5 ms·

That device you used to post that comment, what, did you create it? Those clothes you are wearing, did you create them? The car you drive, did you create it? I

• phkahler 3y ago
  >> You wouldn’t own _anything_ worth any value in the modern world. That seems to be the goal. If everyone rents everything that would increase dollars flowing in the economy right? We are all here to work for the man, and rent the air when we inhale.
• harimau777 3y ago
  The difference is that someone created the products that I own and I payed them for it. However, no one (at least no one human depending on your religious beliefs) created the land.
  • saxonww 3y ago
    Someone created the improvements on it, though. Which is most of what you're paying for when you buy or rent a place to live. This isn't going to change much about landlords. If anything, it will increase the amount of housing rented through landlords, because the land value tax will make it uneconomical for more people to own their own homes. In a high value area, the only people who would be able to do so are the very rich.
    • harimau777 3y ago
      A land value tax seeks to only tax the value of the land itself, not the improvements. Of course that's not always easy to assess, but neither are property values for normal property taxes. Even setting that aside, if the land value taxes on the land that someone owns dramatically increase then that means the value of their property has dramatically increased, and they can sell the land for a dramatic profit. Certainly it sucks that someone might have to sell; however, don't think that someone who becomes rich due to their home value appreciating is really much of a victim in the grand scheme of things.
      • s1artibartfast 3y ago
        The land value in absence of human activity is zero. All value stems from improvements made by people, either on the land, or nearby.
        • lmm 3y ago
          > All value stems from improvements made by people, either on the land, or nearby. Sure. Most of the value comes from the efforts of people who have nothing in particular to do with the "owner" of the land though.
        • epistasis 3y ago
          Exactly. And that's why taxing the land itself—and therefore access to all those improvements and amenities—is a good way to allocate it. If somebody is sitting on a prime seat in the hot tub, and they don't really care very much about it, and there's a line of 20 people waiting to get in, we have a wasted resource. Revealing true preferences by having people put some skin in the game means that more people are happy, more people are productive, and society works better.
          • s1artibartfast 3y ago
            That is a great argument for never building a hot tub, or participating in a project to build one. Why bother making a tub, a neighborhood, or a community if it can simply be taken from you. Id rather burn mine to the ground than have it taken away just because someone else wants it more. They might not even want it more, but they just have more money.
            • epistasis 3y ago
              I don't think you understand, it can't be taken from you, at least no more than now. Nearly every single person will pay less tax on their home under LVT than a property tax, too.
              • 3y ago
    • jmoss20 3y ago
      The problem is exactly that the improvements are not most of what you're paying for, at least in many locales where this sort of policy would make a difference.
    • lelandbatey 3y ago
      In high value land areas, the only people who own their own homes are those who are either very rich, or who were very lucky in the past and who are now very rich due to having bought a home in the past.
      • eru 3y ago
        I appreciate the sentiment, but that's not really true. If you can afford the rent for your home, you can afford to own it via a mortgage. (Assuming functioning capital markets and assuming low enough transaction costs.) Something like this has to be true, because that's how landlords pay for their cost of capital and maintenance etc. If rent couldn't cover that, but for some reason home prices still stayed high, and sane land lord would sell the property and put the proceeds in some investment that does cover its cost of capital.
        • jandrewrogers 3y ago
          > If you can afford the rent for your home, you can afford to own it via a mortgage. This does not follow. It assumes the landlord has the same cost basis and cashflow requirements as the person with the mortgage, which is almost never the case. Your mortgage interest payments alone can be higher than a rent that allows a landlord to make a profit. This is not uncommon. Rents in Seattle, for example, are far lower than the equivalent mortgage if you bought the place.
          • eru 3y ago
            Why does anyone in Seattle buy then?
            • jandrewrogers 3y ago
              Because most people don’t live their life by min-maxing their finances. They have other non-financial objectives that take priority over being efficient with money. You might as well ask why people buy nice cars, eat out at restaurants, etc. If people optimized for financial efficiency then the world would look very different, and the median household in the US has a lot of cash leftover to burn even after accounting for ordinary lifestyle expenses (~$12,000 per year, per the US BLS). Seattle, of course, is much wealthier and higher income than the US median so there is more money to burn. That said, most people struggle with financial and investment math generally, even when they sincerely attempt to make prudent financial decisions. I can’t really blame people for not knowing how to build and reason about financial models, it isn’t a skill you ordinarily pick up in day-to-day life.
    • eru 3y ago
      > This isn't going to change much about landlords. If anything, it will increase the amount of housing rented through landlords, because the land value tax will make it uneconomical for more people to own their own homes. In a high value area, the only people who would be able to do so are the very rich. No. A land value tax doesn't make any difference at all to the ongoing cost of owning a given piece of land. That's because land value taxes decrease the price of a piece of land (via market mechanisms), so that the sum of tax plus ongoing capital cost is the as before. A simplified example: without LVT you might be able to buy a piece of land with a mortgage that costs $1000 per month. Afterwards, you can buy the same piece of land with a smaller mortgage of $200 dollar a month, but you are paying $800 in LVT. If you own the land outright, you still have opportunity costs of capital. But it's easier to explain with a mortgage. Also, if you already own land then the introduction of an LVT will definitely put a one-off hit on your finances. (Unless the government compensates you.) But there's no long running impact.
    • shiroiuma 3y ago
      >If anything, it will increase the amount of housing rented through landlords, because the land value tax will make it uneconomical for more people to own their own homes. You do realize condominiums exist, right? You don't need to own an entire parcel of land to own your own home.
      • saxonww 3y ago
        Do you think condominiums are more or less common than apartments for rent?
• epistasis 3y ago
  The difference is that they are making more phones, more cars, more clothes, etc. They are not finite. As the saying goes, they aren't making more land. With a constrained resource that nobody created, the least efficient way to allocate it is to just let whoever got there first have it. A far better way would be to have competitive bidding so whoever thinks they can do a better job gets a shot at it.