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Tax the Land

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Re: Tax the Land

#561

Post by devilbunny »

solidsnack9000 wrote: post #487
devilbunny wrote: post #481

Earlier quoted context omitted.

So what about capital gains/income tax? AIUI - and I have not really studied LVT's closely, but since they have been bandied about quite a bit, I know only enough to be dangerous - LVT's are supposed to pretty much eliminate other taxes, correct? If your property doubles in value, and you sell to get out from under the tax, but you lose 25-40% of that increase to income tax, you just took a big hit. Or am I completel…

I don't think you're representing the situation fairly, because profiting 60% to 75% is definitely not a loss -- it's not taking a "big hit" -- and the problem there has nothing to do with LVTs, anyways. If your property doubles in value in and you sell it and pay 25% to 40% of the increase: the gross profit is: 200 - 100 = 100 the tax is: 25% to 40% of 100 which is 25 to 40 the profit post tax is: 100 minus 25 to 40…

It's a big hit, not a complete erasure of profit (setting aside simple inflation, because that's a big elephant in the room here). When you rewrite the tax laws so that I can effectively be forced to sell because other people would make more productive use of my land, well, regardless of how I feel about the idea, that's a reasonable argument.

But if you tax me for the increase in the value of my land while I still own it, and then tax me on the profit I made from selling it when I decided I didn't want to pay those taxes anymore, that just seems like double-dipping. Isn't the whole point of the LVT that it makes buy-and-hold speculation unprofitable via the LVT itself? So if someone pays their LVT until it becomes so high that the expense of moving is less than the expense of saving, haven't they already effectively paid for their share of the increased value?

I think LVT's are interesting, but the practical considerations involved are enormous.

Re: Tax the Land

#562

Post by geocar »

alex_sf wrote: post #382
geocar wrote: post #369

Earlier quoted context omitted.

> There’s no inalienable right to live in a popular place you cannot afford. There's no right to anything that people don't stand together to say they have a right to. > Can you articulate an ethical argument for why it’s a problem that not everyone can afford to move to the most desirable cities? People shouldn't have to commute for hours so other people can live there because that impacts their health and opportuni…

> There's no right to anything that people don't stand together to say they have a right to. This is ignoring the point: positive rights should not exist. They require taking rights from others, through violence, to enforce. > People shouldn't have to commute for hours so other people can live there because that impacts their health and opportunities for life, liberty, and the pursuit of happiness Ok. Then don't.

> positive rights should not exist

That's like, your opinion man, and I don't know if you mean aspirationally, as in, there shouldn't be racist classist assholes out there so we shouldn't need positive rights to protect the dignity we all deserve, or you mean you so libertarian you side with the racist classist assholes like Ayn Rand, but surely if you meant to debate Kant and Shue: I wouldn't be the first to argue that a fundamental right to freedom is worthless if people aren't able to exercise that freedom, and you can just google search "criticisms of the virtue of selfishness" if you want; People write proper papers and thesis on this stuff, not internet comments.

So I still won't comment on whether positive rights should or should not exist, and instead say it is undignified to have to live in fear and that a lack of equity fosters fear, and ideologically I don't care how we do it, so I believe it ethical to support things like traffic laws, minimum-wage laws, health-and-safety laws especially in farms, restaurants and hotels, and maybe even a commuter-premium to prevent companies from exploiting another way humans are willing to degrade themselves.

Re: Tax the Land

#563

Post by cuteboy19 »

tdehnel wrote: post #554
apendleton wrote: post #349

Earlier quoted context omitted.

... sucks to be them? No tax scheme is truly neutral, and any tax scheme is going to favor certain behaviors and disfavor others. If the behavior you wanted to undertake isn't the one a given tax system incentivizes, that's probably unpleasant, but somebody had to get the short straw, and as a society we may as well pick a short-straw-holder in such a way that broadly pro-social outcomes are maximized, like increasin…

Why not just raise existing taxes across the board to pay for this? Seems a lot more fair since pro-social benefits are distributed among the whole society.

The tax on income disincentivizes meaningful productive work. If you have to pay out $50 for every $100 you make, you would probably just not bother putting in the effort.

As grandparent said, every tax causes this kind of incentive. So people thought long about what was the least worst of all the options and came up with LVT and similar ideas. They cause the minimum harm to the economy and have the least side effects and "unintended consequences"

Re: Tax the Land

#564

Post by alar44 »

jjav wrote: post #546
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…

> We should not have a scarce natural resource sitting idle or under-utilized. Does it make sense to always optimize for nothing but maximum ROI for each plot of land? For example: imagine how many untold billions of extra value and tax revenue could be generated in Manhattan by tearing down Central Park and building it all full of dense housing towers. But would Manhattan be a better place to live as a result?

That's an absurd example. Central Park isn't undeveloped land. It's a freaking historical site and national treasure.

Re: Tax the Land

#565

Post by belorn »

Manuel_D wrote: post #483
belorn wrote: post #390

Earlier quoted context omitted.

> The jobs are becoming increasingly concentrated in a few metro areas, but the home-owning class constrains the supply of housing and drives up the price of their own assets. Disincentivizing this sort of rent seeking behavior is precisely the kind of thing property taxes accomplish. There are two solutions to that problem. Governments could either make it easier to rent in the increasingly concentrated metro areas,…

Reversing the trend of jobs concentrating in metro areas is not exactly feasible. How would this be done? Prohibiting companies from hiring more than X employees? What keeps them from just setting up another company and hiring them as consultants? Or is there going to be a fixed cap on the number of people who are permitted to be employed? If someone moves to the city, and it's already at it's max number of workers t…

The first step a government could do is to encourage remote work. Good Internet infrastructure is an essential first building block, one which is slowly start to be a reality even in rural areas.

