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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

#831

Post by bombcar »

seanmcdirmid wrote: post #812
bombcar wrote: post #791

Earlier quoted context omitted.

> In 2021, state and local governments in the United States collected about 630.21 billion U.S. dollars via property taxes. > In FY 2023, the Department of Education (ED) had $271.01 Billion distributed among its 10 sub-components. Maybe they just burn that quarter trillion, but I suspect it ends up in the districts eventually.

Here is a good breakdown of funding in CA: https://peecs.net/2021/03/10/how-are-california-school-budge... So federal is...7%?

The problem is that federal grants often go through the state, so some percentage of "state" may source from the feds.

Of course it's all academic in a way, because money is fungible.

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

#832

Post by bombcar »

sagarm wrote: post #786
flenserboy wrote: post #737

Earlier quoted context omitted.

You are amazingly blasé about that fact that this would be using taxation to prevent people from using their own property as they see fit. This is utilitarianism run amok.

We prevent people from using their property as they see fit all the time via zoning. It is in fact mostly those with generational wealth that use this power.

Most people don't care about zoning, but they really do care about zoning changes that affect them.

Being told you can't live in your house anymore because it is now zoned commercial gets people riled up, and being told the same because it's now too expensive does the same.

It's a hot-button issue but you can defuse it by putting safeguards in, though they're not always successful - see eminent domain scandals.

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

#833

Post by seanmcdirmid »

bombcar wrote: post #831
seanmcdirmid wrote: post #812

Earlier quoted context omitted.

Here is a good breakdown of funding in CA: https://peecs.net/2021/03/10/how-are-california-school-budge... So federal is...7%?

The problem is that federal grants often go through the state, so some percentage of "state" may source from the feds. Of course it's all academic in a way, because money is fungible.

The table implies funding origins via taxes (local vs. state taxes, for example). I don't think any ED money is going to CA first before going to the districts. CA is also a special case where more funding is state level (due to Prop 13).

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

#834

Post by jimnotgym »

xienze wrote: post #647
jimnotgym wrote: post #546

Earlier quoted context omitted.

Some of the 'nicest' areas of UK cities are redevelopments of some of the worst areas. Just because they are not nice now does not stop them being nice later.

I think you might be underestimating just how bad parts of Detroit are.

I think you are underestimating the difference being in range of German bombing has made to our respective countries attitude to urban resilience, and to the other commenter, our attitude to real ruins. Detroit has but a flesh wound.

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

#835

Post by sideshowb »

eru wrote: post #298
sideshowb wrote: post #183

Earlier quoted context omitted.

Given the friction (inconvenience) in having to move house/business etc, that hardly seems fair. It also defeats the object of land ownership if you can be kicked off it at any time.

Well, you can also use whatever mechanism is currently in use for people who don't pay their property taxes.

So you want people to bid for their own homes? Glad you're not dictator mate

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

#836

Post by mikecoles »

ses1984 wrote: post #524
josnyder wrote: post #73

Earlier quoted context omitted.

Yes, by design. One major goal is to prevent a landowner from squatting on an empty lot while their neighbors build prosperity around it. The "squatter" then cashes in, having done nothing themselves. "Everyone works but the empty lot" is the commonly used phrase. The goal of an LVT is to insulate a landowner's tax bill from being affected by their own improvements. Its anti-goal is to insulate a landowner from chang…

It’s just strange phrasing that improvements increase the value of adjacent land but not the land they’re on.

Think of it as part of a communist plan and you'll see the why and who start to make sense.

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

#837

Post by krschultz »

flenserboy wrote: post #659
bombcar wrote: post #620

Earlier quoted context omitted.

The idea is that you tax the land only as if it was being used for best use - so that every property is encouraged to develop to maximum density. I suspect that in actual use it would end up having a small to no effect.

In actual use it would, in most cases, ensure that people would not, could not have long-term ownership of land passed down from generation to generation. There would be significant social downstream effects & likely upheaval caused by this, & that would be compounded by the deleterious results of forcing more & more people to live shoulder to shoulder in the name of that maximum density you mention. No system of tax…

Huh? You have to pay property taxes now and those could end up being too high for subsequent generations to afford. That happens all the time and is a common reason why property gets subdivided. This is simply a question of whether the value of structures on that land should be included.

If anything a pure land value tax should be more predictable than a property tax, I got hit with a major property tax increase and looked into it, the town had calculated the new property tax based on an incorrect square footage and number of bedrooms for my house. After filing an appeal and going to court I got it fixed, but that was a more capricious process than if it was simply based on the value of the land under the house.

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

#838

Post by krschultz »

giantg2 wrote: post #809
simonh wrote: post #788

Earlier quoted context omitted.

So we're paying for all those facilities, infrastructure and so on, and it's going to waste. That's inefficient. We want that land being used productively, contributing to the economy, making profits which pay taxes, to pay for these services.

You're leaving out the usage/ capacity side. If you actually fill all the empty spaces, you'll need to add additional facilities. Current facility usage is usually near capacity already.

That's not universally true. The sewer system in my town was overbuilt in anticipation of a development that fell through. That's why sewer / water bonds are typically up for vote separately from property taxes because there's such an interplay with development.

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

#839

Post by sideshowb »

avar wrote: post #202
sideshowb wrote: post #183

Earlier quoted context omitted.

Given the friction (inconvenience) in having to move house/business etc, that hardly seems fair. It also defeats the object of land ownership if you can be kicked off it at any time.

You can trivially structure such a tax in such a way that going through a "forced sale" is going to be very lucrative (edit: elaborated in a sibling comment: https://news.ycombinator.com/item?id=37909570 ). > It also defeats the object of land ownership[...] So no, most people could keep land they'd like to keep in practice. The entire notion of any sort of property tax is also predicated on the idea that individual…

> The entire notion of any sort of property tax is also predicated on the idea that individual land ownership is a tradeoff between the interest of the individual and society at large.

Indeed, and I like this concept, I don't think we should ever "own" land in the same way as I own, say, my phone. All we ever do is borrow it from society (or even nature).

However, some aspects of land ownership are a net positive for society at large. In particular, the incentive to look after it better if it's really yours until you sell it or you die. With this in mind I like some proposals I've heard whereby unpaid land value tax can be accrued to be paid at death or on sale. That way the stewardship aspect of ownership is reinforced without the freeloading on land value increases.

Returning to the valuation question. I think you're assuming an efficient market when it clearly isn't one. It would be like having to reapply for your own job, except it's rebidding for your own house. Not a kind thing to do to anyone.

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

#840

Post by sokoloff »

fastball wrote: post #594
robertlagrant wrote: post #581

Earlier quoted context omitted.

In real estate property value is constantly being corrected by an actual market. Prices aren't set by bureaucrats; they're paid by people for whom that price is worth it.

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

Is it common to sell the land without selling the improvements located on top of it? If that's common, it's straightforward to use that market to value the land.
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