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Agreed - the many counties in the US already have a portion of the property tax bill coming from a land value tax/Georgianism. California property tax bills ha

Agreed - the many counties in the US already have a portion of the property tax bill coming from a land value tax/Georgianism. California property tax bills have two components [1][2]: - structure/improvement assessed value - land value assessed value The land value component is re-accessed frequently and changes based on comparables (presumably but its mostly black box). The question is to what degree/portion of Georgianism to apply and what to do when the land value component starts going up infinitely that its starts hurting the electorate. Do you introduce alternative tax sources (i.e. income)? Do you introduce caps on annual land value increases or add a bunch of waivers for specific use cases (i.e. primary homes, day cares)? Or do you just stick with the unrelenting assessed value increases and go free market/no pain no gain/survival of the fittest on the electorate? Basically Texas is basically the US experiment closest to pure Georgianism. [1] https://www.propertytax.lacounty.gov/Home/AnnualSecuredProperty https://www.propertytax.lacounty.gov/Home/AnnualSecuredPrope...

ethanbond 3y ago
Why would the land value spiral upwards? At some point the land becomes not worth buying/developing, so there’s still downward pressure on price. Or are you suggesting the tax rate will spiral upward infinitely? Again, at some point that just means it’s not worth buying the land unless the productivity possible on it is through the roof as well.
- somethoughts 3y ago
  Here would be an example: North Texas homeowners getting 'sticker shock' with new property tax appraisals https://www.youtube.com/watch?v=Nu5jAqB88tc https://www.youtube.com/watch?v=Nu5jAqB88tc
  - eru 3y ago
    That's an increase, but is it a spiral?
    - somethoughts 3y ago
      Agree - for most people its an increase, but for a homeowner on a fixed income it can feel the equivalent to a spiral.
      - ethanbond 3y ago
        The “spiral” question is because I’m looking for a positive feedback loop. Just an increase (even a substantial one) is way less alarming.
Scaevolus 3y ago
You're forgetting the critical 3rd component of California property tax bills: Prop 13.
- somethoughts 3y ago
  Perhaps my response was a bit long but I did attempt to address it. Perhaps I can elaborate: The question is to what degree/portion of Georgianism to apply and what to do when the land value component starts going up infinitely that its starts hurting the electorate. - Do you introduce alternative tax sources (i.e. increase income taxes on billionaires instead as in California)? - Do you introduce caps on annual land value increases (i.e. Prop 13 as in California) or add a bunch of waivers for specific use cases (i.e. primary homes also know as the homestead exception, day cares as they are starting to do in Texas)?
  - KptMarchewa 3y ago
    Proper, non prop 13 land value tax limits this infinite value growth.
    - somethoughts 3y ago
      Agree - I think pure land value/pure Georgism works best when there are no limits on development (zoning/water availability/topography) and there's room for infinite sprawl into adjacent flat land. As mentioned I think Texas will be interesting to watch as its pretty close pure Georgianism - the state's revenue is mostly/all LVT property taxes - but they are starting to see exponential growth - so it will be interesting to see if they stick to it or resort to California style Prop 13.
  - eru 3y ago
    Exceptions are a bad idea, and as bad ideas tend to go, popular with voters. Exempting by use, like primary homes or day cares, now means that the government is in the business of snooping on you to make sure that the primary home you declare is also your actual primary home. You also give well-off people with a bigger primary home (or owning a home at all instead of renting) a big tax break. Welfare for the well-off is not an efficient use of funds. > - Do you introduce alternative tax sources (i.e. increase income taxes on billionaires instead as in California)? If you do that, you lower your land value tax take. (Of course, if you already already sabotaged your land value tax base via exemption and limits, as per your second point, then bad decisions beget more bad decisions and special taxes on billionaires seem like a good idea..)
gnopgnip 3y ago
The economy is not a zero sum game. If a land tax leads to increased economic activity it can actually result in a lower tax rate and generate more than enough tax to pay for the services the government provides.
- PaulDavisThe1st 3y ago
  Could you provide some examples of where this has happened?
  - gnopgnip 3y ago
    Yes, Japan, Korea and Signapore are examples where a more efficient property tax system led to a huge economic expansion. Japanese Land Tax Reform of 1873 is probably the most well known example. It also involved lowering property tax rates.
- xienze 3y ago
  Do you think this would actually happen in a place with as inefficient and corrupt local government as Detroit? Be honest.
  - jimmyk2 3y ago
    My guess is that the Illitch and Gilbert tax bills are about to plummet as their highly improved and revenue generating properties get averaged out with 1950’s mid rises. Bonus points if we can crank up the tax bill on families which inherited their home but never had the money to make improvements.
  - gnopgnip 3y ago
