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> 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 coul

by 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.
  - throwaway092323 3y ago
    > 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. Yes and no. You're not taxing the land as if it was bare or as if it was full; you're taxing it based on the perceived value to a developer. > 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 value of an empty lot is approximately equal to the value of the developed lot right next to it. This is already being done. > 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. Government-owned land could be tax-free since (in theory) it's being used for public good.
    - jjav 3y ago
      > The value of an empty lot is approximately equal to the value of the developed lot right next to it. This is already being done. So I feel like you just agreed with my premise, no? The value (and thus the tax) on my empty lot with nothing but dirt is going to be set by the tax of the developed lot right next to it, which might contain a highrise apartment building. So you're saying I will be taxed on the value of an imaginary building I don't actually have, just because the neighboring lot has one. So there's no way I can afford to pay that since the bare dirt doesn't give me any income. So I will lose this land due to the tax. Am I wrong?
      - throwaway092323 3y ago
        > So I feel like you just agreed with my premise, no? Maybe. I can't tell if we're talking past each other. > The value (and thus the tax) on my empty lot with nothing but dirt is going to be set by the tax of the developed lot right next to it, which might contain a highrise apartment building. Yes, the empty lot will be higher because of the highrise apartment next to it, BUT... > So you're saying I will be taxed on the value of an imaginary building I don't actually have, just because the neighboring lot has one. No, because the appraiser wouldn't include the building's value; they'd only be appraising the average value of land in the area. > So there's no way I can afford to pay that since the bare dirt doesn't give me any income. So I will lose this land due to the tax. That's intentional. If the land is only profitable for highrise apartments, then you should sell it to someone who can afford to build some. Note that this would help with the housing crisis.

by jjav 3y ago

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.
- throwaway092323 3y ago
  > 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. Yes and no. You're not taxing the land as if it was bare or as if it was full; you're taxing it based on the perceived value to a developer. > 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 value of an empty lot is approximately equal to the value of the developed lot right next to it. This is already being done. > 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. Government-owned land could be tax-free since (in theory) it's being used for public good.
  - jjav 3y ago
    > The value of an empty lot is approximately equal to the value of the developed lot right next to it. This is already being done. So I feel like you just agreed with my premise, no? The value (and thus the tax) on my empty lot with nothing but dirt is going to be set by the tax of the developed lot right next to it, which might contain a highrise apartment building. So you're saying I will be taxed on the value of an imaginary building I don't actually have, just because the neighboring lot has one. So there's no way I can afford to pay that since the bare dirt doesn't give me any income. So I will lose this land due to the tax. Am I wrong?
    - throwaway092323 3y ago
      > So I feel like you just agreed with my premise, no? Maybe. I can't tell if we're talking past each other. > The value (and thus the tax) on my empty lot with nothing but dirt is going to be set by the tax of the developed lot right next to it, which might contain a highrise apartment building. Yes, the empty lot will be higher because of the highrise apartment next to it, BUT... > So you're saying I will be taxed on the value of an imaginary building I don't actually have, just because the neighboring lot has one. No, because the appraiser wouldn't include the building's value; they'd only be appraising the average value of land in the area. > So there's no way I can afford to pay that since the bare dirt doesn't give me any income. So I will lose this land due to the tax. That's intentional. If the land is only profitable for highrise apartments, then you should sell it to someone who can afford to build some. Note that this would help with the housing crisis.