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

economist.com

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

#411

Post by ilamont »

ab_goat wrote: post #258
chrisweekly wrote: post #179

Earlier quoted context omitted.

I'm a homeowner in MA interested to hear more.

I come from Western Massachusetts, which is characterized by smaller populations and lower budgetary allocations. The most significant budget item in most municipalities here is education, followed by road maintenance, which is often extremely costly. In Massachusetts, the basic cost estimate for repaving a standard road is approximately $1 million per mile, and this investment typically only lasts about a decade bef…

Eastern Mass resident here. Thanks for sharing this. I wish our elected officials were so transparent with these basic facts when they discuss road improvement projects.

In my city we pay a negligible “excise tax” on our vehicles. It’s like $100 for 2 older cars. If it were doubled or even tripled in think most people could afford it. This would seem to be the logical way to pay for road improvements, or a municipal gas tax.

Yes, people would skirt it (there already is a problem with people’s registering their cars in New Hampshire to avoid the excise tax, or driving over state lines to buy gasoline). But if even 80% of residents paid the taxes, it would make a real difference to municipal budgets for fixing roads.

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

#412

Post by epistasis »

phkahler wrote: post #105
Yodel0914 wrote: post #88

Earlier quoted context omitted.

It's the same in Australia. It seems like a pretty sensible way to encourage the best use of high value land.

But who gets to decide the best use? It seems like everyone but the owner.

It is only the owner who gets to decide the best use, whatever they want! But the land value is determined by what others are willing to pay to no longer be excluded from the area, or to be given a spot in the area.

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

#413

Post by asdff »

sethherr wrote: post #303
ab_goat wrote: post #289

Earlier quoted context omitted.

State-mandated design and build engineering requirements

Not having the bridge blow over or vibrate apart.

Yet there are wooden trestle bridges that have seen traffic for 100 years

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

#414

Post by AlbertCory »

(I lived in the Detroit area for nine months)

"Getting rid of the speculators" sounds good and might even BE good. But you know, Detroit's been in decline since the 1967 riots. No conceivable LVT is going to be a game changer. If the land isn't worth anything because no one wants to live there, that's the end of the story.

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

#415

Post by hn_throwaway_99 »

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.

I think the Wikipedia entry, https://en.m.wikipedia.org/wiki/Land_value_tax, actually does a pretty good job explaining land value taxes, and specifically in explaining the benefits compared to property taxes.

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

#416

Post by flagrant_taco »

zip1234 wrote: post #214
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…

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.

This argument has often confused me when so many people are concerned with global warming. Why should a city incentive land owners to develop and commoditize their land?

If we want to reduce human impacts on the planet, why not incentive the opposite and incentive leaving the land natural?

Land value taxes prioritize GDP and profit above all else. Isn't that how we got into this mess in the first place?

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

#417

Post by ItsMonkk »

s1artibartfast wrote: post #325
ItsMonkk wrote: post #314

Earlier quoted context omitted.

Under the existing system you are incentivized for your own land to be zoned as highly as possible while your neighbors land is restricted as possible to keep supply low. Since everyone votes against you and you vote against everyone, zoning is low just about everywhere. Under a land value tax this flips, and the majority vote would go to up-zoning.

No, I think it is the opposite. The more options available for your land and that of your neighbors, the higher your land is valued. This means you want the maximum restrictions to keep the value low, for both you and your neighbors.

And what is your take on when Minneapolis voted to allow multi-family units[0] and rents dropped[1] relative to other cities? Shouldn't those new units have brought higher land values, and with it higher rents?

[0]: https://archive.ph/7oCO6

[1]: https://archive.ph/lO8xY

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

#418

Post by hn_throwaway_99 »

waveBidder wrote: post #241
rconti wrote: post #5

Earlier quoted context omitted.

Fascinating. First I've heard of this. I can see the obvious advantages, though I'm sure there are disadvantages I'm missing.

Historically, whoever controls the land also tends to control political power. But also, assessment is a really tricky proposition.

> But also, assessment is a really tricky proposition.

If anything it seems like it would be much easier than the current property tax assessment scheme.

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

#419

Post by epistasis »

surge wrote: post #340
onlyrealcuzzo wrote: post #268

Earlier quoted context omitted.

They should implement a blight tax or a vacant land tax instead. I don't see how this helps Detroit's problems - unless they arbitrarily set high values on land where land is possibly already worthless. The areas with the most blight have the lowest land values already. The city already owns 75k out of 380k lots (~20% of the city - most of it vacant) - and instead of trying to sell the lots - the Detroit Land Bank ho…

I think the same tax should be on vacant rental properties. If you're still sitting on a rental property after 6 months to a year, you're charging too much for it since its apparently above market rate. At the very least you shouldn't be able to claim write off the loss on your taxes past a certain period. Maybe depreciation is another thing that should be fixed.

Pretty sure you can't write off missing rent as a business loss.

Depreciation definitely needs to be fixed. You shouldn't be able to claim 3% of a structures value as business loss every year, without some sort of evidence that you will actually tear down the structure in 33 years. And perhaps after it has been counted as depreciated once, future owners shouldn't be allowed to deduct the depreciation either.

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