4 ms·

Let’s sidestep the legitimate uses of the money for now. These institutions in Boston are centuries old. Boston has a very finite amount of land. Allowing org

Let’s sidestep the legitimate uses of the money for now. These institutions in Boston are centuries old. Boston has a very finite amount of land. Allowing organizations with a lifespan in centuries the ability to buy and hold land without limit at no cost seems like a bad long term economic policy. What is the limiting factor on their growth?

biztos 3y ago
If the goal is to use the land better, making the very very rich pay a tax for using it badly is not a great idea. They will pay the tax, and use the land, and the city will have exactly the same problem as before, but with some more money that disappears into the “general fund.”
- stale2002 3y ago
  > They will pay the tax, and use the land Wait, that's amazing then. It means that the city can get money from them completely for free with no downside. They can just keep increasing it, they will keep paying, and all fitt budget issues will be solved forever!
  - tourmalinetaco 3y ago
    > and all fitt budget issues will be solved forever! Until, of course, it’s pocketed just like most tax money.
    - cosmojg 3y ago
      Whose pocket?
    - deleted 3y ago
      [deleted]
  - AnthonyMouse 3y ago
    > It means that the city can get money from them completely for free with no downside. Let's apply this argument to the use of a head tax. Everybody pays the same amount unconditionally with no way to avoid it, so it's free money with no downside?
    - stale2002 3y ago
      > Let's apply this argument to the use of a head tax. Everybody pays the same amount unconditionally with no way to avoid it, so it's free money with no downside? No there is a downside to that. The downside is one of redistributionary effect of having a flat tax. IE it negatively effects poor people more. Thats a separate and unrelated downside to the other example. This example isn't that though. The hypothetical that the other person gave, was that we could engage in taxing wealthy people and it would have zero deadweight loss (as in, those wealthy people apparently keep using the land exactly the same amount as they were before). This would indeed be a free win, in economics. Usually, the problem in economics of taxing wealthy people is that it puts a disincentive on productive work. This is called deadweight loss. But in this other crazy hypothetical, we can get tax dollars infinitely for free from only wealthy people! Amazing!
      - AnthonyMouse 3y ago
        > The downside is one of redistributionary effect of having a flat tax. IE it negatively effects poor people more. To affect poor people more it would have to be affecting people. I thought it was free money because it doesn't put a disincentive on productive work? > The hypothetical that the other person gave, was that we could engage in taxing wealthy people and it would have zero deadweight loss (as in, those wealthy people apparently keep using the land exactly the same amount as they were before). They might keep using the land in the same way, but that doesn't tell you anything about how they were using the money. They could intend to donate it to a charity or use it for some economically productive activity and the government may or may not be able to put it to a more productive use. US legislators' track record on monetary efficiency is rather humiliating.
        3y ago
valianteffort 3y ago
The institutions have been a considerable growth factor for the city. Seems kind of rude to stop them from parking their money in real estate like everyone else has been doing.
- bobthepanda 3y ago
  Who’s stopping them? They can own real estate, they just have to pay taxes “like everyone else has been doing.”
  - lmm 3y ago
    I'm all for getting rid of special treatment for 503cs, but slapping an arbitrary extra 2.5% tax on large endowments is just as bad.
lmm 3y ago
> Allowing organizations with a lifespan in centuries the ability to buy and hold land without limit at no cost seems like a bad long term economic policy. Why? If you believe land should be owned at all, an institution with a lifespan in centuries seems more likely to use the land responsibly than one with shorter-term planning. (At the least they should be less likely to e.g. dump a bunch of toxic waste for others to clean up; better, they actually have an incentive to develop it in positive ways)
- bobthepanda 3y ago
  All that land still gets hooked up to the power grid, local roads, the staff’s children need local schools, etc. and property tax is used to pay for upkeep and services. It is not as if Harvard is running its own sewage treatment and maintains the public roads through campus.
  - lmm 3y ago
    The comment I replied to literally started with "Let’s sidestep the legitimate uses of the money for now."
    - tacticalturtle 3y ago
      I was trying to head off a nitpicking discussion over what is and is not a good use of tax payer money. The big idea is that cities do need some money. Locking away large portions of the city’s revenue generating assets (the land) indefinitely is going to reduce options for future city governments. We don’t know what the funding challenges of the future will be. I hope they are small - with minimal tax increases. But I think cities should have some ability to safeguard their future revenue generation.
      - lmm 3y ago
        A government should be the servant of its people, not their master; you're talking like the city naturally owns the land and other entities should have access to it on sufferance, which is backwards - especially in the case of Harvard which is likely older than the city government (and certainly older than city provision of electricity, roads, and schooling as GP was talking about). Blocking people from owning land today in case the city runs out of money in the future is putting the cart thoroughly before the horse.
roenxi 3y ago
It is good economic policy. There isn't much of an argument that tax is helpful to the economy. The argument is that despite the damage tax does to the economy, we should tolerate it anyway for moral or logistical reasons. The list of countries that taxed their way to prosperity is ... I've never seen the list. There is an argument to fairness. Everyone should be subject to the same tax rules. Even deserving causes like educating elite children.

