Tax the Land • Hacker News Board

Re: Tax the Land

#191

Post by legitster » Sat, Apr 16, 2022, 1:51 AM UTC

mdorazio wrote: post #9

Not really stated in the article are three caveats: 1) Zoning laws have to change as well to actually allow development of the land being taxed toward more productive ends. 2) The land tax amount needs to be high enough that the pain of the tax effectively forces owners to improve what's on the land. A homeowner sitting on a million dollar piece of property in California taxed at ~1% is still unlikely to build an apa…

2) "Think on the margin" - a LVT might not make Bill Gates turn his mansion into condos, but down the bell curve there are likely plenty of people right on the fence who may be swayed.

3) LVT would (theoretically) equally encourage the development of condos as it would rental units.

Re: Tax the Land

#192

Post by teddyh » Sat, Apr 16, 2022, 1:51 AM UTC

brians wrote: post #168

teddyh wrote: post #164

The idea of land-value tax strongly reminds me of the often cited, and much maligned, so-called fiduciary duty to shareholders which CEOs and/or board members reportedly have. This duty creates, it is said, an incentive towards naked short-term greed, which is often described as a bad thing. Now, even though this duty is also usually derided as fictional, the argument, if this duty did exist, would be reasonable. But…

The Georgist land tax taxed the unimproved value of the land. The tax remains the same whatever you build on it. Sale price already nudges you to preserve, improve, or augment the value of the land. So I think your concern either already would have happened, or if not, a Georgist land value tax makes it no more likely. Thanks for the opportunity to think this through this far; what am I missing?

The article seems to be a little loose with its terminology. It uses the term “land value tax”, but describes it the same as what you term a “Georgist land tax”. But then the article seems to imply that all efforts nationwide to implement a “land value tax” are good, which I doubt, since what people usually mean by “land value tax” is much closer to what I described, not what you wrote.

Re: Tax the Land

#193

Post by eric4smith » Sat, Apr 16, 2022, 1:51 AM UTC

rnk wrote: post #174

eric4smith wrote: post #163

Vox needs a spanking. (As always). Just imagine. I have some land. Lots of people would love to buy it it for different things. But for now, I just want to hang onto it until I'm ready to use it. And my house is sitting right next to it. Yeah, nimby blah, blah blah. But it's my house and my backyard and my land so... I have to be forced to sell it? Brah. Just another socialist redistribution scheme.

I don't want you to have to leave your land or be forced to sell it. But you should be paying taxes based on the actual value of it. Not on what it was 30 years ago when someone built it. California's proposition 13 is hiding actual values of many wealthy people's homes from the tax man; being able to transfer them without triggering new valuations used in taxes is a key problem.

Are you even listening to yourself?

Of course I would be forced to sell it because the taxes would be too high. That's the whole point. Because of tax policy I would be forced to sell the land that I want to keep and sell later for appreciation value.

Sometimes we forget that this is a capitalist free market country. I'm free to do what I want with my own land and my own capital.

Sometimes it is not optimal, but if you take that part away, what incentive do people have to do business anymore?

Re: Tax the Land

#194

Post by schoen » Sat, Apr 16, 2022, 1:58 AM UTC

giantg2 wrote: post #13

"The big question land value taxes help answer is: How can a government raise funds without distorting choices and possibly leaving people worse off? If you tax income, it provides a disincentive to work. If you tax property, it provides a disincentive to improve the physical buildings on top of the land." Of course it will distort choices and leave some people worse off. If the author can't see that, then they have…

> Please, show me how an appropriately set income tax disincentivizes work.

The most relevant phenomenon is

https://en.wikipedia.org/wiki/Deadweight_loss#Deadweight_los...

What might be confusing is that relatively few people are incentivized by an income tax to do no work at all, but many people may be incentivized to do less paid work than they otherwise would. (In fact, under idealizing assumptions which don't quite apply in all cases, you would expect every person facing an income tax to do at least very slightly less paid work than without the tax.)

Re: Tax the Land

#195

Post by zzzzzzzza » Sat, Apr 16, 2022, 1:59 AM UTC

eric4smith wrote: post #163

Vox needs a spanking. (As always). Just imagine. I have some land. Lots of people would love to buy it it for different things. But for now, I just want to hang onto it until I'm ready to use it. And my house is sitting right next to it. Yeah, nimby blah, blah blah. But it's my house and my backyard and my land so... I have to be forced to sell it? Brah. Just another socialist redistribution scheme.

there's a finite amount of land and taxing it doesn't reduce the amount of land there is. if you tax services there will be fewer services. if you tax goods there will be less goods.

land is both inelastic and valuable and that is why land tax is perfectly economically efficient and creates no deadweight loss.

the fact that it is also necessary for life and production while being finite is what makes it a moral imperative to redistribute land rents to the proper owners (i.e. society and not an individual, who pays society for the right to a local monopoly over a piece of land).

for me lvt is not about building condos, in some areas it will incentivise that, in other it wont. it's a fundamental moral and philosophical issue on par with slavery; it's about transitioning away from a feudal model and towards a freer market and more participatory and empowering society.

for the true believer lvt must replace other taxes, and in theory all taxes come out of rent, so abolition of sales or income tax will increase lvt even more, in a virtuous cycle.

the appropriate amount to tax land is as close to 100% as you can get.

