3 ms·

> The land will still be owned, just by different people, regardless of how high it is taxed. That means that the government can raise revenue without curtailin

by msla 3y ago

> The land will still be owned, just by different people, regardless of how high it is taxed. That means that the government can raise revenue without curtailing economic activity. And this is a fantasy. Some land is marginal: Taxing it more would reduce the profit anyone could make from it to nothing, leading to empty lots that aren't owned by anyone because the last owners were delinquent on taxes to the point the local government took the land from them and is now trying to auction it off. Look at houses in Detroit being sold for a dollar for an example of this. The city makes no money from those. https://99wfmk.com/detroits-one-dollar-houses/ https://99wfmk.com/detroits-one-dollar-houses/ > It sounds like a good deal...a dollar for an old decrepit house – but then what? Then you have to pay for all the repairs, renovations, excavation (if needed), property taxes, lawn work.....so you fork out just one whole dollar but you wind up spending no less than six figures getting it in shape. Whether you plan to keep it or sell it is a moot point. You're still out that money. Plus: > The moral argument is that nobody built the land out of their own labor, they only conquered it. Turn a piece of land into a farm and say that.

nostrademons 3y ago
That's why the tax is in proportion to the unimproved value of the land. Marginal land has almost zero value; therefore it will have almost zero tax. The landowner gets to keep rent due from any improvements (like structures) on the land.
- msla 3y ago
  > That's why the tax is in proportion to the unimproved value of the land. https://news.ycombinator.com/item?id=37913341 https://news.ycombinator.com/item?id=37913341 > The idea is that you tax the land only as if it was being used for best use - so that every property is encouraged to develop to maximum density.
  - LordDragonfang 3y ago
    >Marginal land is land that has little or no agricultural or industrial value. So by definition, the "best use" isn't very valuable. I suppose the definition doesn't strictly include residential usage, but it's not hard to see that some land is inherently less valuable for residential as well, because location matters.
  - nostrademons 3y ago
    In practice a LVT is usually applied statistically. You run a regression on the features of the buildings across all parcels, determine a coefficient of value for various structures and usages (eg. multifamily is worth $X in cash flow for a certain size apartment, extra bedroom in a SFH is worth $Y, pool is worth $Z), subtract out the computed value of the structure, and then smooth across all properties in a given local area to compute the value of the land alone. That's what you're taxed on. "Tax the land as if was being used for best use" is an oversimplification. The government can't realistically know what the best use of land is, or what value that would command. That's for the market to decide. But the point of an LVT is that you're taxed on the base value of the land (as measured by how much profit your neighbors are making off it), and so only usages of the land that are better than average remain profitable. If none of your neighbors can turn a profit on it either, tax will be negligible.

by msla 3y ago

nostrademons 3y ago

That's why the tax is in proportion to the unimproved value of the land. Marginal land has almost zero value; therefore it will have almost zero tax. The landowner gets to keep rent due from any improvements (like structures) on the land.

msla 3y ago
> That's why the tax is in proportion to the unimproved value of the land. https://news.ycombinator.com/item?id=37913341 https://news.ycombinator.com/item?id=37913341 > The idea is that you tax the land only as if it was being used for best use - so that every property is encouraged to develop to maximum density.
- LordDragonfang 3y ago
  >Marginal land is land that has little or no agricultural or industrial value. So by definition, the "best use" isn't very valuable. I suppose the definition doesn't strictly include residential usage, but it's not hard to see that some land is inherently less valuable for residential as well, because location matters.
- nostrademons 3y ago
  In practice a LVT is usually applied statistically. You run a regression on the features of the buildings across all parcels, determine a coefficient of value for various structures and usages (eg. multifamily is worth $X in cash flow for a certain size apartment, extra bedroom in a SFH is worth $Y, pool is worth $Z), subtract out the computed value of the structure, and then smooth across all properties in a given local area to compute the value of the land alone. That's what you're taxed on. "Tax the land as if was being used for best use" is an oversimplification. The government can't realistically know what the best use of land is, or what value that would command. That's for the market to decide. But the point of an LVT is that you're taxed on the base value of the land (as measured by how much profit your neighbors are making off it), and so only usages of the land that are better than average remain profitable. If none of your neighbors can turn a profit on it either, tax will be negligible.