Why a land-value tax is inevitable • Hacker News Board

Re: Why a land-value tax is inevitable

#101

Post by throwaway201103 » Sat, Dec 05, 2020, 9:48 PM UTC

paconbork wrote: post #21

kevinpet wrote: post #13

Earlier quoted context omitted.

A charming bakery in a now expensive part of town is in fact an economic inefficiency. You can argue against it on non-economic grounds, but living in a luxury apartment is a good that people consume, just like madeleines.

Charming bakery with five stories of apartments above it > charming bakery by itself

Bakery in a retail slot in the ground floor of a 5-story apartment building is by definition not charming. It's cookie-cutter (pardon the pun). It's the sort of place that opens, struggles for nine months, and goes bankrupt.

We see so much about wanting "walkable" neighborhoods where we have shops and markets all steps away from our door. Well, if the land is so valuable that it will only support dense apartment towers, small businesses like that will not be able to afford to be close by.

Re: Why a land-value tax is inevitable

#102

Post by Ericson2314 » Sat, Dec 05, 2020, 9:49 PM UTC

kart23 wrote: post #19

I think an LVT only works if property tax is removed. And getting every state to have less taxes will be rough. http://savingcommunities.org/issues/taxes/landvalue/

That is a needless dichotomy. For a variety of reasons we want a smooth transition.

Today:

c(land value) + c(building value) = tax

eventually:

big(land value) + small(building value) = tax

Just interpolate between those the obvious way.

Re: Why a land-value tax is inevitable

#103

Post by wmf » Sat, Dec 05, 2020, 9:49 PM UTC

kart23 wrote: post #19

I think an LVT only works if property tax is removed. And getting every state to have less taxes will be rough. http://savingcommunities.org/issues/taxes/landvalue/

An LVT at a high enough rate could generate the same revenue as current property taxes.

Re: Why a land-value tax is inevitable

#104

Post by mullingitover » Sat, Dec 05, 2020, 9:49 PM UTC

Rickvst wrote: post #18

Land-value tax doesn't have huge inefficiencies like some other taxes. But the hard part is assessing "value". How should land value be decided? The book "Radical Markets" has some good insights on how to find the value of every plot of land by using markets.

> But the hard part is assessing "value"

Insurers have no problems assessing land value and have been doing it for centuries.

Re: Why a land-value tax is inevitable

#105

Post by Ericson2314 » Sat, Dec 05, 2020, 9:50 PM UTC

bjarneh wrote: post #64

There are so many ways to tax the wealthy that would "work". But as long as the rich have way more influence on how society is organized than than the poor or middle class, it's just very difficult to do anything about it.

Absolutely, but their best defense is complexity and regularity capture, so the masses don't even know they're getting fucked.

If one can, by some miracle, pass simple policies like LVT and UBI, the resulting fronts and battlegrounds are a hell of a lot clearer.

Re: Why a land-value tax is inevitable

#106

Post by Spooky23 » Sat, Dec 05, 2020, 9:51 PM UTC

ichbinwiederda wrote: post #68

I detest property taxes. What ends up happening is that people who are on the brink of poverty keep losing their (inherited) land because the government deems it an income generating asset, even though it is not (it's either their home or some dilapidated piece of land without much actual income generation prospects). Often they also get screwed on the selling because they are under pressure and because they are not…

I just don’t see this happening. Maybe I live in a different place.

Who are these people inheriting land who are too poor to use it, too dumb to sell it and losing it to the county?

I live in a high tax state and have served on nonprofit boards that have exposure to housing issues. This didn’t happen.

The common problems of this ilk were usually frauds where caregivers, relatives, powers of attorney or others squander or steal proceeds of reverse mortgages or borrow money against property without telling the family. The other issue that would come up is Medicaid recapture when money is given away.

Usually if there is a tax sale there is some bigger story why the property is worthless. You can borrow against the equity of anything.

Re: Why a land-value tax is inevitable

#107

Post by lilgreenland » Sat, Dec 05, 2020, 9:51 PM UTC

hourislate wrote: post #53

The only thing inevitable will be that eventually Land-Value taxes will not be enough (if implemented) and then what? There is no end or limit to the amount of money a Government can squander.

This is a really good example of the slippery slope logical fallacy. https://en.wikipedia.org/wiki/Slippery_slope

Re: Why a land-value tax is inevitable

#108

Post by mullingitover » Sat, Dec 05, 2020, 9:53 PM UTC

throwaway201103 wrote: post #88

stickyricky wrote: post #54

Earlier quoted context omitted.

> This sounds regressive. We can't make that determination without knowing how much profit a rented bungalow can receive versus the apartment building. A bungalow in midtown Manhattan might very well house one of the world's richest families. Fundamentally, LVT is a wealth tax. If you hold a large amount of wealth (land) but have no income then the tax would seem regressive from an income-based perspective. But from…

The argument against it is that a vacant property imposes very little cost upon society. It doesn't require fire protection, it doesnt add children to the education system, it doesn't use any municipal resources. If it's an eyesore or presents a hazard in some way, sure, but simply being vacant or "underutilized" doesn't do that. Why should it pay to simply exist?

The vacant lot in the middle of Manhattan has a massive opportunity cost to society. If you goal is to own a vacant lot and you don't care where it is, trade that vacant lot in Manhattan for another one in rural Alabama.

Re: Why a land-value tax is inevitable

#109

Post by ichbinwiederda » Sat, Dec 05, 2020, 9:53 PM UTC

ghayes wrote: post #85

ichbinwiederda wrote: post #68

I detest property taxes. What ends up happening is that people who are on the brink of poverty keep losing their (inherited) land because the government deems it an income generating asset, even though it is not (it's either their home or some dilapidated piece of land without much actual income generation prospects). Often they also get screwed on the selling because they are under pressure and because they are not…

Do you have a viable alternative to property taxes for raising municipal revenues? Additionally, certain acts like California Prop 13 of 1978 attempt to solve the problem you’re addressing but, in my opinion, ended up causing much more harm than good. https://en.m.wikipedia.org/wiki/1978_California_Proposition_...

Yes but it is like a complete rewrite of the tax code if you are American. In my country we just don't have municipal taxes. Municipalities have reduced responsibility. All the important services are funded directly from central governments. So you don't get problems like underfunded schools and such. Municipalities get pocket money also from the central government and are only in charge of less important infrastructure and service.

There is no property tax, but we have capital gains taxes based on transfers of assets.

Re: Why a land-value tax is inevitable

#110

Post by Ericson2314 » Sat, Dec 05, 2020, 9:53 PM UTC

hourislate wrote: post #53

The only thing inevitable will be that eventually Land-Value taxes will not be enough (if implemented) and then what? There is no end or limit to the amount of money a Government can squander.

While I don't agree with your premise that private sector is magically more efficient, let's just accept it.

The government can also hand out cash raised from the LVT as a UBI.

Problem solved.