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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

#131

Post by jjav »

colinmhayes wrote: post #118
onlyrealcuzzo wrote: post #111

Earlier quoted context omitted.

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.

> > US is >50% urban

> Source? My understanding is that most Americans live in suburban areas.

One variable is that it really depends on the definition of "suburb" each person is using.

Take the greater Silicon Valley area. There's only three small urban cores, San Francisco, Oakland and San Jose. Even within those, a lot of the area is suburbs and even semi-rural and agricultural. So by that viewpoint, most of Silicon Valley is suburbs.

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

#132

Post by onlyrealcuzzo »

colinmhayes wrote: post #118
onlyrealcuzzo wrote: post #111

Earlier quoted context omitted.

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.

https://www.pewresearch.org/social-trends/2020/07/29/prior-t...

If you count places like Evanston, Yonkers, and Pasadena as Urban - then you get ~56% urban. If you pretty much only count places where the vast majority of buildings are multifamily - then you only get ~30%.

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

#133

Post by abakker »

pyradius wrote: post #106
abakker wrote: post #98

Earlier quoted context omitted.

Homeowners already pay "rent" in the form of property tax. Depending on where you are, this might be quite a high payment already. For a mortgage holder with property tax, a great deal of that payment is fees and taxes already.

Property tax falls on both the land and improvements. Inasmuch as they pay a 'property tax on land', they paid a reduced price to purchase said land. If there had been no tax on land, they would have simply paid that much more in lump sum for their fee simple ownership. The premise behind a land value tax is to take an increasing amount of the land rent in taxation, which at the extreme end would reduce the selling p…

Yes - I understand the theory, but, it is not exactly clear to me how private property rights - the things you actually buy when you buy land - are an issue for collective justice, and it is less clear how charging the a land value tax change this.

I think the core of it is that taxes are for the people to pay the government for services, and the value of land does not correlate to the amount of services used.

for example, a single person, dwelling on an acre of land may consume very little water, school usage, police assistance, etc. A 40 story apartment on an acre will consume a great deal more of those services. The value of the land is not taxed right now because it is understood that the improvements to the land dictate the cost of the services that the government needs remuneration for.

The government derives its mandate to tax from private property owners' demands that they provide services. Not vise versa.

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

#134

Post by ericmay »

Retric wrote: post #104
ericmay wrote: post #36

Earlier quoted context omitted.

> it would however tank the value of ultra expensive land. Well it would depend on why the land is expensive. What it would do (at least in theory which I do agree with) is force the expensive land to be developed for a useful economic purpose instead of just sitting there. For single-family homes and such a LVT is likely to be neutral or slightly positive b/c a lot of those homes weren't built on particularly valuab…

LVT’s don’t cover the cost of education, roads, police, etc that scale with population. What they tax is proximity to places people want to live or resources to be extracted etc. This tends to minimize the distance people travel to work, but it’s hardly go to force a billionaire to sell land they want to keep.

It depends on the implementation, but generally it actually would cover these things.

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

#135

Post by jjav »

InefficientRed wrote: post #101
hardwaresofton wrote: post #91

It doesn't have to be this complicated. We don't need a land value tax. The most straight forward way to make people avoid speculating is to heavily tax all non-primary residence homes. Cap the amount people can charge in rent to some %s of purchase value (incentive to have high purchase value) to and set a baseline on the taxes required and make the math for building property empire bleak (absolute destruction of th…

> Cap the amount people can charge in rent to some %s of purchase value (incentive to have high purchase value) Landlords will figure out how to setup wash sales, or as close to a wash sale as they can legally get, or trade property between entities owned by the same real people, or engage in swapping behavior with other large holders in a cartel-like fashion, etc. Closing all the loop-holes would be difficult. Tax t…

> slap a 100% capital gains tax on any property that is not owner-occupied

This is backwards. Such a tax will be a strong incentive to never ever sell since the seller would hand off all gains to the tax man. Who would want to sell?

Instead, you'd want to actually incentivize selling if you're not living on the property. Make the capital gain tax very low, that makes selling it off the most attractive option.

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

#136

Post by [deleted] »

onlyrealcuzzo wrote: post #132
colinmhayes wrote: post #118

Earlier quoted context omitted.

> 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.

https://www.pewresearch.org/social-trends/2020/07/29/prior-t... If you count places like Evanston, Yonkers, and Pasadena as Urban - then you get ~56% urban. If you pretty much only count places where the vast majority of buildings are multifamily - then you only get ~30%.

