4 ms·

It's shocking how often the answer to real estate issues is "land value tax would fix this!"

deleted 2y ago
[deleted]
some_random 2y ago
I'll bite, how would land value tax fix raves not being profitable enough to afford their venues? It seems to me like it make things worse.
- owisd 2y ago
  The theory is that (a) the tax would be paid by the property owner and not the venue (it is assumed rent follows an econ 102 inelastic supply model) and (b) property would be less attractive as a store of wealth so prices would drop.
CamperBob2 2y ago
Seems like that would guarantee that only the most profitable uses of a given property would be contemplated by the owner.
- permo-w 2y ago
  exactly, so those people who own an old empty warehouse, a large basement, or whatever, now have a huge incentive to find uses for them. or they have to sell them which pushes prices down for everything
  - CamperBob2 2y ago
    But what good does it do to push prices down, if even more money has to be paid in taxes for as long as they own the property?
    - permo-w 2y ago
      lower value, lower tax. lower value, lower rent.
cooper_ganglia 2y ago
Sorry, but a "land value tax" is one of the worst political propositions I've ever heard. This is a great way to further erode the middle class, ensure that owning is always prohibitively out-of-reach for anyone born after 1980, and to promote corporate consolidation of land by BlackRock and other corporations.
- strken 2y ago
  > ensure that owning is always prohibitively out-of-reach for anyone born after 1980 I would expect a land tax to do the complete opposite and reduce the value of land by half or more, which would do quite bad things to the finances of homeowners, most of whom were born before 2000.
- JW_00000 2y ago
  I assume the parent comment proposes land value tax as a replacement for existing property tax schemes. In other words, instead of taxing the value of the land + whatever is built on it (current system in most parts of the world), you only tax based on the value of the land, regardless of what is built. Such a system would incentivize using the land as efficiently as possible, as that part is not taxed. If you have prime real estate in the center of a city but that is undeveloped, currently developing it increases your tax. In a land value tax system, that land would presumably be taxed higher, but tax would not increase if it is developed, therefore incentivizing the owner to actually use it.
  - cooper_ganglia 2y ago
    So what happens when someone owns land, and then has a bunch of neighborhoods and developments pop up around them? I know a lot of poorer people who bought their home when the area wasn't developed, only for things to spring up around them. That would increase their land value, sure, but also their tax, and I don't think that's fair. It feels like a way to force these people out of the towns and family homes they've grown up in, in favor of some rich guy or corporation. They can be strong-armed out by increasing their property value around them past a point they can afford the taxes.

deleted 2y ago

[deleted]

I'll bite, how would land value tax fix raves not being profitable enough to afford their venues? It seems to me like it make things worse.

owisd 2y ago
The theory is that (a) the tax would be paid by the property owner and not the venue (it is assumed rent follows an econ 102 inelastic supply model) and (b) property would be less attractive as a store of wealth so prices would drop.

CamperBob2 2y ago

Seems like that would guarantee that only the most profitable uses of a given property would be contemplated by the owner.

permo-w 2y ago
exactly, so those people who own an old empty warehouse, a large basement, or whatever, now have a huge incentive to find uses for them. or they have to sell them which pushes prices down for everything
- CamperBob2 2y ago
  But what good does it do to push prices down, if even more money has to be paid in taxes for as long as they own the property?
  - permo-w 2y ago
    lower value, lower tax. lower value, lower rent.

cooper_ganglia 2y ago

Sorry, but a "land value tax" is one of the worst political propositions I've ever heard. This is a great way to further erode the middle class, ensure that owning is always prohibitively out-of-reach for anyone born after 1980, and to promote corporate consolidation of land by BlackRock and other corporations.

strken 2y ago
> ensure that owning is always prohibitively out-of-reach for anyone born after 1980 I would expect a land tax to do the complete opposite and reduce the value of land by half or more, which would do quite bad things to the finances of homeowners, most of whom were born before 2000.
JW_00000 2y ago
I assume the parent comment proposes land value tax as a replacement for existing property tax schemes. In other words, instead of taxing the value of the land + whatever is built on it (current system in most parts of the world), you only tax based on the value of the land, regardless of what is built. Such a system would incentivize using the land as efficiently as possible, as that part is not taxed. If you have prime real estate in the center of a city but that is undeveloped, currently developing it increases your tax. In a land value tax system, that land would presumably be taxed higher, but tax would not increase if it is developed, therefore incentivizing the owner to actually use it.
- cooper_ganglia 2y ago
  So what happens when someone owns land, and then has a bunch of neighborhoods and developments pop up around them? I know a lot of poorer people who bought their home when the area wasn't developed, only for things to spring up around them. That would increase their land value, sure, but also their tax, and I don't think that's fair. It feels like a way to force these people out of the towns and family homes they've grown up in, in favor of some rich guy or corporation. They can be strong-armed out by increasing their property value around them past a point they can afford the taxes.