[HN Gopher] Some arguments against a land value tax (2024)
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Some arguments against a land value tax (2024)
Author : danny00
Score : 61 points
Date : 2025-07-11 13:14 UTC (9 hours ago)
(HTM) web link (www.lesswrong.com)
(TXT) w3m dump (www.lesswrong.com)
| greenie_beans wrote:
| land value tax is a regressive tax on middle class homeowners
| that would ultimately benefit the wealthy. bc middle class single
| family homeowners would not be able to afford the tax increase or
| afford the construction to fully utilize the property, which
| would force them to sell to investors who could afford it.
|
| terrible idea.
|
| not to mention the political debates/decisions over what
| constitutes "fully utilized". what about public parks? urban
| agriculture? so many exceptions.
|
| this would be a nightmare policy to retrofit. maybe a good idea
| if we had started there first, but we didn't.
|
| it's also an ignorant diagnosis of the issue. land values and
| speculation is not the issue in my location (burlington, vermont)
| where we have a housing crisis. there are not many vacant lots
| (i'm guessing maybe a dozen in the entire municipality).
|
| it's just an overly simplified solution to a complex problem.
|
| here is what i believe to be the superior solution:
| https://www.npr.org/2024/10/07/nx-s1-5119633/housing-crisis-...
| jimlawruk wrote:
| > land value tax is a regressive tax on middle class homeowner
|
| Not if you make the tax progressive. The first 200K could be
| tax free, for example. Primary residences pay a lower % of the
| value than 2nd and 3rd homes. I bet there are a ton empty
| vacation homes in Vermont. It can be applied gradually not to
| shock the system.
| nerdsniper wrote:
| That would somewhat defeat the purpose of the LVT. The point
| is to force landowners to develop their land. A "fix" would
| be to make access to capital easier.
|
| Optimum development in many areas isn't necessarily a large
| mid-rise or high-rise. For most areas, the maximum that the
| roads and other utilities could support would be dense
| townhomes, triplexes or quadplexes. Outside of the very
| highest-demand areas, the LVT would mainly encourage land
| owners to build additional units on under-utilized square
| footage or build up a bit. Increasing housing in an area
| necessarily requires access to capital - so that's what
| should be provided.
|
| It's not perfectly fair to everyone; it would enrich current
| landowners. But lower-income/wealth individuals would also
| benefit because they'd get access to more affordable housing
| in the areas that they need to live.
| jimlawruk wrote:
| > The point is to force landowners to develop their land.
|
| The point is to ensure landowners don't sit on land. If
| taxes go up on your vacation home that you spend two weeks
| a year in, you will be incentivized to sell it or rent it
| out more. Both of which benefits the public at large. Not
| to mention it is a fairer tax than an income tax or wealth
| tax.
| greenie_beans wrote:
| most of the vacation homes in vermont are in rural areas.
| so they wouldn't get penalized by the tax if the purpose
| of LVT is to increase taxes in urban areas.
| greenie_beans wrote:
| > But lower-income/wealth individuals would also benefit
| because they'd get access to more affordable housing in the
| areas that they need to live.
|
| how does this create affordable housing? taxes are only one
| piece of why housing is so expensive. the landowners would
| need a return on their investment, which they would get by
| raising rent. this is the core problem imo -- costs for
| construction and labor and permitting and taxes requiring
| higher rent in order to make the investment worthwhile.
|
| the offset of lower taxes will absolutely not pay for the
| cost to "fully utilize" the property.
| some_random wrote:
| The theory here is that people who aren't getting "enough
| value" out of the land will be forced to sell to
| developers who will turn them into, among other things,
| houses.
| greenie_beans wrote:
| yes i know, that is the "theory" in a logical vacuum.
| that just reinforces my original point that it will hurt
| the middle class and only benefit wealthy people.
| especially since the tax would make the land cheaper (in
| LVT theory), so when you are forced to sell it you're
| gonna have to sell at a lower price than you'd like (that
| is the entire logic of LVT: make land cheaper to
| encourage more building).
|
| you can't just wave a wand to build housing if the taxes
| change to LVT. we all know that developers don't build
| affordable housing. the margins are much more attractive
| to build luxury housing...it's the incentive structure.
| housing is expensive to build, and those investors will
| require an ROI.
|
| terrible idea! the more you look at it, the worse and
| worse it sounds.
| ljlolel wrote:
| It's not application of the tax but (relatively) sudden
| increases in land value that would price out force out
| neighborhoods
| sokoloff wrote:
| I don't think a land value tax is a good idea, because I've
| never heard a satisfactory way to objectively value the land
| as-if unimproved.
|
| But making you and I pay a different amount of LVT on the
| same exact piece of land definitely makes it a worse idea in
| my view.
| eitally wrote:
| Afaict, Prop 13 does this in California. Property tax is
| based on assessed value, and that assessed value isn't just
| for the improvements, but also the underlying land. So the
| fact that I pay about $20k/yr in property tax and my back-
| fence neighbor pays about $3500 (because we purchased in
| 2016 and they inherited the 1954 home from original owner
| parents) _must_ indicate that it 's not just the
| improvements that are covered by Prop 13. I had never
| thought about this before, but at least in California a
| potential compromise around LVT would be the modify Prop 13
| to allow land values to appreciate at market rates while
| keeping appreciating of improvements capped.
| sokoloff wrote:
| There is a market for land plus improvements. What you
| actually paid in 2016 is presumably the market value of
| that combination. You probably referred to other similar
| parcels that had recently sold when contemplating your
| offer as well.
|
| It's trying to figure out "what is the _land alone_ under
| these improvements worth?" that has no market signal to
| use as a reference (or an extremely weak signal in areas
| where unimproved lots do sell on the open market).
|
| If you paid $1.5M in 2016, was the land alone $500K, $1M,
| or $1.25M? If you disagreed with the city's assessment of
| _just your land_ , how would you find comps to argue your
| case?
| eitally wrote:
| I think you're missing my specific point that this is a
| Prop 13 issue.
|
| My land is valued at X and my neighbor's identical
| rectangular plot is valued at Y, why should that be the
| case if the land's objective value is identical (which it
| is, and neither X nor Y are close to current market value
| Z because Prop 13 caps appreciation at 2%/yr).
|
| No land value or improvements are revalued at market rate
| until they're sold, obviously, but two things are also
| true: 1) tax assessors almost never lower assessment
| values (anywhere), and 2) assessed values are completely
| detached from reality of the majority of properties in
| the state of California because of Prop 13.
|
| To answer your question, if I wanted to argue that the
| assessment of my land is too high, I'd likely not have a
| case because the assessor could just look at any comps
| that trades hands in the last few years and those would
| show assessments far higher than mine. But I absolutely
| could show that the assessment of others' properties are
| "too low" relative to my own (or mine to current) just by
| similarly looking back in time at homes that haven't
| traded hands in decades, if ever.
| greenie_beans wrote:
| like i said, terrible idea with a million exceptions
| Aurornis wrote:
| > Primary residences pay a lower % of the value than 2nd and
| 3rd homes.
|
| I think it's funny how every LVT discussion eventually comes
| back to some inclusion of other factors to adjust the taxes
| or provide exemptions, which starts to defeat the claimed
| purpose of a Land Value Tax.
|
| LVT is a concept that sounds amazing and novel in a vacuum,
| but starts to look less ideal in the real world. The people
| who think about it enough start to include factors like
| structure value and different exceptions for how the land is
| being used, which starts to look a lot like existing tax code
| in most places.
| some_random wrote:
| LVT sounds really smart when you exclusively talk about car
| parks in downtown NYC or whatever, it's not actually a good
| tax framework as soon as the conversation shifts from
| talking about low perceived social value commercial
| endeavors.
| niam wrote:
| > which starts to defeat the claimed purpose of a Land
| Value Tax.
|
| What do you think others claim the purpose of an LVT is?
|
| > every LVT discussion eventually comes back to some
| inclusion of other factors to adjust the taxes or provide
| exemptions
|
| This argument seems only to follow from a belief that
| carving exceptions out of policy here is either: inherently
| bad, lends to a slippery slope towards badness, or is
| fundamentally incompatible with the professed aims of an
| LVT (hence my asking).
|
| I don't believe any of those are true, so this sounds to me
| an unfair indictment against the otherwise legitimate
| strategy of "keep what's good; change what's bad", which is
| practical and works for other policy all the time. While
| I'd scorn the complexity of our current tax code, I
| wouldn't do so on _principle_ of exemptions being bad, but
| rather that we 've made poor tradeoffs or struck a bad
| balance.
| webstrand wrote:
| Yeah, no LVT proponent has successfully explained to me how it
| does not cause the erasure of urban or even suburban green
| spaces, be they public parks, private parks, gardens, etc. If a
| park increases neighboring land values, then the taxes incurred
| by the park go up without recompense to the owner (assuming the
| park is not held by the government).
| Nasrudith wrote:
| I think you might be slightly confused. Wouldn't the issue be
| not that the parks themselves are expensive to the owner tax
| (not only is thr landscaping not that expensive, as LVT
| excludes your own improvements), but instead that they are
| effectively discouraged by increasing the tax on everyone
| adjacent and thus peversely encouraging NIMBYism of towards a
| common good by imposing a negative externality which does not
| exist otherwise? The issue wouldn't be that it would add a
| tax burden upon the park owner, but that it turns operating a
| common good into a 'sadistic' act that pushes costs onto
| others.
