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> No profit from land ownership means no price bubbles, because there’s no incentive (in fact, a powerful financial disincentive) to idly hold onto land.
There is no incentive to hold land at all. Business transactions are motivated by monetary gain. If there is none, business will seldom occur.
I feel like I'm failing an IQ test here. I assumed he meant 100% tax on rent, but then there's this line: >Owners of valuable land would be forced to make maximum use of land with higher density rentals in order to make sufficient rental income to pay the land tax. What would the 100% be on exactly?
100% of the rental income generated from land value (as opposed to buildings/improvements). Formula: total rental income * (value of land / value of land and buildings)
[1] https://en.wikipedia.org/wiki/Georgism
[2] http://www.economist.com/blogs/freeexchange/2015/04/land-val...
This has to be satire. No one can be this narrow minded. It sounds like this author wants the government to essentially own all of the land, and only those who can afford to (the rich) to actually do anything with it. What's valuable land? What is this tax actually for? I think this is satire and the author is trying to make a point about socialism or something, no one can be these inept at economics.
https://en.m.wikipedia.org/wiki/Poe%27s_law
>Income from land is thus completely unearned and thus any income gained from land ownership should be completely taxed at 100%. That pretty much sums up the article. This is a horrible idea and will never happen.
Could you explain why it's a horrible idea? Merely asserting it isn't the same as refuting the article (which lays out some arguments) and doesn't really add anything to the discussion.
Taxes on land certainly make sense, but as written this essay's suggestion is to have a 100% tax on landholders income from land. So how, then, do they make money? Does this only apply to people who rent land but have done nothing to improve it? If I have a family farm that I want to hold onto, but rent out 100 acres to a lumber company does that mean I can't earn anything from that rent because I'm not the one doing the work? This essay needs some work to produce anything approaching a reasonable solution.
I may not be understanding his proposal fully, so please bear with me. If I'm making a complete jackass of myself through misunderstanding, let me know. > It’s worth noting that more tax on land doesn’t mean higher housing costs! For those living in enormous houses in very expensive neighbourhoods, it certainly will: but that’s by design. But shifting the tax burden onto rich folks like this, means that the average p…
> what exactly is going to stop the company that owns the 50-unit apartment building that I live in from passing that tax directly onto me and the other tenants via rent? Competition. Your landlords are already charging as much as they can get away with. > And how does this help my parents, who own land and have completely paid off their house? The enormous pool of money raised could help fund public healthcare and s…
The smallest tax/rent increase will go to those using the land relatively optimally (to be decided by tax surveyors).
This has to be satire. No one can be this narrow minded. It sounds like this author wants the government to essentially own all of the land, and only those who can afford to (the rich) to actually do anything with it. What's valuable land? What is this tax actually for? I think this is satire and the author is trying to make a point about socialism or something, no one can be these inept at economics.
I'm also not sure what makes it so hard for people to see the obvious fact that landlording is morally unjustifiable. Ideology is a hell of a drug I guess.
I may not be understanding his proposal fully, so please bear with me. If I'm making a complete jackass of myself through misunderstanding, let me know. > It’s worth noting that more tax on land doesn’t mean higher housing costs! For those living in enormous houses in very expensive neighbourhoods, it certainly will: but that’s by design. But shifting the tax burden onto rich folks like this, means that the average p…
The path is a bit roundabout but it makes sense. The point is to make underutilized land uneconomical to keep that way. Landowners can no longer just sit on land that's not generating revenue. To generate revenue they will build more housing. The economics of supply and demand with additional supply will make housing cheaper more than additional taxes passed on to tenants will make it more expensive.
Income from land is thus completely unearned and thus any
income gained from land ownership should be completely taxed
at 100%.
> Rural land and average suburban land would be taxed at low rates because that land is comparatively cheap. How would we know what the value of that land is? Does some assessor come around and place an "expert opinion" sticker price on that land?
Is that not done in America? The city of Toronto taxes my condo based on a fraction of it's assessed value. They don't even enter the building up decide what that value is, but they have a database of every homes estimated value.
It may be easier to see in rural areas. As a farmer, the price of farmland in the current climate seems to move to where the net profit on the productive use of that land is expected to be ~2-3% of the land's current value. So, as a rule of thumb, if you can expect to make $20-30,000 per year off 100 acres, then that 100 acres will sell for ~$1M.
If the tax on profits is 100%, the expected income will always be zero. Thus, the land is worth nothing. It doesn't really matter if it is in the heart of a city, or out in the middle of nowhere.