They watched Breaking Bad too much :-)
Why are there suddenly so many car washes?
361–370 of 615 posts
Re: Why are there suddenly so many car washes?
#362Earlier quoted context omitted.
> why should a politician need to step in to regulate, rather than letting the market decide? If we taxed land, then sure, we'd get efficient use of land. But we (mostly) don't, so here we are, surrounded by car washes and parking lots.
>But we (mostly) don't Just because we don't have Georgism doesn't mean we don't already tax land a ton. Annual property tax revenue for the entire US is ~$600 billion. By comparison, federal income tax revenue is about $2.6 trillion annually.
Property tax is mostly the structure though.
Re: Why are there suddenly so many car washes?
#363Earlier quoted context omitted.
The irony is that car washes are the result of regulation in the first place because if you eliminated parking requirements, ridiculously low insurance minimums etc there'd be a lot fewer cars that needed washing. It's kind of odd to frame intervention in anything car related as an intrusion on the free market when it's one of the most artificially and politically constructed sectors to begin with.
> ridiculously low insurance minimums This looks like a claim that car owners should be required to have even more insurance, which seems inconsistent with your claim that widespread car ownership is the product of onerous regulation. All in all I think this is a pretty glib take that I’ve seen enough times that I’m bored with it. Suffice to say that most of the regulations you’re complaining about mostly postdate th…
>which seems inconsistent with your claim that widespread car ownership is the product of onerous regulation.
how is this inconsistent? Insurance raises have to be approved at the state level, again this is not a free market, and for political reasons many states have kept insurance rates at decades old price levels. Insurers actually lose money in most places because they cannot raise prices. (https://www.economist.com/united-states/2024/01/18/why-car-i...) and as a result often health insurance and other institutions have to cover the cost, which is to say the public pays.
Just to see how absurd this is. Minimum liability in a lot of states is 50k. In Germany and much of Europe minimum liability is seven million.
It's the governments job to take externalities into account and design urban environments rationally, not to coddle car obsessed consumers and have everyone else pay for the cost they impose on others and the environment.
Re: Why are there suddenly so many car washes?
#364Earlier quoted context omitted.
On the parks/“natural land”: would you rather land exist as an empty razed dirt field for speculators to wait to sell, or given back to the city? Taxing the land value means there’s no incentive to own land that won’t be productive. The city or municipality can guarantee land it owns can have natural growth on it, whereas when private individuals own it the state can’t really stop the land from transforming into a pa…
> On the parks/“natural land”: would you rather land exist as an empty razed dirt field for speculators to wait to sell, or given back to the city? That seems to be jumping to an extreme end, that someone owns an empty plot of land that has been cleared and destroyed to bare, dead dirt. My concern is that the same incentive pushing one to sell a pile of dirt would exist for someone owning an undeveloped, natural plot…
> That seems to be jumping to an extreme end, that someone owns an empty plot of land that has been cleared and destroyed to bare, dead dirt. My concern is that the same incentive pushing one to sell a pile of dirt would exist for someone owning an undeveloped, natural plot of land. My earlier caveat still exists, maybe this isn't a concern in dense areas though it would add some blockers for anyone interested in turning developed land back into a park.
If you're not doing anything with land in an in-demand area then it creates an incentive to sell it, yes - that's pretty much the point. Realistically, undeveloped lots in in-demand areas (i.e. cities) are not nice natural landscapes - they're dirt yards at best. It takes a lot of work to maintain a park, and frankly putting a tax on land is more likely to return some of those unused lots to the city who could then open a public parks there, than discourage someone who was maintaining a park privately.
Even in the country, land that's completely untended is rarely pleasant, although in places where land isn't worth much, a tax like this won't make much difference either way.
> One concern I have is the expectation that all land should be optimized for productivity. That goes against my own view on land, I don't think we humans have some innate right yo extract all available value. I also don't like that this likely goes against concerns of environmental impact.
The idea that someone owns land like chattel and can do whatever they want with it is surely worse from that point of view. If you're taxed on the value of your land, you're incentivised to use as little as possible, and leave the rest for the public or nature - e.g. if you can build a factory in half as much space, you've halved your tax bill.
> The market only decides on my land's value when I sell it. Until then, is the land valued at what I paid for it?
No, there would need to be an assessment process, although perhaps backed by a market mechanism (i.e. if you think the assessment is too high you can ask the government to buy you out at that amount, or some such).
> Taxing to create incentives to build as high-value improvements as possible would inevitably lead to a drastic increase in a locality's energy requirements.
It doesn't create a new incentive to build more unless the more you're building is valuable. You can densify by building more in the same space yes, but you can also densify by building the same in less space, and that's what saves you money so presumably that's what people will do (after all, if building more was profitable, wouldn't people already be building more)? For the same amount of economic activity, you'll require the same amount of energy, just in a smaller space, which again is likely to be more efficient and better for the environment (the same number of factories in half the space means fewer cables, less transmission losses etc.).