|
| A LVT could thus accidentally wind up like a window tax in
| that it could wind up discouraging efficient improvements to
| human conditions out of a misguided attempt at improving
| perceived fairness.
| kfajdsl wrote:
| How many private parks are there? Pretty much every one I've
| been to has been government run, other than small outdoor
| spaces next to private buildings and large pay for admission
| gardens that are usually way out in the boonies on the
| grounds of an old plantation or manor.
|
| I can't think of how a private, but still public-access, park
| survives without a rich benefactor eating the losses, even
| today.
| greenie_beans wrote:
| all of my favorite hiking areas in the birmingham, alabama
| area were privately owned. churches have public areas that
| you can enjoy as a non-member of the church. i'm sure we
| could think of more
|
| edit: oh i just realized a huge one in my daily life: the
| intervale in burlington is owned by the intervale center
| but the community garden is managed by the city's parks &
| rec. also there are a ton of public trails on that private
| property.
| tetromino_ wrote:
| In New York, you sometimes find unofficial community parks
| / third spaces on unused plots of land which for whatever
| reason (such as a strange shape) are difficult to develop.
| These are maintained by enthusiastic local residents, and
| the land owners turn a blind eye to it as long as there are
| no complaints.
|
| If LVT is implemented, land owners will have a financial
| incentive to sell off the plots, and the spaces will be
| gone.
| ta1243 wrote:
| Sell them to who? How much would someone pay for land
| that's difficult to develop?
|
| If someone else can develop the land, why doesn't the
| current land owner
| kfajdsl wrote:
| What incentive to sell off the plot does LVT create that
| doesn't already exist, maybe with a marginally lower
| degree? I'm guessing the reason they can't sell a tiny
| weirdly shaped lot is that no one wants it. If they
| didn't want it and they could sell it, they already have
| ample financial incentive to sell.
| webstrand wrote:
| Around here, there are a bunch of private parks in that you
| pay a fee to enter the park or you can purchase a
| membership. The fee is minimal and mostly just serves to
| maintain the park. These are privately held parks, too, not
| owned by local or state government.
|
| As far as I am aware, they are able to survive on their
| membership or visitor fees. But major improvements do take
| larger donation.
| renewiltord wrote:
| Parks built for the public benefit as 501c3 don't pay
| property taxes.
| webstrand wrote:
| I'm not really sure that's a complete solution. Couldn't
| you just spin up a 501 c3 org to hold onto properties until
| you want to do something with them, bypassing the LVT?
| renewiltord wrote:
| I wasn't suggesting a solution. I was just describing it
| as it is today. Presumably if you don't show 501c3
| activities, you'd lose the status.
|
| Any LVT would just involve scaling up land portion and
| setting building portion to zero in our current regimen.
| It wouldn't require anything novel. The 501c3 exemption
| is not something new I'm suggesting.
| owisd wrote:
| I guess if everywhere's zoned for max density. If it's zoned
| as a public park, so no ability to develop it and generate
| revenue, or close it off for private use, then its rated
| value would be close to zero. Possibly negative if ownership
| imposes some maintenance obligations on the owner.
| strbean wrote:
| > taxes incurred by the park go up without recompense to the
| owner
|
| The value of the park is going up, is that not recompense?
| strbean wrote:
| The bottom 50% in terms of wealth in the US only own 10% of the
| land. How on earth is this a regressive tax? The top 10% own
| over 40% of the land.
| https://fred.stlouisfed.org/graph/?g=1KsUt
| greenie_beans wrote:
| how much of US land is housing? probably much less than 10%
|
| edit: yep https://www.visualcapitalist.com/america-land-use/
|
| amusing attempt at using data for an argument
| highwayman47 wrote:
| https://en.m.wikipedia.org/wiki/Georgism
| andrewla wrote:
| I agree with many of the arguments here about the theoretical
| impacts of a land value tax, especially the section "an LVT
| implicitly taxes improvements to nearby land" which is often
| overlooked or glossed over in these discussions.
|
| But my main argument is practical. I content that it is simply
| not possible to evaluate the "unimproved value" of a given
| parcel. Any discussion of a practical LVT has to start with the
| fact that it is an approximation to a theoretical ideal, and
| define exactly what the basis for "land value" estimation is,
| because it's really a tax on that process. While some of these
| may have overlap with the benefits and detriments of a
| theoretical LVT, they have to be looked at from first principles
| rather than by comparison with the LVT because the fundamental
| assumptions are often broken.
| Aurornis wrote:
| > especially the section "an LVT implicitly taxes improvements
| to nearby land" which is often overlooked or glossed over in
| these discussions.
|
| The claim, which I disagree with, is that spreading those taxes
| across nearby land incentivizes those property owners to sell
| their land to someone else who will improve it.
|
| Which gets at another LVT problem that is glossed over in
| discussions: Everything assumes that selling properties and
| moving is cheap and easy. If grandma's forever home is
| surrounded by apartment complexes when she's 85 years old, her
| taxes would become unaffordable because she's paying her share
| of those apartment complex value taxes. She would just pick up
| and move, which we're supposed to assume is cheap and easy.
|
| It can all be fixed by making the tax structure a combination
| of land value and structure value, which happens to be how
| existing property taxes are constructed in most places.
| pydry wrote:
| >The claim, which I disagree with, is that spreading those
| taxes across nearby land incentivizes those property owners
| to sell their land to someone else who will improve it.
|
| The only claim here is that if you own land which makes you
| $1000 in income and pay $2000 in taxes for that underutilized
| land you'd probably prefer to sell up.
|
| Which has to be the least controversial part of LVT.
|
| >Which gets at another LVT problem that is glossed over in
| discussions: Everything assumes that selling properties and
| moving is cheap and easy. If grandma's forever home is
| surrounded by apartment complexes when she's 85 years old,
| her taxes would become unaffordable because she's paying her
| share of those apartment complex value taxes. She would just
| pick up and move, which we're supposed to assume is cheap and
| easy.
|
| We're seeing the net result of your desired policy right now
| where retired boomers sit on 4 bedroom houses with 3 empty
| bedrooms while anything resembling this type of family home
| is unaffordable for _actual families_.
|
| Personally I think I preferred it when retirees were given
| tax incentives to sell up and downgrade to a smaller
| property, because even though moving day is stressful, not
| easy and costs money, it's not worth sacrificing an entire
| society over trying to avoid it.
| amluto wrote:
| > We're seeing the net result of your desired policy right
| now where retired boomers sit on 4 bedroom houses with 3
| empty bedrooms while anything resembling this type of
| family home is unaffordable for actual families.
|
| Some of this is due to tax policy, at least in the US. If
| you own an oversized house that you've had for long enough,
| then most of the value is a capital gain. If you sell it,
| you pay taxes on all but $500k of that gain, even if you
| promptly buy a new, smaller house that costs almost as
| much. If, instead, you hold the house until you die, the
| tax is waived completely.
|
| California has additional perverse incentives due to
| property taxes.
| bombcar wrote:
| Some states are allowing you to "carry around" your
| assessed value, perhaps the $500k cap gains exclusion
| should be made similar - you can carry your basis similar
| to a 1039 exchange if you sell and rebuy in the same area
| soon enough.
| bluGill wrote:
| Retirees have been doing this for as long as humans have
| owned property. Then they die and the house moves on. There
| is good reason someone will want to live in a house that is
| larger than they need.
|
| If there are not enough houses don't blame that on existing
| houses.
| strbean wrote:
| > Retirees have been doing this for as long as humans
| have owned property.
|
| Absolutely not. Extended families lived under the same
| roof for most of human history. This is a Nuclear Family
| problem, which only emerged in the 20th century.
| bluGill wrote:
| The poor widow living alone is in many stories from old.
| If there is land to inheirit then someone will but
| otherwise it isn't assured
| jltsiren wrote:
| Multigenerational households were the norm until
| recently. The eldest son gradually took over the
| household and raised his family there, or something like
| that. Both because it would have been terrible waste to
| have an entire house for some old people, and because
| household chores were hard work before modern amenities.
| majormajor wrote:
| It still happens.
|
| The less wealthy the family, the more likely you'll see
| it.
|
| So your aggressive taxes will hit those people -
| displacing additional generations, not just the land-
| owning-but-otherwise-fairly-poor retiree - before it will
| hit the stereotypical middle class boomer retiree.
|
| Outside of CA's Prop-13 territory, the multi-generational
| shabby-old-home-owners pay less taxes currently than
| their richer neighbors who moved more recently and
| renovated or expanded. The land value of both is going
| up, but the improvement value is lower for the poorer
| family. So now you'll get rid of the improvement value
| and even it out for both, which will hit the poorer land
| owners the hardest.
| bluecalm wrote:
| But land is a scarce resource, at least desirable land.
| Blaming existing houses is exactly what you should do
| because instead of them you could build higher density.
