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Redfin Economist says land value tax will fix the economy

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Re: Redfin Economist says land value tax will fix the economy

#81

Post by colinmhayes »

sudden_dystopia wrote: post #32

Disagree. We should go the other way, abolish all primary residence property taxes and replace with value added taxes. Other lands for secondary and commercial properties can still be taxed. Otherwise you are really just leasing land from the government. On a somewhat absurd tangent, I’ve been toying with the idea of something I call a “land dividend” to solve homelessness. If every US citizen had by birthright, a sm…

> you are really just leasing land from the government.

This is largely the point of Georgism. Basically the premise is that land is the most valuable asset a society has and since all profits tend to accrue to land holders in the long run it is immoral to have any system other than the government being the only landholder with the people being able to enter perpetual leases for the full value of the land.

They even made a song about it https://en.wikipedia.org/wiki/The_Land_(song)

Re: Redfin Economist says land value tax will fix the economy

#82

Post by bko »

scld wrote: post #64
bko wrote: post #43

Earlier quoted context omitted.

If I understand it correctly, LVT would allow people to state what they think their property is worth and pay taxes accordingly. They could put down any value but anyone could buy it from them at that value. And this is supposed to be good? Forget politics, who thinks its a good idea to force people into economic transactions? I could see a whole new line of blackmail, akin to patent trolls, looking for people who un…

You don't understand correctly. LVT is basically just property tax that doesn't assess the structure that's built on the land. So, land near a subway stop or bus terminal or downtown offices would be taxed higher as compared to land in the outskirts of town or in suburbs. You are thinking more of something like Glen Weyl's Radical Markets proposals.

Guess I got some terms mixed up. Thanks for clearing that up.

My taxes are assessed as land and property, with the majority of the valuation coming from the land. Is LVT a big departure from what we currently have in most US states?

Re: Redfin Economist says land value tax will fix the economy

#83

Post by colinmhayes »

stevenalowe wrote: post #17
geocon wrote: post #9

Earlier quoted context omitted.

Well, land and property taxes are not the same- the notable difference being that property taxes penalize building/remodeling/additional construction and so forth. A big part of addressing NIMBYism is to remove the economic incentives for it, a lot of which is attempting to profit off of increasing land values, which is much harder with an LVT- so shifting the way that people think about housing, away from investment…

The NIMBYism I've noticed - a small subset, to be sure - would not be affected by any tax. People don't want mass housing, prisons, or industries in their neighborhood because of the increased risks (traffic, crime, pollution, etc.) and inconvenience, not just the effects on property values. Adding another tax solves nothing.

> People don't want mass housing, prisons, or industries in their neighborhood because of the increased risks (traffic, crime, pollution, etc.) and inconvenience, not just the effects on property values

LVT would force these people (on the margin) to move to less desirable areas since their tax bill will go up. When they people will buy their house and want higher density housing put it since it's cheaper than single family homes under LVT. Over time all the single family home wanters will be forced to live further from the city center/desirable areas as land value continues to rise due to development in the area.

Re: Redfin Economist says land value tax will fix the economy

#84

Post by dlp211 »

strongpigeon wrote: post #51
fullshark wrote: post #29

Earlier quoted context omitted.

But pollution is a byproduct of being productive?

What I guess the parent is implying is that by taxing something, you’re effectively disincentivizing it. Tax land value, you’re punishing people for making land valuable. Tax pollution, you’re incentivizing people to pollute less.

No, quite the opposite. The tax is the same irrespective of the productivity of the land. If you make the land valuable, by making it productive, you've decreased the relative cost of the tax. That is the whole point of a LVT.

This is a huge problem where I live. Folks sit on these parcels of land that are taxed at super favorable rates compared to improved properties. This drives up the cost of existing land and makes building additional housing extremely expensive. Their land should be taxed the same rate as my land and they would likely sell as it no longer makes financial sense to hold onto such unproductive land.

Re: Redfin Economist says land value tax will fix the economy

#85

Post by SllX »

Wowfunhappy wrote: post #65
newaccount2021 wrote: post #42

Earlier quoted context omitted.

then that city would die and everything around it would flourish

Isn't the idea that a LVT would improve the use of land? If that premise is correct, it could cause the city to flourish and grow ahead of its neighbors. Implementing the change more narrowly would allow you to test that assumption.

That’s optimistic.

You’re reframing tax-policy to shape landowner behavior towards your desired outcome on the presumption that this will be an improvement of the land by increasing the cost of owning it by fiat. Sin taxes exist for a similar reason and have similar problems.

