6 ms·

I'm amazed that anything this obviously correct is entering the Overton Window. Next we'll hear someone advocating land value taxes.

• Antiquarian 13y ago
  Be still my heart.
• toomuchtodo 13y ago
  > land value taxes What is the value of a land value tax? (ELI5)
  • 3825 13y ago
    In the most basic sense, land value tax would mean that the tax would be the same whether your land was just sitting there empty or you had a hundred-story skyscraper on it. I don't know what that effects it would have. I assume the first and most direct effect would be budget shortfalls in local governments which would probably try to create more fines[0] and sin taxes (assuming they are still legal). [0] LA has an almost $200 fine for jaywalking. I'd argue that fines and confiscated money from drugs should never go into general treasury much less directly used to fund the department collecting such fines and confiscations. Our government should run on taxes alone and not on fines and fees. http://www.nytimes.com/2013/12/26/us/in-a-car-culture-clash-its-los-angeles-police-vs-pedestrians.html?pagewanted=all http://www.nytimes.com/2013/12/26/us/in-a-car-culture-clash-...
    • toomuchtodo 13y ago
      Thank you!
    • dllthomas 13y ago
      "I don't know what that effects it would have. I assume the first and most direct effect would be budget shortfalls in local governments which would probably try to create more fines[0] and sin taxes (assuming they are still legal)." In principle you could have a revenue neutral transition to a land-value tax. In practice, it might very well lead to crazy numbers.
    • notahacker 13y ago
      Land which is worth enough to put a hundred story skyscraper on it usually doesn't stay empty for long, especially if the landowner is paying the same tax rates as the owners of the surrounding city centre lots. There's no a priori reason to assume that land value taxes would either fully replace other tax systems or not be revenue neutral. If collected locally, they might even favour well-managed local governments who should see their investment in better services reflected in higher land prices.
      • dllthomas 13y ago
        Interestingly, it would be a huge blow to cars in cities, as parking would need to get substantially more expensive.
  • praptak 13y ago
    I cannot ELY5 because I don't find that simple nor obvious and it would also require explaining the distinction of "unimproved" land value, but: "Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground." - Adam Smith
    • toomuchtodo 13y ago
      Thank you!
• tedsanders 13y ago
  Could you explain why this is obviously correct? It's not obvious to me. To me, the Fed's current process of bidding on very liquid, publicly sold assets seems to be the most neutral way of injecting dollars into the world.
  • natrius 13y ago
    Only the wealthiest Americans (and foreigners for that matter) own the assets the Fed is bidding on. It is not neutral.
    • tedsanders 13y ago
      Could you please explain why the money going to wealthy people is a problem? I think it's fine for $100 million to go wealthy people if the wealthy people lose $100 million of treasuries at the same time. It only becomes a problem if the Fed overpays for the assets. Which is why it's so important to pick giant liquid asset markets like US treasuries. Giant liquid markets are the least likely to be distorted by Fed action.
      • natrius 13y ago
        I don't think it's a problem per se, but it's not neutral. When the Fed purchases $100 million of treasuries with new money, it makes wealthy people as a class $100 million richer.
        • tedsanders 13y ago
          Could you please explain how it makes them $100 million richer? They have $100 million more in money, but $100 million less in assets. Their net worth is unchanged. They are not richer, even when considered as a class. (I think your comments could be improved if you made some of your thinking more explicit. I have difficulty following your lines of reasoning. Brevity has value, but also cost.)
          • natrius 13y ago