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Redfin Economist says land value tax will fix the economy

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Re: Redfin Economist says land value tax will fix the economy

#111

Post by onlyrealcuzzo »

colinmhayes wrote: post #67
onlyrealcuzzo wrote: post #49

Earlier quoted context omitted.

A LVT can be implemented while other taxes are reduced to make up for it. If income tax drops by X% and a LVT of Y% is implemented to, theoretically, keep the same revenues - some people will win and some will lose. The idea that all of the middle class, upper class, and wealthy will lose seems absurd. Some people seem poised for a loss - all the people living in SFH in the middle of a city where lots are worth $2M.…

The upper middle class is largely defined by having a large amount of their wealth in their single family home. They would absolutely be crushed by a LVT, since discouraging single family homes on expensive land is pretty much the whole point. Hurting the people with the most political power is not a successful political strategy.

Sure - if that's how you define upper middle class - then by definition, it is true.

I'm not sure that's actually what the upper middle class is.

The US is >50% urban. Wealth MASSIVELY skews urban. Home values massively skew urban.

I would not be surprised if >50% of the "upper middle class" does not own an expensive SFH in the suburbs.

And, again, this is beside the point.

If income tax is reduced by 50% for the average upper middle class family, and then a LVT makes up the difference - there is no change. You're just incentivizing different behaviors.

It comes down to implementation.

Re: Redfin Economist says land value tax will fix the economy

#112

Post by bobthepanda »

notahacker wrote: post #93
bobthepanda wrote: post #21

Earlier quoted context omitted.

Part of how LVT "solves" this is that if you really don't want to develop your property to the point that the market thinks it can handle, you have to put your money where your mouth is to enforce NIMBYism, since the land tax of developing vs not developing would be the same.

Frankly, people are already giving up moneymaking opportunities by not turning their literal own backyard into a multistorey apartment development or glue factory where permitted. LVT doesn't radically alter that, just adds a stick incentive as well as a carrot incentive Usually the obstacle is they're not permitted to, not least because the neighbours don't want it. LVT doesn't solve the neighbours not wanting it -…

> LVT doesn't radically alter that, just adds a stick incentive as well as a carrot incentive

Yes, that's the point, the current levels of incentive are not working so we need to crank it up

> LVT doesn't solve the neighbours not wanting it

The point is to crank up the pain, a lot. NIMBY-ism can be very local since not every parcel of land is being developed at the same time, but the beauty of LVT is that land value doesn't vary much in a local immediate area, so it hits everyone the same. The idea is that if everyone is hurting, they will seek relief as a group by overall relaxing restrictions that would better allow them to meet their tax burden.

> For some things it makes it worse: now people protest against mass transit they don't think they'll hear or will bring the "wrong sort of people" into the neighbourhood because land near a transit hub will be in a higher tax bracket.

This already happens. Those who want to NIMBY against new development will do so in any shape or form it takes, and it's not clear that the current paradigm is really effectively addressing this either.

> And if LVT is assessed on development potential of the land

LVT is assessed on land value, and development potential is but one piece. Other pieces include convenience, good amenities like parks and schools, etc.

Part of why I find LVT so appealing is that it has the potential to address (not necessarily completely solve, but address) the US's very unequal system of things like access to good schools, parks, convenience that are more or less funded by local property taxes; if you want good services, you will also be forced to open those up to others as well to address your tax burden.

Re: Redfin Economist says land value tax will fix the economy

#113

Post by lukasb »

hash872 wrote: post #94
hash872 wrote: post #24

A very high LVT is a politically unserious proposition, because it would involve drastically raising taxes on the people who actually vote & hold political power in society- the middle class, upper middle class, and wealthy in suburbs and low-density urban areas. All of the alleged 'efficiency' gains you hear Georgists claim really mean 'middle class homeowners forced to sell their single family home to developers du…

Like here, just to make the point, here is a quote I saved from a Scott Alexander Substack discussion of Georgism. I liked this so much I saved it in Notion, sorry I don't have the commenter's name. If you read a lot of Georgism stuff, you'll notice that they call literally everything 'speculation'- if you want to, you know, live in your home, that's greedy 'speculation' that an LVT will stamp out: "A greedy land spe…

And? This is basically an argument for preserving the status quo of housing. The status quo sucks.

