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Tax the Land

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Re: Tax the Land

#171

Post by [deleted] »

brians wrote: post #168
teddyh wrote: post #164

The idea of land-value tax strongly reminds me of the often cited, and much maligned, so-called fiduciary duty to shareholders which CEOs and/or board members reportedly have. This duty creates, it is said, an incentive towards naked short-term greed, which is often described as a bad thing. Now, even though this duty is also usually derided as fictional, the argument, if this duty did exist, would be reasonable. But…

The Georgist land tax taxed the unimproved value of the land. The tax remains the same whatever you build on it. Sale price already nudges you to preserve, improve, or augment the value of the land. So I think your concern either already would have happened, or if not, a Georgist land value tax makes it no more likely. Thanks for the opportunity to think this through this far; what am I missing?

[deleted]

Re: Tax the Land

#172

Post by long_time_gone »

s1artibartfast wrote: post #96
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.

How many years would it take to recoup your down payment if the home value doesn't change? If you pocket 500 per month, you are looking at around 35 years to break even on a $200k down payment. You will never break even when take into account opportunity cost compared to a low appreciation bond or stock.

> If you pocket 500 per month, you are looking at around 35 years to break even on a $200k down payment.

Not sure your definition of break even. After 30 years, I will have paid off the entire house.

Re: Tax the Land

#173

Post by yes_really »

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…

> Please, show me how an appropriately set income tax disincentivizes work. I'm guessing they can't and are equally uneducated on that subject. Income tax would only provide a disincentive to work if the alternative (assistance programs) is more attractive. Which doesn't seem to be the case.

It's almost tautological that taxing income disincentivizes work. Of course, it does not mean that a 30% income tax will disincentivizes work so much as to completely stop it (the "optimal" point in the Laffer curve is around the 30% point), but it is obvious that on the margin people will start dedicating less to work if their returns are lowered due to taxes.

Re: Tax the Land

#174

Post by rnk »

eric4smith wrote: post #163

Vox needs a spanking. (As always). Just imagine. I have some land. Lots of people would love to buy it it for different things. But for now, I just want to hang onto it until I'm ready to use it. And my house is sitting right next to it. Yeah, nimby blah, blah blah. But it's my house and my backyard and my land so... I have to be forced to sell it? Brah. Just another socialist redistribution scheme.

I don't want you to have to leave your land or be forced to sell it. But you should be paying taxes based on the actual value of it. Not on what it was 30 years ago when someone built it. California's proposition 13 is hiding actual values of many wealthy people's homes from the tax man; being able to transfer them without triggering new valuations used in taxes is a key problem.

Re: Tax the Land

#175

Post by SnowHill9902 »

Tax on land goes against the right to property. If all you have is illiquid land, how are you supposed to pay? You would be forced to sell which ends up being an indirect expropriation.

Re: Tax the Land

#177

Post by long_time_gone »

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…

> 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.

I would also getting the increased equity in the house as each mortgage payment lowers the total loan amount.

Re: Tax the Land

#178

Post by why_only_15 »

SnowHill9902 wrote: post #175

Tax on land goes against the right to property. If all you have is illiquid land, how are you supposed to pay? You would be forced to sell which ends up being an indirect expropriation.

Property taxes already exist in many states, so this isn't fundamentally different.

Re: Tax the Land

#179

Post by reducesuffering »

SnowHill9902 wrote: post #175

Tax on land goes against the right to property. If all you have is illiquid land, how are you supposed to pay? You would be forced to sell which ends up being an indirect expropriation.

Atleast deferred payments due on sale. That's the actual feasible political solution to California's prop 13 conundrum. Ok, it's impossible to raise effective property taxes to 1% (which causes some of the insane housing prices due to low carrying costs for speculation), because it would reduce the ability for some retirees to pay because they didn't budget for it, and they'll always vote against it. Then at least defer those taxes until time of sale.

Re: Tax the Land

#180

Post by [deleted] »

brians wrote: post #168
teddyh wrote: post #164

The idea of land-value tax strongly reminds me of the often cited, and much maligned, so-called fiduciary duty to shareholders which CEOs and/or board members reportedly have. This duty creates, it is said, an incentive towards naked short-term greed, which is often described as a bad thing. Now, even though this duty is also usually derided as fictional, the argument, if this duty did exist, would be reasonable. But…

The Georgist land tax taxed the unimproved value of the land. The tax remains the same whatever you build on it. Sale price already nudges you to preserve, improve, or augment the value of the land. So I think your concern either already would have happened, or if not, a Georgist land value tax makes it no more likely. Thanks for the opportunity to think this through this far; what am I missing?

[deleted]
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