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Tax the Land

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Re: Tax the Land

#401

Post by yobbo »

Land itself isn't "productive" in our time the way arable land once was the key to wealth. Persistently rising housing prices does not mean that land is productive, it means mortgage rates are persistently too low.

Taxing land will not create more housing; if it was profitable it would happen regardless of tax.

> “It doesn’t disappear — so you can lower taxes on things that do go away.”

It absolutely goes away. The only value of land is its utility to humans - the infrastructure, buildings, utilities. Just look at all the ghost towns that lost their economic viability. That land now has negative value since old buildings need to be demolished before being developed. Measured in acreage, there is effectively infinite land, but without infrastructure and buildings it has no value to people.

The value of land that is polluted and needs to be rehabilitated becomes negative.

Re: Tax the Land

#402

Post by tome »

2Gkashmiri wrote: post #371
tome wrote: post #355

Earlier quoted context omitted.

> what more do you want them to impose? The point of land value tax is to remove all those other taxes (at least, I wouldn't support introduction unless it did).

would that result in less collection of taxes or more? because current implementation of cascading effect means more and more taxes are incurred, which while increases the price of property, gives taxes to government which is just that

Whether the overall tax take is more or less depends on the LVT rate! But I think proponents of LVT say that when introducing the tax the rate should be set so that the overall tax take is the same.

Re: Tax the Land

#403

Post by tome »

chii wrote: post #376
tome wrote: post #348

Earlier quoted context omitted.

> if you're against title-holding, you are really against the idea of ownership, and capital. Is anyone in this discussion against title-holding per se? Not that I can see. The point is that title-holding should come with some responsibilities, specifically to pay a tax proportional to the value of the title. For comparison, someone is not necessarily against work because they believes that earning income comes with…

> pay a tax proportional to the value of the title. Would you also agree then, that holding onto shares of a company would also require you to pay a proportion of the value of those shares in tax? In other words, this is a wealth tax?

What I agree with is of little consequence, because I'm not proposing this form of taxation[1]. But, interpreting LVT proponents, I believe they would say no, it's not a wealth tax, it's very specifically a land tax. I believe the point is to replace (all?) other forms of taxation.

[1] although I'm optimistic about it and might become a proponent in the future if it seems like an effective policy.

Re: Tax the Land

#404

Post by onlyrealcuzzo »

yobbo wrote: post #401

Land itself isn't "productive" in our time the way arable land once was the key to wealth. Persistently rising housing prices does not mean that land is productive, it means mortgage rates are persistently too low. Taxing land will not create more housing; if it was profitable it would happen regardless of tax. > “It doesn’t disappear — so you can lower taxes on things that do go away.” It absolutely goes away. The o…

> Taxing land will not create more housing; if it was profitable it would happen regardless of tax.

Completely false.

Prop 13 is the reason you have parking lots that generate less than 1% per anum on the value of land in some of the most expensive pieces of real estate in CA.

Prop 13 means the property tax is next to nothing - so the 1% is still cash-flow positive. It also artificially reduces supply since prices are high because no one wants to sell because buying something new would mean taxes 10-1000x higher.

On the vast majority of lots in CA - you cannot buy from the owner and put enough additional stock on the market for it to make sense for anyone. It's just so much better for the existing owner who is paying 90% less property tax and getting all those unrealized gains they can HELOC out tax-free if they really want.

So many major cities are moving the way of California and either passing laws to limit property tax increases (Michigan) or simply never re-assessing home values (Pittsburgh).

In a market where prices are re-assessed and everyone pays the same taxes - I agree. But that's not the way it works in ~50% of the US.

Re: Tax the Land

#405

Post by CryptoPunk »

belorn wrote: post #399
CryptoPunk wrote: post #392

Earlier quoted context omitted.

>>I am rather skeptic of land value taxes, but I would like to hear your view of why land value tax is better than simply raising the tax on rent and property sales. The article goes into the advantages of a land value tax over other types of tax, including a property tax: The big question land value taxes help answer is: How can a government raise funds without distorting choices and possibly leaving people worse of…

> Those people should be selling their land. We should not have a scarce natural resource sitting idle or under-utilized. From the article as well: If we have that attitude to people owning things, then the first thing should be wealth tax on jewelry, cars, boats, and other luxury items which if you can't afford to pay the tax then you should be forced to sell it. I remember how popular that concept where here in EU…

I don't think this necessitates having that attitude toward owning things in general. Owning scarce natural resources is very different than owning man-made resources that have an elastic supply that can be expanded through production. A coherent moral framework can support the former being taxed, while maintaining that the latter should not be.

Private ownership of the latter is both just, because the original owners comes to own it by producing it, and economically advantageous, because ownership incentivizes production, which leads to its supply increasing. With land, there is no moral justification for private ownership, as no private party created the land, and private ownership does not have the economic effect of leading to the supply of it expanding, since land cannot be produced.

Re: Tax the Land

#406

Post by djokkataja »

valenterry wrote: post #400
djokkataja wrote: post #395

Earlier quoted context omitted.

> For instance, say I live in a very expensive city and I can no longer afford the land tax. One of the major reasons that our cities become expensive in our "modern" society is that we don't have land value taxes. If we have a land value tax, then when someone decides they can't afford to keep paying the tax, they sell it to someone who can OR they find a way to make the things built on that property much more valua…

All you say is interesting and probably true, but you did not address OP's specific point at all.