| bluGill wrote:
| There are plenty of houses for sale at any time. If
| building densely is the goal then any one of them can be
| used to build. Speculators buy houses in hopes that in
| the future the house next door will sell and then they
| can combine the lots to a larger building - where this is
| allowed.
| majormajor wrote:
| If you're concerned with "it's underutilized because the
| population density is low and other people need more
| housing" than it would be much easier and more effective to
| directly pursue building housing on low-population-density
| non-residential land. Direct construction driven by the
| government, vs a multi-step strategy of "make people
| miserable with tax payments until they sell, hope the
| people they sell too will be deep-pocketed developers who
| will build super-high-density stuff instead of just fancier
| homes for richer families, and hope all this happens
| quickly."
|
| Cause a tax amount that goes up based on what _people with
| more money than you do on other pieces of property_ simply
| gives more power to the wealthy. "Underutilized" as far as
| _tax implications_ go then means "people with more money
| than you would like there to be something else there."
|
| And, of course, this _already_ happens with US property
| taxes in many jurisdictions. And people _absolutely hate
| it_.
|
| "Tax incentives to downgrade to a smaller property" sounds
| great in theory for retirees sitting in huge properties,
| but I think is limited in practice. The people with the
| really big places are wealthy and politically influential,
| so you'll get Prop 13s, or you'll get the recent cuts to
| property tax in Texas. "Make housing more affordable by
| cutting the taxes!" And the people impacted by more
| aggressive taxes will less be the boomers in giant houses
| and more be the poorer retirees in multi-generational
| living situations, or ones in fairly small condos.
| pydry wrote:
| Im very pro building more homes as well but to call it
| quick OR easy is wrongheaded.
|
| An LVT is an excellent stopgap and a way to incentivize
| the creation of higher density housing where it is
| needed.
| majormajor wrote:
| How would LVT be easier or quicker? In what states are
| you going to be able to campaign on this?
|
| "Change commercial and industrial under-utilized areas to
| allow residential, then aggressively subsidize developers
| or build directly there" sounds much easier to me than
| "pass a property tax increase that people will fight
| tooth and nail." Your LVT is gonna need to come with
| zoning changes too, after all.
|
| California has Prop 13. Texas lowered property taxes
| recently. Florida is considering property tax rebates.
| You're gonna have a hard time convincing people to
| increase property taxes when housing is expensive
| already. Big overlap between "property owners" and
| "highly motivated voters" already.
|
| Incentivizing density in single-family areas is quite
| hard, I'm not convinced it would do much even if it
| passed! Even in CA where neighborhoods can now have ADUs,
| sales prices for 5bd big-as-box-as-possible single family
| units are generally higher than prices for 3bd or 4bd +
| an ADU properties with separate units. Because the people
| who can afford those would rather have a giant-ass house
| than be a small-time landlord on the side. So maybe you
| just displace the old retirees and a bunch of high-income
| DINKS move from their condos to those SFHs. Sales price
| goes down a bit to compensate for the now-higher tax
| burden; remains unreachable for many but reachable enough
| for enough that it doesn't spur massive change.
| vannevar wrote:
| Grandma's problem has been historically solved with a
| homestead exemption. Of course the value could rise above the
| exemption, but that just means it should be set high enough
| to ensure that the proceeds of selling will give Grandma a
| lot of options.
| sapal wrote:
| > I content that it is simply not possible to evaluate the
| "unimproved value" of a given parcel.
|
| Here is an article arguing that yes, it can be done well
| enough: https://www.astralcodexten.com/p/does-georgism-work-
| part-3-c...
| derektank wrote:
| Do you believe you can determine the true value of _improved_
| land, given how illiquid a market it is? Obviously, the last
| sale price provides some true information about the value, but
| it could literally be a decades old number. Do you believe
| states and municipalities shouldn 't update property taxes for
| a parcel of real estate unless it's sold? I think we've seen
| from CA's experience with Prop 13 that this creates pretty
| distortionary incentives.
| andrewla wrote:
| > Do you believe you can determine the true value of improved
| land
|
| It is at least theoretically answerable. In the extreme, yes.
| We can simply force the sale of the land. Practically
| speaking, no, we cannot answer that question in a deeply
| illiquid market.
|
| For the unimproved value I'm not certain that there is a
| consistent and useful theoretical definition that can be
| translated to practice. Even in the extreme the question of
| the unimproved value of the land becomes difficult. Were we
| to raze all improvements and force the sale would that give
| us an answer? Do we include the cost of razing? What counts
| an unimproved? Can we leave trees or grass?
| andrewla wrote:
| To expand on this differently -- if we have a model that
| produces estimates of the "true value of improved land",
| then we can validate that model whenever property sells. It
| would be a slow process but if we have a model and the
| model parameters capture a significant portion of the
| variance, then we would expect the model to converge over
| time.
|
| Nobody does this, of course; it is not usually politically
| expedient to do so for a number of reasons, not least of
| which is the predictability of taxes for a given parcel.
| But at least it is theoretically asymptotically achievable.
| Not so for unimproved land value because the value you are
| trying to estimate is not an actual quantity.
| bluGill wrote:
| Real estate is liquid enough. I cannot sell my house this
| afternoon, so it isn't fully liquid, but a real estate agent
| can give me a number to list my house at this afternoon and
| be within a few % of what I get in a few months in most cases
| so that is close enough to liquid.
| itsdrewmiller wrote:
| This is already part of property tax assessment - I get a
| separate price estimate for the land and the structure. I also
| own some undeveloped land and pay property taxes on that. All a
| LVT does is get rid of the structure part and raise the rate on
| the land part.
| andrewla wrote:
| Saying that they assess the value tells me nothing. How,
| specifically, do they arrive at these assessments.
|
| In my experience there is often an assessment process that is
| essentially just made up. And when properties do sell, the
| sale price is always a "surprise" relative to the assessed
| combined value of the property.
|
| In a sense the question is "What in particular makes you
| confident that the estimate accurately reflects the price of
| the land" but in a deeper sense what does the concept of
| "price of the land" even mean in practical terms? How would
| you know that the answer is right even if you were
| omniscient? And given the practical divergence from whatever
| theoretical standpoint, does then this value serve the same
| objectives as a "true" LVT?
| itsdrewmiller wrote:
| The assessments are roughly based on the sale price of
| similar lots and the approximate rebuild value of the
| structures; usually erring on the low side in my experience
| (though that is probably more about the direction of the
| housing market than inherent to the process). I agree there
| is a qualitative element that strikes me as icky compared
| to pure quant taxes like wages, but it's already happening
| so LVT doesn't materially change things.
| adverbly wrote:
| > How, specifically, do they arrive at these assessments.
|
| So is your argument that you don't understand something and
| so it must be wrong?
|
| There's an extremely large amount of existing material that
| is used by property assessors available for you to look up
| to research how they do this. It is a well-established
| field.
|
| Property assessments have been done across a huge number of
| countries for decades probably billions of times at this
| point. There are probably trillions of dollars of capital
| that flows according to these assessments.
| andrewla wrote:
| No, my point is that two things both calling themselves a
| "land value tax" based on a putative "unimproved land
| value" can be wildly different in terms of incentives and
| results based on the specific mechanism used for
| computing that value, because there is a lack of any sort
| of objective reality underlying the assumptions that go
| in to computing that number.
|
| At least for an entire value tax, we have the benchmark
| of "when a house is sold, how closely does the price hew
| to the imputed value for tax purposes" to determine if
| the tax is, in some sense, fair. Some municipalities do
| better than others by this benchmark, but many of them
| continue their totally broken methodologies (by the
| standard of predicting sale prices) for a variety of
| political and bureaucratic reasons.
|
| For a specific attempted implementation of a land value
| tax, how do you go about measuring whether you are doing
| it well? You can sometimes get sparse data points when
| vacant lots go up for sale, but otherwise you're just
| benchmarking against other models.
| pydry wrote:
| >I agree with many of the arguments here about the theoretical
| impacts of a land value tax, especially the section "an LVT
| implicitly taxes improvements to nearby land"
|
| Which is more of a feature than a bug.
|
| The alternative to "local land value improvements feed the
| local tax base" is that schoolteachers who make the local
| schools good make the local landlords more money.
|
| The idea mooted in the article that developers would be
| unwilling to build 20 houses on a plot of land because having
| 10 houses would jack the LVT up for the other 10 is entirely
| backward. The value of those houses will be predicated almost
| entirely on infrastructure (roads, rail, schools, etc.) or
| services (shops) provided by _the community you 're paying
| taxes to_.
|
| >I content that it is simply not possible to evaluate the
| "unimproved value" of a given parcel.
|
| Did you read the wikipedia page about LVT which describes how?
| Which _part_ is impossible?
| andrewla wrote:
| > Did you read the wikipedia page about LVT which describes
| how? Which part is impossible?
|
| The wikipedia article describes some processes, including
| assessments, regressions, and interpolation from fixed
| landmarks.
|
| Those are all means of estimating something, which you can
| call the "unimproved land value" if you are so inclined, but
| what exactly is the thing that they are estimating? How do
| you know if they are accurate?