    Detroit probably has more to gain from more efficient land use from a property tax perspective because of it's history of corruption and inefficiency
LVTfan 3y ago
As I understand it, what prompted Prop 13, aside from the desire to serve the owners of the best land, was that while land values were rising astronomically, municipalities and elected representatives were eager to serve their constituents, who naturally wanted all the amenities that their governments cared to offer. And the municipalities -- their local elected representatives -- complied. They didn't reduce the millage rate each year to stay revenue neutral. No, they used those funds to supply those desired public goods. And as land values rose, taxes rose. And eventually, people whose homes were appreciating by half (or 100% or more) of their annual incomes, increasing their home equity at an awesome rate, started objecting to the taxes that were paying for all those public goods. Remember that in those days, California's colleges and universities were regarded as among the very best. And they changed a lot of lives, particularly of those in the school districts so well funded by those taxes that were ever-rising because the local officials didn't lower the tax rate to remain revenue neutral. I don't see any sign that California, under Prop 13, has any resemblance to Georgism. Take a look at a listing at realtor.com for a home in any California city or suburb, and focus on the "Property History" section, on (1) asking and selling prices; and, under that (2) assessment and tax history. (Choose the "see more" option in each section.) Then look at the assessments vs the current asking price. The land and "additions" figures rise by no more than 2% per year, while the asking and selling prices are far above the assessment on which taxes are based. "The land value component is re-accessed frequently and changes based on comparables (presumably but its mostly black box)." No, they rise by 2% per year, until a sale takes place, at which point their sum is adjusted to the selling price. But the house next door, of similar age and condition, but not sold in 20 or 40 years, is receiving a huge subsidy, paying a tiny fraction of what the newly sold neighboring buyers are paying. Where is the equity in that? The answer, for other states, is not assessment caps or capping taxes at a certain percentage of assessed value, but reducing the millage rate to remain revenue neutral, unless the local property owners approve a millage rate that is higher than revenue neutral because they actively desire more services, better schools, etc.
- somethoughts 3y ago
  Agreed. I was primarily highlighting that California (and many states) tax code has components of LVT already and therefore have elements/influences of Georgism. It's just not purist Georgism. And even if LVT was the only source of tax income - it could be done at punitive level to prevent all land speculation or be more relaxed. I think somethings that I haven't seen addressed by pure Georgists: - Where to stick schools and playgrounds to support the newly built residential towers - Water/sewage/gas improvements/transportation stresses - Displaced people who get kicked out of the single family home if no private developer wants to build condos for them From what I can tell - it'd require proper pre-planned zoning when the city is in its early stages and for the stuff to be written into the city charter. Or some strong government intervention that could just plop new 3 story schools and 10 store public housing towers where it wants.
yumbaya 3y ago
Texas is not Georgist. Property tax is assessed on the full market value of property, not on land. And Texas’s land speculation and sprawling, inefficient land use reflects this.
- somethoughts 3y ago
  Agreed - its not pure Georgism. It is however the closest experiment to Georgism in the US as far as I can tell having looked at their tax revenue sources (mostly property taxes with some petroleum production tax and no income tax) and the fact that they will attempt to increase the property taxes to market value on an empty lot. For now at least... [1] https://www.dallasnews.com/news/watchdog/2022/04/20/property-tax-alert-what-does-land-value-mean-for-your-taxes-watchdog-curious-texas-can-tell-you/ https://www.dallasnews.com/news/watchdog/2022/04/20/property... "What we're trying to do is value that land as if it were vacant — or that lot — and ready to be put to its highest and best use, which is to build a single-family home on, And we do that by looking at lot sales of what would be a competitive or a substitute product."
  - yumbaya 3y ago
    It’s good they’re trying to match market value. They come up with that assessment by assessing the land value, and the structure value, and adding them together. But they are still taxing improvements at the same rate as the land. Sure, land value can rise and become a greater portion of the total market value. But this is still conventional property taxation. In a pure LVT system the structure should play no part. The landowner should be free to build whatever they want on their land without such building causing a change to their taxes. A partial step towards LVT would be a “split rate” system, where the value of the land is taxed at a higher rate, say 5%, than the value of the structures, which could be 0.5%. Pennsylvania is the example case here in the US: https://www.strongtowns.org/journal/2019/3/6/non-glamorous-gains-the-pennsylvania-land-tax-experiment https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...
  - bostonvaulter2 3y ago
    I thought Philadelphia was closer to a LVT?

