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Land value taxes aren't about destroying natural land to extract value. The point of taxing the value of the land in urban areas is that a lot of the time plac

by mdasen 3y ago

Land value taxes aren't about destroying natural land to extract value. The point of taxing the value of the land in urban areas is that a lot of the time places essentially squat on land that could be better used. A car wash building will have a low assessed value for its improvements compared to a biotech building. For example, in my city we have a carwash with its improvements valued at $400,000 and a biotech building with its improvements valued at $275,000,000. The biotech building uses only double the land, but pays a ton more taxes. In my city, there are lots where they're basically abandoned. The owners know that they can just sit on the land and it'll increase in value over time even if it isn't used for a productive purpose. During this time, people need housing, businesses need office space, etc. This isn't "natural land", they're gravel pits. In fact, lack of a land value tax causes us to destroy natural land. Instead of using land well, we sprawl and pave our way into the suburbs and beyond. Not all land is equally valuable and land can be made non-valuable from the standpoint of a land value tax like parks and nature reserves. A land value tax isn't really meaningful in rural areas where the land isn't really that valuable due to its location. Where a land value tax is meaningful is in cities where land is scarce and we want to put it to good use. In a city, we don't want someone keeping an empty lot for decades so they can become richer based off the hard work of others around them - productive investors creating housing and office space, workers and artists making an area more desirable, etc. They sit on their empty lot paying nothing in taxes while others make them richer. A land value tax says: put that land to good use or your investment won't pay off that well. Under the current system based on improvements, they pay almost nothing and leech off the hard work of everyone else. Land value taxes don't destroy natural land. They'd probably preserve it. A land value tax might destroy surface parking lots in dense cities, but that isn't "natural land". They're a poor use of space. I live in one of the densest cities in the US and around the corner from a lot of 1-story retail. It would be better for the community if that retail had housing on top and a land value tax would encourage that. The alternative to encouraging good land use is having sprawl. Sprawl doesn't preserve natural land, it destroys it. It also destroys our climate with the carbon emissions from people who then drive everywhere. A land value tax isn't about taxing all land equally across the US. If you have land in an area where land is plentiful, then it doesn't have a high value (because it's plentiful) and it doesn't need to have a lot of value extracted from it. If you buy land in Manhattan, Boston, etc. and decide that you like it as an abandoned piece of property, that's not good for the community and there should be pressure on you to put it to better use or sell it to someone who will put it to good use. A land value tax is about taxing land in a way that prevents someone profiting off squatting on land.

_heimdall 3y ago
Thanks for all the details! Limiting a land value tax to densely populated areas is a great detail here. Sorry if I end up with a long list of follow-up questions here, this is really interesting. So my main concern related to destruction of natural land is that there is a disincentive to keep land natural if you have to pay the tax anyway. In dense areas that wouldn't be nearly as much of an issue, but it would still mean that parks would be an unlikely occurrence and likely only feasible when run by the government. I assume most parks in these areas are anyway, so the loss may be limited to smaller neighborhood parks, courtyards, etc. Finding a clear way to draw a line between what area is dense enough to be taxed and what isn't seems like it would be an ongoing challenge. Not only would you have to define specific measures and thresholds, you would have to eventually move the line as the city evolved. Any thoughts on his this would be done, or already is in areas with a similar tax? When it comes to "best use" of a piece of land, who decides this? Does that measure really just boil down to whatever spends the most capital to build on the land, without regard for economic or social value, environmental impacts on the land and surrounding area, etc? It seems like this would lead to a lot of economic and social impacts that aren't necessarily desirable. Is there a clear way to guard this system from building higher and higher economic centers, inflating incomes and forcing even more of a wedge into the wealth gap? In you example, a car wash would be able to employee people at a lower once level in the area where a much more expensive biotech building would mostly employ highly educated people who bring much higher price pressure to the area. Can that be avoided with a tax that incentivizes building more expensive, and likely more technical/specialized, businesses on every plot of land? Related to that, what's the solution for infrastructure and resource requirements? Large biotech facilities would likely require more power, transportation and delivery access, maintenance, and building materials. If we are simultaneously concerned with environmental impact, creating incentives to build much larger building with much higher resource requirements flies in the face of this. Would we be creating a situation where businesses are pushed to use more energy, concrete, steel, and glass partly because a tax makes smaller businesses less feasible? --- Well that ended up being a bit of a brain dump with questions mixed in. If you made it this far, thanks for playing along!
- Retric 3y ago
  > So my main concern related to destruction of natural land is that there is a disincentive to keep land natural if you have to pay the tax anyway. There’s no need to limit land value taxes based on density as that’s what’s giving land its value. With the property if the tax is say 0.2%. An acre of farmland worth in rural Idaho worth 20k would be assessed as being worth 20k in a land value tax and an acre of swamp might be worth 1,000$. Meanwhile an acre in Manhattan might be valued at 200 million, and the ~5 orders of magnitude difference in taxation would therefore apply dramatically different results. The farmland’s 40$/year in taxes isn’t pushing anyone to sell, the swamp’s 2$/year in taxes is irrelevant for most people. But eating 400k in taxes on a manhattan parking lot is definitely pushing someone to be more productive with it.