Now of course if you make business more efficient then maybe you end up with more business, but isn't that a good thing? Again it only makes sense to build more if there's demand for it - otherwise you're better off staying small and cutting your expenses. Land value tax might even help encourage people to not expand prematurely - if doubling the size of your warehouse means paying more tax, maybe you'll put it off a few years until you're actually going to use that space.
Re: Why are there suddenly so many car washes?
#365Earlier quoted context omitted.
Thanks for all the details! Limiting a land value tax to densely populated areas is a great detail here. Sorry if I end up with a long list of follow-up questions here, this is really interesting. So my main concern related to destruction of natural land is that there is a disincentive to keep land natural if you have to pay the tax anyway. In dense areas that wouldn't be nearly as much of an issue, but it would stil…
> So my main concern related to destruction of natural land is that there is a disincentive to keep land natural if you have to pay the tax anyway. There’s no need to limit land value taxes based on density as that’s what’s giving land its value. With the property if the tax is say 0.2%. An acre of farmland worth in rural Idaho worth 20k would be assessed as being worth 20k in a land value tax and an acre of swamp mi…
> There’s no need to limit land value taxes based on density as that’s what’s giving land its value.
That can't be the case; density is an amenity and is, by definition, not part of the value of the land.
Re: Why are there suddenly so many car washes?
#366I really hate sounding like a broken record but this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses. The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan. TBH I think real estate used to have high information asymmetry between local residents and large investors; low property…
>...this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses. The government also benefits from sales taxes, licenses, permitting fees, etc.
> The government also benefits from sales taxes, licenses, permitting fees, etc.
They won't be getting much in the way of sales tax if the business is low-value, by definition.
Re: Why are there suddenly so many car washes?
#367Earlier quoted context omitted.
To be honest, I think you have it exactly backwards, and a land value tax isn't about taxing "raw land" (that is, land with no improvements), it's about taxing the value of the land without regard to improvements. See https://en.wikipedia.org/wiki/Land_value_tax and https://en.wikipedia.org/wiki/Georgism
Would the land go untaxed until there are improvements? If not, the raw land value itself is being taxed.
The value of the land is not solely based on the "raw land." As they say in real estate, it's all about location, location, location! A half-acre beachfront plot in Malibu is worth orders of magnitude more than a half-acre of grassland in Montana. A lot of the value comes from the beachfront itself, yes, but a lot more of the value comes from all the development around it.
This is the whole basis for the business model behind golf course development. Developers acquire a large plot of land in a nice area and build a golf course on part of it. The rest of the land (surrounding the golf course) is divided up into plots and used to build luxury housing. The existence of the golf course (and all of the landscaping in the area in general) dramatically increases the desirability (and hence property value) of the houses.
If you didn't build the golf course at all you could fit more houses on the land overall. The problem with that is that without the golf course the houses are less desirable and worth less -- and also more capital intensive to build than a golf course -- so the overall profit is lower.
Re: Why are there suddenly so many car washes?
#368I really hate sounding like a broken record but this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses. The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan. TBH I think real estate used to have high information asymmetry between local residents and large investors; low property…
When you see a solution here of higher property taxes, is it focused on the raw land value or on the value of "improvements?" I've never been a fan of taxing the value of raw land, mainly because it creates incentives for destroying natural land and extracting as much value as possible from the space. Taxing structures based on the expected economic value can make sense, though even then if its a business there are m…
I'm not agreeing or disagreeing with you, but your comment reminded me of this tax loophole, which fills me with rage everytime I see a new self-storage style business being "constructed."
https://boxwell.co/section-179-tax-benefit-for-relocatable-s...
>Relocatable storage units are portable and moveable. Therefore, they can be classified as equipment instead of as a building or permanent structure. Not only does this help self-storage operators bypass the lengthy process of permitting and zoning. But it’s also a great tax advantage when classifying these convenient storage units as equipment. In most cases, the units are eligible for 100% deduction after just one year.
edit typo
Re: Why are there suddenly so many car washes?
#369I really hate sounding like a broken record but this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses. The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan. TBH I think real estate used to have high information asymmetry between local residents and large investors; low property…
> this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses Thank god we haven't optimized that fully. This is how small businesses like local cafes, delis, bookstores, and "mom and pop" stores are able to survive in cities. I wouldn't want to live in any capitalist shit-hole where land value taxes force high-value businesses.
> This is how small businesses like local cafes, delis, bookstores, and "mom and pop" stores are able to survive in cities.
Nonsense. Those aren't the businesses that take up masses of land - hell, a lot of the best of those are run by people who live above the store, meaning the extra land use is zero. The businesses that benefit from a lack of land value tax are parking lots, drive thrus, distribution centres, that sort of thing.
Re: Why are there suddenly so many car washes?
#370Will it really be like the coffee market? I don't think so.
Gen Z has the least intent to buy properties, buy cars, how will cars washes sustain in the future?