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Tax the Land

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Re: Tax the Land

#121

Post by diebeforei485 »

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.

It's reasonable to offer options to low-income retirees, for example allowing them to defer property tax payments until death. Texas does this, it works alright.

Note that a single family dewlling on .75 acres likely costs the government a lot of money to provide services (plumbing, sewer, electric etc) and is likely already a net debtor to the city/county. This style of development is why American (and Canadian) cities are going broke.

Re: Tax the Land

#122

Post by anamax »

"It's the poor use of land right now that I believe is the main driver of poor affordability of housing."

The assumption that everyone who wants to live in {place} should be able to do so is interesting.

It's quite likely that {place} is a good place to live because there aren't too many people who live there. If that's true, we either come up with some way to limit the number of people or we destroy {place}.

As to the "but what about the poor people who provide services?" - sorry - I don't have have any sympathy for rich people who don't pay the help enough. Said rich people can do without.

Re: Tax the Land

#123

Post by PaulDavisThe1st »

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 seem to be assuming that a rental property is subject to a mortgage. I don't know how what fraction of the US rental property is covered by mortgages, but it is definitely not 100%. For those that are not, your math is totally wrong.

I've been a landlord of a non-mortgaged property and am about to become one again (reluctantly). We charge a below market rental rate, and typically make around 4-6% (pretax) of the nominal property value a year (we typically divert 1-2% of the rent into a maintainance fund).

Re: Tax the Land

#124

Post by uoaei »

giantg2 wrote: post #90
aperson_hello wrote: post #53

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. This policy only makes sense where zoning is also loosened enough to actually build on the land though...if zoning doesn't allow you to do anything with the land to make more money (building apartments, subdividing, etc.), this just becomes a tax on poor landowners.

"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…

Do you have an argument against redistribution that isn't "I disagree with what the public wants"?

Re: Tax the Land

#125

Post by uoaei »

giantg2 wrote: post #94
trgn wrote: post #48

Earlier quoted context omitted.

>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…

"(which would be realized in actual moneys upon sale of their property), and hence, should be taxed more." If it were taxed only when realized, that would make sense. "It's the poor use of land right now that I believe is the main driver of poor affordability of housing." It's the preference of a large number of people to live in a small area. You could fix this by capping the number of jobs so that increases in popu…

Your solutions seem hacky and off-the-cuff, when we could solve the problem by addressing it directly: if a large number of people want to live in a small area, make that area support a large number of people! High-density housing with walkable neighborhoods, and excluding cars from walkable spaces, makes all of the typical pains of city-dweller life melt away.

Re: Tax the Land

#126

Post by beebmam »

anamax wrote: post #122

"It's the poor use of land right now that I believe is the main driver of poor affordability of housing." The assumption that everyone who wants to live in {place} should be able to do so is interesting. It's quite likely that {place} is a good place to live because there aren't too many people who live there. If that's true, we either come up with some way to limit the number of people or we destroy {place}. As to t…

>It's quite likely that {place} is a good place to live because there aren't too many people who live there.

Citation needed. Intuitively to me, it seems that {place} is a good (or bad) place to live because of a lot of reasons, not just one, as you suggest.

Re: Tax the Land

#127

Post by powerslacker »

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…

Income tax definitely disincentives work. Source: my life. In the current economic situation I could easily take on another 40/hour a week job. If I do that I only get to keep just over half of the additional pay my extra job would supply. It's not worth my time to work for half my 'hourly rate'. So now there's an extra job vacancy.

Re: Tax the Land

#128

Post by azth »

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.

As someone else mentioned, landlords provide a valuable service to the economy. They take on the risk of property ownership and maintenance etc.

Now, if we look at why the three major religions prohibited money lending with interest, we can see where the true parasitic middlemen are: the money lenders.

Re: Tax the Land

#129

Post by dismalpedigree »

uoaei wrote: post #124
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…

Do you have an argument against redistribution that isn't "I disagree with what the public wants"?

The masses are asses. We shouldn’t just do things because the most people want it. Thats called tyranny by the majority.

Re: Tax the Land

#130

Post by Hammershaft »

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…

> Of course it will distort choices and leave some people worse off. If the author can't see that, then they have a serious bias problem. The whole point of the land value tax is to tax land to encourage higher density and higher cost use.

Under our current system we subsidize low value land uses by subsidizing the crap out of infrastructure to expansions of suburban areas zoned for single family homes.

https://www.youtube.com/watch?v=7Nw6qyyrTeI

The only revenue positive portion of nearly any modern american city/town are the few sparse walkable mixed use neighbourhoods and the dense urban core. Policies like a land value tax that push for higher value land uses are necessary to stave off the oncoming wave of municipal bankruptcies America faces.

> Income tax would only provide a disincentive to work if the alternative (assistance programs) is more attractive.

You are thinking in absolute terms and not on the margins. If the marginal income tax beyond a threshold jumps by %10, then even discounting the increasingly marginal value of each additional dollar earned I will value the return on work less when I hit that tax threshold.

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