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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

#151

Post by WalterBright »

lotsofpulp wrote: post #114
WalterBright wrote: post #103

Earlier quoted context omitted.

> 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/hou…

Um, but their income won't be taxed, which will provide the capital to find all kinds of less-polluting ways to get groceries and vacation in Mexico.

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

#152

Post by Wowfunhappy »

SllX wrote: post #142
Wowfunhappy wrote: post #123

Earlier quoted context omitted.

> 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 t…

> A “carbon” tax would effectively be a tax on all goods and services that use energy (all of them).

Unless one company could find a way to produce goods with less energy than their competitors, or obtain its energy from cleaner sources, perhaps by investing in solar power. This would of course incentivize competitors to do the same.

Yes, it would cause prices to go up, but those prices would reflect the actual cost of the good. As you noted, you could offset the price increases by redistributing the tax revenue to the public. This redistribution doesn't make the tax pointless: you're giving a discount to individuals who make greener choices. People who pollute more (whether directly or indirectly via the products they buy) will pay more of the tax but not receive more back.

(This reasoning can apply to a LVT as well, but I prefer the carbon example because I think it's more clear-cut. Clearly, no one person owns the air. People do own land, so I'm more conflicted.)

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

#153

Post by ericmay »

Retric wrote: post #144
ericmay wrote: post #141

Earlier quoted context omitted.

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 les…

You are mistakenly believing that LVT means that two lots of the same size are taxed the same rate.

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

#154

Post by yellowapple »

SllX wrote: post #142
Wowfunhappy wrote: post #123

Earlier quoted context omitted.

> 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 t…

> Costs are not borne by the business but paid for by their customers in a manner which is usually obscured to them.

Only if the supply of the thing being taxed is elastic. The supply of land is inelastic, so (returning to the original topic) there is no way to price LVT into downstream rents; attempting to do so would mean pricing the thing above the value set by its demand, which would mean even less profit.

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

#155

Post by yellowapple »

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.

Why would it be identical? If one's in a better school district, then that would be a good reason for one to be of greater value than the other. That the one in the other school district has sufficiently higher demand that it has ten times the residents as the complex across the street further suggests a higher land value and therefore higher LVT.

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

#156

Post by SllX »

Wowfunhappy wrote: post #152
SllX wrote: post #142

Earlier quoted context omitted.

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 t…

> A “carbon” tax would effectively be a tax on all goods and services that use energy (all of them). Unless one company could find a way to produce goods with less energy than their competitors, or obtain its energy from cleaner sources, perhaps by investing in solar power. This would of course incentivize competitors to do the same. Yes, it would cause prices to go up, but those prices would reflect the actual cost…

> Unless one company could find a way to produce goods with less energy than their competitors, or obtain its energy from cleaner sources, perhaps by investing in solar power.

Sure. Let’s take that solar power investment: under your proposed regime, the cost of the supplies and materials and electronics of the R&D employees would be bear a carbon tax. The electricity to power the lightning and electronics would beat a carbon tax. Any transport they use will bear a carbon tax. The food they eat will bear a carbon tax. The mines the materials for the panels will bear a carbon tax. The transport of the materials will bear a carbon tax. The equipment for extraction will bear a carbon tax. The factories which produce the panels will bear a carbon tax. The intermediaries that ship and handle the panels will bear a carbon tax. The infrastructure to connect it to the grid will bear a carbon tax. And I’m sure I’m leaving out several thousand items, but that’s probably why the serious proposals say to just do it at the plants and refineries, I.e. increase the cost of energy directly.

Taxes are not a cost in the way supplies and materials are and a carbon tax doesn’t make the “cost of the good” more real, just higher. They are a fiat cost, hence the need to tie to something real: the cost of governance. Consumers do not accept lightly increases in their cost of living, as you can see in the present moment with the current price of fuel in the US and the likely parties to suffer in upcoming elections.

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

#157

Post by yellowapple »

zip1234 wrote: post #69
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…

Who said anything about a very high LVT? Where LVTs have been implemented, they phase them in and can make the taxes about the same as before. It will certainly increase taxes on people that are holding an empty lot in the center of town though.

A 100% LVT is the endgoal (since that represents full compensation for the externalities produced by excluding others from land), but I don't know of anyone proposing it as an immediate target; usually the idea is to ramp it up gradually while phasing out other taxes.

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

#158

Post by yellowapple »

UncleOxidant wrote: post #38
gruez wrote: post #28

Earlier quoted context omitted.

>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'. Every day the evening news and social media would carry a new, tearful story of a family forced to sell their home. This seems trivially fixable by making the tax revenue neutral (ie. every additional dollar collected by the LVT is c…

I'm assuming you mean a reduction in income taxes to offset the increase in property tax. This would still negatively effect retirees and others who don't make a lot of income and thus wouldn't have much income tax to offset.

That's where UBI (or "citizens' dividend", in Georgist parlance) comes in. Unless Grandma's living in a SFH in SoMa, she's probably gonna end up getting more in dividends and other public services than she'd pay in LVT.

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

#159

Post by yellowapple »

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.

The upper middle class is also tiny compared to the rest of the middle class (let alone the lower) who are decreasingly able to afford a home at all and would only benefit from LVT, especially if paired with UBI.

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

#160

Post by SllX »

yellowapple wrote: post #154
SllX wrote: post #142

Earlier quoted context omitted.

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 t…

> Costs are not borne by the business but paid for by their customers in a manner which is usually obscured to them. Only if the supply of the thing being taxed is elastic. The supply of land is inelastic, so (returning to the original topic) there is no way to price LVT into downstream rents; attempting to do so would mean pricing the thing above the value set by its demand, which would mean even less profit.

Yes but there is a way to fire anyone who sets an arbitrarily high LVT, which is why the OP at the root of this comment thread called a very high LVT a politically unserious proposal (emphasis mine) and I agree with that.

Property taxes do go into the cost of business by the way; and that would be true for an LVT as well. The land itself may be inelastic but that isn’t necessarily true of the products and services that are produced on it.

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