I like this. It's like "use it or lose it".
Because living in your home isn't a good enough use?
Detroit wants to be the first big American city to tax land value
121–130 of 910 posts
Re: Detroit wants to be the first big American city to tax land value
#122Earlier quoted context omitted.
Gentrification, which displaces renters (rents become too expensive for existing tenants so they need to leave the area), will start displacing some land owners as well. LVT would increase due to land value increasing, and the current land owners may not be able to afford the increased tax. If you don't allow deferment of the tax, pensioners might have to move unwillingly (low income that may not cover the tax). Most…
> Most proposals allow deferment for retirees until sale of the property, though, so it's kinda a non-issue. Ah more carve outs for boomers. I knew it had to be in there somewhere .
Most people I know who are younger than Boomers plan to someday retire, and so they too will benefit when that time comes.
Re: Detroit wants to be the first big American city to tax land value
#123Earlier quoted context omitted.
Which, from some points of view, is the point. The government wants money to be going toward investments (real, productive kinds), not sitting around as an inflation hedge.
It's not the governments job to care about that.
It very much is the government's job to deal with tragedy of the commons situations. It's arguably it's only job, outside of contract enforcement and national defense.
Re: Detroit wants to be the first big American city to tax land value
#124Perhaps someone who has thought about this more can explain how a 'land value tax' differs from existing property tax regimes that explicitly examine the value of improvements and the value of land... This Detroit case is interesting because there are different rates of taxation on the land, but the difference in rate could also be obtained by increasing the land component of a parcel's value.
Land value taxes don't factor in improvements. Improving the land results in no property tax change, so they incentivize doing more useful things with the land.
They factor in both your improvements and all the improvements around you.
If if someone in your neighborhood repaints their house, your land becomes more desirable. This is true for you and others!
Re: Detroit wants to be the first big American city to tax land value
#125Earlier quoted context omitted.
> Most proposals allow deferment for retirees until sale of the property, though, so it's kinda a non-issue. Ah more carve outs for boomers. I knew it had to be in there somewhere .
My grandmother (greatest generation) built her house in the 50s and lives on a fixed income. Should she be forced to sell (assuming she couldn’t afford LVT) for an investment she took all the risk to develop? We’re so addicted to spending that anything that leads to generational wealth is fair game for governments to loot?
Does she not already pay property tax on her home? And sales tax on her purchases?
Re: Detroit wants to be the first big American city to tax land value
#126Earlier quoted context omitted.
Land value taxes don't factor in improvements. Improving the land results in no property tax change, so they incentivize doing more useful things with the land.
Land in Detroit is cheap already. This sounds like a way for investors to build big things and not increase their tax bill.
Giving investors a greater incentive to build big things is the exact point
Re: Detroit wants to be the first big American city to tax land value
#127Earlier quoted context omitted.
Don’t improvements in nearby plots change the value of a plot of land?
Yes, by design. One major goal is to prevent a landowner from squatting on an empty lot while their neighbors build prosperity around it. The "squatter" then cashes in, having done nothing themselves. "Everyone works but the empty lot" is the commonly used phrase. The goal of an LVT is to insulate a landowner's tax bill from being affected by their own improvements. Its anti-goal is to insulate a landowner from chang…
Another benefit is that it encourages more efficient use of land. Existing taxes mean that if you demolish a high density retail strip and replace it with a McDonald’s or Walmart with large parking lot/drive thru, the tax income plummets while the cost to maintain the roads and plumbing remains the same.
Re: Detroit wants to be the first big American city to tax land value
#128Earlier quoted context omitted.
Given that it was never "your" land to begin with (what, did you create it?), that's not an unreasonable approach.
That device you used to post that comment, what, did you create it? Those clothes you are wearing, did you create them? The car you drive, did you create it? I’m not saying anything pro/con the LVT. But measuring ownership by whether you created it or not is a pretty terrible measure. You wouldn’t own _anything_ worth any value in the modern world.
The difference is that someone created the products that I own and I payed them for it. However, no one (at least no one human depending on your religious beliefs) created the land.
Re: Detroit wants to be the first big American city to tax land value
#129I hope they do try it. If they do, one of two thing will happen. Either it will fail dramatically, in which case the LVT muppets can finally shut up about it... or it will succeed, all of our cities will migrate to this new utopian taxation scheme, and the LVT muppets can finally shut up about it.