Detroit wants to be the first big American city to tax land value • Hacker News Board

Re: Detroit wants to be the first big American city to tax land value

#211

Post by maxerickson » Tue, Oct 17, 2023, 1:27 AM UTC

AmericanChopper wrote: post #187

harimau777 wrote: post #142

Earlier quoted context omitted.

You are already paying taxes, Land Value Taxes just seek to be a more efficient (since they try to target rent seeking rather than profitable labor) and more just (since they target land that the owner didn't create) form of taxation. So arguing that it's effectively the government stealing your property is only a valid argument if you are arguing that all taxation is theft. If that's what you believe then that's fin…

Property taxes and wealth taxes undermine property rights in ways that normal income taxes don’t. If I earn $100 and pay tax on it, whatever’s left over is mine forever, and I never have to pay tax on that income again. If I buy $100 worth of property, I have to pay tax on it again every year forever, which basically means I’m only buying the right to rent it from the government in perpetuity. Your use of the phrase…

You are renting it from society, not from government. Government is administering the rent.

Re: Detroit wants to be the first big American city to tax land value

#212

Post by eru » Tue, Oct 17, 2023, 1:28 AM UTC

somethoughts wrote: post #192

Scaevolus wrote: post #174

Earlier quoted context omitted.

You're forgetting the critical 3rd component of California property tax bills: Prop 13.

Perhaps my response was a bit long but I did attempt to address it. Perhaps I can elaborate: The question is to what degree/portion of Georgianism to apply and what to do when the land value component starts going up infinitely that its starts hurting the electorate. - Do you introduce alternative tax sources (i.e. increase income taxes on billionaires instead as in California)? - Do you introduce caps on annual land…

Exceptions are a bad idea, and as bad ideas tend to go, popular with voters.

Exempting by use, like primary homes or day cares, now means that the government is in the business of snooping on you to make sure that the primary home you declare is also your actual primary home. You also give well-off people with a bigger primary home (or owning a home at all instead of renting) a big tax break. Welfare for the well-off is not an efficient use of funds.

> - Do you introduce alternative tax sources (i.e. increase income taxes on billionaires instead as in California)?

If you do that, you lower your land value tax take. (Of course, if you already already sabotaged your land value tax base via exemption and limits, as per your second point, then bad decisions beget more bad decisions and special taxes on billionaires seem like a good idea..)

Re: Detroit wants to be the first big American city to tax land value

#213

Post by throwawa14223 » Tue, Oct 17, 2023, 1:28 AM UTC

Georgism has always felt like a big step in the wrong direction to me. It moves us away from what little concept of personal ownership we have left to more of a collective ownership.

Re: Detroit wants to be the first big American city to tax land value

#214

Post by zip1234 » Tue, Oct 17, 2023, 1:28 AM UTC

unyttigfjelltol wrote: post #150

ejstronge wrote: post #39

Perhaps 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.

They are loading the tax burden on the land rather than on structures. So, you can build the Taj Mahal or leave the lot a burned out wreck-- either way you pay the same tax. Many comments on the thread overstate what this is. I happen to think it's interesting, but for reasons unrelated to the article-- it's kinda goofy for the state to tax personal property that happens to be fixed to a location, like a fireplace, s…

Detroit has blight. LVT addresses property speculators that buy land to sit on it for 10 years and do nothing with it. With LVT they have to either pay up, develop it, or sell it. All options good for the city.

Re: Detroit wants to be the first big American city to tax land value

#215

Post by eru » Tue, Oct 17, 2023, 1:28 AM UTC

somethoughts wrote: post #201

ethanbond wrote: post #170

Earlier quoted context omitted.

Why would the land value spiral upwards? At some point the land becomes not worth buying/developing, so there’s still downward pressure on price. Or are you suggesting the tax rate will spiral upward infinitely? Again, at some point that just means it’s not worth buying the land unless the productivity possible on it is through the roof as well.

Here would be an example: North Texas homeowners getting 'sticker shock' with new property tax appraisals https://www.youtube.com/watch?v=Nu5jAqB88tc

That's an increase, but is it a spiral?

Re: Detroit wants to be the first big American city to tax land value

#216

Post by Mechanical9 » Tue, Oct 17, 2023, 1:29 AM UTC

tzs wrote: post #182

unyttigfjelltol wrote: post #150

Earlier quoted context omitted.