|
| You can implement a framework based on any of those measures,
| but crucially as above they are not an LVT, they are a
| "proportionate tax on total value based on extrapolating
| previous sales minus human estimates of improvement value
| according to a rubric" for example, and have different
| advantages and disadvantages than an LVT even theoretically,
| so every time you make an argument that "LVTs have such-and-
| such a property" you have to expand the definition of LVT to
| be the specific case and verify whether that property makes
| sense in the context of that particular methodology. As a
| shorthand it becomes useless.
|
| My point is not that there are attempts to have an LVT that
| are approximations of the ideal reality; my point is that
| this ideal simply does not exist in any sort of cogent way so
| you might as well tax based on how much God loves the
| property or how many potatoes you could grow on the land.
| pydry wrote:
| >You can implement a framework based on any of those
| measures, but crucially as above they are not an LVT, they
| are a "proportionate tax on total value based on
| extrapolating previous sales minus human estimates of
| improvement value according to a rubric"
|
| In other words an accurate imputed land value.
|
| I still dont see a problem with this.
| notahacker wrote:
| > The alternative to "local land value improvements feed the
| local tax base" is that schoolteachers who make the local
| schools good make the local landlords more money
|
| Or indeed that a headteacher works long and hard to improve
| their school and all they get for it is a reduction in their
| real income because the plot of land their house sits on
| costs 20% more.
|
| Or the schoolteachers get driven away by a horde of NIMBYs
| who really don't want to be forced to move because the
| schools are good...
| pydry wrote:
| And that headteacher's salary can increase too because the
| tax base went up.
|
| No such luck for the poor schoolteacher whose rent went up.
| All she will contribute to is her landlord's vacation fund.
|
| >Or the schoolteachers get driven away by a horde of NIMBYs
|
| Really??? You think NIMBYs will protest a good school?
|
| If you want NIMBYs go visit San Francisco. Theyve detaxed
| land there to such an absurd extent that the locals with
| $1.5 million mortgages will flock to town council meetings
| to try to declare a _launderette_ historic to prevent it
| from being turned into apartments (because if any more
| apartments are built they will go underwater on their
| absurdly sized mortgage).
| strbean wrote:
| > all they get for it is a reduction in their real income
| because the plot of land their house sits on costs 20% more
|
| And, y'know, the value of something they own goes up by
| 20%...
| mNovak wrote:
| >> I content that it is simply not possible to evaluate the
| "unimproved value" of a given parcel
|
| There's a decent discussion on that topic here [1], as a
| starting point. Not saying it's absolutely conclusive, but
| gives some food for thought. I suppose where determining an
| accurate value might be most difficult is parcels that rarely
| turn over, so have little direct or nearby sales data.
|
| [1] https://www.astralcodexten.com/p/does-georgism-work-
| part-3-c...
| andrewla wrote:
| It is an interesting discussion, but I don't see anything in
| there about how to assess the accuracy of any of the methods
| against some sort of objective truth. I would have to read
| the underlying papers I think to get at this, but I don't
| feel a strong need because I feel like the larger epistemic
| point is unaddressed in any of the summaries.
|
| The closest I saw was one study that compared the model to a
| human generated data set, which is just kicking the can down
| the road. The article semi-concludes
|
| > I think it's quite plausible but not a slam dunk. That
| said, if the objection is, "valuing land separately from
| improvements is fundamentally impossible, and we can never
| get better at it, so we shouldn't try," I think that's
| plainly ruled out.
|
| I do not agree with this assessment -- you can create a bunch
| of models and show that the models have good intra-model
| agreement, but the fundamental point has not been touched.
| alistairSH wrote:
| Maybe but at some point, isn't your problem the same
| valuing a single dollar? We can compare the USD against
| other fiat currency, but they're all valued against the USD
| or some other bucket of fiat currencies. Or, you could try
| to tie the value of the dollar against a bucket of goods,
| but that's also just moving the goalposts around.
| andrewla wrote:
| Now we're wandering a bit far afield, but estimates and
| measurements like this are fine if they are designed for
| an operational purpose. If I want to know the unimproved
| value of my land so that I can evaluate whether to buy a
| similar property and build a similar house on it, then
| it's fine for me to use whatever estimation protocol is
| going to help me make a decision. If my protocol is bad
| then my estimates will be bad then <shrug emoji> it's my
| problem.
|
| Similarly trying to measure the value of the dollar --
| what is the operational purpose of that measurement? This
| is a real problem in any sort of macroeconomic analysis,
| and Goodhart's law makes it far far far worse when trying
| to apply it for practical purposes. Mostly you have to
| accept that there is not going to be a quantitative
| metric that captures the underlying squishy concept so
| better not to think about the problem of, say, inflation,
| in purely quantitative terms.
| adverbly wrote:
| > I content that it is simply not possible to evaluate the
| "unimproved value" of a given parcel.
|
| How familiar are you with existing property taxes?
|
| It might surprise you that land value estimation is literally
| already happening at scale.
|
| Also, you don't need to be 100% accurate with the estimation.
| Even a 50% lvt would be a huge improvement and would mean that
| you could literally be off by 100% which is extremely unlikely.
| How many houses do you see selling for twice the listing price?
| vannevar wrote:
| Indeed. When I see these discussions, I am always struck by
| two things:
|
| 1) that many people don't seem to realize that a tax on land
| value is not novel, but is one of the oldest ways to fund
| government, with tons of experience behind it (past and
| present); and
|
| 2) that whatever the problems associated with figuring out
| land value, they pale in comparison to figuring out an
| individual's real income, which obviously didn't stop us from
| taxing that.
| sebastos wrote:
| But the difference is that assessing total property value can
| appeal to recent sales, so you have actual objective data to
| bound the realism of your assessment. What somebody would pay
| for the land without the improvement is stuck in imagination
| land.
| Jensson wrote:
| We know construction costs so its not really hard to do
| without going to more imagination land than estimating
| property value.
| patmcc wrote:
| >>>I content that it is simply not possible to evaluate the
| "unimproved value" of a given parcel.
|
| I think there's a perfectly fine way; you estimate it the way
| we currently estimate properly values for tax purposes. If they
| owner doesn't like that value, you allow them to contest it,
| and we immediately accept any contested claim and value it as
| the owner desires, with two small caveats: a) they pay tax on
| the claimed value, to ensure they don't over value and b) they
| are required to sell to anyone at claimed value + 10%, to
| ensure they don't under value.
|
| edit: two points to address some responses. First, it can be
| claimed land value + assessed/claimed improvement value + 10%,
| that's fine. Second, I'd only require they sell at that value
| if the owner contests the original appraisal. If they accept
| it, nobody can buy their stuff out from under them for any
| price.
| baggy_trough wrote:
| What a terrible way to live that would be.
| bombcar wrote:
| Imagine the uproar when Elon would buy the house of anyone
| he got into a twitter spat with!
| delecti wrote:
| > sell to anyone at claimed value + 10%
|
| But the point of LVT is that it doesn't include the value of
| the stuff on the land. A house can easily be worth more than
| 10% of the land it's on, my house is valued at about twice
| that of the land, or 20x what your plan would require me to
| accept for the house.
| vannevar wrote:
| >they are required to sell to anyone at claimed value + 10%
|
| I like the goal here, but I think a less intrusive way to
| achieve it would be to charge back taxes at the time of a
| future sale if the sales price is in excess of the valuation.
| To ensure the back taxes are paid, they would encumber the
| title of the new owner, so that in practice the buyer would
| require them to be paid at closing.
| bluecalm wrote:
| >>I agree with many of the arguments here about the theoretical
| impacts of a land value tax, especially the section "an LVT
| implicitly taxes improvements to nearby land" which is often
| overlooked or glossed over in these discussions.
|
| That's a feature not a bug. The whole argument is that it's
| good to tax wealth that you didn't work for. It's surely more
| just than taxing labor or the improvement you have made
| yourself.
| spjt wrote:
| The most obvious argument for me is that I don't even think that
| developing land as much as possible should be a desired outcome.
| I'd rather have some billionaire sitting on a huge plot of
| wilderness than turn it into another shopping center.
| potato3732842 wrote:
| Many states have adopted various sorts of watershed protection
| or conservation laws that make many areas undevelopable in any
| profitable way. The cost of the hoops one must jump through to
| prove some small project will not run afoul of these laws is a
| non starter....unless the developer is professional capital
| fueled operation looking to put in a chain store, strip mall or
| 5-over-N. That drags up adjacent values enough that the
| suburban subdivision developers show up and start buying the
| farms, etc, etc.
|
| So in a perverse sort of way you basically get what you want,
| wide swaths of low/no development wilderness, but it's paid for
| by the everyman not the billionares.
| sc68cal wrote:
| > I'd rather have some billionaire sitting on a huge plot of
| wilderness
|
| I'd rather not have a billionaire sitting on a huge plot of
| land. If we as a society want that wilderness to be preserved,
| it should be a state park or national park, that should be
| relinquished to our government.
| rufus_foreman wrote:
| They tried a land value tax in Hawaii. The results are
| described in the lyrics of the Joni Mitchell song "Big Yellow
| Taxi":
|
| "They paved paradise
|
| And put up a parking lot"
| thrance wrote:
| I'd rather the plot be a national park be yes, no need to pave
| the entire country in the name of efficiency.
