4 ms·

To be honest, I think you have it exactly backwards, and a land value tax isn't about taxing "raw land" (that is, land with no improvements), it's about taxing

To be honest, I think you have it exactly backwards, and a land value tax isn't about taxing "raw land" (that is, land with no improvements), it's about taxing the value of the land without regard to improvements. See https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax and https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism

_heimdall 3y ago
Would the land go untaxed until there are improvements? If not, the raw land value itself is being taxed.
- GeneralMayhem 3y ago
  No. The land would be taxed whether it has improvements or not, and in fact would be taxed the same amount whether improved or not. That's how such a tax incentivizes improvement - if you're paying the tax either way, you want to do as much as possible with it to get your money's worth.
  - sethammons 3y ago
    Which encourages destruction of natural lands
    - alexb_ 3y ago
      "Land" is shorthand for all of the natural resources on this earth. That means space, but it also means clean air and anything else extracted. Pollution and extraction taxes are different forms of land taxes.
      - Gormo 3y ago
        So the proposal is that people should never be able to use the land they own for their own purposes without the threat of being dispossessed because strangers are willing to pay more for it, even if they don't want to sell? That sounds like a horrible situation, and it seems clear why real-world tax systems don't take this approach to its ultimate conclusion. There's also something very objectionable about attempting to use taxation as a tool to manipulate behavior and engineer outcomes. Where taxation is justifiable, it is justifiable solely as a pragmatic means to fund the necessary operations of government, and never as an end in itself.
        GeneralMayhem 3y ago
        At the risk of feeding a troll... no, that is not the proposal. The proposal is to make it economically unviable to do socially suboptimal things with common resources. The underlying principle is that land - including natural resources as a whole - is finite. It's a common good owned by humanity as a whole; or, failing that, at least in common by the nation-state in which it falls. Allowing individuals to hoard those finite resources is bad for society. Under a land-value tax system, individuals can do whatever they want, but they're appropriately charged for their negative externalities. Just like we should have a carbon tax to disincentivize people using the shared natural resource of carbon fixing without a good reason, we should have a land tax to disincentivize people using the shared natural resource of flat, arable land without a good reason. You can choose to pay your taxes and do nothing with the land, if you have another source of wealth to make up for it - effectively, you need to express to society just how much it's worth it to you to sit on that land doing nothing, and the way that we express the strength of our convictions in a market economy is with dollars. > There's also something very objectionable about attempting to use taxation as a tool to manipulate behavior and engineer outcomes. The goal here is not to manipulate behavior for its own sake, it's to use the power of the state to correct for a mispricing in the market. Market forces alone are incapable of correctly pricing deals involving common goods, because most of the people who are implicitly participating in the transaction (i.e., the rest of humanity that is now deprived of that land/air/resource) are not compensated. It's a problem of negative externalities, for which a Pigouvian tax [1] is a perfectly appropriate remedy. In a democracy, the state is how the public as a whole imposes its collective will; having the state "bid" on behalf of the public interest is the most capitalist solution possible to the externalities problem. [1] https://en.wikipedia.org/wiki/Pigouvian_tax https://en.wikipedia.org/wiki/Pigouvian_tax
        _heimdall 3y ago
