - daveguy 4y ago
      Why couldn't ther be a tax per sqft? LAT rather than LVT. Would it change incentives in the way gp hypothesizes? Seems like it would.
      - geocon 4y ago
        That would be a terrible idea, frankly, because it will cause gradients of overbuilding/land abandonment and underuse. Think about it this way: you have a city where land is worth $30/sqft/yr in the center, $10 at the edge and $20 in between. If you set the tax at $20/sqft/yr, you will not incentivize people to build enough in the center of the city. It will be just fine in the middle, but it would be impossible to earn enough money from land to pay the tax on the outside of the city, so people would just abandon the land or try to build way more than you would actually want there (in which case the supposed land tax is actually cutting in and taxing labor and property as well)
        daveguy 4y ago
        I didn't mean there would only be a sqft / yr based on the value. I meant there would be a sqft / yr + value. So the city center would still be a higher tax than the edge. The edge would still be worth more to build on because of the lower base-dominant tax. But it does make the edge less accessible to lower incomes due to the base tax. It should probably be a max value or max sqft on a given entity than try to indirectly force that with tax values. There's a reason we have anti-trust laws.
    - jeffreyq 4y ago
      How does "value" get defined here? In the context of LVT.
- zip1234 4y ago
  My understanding is that in most places taxes would go down for homes. They would go up massively for those with vacant lots or a lot of land in prime areas that is being underutilized, which is why LVT is great.
  - rightbyte 4y ago
    My understanding is that people try to live their life and than tech bros and yuppies move in and somehow the taxes go through the roof and you gotta leave. I mean, you sell your house with a lot of lot for a lot to some Facebook manager and move to Florida, but the whole scheme seems sinister to me. Somehow "not getting my neighborhood ruined" is labeled NIMBY:ism nowadays?
    - zip1234 4y ago
      I was specifically responding to the actual effects of LVT in practice. I'm not sure what you mean by sinister and also 'neighborhood ruined'?
IG_Semmelweiss 4y ago
Prop 13 was a direct result of a California court decision. I forget the 1960s case, but the gist of it was it instituted equalization in school budgets out from property taxes in the name of equity. In other words, high property taxes in 1 town were forced to be transfered to the neighboring town with a lower budget, so much so that the transfer had to be make payments by pupil within a $100 band. That was instituted blind to school performance of course. This actually took hold in many states not just California, however CA was the o ly one that forced transfer payments within a $100 band. There are different flavors of this all accross the country Of course, homeowners are not idiots. They dont want their tax dollars wasted. So soon after this case forced these transfer payments, there was a swell of home owners pushing for prop 13. Makes sense. Local taxes to local benefit. If my taxes are going elsewhere, why should i pay more? And so here we are. Almost 50 years later. Prop 13 is here to stay and is the only restraint that communities have against out of control state spending.
- treeman79 4y ago
  There was also the whole issue of older people being forced out of their homes due to the rising property taxes. Turns out they vote in high numbers.
  - rcpt 4y ago
    Lies. Since 1977 (before Prop 13) we've had the California Tax Postponement Program. Low income seniors, the disabled and the blind can defer taxes indefinitely. They have zero pressure from the state to move.
    - seanp2k2 4y ago
      Also, the biggest winners from prop 13 are businesses like Disney: https://www.curbed.com/2020/10/prop-15-california-property-tax-prop-13.html https://www.curbed.com/2020/10/prop-15-california-property-t... Meanwhile, anyone who didn’t buy a house or property for a business 20+ years ago is priced out of the market, so we have tons of low-quality stores and businesses that are insulated from competition. It’s interesting how many free market advocates will throw their values out the window when it benefits them to do so.
poulsbohemian 4y ago
As I don't live in CA, explain to me how this would work? As an outsider, it sounds on the surface a lot like those people who advocate for a flat income tax, IE: you and I both own a half-acre, but I have a single-wide trailer and you have the Hearst Mansion, but we are both taxed the same amount.
- HDThoreaun 4y ago
  That’s the point. If you own a valuable piece of land, the government needs to incentivize you to density so that the community has cheap housing. Putting a single wide on a in demand spot is wasteful and should be punished. More generally, land value tax returns land to its rightful owner, the people in the community. No one created land so it doesn’t make sense to allow people to profit off it.
  - chii 4y ago
    > returns land to its rightful owner, the people in the community. if that was the case, why does somebody currently own it, and who did this current owner buy it from (ala, go up the purchase chain back to the first buyer).
    - HDThoreaun 4y ago
      Mistakes were made. They obtained it from someone who had no right to give it to them in my opinion, although of course rights are a tricky subject and many believe “might makes right” Eventually going up the chain brings us to the government, which again, had no right to give that land away when it belongs to the people. Whether they did it because of corruption or ineptitude is irrelevant.
- geocon 4y ago
  The idea is to tax land as a percentage of its value (notably, not its size). This is because land is a necessary good which is exclusionary: because there is a fixed supply of land, it can only be owned at the expense of someone else. So, let's take the scenario you gave: it depends very much where the mansion and the trailer are. Generally, people build mansions on high-value land and trailers are on low-value land, so the mansion will be taxed more than the trailer (a half acre in LA has a much higher value than a half-acre in rural Nevada where I live). If they are on the exact same lot, though, then yes they would pay the same tax. The idea is that taxing this way incentivizes the best use of land. Imagine that you have identical plots in New York, one is a big apartment complex, and the other a parking lot. With a property tax, you take a huge tax penalty for building, and so the housing complex pays a lot of taxes and the parking lot almost nothing. With a land value tax, however, the parking lot and the housing complex pay the same amount in tax, so it incentivizes the owner of the lot to build a more profitable housing complex there as well, and they take no tax penalty. Prop 13 in CA is a law that freezes property tax assessments at sale, so you have people who are paying taxes on a home currently worth $2 million as if it were only worth the $150k they bought it for in 1980. This means it is always better just to rent the house out than sell it, since you have a huge tax benefit, making housing almost impossible to buy. Worse, you can pass the frozen assessment on in your will. So it is almost literally creating a quasi-landed gentry class.

