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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

#841

Post by kaibee »

orwell_bruh wrote: post #547
chongli wrote: post #392

Earlier quoted context omitted.

I don't think tax law fears complexity Of course it does. Complexity in the tax law is regressive. It lets wealthier people and businesses take advantage of more deductions and writeoffs to lower their tax burden, due to the ability to hire accountants full time to work on it. Simple taxes that are difficult to avoid (such as LVT) are best if you want a progressive tax regime. One of the best features of LVT is that…

One implication of what you write seems to be that every property owner is incentevized to NIMBY any improvements to the area that they don't care about. For example, if I am "child free" I will now oppose the building of schools and playgrounds on the basis that they make my LVT go up with no benefit to me. This looks more like a way to destroy society than prudent tax policy.

> One implication of what you write seems to be that every property owner is incentevized to NIMBY any improvements to the area that they don't care about. For example, if I am "child free" I will now oppose the building of schools and playgrounds on the basis that they make my LVT go up with no benefit to me.

This already happens just with more economic inefficiency under a property-tax regime. People already vote against improvements that would cause their taxes to go up.

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

#842

Post by simonh »

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.

Sure, to some extent, but overall it's clearly in our interests to have that land be used productively. If we want some land to be fallow, as policy, again there are better options than it just being underdeveloped, such as park land or gardens.

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

#843

Post by poulsbohemian »

Reading the article and the threads below, I have to wonder if there's something unique to Detroit or other areas of the country exploring this land value taxation concept... for example, in my (WA) residential tax statement, there's already a breakdown of the value of the land from its enhancements (IE: my house). Similarly, an alfalfa field (bare land) is going to be taxed at a different rate than that same field having been rezoned as residential and ready for the construction of 200 new homes. That same lot, zoned commercial in the middle of our little town, would have still another tax rate. The state of Oregon is even so kind as to tell you both the value at which they are taxing your property, plus what they believe the market value for the property. So... does Michigan and/or the county and city do something different here? Really trying to understand whether there is an actual tax policy / structure problem, or as the quote at the bottom of the article indicates "We currently have an assessment division that’s not doing its job".

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

#844

Post by friend_and_foe »

TravHatesMe wrote: post #409
friend_and_foe wrote: post #308

Earlier quoted context omitted.

I used to agree with you, then I read Falkvinge's proposal of a taxless state and it changed my mind. I'm now convinced that property tax (or more accurately, land tax) is the only justified tax, or more generally, that all taxes paid must be tied explicitly and characteristic to a service rendered, and that the only services a state should be allowed to render must be administration of a commons. You cannot defend y…

Interesting take. What are your thoughts on government healthcare? Just or unjust. To what extent?

Well, how would you design a tax scheme to pay for it? Remember, a tax that doesn't directly derive from healthcare would be unjust according to these axioms. So it can't be an income tax, just as it would be unjust to pay for roads using an income tax. You tax everyone using the healthcare system and to the degree that they use it and pay for it that way.

Further, healthcare isn't a commons, so it is arguable that a state has no business interfering. Emergency facilities specifically are a commons, if the hippocratic oath is followed and all in need are helped. So some scheme where people pay for the maintenance of these facilities and services rendered in them based on how much they stand to benefit from them would be just. I don't know how you'd do that beyond sending them a bill. Maybe yearly renew on an access card, like vehicle registration, that isn't based on income but maybe could be based on medical history, or just flat rate for everyone. Taxing income, or wealth, to pay for blanket coverage including person to person contracts with specialists would be unjust, socializing something that isn't a commons would be unjust, but managing emergency facilities as a commons and funding them with some type of tax directly derived from their existence would be, because they are a commons and do suffer from tragedy of the commons.

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

#845

Post by zdragnar »

letmeinhere wrote: post #803
zdragnar wrote: post #479

Earlier quoted context omitted.

How ironic that a campaign with "free land" in the slogan treated land as a public commodity and sought to make land the entire basis of the government's tax income.

Only ironic to those whose concept of "freedom" is "private and enclosed".