They are loading the tax burden on the land rather than on structures. So, you can build the Taj Mahal or leave the lot a burned out wreck-- either way you pay the same tax. Many comments on the thread overstate what this is. I happen to think it's interesting, but for reasons unrelated to the article-- it's kinda goofy for the state to tax personal property that happens to be fixed to a location, like a fireplace, s…

What's the tax used for, though? In many places a large part of what property tax is for is things like roads, water, sewer, police, fire, and schools. For most of those how much money is needed for them depends a lot more on what is on the land than on the land itself. E.g., the amount of sewer capacity needed for a lot is proportional to the number of people who live on the lot. It thus seems sensible to have a tax…

I think the idea is those roads and sewers have the same capacity downtown whether next to an apartment building or a surface-level parking lot. There will be the same number of lanes, street lamps, sidewalks, etc.

I would go further and actually argue that you need more road and sewer capacity because someone inserted a blank patch of land between dense areas.

The tax is an incentive to develop when the land's value is high. The city is basically saying that you have an obligation to build something useful or sell the land to someone who will.

I'm interested to see what happens. I'm hopeful that it will be good for urbanization.

Surrounding towns will probably not do LVT, which will also be interesting.

Re: Detroit wants to be the first big American city to tax land value

#217

Post by dheera » Tue, Oct 17, 2023, 1:29 AM UTC

friend_and_foe wrote: post #205

Oh man, I was hoping that this would be one of those things where they tax land to encourage new building, but it's just another city hurting for revenue looking to squeeze it's population a little more. Not that it won't spur development. It will. But not as much as anyone hopes. They have to eliminate taxes on all improvements to the land and tax the land itself only. Also remove code and zoning restrictions on it.…

Yep, if I own something I'd better own it. I shouldn't have to pay rent for owning land, or pay rent for owning a house.

I'll just keep renting, I guess, since it makes no difference.

Re: Detroit wants to be the first big American city to tax land value

#218

Post by s1artibartfast » Tue, Oct 17, 2023, 1:29 AM UTC

somewhereoutth wrote: post #169

EA-3167 wrote: post #86

Earlier quoted context omitted.

That's a lot more romantic until you remember it's just going to the government, not some mystical starscape.

Where I live the government is by, of, and for the people.

Thats what I learned growing up, but it seems like time have changed and reversed it.

Now people live by, for, and at the discretion of the government.

There is no personal property, only what the government allows you temporarily posses.

Re: Detroit wants to be the first big American city to tax land value

#219

Post by [deleted] » Tue, Oct 17, 2023, 1:29 AM UTC

BoiledCabbage wrote: post #144

injeolmi_love wrote: post #113

Earlier quoted context omitted.

Whenever something is taxed, less of it is produced. In the case of LVT, the tax is on land that is in a desirable location with lots of nearby amenities. LVT encourages urban sprawl by punishing retail, industrial, and residential concerns that choose to agglomerate with higher taxes. LVT means less walkable cities and more LA style sprawl.

> LVT encourages urban sprawl by punishing retail, industrial, and residential concerns that choose to agglomerate with higher taxes. Can you explain more? I don't see it. If a place already has high property taxes, and they are currently assessed on the land and the improvements then improved land in an area will receive a relative "tax reduction" compared to a full encompasing property tax. This means it is benefic…

[deleted]

Re: Detroit wants to be the first big American city to tax land value

#220

Post by gnopgnip » Tue, Oct 17, 2023, 1:29 AM UTC

ejstronge wrote: post #39

Perhaps 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.

Existing tax policies focus on the current market value of the land. Compared to a land value tax, existing tax policies under assess poorly used land or vacant land and the owners pay much less in taxes. This encourages speculation and discourages productive use.

The assessor can't the change the share of land vs structure unfairly any more than they can increase the assessed value unfairly. A homeowner can protest the assessment and provide comparable sales and other estimates that show a more objective split of value.

Michigan property taxes are interesting in another way, they have had issues with "dark store" restrictive covenants for commercial and industrial real estate. Basically the owner of a large commercial building argues the land/building has very little value on the open market, it is a single use building with restrictive covenants that prevent an alternative use. These restrictive covenants prevent the land from being sold to their main competitors, and these restrictive covenants are self imposed.