The OP's specific point was based on a misunderstanding: that being unable to pay the land value tax would mean they would have to move to a different city because the cost of living in their original city would be too high. This might be a reasonable concern during a transition to a land value tax system, but once the land value tax has been in place long enough to see more efficient use of land actually happening, the cost of living would be going down. So the premise of their argument doesn't hold.

Put another way, their concern was based on them specifically paying more taxes on land while society stays the same in regards to use of land. But that doesn't make sense because they're not the only person who would be paying land taxes; everyone who owns land would be, and that changes everyone's incentives for how they use land.

If you mean the part about "how could this ever overcome NIMBY" / tradeoffs between people who already live somewhere and people who want to live somewhere, then yeah, that wasn't what I was talking about.

Re: Tax the Land

#407

Post by Game_Ender »

valenterry wrote: post #400
djokkataja wrote: post #395

Earlier quoted context omitted.

> For instance, say I live in a very expensive city and I can no longer afford the land tax. One of the major reasons that our cities become expensive in our "modern" society is that we don't have land value taxes. If we have a land value tax, then when someone decides they can't afford to keep paying the tax, they sell it to someone who can OR they find a way to make the things built on that property much more valua…

All you say is interesting and probably true, but you did not address OP's specific point at all.

The answer is that he could still afford to live there just no longer as an owner of that much land. In a city with a land value tax the rental or condo market would be much more dynamic so he would be able to find and affordable option their.

Re: Tax the Land

#408

Post by mrep »

dbspin wrote: post #362
teakettle42 wrote: post #337

Earlier quoted context omitted.

> deliberately causing a shortage of a basic need There’s no housing shortage. There’s a limited supply in highly desirable locations because they’re highly desirable. People can and do live elsewhere, working local jobs or commuting. > The jobs are becoming increasingly concentrated in a few metro areas That’s just one of many problems of scale; the solution is not to keep scaling up. > … the home-owning class const…

Just to address this from a non US standpoint. While I'm sympathetic toward both the desire to preserve the character and community of a neighbourhood and your antipathy towards rentiers - there absolutely is a housing crisis across Europe (and presumably in the US). Part of the reason is the lack of social housing provision, with most EU governments reducing or all together abandoning their post war commitments to l…

According to this website [0], the US has the 3rd lowest income/house price ratio in the entire world.

Outside the west coast and parts of the northeast which are geographically limited in building new houses, we basically have infinite land to build housing which is why inflation adjusted price per square foot hasn't really changed in decades [1].

[0]: https://www.numbeo.com/property-investment/rankings_by_count...

[1]: https://www.supermoney.com/inflation-adjusted-home-prices/

Re: Tax the Land

#409

Post by caf »

inter_netuser wrote: post #218
CryptoPunk wrote: post #212

I've long advocated a land value tax. I would suggest that any reform of this nature, that eliminates private capture of economic rent, accompany one-time compensation to the parties that lose that economic rent, so in this case, compensation to make up for the loss in property value that a LVT would incur. The same should apply to any other repeal of rent-seeking institutions: anti-labor-competitive laws privileging…

I like Georgist taxes, but it's unclear that tax incidence will fall entirely on the rentier class. Important land is always unique, and therefore taxation would be have be incredibly dialed-in, no? A busy major international port would need to be taxed very differently than a sparsely attended beach just a mile away. This seems very difficult to get right. Have there been practical applications that show that's not…

Land taxes are certainly in use around the world. My "rates" which fund the local government are based on the "unimproved land value". If you are unhappy with the land value determination (presumably because you feel it is too high) you can object and present evidence - for residential property that isn't too hard because area sales records are available and the replacement cost of the improvements on the land are reasonably easy to estimate and subtract from the sale price. No doubt unique businesses like airports get professional appraisals that painstakingly put an estimate together.

Re: Tax the Land

#410

Post by belorn »

CryptoPunk wrote: post #405
belorn wrote: post #399

Earlier quoted context omitted.

> Those people should be selling their land. We should not have a scarce natural resource sitting idle or under-utilized. From the article as well: If we have that attitude to people owning things, then the first thing should be wealth tax on jewelry, cars, boats, and other luxury items which if you can't afford to pay the tax then you should be forced to sell it. I remember how popular that concept where here in EU…

I don't think this necessitates having that attitude toward owning things in general. Owning scarce natural resources is very different than owning man-made resources that have an elastic supply that can be expanded through production. A coherent moral framework can support the former being taxed, while maintaining that the latter should not be. Private ownership of the latter is both just, because the original owner…

I have a hard time distinguish between people owning gold and people owning land, and in this discussion, we are not just talking about owning land but people owning a house on that land. Similar in how gold is turned into a jewelry that people form emotional attachment to, a home is built on land which people form emotional attachments to. In both cases we have a man-made resource, ie a jewelry and homes, and in both cases they got created from a scarce natural resources, gold and land. They are also both mental concepts that is a man-made product formed by using a natural resource.

Land cannot be produced but homes can be designed, constructed and built. If we want to tax land but not homes, and we want to tax gold but not jewelry, I would find that perfectly consistent. People rarely form attachment to unused land, similar to how people don't form attachment to solid gold bars or ingots. Incentivizes production of unused land and vacant properties is something I would support, while I am rather suspicious of taxing ownership of man-made resources.

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