4 ms·

> It would seem that the land value of both parcels should be the same. Yes, the land value is the same. lets say the Land value is $1 million each and the sky

> It would seem that the land value of both parcels should be the same. Yes, the land value is the same. lets say the Land value is $1 million each and the skyscraper is worth $1 million. Lets say property taxes are 1% under the current system: 0.01 * 2,000,000 = $20,000/year for skyscraper plot 0.01 * 1,000,000 = $10,000/year for vacant plot There's a total of $30,000 per year in income so we have to equalize our LVT to match. a 1.5% LVT gives us: 0.015 * 1,000,000 = $15,000/year for skyscraper plot 0.015 * 1,000,000 = $15,000/year for vacant plot The owner will evaluate building a skyscraper against investing in some other venture unrelated to the land. Under Property Tax, investing that $1 million into his property adds a -1% to his projected yearly returns that isn't present for other investments that $1 million is competing for. That discourages development even if the skyscraper would have been profitable.

ejstronge 3y ago
Yes, we are on the same page the whole way. My question is why we need to reframe our extant system as a 'land value tax.' This proposition suggests that we should give concessions to developers in areas where there is a need for more development. But this already happens! I guess I don't know why we should avoid taxing the value of revenue-generating assets if they are fixed. Buying a truck for a landscaping business is an taxable purchase. Why should this be different when the asset is fixed?
- BariumBlue 3y ago
  Ahh, I think I get what you're saying now. For "This proposition suggests that we should give concessions to developers in areas where there is a need for more development." Development is a good thing. Maintaining your house or property, improving it, developing businesses are all good things. I'm not sure we should restrict these things to "areas where there is a need for more development". I don't want to live next to someone who has a rotting ruin of a house, who didn't maintain their place in order to pay less in taxes. Someone maintaining their roof isn't a developer, and isn't going to be making money from their investment but they still pay more in taxes because they do it. They always won't get any government concessions or subsidies to do it (in general). Similarly, a small business owner usually does not get concessions for starting their business. Usually they instead have to pay extra for permitting and such. The parking lot owner next the skyscraper, however, gets FREE value from the skyscraper construction - essentially leaching off of another's productivity. As for the argument how we SHOULD be taxing assets ... every tax takes money from the economy, and some ways of doing that are "better" than others, in that they result in more desired outcomes. LVT seems to provide better outcomes than other ways of taxation.

ejstronge 3y ago

Yes, we are on the same page the whole way. My question is why we need to reframe our extant system as a 'land value tax.' This proposition suggests that we should give concessions to developers in areas where there is a need for more development. But this already happens! I guess I don't know why we should avoid taxing the value of revenue-generating assets if they are fixed. Buying a truck for a landscaping business is an taxable purchase. Why should this be different when the asset is fixed?

BariumBlue 3y ago
Ahh, I think I get what you're saying now. For "This proposition suggests that we should give concessions to developers in areas where there is a need for more development." Development is a good thing. Maintaining your house or property, improving it, developing businesses are all good things. I'm not sure we should restrict these things to "areas where there is a need for more development". I don't want to live next to someone who has a rotting ruin of a house, who didn't maintain their place in order to pay less in taxes. Someone maintaining their roof isn't a developer, and isn't going to be making money from their investment but they still pay more in taxes because they do it. They always won't get any government concessions or subsidies to do it (in general). Similarly, a small business owner usually does not get concessions for starting their business. Usually they instead have to pay extra for permitting and such. The parking lot owner next the skyscraper, however, gets FREE value from the skyscraper construction - essentially leaching off of another's productivity. As for the argument how we SHOULD be taxing assets ... every tax takes money from the economy, and some ways of doing that are "better" than others, in that they result in more desired outcomes. LVT seems to provide better outcomes than other ways of taxation.