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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

#141

Post by ericmay »

Retric wrote: post #139
ericmay wrote: post #134

Earlier quoted context omitted.

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.

In such a case I think it wouldn’t be possible to have those two buildings be taxed exactly the same per-person because by virtue of 10,000 people living in an equivalent lot you’re demonstrating that the land value is quite high and so the 1,000 person lot would have to be adjusted significantly. You’d have to actually cram that many people onto a lot too, which means you are looking at a location like Manhattan level density in which case it’s very unlikely that a 1,000 person property isn’t paying significant land value taxes.

I’m sure we can come up with contrived examples of things, but be open-minded to how things could work.

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

#142

Post by SllX »

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…

Ah, that’s a misunderstanding.

Taxes are a cost from a business accounting perspective. Costs are not borne by the business but paid for by their customers in a manner which is usually obscured to them. A “carbon” tax would effectively be a tax on all goods and services that use energy (all of them).

Now my understanding (when I’ve raised this cost of governance issue with advocates prior anyway) of a lot of carbon tax proposals is that the taxes paid would be remitted back to taxpayers or citizens in some way in a kind of Robin Hood-like manner rather than actually used to cover the cost of government, but this doesn’t actually accomplish anything and I disagree with that kind of scheme on prudential grounds (inappropriate use of tax authority). In any case it would be cash seized from someone who earned it first. A power plant doesn’t emit hydro-carbons needlessly, it emits them as a function of a customer downstream paying for it: to power your refrigerator or to pay for the manufacture of the phone you purchased.

Whether you are levying the tax against the business operating the plant, the customer at the point of sale or any and all of the intermediaries, what you are effectively doing is raising business costs no matter how you phrase it or rhetorically justify it. This informs the final product and service price, so if costs go up including taxes, you should also expect prices to go up.

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

#143

Post by notahacker »

bobthepanda wrote: post #112
notahacker wrote: post #93

Earlier quoted context omitted.

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…

> 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.

Nope. If I'm hurting from my tax burden, I don't want to remove restrictions on development which will make my land more valuable (unless I've decided to move). On the contrary, there's nothing I'd love more than a zoning restriction which not only stops my neighbour building an apartment block overlooking my property but also reduces my taxes as my dwelling no longer sits on land which can be considered prime real estate for building apartments on.

(As an aside, talking about 'cranking up the pain a lot' on people who are guilty of the crime of enjoying a house they bought in an area which is nice as a benefit to the system is a large part of the reason that Georgism has never really got anywhere)

> 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.

But as I said in the part you reply to, LVT explicitly creates new incentives to NIMBY: people that do not find the noise of a mass transit system bothersome will find the tax increases bothersome (unless they're personally big users of the system). That's more people opposing the development than before. Indeed it creates incentives to NIMBY against stuff almost universally considered good because the further away the excellent public school is, the less tax you pay. This doesn't mean facilities will be built in deprived areas, it means people will seek to block them being built in good areas. A "solution" to NIMBYism which creates more NIMBYism is no kind of solution at all

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

#144

Post by Retric »

ericmay wrote: post #141
Retric wrote: post #139

Earlier quoted context omitted.

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.

In such a case I think it wouldn’t be possible to have those two buildings be taxed exactly the same per-person because by virtue of 10,000 people living in an equivalent lot you’re demonstrating that the land value is quite high and so the 1,000 person lot would have to be adjusted significantly. You’d have to actually cram that many people onto a lot too, which means you are looking at a location like Manhattan lev…

First absolute density isn’t relevant in my example as a single property could hold 10,000 garden style apartments or 1,000 single family homes etc.

Anyway, it’s not that property taxes are 1:1 with population, however it does broadly correlate with density. A farmer next to a subdivision is a more extreme version of the same thing that only represents which farmer happened to sell their land. Meanwhile a farm is less value per acre than a housing development. Just as high rises represent more value per acre than garden style apartments and garden style apartments beat single family homes.

Land value taxes on the other hand ignore all such differences by design. The farmer pays the same amount per acre as the subdivision next door. LVT can capture increases in value as regions develops, but those increase don’t line up with political borders.

