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Our local government taxes are entirely LVT and yet our housing prices still spiral upwards. I'm not sure how to work this to everyday people's benefit - are t

Our local government taxes are entirely LVT and yet our housing prices still spiral upwards. I'm not sure how to work this to everyday people's benefit - are the taxes to be so large punative that half of everyday home owners need to sell up? (I mean, the tax will only depress value if sales are avoided, or existing owners choose to sell, right?) I'm probably in the "increase supply until no one else wants one" camp...

twoodfin 11mo ago
You got it. The LVT doesn’t work unless it’s so high it can force Grandma out of the house she grew up in, the one she thought was built on “her” land in Alameda. It has to act like a market rent paid to the government, or it can’t induce the behavior changes it’s supposed to. Hard to believe Americans, at least, would accept that shift in property rights.
lotsofpulp 11mo ago
> are the taxes to be so large punative that half of everyday home owners need to sell up? Yes, either you are rich enough to occupy land in an expensive area for a suboptimal use (usually means central to transportation and population), or you have to give it up to someone who can make use of it. Note that homeowners who live further away from stuff are not impacted. It’s for underutilized lots that are being squatted on due to someone laying claim to it first decades ago, but that is not an efficient way to allocate resources in a society. Hence, why China can develop rapidly to benefit 80% of its population, while other developed countries are stuck catering to 20% of its population who got theirs first (or really, their ancestors did).
- twoodfin 11mo ago
  By “laying claim” you mean “holding a legally recognized title to the real estate”? That’s a property rights regime that applies to everyone. If you want to get rid of it you have to get rid of it for everyone, you can’t say “titles are no longer valid if the land they cover is valuable enough, but otherwise, out in the boonies, still good”. If nothing else, that’s a Constitutional takings problem.
  - lotsofpulp 11mo ago
    The constitution already allows for it, via what happens when you don’t pay property tax. And property rights are very much a political negotiation (just before things get violent). The government takes a piece of everyone’s income with no problem. And land owners use the most resources of everyone. All the military spend to protect their asset, all the education, police, and judicial expenses to keep an orderly society, all the energy to move resources around the land. Right now, we take more, proportionally, from income earners (workers) who live in tiny apartments compared to rent seekers who squat on underutilized lots that use up a lot more of society’s resources.
    - twoodfin 11mo ago
      Sorry, I don’t understand your position. Income taxes are transfer taxes: The government takes a cut of money moving from a labor buyer to a labor seller. Not unlike excise taxes or tariffs, though we needed a Constitutional amendment for Congress to do it. Property taxes are property taxes. They’re premised on the notion that there’s a private owner of the property to be taxed, and those taxes fund services and protections via the elected government of the property holder. If LVT requires rent-equivalent rates to work, you can call it a really high property tax, but that’s just linguistic games: The government is charging rent on property it now effectively owns. What part of that do you disagree with? I took your comments to imply yes, in fact, under LVT the government effectively owns the land and charges rent on it, as it was in feudal times and perhaps should have continued to be so? (Also, re: property taxes and takings, check out Tyler v. Hennepin. 9-0. https://www.oyez.org/cases/2022/22-166 https://www.oyez.org/cases/2022/22-166)
      - lotsofpulp 11mo ago
        Any money the government collects is a tax. > If LVT requires rent-equivalent rates to work, you can call it a really high property tax, but that’s just linguistic games: The government is charging rent on property it now effectively owns. In nature, might makes right. Whether you fight against someone else to protect your property, or pay a gang to not disturb you, or pay a democratically elected government to not have the sheriff’s department to remove you. The concept of ownership and titles is very fluid depending on the situation, but what isn’t is the idea of paying for what you use. High earned income tax and low flat land value tax rates incentivize the opposite of a productive society. I would say it is more feudal than paying the government rent. > (Also, re: property taxes and takings, check out Tyler v. Hennepin. 9-0. https://www.oyez.org/cases/2022/22-166 https://www.oyez.org/cases/2022/22-166) This does not seem incongruent with the idea that everyone is renting the land. The important point is the government can take it and sell it to someone who will do something productive with it.
kiba 11mo ago
The taxes must be high enough if you want to drive the price of land down to zero. Lands worth million of dollars represented economic rent untaxed by the government. That leaves you with other factors in the consideration of purchasing real estate such as the price of the building itself, as opposed to the land.