by mdasen 3y ago

_heimdall 3y ago

Thanks for all the details! Limiting a land value tax to densely populated areas is a great detail here. Sorry if I end up with a long list of follow-up questions here, this is really interesting. So my main concern related to destruction of natural land is that there is a disincentive to keep land natural if you have to pay the tax anyway. In dense areas that wouldn't be nearly as much of an issue, but it would still mean that parks would be an unlikely occurrence and likely only feasible when run by the government. I assume most parks in these areas are anyway, so the loss may be limited to smaller neighborhood parks, courtyards, etc. Finding a clear way to draw a line between what area is dense enough to be taxed and what isn't seems like it would be an ongoing challenge. Not only would you have to define specific measures and thresholds, you would have to eventually move the line as the city evolved. Any thoughts on his this would be done, or already is in areas with a similar tax? When it comes to "best use" of a piece of land, who decides this? Does that measure really just boil down to whatever spends the most capital to build on the land, without regard for economic or social value, environmental impacts on the land and surrounding area, etc? It seems like this would lead to a lot of economic and social impacts that aren't necessarily desirable. Is there a clear way to guard this system from building higher and higher economic centers, inflating incomes and forcing even more of a wedge into the wealth gap? In you example, a car wash would be able to employee people at a lower once level in the area where a much more expensive biotech building would mostly employ highly educated people who bring much higher price pressure to the area. Can that be avoided with a tax that incentivizes building more expensive, and likely more technical/specialized, businesses on every plot of land? Related to that, what's the solution for infrastructure and resource requirements? Large biotech facilities would likely require more power, transportation and delivery access, maintenance, and building materials. If we are simultaneously concerned with environmental impact, creating incentives to build much larger building with much higher resource requirements flies in the face of this. Would we be creating a situation where businesses are pushed to use more energy, concrete, steel, and glass partly because a tax makes smaller businesses less feasible? --- Well that ended up being a bit of a brain dump with questions mixed in. If you made it this far, thanks for playing along!

Retric 3y ago
> So my main concern related to destruction of natural land is that there is a disincentive to keep land natural if you have to pay the tax anyway. There’s no need to limit land value taxes based on density as that’s what’s giving land its value. With the property if the tax is say 0.2%. An acre of farmland worth in rural Idaho worth 20k would be assessed as being worth 20k in a land value tax and an acre of swamp might be worth 1,000$. Meanwhile an acre in Manhattan might be valued at 200 million, and the ~5 orders of magnitude difference in taxation would therefore apply dramatically different results. The farmland’s 40$/year in taxes isn’t pushing anyone to sell, the swamp’s 2$/year in taxes is irrelevant for most people. But eating 400k in taxes on a manhattan parking lot is definitely pushing someone to be more productive with it.