ethanbond 3y ago

Why would the land value spiral upwards? At some point the land becomes not worth buying/developing, so there’s still downward pressure on price. Or are you suggesting the tax rate will spiral upward infinitely? Again, at some point that just means it’s not worth buying the land unless the productivity possible on it is through the roof as well.

somethoughts 3y ago
Here would be an example: North Texas homeowners getting 'sticker shock' with new property tax appraisals https://www.youtube.com/watch?v=Nu5jAqB88tc https://www.youtube.com/watch?v=Nu5jAqB88tc
- eru 3y ago
  That's an increase, but is it a spiral?
  - somethoughts 3y ago
    Agree - for most people its an increase, but for a homeowner on a fixed income it can feel the equivalent to a spiral.
    - ethanbond 3y ago
      The “spiral” question is because I’m looking for a positive feedback loop. Just an increase (even a substantial one) is way less alarming.

Scaevolus 3y ago

You're forgetting the critical 3rd component of California property tax bills: Prop 13.

somethoughts 3y ago
Perhaps my response was a bit long but I did attempt to address it. Perhaps I can elaborate: The question is to what degree/portion of Georgianism to apply and what to do when the land value component starts going up infinitely that its starts hurting the electorate. - Do you introduce alternative tax sources (i.e. increase income taxes on billionaires instead as in California)? - Do you introduce caps on annual land value increases (i.e. Prop 13 as in California) or add a bunch of waivers for specific use cases (i.e. primary homes also know as the homestead exception, day cares as they are starting to do in Texas)?
- KptMarchewa 3y ago
  Proper, non prop 13 land value tax limits this infinite value growth.
  - somethoughts 3y ago
    Agree - I think pure land value/pure Georgism works best when there are no limits on development (zoning/water availability/topography) and there's room for infinite sprawl into adjacent flat land. As mentioned I think Texas will be interesting to watch as its pretty close pure Georgianism - the state's revenue is mostly/all LVT property taxes - but they are starting to see exponential growth - so it will be interesting to see if they stick to it or resort to California style Prop 13.
- eru 3y ago
  Exceptions are a bad idea, and as bad ideas tend to go, popular with voters. Exempting by use, like primary homes or day cares, now means that the government is in the business of snooping on you to make sure that the primary home you declare is also your actual primary home. You also give well-off people with a bigger primary home (or owning a home at all instead of renting) a big tax break. Welfare for the well-off is not an efficient use of funds. > - Do you introduce alternative tax sources (i.e. increase income taxes on billionaires instead as in California)? If you do that, you lower your land value tax take. (Of course, if you already already sabotaged your land value tax base via exemption and limits, as per your second point, then bad decisions beget more bad decisions and special taxes on billionaires seem like a good idea..)

gnopgnip 3y ago

The economy is not a zero sum game. If a land tax leads to increased economic activity it can actually result in a lower tax rate and generate more than enough tax to pay for the services the government provides.

PaulDavisThe1st 3y ago
Could you provide some examples of where this has happened?
- gnopgnip 3y ago
  Yes, Japan, Korea and Signapore are examples where a more efficient property tax system led to a huge economic expansion. Japanese Land Tax Reform of 1873 is probably the most well known example. It also involved lowering property tax rates.
xienze 3y ago
Do you think this would actually happen in a place with as inefficient and corrupt local government as Detroit? Be honest.
- jimmyk2 3y ago
  My guess is that the Illitch and Gilbert tax bills are about to plummet as their highly improved and revenue generating properties get averaged out with 1950’s mid rises. Bonus points if we can crank up the tax bill on families which inherited their home but never had the money to make improvements.
- gnopgnip 3y ago
  Detroit probably has more to gain from more efficient land use from a property tax perspective because of it's history of corruption and inefficiency

