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The idea is that a land value tax would have a far higher rate on the value of the land. The empty lot, dilapidated building or surface parking lot, right now,
by hibikir 3y ago
The idea is that a land value tax would have a far higher rate on the value of the land. The empty lot, dilapidated building or surface parking lot, right now, pay far lower taxes than a big building sitting next door. With a land value tax that is revenue neutral, those that own underdeveloped land get blasted, as they now pay the same as the as their neighbors, instead if orders of magnitude less.
- ejstronge 3y agoYes, but instead of proposing a new phrase, it would seem that one could simply propose an increase on the tax rate on land values? I am aware of the history of the term - just frustrated that it’s thrown around as a brand new idea. A problem with this system is how to assign land values if not using the sales value approach used in property tax assessments
- busterarm 3y agoI wasn't using the term incorrectly. I was very intentional about what I said. Property tax doesn't adequately tax the value of the land. That's the whole point. This was a vacant, unbuilt lot in the heart of New York City. For ~thirty years. That shouldn't even be a thing ever. Currently the building pays about 20M/yr in property tax. Having a vacant lot there for three decades is many millions in property tax that the city never recieved.
- ejstronge 3y agoI know you were not using the term incorrectly. My problem is with the term, altogether. As you've said, you wish to have a higher tax on land. That is very reasonable, and a policy position that one could examine within the established context of our property tax regime. > Property tax doesn't adequately tax the value of the land. That's the whole point. This was a vacant, unbuilt lot in the heart of New York City. For ~thirty years. That shouldn't even be a thing ever. No tax will prevent this behavior if the final benefit to the owner is high enough. How would a land value tax on three adjacent parcels stop an investor from waiting 30 years for the chance to combine the parcels and unlock far greater value?
- gottorf 3y ago> No tax will prevent this behavior if the final benefit to the owner is high enough. Well, naturally. But a speculative bet that a un-/under-developed piece of land will become vastly more valuable in 30 years looks less and less appealing the more the owner is taxed on the value of the land itself, vs. the value of the improvements upon it, which for a undeveloped parcel is by definition very low. I don't know the specifics for NYC, but I do know that there is effectively no jurisdiction within the US that even comes close to a full LVT as imagined by Henry George.
- ProfessorLayton 3y ago>How would a land value tax on three adjacent parcels stop an investor from waiting 30 years for the chance to combine the parcels and unlock far greater value? The goal isn't to stop a developer from combining parcels, or whatever their development objective is — LVT changes the calculus on speculative investments, and hopefully benefiting tax payers as well. If a developer wants to sit on a parcels for 3 decades, they're still able to do so but they'll also need to pay up for keeping high-value land vacant. That money can then be reinvested into the community.
- ejstronge 3y ago> If a developer wants to sit on a parcels for 3 decades, they're still able to do so but they'll also need to pay up for keeping high-value land vacant. That money can then be reinvested into the community. How is that different from what happens now? It sounds like what you are saying is that you don't believe that property taxes are high enough since there exist vacant buildings. That is a fine thing to believe but there is nothing about the current structure of property taxes that goes against this, in principle, besides the tax rate.
- ProfessorLayton 3y agoI'm not arguing for specifics in implementation, rather the outcomes: Better use of productive land and infrastructure. If the current structure isn't providing that, then perhaps LVT is the way to go over our current structure. If it turns out LTV didn't provide the desired outcomes, then let's try something else! The current status quo of letting developers speculate endlessly while holding back growth or even providing negative economic externalities doesn't seem to be working as well as it could be.
- sroussey 3y agoThe solution is to put in a massage parlor.