Re: Tax the Land

#196

Post by jfoutz » Sat, Apr 16, 2022, 2:00 AM UTC

bombcar wrote: post #70

mdorazio wrote: post #65

Earlier quoted context omitted.

I'm strongly going to need a source to back up your claim.

Find banks or real-estate companies that invest in single family homes for the purpose of renting them. If you can find one, you often find that they'd rather let the property sit empty than renting it. Or just look at the cost of buying a house vs renting a similar house, account for maintenance, and see if the numbers line up.

https://www.wfae.org/business/2022-02-09/as-single-family-re...

That count?

Re: Tax the Land

#197

Post by fennecfoxen » Sat, Apr 16, 2022, 2:00 AM UTC

bombcar wrote: post #12

mdorazio wrote: post #9

Not really stated in the article are three caveats: 1) Zoning laws have to change as well to actually allow development of the land being taxed toward more productive ends. 2) The land tax amount needs to be high enough that the pain of the tax effectively forces owners to improve what's on the land. A homeowner sitting on a million dollar piece of property in California taxed at ~1% is still unlikely to build an apa…

The average single-family dwelling landlord is subsidizing someone; rents are usually below actual carrying costs (maintenance, etc) and most landlords would be better off selling. It’s one of the reasons banks and companies aren’t in the single family rental business. The main thing that covers for it is property appreciation - the rent is used to just offset carrying costs while you wait for the property to go up i…

https://www.wsj.com/articles/built-to-rent-suburbs-are-poise...

> Today, built-to-rent homes make up just over 6% of new homes built in the U.S. every year, according to Hunter Housing Economics, a real estate consulting firm, which projects the number of these homes built annually will double by 2024. The country’s largest home builders are planning for that future. Backed by banks and private investment firms, they have already bet billions on the sector, and will put down some $40 billion more during the next 18 months, Brad Hunter, founder of Hunter Housing Economics, projects. Built-to-rent subdivisions have been constructed or are under development in nearly 30 states. Taylor Morrison Home Corp. , Mr. Wood’s development partner and the nation’s fifth-largest builder, has said built-to-rent could soon become 50% of its total business. The company didn’t disclose the current share.

> Homeownership is expected to decline over the next two decades—a trend that started with the generation after the baby boomers, according to the Urban Institute, a Washington, D.C., think tank that advocates for homeownership. Prices are rising faster than ever, leaving more people, including those with higher incomes, more likely to rent.

Re: Tax the Land

#198

Post by loeg » Sat, Apr 16, 2022, 2:01 AM UTC

missedthecue wrote: post #148

diebeforei485 wrote: post #121

Earlier quoted context omitted.

> We already see standard property tax forcing the elderly out of their homes in many areas. It's reasonable to offer options to low-income retirees, for example allowing them to defer property tax payments until death. Texas does this, it works alright. Note that a single family dewlling on .75 acres likely costs the government a lot of money to provide services (plumbing, sewer, electric etc) and is likely already…

Most suburban/exurban SFH in most regions of the US have their own wells, septic, and plumbing. They're not on city water.

Most suburban SFH is on well water and septic? I really doubt that. Exurban maybe, rural sure.

Re: Tax the Land

#199

Post by sokoloff » Sat, Apr 16, 2022, 2:01 AM UTC

noahtallen wrote: post #190

sokoloff wrote: post #36

Earlier quoted context omitted.

The question is “if Blackrock can buy and turn an immediate profit, why didn’t MAA, Starwood, AvalonBay, or one of 100 others not bid it up from the easy-money, too-cheap level?”

From experience in Portland and Seattle, large management companies are purchasing as many properties as they possibly can.

Indeed. That’s what makes the bids high enough to leave limited immediate cash flow.

Re: Tax the Land

#200

Post by fennecfoxen » Sat, Apr 16, 2022, 2:03 AM UTC

ItsMonkk wrote: post #109

giantg2 wrote: post #102

Earlier quoted context omitted.

I doubt that would actually occur. People with deep pockets could buy it up because they don't care about the tax. They'll just pass the cost on to renters anyways.

The reason that most taxes can be passed on is because as price is raised, the supply and demand curve is pushed and less is made. With land, there is a finite supply, none can be created, none can be destroyed, so land value taxes can not be passed on. As the land value will always be zero, there is little value in holding land that you are not using productively, so speculation will drop heavily.

> With land, there is a finite supply

You say all this as if there isn't any meaningful supply-and-demand to be had in the secondary market.