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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

#501

Post by jonhohle »

J_Shelby_J wrote: post #149
jonhohle wrote: post #110

Earlier quoted context omitted.

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?

Where did the value of your grandmother's "generational wealth" come from? It came from renters and first time home owners putting money into the housing market. Your grandma is doing the looting.

She (and my grandfather) invested in building in an undeveloped area with their own money. They earned it by working and paying for their house and land.

Now public spenders think she owes them what she spent her life building.

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

#502

Post by Brycee »

AlbertCory wrote: post #414

(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.

If you dramatically reduce taxes to labour and capital, it quickly becomes a very attractive place to move your business or earn an income. And that's the start of a development flywheel. Instead of taxing productivity, land taxes reabsorb the value generated by the community (positive externalities), which would otherwise flow into the pocket of the guy who owns a parcel of land in proximity to the public good. You then use these tax revenues to produce more public goods, which benefit everyone, and then suck up the value that accrues to the land. rinse and repeat.

I highly recommend grabbing a copy of land is a big deal. https://www.amazon.ca/Land-Big-Deal-wages-about-ebook/dp/B0B...

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

#503

Post by jimmyk2 »

xienze wrote: post #465
gnopgnip wrote: post #232

Earlier quoted context omitted.

The economy is not a zero sum game. If a land tax leads to increased economic activity it can actually result in a lower tax rate and generate more than enough tax to pay for the services the government provides.

Do you think this would actually happen in a place with as inefficient and corrupt local government as Detroit? Be honest.

My guess is that the Illitch and Gilbert tax bills are about to plummet as their highly improved and revenue generating properties get averaged out with 1950’s mid rises.

Bonus points if we can crank up the tax bill on families which inherited their home but never had the money to make improvements.

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

#505

Post by lliamander »

krupan wrote: post #497

It's so weird to me that with our income tax laws we to try and make sure they are fair and taxing people according to their means. You make more income, you pay more taxes, you make less income, you pay less taxes. But then we layer on property/land taxes that absolutely do not follow that principle. Retired Grandma living off social security has land that she bought 50 years ago is now worth 50 times what it was? T…

While I share your reservations, I do prefer this to imminent domain (a practice I am not a fan of). I think it's more likely for the seller to get the best value for their property, and incentivizes the seller to make good use of the property.

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

#506

Post by asdfaoeu »

lbwtaylor wrote: post #477
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…

>> Land Value Taxes just seek to be a more efficient (since they try to target rent seeking rather than profitable labor) and more just So someone like Musk should pay basically no tax personally because he doesn't own any land? I think the idea LVT comes from a period of time when land was a good proxy for wealth. These days, I think that's only true for the middle class, who gets crushed by LVT while the true wealt…

People who don't directly own land will pay rent in one form or another that will go to a landlord that does pay rent.

Also ask a different question if he doesn't benefit from any of the land in the US why is he still there?

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

#508

Post by tprice7 »

eru wrote: post #198
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…

> 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, stained glass window or chandelier. The 'goofiness' is on purpose: you tend to get less of what you tax. Most taxes are taxes on some kind of economic activity. The supply of land is fixed, so you can tax it all you want with…

I think that unyttigfjelltol was saying that taxing the value of improvements is goofy, not LVT. The comment was in favor of LVT.

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

#509

Post by Proziam »

jackson1442 wrote: post #336
Proziam wrote: post #85

If a person's primary residence isn't given an exception this will guarantee that people get kicked out of their homes once the land value increases too much. Similarly, if the tax on a rental property becomes too great the rent will rise to meet it. And again, people will be priced out of their homes.

> people get kicked out of their homes once the land value increases too much This is already possible with property taxes. FTA the city claims that 97% of homeowners will see a reduction in taxes. Typically, LVT is highest in areas more central to the city (think downtown) and lowers as you move outwards. This means that, for example, a multitenant strip mall neighboring an Arby’s on a plot of the same size will pay…

I have the exact same belief about property taxes. I believe they are perverse at the core. If you own something you should not then have to also pay "rent" to avoid having it seized and auctioned off (at a discount, no less) to those who are already more fortunate than you.

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

#510

Post by flownoon »

AnimalMuppet wrote: post #193
harimau777 wrote: post #154

Earlier quoted context omitted.

I think that you may be missing the point of the argument that you are replying to. As I understand it, what they are getting at is that no one created the land, it was already here. Therefore, it's not valid to say that the person who originally claimed the land had a right to it in the same sense that, for example, a farmer has a right to what they grow because of the labor they put into growing it. In effect, the…

Well, in the US at least, the one who first claimed the land is the one who built a cabin there, often broke the land to the plow, and then held it against anyone who tried to take it from them. It wasn't just "claiming" the land. They had to work to improve it.

So LVT separates the value created by your labor (building the cabin, plowing, etc) from the value you did not create. I think its more just than taxing, i.e. cabins or crops.
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