Re: Redfin Economist says land value tax will fix the economy

#114

Post by lotsofpulp »

WalterBright wrote: post #103
strongpigeon wrote: post #51

Earlier quoted context omitted.

What I guess the parent is implying is that by taxing something, you’re effectively disincentivizing it. Tax land value, you’re punishing people for making land valuable. Tax pollution, you’re incentivizing people to pollute less.

> Tax pollution, you’re incentivizing people to pollute less. Exactly. Taxing pollution not only raises needed tax revenue, it reduces pollution as a side effect. It's a winner of a way to run things.

It also reduces people’s (perceived) quality of life as they can no longer drive their F150s to get groceries and fly to Mexico and Hawaii for vacation every year. Not to mention all the reduction of gadgets and trinkets due to price increases in plastics. And smaller homes and plots of land, if not apartment style living due to needing to be closer to everything.

The solution to pollution ($30/gallon gas and $1k/hour flights, or whatever numbers make consumption go down) was obvious a long time ago. The problem is it is not going to be political popular for people to vote to kill their own dreams of future consumption.

Re: Redfin Economist says land value tax will fix the economy

#115

Post by throw0101a »

hash872 wrote: post #24

A very high LVT is a politically unserious proposition, because it would involve drastically raising taxes on the people who actually vote & hold political power in society- the middle class, upper middle class, and wealthy in suburbs and low-density urban areas. All of the alleged 'efficiency' gains you hear Georgists claim really mean 'middle class homeowners forced to sell their single family home to developers du…

> Every day the evening news and social media would carry a new, tearful story of a family forced to sell their home.

The same things were said with market value assessment was in introduced in Ontario, Canada:

* https://en.wikipedia.org/wiki/Municipal_Property_Assessment_...

Municipalities were forced to used the market value, but could determine rates themselves. Not much happened IIRC.

Re: Redfin Economist says land value tax will fix the economy

#116

Post by xxpor »

motohagiography wrote: post #97

I personally advocate things like urban density, mixed use zoning, walkable cities, human sized homes, urban forestry, but I don't think LVT's are the right tool. I live in a city with "market value assessment" for property taxes, and it profoundly lacks transparency, and is a very dodgy regime altogether. The main thing a LVT creates is constant churn as (retired) people cease to be able to afford to live in their h…

>who may be skeptical of centralized policymaking.

Oh, we're talking about zoning?

>The main thing a LVT creates is constant churn as (retired) people cease to be able to afford to live in their homes, incentivizes being a landlord, and punishes family wealth creation via home ownership (which is a barrier to class mobility)

Yes, this is in fact literally the point.

You can't have a growing population, and then depend on land ownership to generate wealth in perpetuity. There's only so much land. The class mobility point is especially hilarious. Yeah, Joe the Waiter is really going to be able to afford the $1.5 million 2000 sq ft house in Seattle to move his family up the ladder.

Re: Redfin Economist says land value tax will fix the economy

#117

Post by InefficientRed »

sudden_dystopia wrote: post #32

Disagree. We should go the other way, abolish all primary residence property taxes and replace with value added taxes. Other lands for secondary and commercial properties can still be taxed. Otherwise you are really just leasing land from the government. On a somewhat absurd tangent, I’ve been toying with the idea of something I call a “land dividend” to solve homelessness. If every US citizen had by birthright, a sm…

> If every US citizen had by birthright, a small parcel of land with no taxes owed, they would always have somewhere to go.

With no restrictions on use of the land, this is obviously unsustainable and impossible to make fair. Not all land is equal and if someone trashes their lot then it can't be used by the next generation.

> Even if they lived in a tent

This already exists -- it's called public lands.

