Tax the Land • Hacker News Board

Re: Tax the Land

#511

Post by eli_gottlieb » Sat, Apr 16, 2022, 9:22 PM UTC

Mizza wrote: post #393

gameman144 wrote: post #366

I totally get the appeal of land taxes and restriction of land-use regulation at the local level, and by and large they seem like a reasonable approach to poor resource allocation and unequal ownership opportunities. One thing I've not seen addressed, though, is the apparent disincentive to improve communities in meaningful ways. For instance, say I live in a very expensive city and I can no longer afford the land ta…

Surely this is going to be a problem as long as housing is just another market commodity? I remember living in a pretty shabby student ghetto district of Boston, and you'd regularly see graffiti saying "Keep Allston Shitty". In Philadelphia, I heard similar rumors of locals occasionally firing off a few gunshots every month, just to keep the white people scared and the rents down. Renters everywhere are basically inc…

For once someone actually makes a decent point about the contradictory class interests of renters!

Re: Tax the Land

#512

Post by imtringued » Sat, Apr 16, 2022, 9:23 PM 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.

This is known as liquidity preference. People would rather keep their property liquid, meaning they have the ability to decide what happens with the property with little delay. Renting out a property makes it less liquid, constructing a building on top of land makes it less liquid. People demand a compensation for giving up liquidity called liquidity premium. Rental payments must exceed that liquidity premium. If they do not, the land owner would rather keep his property liquid, i.e. ready to sell or rent out to someone whose rental payments exceed the liquidity premium.

The reason why liquidity preference exists is that land can be used for almost anything, is limited in supply and going up in value, making an early commitment can lose you a lot of potential profit. For example, a 10 year lease to a farmer could turn out to be a bad decision if 3 years into the lease, a power utility offers to build wind turbines on the land and you are still stuck with 7 years on that lease. The power company moves on and you lost your opportunity.

It turns out, a land value tax neutralizes liquidity preference.

Re: Tax the Land

#513

Post by imtringued » Sat, Apr 16, 2022, 9:31 PM UTC

giantg2 wrote: post #87

ItsMonkk wrote: post #60

Earlier quoted context omitted.

The carbon price and dividend shows a great example of how to correctly set incentives. You tax the carbon. That tax money is then put into an account. At the end of the year, every single individual is then given an equal share. The disincentives the use of carbon, while at the same time providing means that a majority of people actually get a net benefit. The land tax should be set so that the price of the house be…

"The land tax should be set so that the price of the house becomes just the price of the house - the cost of the materials and labor." How is that even possible? The root cause of property values being high in specific areas is because demand is high. Without changing demand, I don't see how it can just be labor and materials, especially since the buyer will be paying land value tax as well (since it's not a condo, h…

An income tax discourages you from earning money. A land value tax discourages you from using land. Using land more efficiently allows more people to live in that area.

I find proposals to reduce land value close to $0 extreme. After all, it would require some absurd tax rate like 100000% land value tax. The value of the land is 2k€ at 100% LVT representing the maximum in taxes one would pay for the property. At 100000% the payment is still 2k€ but the value of the land is now 2€ and you are paying 1000x on top of that land value in land value taxes. This means you can purchase the land for very little upfront. However, a 100% LVT would be more than sufficient because people can easily afford to prepay one year of taxes.

Re: Tax the Land

#514

Post by jallen_dot_dev » Sat, Apr 16, 2022, 9:34 PM UTC

pandaman wrote: post #474

jallen_dot_dev wrote: post #468

Earlier quoted context omitted.

"I have the right to build apartments on the land I own." "I have the right to tell you what you can and can't build in my neighborhood." Which one is positive and which is negative?

Neither is positive, both are negative. Also the former does not exist in reality, in fact you often don't have a right to build anything in a township thus you have to get a permission from the local government for almost any construction (with some things implicitly permitted).

I guess I don't understand the distinction or how the second one isn't a positive right. By your own rule of thumb, if you take away other people then the right to tell others what they can/can't build disappears.

> Also the former does not exist in reality

Irrelevant, we're discussing how things should work not how they are.

Re: Tax the Land

#515

Post by clairity » Sat, Apr 16, 2022, 9:35 PM UTC

imtringued wrote: post #495

belorn wrote: post #378

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 main argument that I see against land value taxes is that land doesn't generate any income by itself, which forces people to pay money in situation where they might not have any income to do so. One could bypass this problem by putting in limitations,…

If you tax rent, you are taxing the building which is not the point of a land value tax.

again, rents here are economic rents, not rent payments, which is an unfortunate name collision. economic rents are, by definition, unproductive capture of surplus. rent payments can fall into productive (for the provision of services, upkeep, and expansion) or unproductive (excess cash flow resulting from restrictive policy) uses, but that's really beside the point in respect to a land value tax.

the land value tax is aimed squarely at taking economic rents of real property down to zero via taxation. in the ideal scenario, the land value tax would be exactly equal to the economic surplus (generated by poor policy or anything else) for each property, to negate the ability to extract economic rents, leaving only productive uses to generate income (perhaps in the form of a rent payment).