biztos 3y ago

If the goal is to use the land better, making the very very rich pay a tax for using it badly is not a great idea. They will pay the tax, and use the land, and the city will have exactly the same problem as before, but with some more money that disappears into the “general fund.”

stale2002 3y ago
> They will pay the tax, and use the land Wait, that's amazing then. It means that the city can get money from them completely for free with no downside. They can just keep increasing it, they will keep paying, and all fitt budget issues will be solved forever!
- tourmalinetaco 3y ago
  > and all fitt budget issues will be solved forever! Until, of course, it’s pocketed just like most tax money.
  - cosmojg 3y ago
    Whose pocket?
  - deleted 3y ago
    [deleted]
- AnthonyMouse 3y ago
  > It means that the city can get money from them completely for free with no downside. Let's apply this argument to the use of a head tax. Everybody pays the same amount unconditionally with no way to avoid it, so it's free money with no downside?
  - stale2002 3y ago
    > Let's apply this argument to the use of a head tax. Everybody pays the same amount unconditionally with no way to avoid it, so it's free money with no downside? No there is a downside to that. The downside is one of redistributionary effect of having a flat tax. IE it negatively effects poor people more. Thats a separate and unrelated downside to the other example. This example isn't that though. The hypothetical that the other person gave, was that we could engage in taxing wealthy people and it would have zero deadweight loss (as in, those wealthy people apparently keep using the land exactly the same amount as they were before). This would indeed be a free win, in economics. Usually, the problem in economics of taxing wealthy people is that it puts a disincentive on productive work. This is called deadweight loss. But in this other crazy hypothetical, we can get tax dollars infinitely for free from only wealthy people! Amazing!
    - AnthonyMouse 3y ago
      > The downside is one of redistributionary effect of having a flat tax. IE it negatively effects poor people more. To affect poor people more it would have to be affecting people. I thought it was free money because it doesn't put a disincentive on productive work? > The hypothetical that the other person gave, was that we could engage in taxing wealthy people and it would have zero deadweight loss (as in, those wealthy people apparently keep using the land exactly the same amount as they were before). They might keep using the land in the same way, but that doesn't tell you anything about how they were using the money. They could intend to donate it to a charity or use it for some economically productive activity and the government may or may not be able to put it to a more productive use. US legislators' track record on monetary efficiency is rather humiliating.
      - 3y ago

valianteffort 3y ago

The institutions have been a considerable growth factor for the city. Seems kind of rude to stop them from parking their money in real estate like everyone else has been doing.

bobthepanda 3y ago
Who’s stopping them? They can own real estate, they just have to pay taxes “like everyone else has been doing.”
- lmm 3y ago
  I'm all for getting rid of special treatment for 503cs, but slapping an arbitrary extra 2.5% tax on large endowments is just as bad.

lmm 3y ago

> Allowing organizations with a lifespan in centuries the ability to buy and hold land without limit at no cost seems like a bad long term economic policy. Why? If you believe land should be owned at all, an institution with a lifespan in centuries seems more likely to use the land responsibly than one with shorter-term planning. (At the least they should be less likely to e.g. dump a bunch of toxic waste for others to clean up; better, they actually have an incentive to develop it in positive ways)

bobthepanda 3y ago
All that land still gets hooked up to the power grid, local roads, the staff’s children need local schools, etc. and property tax is used to pay for upkeep and services. It is not as if Harvard is running its own sewage treatment and maintains the public roads through campus.
- lmm 3y ago
  The comment I replied to literally started with "Let’s sidestep the legitimate uses of the money for now."
  - tacticalturtle 3y ago
    I was trying to head off a nitpicking discussion over what is and is not a good use of tax payer money. The big idea is that cities do need some money. Locking away large portions of the city’s revenue generating assets (the land) indefinitely is going to reduce options for future city governments. We don’t know what the funding challenges of the future will be. I hope they are small - with minimal tax increases. But I think cities should have some ability to safeguard their future revenue generation.
    - lmm 3y ago
      A government should be the servant of its people, not their master; you're talking like the city naturally owns the land and other entities should have access to it on sufferance, which is backwards - especially in the case of Harvard which is likely older than the city government (and certainly older than city provision of electricity, roads, and schooling as GP was talking about). Blocking people from owning land today in case the city runs out of money in the future is putting the cart thoroughly before the horse.

roenxi 3y ago

It is good economic policy. There isn't much of an argument that tax is helpful to the economy. The argument is that despite the damage tax does to the economy, we should tolerate it anyway for moral or logistical reasons. The list of countries that taxed their way to prosperity is ... I've never seen the list. There is an argument to fairness. Everyone should be subject to the same tax rules. Even deserving causes like educating elite children.