| seanalltogether wrote:
| LVT should be incorporated with an occupancy tax, it's the only
| fair way to fund government services. If I own a farm, and my
| neighbor sells their farm to turn into a housing estate with 99
| single family homes, then it is fair to say that my land is now
| more valuable and I should pay more to keep you it, but it isn't
| fair to say that my taxes should rise to cover half of the local
| budget just because I own half of the land in region
| tartoran wrote:
| In this scenario your property value would go up and with
| higher taxes you'd be incentivized to sell for a profit and
| move your farm farther away in a different zoning.
| thow58406 wrote:
| The incentives you've presented are correct. However, my
| friends from rural areas always complain about rich outsiders
| moving in, buying everyone else out, and raising the cost of
| living. If LVT is just a way to "[incentivize farmers] to
| sell for a profit", why would people in these areas support
| LVT? I'm afraid it would just turn into another partisan
| issue, regardless of merits. And I like LVT!
| eitally wrote:
| Perhaps a solution is to create "LVT Zones" in metro areas,
| and perhaps replace current residential / commercial /
| agriculture / industrial zoning with them?
|
| And LVT that replaces zoning basically just lets the
| highest bidder do whatever they want with the land. An LVT
| that augments zoning could perhaps be tenable but I would
| argue that in VHCOL areas there's already something of an
| LVT in place. My SFH in San Jose is assessed as having
| equal value for the 8800sqft as it is for the house built
| on it. What I wonder is how the actuaries and policy makers
| responsible for assessing property values for county
| taxation actually do that, and how much of the formula is
| already based on land value.
| Aurornis wrote:
| This is how every argument about LVT goes once people start
| thinking about the details: They start thinking of various edge
| cases and exceptions that highlight how it's not as fair as
| proponents claim, until eventually we're back to the current
| taxation systems where land value is part of the tax, but other
| factors are also considered.
| pydry wrote:
| An LVT would need relatively few exceptions and rules in
| order to function well and is unavoidable _by design_. What
| we have right now for most taxes is the exact opposite of
| that - e.g. with sales, income taxes, etc.
|
| Mostly there are just pearl clutchers complaining about how
| elderly cash poor people sitting in large old houses on
| expensive land they've lived in for 20 years would be
| financially nudged into downgrading.
|
| The real roadblock for LVT is not in the slightest bit
| technical, but simply that it would undermine a lot of
| privately held oligarchic wealth.
| kemotep wrote:
| Land owners make up a plurality of voters. In some cases
| those land owners are retirees living in a house they
| bought 45 years ago others are people who own 500 houses.
|
| The land value tax "equally" punishes them for their
| inefficient land usage. But at some point we need to pay
| our fair share on taxes and the later group hiding behind
| the former group is how you end up with California's
| dumpster fire of a housing crisis.
| daveguy wrote:
| I agree with this. I really do not know why in the hell
| one person or entity owning 500 houses _wouldn 't_ pay
| more in taxes for the 500th house than the 1st house. You
| pay more income tax on the 500,000th dollar than the
| first dollar. Land is taxed regressively in favor of
| oligarchs.
|
| First house is claimed as homestead and gains on sale
| aren't taxed, but the yearly property tax should work
| similarly.
| bluGill wrote:
| Where I live homestead status affects yearly taxes as
| well.
|
| This is a negative for anyone who is renting since they
| now have to pay more rent to cover those taxes. (taxes
| set a floor on rent long term, though of course tax is
| only one factor in rental prices)
| ifyoubuildit wrote:
| "Mostly there are just pearl clutchers complaining about
| how elderly cash poor people sitting in large old houses on
| expensive land they've lived in for 20 years would be
| financially nudged into downgrading"
|
| I wonder if you wouldn't be clutching your pearls if you
| were being forced (sorry, "financially nudged") out of your
| home of 20 years?
|
| These cash poor elderly folks aren't exactly "oligarchic".
| sealeck wrote:
| They can move somewhere cheaper? And then the high value
| land can be used more productively (e.g. higher density
| occupancy).
| sokoloff wrote:
| "Beat it, grandma! We have better ideas on how to use the
| land and house you raised a family in!" is unlikely to be
| a winning campaign platform. (Thankfully.)
| strongpigeon wrote:
| What a lot of jurisdiction do to deal with this situation
| is to allow elderly folks to accrue what is essentially a
| lien on their house for the property taxes going up more
| than a certain amount.
|
| This way these folks don't have to pay much more than
| before, can stay in their house and the county gets its
| share when these people die or move out.
| xnx wrote:
| Would it be even more fair to assess taxes based on services
| allocated?
| bitshiftfaced wrote:
| Isn't this case just revealing the opportunity cost of keeping
| the land as a farm in that location? For example, what
| incentive is there to buy an acre of downtown Miami and convert
| it to farm land? Should we lower that acre's property tax now?
| ta1243 wrote:
| Why would the cost of local services be related to the tax on
| the value of the land?
| bluecalm wrote:
| It's a good point. Usually farms are on land classified as
| agricultural and residential buildings are on residential land.
| It's easy to design a system that values residential land
| higher (because it's in fact more valuable if you can build
| residences on it). You wouldn't pay half the taxes until you
| convert it to residential at which point you should in fact be
| paying half the LVT (maybe with a few years leeway).
| scyclow wrote:
| Let's be real: if this scenario unfolded today, your land would
| be worth more as housing/infrastructure/commercial/etc. than as
| farmland, some real estate developer would buy it from you, and
| you'd make a lot of money without having to do anything. If
| there was a 75% LVT then you'd just make less money.
| seanalltogether wrote:
| The reason I brought up this argument is because this exact
| scenario is happening all over the UK and Ireland right now.
| One of the houses my wife and I looked at purchasing was
| built about 20 minutes outside Belfast on old farmland that
| was converted into a new housing estate. The farms
| surrounding this housing estate have been incorporated into a
| new village.
| jlhawn wrote:
| This goes back to my top-level comment: the assessment of your
| property should not be based on sales of nearby property but on
| observed rental values. Just because your neighbor has sold
| their plot and the new owner has the _intent_ to build 99
| houses on is so far inconsequential ... _we have yet to observe
| any actual rent increases_ and likely will not until those
| houses are actually constructed and rented /sold themselves.
| Only then can we accurately observe the potential rental value
| of your adjacent land.
| cma256 wrote:
| Why are we pretending like LVT doesn't exist already? I pay taxes
| on my land. Those taxes are calculated based on size and
| location. The Disney example is particularly egregious. They pay
| taxes on the land AND the structures they built but the article
| acts as though they would be disincentivized from building if we
| _removed_ taxes on the structures? Huh?
| bitshiftfaced wrote:
| The idea is not to disincentivize developing on the land. To
| me, it only really works when you remove the friction/gaming of
| all the other taxes and put it all into LVT, but that will
| never happen of course.
| xvedejas wrote:
| If your land can be treated as an asset, then we don't really
| have LVT yet. The goal of LVT is to tax land to the point where
| it is no longer an appreciating asset (and, not too much that
| it becomes a liability)
| xnx wrote:
| What's the societal value in trying to financially engineer land
| development? Is it to better utilize existing infrastructure?
| Charge each property proportionally for the road system and
| fallow land will naturally be developed to handle the taxes.
| derektank wrote:
| Property taxes are attractive because land doesn't move (unlike
| other forms of wealth) and it's easy to account for by tax
| collectors. There's also zero dead weight loss as you can't
| create more land. Taxes on land improvements are unattractive
| because they disincentivize owners from investing in their
| property. This leaves us with taxes on unimproved land being a
| very attractive option funding the government.
| xnx wrote:
| Good overview. What's the imperative for a government to
| incentivize owners to invest in their property? Seems like
| it's fine if the owner invests in their property or not.
| Y_Y wrote:
| It makes GDP go up
| Mikhail_K wrote:
| "Ratinalists" are basically libertarians that are coy about it.
| antonvs wrote:
| They're more culty than libertarians.
|
| They're a lot like the modern-day version of Ayn Rand's
| Objectivism, which is also libertarian. I remember people
| getting involved in that at university in the '80s and thinking
| how cult-like it all was - people feeling they had "found the
| truth" and wanting to recruit new members.
|
| Rationalism seems to be playing a similar role for a certain
| type of person in Silicon Valley today, fulfilling an
| emotional/religious need.
|
| Another way to look at it: Scientology, but replace Xenu with
| Yudkowsky and volcanoes with Harry Potter, or something.
| krapp wrote:
| It will never cease to amuse me that people calling
| themselves "rationalists" wound up recreating Pascal's Wager
| from first principles, just with time travelling robots, and
| drove themselves to sometimes murderous insanity over it. And
| that their Bible is essentially a Harry Potter fanfic.
|
| These are the dipshits conspiring to shape our future,
| control our destiny and create the Machine God in their
| image. They make the billionaires messing around the big owl
| at Bohemian Grove look positively tame and... rational.
| antonvs wrote:
| In my more benevolent moments, despite not being religious,
| I take a Jesus-like attitude: "Forgive them, they know not
| what they do."
