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Tax the Land

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Re: Tax the Land

#41

Post by boredumb »

rapind wrote: post #24
refurb wrote: post #11

Earlier quoted context omitted.

Anyone who has been a landlord can attest "providing no service" isn't true at all.

Subjective. When I used to rent, I never saw my landlord after signing the lease. I was renting a house and taking care of small maintenance issues myself. I'd say it was far less effort to rent to me, then it would have been to live there himself. Of course there are bad tenants, but I suspect, like most things, we focus on those negatives and ignore all the low maintenance tenants when thinking about it.

a new roof is over 20,000$ a new floor in a modest home is over 10,000$ a burst pipe will be over 1,000$ interest payments are thousands a year property taxes are thousands of dollars a year

all are guarantees even with the lowest maintenance tenants.

Re: Tax the Land

#42

Post by trgn »

andrepd wrote: post #30
sokoloff wrote: post #17

Earlier quoted context omitted.

If that were the case, why would someone else not bid $1 more to buy that house and rent it out? Then someone else would logically be willing to bid $1 more than that, until there was no easy profit left… I think the answer is that much of the landlord’s initial profit is more or less income from working a job (buying, insuring, readying, showing, screening, fixing, collecting, etc) as evidenced by the share that a p…

> If that were the case, why has someone else not bid $1 more to buy that house and rent it out? Because capital is privatised and scarce, therefore a working-class family wishing to buy a home to live on cannot do so since they're outbid by those with capital. This leaves them with two choices: (1) pay rent to a middleman with capital, who buys the house, or (2) beg a private entity for a capital advance to be repai…

> a working-class family wishing to buy a home to live

What people picture is owning houses. Landtax will not meaningfully make that more affordable. It will make holding on to land more expensive, therefore really putting pressure to extract the most value from it. Homes really aren't doing that. That will mean more capital improvements; more units on smaller lots, more apartments, ...

It will curb speculation, lower rents in the aggregate, but ownership of land will remain expensive, especially for poorly improved land like family homes.

Re: Tax the Land

#43

Post by derbOac »

I don't think the issue is taxing land per se, or even property, it's making illegal and taxing practices that are seen as immoral or not in societys best interest. This gets dangerously vague, but it has always been puzzling to me why actually blighted properties, essentially abandoned by owners not living anywhere near the area, werent taxed at ridiculously high rates.

The other side of the coin is municipalities abusing power to disenfranchise legitimate landowners. It seems like rules around all of this could be made clearer.

Sometimes it seems like you can go so far in avoiding a slippery slope that you're nowhere near one, but also nowhere near where you need to be.

Re: Tax the Land

#44

Post by trgn »

andrepd wrote: post #37
trgn wrote: post #29

Earlier quoted context omitted.

> providing no service Landlords are not parasites and provide a valuable service. I think a land tax would be great to curb speculation. Buying property, not providing any service (neither by renting nor capital investment in improvements), and just pocketing the appreciation, I agree, that's parasitic on the community. FWIW - I don't think a landtax would create a meaningful tilt towards more affordable home owners…

Oh but it is the case, for instance buy-to-let loans are a big thing in the UK from a few years back till now.

Thanks, I'll look into it!

Re: Tax the Land

#45

Post by danaris »

trgn wrote: post #29
andrepd wrote: post #7

There is something deeply wrong with the fact that you can buy-to-rent a property and immediately turn up a profit, essentially inserting yourself as a parasitic middleman in the process, providing no service, and extracting an economic rent.

> providing no service Landlords are not parasites and provide a valuable service. I think a land tax would be great to curb speculation. Buying property, not providing any service (neither by renting nor capital investment in improvements), and just pocketing the appreciation, I agree, that's parasitic on the community. FWIW - I don't think a landtax would create a meaningful tilt towards more affordable home owners…

> Landlords are not parasites and provide a valuable service.

Landlords take property that could be owned outright by the resident and extract, at best, a middleman's fee.

Some landlords also provide access to services such as repair, cleaning, etc and combine those fees with the rent, but there is no reason those could not be equally available to owner-residents without the landlord acting as a middleman, and there is nothing inherent in the nature of being a landlord that implies offering such services.

Re: Tax the Land

#46

Post by refurb »

andrepd wrote: post #34
refurb wrote: post #11

Earlier quoted context omitted.

Anyone who has been a landlord can attest "providing no service" isn't true at all.

