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Land value taxes have existed and do exist around the world (along with variations on the theme, such as leasehold land that is leased from the government for a

Land value taxes have existed and do exist around the world (along with variations on the theme, such as leasehold land that is leased from the government for a long time). They don't result in the behaviour you describe. Most land value tax proposals are also revenue neutral (e.g. lower income tax in exchange for higher land value tax), so the balance sheet should end up looking the same for companies and individuals, but with higher land holding costs and lower land purchasing costs.

keiferski 3y ago
But isn’t the proposal that land value taxes will replace income taxes? How is it not advantageous for a company to then reduce its tax burden by moving to a place with lower land taxes? I don’t think this happens today because income taxes are federal and not dramatically different between physical locations. The implementation of a land value tax as the primarily tax would seem to change this, no? To use a direct example: let’s say BigCo is paying 20% of revenue in taxes today. Tomorrow, this changes, and they are paying the same amount, except the source is not revenue, but the value of the land they occupy. They can now move to a location with lower land values and pay less than the the 20% equivalent + keep the current revenue without being taxed on it. Why would the company not choose to do this? That is my question: doesn’t this set up incentives for companies to continually move to lower land tax locations and minimize the land value that they currently own?
- diordiderot 3y ago
  > How is it not advantageous for a company to then reduce its tax burden by moving to a place with lower land taxes? Forget all the numbers and try to answer the question: Why doesn't JP Morgan move their headquarters to Rawlins Wyoming?
  - keiferski 3y ago
    I think I already answered this: because their taxes would basically be the same. They won’t be avoiding 20-30% in taxes by moving there. And yes, of course there’s the factor of New York’s value as a cultural hotspot, base of workers, etc. but as I said, the growth of remote work will probably have a pretty serious effect on this. We’re already seeing panic signals from city governments trying to get people to stop working remotely. I don’t think it’s inconceivable that the JP Morgan of 2040 would have a predominately remote workforce and have no issues moving their headquarters to Rawlins if it means they avoid a massive land value tax. It doesn’t really need to be that extreme of an example, though: there are plenty of smaller cities in the NYC metro area that are more attractive and fulfill the same role as a low-tax zone (if taxes are based on land values.)
    - db48x 3y ago
      Why would that be a problem? The tax revenue of Manhattan goes down because JP Morgan is no longer headquartered there, but Manhattan also doesn’t have to provide as many services. All of those employees who used to live in Manhattan needed roads to drive on and police patrols and tree trimming and whatever else the city of Manhattan does. That’s a lot of money that Manhattan saves by not having as many people living there. Now all of those people are working remotely, living wherever they want to live, and are no longer forced to live in Manhattan. They no longer have to commute, so they're not adding traffic at all. They still need services, but they’re paying property taxes in whatever place they live in, so those are still paid for. In fact, the “headquarters” is really just the CEO’s house, because now _everyone_ is working remotely. JP Morgan still needs bank branches all over the place, and some of those are in Manhattan. JP Morgan must pay the land–value tax for the land that those branches occupy, and that money pays for the city services required by the branches. They’ll still have the same number of branches before and after the move, so that won’t change. JP Morgan still needs datacenters. The largest ones will be located where the land value is the lowest, of course. However, it will still be necessary to interconnect with multiple backbones, and the best place to do that is in the city where many companies are very close to each other. That won't change either. I don't see how this would be a negative for anybody. People who want to live in a dense city still can. Businesses who want to operate in a dense city with lots of nearby customers will still do so, even if the land value taxes are higher; the revenue will be higher as well so it will be worth it.
      - throwawa14223 3y ago
        Maybe I’m thinking about this wrong, but wouldn’t it incentivize people to try as hard as possible not to live in the same district as people who need redistributive government services?
        db48x 3y ago
        What do districts have to do with it?
      - sokoloff 3y ago
- thfuran 3y ago
  >I don’t think this happens today because income taxes are federal and not dramatically different between physical locations. It’s true that there’s federal income tax in the US, but there’s still significant variation in state and local taxes.
- namlem 3y ago
  Because a place with lower land taxes will have fewer workers and worse infrastructure. Companies with a small land footprint will end up paying less taxes, companies with a large land footprint will end up paying more. If a company needs a lot of land to do business, then it is good for them to move to a place where land is cheaper because others could make more efficient use of that land.