|
| It all seems to have been a very predictable consequence of
| the de-emphasis of teaching any humanities at all in favor
| of STEM uber alles.
|
| It's like the line from "Kung Pow: Enter the Fist": "Pay no
| attention to Wimp Lo, we purposely trained him wrong... as
| a joke."
|
| Except it wasn't a joke, it was an economic strategy.
|
| > time traveling robots
|
| Won't someone think of the children, I mean, future
| simulated me?
| lanfeust6 wrote:
| You don't know what you're talking about. There are just as
| many socialists among them.
| pydry wrote:
| >Take, for example, the case of surveying land for oil. Imagine a
| landowner invests significant time, money, and effort into
| exploring their property to determine whether it contains
| untapped oil reserves.
|
| LVT is for building property or occupying land. Mineral rights
| are under many if not most legal systems treated separately from
| land ownership (e.g. they are auctioned off) because unlike land,
| oil wells eventually run dry.
|
| This does not seem like an honest criticism of LVT, because it
| deliberately blurs land and mineral rights.
|
| >This is important because it implies that, under an LVT,
| landowners with large plots of land are disincentivized to create
| any improvements they make to one part of their property, as it
| could trigger higher taxes on nearby land that they own. For
| instance, if a developer owns multiple adjacent parcels and
| decides to build housing or infrastructure on one of them, the
| value of the undeveloped parcels will rise due to their proximity
| to the improvements.
|
| A problem with _not_ having LVT is that you _aren 't incentivized
| to make improvements to land that you own_. Without LVT if I'm
| lazy I can just build a car park on highly valuable city center
| land I inherited and collect fees, still making a tidy profit.
| With LVT I need to A) develop it to its actual potential, B) sell
| it to somebody who will or C) eat losses.
|
| That's the kind of market discipline we are currently lacking
| which the author of this piece apparently does not want.
|
| On the other hand, a developer who builds 10 houses on one plot
| of land is not going to magically make 10 houses on another plot
| of land double in price.
|
| >Even in its simplest "naive" form, the LVT has a narrow tax
| base. The reality is that the vast majority of global wealth is
| created through human labor and innovation
|
| This last criticism is A) wrong and B) only applies to _single_
| taxers, not proponents of LVT.
| some_random wrote:
| >>This is important because it implies that, under an LVT,
| landowners with large plots of land are disincentivized to
| create any improvements they make to one part of their
| property, as it could trigger higher taxes on nearby land that
| they own. For instance, if a developer owns multiple adjacent
| parcels and decides to build housing or infrastructure on one
| of them, the value of the undeveloped parcels will rise due to
| their proximity to the improvements.
|
| >A problem with not having LVT is that you aren't incentivized
| to make improvements to land that you own. Without LVT if I'm
| lazy I can just build a car park on highly valuable city center
| land I inherited and collect fees, still making a tidy profit.
| With LVT I need to A) develop it to its actual potential, B)
| sell it to somebody who will or C) eat losses.
|
| You're missing the point entirely. When your small business,
| single family home, little ranch, whatever, becomes in
| increasing proximity to improvements your tax goes up. If you
| own a big ranch and decide to split some of it off, build
| housing or whatever and sell, then your tax on everything goes
| up per LVT.
| pydry wrote:
| and?
|
| when the value of your land goes up it is because it brings
| benefits. you can capitalize upon those benefits or you can
| sell up.
|
| neither are bad options.
| tom_ wrote:
| See also, perhaps, Killer Arguments Against Land Value Tax...
| Not: https://kaalvtn.blogspot.com/p/index.html
| noqc wrote:
| You should always be wary of arguments from people who name
| themselves "The correct people". Less wrong, and the
| "rationalists" generally, are engaged in magical cult-like
| thinking.
| some_random wrote:
| Could you go ahead and cite an example of such thinking from
| this article?
| noqc wrote:
| Sure, but my point stands _regardless_.
|
| All taxes that generate revenue are taxes on good things.
| This is a fundamental rule of economics. Using this as an
| argument against LVT just means that you are opposed to
| taxation generally as a way to generate revenue. This essay
| doesn't defend _that_ position though, because it is engaged
| in magical thinking.
|
| Calling yourself a rationalist is just branding. It means
| that your opponents aren't rationalists. It's dishonest.
| some_random wrote:
| That is an absolutely hilarious argument, made even funnier
| by accusing other people of magical thinking. I don't even
| know where to start with it, "All taxes that generate
| revenue are taxes on good things"? A fundamental rule of
| economics? Is your argument that LVT generates revenue
| therefore you can't criticize that it could suppress
| development in some cases?
| noqc wrote:
| >Is your argument that LVT generates revenue therefore
| you can't criticize that it could suppress development in
| some cases?
|
| No.
| zahlman wrote:
| > Calling yourself a rationalist is just branding. It means
| that your opponents aren't rationalists. It's dishonest.
|
| This frankly comes across as projection.
| noqc wrote:
| >projection
|
| Please elaborate. I do not know what you could possibly
| mean.
| lanfeust6 wrote:
| > Calling yourself a rationalist is just branding. It means
| that your opponents aren't rationalists. It's dishonest.
|
| Consider, are you exceptional in the sense that you would
| not place yourself in any camp whatsoever, ascribe to any
| ideology? You're neither left or right? Actions dictate
| identity.
|
| Having an interest in something is not the same as having a
| superiority complex.
| noqc wrote:
| If your name for your "ideology" is "better than yours",
| then yes, I consider this to be a superiority complex.
| bluGill wrote:
| > All taxes that generate revenue are taxes on good things
|
| I think a majority would agree tobacco is not a good thing
| and yet we tax it.
| noqc wrote:
| taxing tobacco is not to generate revenue. That is, in
| fact, exactly the point. Taxing tobacco is to discourage
| tobacco use. The point is to have close to zero tobacco
| use, which results in close to zero revenue.
| bluGill wrote:
| Taxing tobacco is for both purposes.
| itsdrewmiller wrote:
| The author is quite clear that they are just pointing out
| that the LVT has some downsides, and are not trying to make
| any case about its overall value. It's good for LVT
| supporters to understand the counterarguments and be able
| to weigh them and rebut them (or change their mind! but
| hopefully not in this case because the counterarguments are
| very weak).
|
| I don't understand your "fundamental rule of economics"
| claim - carbon taxes are a clear counterexample, I would
| think.
| noqc wrote:
| If the tax equals the externalized costs of burning
| carbon, and people continue to burn carbon, burning
| carbon is "good".
| umbra07 wrote:
| person 1: "i am a rational person."
|
| person 2: "how dare you call me an irrational person!"
| noqc wrote:
| What do you imagine the purpose of naming the movement
| "pro-life" to be?
| strbean wrote:
| > Calling yourself a rationalist is just branding. It means
| that your opponents aren't rationalists. It's dishonest.
|
| It seems like you are equating self-labeling of this sort
| with claiming to be a paragon of that ideology.
|
| Do you think someone who labels themselves as "Christian"
| inherently believes they are pure of soul and perfect, and
| sins less than non-Christians? Certainly there are plenty
| of self-righteous people out there, but "Christian" does
| not imply "Christ-like".
|
| The same goes for rationalists - "rationalist" does not
| imply "rational". I don't know the proportion of self-
| described rationalists that would consider themselves truly
| rational, but I think a good portion of them would consider
| anyone who made that claim to be full of crap. The whole
| movement is predicated on studying and maintaining
| awareness of the mountains of cognitive bias humans carry.
| If you can study that and still think you are ultra-
| rational, you've got a special kind of hubris.
| noqc wrote:
| >Do you think someone who labels themselves as
| "Christian" inherently believes they are pure of soul and
| perfect, and sins less than non-Christians?
|
| I have known a lot of Christians. I can answer with an
| unequivocal yes.
| zahlman wrote:
| Rationality (not "rationalism") does not present anything like
| such a mindset. The entire point of the name "less wrong" is
| that one is still wrong.
| sealeck wrote:
| In fact commenters on Less Wrong are often _more wrong_!
| lanfeust6 wrote:
| The rat-adjacent types are not a monolith and are not of the
| same worldview. The distribution between left and right,
| politically, approximately matches the general population. What
| they're about is approaching the best data we have in good
| faith and being open to updating perspectives.
|
| Sounds like you wouldn't fit in.
| noqc wrote:
| You can try to be rational without naming yourself a
| "rationalist".
| strbean wrote:
| The name Less Wrong was at least intended to be aspirational.
| From the about page:
|
| > LessWrong is an online forum and community dedicated to
| improving human reasoning and decision-making.
|
| The _goal_ is to be less wrong. It isn 't intended as a claim
| that Yudkowksy is less wrong than others.
|
| Whether that actually reflects the attitudes of members of
| those communities today is doubtful, though.
| noqc wrote:
| All human epistemology is trying to be "less wrong", just
| like all cereal is "all natural". The rationalists aren't
| even the first to recognize the value of printing it on the
| box.
| advisedwang wrote:
| Do LVT proponents believe economic activity that requires minimal
| land ownership relative to the profit should be untaxed?
|
| E.g.
