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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

#621

Post by developer93 »

flagrant_taco wrote: post #484
Karrot_Kream wrote: post #478

Earlier quoted context omitted.

5 single-family homes will consume the same amount of food and water as 5 units in a few duplexes or a five-over-one. The SFHs will consume more energy for heating and cooling (related to larger footprints) and use more resources to send power and water (larger distances to send power and water.) An SFH consumes more resources than a multifamily-housing unit holding the same number of people.

That really does entirely depend on the size and style of the SFH, location on the land, lifestyle, etc. Single family homes are often easier to power off-grid with solar if that's on the table, though again with regards to externalities the solar power equipment likely sends those costs to multiple countries on the other side of the planet.

They would still use more energy in total, since flats insulate themselves to a certain extent due to having less outside walls & tend to be smaller requiring less energy to heat the space. You can also power flats with renewable energy. At this point less total energy is good regardless.

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

#622

Post by epistasis »

s1artibartfast wrote: post #493
epistasis wrote: post #407

Earlier quoted context omitted.

Exactly. And that's why taxing the land itself—and therefore access to all those improvements and amenities—is a good way to allocate it. If somebody is sitting on a prime seat in the hot tub, and they don't really care very much about it, and there's a line of 20 people waiting to get in, we have a wasted resource. Revealing true preferences by having people put some skin in the game means that more people are happy…

That is a great argument for never building a hot tub, or participating in a project to build one. Why bother making a tub, a neighborhood, or a community if it can simply be taken from you. Id rather burn mine to the ground than have it taken away just because someone else wants it more. They might not even want it more, but they just have more money.

I don't think you understand, it can't be taken from you, at least no more than now. Nearly every single person will pay less tax on their home under LVT than a property tax, too.

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

#623

Post by bombcar »

michaelt wrote: post #593
hiAndrewQuinn wrote: post #575

Earlier quoted context omitted.

There are theoretical difficulties, yes. The elegant way out is to have the person owning the land self-assess its value, set the LVT at x% of that value, and be legally bound to sell it to anyone who comes up to them offering that price. Now how do we determine that x%? That's a good question. I think there's no way out of some empiricism even if someone did try this approach. But you can always start it low and rai…

> The elegant way out is to have the person owning the land self-assess its value, set the LVT at x% of that value, and be legally bound to sell it to anyone who comes up to them offering that price. That doesn't make any sense in the context of a land value tax. The whole point of a land value tax is that a parcel of city center land is taxed at the same rate whether it's got a parking lot on it or an apartment bloc…

They’d argue that the price is for the land only, not improvements but now you’re back to non-forced sale.

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

#624

Post by ajsnigrutin »

nisegami wrote: post #615
ajsnigrutin wrote: post #607

Earlier quoted context omitted.

The problem is, what if it doesn't produce that much? What if it doesn't produce anything? Imagine someone buying a house somewhere cheap. Then some gentrification, a new microsoft campus built nearby, etc., and the price of the house jumps 10x+. You're on a fixed income, and your taxes are now higher then you can afford. If you have multiple houses, sure, tax the second, third, etc. one (evn though the taxes are the…

One way you could look at it is that this person's inability to afford the land value tax signals that they are not making effective use of the land and that it would be in society's best interest if the land were to change hands to someone who could use it in a way that lets them afford the taxes on it.

You're looking at a persons home as an economic investment and not as a social thing. It's a home. Someone will live in that house. You just want to replace a poor grandma with someone who can pay more taxes, while the use of the land/house/apartment will stay the same, even with airbnb, someone will just use that apartment to sleep in.

It's the society's best interest that people can afford places to live and not live under threat that some new fad will make something they already own (and need to survive) unaffordable.

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

#625

Post by bombcar »

developer93 wrote: post #588
flagrant_taco wrote: post #481

Earlier quoted context omitted.