Behold the rise of neofeudalism: you can already see it in California, thanks to Prop 13. Land value tax would fix this.

by geocon 4y ago

Behold the rise of neofeudalism: you can already see it in California, thanks to Prop 13. Land value tax would fix this.

rightbyte 4y ago

> Land value tax would fix this. The banks decide what your house is worth and the gov then tax you based on that. Seems like a way to force people into a never ending grind and kicking out seniors. No thanks.

geocon 4y ago
Er, an LVT doesn't tax the house at all, that's precisely the point. It only taxes the land... It's literally just a property tax that doesn't tax the house.
- tzs 4y ago
  So if I've got 10 acres that I'm keeping as an undeveloped wilderness to provide habitat for migratory birds to use during migrations and you've got 10 acres next to mine with a 200 unit apartment building on it we pay the same amount of tax? That doesn't seem fair since your 10 acres is using way more of nearly every government service property taxes fund and requires more of nearly every government infrastructure that property taxes pay for.
  - unusualmonkey 4y ago
    In that case, I'd imagine the solution would be to ask for a zoning change to the land (changing it's value), or put it in a non-profit which could have special tax treatment - or transfer ownership back to give under specific conditions.
janalsncm 4y ago
A LVT is a fixed tax per square foot of land. It incentivizes maximizing the property value on the land and building high density housing there.
- geocon 4y ago
  To clarify, it's not a flat dollar amount per square foot, it's a flat percentage of value. An acre of land in Wyoming is not taxed the same $/sqft as an acre of land in NYC.
  - daveguy 4y ago
    Why couldn't ther be a tax per sqft? LAT rather than LVT. Would it change incentives in the way gp hypothesizes? Seems like it would.
    - geocon 4y ago
      That would be a terrible idea, frankly, because it will cause gradients of overbuilding/land abandonment and underuse. Think about it this way: you have a city where land is worth $30/sqft/yr in the center, $10 at the edge and $20 in between. If you set the tax at $20/sqft/yr, you will not incentivize people to build enough in the center of the city. It will be just fine in the middle, but it would be impossible to earn enough money from land to pay the tax on the outside of the city, so people would just abandon the land or try to build way more than you would actually want there (in which case the supposed land tax is actually cutting in and taxing labor and property as well)
      - daveguy 4y ago
        I didn't mean there would only be a sqft / yr based on the value. I meant there would be a sqft / yr + value. So the city center would still be a higher tax than the edge. The edge would still be worth more to build on because of the lower base-dominant tax. But it does make the edge less accessible to lower incomes due to the base tax. It should probably be a max value or max sqft on a given entity than try to indirectly force that with tax values. There's a reason we have anti-trust laws.
  - jeffreyq 4y ago
    How does "value" get defined here? In the context of LVT.
zip1234 4y ago
My understanding is that in most places taxes would go down for homes. They would go up massively for those with vacant lots or a lot of land in prime areas that is being underutilized, which is why LVT is great.
- rightbyte 4y ago
  My understanding is that people try to live their life and than tech bros and yuppies move in and somehow the taxes go through the roof and you gotta leave. I mean, you sell your house with a lot of lot for a lot to some Facebook manager and move to Florida, but the whole scheme seems sinister to me. Somehow "not getting my neighborhood ruined" is labeled NIMBY:ism nowadays?
  - zip1234 4y ago
    I was specifically responding to the actual effects of LVT in practice. I'm not sure what you mean by sinister and also 'neighborhood ruined'?

