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Tax the Land

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Re: Tax the Land

#111

Post by s1artibartfast »

giantg2 wrote: post #104
s1artibartfast wrote: post #95

Earlier quoted context omitted.

It's not solely a redistribution scheme. It's based on the fundamental principle that the government is the ultimate owner of all land, and private individuals are simply renters. If you accept this to be true and good, then it makes perfect sense. If you are the type that wants to be non dependent on the government, it is deeply grating.

"If you accept this to be true and good oh, then it makes perfect sense." One can accept that the government owns the land while simultaneously believing that the government can abuse that power, just like a bad landlord can.

I don't disagree, But I do think the idea that the government, not individuals, is the ultimate owner of the land is a fundamental assumption of LVT. Not all people believe this.

Re: Tax the Land

#112

Post by s1artibartfast »

derbOac wrote: post #107
s1artibartfast wrote: post #89

Earlier quoted context omitted.

> 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. Because the governments don't want to take possession o the houses. If you tax them high, the owners default, because taxes exceed the property value. Then the government is the owner of a low value deteriorating asset that nobody wants. This…

Yes that has crossed my mind. However, I'm also aware of very publicized cases in my area where there was serious interest in a property from several serious, large buyers, it was sitting unused, like as an empty unused parking lot, but the owner, out of state and region, wouldn't sell and also wouldn't develop it (why this is the case no one could tell). These cases went on for decades, with the government eventuall…

>Maybe this is all more difficult than I think.

I think you basically get it. It all comes down to property rights vs public good. Take the extreme case of someone with a vacant lot in downtown Manhattan.

On one hand, the development could help the city and improve general prosperity. On the other hand, someone owns it and is free to use it (or not) as they see fit.

My understanding is that the current state of eminent domain is that public good is necessary, but not sufficient to justify the forced sale of the land. The city can not take it because someone else could develop it for the public good. The city could take it in very narrow cases, like if they wanted to put in a metro station and there were no viable alternatives.

Whether this is a feature or a bug is really a matter of perspective. Is the goal of the government and law to optimize for the greater good, or protect individuals against the greater good as long as they aren't harming anyone (and opportunity costs don't count!). I tend to land on the latter side, but get that others don't feel the same way.

Re: Tax the Land

#113

Post by nukemaster »

ekianjo wrote: post #19
nukemaster wrote: post #2

No matter what we do on the supply side it will be eaten up by the unlimited demand from people coming here. Unless we slow down immigration housing will always be too expensive. This only further hurts people living here by chasing them out of their homes and taking control of their communities away from them. We can't solve the problems of every country in the world by destroying our own. That only makes things wor…

> Unless we slow down immigration housing will always be too expensive. Tokyo has a huge demand in accommodation and guess what, they keep building a lot of apartment buildings and it works.

No post body was provided.

Re: Tax the Land

#114

Post by mdorazio »

bombcar wrote: post #86
long_time_gone wrote: post #78

Earlier quoted context omitted.

This isn’t really a source though, it’s requiring the other commenter to prove the point you made. Anecdotally, I know people who buy single family homes and rent them for profit. My 3 bed, 2 bath single-family home has a $3,000/monthly mortgage, I could easily rent it for more than $3,500 (closer to $4,000). Take out 10% for maintenance fees, and I net $200 a month.

That shows exactly the point, 10% for maintenance isn't enough, doesn't cover taxes, insurance, and other costs, and netting $200/month on a (assumed) $450k+ house isn't great, that's less than the interest earned on a deposit of the same amount. Even if you only count the downpayment, $2400 a year on $90k is a 2.6% return; you therefore are getting the majority of your return from appreciation. To actually make a pr…

You realize that a mortgage is a loan, right? You’re paying both interest and equity on it over time, which you need to take into account. The longer you pay it, the more of your payments are really going right back into your own pocket. Renters get zero equity in exchange for their rent.

And yes, I’ll agree that some portion of the ROI on a house is the expected appreciation, but we’ve setup a system where that’s effectively guaranteed in many locations and simultaneously unavailable to renters. There’s a reason “be a landlord” is now the go-to “get rich” strategy for a large number of people.

Re: Tax the Land

#115

Post by s1artibartfast »

ItsMonkk wrote: post #106
s1artibartfast wrote: post #99

Earlier quoted context omitted.

Some Land value taxers would exempt improvements. however, in practice, it is very difficult separate the hypothetical pre-improvement value from market value. Imagine trying to asses the value of a modern farm today for the hypothetical where a connecting aqueduct had not been built 70 years ago. Exempting improvements also undermines the argument that LVT puts the land to it's best possible use. When you improve la…

This is why we're starting occasionally to use the term "location value" instead of "land value". When we are taxing the land, what we are really accomplishing most of the time is taxing the positive externalities that your city is providing, as well as that or your neighbors and businesses. Building the aqueduct, or a city building a train terminal, both provide positive externalities for the entire region. Those ex…

This all assumes that it is moral and just to try to capture the value of positive externalities.

I fundamentally disagree on grounds of consent and equity.

It is one thing to recoup costs and upkeep for a collectively endorsed project. It is entirely different to claim and capture perpetual dividends on the positive externalities.

