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Copy of my other responder to a parallel comment: There is an opportunity cost for society from every piece of land we cannot use for something new. That's ref
by ajmurmann 3y ago
Copy of my other responder to a parallel comment:
There is an opportunity cost for society from every piece of land we cannot use for something new. That's reflected by the value of the land. If the value to the owner is much lower than the value to someone else, we aren't using the land efficiently.
It's also unearned income. It's ideal to tax unearned income because you don't create negative incentive for desired activities. It's in essence a tax that comes at no cost to society.
- singleshot_ 3y agoI hear you. Our system is profoundly bad at taxing unrealized gains, though, for some pretty serious reasons. (See also, wealth tax).
- ajmurmann 3y agoYou are right, to some degree this would be taxing unrealized gains which IMO is generally bad. The important part though is that it's taxing a negative externality (the opportunity cost for society).