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

Re: Why a land-value tax is inevitable

#111

Post by Spooky23 » Sat, Dec 05, 2020, 9:53 PM UTC

Ericson2314 wrote: post #97

ichbinwiederda wrote: post #84

Earlier quoted context omitted.

I am talking from experience. You are wrong on both counts. What makes you think that poor people don't inherit property? There are lots of people with very low incomes but who own a house. And no they don't just sell it. Why sell the only house you have? Or maybe it is not their house but it is a piece of property that they have always owned and which they use as a garden or a yard or storage. They don't sell it bec…

This only happens because our terrible land use is inflating the real estate market + terrible policy like prop 13. In an LVT world, the value of land (overall-inflation-adjusted) should basically track the population, and virtually no one will own land they could no longer afford to buy.

That’s why LVT will never happen and is a dumb idea.

If a freeway exit gets built a block away from my house, my taxes will reflect the value of a Walmart or whatever instead of my house.

Re: Why a land-value tax is inevitable

#112

Post by wmf » 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?

It imposes the cost of pushing people farther away from each other. Every block that's empty is one block farther people have to walk/cycle/drive to get where they're going.

Re: Why a land-value tax is inevitable

#113

Post by ip26 » Sat, Dec 05, 2020, 9:55 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/

LVT can levy the same amount of net revenue. It's just a different way of determining valuation. Large buildings in the desert come to pay less. Empty lots in the middle of downtown come to pay more.

Re: Why a land-value tax is inevitable

#114

Post by Ericson2314 » Sat, Dec 05, 2020, 9:55 PM UTC

supernova87a wrote: post #46

There was a convincing op-ed in WSJ a few years ago about how in all the states that are facing public sector defaults, the ultimate payer of these debts will be homeowners. Since basically the only place left for most governments to go is property value (unless they have huge businesses they can tax). And it is worse in the poorer states, because they don't have high home values to cushion the blow to the individual…

I wish, but household owners are so politically powerful I doubt it will happen.

Re: Why a land-value tax is inevitable

#115

Post by bhawks » Sat, Dec 05, 2020, 9:55 PM UTC

Ericson2314 wrote: post #78

kashkhan wrote: post #48

Earlier quoted context omitted.

Add MMT to the list. LVT is good for state governments that don't have their own currency.

Modern Monetary theory is theory not policy. The jobs guarantee that goes with it I really don't like. It's stupid in 2020 to not be trying to reduce the total labor per person. Sure, some infrastructure projects are really important, not profitable, and might even require the training of new labor to get it done. They should definitely still happen. But I see no good reason to hitch that to jobs guarantee.

Reducing labor as a goal seems rather odd. Why do you feel people should not have the freedom to work? What would you rather people do instead?

Re: Why a land-value tax is inevitable

#116

Post by mr_cyborg » Sat, Dec 05, 2020, 9:55 PM UTC

lokar wrote: post #38

mr_cyborg wrote: post #16

I’m struggling to envision how this would impact homeowners differently than the current property tax paradigm. If I have a house and the value of the property goes up, my property taxes increase. If I were to sell a house at market rate, theoretically it would be reflective of what rate it was being taxed at. How would this same situation play out with a land-value tax?

About the same. AIUI, they see a few benefits: - it will ensure someone holding onto empty land for future use will have to pay at the same "rate" as you do. They don't get a discount simply because they choose not to use the land. If you aim to collect the same total amount of revenue, this would lower your tax. - Use of land would be better optimized if there was no disincentive to build an expensive (eg bigger/den…

Thanks for this response. Disclaimer: I live in a city that is growing constantly and has many growing pains that are being worked through.

To me, it almost sounds like this type of tax puts more power in the hands of big developers, which is a challenge many municipalities deal with right now - striking the right balance with that. If they want to force someone to sell the remaining property in a block they’re trying to develop, wouldn’t they just need to make enough improvements that the city drives that person out with taxes?

I can’t help but think it could incentivize municipal governments seeking revenue to approve big projects without input from people living there, and incentivize people living somewhere to being actively anti-development.

Re: Why a land-value tax is inevitable

#117

Post by Ericson2314 » Sat, Dec 05, 2020, 9:56 PM UTC

mr_cyborg wrote: post #16

I’m struggling to envision how this would impact homeowners differently than the current property tax paradigm. If I have a house and the value of the property goes up, my property taxes increase. If I were to sell a house at market rate, theoretically it would be reflective of what rate it was being taxed at. How would this same situation play out with a land-value tax?

> If I have a house

After the transition period, far fewer people can afford freestanding single-family buildings.

Re: Why a land-value tax is inevitable

#118

Post by dragonwriter » Sat, Dec 05, 2020, 9:56 PM UTC

ip26 wrote: post #113

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/

LVT can levy the same amount of net revenue. It's just a different way of determining valuation. Large buildings in the desert come to pay less. Empty lots in the middle of downtown come to pay more.

LVT isn't a way of determining valuation, it's a restriction of what things you need to determine the value of.

Re: Why a land-value tax is inevitable

#119

Post by loeg » Sat, Dec 05, 2020, 9:59 PM UTC

AnthonyMouse wrote: post #79

CyberDildonics wrote: post #75

Earlier quoted context omitted.

What are you basing your predictions here on? Do you have an example where this has happened?

Do you have an example of where LVT was tried at scale anywhere at all ever? I'm just describing the incentives. Identify the flaw in the logic.

You're describing a scenario starting with extreme zoning restrictions and then immediately lifting those restrictions. I don't think your predictions relate to a LVT at all — similar drastic development with varying height would happen in any desirable area with sudden change in zoning restriction.

Imagine instead that zoning restrictions were relaxed gradually.

Re: Why a land-value tax is inevitable

#120

Post by paconbork » Sat, Dec 05, 2020, 9:59 PM UTC

AnthonyMouse wrote: post #79

CyberDildonics wrote: post #75

Earlier quoted context omitted.

What are you basing your predictions here on? Do you have an example where this has happened?

Do you have an example of where LVT was tried at scale anywhere at all ever? I'm just describing the incentives. Identify the flaw in the logic.

>They abandon their properties, which have already declined in value, because the tax is more than the newly lowered cost of buying space in one of the tall buildings.

If we hit the saturation point for tall apartment buildings, the land is less valuable (since you can't extract as much value from it), decreasing the land value taxes (and thus, incentive to leave homes). Lower land value taxes incentivize constructing more modest apartment buildings, as those will now be profitable. This process continues until housing supply meets demand.

Also many people prefer living in single-family houses. The bay area is full of people who won't sell their single-family house even though the value has gone up 20x. They wouldn't abandon their properties unless they had to. And if they have to it means they can sell them for a lot to a developer who will profitably build an apartment.