But I have been a landlord, I rented out my old apartment for several years after I moved to my new home. I don't pretend the income I got was for "services rendered". It is trivially easy to demonstrate that: you can outsource all tasks (cleaning, maintenance, even management and accounting) and still turn up a profit, which implies that this profit is entirely due to your monopoly on capital wrt. the rentee, and no…

But the rental market and home purchase markets as separate markets. There is nothing that says rent has to be more than the cost of ownership. Go to a big city like Toronto and you'll meet plenty of landlords taking a loss each month. And there is nothing that says it has to remain static. Rents can drop while housing prices go up (see SF during Covid).

And in the end, I'm not sure it matters? I've lived in cities where despite being able to afford ownership, I choose to rent. I'm glad to exchange my money for exclusive use of a house that I take no financial risk on, have no obligation to maintain, has only negligible transaction costs and I can walk away from with a months notice. All of those things have intrinsic value to me, some of those being services that I don't have to perform.

I mean, is it unfair when someone rents out their cars on Turo and make a profit each month? Are they "extracting rents"?

Re: Tax the Land

#47

Post by silicon2401 »

andrepd wrote: post #7

There is something deeply wrong with the fact that you can buy-to-rent a property and immediately turn up a profit, essentially inserting yourself as a parasitic middleman in the process, providing no service, and extracting an economic rent.

> providing no service

Being a landlord does provide a service, the service of managing the land and property. I don't want to buy a house right now because I'm not ready yet, so I _want_ landlords to provide properties so that I can have a home without having to go through the process of buying one just to sell it a year or so later.

Re: Tax the Land

#48

Post by trgn »

giantg2 wrote: post #13

"The big question land value taxes help answer is: How can a government raise funds without distorting choices and possibly leaving people worse off? If you tax income, it provides a disincentive to work. If you tax property, it provides a disincentive to improve the physical buildings on top of the land." Of course it will distort choices and leave some people worse off. If the author can't see that, then they have…

>If I have .75 acres with a single family home and 30 years later the area around me is developed

I think this is exactly the framework. The idea is that that person right now is benefitting from increased community wealth (which would be realized in actual moneys upon sale of their property), and hence, should be taxed more.

Maybe there are some sophisticated ways to strike a balance, to avoid the situation you are describing. For example, people could pay less tax, but then they (or their estate) cannot pocket the capital gain upon sale of their property.

In any case, I think a land tax is much more equitable, because it punishes landholding, rather than punishes improving land. It's the poor use of land right now that I believe is the main driver of poor affordability of housing.

Re: Tax the Land

#49

Post by silicon2401 »

danaris wrote: post #45
trgn wrote: post #29

Earlier quoted context omitted.

> providing no service Landlords are not parasites and provide a valuable service. I think a land tax would be great to curb speculation. Buying property, not providing any service (neither by renting nor capital investment in improvements), and just pocketing the appreciation, I agree, that's parasitic on the community. FWIW - I don't think a landtax would create a meaningful tilt towards more affordable home owners…

> Landlords are not parasites and provide a valuable service. Landlords take property that could be owned outright by the resident and extract, at best, a middleman's fee. Some landlords also provide access to services such as repair, cleaning, etc and combine those fees with the rent, but there is no reason those could not be equally available to owner-residents without the landlord acting as a middleman, and there…

> Landlords take property that could be owned outright by the resident

Why do you assume every resident wants to own their property? When I lived in Baltimore you can be damn sure I didn't want to own anything in that city. There are valid reasons for renting to exist, landlords do provide valuable services, and there are people who do want landlords and renting to exist. It's okay to say you personally don't like landlords without making it seem like they're some kind of demons

Re: Tax the Land

#50

Post by Spooky23 »

throwaway894345 wrote: post #38
flenserboy wrote: post #23

This would be a great way to destroy (privately held) farms and significantly, permanently raise food prices.

While incentivizing denser factory farms over free range. Similarly, it incentivizes higher-yield GMOs over organic/local. I’ve been seeing a lot of this pro-density stuff pop up and it seems like urbanites trying to solve for urban problems on a national level despite that much of the nation doesn’t have urban problems. See also the various anti-car/everyone-should-bike-everywhere debates.

It’s not even that. LVT is one of these magical solutions to problems similar to the gold standard for goldbugs.

The reality is that it’s a highly regressive tax. Taxes shouldn’t be a prime driver of economic activity.

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