IG_Semmelweiss 4y ago

Prop 13 was a direct result of a California court decision. I forget the 1960s case, but the gist of it was it instituted equalization in school budgets out from property taxes in the name of equity. In other words, high property taxes in 1 town were forced to be transfered to the neighboring town with a lower budget, so much so that the transfer had to be make payments by pupil within a $100 band. That was instituted blind to school performance of course. This actually took hold in many states not just California, however CA was the o ly one that forced transfer payments within a $100 band. There are different flavors of this all accross the country Of course, homeowners are not idiots. They dont want their tax dollars wasted. So soon after this case forced these transfer payments, there was a swell of home owners pushing for prop 13. Makes sense. Local taxes to local benefit. If my taxes are going elsewhere, why should i pay more? And so here we are. Almost 50 years later. Prop 13 is here to stay and is the only restraint that communities have against out of control state spending.

treeman79 4y ago
There was also the whole issue of older people being forced out of their homes due to the rising property taxes. Turns out they vote in high numbers.
- rcpt 4y ago
  Lies. Since 1977 (before Prop 13) we've had the California Tax Postponement Program. Low income seniors, the disabled and the blind can defer taxes indefinitely. They have zero pressure from the state to move.
  - seanp2k2 4y ago
    Also, the biggest winners from prop 13 are businesses like Disney: https://www.curbed.com/2020/10/prop-15-california-property-tax-prop-13.html https://www.curbed.com/2020/10/prop-15-california-property-t... Meanwhile, anyone who didn’t buy a house or property for a business 20+ years ago is priced out of the market, so we have tons of low-quality stores and businesses that are insulated from competition. It’s interesting how many free market advocates will throw their values out the window when it benefits them to do so.

poulsbohemian 4y ago

As I don't live in CA, explain to me how this would work? As an outsider, it sounds on the surface a lot like those people who advocate for a flat income tax, IE: you and I both own a half-acre, but I have a single-wide trailer and you have the Hearst Mansion, but we are both taxed the same amount.

HDThoreaun 4y ago
That’s the point. If you own a valuable piece of land, the government needs to incentivize you to density so that the community has cheap housing. Putting a single wide on a in demand spot is wasteful and should be punished. More generally, land value tax returns land to its rightful owner, the people in the community. No one created land so it doesn’t make sense to allow people to profit off it.
- chii 4y ago
  > returns land to its rightful owner, the people in the community. if that was the case, why does somebody currently own it, and who did this current owner buy it from (ala, go up the purchase chain back to the first buyer).
  - HDThoreaun 4y ago
    Mistakes were made. They obtained it from someone who had no right to give it to them in my opinion, although of course rights are a tricky subject and many believe “might makes right” Eventually going up the chain brings us to the government, which again, had no right to give that land away when it belongs to the people. Whether they did it because of corruption or ineptitude is irrelevant.
geocon 4y ago
The idea is to tax land as a percentage of its value (notably, not its size). This is because land is a necessary good which is exclusionary: because there is a fixed supply of land, it can only be owned at the expense of someone else. So, let's take the scenario you gave: it depends very much where the mansion and the trailer are. Generally, people build mansions on high-value land and trailers are on low-value land, so the mansion will be taxed more than the trailer (a half acre in LA has a much higher value than a half-acre in rural Nevada where I live). If they are on the exact same lot, though, then yes they would pay the same tax. The idea is that taxing this way incentivizes the best use of land. Imagine that you have identical plots in New York, one is a big apartment complex, and the other a parking lot. With a property tax, you take a huge tax penalty for building, and so the housing complex pays a lot of taxes and the parking lot almost nothing. With a land value tax, however, the parking lot and the housing complex pay the same amount in tax, so it incentivizes the owner of the lot to build a more profitable housing complex there as well, and they take no tax penalty. Prop 13 in CA is a law that freezes property tax assessments at sale, so you have people who are paying taxes on a home currently worth $2 million as if it were only worth the $150k they bought it for in 1980. This means it is always better just to rent the house out than sell it, since you have a huge tax benefit, making housing almost impossible to buy. Worse, you can pass the frozen assessment on in your will. So it is almost literally creating a quasi-landed gentry class.