If a city builds a train terminal, the citizens pay for it once in taxes and bonds. The city should not be able to extract further value beyond upkeep. After investment costs are covered, the entirety of the benefit should belong to the people.

How many times over is it equitable to expect citizens to pay for a project?

This is the difference between non-profit and rent-seeking behavior, and I think governments should ask more as a non-profit.

This is why use and service taxes are far superior for taxing benefit.

Re: Tax the Land

#116

Post by pj_mukh »

giantg2 wrote: post #88
pj_mukh wrote: post #27

Earlier quoted context omitted.

The reform of zoning laws (atleast in California) is blocked by property owners sitting on low-tax properties. Raising the land value tax would be a surefire way to make the opposition disappear as property owners would have to scramble to make their land more productive.

Or they'll block land value tax just as they so zoning. But you seem to be agreeing with my point that it inherently is designed to affect choices (eg changing land usage to be more productive).

Yes, LVT solves problems at multiple levels (removes barriers to zoning reforms and incentivizes more productive use of land).

It’s also politically difficult to get passed. However, it seems if we were to try to turn the tide on just one policy, it would be LVT, as it solves a lot of other political problems downstream.

Re: Tax the Land

#117

Post by s1artibartfast »

pyradius wrote: post #108
s1artibartfast wrote: post #99

Earlier quoted context omitted.

Some Land value taxers would exempt improvements. however, in practice, it is very difficult separate the hypothetical pre-improvement value from market value. Imagine trying to asses the value of a modern farm today for the hypothetical where a connecting aqueduct had not been built 70 years ago. Exempting improvements also undermines the argument that LVT puts the land to it's best possible use. When you improve la…

It is not very difficult to separate improvements from the land. Critically, due to the deadweight loss of present taxes, even an inaccurate LVT would be superior to the present tax system. The margin of error for LVT is essentially "is it worse than the present system?" I'd recommend reading - Can Land be Assessed at Highest and Best Use? - https://www.jstor.org/stable/43817496?read-now=1&refreqid=ex... and Administ…

I will focus on your last three points as I think it summarizes the above examples. Generally,

I have two criticisms.

1) The claimed purpose of sate to allocate resources to the "Highest and Best Use" seems in conflict with the purpose of the state to protect individual autonomy and freedoms. Placing economic development and growth above the latter is essentially economic utilitarianism, and carries all of the baggage that goes along with it.

2) It models the state as a sovereign to the people, with overlying claims to any positive externalities of development, opposed to the servant of the people, who retain the rights to these externalities. I think this is apparent in the idea that the three value streams are unearned, and therefor belong to the government.

>Land and its value is the joint product of at least three things:

• nature, which created it;

-I see this as neutral, as this predates both the existence of the government and the people.

• government, which acquired it from other sovereigns and protects it from other powers and extends public works for the public's benefit

-As the servant of the people, the government is not entitled to the benefits of public works. These belong to the people, who commissioned the public works. By analogy, If a city builds a train terminal, the citizens pay for it once in taxes and bonds. The city should not be able to extract further value beyond upkeep. After investment costs are covered, the entirety of the benefit should belong to the people. How many times over is it equitable to expect citizens to pay for a project?

• synergism, which is the increment to value that spills over from social and economic activity in the neighborhood of each parcel of land.

-As I understand it, incremental value is generated by the social and economic activity of the people. It is the result of the labors, improvements, and collaboration with the community. It seems that the people have more collective claim than the government.

In summary, the people and the government have a working relationship. Is the model one where government behaves like a employer which entitled to the excess value after services rendered, or is the government the employee and the people entitled to the excess value after services rendered. I prefer the latter, and it seems LVT assumes the former.

Re: Tax the Land

#118

Post by RC_ITR »

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…

>We already see standard property tax forcing the elderly out of their homes in many areas.

This was exactly the narrative that led to Prop 13, and what it has led to is the most inflated property market in the entire world because there is nearly no carrying costs for a first (LA), second (Palm Springs), third (Atherton), or fourth (Tahoe) home!

Sure, a random subset of boomers can die in their empty 6 bedroom houses now, but countless people are moving to places like Texas where land value/property taxes have keep real estate prices relatively low (due to huge carrying costs).

I love CA, but the income vs. wealth/property tax split is what will kill it (at least in its current form).

Re: Tax the Land

#119

Post by paxys »

In California at least new construction is held back by zoning laws and prop 13. A land tax does nothing to fix either of those.

Re: Tax the Land

#120

Post by 8note »

s1artibartfast wrote: post #95
giantg2 wrote: post #90

Earlier quoted context omitted.

"Getting that 0.75 acres to turn over is exactly the point. Incentivizing them to leave (or better yet: subdivide and sell the land) is good for society." I doubt the affected person feels it's good. Quite frankly, the land value tax ideas seem absurd to me. It's just another redistribution scheme - work hard, retire, get forced off your land via tax. It seems it's the government's and everyone else's desire to just…

It's not solely a redistribution scheme. It's based on the fundamental principle that the government is the ultimate owner of all land, and private individuals are simply renters. If you accept this to be true and good, then it makes perfect sense. If you are the type that wants to be non dependent on the government, it is deeply grating.

I don't think you can avoid the government ownership of land, at least within the US.

If its not the governments, it still belongs to the natives the government stole it from. The individual's legitimacy comes from the government's claims over the land

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