keiferski 3y ago

But isn’t the proposal that land value taxes will replace income taxes? How is it not advantageous for a company to then reduce its tax burden by moving to a place with lower land taxes? I don’t think this happens today because income taxes are federal and not dramatically different between physical locations. The implementation of a land value tax as the primarily tax would seem to change this, no? To use a direct example: let’s say BigCo is paying 20% of revenue in taxes today. Tomorrow, this changes, and they are paying the same amount, except the source is not revenue, but the value of the land they occupy. They can now move to a location with lower land values and pay less than the the 20% equivalent + keep the current revenue without being taxed on it. Why would the company not choose to do this? That is my question: doesn’t this set up incentives for companies to continually move to lower land tax locations and minimize the land value that they currently own?

diordiderot 3y ago
> How is it not advantageous for a company to then reduce its tax burden by moving to a place with lower land taxes? Forget all the numbers and try to answer the question: Why doesn't JP Morgan move their headquarters to Rawlins Wyoming?
- keiferski 3y ago
  I think I already answered this: because their taxes would basically be the same. They won’t be avoiding 20-30% in taxes by moving there. And yes, of course there’s the factor of New York’s value as a cultural hotspot, base of workers, etc. but as I said, the growth of remote work will probably have a pretty serious effect on this. We’re already seeing panic signals from city governments trying to get people to stop working remotely. I don’t think it’s inconceivable that the JP Morgan of 2040 would have a predominately remote workforce and have no issues moving their headquarters to Rawlins if it means they avoid a massive land value tax. It doesn’t really need to be that extreme of an example, though: there are plenty of smaller cities in the NYC metro area that are more attractive and fulfill the same role as a low-tax zone (if taxes are based on land values.)
  - db48x 3y ago
    Why would that be a problem? The tax revenue of Manhattan goes down because JP Morgan is no longer headquartered there, but Manhattan also doesn’t have to provide as many services. All of those employees who used to live in Manhattan needed roads to drive on and police patrols and tree trimming and whatever else the city of Manhattan does. That’s a lot of money that Manhattan saves by not having as many people living there. Now all of those people are working remotely, living wherever they want to live, and are no longer forced to live in Manhattan. They no longer have to commute, so they're not adding traffic at all. They still need services, but they’re paying property taxes in whatever place they live in, so those are still paid for. In fact, the “headquarters” is really just the CEO’s house, because now _everyone_ is working remotely. JP Morgan still needs bank branches all over the place, and some of those are in Manhattan. JP Morgan must pay the land–value tax for the land that those branches occupy, and that money pays for the city services required by the branches. They’ll still have the same number of branches before and after the move, so that won’t change. JP Morgan still needs datacenters. The largest ones will be located where the land value is the lowest, of course. However, it will still be necessary to interconnect with multiple backbones, and the best place to do that is in the city where many companies are very close to each other. That won't change either. I don't see how this would be a negative for anybody. People who want to live in a dense city still can. Businesses who want to operate in a dense city with lots of nearby customers will still do so, even if the land value taxes are higher; the revenue will be higher as well so it will be worth it.
    - throwawa14223 3y ago
      Maybe I’m thinking about this wrong, but wouldn’t it incentivize people to try as hard as possible not to live in the same district as people who need redistributive government services?
      - db48x 3y ago
        What do districts have to do with it?
    - sokoloff 3y ago
thfuran 3y ago
>I don’t think this happens today because income taxes are federal and not dramatically different between physical locations. It’s true that there’s federal income tax in the US, but there’s still significant variation in state and local taxes.
namlem 3y ago
Because a place with lower land taxes will have fewer workers and worse infrastructure. Companies with a small land footprint will end up paying less taxes, companies with a large land footprint will end up paying more. If a company needs a lot of land to do business, then it is good for them to move to a place where land is cheaper because others could make more efficient use of that land.