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it would increase the tax rate on land to be much higher. In the most extreme case, the annual tax on land value would so high that vacant land could be purchas
by jlhawn 3y ago
it would increase the tax rate on land to be much higher. In the most extreme case, the annual tax on land value would so high that vacant land could be purchased for close to zero purchase price because the holding cost of the tax is high enough to capture all the value which is capitalized into a purchase price.
- ProfessorLayton 3y agoCorrect, but that's the point really. In an extreme case, such as an empty lot in Manhattan, it would cause the property to change hands to someone who could be more productive with it. Even though it wouldn't be worth as much without LVT, it would still be worth a lot in such an extreme case, so it's not devastating for the owner either.