4 ms·

I really reccomend this primer on the idea. https://www.astralcodexten.com/p/your-book-review-progress-and-poverty https://www.astralcodexten.com/p/your-book-r

I really reccomend this primer on the idea. https://www.astralcodexten.com/p/your-book-review-progress-and-poverty https://www.astralcodexten.com/p/your-book-review-progress-a... Georgism is simply one of those ideas that has changed how I look at the city around me. After reading that primer, I recommend looking around your city with fresh eyes, noticing how many vacant shops, mostly empty parking lots, and underutilized spaces blight otherwise productive (and expensive) urban cores. http://www.vacantnewyork.com/ http://www.vacantnewyork.com/

robocat 3y ago
From https://archive.ph/eLjbX https://archive.ph/eLjbX about the proposed Detroit land tax: land will be taxed at a new rate of 11.8%, whether or not it has anything built on it. Homeowners are guaranteed that they won't pay more tax. They can make the change fairly cost neutral for honeowners because currently land value is usually low compared to value of the house. Increasing tax to 12% will drastically devalue existing vacant land. Land owners are currently paying say 7% mortgage (or equivalent opportunity cost by tying up equity). Adding a 12% land tax would massively devalue land. The city is basically saying use it or lose it. To make it worthwhile to use it, any extra investment needs to return enough income to cover the new land tax (the tax is still there even if developed since the land value remains the same). I imagine owners would sue the city. Having your land value crashed by heavy taxation seems a bit harsh (not that most of us would be weeping for the investors). The land value tax appears to only affect some of Detroit: Before: https://detroitmi.gov/sites/detroitmi.localhost/files/2023-09/MO-Land%20Value%20Tax%20Regional%20Maps-Before-09012023.png https://detroitmi.gov/sites/detroitmi.localhost/files/2023-0... After: https://detroitmi.gov/sites/detroitmi.localhost/files/2023-09/MO-Land%20Value%20Tax%20Regional%20Maps-After-09012023.png https://detroitmi.gov/sites/detroitmi.localhost/files/2023-0... I can't think of a way to model the drop in property market value due to the taxation. Can anyone think of a good approximation for how precipitously the market value would drop? PS: I live near an area totally blighted by investors over many decades. I agree with the purpose behind land value tax - even though a land tax appears to completely screw over current investors. Investors have been screwing us locals for a long time, so maybe it is just.
- Hammershaft 3y ago
  A %12 tax is relatively mild, but you're right that a transition to a tax system that taxes land more and taxes everything else less will screw over existing investors of underutilized land. Another pain point is that homeowners who have been sitting on lots that are highly desirable and infilled will be taxed considerably more. This is in the long run a major benefit of the LTV: that underutilized land is put to productive use. That doesn't mean the political optics won't be difficult to square.
  - robocat 3y ago
    > A %12 tax is relatively mild Strong disagree. 12% is halving value in 5 years. A tax that steals half of the asset over 5 years is not "mild". The tax makes a mockery of any reasonable multiyear plans. It's okay to say screw retirement savings, but be honest exactly what is being said. Investing often talks about percentage points because small differences in returns matter. 12% is two orders of magnitude bigger - it's significant. 1% really matters - which you would know if you were involved with finance or had a variable rate mortgage.
    - Hammershaft 3y ago
      Note the word relative. The land value tax has been championed by economists across the political sprectrum as a single tax to displace other taxes with. The entire movement of georgism advocates for a land value tax approaching %100.
  - TheCleric 3y ago
    > will screw over existing investors of underutilized land. That's a feature, not a bug.
    - Hammershaft 3y ago
      Yeah, I absolutely agree. It's just that it makes georgism politically difficult, as benefits are diffused across a wider population and the negatives are intensely focused on a smaller population.

robocat 3y ago

From https://archive.ph/eLjbX https://archive.ph/eLjbX about the proposed Detroit land tax: land will be taxed at a new rate of 11.8%, whether or not it has anything built on it. Homeowners are guaranteed that they won't pay more tax. They can make the change fairly cost neutral for honeowners because currently land value is usually low compared to value of the house. Increasing tax to 12% will drastically devalue existing vacant land. Land owners are currently paying say 7% mortgage (or equivalent opportunity cost by tying up equity). Adding a 12% land tax would massively devalue land. The city is basically saying use it or lose it. To make it worthwhile to use it, any extra investment needs to return enough income to cover the new land tax (the tax is still there even if developed since the land value remains the same). I imagine owners would sue the city. Having your land value crashed by heavy taxation seems a bit harsh (not that most of us would be weeping for the investors). The land value tax appears to only affect some of Detroit: Before: https://detroitmi.gov/sites/detroitmi.localhost/files/2023-09/MO-Land%20Value%20Tax%20Regional%20Maps-Before-09012023.png https://detroitmi.gov/sites/detroitmi.localhost/files/2023-0... After: https://detroitmi.gov/sites/detroitmi.localhost/files/2023-09/MO-Land%20Value%20Tax%20Regional%20Maps-After-09012023.png https://detroitmi.gov/sites/detroitmi.localhost/files/2023-0... I can't think of a way to model the drop in property market value due to the taxation. Can anyone think of a good approximation for how precipitously the market value would drop? PS: I live near an area totally blighted by investors over many decades. I agree with the purpose behind land value tax - even though a land tax appears to completely screw over current investors. Investors have been screwing us locals for a long time, so maybe it is just.

Hammershaft 3y ago
A %12 tax is relatively mild, but you're right that a transition to a tax system that taxes land more and taxes everything else less will screw over existing investors of underutilized land. Another pain point is that homeowners who have been sitting on lots that are highly desirable and infilled will be taxed considerably more. This is in the long run a major benefit of the LTV: that underutilized land is put to productive use. That doesn't mean the political optics won't be difficult to square.
- robocat 3y ago
  > A %12 tax is relatively mild Strong disagree. 12% is halving value in 5 years. A tax that steals half of the asset over 5 years is not "mild". The tax makes a mockery of any reasonable multiyear plans. It's okay to say screw retirement savings, but be honest exactly what is being said. Investing often talks about percentage points because small differences in returns matter. 12% is two orders of magnitude bigger - it's significant. 1% really matters - which you would know if you were involved with finance or had a variable rate mortgage.
  - Hammershaft 3y ago
    Note the word relative. The land value tax has been championed by economists across the political sprectrum as a single tax to displace other taxes with. The entire movement of georgism advocates for a land value tax approaching %100.
- TheCleric 3y ago
  > will screw over existing investors of underutilized land. That's a feature, not a bug.
  - Hammershaft 3y ago
    Yeah, I absolutely agree. It's just that it makes georgism politically difficult, as benefits are diffused across a wider population and the negatives are intensely focused on a smaller population.