If your idea is that free means that it is something the government taxes, then I don't think I'd care for what the other two parts of the slogan (free speech and free men) might mean.

If you mean "free use" then land and speech are okay, but I still don't like the idea being applied to people.

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

#846

Post by giantg2 »

krschultz wrote: post #838
giantg2 wrote: post #809

Earlier quoted context omitted.

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.

That's still cheap when you're looking at the whole picture. Sewer is much cheaper than police, EMS, road construction/maintenance, schools, etc.

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

#847

Post by friend_and_foe »

mortify wrote: post #371
friend_and_foe wrote: post #308

Earlier quoted context omitted.

I used to agree with you, then I read Falkvinge's proposal of a taxless state and it changed my mind. I'm now convinced that property tax (or more accurately, land tax) is the only justified tax, or more generally, that all taxes paid must be tied explicitly and characteristic to a service rendered, and that the only services a state should be allowed to render must be administration of a commons. You cannot defend y…

Land ownership must be enforced by court of law, and that's true of all property. Yet land ownership is the easiest to maintain. While my neighbor might take my lawnmower and claim it as his own and the courts would have difficulty proving otherwise. Land is difficult to walk off with. Maintaining ownership is simply a matter of maintaining accurate and secure records.

No it's not. The records only mean something if a system exists to enforce those records. This is what we pay for, in the form of courts and armies. The record means nothing if it is not practically enforceable, and being able to enforce them comes with an ongoing cost, which the beneficiary, the land owner, has to pay for one way or another.

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

#848

Post by mactrey »

lend000 wrote: post #817
konschubert wrote: post #572

Earlier quoted context omitted.

You have the same problem with property taxes, no? Usually that is solved by various measure to slow down the tax increases for existing homeowners - which can be good or bad, depending on whether you're a homeowner or somebody looking for a home.

No, there's a big difference. If someone bought a house and gets priced out of the house due to massive increases in value in the neighborhood and overall market, they reap the rewards of selling the house, because they owned the property. I don't believe tax increases should be slowed like they are in California -- that's a big part of the housing problem IMO. Whereas in an LVT system, a person just gets priced out…

No, you are wrong. The two cases are analogous. Under a LVT, if their tax goes up, it's because their land became more valuable. So when they sell they get more money. And under a LVT, if they spend money to build or improve a house, then they also get a benefit when they sell for a corresponding higher price. It's just that those improvements would not be reflected in a higher tax bill.

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

#849

Post by giantg2 »

simonh wrote: post #842
giantg2 wrote: post #809

Earlier quoted context omitted.

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.

Sure, to some extent, but overall it's clearly in our interests to have that land be used productively. If we want some land to be fallow, as policy, again there are better options than it just being underdeveloped, such as park land or gardens.

"but overall it's clearly in our interests to have that land be used productively."

Sure, but the real question is what does one consider productive enough? Should we tax a single family home at the rate of an apartment building just because the zoning changed? My opinion is that this type of scheme will be abused to force some people out of their homes in the name of benefiting society. My guess is developers and apartment companies can "persuade" politicians in many areas to change zoning to force people out, possibly the "wrong" kinds of people.

If you want productive uses, then you'd be better off charging a vacancy tax to already developed property. You wouldn't be able to fill all those spaces because the physical economy has shrunk, or people don't want to live/work in a rundown area, etc. There's plenty of open commercial real estate around me. The problem is you don't have customers to support the businesses that already exist.

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

#850

Post by simonh »

giantg2 wrote: post #849
simonh wrote: post #842

Earlier quoted context omitted.

Sure, to some extent, but overall it's clearly in our interests to have that land be used productively. If we want some land to be fallow, as policy, again there are better options than it just being underdeveloped, such as park land or gardens.

"but overall it's clearly in our interests to have that land be used productively." Sure, but the real question is what does one consider productive enough ? Should we tax a single family home at the rate of an apartment building just because the zoning changed? My opinion is that this type of scheme will be abused to force some people out of their homes in the name of benefiting society. My guess is developers and a…

If you really want to micromanage property types you could always adjust the land value tax based on actual usage.
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