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

#145

Post by yellowapple »

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…

> All of the alleged 'efficiency' gains you hear Georgists claim really mean 'middle class homeowners forced to sell their single family home to developers due to crushing tax increases'.

Not if it's paired with a citizen's dividend or other form of UBI, which is what most Georgists (myself included) advocate. The idea is that if you're occupying your equal share of land value, then at a 100% LVT rate the tax you pay should be equal to what you're getting back in dividends + public services.

LVT+UBI therefore represents a tax savings for everyone except the wealthiest of land owners.

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

#146

Post by yellowapple »

newaccount2021 wrote: post #42
Wowfunhappy wrote: post #27

Earlier quoted context omitted.

Could you start small? Just a minor LVT to begin with, which could potentially be raised over time. Possibly implemented by a single city instead of nationwide.

then that city would die and everything around it would flourish

The precise opposite would happen.

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

#147

Post by ItsMonkk »

hardwaresofton wrote: post #125
InefficientRed wrote: post #101

Earlier quoted context omitted.

> 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…

> 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. Ah thanks for this criticism, the amount of loop holes would be pretty staggering/annoying. > Tax the net proceeds…

The economist in the podcast was explicitly asked why doing things like "heavily tax all non-primary residence homes" wouldn't work. Do you have any argument as to why she was wrong?

The many changes that you are proposing, and the tax evasion that will occur, and the modifications to stop those evasions, and the changed behaviors to those modifications are where the complexity lies. A Land Value Tax isn't a complicated thing. In fact, in a single land tax + carbon tax world, many things would be drastically simpler.

The beautiful thing about a Land Value Tax is that it is incredibly hard to evade. You own the land, you pay the tax. You don't want to pay the tax? Sell the land.

> Tax the net proceeds of rental properties at 90% and slap a 100% capital gains tax on any property that is not owner-occupied.

This disincentives building, and would harm rent prices over the long run. The land value tax does not have this downside.

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

#148

Post by forum_ghost »

harpersealtako wrote: post #89
Wowfunhappy wrote: post #27

Earlier quoted context omitted.

Could you start small? Just a minor LVT to begin with, which could potentially be raised over time. Possibly implemented by a single city instead of nationwide.

That's one of the big appeals of LVT: in theory it works incrementally. You try e.g. a 5% LVT and you should notice 5% of the effects.

so shouldn't we have already noticed some of this?

Property tax isn't THAT different, and one component of it is a tax on land.

Are we seeing the LVT effects in locales with high property taxes?

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

#149

Post by InefficientRed »

jjav wrote: post #135
InefficientRed wrote: post #101

Earlier quoted context omitted.

> 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.

> 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?

Good point, thanks for the criticism. There are many ways to solve this problem.

> 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.

No.

First, that incentivizes treating property as an appreciating asset.

Second, fuck low taxes on capital gains, period. The tax rate on any capital gain should not be lower than the highest rate on labor. Ever.

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

#150

Post by yellowapple »

SllX wrote: post #85
Wowfunhappy wrote: post #65

Earlier quoted context omitted.

Isn't the idea that a LVT would improve the use of land? If that premise is correct, it could cause the city to flourish and grow ahead of its neighbors. Implementing the change more narrowly would allow you to test that assumption.

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…

> by increasing the cost of owning it by fiat

You're ignoring the reductions/eliminations of other taxes. For example, replacing property taxes with LVT is the usual "first step", and would reduce costs for most homeowners (whose land is typically less valuable than the house sitting on it). Same with sales tax, or income tax, or any other non-LVT tax; non-LVT taxes are less efficient than LVT, so replacing them with LVT would maximize tax revenue while reducing individual tax burdens for all but the largest landowners (namely: landlords, be they residential or commercial/industrial).

> taxation is a taking of assets from its owners

The private ownership of land is itself theft from the commons, and is itself the product of state power and authority. A tax on the value of that land is therefore compensation for that theft, and is more than fair.

Modern society has gone on long enough letting land owners have their cake and eat it too. If land owners expect society to respect their exclusive claims over land, then it's on them to compensate society accordingly.

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