[deleted]

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

#137

Post by motohagiography »

xxpor wrote: post #116
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 depen…

Joe the Waiter buys a house in a rough neighbourhood with his partner Lance, who works a hospital caregiver job, and together, their relationship becomes a community fixture that makes that neighbourhood a little more desirable for other families, who move in, and leverage their property to send their kid to college, who in turn become engineers and lawyers, etc. Eventually, Lance dies, and Joe lives on his remaining pension in the house they had together, in a neighbourhood they invested their lives in and made it desirable and safe.

This hypothetical couple took a risk by moving into an area that was blighted by related naive policymaking the OP was advocating, and a LVT just penalizes them for their rapacious capitalist gentrification of a progressive policy failure.

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

#138

Post by ItsMonkk »

Wowfunhappy wrote: post #123
SllX wrote: post #119

Earlier quoted context omitted.

> 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…

> You are free to disagree, but what is the purpose of the disagreement here? Because in the case of a carbon tax, the government isn't taking assets that are rightfully yours; they're taking assets that rightfully belong to the public. Let's say that I bulldoze your house in order to expand the size of my factory. The factory might generate lots of additional revenue, but that revenue would not be rightfully mine. N…

A carbon tax is correcting the negative externality of using the carbon. So you are paying for the harm that you are doing to society.

In that same exact way, a land value tax is correcting the capture of the positive externality that is coming from your neighbors for your particular location because of your monopoly over it.

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

#139

Post by Retric »

ericmay wrote: post #134
Retric wrote: post #104

Earlier quoted context omitted.

LVT’s don’t cover the cost of education, roads, police, etc that scale with population. What they tax is proximity to places people want to live or resources to be extracted etc. This tends to minimize the distance people travel to work, but it’s hardly go to force a billionaire to sell land they want to keep.

It depends on the implementation, but generally it actually would cover these things.

If the land tax is identical between an apartment complex with 1,000 people and one across the street in a different school district with 10,000 people then it can’t.

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

#140

Post by robocat »

We have a sort of LVT in New Zealand: council rates are ~0.6% of the land+house value where I live in Christchurch.

* Major issue: LVT is related to valuation, but valuation depends on mortgage rates. House valuations are mostly driven by interest repayments, not scarcity. This was demonstrated in Christchurch because there were homes going for say 30% of “value”, even though housing was in short supply due to the 2010 earthquake. A property could not be insured so buyers could not get a mortgage, and without a mortgage properties were going very cheaply. I bought a uninsurable home for ~$200k that would have sold for about $600k if it was insurable. Insurance was unavailable because the floor was out of level by 60mm due to land movement - but the home was fine. I see friends buy a house based on how much they can afford to pay on the mortgage: the housing market value is not related to what houses are worth but mostly to what people can afford. Mostly a zero-sum game where buyers bid against each other for how much they can pay, and the bank wins.

* An LVT is expensive for retirees. An average home in Christchurch is $750000 which has rates (LVT) ~$5000, a single retiree gets about $21k. There is a rebate of up to $665 from the government for low earners (like retirees). Forcing people to move from their home is pretty shitty - I would like to be able to retire in fair comfort without being forced into a shitty retirement home.

* The NZ government introduced a bipartisan law to force allow infill housing without NIMBY constraints in all cities - overriding almost all city district rules. Housing density will go up, a lot. https://bonded.co.nz/news/what-do-the-new-medium-density-hou...

* Locals complain about farming land being wasted for residential subdivision. This is bollox. Land around Christchurch is low value for farming unless you can get irrigation - water is the resource limitation therefore land is not being wasted. I see similar nonsense reasoning supporting an LVT.

* After the 2010 Christchurch earthquake, about 8000 homes were permanently removed (redzoned[1]). Thousands of new sections were created on existing farmland (greenfield sections) but new housing requires infrastructure that takes many years to build[2]. There are between 100k and 200k homes in Christchurch (depending on when and how you count).

* Saying that LVT is only land value and not the house, is crappy misdirection. Land value is related to the value of the surrounding properties, which depends on the developed value of the surrounding properties. This really shows in Christchurch where a home in a good suburb pays far more rates (LVT) than a similar home in a bad suburb. Land gets revalued by the government, but the figures are kind of made-up.

[1] https://en.wikipedia.org/wiki/Residential_red_zone

[2] https://www.stuff.co.nz/the-press/news/70270288/5000-greenfi...

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