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

Re: Why a land-value tax is inevitable

#171

Post by scarmig » Sat, Dec 05, 2020, 10:52 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.

I'm curious what mechanisms it proposes.

One of the funner ones I've heard of is that the owner and payer of the property tax performs the valuation of the land: it makes implementation pretty much free and uncontroversial! The only caveat is that whatever value the owner lists as the value is an amount they must accept for the land in a sale (plus some meaningful fee to drive off trolls).

So, sure, you can list the value of the land of your Pac Heights mansion as $1 and pay a commensurate tax on that. If you do, though, someone can purchase it for $1 and start charging you a hefty use fee.

Re: Why a land-value tax is inevitable

#172

Post by throwaway201103 » Sat, Dec 05, 2020, 10:53 PM UTC

mlinksva wrote: post #153

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.

Squandering taxes seems like a separate problem. In the case taxes are squandered, and in the case they are not, it makes sense to use the most efficient taxes first. Also https://en.wikipedia.org/wiki/Henry_George_theorem shows "that under certain conditions [presumably including limited squandering, though I didn't check], beneficial investments in public goods will increase aggregate land rents by at least as much…

That might be true to the extent government spending is actually in public goods, such as infrastructure, transit, parks, schools, what have you. In reality most government fiscal problems are from things like underfunded pensions and debt service.

Re: Why a land-value tax is inevitable

#173

Post by Retric » Sat, Dec 05, 2020, 10:54 PM UTC

joe_the_user wrote: post #160

I think the problem with land-value taxes is that objective valuation of raw land value is actually difficult and even arbitrary. If you say a parcel of land is valuable because there's a building on it, you wind-up with just a real estate tax. If you value all land the same, people will just abandon ownership of large parcels, probably with paradoxical results. Almost automatically, the assessment of just land has t…

You don’t need a great deal of precision with a land value tax. If the closest properties where sold at X$/ acre that’s a solid suggestion of the actual value of that land.

The goal is essentially to separate the value of land based on local infrastructure like subway systems from the amount of effort put into improving the property. An empty lot that’s worth 10,000$ per acre may physically look the same as an empty lot worth 10,000,000$ per acre, but it’s clear society not the property owner generated that value is.

That said, there are a lot of edge cases like beach front property vs having another house in front.

Re: Why a land-value tax is inevitable

#174

Post by dbcurtis » Sat, Dec 05, 2020, 10:57 PM UTC

mullingitover wrote: post #104

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.

Not so much. Insurers don't insure land. The insure property built on land, crops grown on land, and they insure against various kinds of liability. None of my dirt is insured.

Re: Why a land-value tax is inevitable

#175

Post by paconbork » Sat, Dec 05, 2020, 10:59 PM UTC

jelliclesfarm wrote: post #95

Ericson2314 wrote: post #66

Earlier quoted context omitted.

No, or not nearly as much. The needs of a child are mediated by productivity, which has been wildly different throughout history. E.g. maybe we'll have practical fusion in 100 years and can support 100 billion people no problem. But the surface area of the earth is fixed. If you want 100 acres to do nothing good with, do it with a giant seastead.

That’s not my point. And you didn’t answer my question. You spoke of commons as collective inheritance. A serial breeder..say..someone who has a couple of children with different women more selfish than someone who has 1-2 children. The commons will be saturated by the needs of genes of prolific breeders who use women’s bodies as vessels. Is that selfish? Since we are talking about selfishness and commons as a collec…

> the needs of genes of prolific breeders who use women’s bodies as vessels

I believe you mean the needs of actual human beings born of such people, to whom the God-given rights of life, liberty, the pursuit of happiness, and yes, the collective inheritance of the commons, are owed.

Re: Why a land-value tax is inevitable

#176

Post by syrrim » Sat, Dec 05, 2020, 11:00 PM UTC

lilgreenland wrote: post #107

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

It's a slippery slope argument. Logicians demand perfect rigour, and label reasoning that fails to attain that a "fallacy". Humans are satisfied with heuristical arguments, which the slippery slope is an example of. Pointing out that it fails to achieve perfect rigour is meaningless; no argument reaches that bar, and demands to pursue it will only result in obfuscation. Instead, try to explain why the heuristic doesn't apply in this case - if you can. The general response to a slippery slope argument is to explain why one step, once achieved, won't lead to any further steps. You will have great difficulty demonstrating that in this case, since government expenditures regularly rise to the level of their budgets (and indeed beyond).

Re: Why a land-value tax is inevitable

#177

Post by tekkk » Sat, Dec 05, 2020, 11:01 PM UTC

I think this has been implemented already in Finland. The tax administration evaluates the property's value (both land and infrastructure) and taxes it accordingly, eg 0.5%. For unused land the municipality can set an extra tax to coerce the land owner to develop the land, for example 1 to 3 percent. But I wouldn't say it is a miracle maker, just a part of an effective taxation system.

What I personally would do, if I could, is to target the unscrupulous rich by banning companies located in tax havens from operating in the country, unless they can prove that they have proportionally high enough of employees working full-time in the said tax haven compared to their assets. That, I would say, is very achievable goal that would affect mostly just tax-dodgers and give a strong signal that those practices should come to an end.

I think it is just unfair that normal people have pay taxes up to 50% on their earnings (depending on the country of course) while millionaires and billionaires can just bypass the whole system by incorporating a holding company in Cayman Islands. Or mega corporations that can even negotiate special tax privileges.

Re: Why a land-value tax is inevitable

#178

Post by arrosenberg » Sat, Dec 05, 2020, 11:02 PM UTC

paconbork wrote: post #161

Spooky23 wrote: post #149

Earlier quoted context omitted.

Why would Walmart make a deal when they could just wait for or lobby the county to valuate your land at some excessive value and force a sale in distress? LVT is just bad policy that sounds ok in concept. In my city, inner city residential property is near worthless once it falls below section 8 standards. The taxes are low too as result. With a LVT scheme, someone would cook up some “true” value subjectively, which…

Can't Walmart already do this? Property assessors already estimate the value of your property and the value of the land plays a part.

Or the very questionable use of eminent domain that some municipalities engage in.

Re: Why a land-value tax is inevitable

#179

Post by dbcurtis » Sat, Dec 05, 2020, 11:03 PM UTC

throwawaysea wrote: post #165

The big moral problem I have with a recurrent tax on assets like land or improvements on land (buildings) is that it erodes the fundamental right to private ownership. What does it mean to own anything if policies can retroactively apply taxes to it or continually extract taxes and ultimately take that asset away from you? That’s simply not compatible with a free society and it amounts to theft in my opinion.

Exactly. It's the feudal system implemented with different accounting methods. Landowners are turned into sharecroppers working for the government.

Re: Why a land-value tax is inevitable

#180

Post by technotarek » Sat, Dec 05, 2020, 11:03 PM UTC

Anecdotally, I’ve been surprised by how Washington DC’s aggressive, punitive taxing of vacant properties has done little (in my observation) to free up these plots. $MM properties that just sit there.