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If tax is based on land improvement, a flat parking lot in a busy area is profitable, even if it doesn't provide optimal value to the community. The owner may w

If tax is based on land improvement, a flat parking lot in a busy area is profitable, even if it doesn't provide optimal value to the community. The owner may wish to add some buildings to the lot, but land improvement tax means they have to pay extra to have and keep those buildings, even if a recession keeps them empty. Land value tax flips this, removing some of the risk of adding value to a property while discouraging hoarding.

bequanna 3y ago
Uh huh, so you’re taxing land based on some theoretical “highest and best use”? This will only serve to punish small businesses who will see a huge jump in taxes, forcing some of them to sell to some large developer. Pure academic nonsense. Punishing people for not doing what YOU want with THEIR land.
- Kbelicius 3y ago
  > Uh huh, so you’re taxing land based on some theoretical “highest and best use”? No, they tax based on the value of the land... I mean, it's in the name.
  - bequanna 3y ago
    We’re talking in circles then. Land value + improvements is already taxed pretty much everywhere I am aware of.
    - jjk166 3y ago
      Yeah, and the goal is to remove the "+ improvements" part of the tax.
- throwaway092323 3y ago
  > Uh huh, so you’re taxing land based on some theoretical “highest and best use”? Someone has to eat the opportunity cost of sub-optimally used land. Would you rather it be corporations and house-flippers, or renters and homeowners? > Pure academic nonsense. Several places have implemented LVT (eg Pennsylvania). What's nonsense is treating it like idle theory-crafting when there's evidence to judge. > Punishing people for not doing what YOU want with THEIR land. Not all societies believe in land ownership to begin with. Owning land keeps other people from using it, so it should come with a sense of duty. Also, no one under either system is arbitrating the correctness of land use to pick winners and losers. The free-market still decides what is or isn't effective land use; it's just that under LVT people are disincentivized from speculating on empty land.
jjav 3y ago
> If tax is based on land improvement I don't see how this can work in practice. You grant the government infinite power to come in and say that your land could surely be used to build a 50 story luxury apartment building and therefore you now have to pay tax on a $50M imagined value. Even though the land might actually only be worth far less on the open market. This is basically just a way to arbitrarily take away land from owners without any controls, since nobody can afford to pay taxes on imaginary buildings that don't exist.
- jjk166 3y ago
  The government isn't coming in and saying what you could build and taxing you based on the value of the building. It's just taxing the value of the land without any improvements at all. The developer is going to pay the same taxes no matter what they build, so they rationally should make as efficient use of the land as possible, but that most efficient use is determined entirely by the free market, and they are free to make less efficient use so long as they are comfortable leaving money on the table. If you're not going to do something with the land that generates more value than it being left alone, then you just leave it alone.
  - jjav 3y ago
    > It's just taxing the value of the land without any improvements at all > rationally should make as efficient use of the land as possible These two statements are contradictory. The value of the bare land (just pure dirt) is low no matter where it is. But the second statement is where the consequences show up. The LVT idea isn't really to tax the bare land, it is to tax it as if it was being used by the most financially productive way possible. So, tell me how is that not a tax that is based on something that doesn't actually exist today? The assessor can say: Sure, it's just bare dirt, worth nothing right now, but you could have a skyscraper there and if you did, it'd be worth a lot. So we'll pretend it's worth a lot and tax based on that. The other bad consequence of LVT is that it's supposed to force every bit of land to the most financially productive use. Do you want to live in such a society? Something like a free playground is never the most income-generating use for a patch of land, but it's a wonderful thing to have in towns.

bequanna 3y ago

Uh huh, so you’re taxing land based on some theoretical “highest and best use”? This will only serve to punish small businesses who will see a huge jump in taxes, forcing some of them to sell to some large developer. Pure academic nonsense. Punishing people for not doing what YOU want with THEIR land.

Kbelicius 3y ago
> Uh huh, so you’re taxing land based on some theoretical “highest and best use”? No, they tax based on the value of the land... I mean, it's in the name.
- bequanna 3y ago
  We’re talking in circles then. Land value + improvements is already taxed pretty much everywhere I am aware of.
  - jjk166 3y ago
    Yeah, and the goal is to remove the "+ improvements" part of the tax.
throwaway092323 3y ago
> Uh huh, so you’re taxing land based on some theoretical “highest and best use”? Someone has to eat the opportunity cost of sub-optimally used land. Would you rather it be corporations and house-flippers, or renters and homeowners? > Pure academic nonsense. Several places have implemented LVT (eg Pennsylvania). What's nonsense is treating it like idle theory-crafting when there's evidence to judge. > Punishing people for not doing what YOU want with THEIR land. Not all societies believe in land ownership to begin with. Owning land keeps other people from using it, so it should come with a sense of duty. Also, no one under either system is arbitrating the correctness of land use to pick winners and losers. The free-market still decides what is or isn't effective land use; it's just that under LVT people are disincentivized from speculating on empty land.

jjav 3y ago

> If tax is based on land improvement I don't see how this can work in practice. You grant the government infinite power to come in and say that your land could surely be used to build a 50 story luxury apartment building and therefore you now have to pay tax on a $50M imagined value. Even though the land might actually only be worth far less on the open market. This is basically just a way to arbitrarily take away land from owners without any controls, since nobody can afford to pay taxes on imaginary buildings that don't exist.

jjk166 3y ago
The government isn't coming in and saying what you could build and taxing you based on the value of the building. It's just taxing the value of the land without any improvements at all. The developer is going to pay the same taxes no matter what they build, so they rationally should make as efficient use of the land as possible, but that most efficient use is determined entirely by the free market, and they are free to make less efficient use so long as they are comfortable leaving money on the table. If you're not going to do something with the land that generates more value than it being left alone, then you just leave it alone.
- jjav 3y ago
  > It's just taxing the value of the land without any improvements at all > rationally should make as efficient use of the land as possible These two statements are contradictory. The value of the bare land (just pure dirt) is low no matter where it is. But the second statement is where the consequences show up. The LVT idea isn't really to tax the bare land, it is to tax it as if it was being used by the most financially productive way possible. So, tell me how is that not a tax that is based on something that doesn't actually exist today? The assessor can say: Sure, it's just bare dirt, worth nothing right now, but you could have a skyscraper there and if you did, it'd be worth a lot. So we'll pretend it's worth a lot and tax based on that. The other bad consequence of LVT is that it's supposed to force every bit of land to the most financially productive use. Do you want to live in such a society? Something like a free playground is never the most income-generating use for a patch of land, but it's a wonderful thing to have in towns.