twoodfin 11mo ago

You got it. The LVT doesn’t work unless it’s so high it can force Grandma out of the house she grew up in, the one she thought was built on “her” land in Alameda. It has to act like a market rent paid to the government, or it can’t induce the behavior changes it’s supposed to. Hard to believe Americans, at least, would accept that shift in property rights.

lotsofpulp 11mo ago

> are the taxes to be so large punative that half of everyday home owners need to sell up? Yes, either you are rich enough to occupy land in an expensive area for a suboptimal use (usually means central to transportation and population), or you have to give it up to someone who can make use of it. Note that homeowners who live further away from stuff are not impacted. It’s for underutilized lots that are being squatted on due to someone laying claim to it first decades ago, but that is not an efficient way to allocate resources in a society. Hence, why China can develop rapidly to benefit 80% of its population, while other developed countries are stuck catering to 20% of its population who got theirs first (or really, their ancestors did).

twoodfin 11mo ago
By “laying claim” you mean “holding a legally recognized title to the real estate”? That’s a property rights regime that applies to everyone. If you want to get rid of it you have to get rid of it for everyone, you can’t say “titles are no longer valid if the land they cover is valuable enough, but otherwise, out in the boonies, still good”. If nothing else, that’s a Constitutional takings problem.
- lotsofpulp 11mo ago
  The constitution already allows for it, via what happens when you don’t pay property tax. And property rights are very much a political negotiation (just before things get violent). The government takes a piece of everyone’s income with no problem. And land owners use the most resources of everyone. All the military spend to protect their asset, all the education, police, and judicial expenses to keep an orderly society, all the energy to move resources around the land. Right now, we take more, proportionally, from income earners (workers) who live in tiny apartments compared to rent seekers who squat on underutilized lots that use up a lot more of society’s resources.
  - twoodfin 11mo ago
    Sorry, I don’t understand your position. Income taxes are transfer taxes: The government takes a cut of money moving from a labor buyer to a labor seller. Not unlike excise taxes or tariffs, though we needed a Constitutional amendment for Congress to do it. Property taxes are property taxes. They’re premised on the notion that there’s a private owner of the property to be taxed, and those taxes fund services and protections via the elected government of the property holder. If LVT requires rent-equivalent rates to work, you can call it a really high property tax, but that’s just linguistic games: The government is charging rent on property it now effectively owns. What part of that do you disagree with? I took your comments to imply yes, in fact, under LVT the government effectively owns the land and charges rent on it, as it was in feudal times and perhaps should have continued to be so? (Also, re: property taxes and takings, check out Tyler v. Hennepin. 9-0. https://www.oyez.org/cases/2022/22-166 https://www.oyez.org/cases/2022/22-166)
    - lotsofpulp 11mo ago
      Any money the government collects is a tax. > If LVT requires rent-equivalent rates to work, you can call it a really high property tax, but that’s just linguistic games: The government is charging rent on property it now effectively owns. In nature, might makes right. Whether you fight against someone else to protect your property, or pay a gang to not disturb you, or pay a democratically elected government to not have the sheriff’s department to remove you. The concept of ownership and titles is very fluid depending on the situation, but what isn’t is the idea of paying for what you use. High earned income tax and low flat land value tax rates incentivize the opposite of a productive society. I would say it is more feudal than paying the government rent. > (Also, re: property taxes and takings, check out Tyler v. Hennepin. 9-0. https://www.oyez.org/cases/2022/22-166 https://www.oyez.org/cases/2022/22-166) This does not seem incongruent with the idea that everyone is renting the land. The important point is the government can take it and sell it to someone who will do something productive with it.

kiba 11mo ago

The taxes must be high enough if you want to drive the price of land down to zero. Lands worth million of dollars represented economic rent untaxed by the government. That leaves you with other factors in the consideration of purchasing real estate such as the price of the building itself, as opposed to the land.