51–60 of 322 posts
> The LVT is not the same as a property tax, as it does not punish those who put the land to use; it taxes only the land, not the structure built on top of it. This sounds regressive. So someone with a bungalow on their property pays the same tax as someone with a 40 story apartment building?
> The LVT is not the same as a property tax, as it does not punish those who put the land to use; it taxes only the land, not the structure built on top of it. This sounds regressive. So someone with a bungalow on their property pays the same tax as someone with a 40 story apartment building?
It's only sounds that we because there is so much yeoman farmer -> suburban everyman stuff in our heads. The land is our collective inheritence, so someone with 1 story bungalow on highly desireable land is actually extremely selfish and decedent in their misuse of the commons. To get less moral and more mathematical, developers can lessen their tax only to the extent that the flood the market with floors pace, deval…
> The LVT is not the same as a property tax, as it does not punish those who put the land to use; it taxes only the land, not the structure built on top of it. This sounds regressive. So someone with a bungalow on their property pays the same tax as someone with a 40 story apartment building?
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 a wealth-based perspective, its a perfectly reasonable thing to expect those that own to pay taxes not just those who labor.
> The LVT is not the same as a property tax, as it does not punish those who put the land to use; it taxes only the land, not the structure built on top of it. This sounds regressive. So someone with a bungalow on their property pays the same tax as someone with a 40 story apartment building?
land value tax. Yes, If you decide to buy a plot in downtown San Fransisco you are taxed the same as the neighboring plot with the Salesforce tower. This is exactly the point he is making: One should put the land to good use. Move the bungalows where land is cheap and tax is low.
> At the top of an economic cycle, governments are collecting their peak tax revenues — yet even so, many are still running large fiscal deficits and have large existing public debts. They’re also spending more than they ever have before in history. > The LVT is not the same as a property tax, as it does not punish those who put the land to use; it taxes only the land, not the structure built on top of it. I’m not co…
> For a $1m house in the Bay Area, only a quarter or a third of that value is the structure. So the first problem is zoning, but imagine if zoning is fixed. Now the taller the building is, the smaller the portion of the taxable value derives from the land itself. The fact of the matter is single family suburbia is a scourge, and we need redevelopment not more development. We can subsidize affordable housing, or we ca…
Which is sort of the problem, right? You have an area which is, say, two story buildings, in an area where you really need an average of three story buildings to satisfy local demand.
Implement LVT and everyone gets the bright idea to build twelve story buildings, because why wouldn't they? Three story buildings would have four times the tax per unit.
But then you get the opposite problem. Real estate prices crash, because there are suddenly twelve story buildings going up everywhere and the prices need to fall to the level that building more of them isn't viable even against the tax advantage. Which is well before you're saturated with tall buildings.
But now you have a thousand plots of land and 10% of them have new tall buildings while 90% have existing single family homes. Now the owners of the single family homes are paying a disproportionate amount of the taxes. 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.
The government is now receiving no tax from 90% of the lots because they've been abandoned, so the land tax amount has to increase by ten fold per plot. But that makes it profitable to build 25 story buildings instead of twelve story ones, to amortize the tax over more units, and the cycle repeats.
It seems obvious that this only works if the amount of the land tax isn't large enough to cause these behavioral changes.
LVT has to be mixed with an occupancy tax however. If I own a large field capable of supporting 10 homes right in the middle of the suburbs, I shouldn't be paying the equivalent taxes that 10 households should be paying. You have to separate out the taxes used to pay for services like trash from the taxes meant for ownership of the land. (although you could argue that large parts of the government are needed to servi…
That's the whole point. If you want to sit on an acre of land in a dense area, you should be taxed at the highest and best value of that land. You make a valid point about services that can be measured, but the point of a Georgist land value tax is that land is the thing that is least distortionary to tax. I'm not fully bought in and think a transition would be very difficult, but this is one of the reasons I don't l…
Isn't that what property tax already codifies?
Also aren't market forces already essentially doing this? If I sit on an acre of land in a dense area I will have developers knocking at my door and everyone has a price.
1. UBI 2. LVT 3. Environmental externality taxes That's all we need to fix the 21st century. Simple as hell so basically immune to regulatory capture, and will usher in a rate of progress we haven't seen in 100 years, if ever.
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?
Tax should be based on land value, not your improvements. So a really nice house isn't taxed more than a run down house. Fixing up the house, or knocking down a post war box and putting up a nice modern house, should not change your taxes.
Tax needs to vary with the maximum use of the land. A daily farm that is now surrounded by luxury apartments should pay taxes at the same rate per acre as those luxury apartments. This is where people start to flip out and get offended that they might be on the side of things that's disadvantaged by it.
Most property tax systems in the US have features that allow some land to be taxed at much lower rates than other land based just on historical ownership. Most notorious is California's Prop 13. The beneficial incentive system of the LVT is that it encouraging redeveloping now-valuable land. That means grandma can't afford to live there anymore. But, that only happens if grandma owns land that has appreciated, so she's probably okay overall.
I'm not really clear on whether LVT always goes with opposition to zoning or discretionary review, but I have seen some of that as well.
Earlier quoted context omitted.
You can determine if the article is internally self-consistent and externally consistent with your priors.
Those two things are necessary, but not sufficient, to prove something is credible. The best propaganda will meet those two requirements.