        > The underlying principle is that land - including natural resources as a whole - is finite. It's a common good owned by humanity as a whole; or, failing that, at least in common by the nation-state in which it falls. Allowing individuals to hoard those finite resources is bad for society. There's a real risk in attempting to define exactly what "socially suboptimal" uses for land are. Everyone will have a different opinion on how they want land to be used. Worse still, your definition means that any unused land is socially suboptimal and should be disincentivized through taxes. Given that land is finite, how do we guard against eventually using as much land as possible? And where do we get all the resources to develop and maintain the land as well as all the consumables used by everyone living there.
      - _heimdall 3y ago
        Where does this definition come from? Quite a few localities have rules differentiating between land rights, water rights, and mineral rights to name a few.
    - GeneralMayhem 3y ago
      Only if implemented naively. The idea of LVT is to put an economic value (i.e. dollar amount) on the fact that you're preventing people from using land. It's a market correction. If you want to express that some values are actually good beyond what the market is equipped to reward, then you need to correct further. In theory, this means that the government - acting on behalf of the public good, or its citizens, or the future of humanity, or whatever your preferred vision for the social contract is - should offer its own contribution to the cost to be paid. In practice, this means there could be a significant tax credit for meaningful nature preserves, commensurate with the value of that preserve. Taken to its limit, this tax credit could mean a negative tax (i.e. subsidy) that's enough to pay for maintaining the land in its natural state, and oh look we just reinvented public parks.
      - _heimdall 3y ago
        This requires further legislation defining what constitutes a "meaningful nature preserve," how the classification and tax credits work and change over time, etc. The government then has to fund it somehow. Regulation is necessary in some cases, though it should be the exception not the norm. Regulation that requires yet more regulation should be avoided if at all possible in my opinion.
  - ejb999 3y ago
    So where do the animals pay their taxes so they have some place to live after we make it economically un-feasible to keep land undeveloped by taxing raw land out of existence?
    - GeneralMayhem 3y ago
      Animals don't get a vote, but just as the government can forcibly set aside land as parks, the government can subsidize individuals to do so where it would be valuable to the common good.
    - itishappy 3y ago
      Where do they currently?
- chongli 3y ago
  The value of the land is not solely based on the "raw land." As they say in real estate, it's all about location, location, location! A half-acre beachfront plot in Malibu is worth orders of magnitude more than a half-acre of grassland in Montana. A lot of the value comes from the beachfront itself, yes, but a lot more of the value comes from all the development around it. This is the whole basis for the business model behind golf course development. Developers acquire a large plot of land in a nice area and build a golf course on part of it. The rest of the land (surrounding the golf course) is divided up into plots and used to build luxury housing. The existence of the golf course (and all of the landscaping in the area in general) dramatically increases the desirability (and hence property value) of the houses. If you didn't build the golf course at all you could fit more houses on the land overall. The problem with that is that without the golf course the houses are less desirable and worth less -- and also more capital intensive to build than a golf course -- so the overall profit is lower.
  - ufocia 3y ago
    There is that, of course. But good courses also permit real estate companies to hold land for future development at a reduced cost, maybe even a profit, no?
    - itishappy 3y ago
      Is that desirable? To take valuable land and profit from not using it? This seems like exactly what a land-value tax attempts to address.