Taxes should not be conceded as an instrument of power to reorient society into a form viewed by a subset of society as correct, but recognized as what they are sold as: a levy to provide revenue for an unprofitable but necessary organization (“the government”) to raise revenue in order to service its obligations to society. To the extent that this shapes behavior, it is as an unavoidable side effect. When you treat the side effect as the goal, you lose sight of the fact that regardless of reason, taxation is a taking of assets from its owners, and this is a moral compromise we tolerate in service of having a government at all.

Re: Redfin Economist says land value tax will fix the economy

#86

Post by AnimalMuppet »

colinmhayes wrote: post #52
AnimalMuppet wrote: post #41

Earlier quoted context omitted.

1. That might help some, but it won't fix it. Wherever else taxes are cut won't be on property, therefore the "land value tax plus some other tax cuts" will work out worse for property owners. That's kind of the point . But it's also, as hash872 says, the thing that makes it politically impossible. 2. Make it revenue neutral? Who's going to do that? Some legislature somewhere? Are they actually going to do it? Or are…

> I have zero confidence that a Georgist tax would be revenue neutral It's pretty trivially easy to make any tax revenue neutral. Just return 100% of the tax revenue to the people split evenly between every person or adult in the country.

My skepticism has nothing to do with how technically easy it would be. My skepticism comes from observing the behaviors of actual politicians. They're going to spend the money, not give it back, no matter how trivial giving it back would be.

Re: Redfin Economist says land value tax will fix the economy

#87

Post by colinmhayes »

bko wrote: post #82
scld wrote: post #64

Earlier quoted context omitted.

You don't understand correctly. LVT is basically just property tax that doesn't assess the structure that's built on the land. So, land near a subway stop or bus terminal or downtown offices would be taxed higher as compared to land in the outskirts of town or in suburbs. You are thinking more of something like Glen Weyl's Radical Markets proposals.

Guess I got some terms mixed up. Thanks for clearing that up. My taxes are assessed as land and property, with the majority of the valuation coming from the land. Is LVT a big departure from what we currently have in most US states?

A "true" LVT calls for land tax rate of around 80% and getting rid of all other taxes. It's a huge change from how property taxes currently work.

Re: Redfin Economist says land value tax will fix the economy

#88

Post by zip1234 »

uberman wrote: post #13

I guess I am skeptical that LVT would do anything for most of non-dense urban America. I would be happy to swap out my property, school, state, and income taxes for one where I paid what it would cost to lease the land I currently own. It would reduce my tax burden by 99% I know because my neighbor leases a large parcel (several times my lot size) from the federal government. I would be delighted to swap my current p…

LVT has been used to revive declining areas because it disincentivizes what is happening in many of those places, which is rampant property speculation without actual improvements to the properties. Vacant lots taxed the same as improved lots is an incentive to improve the lot or sell it. And yes, where it has been implemented it often reduces the tax burden on people living in the area. There is a surprising amount of underutilized land in most of America, even urban areas. Look at a satellite map of Detroit for example.

Re: Redfin Economist says land value tax will fix the economy

#89

Post by harpersealtako »

Wowfunhappy wrote: post #27
hash872 wrote: post #24

A very high LVT is a politically unserious proposition, because it would involve drastically raising taxes on the people who actually vote & hold political power in society- the middle class, upper middle class, and wealthy in suburbs and low-density urban areas. All of the alleged 'efficiency' gains you hear Georgists claim really mean 'middle class homeowners forced to sell their single family home to developers du…

Could you start small? Just a minor LVT to begin with, which could potentially be raised over time. Possibly implemented by a single city instead of nationwide.

That's one of the big appeals of LVT: in theory it works incrementally. You try e.g. a 5% LVT and you should notice 5% of the effects.

Re: Redfin Economist says land value tax will fix the economy

#90

Post by uberman »

sudden_dystopia wrote: post #32

Disagree. We should go the other way, abolish all primary residence property taxes and replace with value added taxes. Other lands for secondary and commercial properties can still be taxed. Otherwise you are really just leasing land from the government. On a somewhat absurd tangent, I’ve been toying with the idea of something I call a “land dividend” to solve homelessness. If every US citizen had by birthright, a sm…

Any attempt to solve homelessness should be applauded. However, There are plenty of places in the USA where homes with utilities can be traded for smart phones:

https://time.com/3478199/trade-iphone6-for-detroit-house/

There are places where in bulk (sections) you can get land for less than $500 an acre (you would not want to live there admittedly) often land already owned by the state or the fed as you alluded to.

Giving an acre to a homeless person and relocating them there though would be a death sentence.

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