You can already do this on BLM and some USFS land. 14 days in any 25 mile radius. If you have a car then it's hard to go unnoticed but moving around to stay in compliance is easy. If you only have a tent then you could go unnoticed basically forever if yo aren't stupid so the 14 day rule doesn't really matter.

Incidentally, most homeless folks have issues that make it impossible to live out of a tent on public lands. Deeding them a small plot that is technically theirs wouldn't really solve that issue.

Re: Redfin Economist says land value tax will fix the economy

#118

Post by colinmhayes »

onlyrealcuzzo wrote: post #111
colinmhayes wrote: post #67

Earlier quoted context omitted.

The upper middle class is largely defined by having a large amount of their wealth in their single family home. They would absolutely be crushed by a LVT, since discouraging single family homes on expensive land is pretty much the whole point. Hurting the people with the most political power is not a successful political strategy.

Sure - if that's how you define upper middle class - then by definition, it is true. I'm not sure that's actually what the upper middle class is. The US is >50% urban. Wealth MASSIVELY skews urban. Home values massively skew urban. I would not be surprised if >50% of the "upper middle class" does not own an expensive SFH in the suburbs. And, again, this is beside the point. If income tax is reduced by 50% for the ave…

> US is >50% urban

Source? My understanding is that most Americans live in suburban areas. I live in Chicago, where the suburbs have 3x as many people as the city. The city population is largely split between the poorest in the region and richest, most white collar workers live in the suburbs. Seems to be true to a lesser extent in NYC, and it's hard to say there's any urban area in LA, the whole place is suburban.

Re: Redfin Economist says land value tax will fix the economy

#119

Post by SllX »

Wowfunhappy wrote: post #105
SllX wrote: post #85

Earlier quoted context omitted.

That’s optimistic. You’re reframing tax-policy to shape landowner behavior towards your desired outcome on the presumption that this will be an improvement of the land by increasing the cost of owning it by fiat. Sin taxes exist for a similar reason and have similar problems. Taxes should not be conceded as an instrument of power to reorient society into a form viewed by a subset of society as correct, but recognized…

> Taxes should not be conceded as an instrument of power to reorient society into a form viewed by a subset of society as correct Why? If taxes are going to have side effects anyway, I think we should try to make those effects positive instead of negative. > Regardless of reason, taxation is a taking of assets from its owners, and this is a moral compromise we tolerate in service of having a government at all. I don'…

> Why? If taxes are going to have side effects anyway, I think we should try to make those effects positive instead of negative.

Simply put: it’s a moral hazard. When the goal of the tax is in service to something other than the cost of government, then the tax rate can be arbitrary, and manipulated to the benefit of those in political favor. That sort of arbitrariness is intolerable in a free and just society as we should aspire to be.

>> Regardless of reason, taxation is a taking of assets from its owners, and this is a moral compromise we tolerate in service of having a government at all.

> I don't think I agree with that.

> For example, I also think we should have a (revenue neutral) carbon tax. Part of the tax's purpose would indeed be to fund the government, but the other purpose would be to make people pay for the actual social cost of emitting carbon into the atmosphere, as opposed to passing them on to the broader public. This allows the free market to work properly.

You are free to disagree, but what is the purpose of the disagreement here? It is possible to both recognize taxes as both a taking of assets (often cash, but historically could be anything) and a necessity. You can view this on your own paycheck: every single dollar that goes to your government is a dollar that you personally earned and was taken from you (“withheld”) by your employer and paid to your government.

You have some influence over how those dollars are then expensed by your government, by only to the extent allowed by the law through a power-sharing agreement (“the Constitution”, both Federal and your State’s). The larger the government, the less influence you have, and the more likely a higher percentage of the earnings which were taken from you will go to benefit folks you would rather it didn’t (“wasted”).

But you raise a good point about the side effects: we are going to have taxes anyway, and the side effects are going to matter in the discussion. Where they matter though is not in the purpose of the tax—that is and should remain to cover the cost of government—it matters in which taxes are implemented to cover the cost of government. As long as that remains the basis, there is much room for improvement in the way we levy taxes.

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