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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

#631

Post by bombcar »

Kbelicius wrote: post #519
flagrant_taco wrote: post #462

Earlier quoted context omitted.

Wanting to live somewhere and reducing climate impact are different though. If you build a city full of dense housing, where does all the food and water come from? Or the electricity, furniture, and clothing? Costs can be externalized, but at the environment level they still exist even if outside the city of consumers. It's also often the case that externalizing those costs adds even more impact as the product has to…

> If you build a city full of dense housing, where does all the food and water come from? Or the electricity, furniture, and clothing? I don't understand your argument. Are you saying that people that don't live in cities don't consume, or consume less of, food, water, electricity, furniture and clothing? > It's also often the case that externalizing those costs adds even more impact as the product has to be shipped…

In general rural areas are poorer, and poorer people consume less.

It may be true from a theoretical viewpoint, but in general cities are richer and consume more.

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

#632

Post by hiAndrewQuinn »

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…

The x% does not value with the use of the land. An apartment block owner would self assess their land as much more valuable, and then also pay back x% of that much higher land assessment in taxes each year, yes. And if someone came by and decided that e.g. that $5 million apartment land unit would be better as a $5 million parking lot, they could certainly pay them $5 million to do so.

But they may later find out that the parking lot isn't really worth $5 million, because it's harder to make the money to justify the x% of $5 million tax you're paying on it with a parking lot than with an apartment complex. They may then drop their valuation to $3 million, or $2 million, to reduce the total amount they pay in tax each year. But then of course they may run a greater risk of being forced to sell themselves -- perhaps even back to the original apartment runner they paid $5 million to before.

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

#633

Post by bombcar »

tmnvix wrote: post #359
RhysU wrote: post #335

Earlier quoted context omitted.

What happens to a lot with an old gas station with leaky tanks? The land is ruined. Land is not fungible.

> The land is ruined And so the value of the land is less and the LVT drops along with it. Of course for someone planning on putting another service station there maybe not...

The land can go negative in value; does the LVT start paying you at that point?

But that would make the land valuable again …

It’s quite possible to have a plot of land (especially in more rural areas) that is “worth” $10k but has state mandated cleanup required that costs $60k.

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

#634

Post by thelastgallon »

flagrant_taco wrote: post #451
snapplebobapple wrote: post #441

Earlier quoted context omitted.

your first paragraph applies pretty much equally to taxing land+developments. Also, in the context of a city building to the maximum of the zoning is a good thing in nearly all instances because higher density means you need less land to provide shelter for the inhabitants and it's way, way easier to provide most services to higher density.

Property taxes that factor in existing improvements doesn't leave the owner as far behind chasing potential value that they are already being taxed for. When your tax burden is a factor of expected market value of the land plus permanent improvements they're taxing you on what you already have. When it's based on an expected optimal value of the lad they're taxing you on what *they* think your land *should* be worth…

Resources are for a certain quality of life are the same regardless of location. Unless, you are willing to for a lower quality of lifestyle.

These resources can be transported to high density living, or spread out across 100x - 1000x area. Which do you think is more efficient?

Building roads, water, electricity costs millions/mile. All this must be built before you even think about shipping resources to support. Then services (schools, hospitals, dentist) -- all of these and services only make sense at scale.

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

#635

Post by fastball »

robertlagrant wrote: post #603
fastball wrote: post #594

Earlier quoted context omitted.

And bureaucrats are unable to use the market itself to help value land because?

This measure will be harmful. Not just due to the person being a bureaucrat who can be bad at their job and/or influenced to achieve certain outcomes; not just because the info is instantly out of date on purchasing decisions; not just because the pricing info is specific to that purchaser . But because everything like this adds more drag into systems that have enough drag already. People can't do anything useful if…

Again, property taxes already exist. This is simpler.

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

#636

Post by bombcar »

gr__or wrote: post #563
lend000 wrote: post #520

Earlier quoted context omitted.

I've gone back and forth on LVT, but don't currently support it. The problem is determining what the land is worth. If you use a periodic market-based auction system (the only known way that could possibly yield accurate prices), then you give the government and the wealthy extraordinary power to kick people out of their residences, even ones in which the tenants built the house. Good for the collective perhaps, but…

Implementation is also the only aspect that makes me question LVT, otherwise I'm pretty much sold (not an unimportant aspect it is). Wrt "even ones in which the tenants built the house": For me the baseline of implementing LVT is that ppl don't have to pay it for their primary housing (or a much lowered version of it). Is that controversial?

I think that would be the way to start an implementation - have a generous enough homestead allowance that it really only affects investors and commercial interests.

Of course, remember that apartment buildings are commercial businesses…

Also excluding homesteads destroys the public schools, because they’re often in areas that really only have houses and a Walmart or two, and if the entire property tax burden is transferred to the Walmart it’ll just close.

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

#637

Post by fullarr »

red_admiral wrote: post #597
malta_kano wrote: post #595

Earlier quoted context omitted.

Is that the problem though? Empty land held by speculators?

Georgist thinking, as far as I understand, is that taxing total property value disincentivises investment in a way that is worse for society overall. Empty land is just a subcase of that. That said, "everybody works but the vacant lot" is a Georgist slogan that has been seen on billboards before now: https://digitalcollections.nypl.org/items/510d47de-036a-a3d9...

I look forward to starving to death as I try to eat a luxury apartment complex

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

#638

Post by bombcar »

seanmcdirmid wrote: post #321
senkora wrote: post #304

Earlier quoted context omitted.

Surely more housing also means more working adults and more taxable income, so this could be handled with a local income tax.

Are any school districts outside of Prop 13 California funded by primarily income or sales tax? But ya, you would need to do something like that if you were to tax land rather than improvements given schools, police, and lots of infrastructure needs scale up with improvements.

A significant part of the educational budget of the US comes from federal funds and federal funds are almost entirely income taxes (some other sources exist).

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

#639

Post by thelastgallon »

flagrant_taco wrote: post #481
InspiredIdiot wrote: post #472

Earlier quoted context omitted.

> Higher density cities require more outside inputs brought in from outside the city. Surely, it can't possibly be that simple. Sometimes that's true, sometimes it is not. If I want fiber to my house in the country I might be paying $30k to get that line all the way to my one house whether I want 100MB/sec or 10GB/sec. In the city it might be shared with hundreds and only need to run a few yards. Same for sewage. Sam…

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…

Yes! And we can home school kids, hunt and fish and fix our own broken bones like they show in the movies. Just need alcohol for the pain (grow your own moonshine?).

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

#640

Post by edgyquant »

Draiken wrote: post #627
nisegami wrote: post #615

Earlier quoted context omitted.

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…

The entire Georgist argument is that you can’t own land, you simply rent it from society via a land tax. It’s also worth noting that George’s land value tax was devised as a way to pay a citizens dividend (the profit gets distributed evenly among all citizens) not to fund a bureaucracy as will happen here.
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