_heimdall 3y ago

Would the land go untaxed until there are improvements? If not, the raw land value itself is being taxed.

GeneralMayhem 3y ago
No. The land would be taxed whether it has improvements or not, and in fact would be taxed the same amount whether improved or not. That's how such a tax incentivizes improvement - if you're paying the tax either way, you want to do as much as possible with it to get your money's worth.
- sethammons 3y ago
  Which encourages destruction of natural lands
  - alexb_ 3y ago
    "Land" is shorthand for all of the natural resources on this earth. That means space, but it also means clean air and anything else extracted. Pollution and extraction taxes are different forms of land taxes.
    - Gormo 3y ago
      So the proposal is that people should never be able to use the land they own for their own purposes without the threat of being dispossessed because strangers are willing to pay more for it, even if they don't want to sell? That sounds like a horrible situation, and it seems clear why real-world tax systems don't take this approach to its ultimate conclusion. There's also something very objectionable about attempting to use taxation as a tool to manipulate behavior and engineer outcomes. Where taxation is justifiable, it is justifiable solely as a pragmatic means to fund the necessary operations of government, and never as an end in itself.
      - GeneralMayhem 3y ago
        At the risk of feeding a troll... no, that is not the proposal. The proposal is to make it economically unviable to do socially suboptimal things with common resources. The underlying principle is that land - including natural resources as a whole - is finite. It's a common good owned by humanity as a whole; or, failing that, at least in common by the nation-state in which it falls. Allowing individuals to hoard those finite resources is bad for society. Under a land-value tax system, individuals can do whatever they want, but they're appropriately charged for their negative externalities. Just like we should have a carbon tax to disincentivize people using the shared natural resource of carbon fixing without a good reason, we should have a land tax to disincentivize people using the shared natural resource of flat, arable land without a good reason. You can choose to pay your taxes and do nothing with the land, if you have another source of wealth to make up for it - effectively, you need to express to society just how much it's worth it to you to sit on that land doing nothing, and the way that we express the strength of our convictions in a market economy is with dollars. > There's also something very objectionable about attempting to use taxation as a tool to manipulate behavior and engineer outcomes. The goal here is not to manipulate behavior for its own sake, it's to use the power of the state to correct for a mispricing in the market. Market forces alone are incapable of correctly pricing deals involving common goods, because most of the people who are implicitly participating in the transaction (i.e., the rest of humanity that is now deprived of that land/air/resource) are not compensated. It's a problem of negative externalities, for which a Pigouvian tax [1] is a perfectly appropriate remedy. In a democracy, the state is how the public as a whole imposes its collective will; having the state "bid" on behalf of the public interest is the most capitalist solution possible to the externalities problem. [1] https://en.wikipedia.org/wiki/Pigouvian_tax https://en.wikipedia.org/wiki/Pigouvian_tax
        _heimdall 3y ago
        > The underlying principle is that land - including natural resources as a whole - is finite. It's a common good owned by humanity as a whole; or, failing that, at least in common by the nation-state in which it falls. Allowing individuals to hoard those finite resources is bad for society. There's a real risk in attempting to define exactly what "socially suboptimal" uses for land are. Everyone will have a different opinion on how they want land to be used. Worse still, your definition means that any unused land is socially suboptimal and should be disincentivized through taxes. Given that land is finite, how do we guard against eventually using as much land as possible? And where do we get all the resources to develop and maintain the land as well as all the consumables used by everyone living there.
    - _heimdall 3y ago
      Where does this definition come from? Quite a few localities have rules differentiating between land rights, water rights, and mineral rights to name a few.
  - GeneralMayhem 3y ago
    Only if implemented naively. The idea of LVT is to put an economic value (i.e. dollar amount) on the fact that you're preventing people from using land. It's a market correction. If you want to express that some values are actually good beyond what the market is equipped to reward, then you need to correct further. In theory, this means that the government - acting on behalf of the public good, or its citizens, or the future of humanity, or whatever your preferred vision for the social contract is - should offer its own contribution to the cost to be paid. In practice, this means there could be a significant tax credit for meaningful nature preserves, commensurate with the value of that preserve. Taken to its limit, this tax credit could mean a negative tax (i.e. subsidy) that's enough to pay for maintaining the land in its natural state, and oh look we just reinvented public parks.
    - _heimdall 3y ago
      This requires further legislation defining what constitutes a "meaningful nature preserve," how the classification and tax credits work and change over time, etc. The government then has to fund it somehow. Regulation is necessary in some cases, though it should be the exception not the norm. Regulation that requires yet more regulation should be avoided if at all possible in my opinion.
- ejb999 3y ago
  So where do the animals pay their taxes so they have some place to live after we make it economically un-feasible to keep land undeveloped by taxing raw land out of existence?
  - GeneralMayhem 3y ago
    Animals don't get a vote, but just as the government can forcibly set aside land as parks, the government can subsidize individuals to do so where it would be valuable to the common good.
  - itishappy 3y ago
    Where do they currently?
chongli 3y ago
The value of the land is not solely based on the "raw land." As they say in real estate, it's all about location, location, location! A half-acre beachfront plot in Malibu is worth orders of magnitude more than a half-acre of grassland in Montana. A lot of the value comes from the beachfront itself, yes, but a lot more of the value comes from all the development around it. This is the whole basis for the business model behind golf course development. Developers acquire a large plot of land in a nice area and build a golf course on part of it. The rest of the land (surrounding the golf course) is divided up into plots and used to build luxury housing. The existence of the golf course (and all of the landscaping in the area in general) dramatically increases the desirability (and hence property value) of the houses. If you didn't build the golf course at all you could fit more houses on the land overall. The problem with that is that without the golf course the houses are less desirable and worth less -- and also more capital intensive to build than a golf course -- so the overall profit is lower.
- ufocia 3y ago
  There is that, of course. But good courses also permit real estate companies to hold land for future development at a reduced cost, maybe even a profit, no?
  - itishappy 3y ago
    Is that desirable? To take valuable land and profit from not using it? This seems like exactly what a land-value tax attempts to address.