|
| * Offshore oil drilling
|
| * Tech companies
|
| * Fully remote CPAs
|
| * Electricians
|
| * etc
|
| It seems very weird large sections of the economy become
| virtually untaxed, requiring a MASSIVE tax burden on the others.
| The simplicity of the LVT plan kinda hides that it implies a huge
| restructuring of the economy.
| yesfitz wrote:
| Proponents of the Land Value Tax as a single tax would probably
| say that those activities should be untaxed.
|
| Proponents of the Land Value Tax, but not as a single tax would
| probably be more mixed.
|
| Restructuring of the economy isn't a hidden part of the Land
| Value Tax, it's the point.
| closeparen wrote:
| Georgism holds that productive economic activity gets absorbed
| into land value.
| AnimalMuppet wrote:
| Georgism was designed in a completely different economy.
| Google's productive activity has very little to do with the
| land it owns.
| closeparen wrote:
| Google's productive activity mostly accrues to NIMBY
| homeowners in the Bay Area rather than the material living
| standards of anyone connected with Google.
| AnimalMuppet wrote:
| That statement seems clearly wrong to me. Google's
| productive activity is benefiting NIMBY homeowners rather
| than, say, the owners of Alphabet stock? I'm going to
| need to see some evidence before I believe that.
| itsdrewmiller wrote:
| I don't think very many LVT supporters think it should be the
| sole or even primary source of taxation. The main point I see
| being made is that property taxes as designed today discourage
| development, whereas a LVT would encourage it. Property taxes
| are only about 10% of overall US taxation, and a switch to LVT
| would have its intended effect even if they became a smaller
| piece of the pie.
| AnimalMuppet wrote:
| Copyrights.
|
| Domain names.
|
| Patents.
|
| Huge amounts of data.
|
| Those are the "land" of the modern economy. Land value tax
| arguably may have made sense for a 19th century economy; I
| think it's completely missing the point for a 21st century one.
| Land isn't the major source of wealth any more.
| bluecalm wrote:
| I think we can't make LVT the only tax. Other good taxes are
| consumption taxes, pollution taxes, resource usage taxes. You
| can also add some business revenue taxes like recently popular
| idea in EU of a digital tax. I would also tax IP protection (if
| you want to sell your stuff here and have IP/copyright
| protected we will take % of your sells). I think the worst
| possible taxes are capital gain tax an corporate income tax.
| Those should be 0. They only create incentives for various
| shenanigans and have a lot of other negative consequences.
| scyclow wrote:
| LVT proponents also typically advocate for pigovian taxes (tax
| things you want less of to disincentivize it) and taxes on
| rent-seeking activities. So, offshore drilling would probably
| be hit with something like a carbon tax (directly or
| indirectly) and tech companies might get hit with a tax
| regarding their monopolies or IP. The CPAs and the electricians
| would get off easy, though.
| vannevar wrote:
| The LVT would get rolled into rent, which would propagate
| through the economy. I think the chief effect of a fixed LVT
| would be discouraging passive land investment (since you've got
| to collect rent to pay your LVT). IMO, while this might be
| beneficial for increasing the housing supply, a _progressive_
| LVT would be even better. A progressive LVT would put larger
| landowners at a disadvantage in the rental market, because
| their tax would be higher on an equivalent parcel than a
| smaller landowner. By ensuring a larger number of smaller
| landlords, I think you 'd see a more diverse and competitive
| rental market.
| wankerrific wrote:
| Wealth tax on holdings over a billion. Let capital "flight".
| tonymet wrote:
| every tax discussion i've ever read treats taxes in the abstract
| without spending. The assumption is "how do we raise as much tax
| as possible".
|
| When you actually learn about public agency spending, you'll see
| that 2/3 of it is completely unnecessary.
|
| I'm not saying companies are any better, but they generally don't
| have the mandate to take your house from you if you are not a
| customer.
|
| Focus on the spending first, and make sure it's essential. Then
| figure out how to fund it.
|
| If you can get spending scope reduced by 90% (where it was before
| FDR) , you'll find the tax situation solves itself. You won't
| have to invent taxes on every activity.
| adverbly wrote:
| I think I disagree with this?
|
| From pragmatic standpoint there needs to be some spending and
| it obviously makes sense to think about how best to raise
| revenue.
|
| Does that make sense?
| tonymet wrote:
| if spending is 90% lower than today, coming up with revenue
| is trivial.
|
| Until 16th amendment, Federal revenue was from excise tax.
| Income, fees, capital gains were not necessary.
|
| So degree matters. Of course you're going to have to keep
| inventing new tax revenue streams if spending is 6-10x more
| than it should be.
|
| We may keep the property tax, but talking about tax revenue
| absent of spending is like talking about how to deal with a
| headache caused by a nail in the head, without addressing the
| nail.
| adverbly wrote:
| Sounds like we agree. Parent said this:
|
| > Focus on the spending first, and make sure it's
| essential. Then figure out how to fund it.
|
| Which is what I disagreed with. There is no "sequence" to
| this where one comes first. You need to look at both in
| parallel. Its entirely possible that one could be more
| troublesome than another, but you still need to look at
| both!
| tonymet wrote:
| sure but here's what happens in practice. The agency
| raises the revenue, and raises the spending to meet the
| new revenue.
|
| I'll give an example. My local city proposed creating a
| separate taxing authority for the fire department . The
| new authority would get an additional share of the
| property tax. Meanwhile the city would keep the share
| they were getting beforehand, and spend it on other
| things.
|
| My point is that abstract / theoretical approaches to
| taxing don't account for the human factor. The human
| factor is that people just want to make their job easy,
| and if they get more money, they will spend it.
| Brian_K_White wrote:
| As though every single dollar of public spending didn't return
| about 30x in ultimate value vs the best you can get from those
| same dollars in your pocket, even _with_ the waste.
|
| As though everyone agrees which bits are even the waste.
| twoodfin wrote:
| What research did you have in mind that would suggest
| anything like a 30X fiscal multiplier?
|
| Public spending efficiency is generally understood to range
| not that far from 1.00, depending on current economic
| conditions: Better in a recession, worse in an expansion.
| flenserboy wrote:
| LVT is envy written into law -- "how dare someone use what
| belongs to them in a way which doesn't benefit me?!?", whether
| individuals or groups are speaking. It also puts a wonderful tool
| into the hands of decision-makers to reward friends & punish
| enemies. No.
| wahern wrote:
| > The government has incentives to inflate their estimates of the
| value of unimproved land
|
| In fact, the opposite is the case. In the few US cities--
| historically and present--with an LVT, the political pressure was
| and is to consistently _undervalue_ the land. Because the
| quickest way for your administration to get voted out of office
| is for your tax assessors to be hard-asses about applying the LVT
| formula, let alone inflate assessments. As the article
| highlights, one of the problems with LVT is that your assessment
| can rise preciptiously through no "fault" of your own, which
| engenders a strong sense of insecurity wrt your property. That
| has tax-payer revolt written all over it.
|
| Yet underassessing has its own problems--it erodes legitimacy of
| the government. Prior to Prop 13 property assessors were
| consistently underassessing the property of senior citizen
| homeowners. But this engendered a sense of capriciousness that
| was felt most acutely by, ironically, senior citizen homeowners.
|
| None of which is to say LVT could never work, but it requires a
| tremendous shift in the political culture. The legitimacy of the
| existing property tax structure and its relationship to our
| conception of property rights is baked into our political
| culture; shifting to a new system will necessarily be incredibly
| difficult and destabilizing.
| gruez wrote:
| >As the article highlights, one of the problems with LVT is
| that your assessment can rise preciptiously through no "fault"
| of your own, which engenders a strong sense of insecurity wrt
| your property. That has tax-payer revolt written all over it.
|
| Isn't that an issue with all property tax regimes that don't
| have the prop 13 carveout, regardless of whether it's LVT or
| not?
| wahern wrote:
| Yes, and in fact underassessment and smoothing assessment
| increases over time is the norm, AFAIU, for the current
| system(s), both de jure and de facto, depending on locality.
| But pathological underassessment and related political issues
| are a much bigger problem with LVT. The swings can be much
| bigger (especially from the perspective of a property owner
| that hasn't done anything), which means managing
| underassessment to keep taxpayers from revolting requires
| more discretion, something governments have difficulty doing
| while maintaining a sense of fairness. Even theoretical
| application of LVT requires significant individualized
| assessments which in practice require much greater
| discretion. Also, LVT is intended to displace most if not all
| other forms of taxation, so managing the stability of your
| budget in light of the need to smooth out assessments becomes
| more problematic relative to the status quo.
|
| Some localities have tried mixed schemes, e.g. only applying
| LVT to commercial zones. Businesses are savvier and are more
| comfortable engaging with government on assessments as well
| as forecasting and managing swings in assessments. But that
| cuts both ways; in at least one municipality I studied (a
| town in the southwest, IIRC), this engagement turned into
| straight-up corruption.
| quantified wrote:
| Same as for current property tax assessments. Outside of
| CA/prop 13-land, my experience was that assessments could be
| for as little as half the market value (remember, in 2007 the
| market was bananas and didn't reflect a well-grounded worth)
| and almost never more than market value.