Re: Tax the Land

#516

Post by archhn » Sat, Apr 16, 2022, 9:35 PM UTC

causality0 wrote: post #437

archhn wrote: post #243

Earlier quoted context omitted.

It's more complicated than this. Most working class people aren't even exposed to local politics. I guarantee you that the majority of working class people don't even know how or where to vote in local elections. Democracy sounds egalitarian in principle, but in reality, economics on the ground insulates a large number of people from the power process. I get what you are saying about not wanting these clueless people…

I'm a working class person. I don't have a bachelor's degree. My pay is hourly, I spend a good portion of my day on my knees with tools in my hands, and I rented until I bought a house last year at the age of 35. I gave a damn. I spent a lot of time living in the same building with a bunch of people who didn't. It wasn't being poor that made half my neighbors dump trash off their balconies and scream at their kids an…

What an empty circular argument. Maybe they didn't give a damn because...they were living in bad conditions? Maybe they felt like there was no future ahead of them?

Your life isn't the success story you think it is. You bought into an overpriced housing market--probably, I don't know where you live--and had to live as a slave for 35 years.

You will continue living as a slave as you continue to pay your mortgage to a banking system that is completely antagonistic to your class interests.

Sorry man, you were taken as a fool. Enjoy your trophy for being a good compliant slave.

Re: Tax the Land

#517

Post by imtringued » Sat, Apr 16, 2022, 9:38 PM UTC

Mizza wrote: post #393

gameman144 wrote: post #366

I totally get the appeal of land taxes and restriction of land-use regulation at the local level, and by and large they seem like a reasonable approach to poor resource allocation and unequal ownership opportunities. One thing I've not seen addressed, though, is the apparent disincentive to improve communities in meaningful ways. For instance, say I live in a very expensive city and I can no longer afford the land ta…

Surely this is going to be a problem as long as housing is just another market commodity? I remember living in a pretty shabby student ghetto district of Boston, and you'd regularly see graffiti saying "Keep Allston Shitty". In Philadelphia, I heard similar rumors of locals occasionally firing off a few gunshots every month, just to keep the white people scared and the rents down. Renters everywhere are basically inc…

The same is true of people who are trying to make themselves unfireable by writing difficult to maintain software to gain job security.

They do this because they think they would be abandoned by society immediately the moment they are fired. It's kind of ironic. People want power not because they need it but instead to shield themselves from the bad side effects that not having power entails. In other words, people want to have power to protect themselves from those in power.

Re: Tax the Land

#518

Post by dusted » Sat, Apr 16, 2022, 9:40 PM UTC

Wait what? There's no land value tax in USA ?

We have it here in Denmark, and I believe it's very wrong. It effectively means that you cannot own land here. You can only buy the privilege to rent it from the state, it is never yours, and if your source of income goes away, and you cannot pay the rent, the land is taken away from you.

Re: Tax the Land

#519

Post by clairity » Sat, Apr 16, 2022, 9:40 PM UTC

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 disagree that we should make landowners "whole" in some sense, as they went into their investment knowing that the value of their investment could go down. it's not up to the rest of us to bail out wealthy landowners in that way, which creates a perverse incentive to seek government bailout for any and all risk-taking.

enact the tax gradually, say over 5 years, and the property market will adjust accordingly.

Re: Tax the Land

#520

Post by pandaman » Sat, Apr 16, 2022, 9:46 PM UTC

eli_gottlieb wrote: post #506

pandaman wrote: post #451

Earlier quoted context omitted.

Positive right: somebody has to do something for me. Negative right: nobody must do something to me. The right of self-governance is a negative right. I can see how it can be confusing since you can re-phrase anything as either positive or a negative action e.g. "you must stop stealing my stuff so property is a positive right" and "you should not deny my need for healthcare ergo it's a negative right" so here is a tr…

1) Property is a positive right. It requires that the state enforce your property claim. This does not come free; it requires taxes, a police force, etc. 2) Property is delimited in scope . You own your parcel. You do not own the neighborhood, even partially. If someone else wants to put up dense housing on their parcels, their property, there is no negative-right violation against you. You are, at that point, just a…

All rights, positive and negative require the state to enforce them so if we were to accept your definition, the negative rights would not exist and the whole positive/negative qualification became moot. You are free to not recognize the existence of negative rights but then how can you argue over the distinction between positive and negative in a good faith?

> If someone else wants to put up dense housing on their parcels, their property, there is no negative-right violation against you.

That's another POV you are entitled to but the courts found otherwise in the Village of Euclid v. Ambler Realty Co.