My government currently have tax reduction programs in place to enable people to commute to work. The same program could be applied to work from home, giving people tax reduction if they do not travel to work and thus lighten wear on the road system and reduces the pressure on mass transport systems.

In the transportation sector there could be government programs to further incentives technologies that enable direct-to-customer delivery. During the pandemic we saw how reducing crowded stores had some very positive effect on reduced transmission rates, how viruses other than covid also saw a strong reduction. It is possible also that by improving direct-to-customer delivery we end up with less waste, fewer middle men, and possible less impulsive purchases.

We don't need to impose quotas. Make it easier, cheaper and convenient to live outside of large cities and a lot of people will jump for the chance to do so.

Re: Tax the Land

#566

Post by belorn »

solidsnack9000 wrote: post #463
belorn wrote: post #410

Earlier quoted context omitted.

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 bot…

If gold were actually being hoarded in such a way that it prevented manufacturing, and cities and states were passing laws that prevented gold from being used for other purposes -- requiring a ten year approval process to melt a gold "historic heritage heirloom" -- then we'd need to talk about policies for gold; but we don't have that problem! No one seems to have the idea that the government should protect our emoti…

> No one seems to have the idea that the government should protect our emotional attachment to gold

Denmark had a law in place during the mass refugee crisis in Europe, where if a refugee owned valuables then they had to sell that first before they were allowed to receive government help. The idea was that people should first help themselves if they could, and by doing so helped the greater good since then the government could afford to help more people.

Ask people to sell their wedding rings and people get a bit upset, and so people compared it to Nazi Germany when they striped people of valuables. A lot of people wanted that the government should respect and thus protect peoples emotional attachments. Desperate people can't eat gold, and you don't want to force people to sell the last remaining object of emotional attachment that they own. I think even some refugees spoke on the news that they would rather die than sell off their heirlooms.

Re: Tax the Land

#567

Post by vonwoodson »

“In other words, since people who own [property] aren’t actually responsible for it increasing or decreasing in value, it’s pretty absurd that they get to accrue all the benefits of owning [property] without having to do any work for it.” And, there you have it.

Re: Tax the Land

#568

Post by ItsMonkk »

jjav wrote: post #347
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…

> The whole point of the land value tax is to tax land to encourage higher density and higher cost use. This is why I disagree so strongly with the idea. Do I want to live in a society where every square meter of land is forced to be used for the highest possible ROI? No, absolutely not. There is already far too much drive to maximize profit on everything. We need less of that, not more. Just a small sampling of land…

Not true.

It's not each piece of land that you are optimizing, but the community as a whole. If you were to build up Central Park, yes, you could get more income for that space. Because people get less access to things that they want, everyone would move out to CT or NJ. Less tourists would come. The surrounding land would all drop, it would hurt NYC land values as a whole.

In fact, with proper zoning in place that does not incentivize scarcity, one thing we would quickly find is that middle housing would finally be able to be built, and that middle housing would then lead to less skyscrapers in all but the biggest cities and central-most downtowns.

Re: Tax the Land

#569

Post by ItsMonkk »

imtringued wrote: post #513
giantg2 wrote: post #87

Earlier quoted context omitted.

"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 1000…

Let me give an example. Let's say there is currently a property in San Francisco. It's 2100 SQ/FT, it's current market value is $2.5 million, and the house is appraised by insurance for $500k.

The most optimal result, the result that we call 100% LVT(although 101% is much worse than 99%, so we try to aim cautiously) - is if the new market price after a LVT is implemented is $500k. Maybe that means a $24000/year tax. Maybe it means more. We keep raising the tax until the sale price asymptotes at the value of the improvements. Let's say it ends up at $24000/year. $24000/year is the value of the positive externalities that is being captured by this property, and we are therefore taxing the entirety of it.

It might help to also show you the lot next to it[0]. It's totally unimproved. It's going for $2 million. The goal for the land value tax is if the new sale price of that lot is $0. You'll note that if you try to do some math of current sale price to get some tax percent, you can't ever really get to zero. It would need to be an infinite percent tax. But that's because the tax is not based on the market price, but a set amount based on the lot. Because we know the lot next door is exactly the same size, and we know this lot is verrry very slightly closer to a train line, and we can see the general trend of the city is that lots closer to the train are worth more, so this lot based on some algorithm might be $24005/year, and we confirm that when someone buys it for $0. If someone bids thousands of dollars for it, next year we adjust the tax on it slightly up.

[0]: https://www.zillow.com/homedetails/736-Hyde-St-San-Francisco...

Re: Tax the Land

#570

Post by lern_too_spel »

gizmo686 wrote: post #493
drekk wrote: post #489

Earlier quoted context omitted.

We did economically recompense some former slaveowners. Not the slaves or their descendants, of course. https://today.uconn.edu/2021/03/there-was-a-time-reparations...

Assuming by "we" you mean the United States, then we only ever compensated slaveowners in DC [0]. Notably, abolishing slavery in DC did not require going through a costly civil war as it did in (almost) all of the slave states. Granted, it is hard to decide how to read this history. Specifically, the civil war did not start because the federal government tried freeing slaves; but because the eventual confederacy stat…

Lincoln had always planned to compensate slaveowners in order to abolish slavery and drafted his first compensated emancipation plan in 1849. This was rejected by the southern states. http://www.mrlincolnandfreedom.org/civil-war/congressional-a...
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