LVTfan 3y ago

As I understand it, what prompted Prop 13, aside from the desire to serve the owners of the best land, was that while land values were rising astronomically, municipalities and elected representatives were eager to serve their constituents, who naturally wanted all the amenities that their governments cared to offer. And the municipalities -- their local elected representatives -- complied. They didn't reduce the millage rate each year to stay revenue neutral. No, they used those funds to supply those desired public goods. And as land values rose, taxes rose. And eventually, people whose homes were appreciating by half (or 100% or more) of their annual incomes, increasing their home equity at an awesome rate, started objecting to the taxes that were paying for all those public goods. Remember that in those days, California's colleges and universities were regarded as among the very best. And they changed a lot of lives, particularly of those in the school districts so well funded by those taxes that were ever-rising because the local officials didn't lower the tax rate to remain revenue neutral. I don't see any sign that California, under Prop 13, has any resemblance to Georgism. Take a look at a listing at realtor.com for a home in any California city or suburb, and focus on the "Property History" section, on (1) asking and selling prices; and, under that (2) assessment and tax history. (Choose the "see more" option in each section.) Then look at the assessments vs the current asking price. The land and "additions" figures rise by no more than 2% per year, while the asking and selling prices are far above the assessment on which taxes are based. "The land value component is re-accessed frequently and changes based on comparables (presumably but its mostly black box)." No, they rise by 2% per year, until a sale takes place, at which point their sum is adjusted to the selling price. But the house next door, of similar age and condition, but not sold in 20 or 40 years, is receiving a huge subsidy, paying a tiny fraction of what the newly sold neighboring buyers are paying. Where is the equity in that? The answer, for other states, is not assessment caps or capping taxes at a certain percentage of assessed value, but reducing the millage rate to remain revenue neutral, unless the local property owners approve a millage rate that is higher than revenue neutral because they actively desire more services, better schools, etc.

somethoughts 3y ago
Agreed. I was primarily highlighting that California (and many states) tax code has components of LVT already and therefore have elements/influences of Georgism. It's just not purist Georgism. And even if LVT was the only source of tax income - it could be done at punitive level to prevent all land speculation or be more relaxed. I think somethings that I haven't seen addressed by pure Georgists: - Where to stick schools and playgrounds to support the newly built residential towers - Water/sewage/gas improvements/transportation stresses - Displaced people who get kicked out of the single family home if no private developer wants to build condos for them From what I can tell - it'd require proper pre-planned zoning when the city is in its early stages and for the stuff to be written into the city charter. Or some strong government intervention that could just plop new 3 story schools and 10 store public housing towers where it wants.

yumbaya 3y ago

Texas is not Georgist. Property tax is assessed on the full market value of property, not on land. And Texas’s land speculation and sprawling, inefficient land use reflects this.

somethoughts 3y ago
Agreed - its not pure Georgism. It is however the closest experiment to Georgism in the US as far as I can tell having looked at their tax revenue sources (mostly property taxes with some petroleum production tax and no income tax) and the fact that they will attempt to increase the property taxes to market value on an empty lot. For now at least... [1] https://www.dallasnews.com/news/watchdog/2022/04/20/property-tax-alert-what-does-land-value-mean-for-your-taxes-watchdog-curious-texas-can-tell-you/ https://www.dallasnews.com/news/watchdog/2022/04/20/property... "What we're trying to do is value that land as if it were vacant — or that lot — and ready to be put to its highest and best use, which is to build a single-family home on, And we do that by looking at lot sales of what would be a competitive or a substitute product."
- yumbaya 3y ago
  It’s good they’re trying to match market value. They come up with that assessment by assessing the land value, and the structure value, and adding them together. But they are still taxing improvements at the same rate as the land. Sure, land value can rise and become a greater portion of the total market value. But this is still conventional property taxation. In a pure LVT system the structure should play no part. The landowner should be free to build whatever they want on their land without such building causing a change to their taxes. A partial step towards LVT would be a “split rate” system, where the value of the land is taxed at a higher rate, say 5%, than the value of the structures, which could be 0.5%. Pennsylvania is the example case here in the US: https://www.strongtowns.org/journal/2019/3/6/non-glamorous-gains-the-pennsylvania-land-tax-experiment https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...
- bostonvaulter2 3y ago
  I thought Philadelphia was closer to a LVT?