Oh it's definitely not simple, I don't mean to input that. Your examples only really touch on one relevant example though, sewage. Sewage isn't really an issue in rural areas, off grid seltic systems process waste on site and more compelling systems can even compost human waste with very little effort. Modern central sewage system only exist because of dense cities, they weren't needed before that. High speed interne…

Your environmental footprint for transport is higher though right unless you're cycling everywhere, because you need to travel further? Which involves everything you need that you don't produce yourself. Or you're all entirely self sufficient and never leave your smallholdings? I don't mean to sound like a dick, just trying to engage :-)

Many “rural” people actually live in small towns where it is entirely possible to drive less or not at all. I certainly put less miles on our vehicles even though we have more of them and kids now vs living in “the big city”.

However if all you ever do is drive to the big city I can see how that would take more time and distance.

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

#626

Post by tallanvor »

pmontra wrote: post #613
red_admiral wrote: post #561

Earlier quoted context omitted.

Land value tax is an idea by Henry George - the guy who coined the phrase "the rent is too damn high". His idea is among other things that a property tax discourages investment - one way to make money as an investor is to hold a plot of empty land in a desirable city centre location, watch it go up in value, and neither pay tax on any development on it nor bother with messy things such as tenants. Taxing the land val…

If you want to tax properties, why not taxing both the land and what is build upon it? And wardrobes, tables, books or computers (every year) but that's another story.

According to the article, taxing the land at one rate and the property built on it at another rate is exactly what Detroit is proposing.

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

#627

Post by Draiken »

nisegami wrote: post #615
ajsnigrutin wrote: post #607

Earlier quoted context omitted.

The problem is, what if it doesn't produce that much? What if it doesn't produce anything? Imagine someone buying a house somewhere cheap. Then some gentrification, a new microsoft campus built nearby, etc., and the price of the house jumps 10x+. You're on a fixed income, and your taxes are now higher then you can afford. If you have multiple houses, sure, tax the second, third, etc. one (evn though the taxes are the…

One way you could look at it is that this person's inability to afford the land value tax signals that they are not making effective use of the land and that it would be in society's best interest if the land were to change hands to someone who could use it in a way that lets them afford the taxes on it.

What? I must be misunderstanding your comment.

Are we seriously saying that if someone can no longer afford tax on a land they already own because the rich need to get richer, you should sell?

Basically you're asking for normal people to work, get raises forever and hope nothing crazy happens that can raise land value in their neighborhood in order to keep the land they already own.

No, this is not in "society's best interest". This is in the capitalist's best interests. Those are very different.

Comments like these make me not want to live in this world anymore. I really hope I misunderstood the comment.

Edit: removed some unnecessary harsh words.

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

#628

Post by bombcar »

epistasis wrote: post #419
surge wrote: post #340

Earlier quoted context omitted.

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.

Depreciation isn’t free money, and the IRS isn’t giving you anything over time.

It might appear they are, but if you properly account for everything it’s not tremendously advantageous.

And it reduces your cost basis also, which means you pay more tax when selling unless you have other ways of avoiding that.

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

#629

Post by nemo44x »

bagels wrote: post #463
nemo44x wrote: post #439

Earlier quoted context omitted.

Yes, you can abandon land if you no longer want it. You can do this for most property.

Are you sure? What is the actual process in Detroit where you give up the land and are no longer responsible for the taxes?

I figured it was like regular property but after doing brief research, you’re right. It’s more difficult than just walking away as the local government can continue to tax you.

But after some time I guess it could be found to be abandon and then sold at auction. But until then you’re liable for it. And I think it makes a difference if you own outright or if you have a mortgage.

It’s an interesting question though since so much property in Detroit has been abandoned.

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

#630

Post by nemo44x »

dheera wrote: post #485
nemo44x wrote: post #443

Earlier quoted context omitted.

You sound like a great community member! Where I live we see tremendous value in the property taxes we pay. The kids get a quality education, the parks are well maintained, the streets are good and the walkways are clean. It’s not cheap but it’s all accounted for in a public ledger. And if you don’t like it you’re able to run for office to change it. Look - I’m with you when it comes to government inefficiency, corru…

You see where I live, cars get smashed all the time, and the police does nothing about it. They just sit on their lazy asses. Property taxes where I live are also some of the highest in the state.

Ahh yeah, I understand your frustration there. It’s sad how some communities choose to spend their taxes and I empathize with you. It’s sad when corrupt and incompetent government pisses away tax revenue instead of making the locality a better place to live with safe streets, good schools, and nice, clean parks.
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