| bombcar wrote:
| The dirty secret is that assessments don't matter overall -
| just proportionally.
|
| The county or city or whatever has a tax budget of $500
| million, and divides it by whatever percentage your house's
| assessment is of the assessed whole, and allocates it to you.
| My property taxes vary without assessment variations, and
| have gone down on years my assessment has gone up.
|
| Barring anything weird like prop 13.
| wat10000 wrote:
| A lot of people seem to think that the property tax is set
| at a certain percentage, and if property values rise, the
| government just dances around in a fountain of dollar
| bills.
|
| Everywhere I've looked, it's as you say: the local
| government sets a budget first, then that year's property
| tax rate is set at a level which brings in that much money.
| bombcar wrote:
| There is a somewhat delayed and simplified version of
| what people think there is - as property values climb,
| the city will notice and budget more (or less if severe
| drops) and try to stay within some standard percentage.
| adverbly wrote:
| Happy to answer anyone's questions on LVT if they have them!
|
| It sort of breaks your head the first time you try to think about
| it because we are just not used to thinking about supply and
| demand in cases where supply is actually fixed, and that's where
| all the magic benefits come from. Happy to answer any questions
| people have.
|
| Full disclosure though I'm a huge proponent!
|
| As with any policy, there are some advantages and disadvantages
| but I think on the whole LVT is probably the single best policy
| change we could make as a society.
| euleriancon wrote:
| How would you respond to the critique that it makes that tax
| associated with a property dependent on the improvements to
| adjacent properties? I could see a situation where a single
| family home owner would deliberately oppose improvements (i.e.
| parks/bike lanes), because their derived utility from those
| improvements is less than the potential increase in taxes.
| adverbly wrote:
| I would say that this is largely a feature not a bug :)
|
| Let's look at what the author said about this:
|
| > For instance, if a developer owns multiple adjacent parcels
| and decides to build housing or infrastructure on one of
| them, the value of the undeveloped parcels will rise due to
| their proximity to the improvements. As a result, the
| developer faces higher taxes on the remaining undeveloped
| land, making development less financially appealing in the
| first place.
|
| > This creates a counterproductive dynamic: developers may
| hesitate to improve their land or invest in new projects
| because they know that any improvements will increase their
| tax burden on adjacent parcels.
|
| This is exactly correct analysis, but this is good not bad!
| LVT is preventing hoarding land during development. Of course
| someone who acts according to the old system's incentives
| will lose in that model!
|
| First, let's talk about why the existing model is bad though:
| right now, developers make a huge part of their money not
| directly from actually building, but from the increase in the
| land value that happens during construction. This means that
| developers need to acquire huge sections of land and then
| only build one house at a time. This is insanely inefficient!
| It literally prevents anyone else from building in parallel
| or at lower cost! There is zero competition!
|
| In a world with LVT, a developer would be incentivized to
| acquire and start work in smaller increments, leaving the
| door open top more competition and for more companies to
| enter the space - lowering costs and increasing the speed of
| construction.
| strbean wrote:
| Wouldn't this same argument suggest nobody would want to
| increase their income because it will increase the amount of
| income tax they pay?
|
| The property you own is going up in value! That would almost
| certainly outweigh the increase in LVT.
| LegionMammal978 wrote:
| Under an LVT, almost all of the value of the surrounding
| improvements would be considered part of your land value,
| since even an empty lot in their vicinity would benefit
| from the surrounding improvements. Thus, a 100% LVT would
| capture 100% of the value someone might gain from the
| presence of those surrounding improvements. In the worst
| case, you personally benefit far less from those
| improvements than a typical renter would (e.g., bike lanes
| if you don't own a bike), so their presence is a net
| negative to you.
|
| That's why income taxes are less than 100%. But some people
| advocate for a 100% LVT very seriously.
| adolph wrote:
| @patio11's podcast, Complex Systems has two great episodes that
| discuss much of the context about land value tax and property tax
| systems in general (from a US perspective).
|
| How we tax property, with Lars Doucet:
| https://www.complexsystemspodcast.com/episodes/property-asse...
|
| Tax the dirt, with Lars Doucet & Greg Miller:
| https://www.complexsystemspodcast.com/episodes/tax-the-dirt-...
| quantified wrote:
| I lose confidence in the writing early on when it says this: >
| Instead, the government essentially "seizes" the added value by
| taxing its rental value away, eliminating the incentive to
| discover the oil in the first place.
|
| If the tax is 100% of the value, sure. But left unstated is
| whether taxes are 100% of value. If taxes are 100% of value,
| there is no incentive to own the land in the first place, my
| $400,000 house costs me $400,000 in land tax to own... yearly?
| scyclow wrote:
| My biggest criticism of LVT is that the name is confusing :)
|
| The idea is that you're taxing 100% of land rents, not 100% of
| the total value. So if there's a 5% cap rate on your property,
| and the land value is $300k, then the annual tax bill would be
| $15k.
| vannevar wrote:
| Yes, it's a straw man argument. It may be _possible_ to tax the
| rental value away, but in practice, no jurisdiction levies a
| rate that high, because the officials that enacted it would be
| thrown out of office in the next election. It certainly shouldn
| 't be presumed the standard case. It's like saying we shouldn't
| use electricity because it's possible to be electrocuted.
| adolph wrote:
| This stems from the fact that if a landowner successfully
| discovers a valuable resource or identifies a creative way to
| utilize their land more productively, the government will
| increase their tax burden accordingly.
|
| One of the difficulties of arguing against a hypothesis is
| avoiding stawperson construction. In claiming "An LVT discourages
| searching for new uses of land" the author sees land value as
| something different from what I've seen in LVT proponents. As I
| understand it, the point of LVT is avoiding what the author
| proposes.
|
| As an example, many "downtown" areas in the US have many blocks
| with surface parking, a form of underutilization. Under the
| current system, consider a typical downtown and two adjacent
| blocks within it: 1. an multi-story office building, and 2. a
| surface parking lot. 1 will currently pay more tax because some
| of the assessment is based on the value of the building. Under an
| LVT system, 1 and 2 pay the same amount of tax because they
| occupy the same amount of land. Does the owner of 1 pay more
| because they utilize the land more productively? No.
|
| To treat the argument fairly, consider two plots of land on a
| secondary highway in an entirely rural, impoverished county,
| taxed at $1/sq ft. On one plot, the owner builds a farmer's
| market and it is incredibly successful. (I use a market to avoid
| digressions into mineral royalties and negative externalities
| from things like an oil well.) Under the current system, the
| improvement of the market building is assessed for value without
| regard for how successful it is. The taxable value is land at
| $1/sq ft plus improvement. Under LVT as I understand it, after
| the market is built, both plots are still taxed at $1/sq ft. The
| economic activity of the market is not discouraged by taxing its
| existence (this is seperate from sales taxes, which the market
| would create). There is no increase in tax burden because of a
| creative use.
| davidcbc wrote:
| How is this relevant to HN at all outside of being written by
| "rationalists" that are predominately techies?
| umbra07 wrote:
| > On-Topic: Anything that good hackers would find interesting.
| That includes more than hacking and startups. If you had to
| reduce it to a sentence, the answer might be: anything that
| gratifies one's intellectual curiosity.
|
| - HN News Guidelines
| davidcbc wrote:
| I would counter with:
|
| > Off-Topic: Most stories about politics, or crime, or
| sports, or celebrities, unless they're evidence of some
| interesting new phenomenon
|
| This is a story about politics, not related to tech in any
| way, and is not some new phenomenon
| savanaly wrote:
| I see Georgism and LVT brought up on HN fairly frequently, at
| least a few times a year. It's a niche economic outlook and set
| of policy recommendations that many in HN seem to be intrigued
| by. As someone else pointed out, that definitionally makes it
| HN material.
| scyclow wrote:
| The first two arguments he makes here miss the point of a LVT
| entirely
|
| > An LVT discourages searching for new uses of land
|
| > An LVT implicitly taxes improvements to nearby land
|
| If I find oil on my land, or if someone builds a park across the
| street from me, then I _should_ be taxed more. The land is more
| valuable to me! At a 100% LVT I essentially break even. Anything
| less then that, and I still come out on top.
|
| The only valid arguments in here are the last two. If people buy
| a piece of property with certain assumptions and the government
| turns around implements a 100% LVT, then I can understand why
| they would be upset.
|
| So sure, there are some practical considerations to implementing
| a 100% LVT immediately tomorrow with no exemptions, and it
| probably wouldn't raise enough revenue to eliminate all other
| taxes. But the government could still raise a ton of tax revenue
| with minimal deadweight loss by phasing in a 75% LVT over 30
| years with a handful of common sense exemptions.
| LargeWu wrote:
| That's assuming you actually own the mineral rights, which are
| not necessarily the same as the land ownership itself. These
| are quite often separated and held by different entities. In
| practice, the extraction of oil under a parcel of land has
| almost no relation to what the land is being used for.
| scyclow wrote:
| Sure, so I guess if the owner of the land doesn't own the
| mineral rights then they have no incentive to look for oil
| with or without a LVT.
| LargeWu wrote:
| The author's assertion was that LVT disincentivizes one
| from using the land productively, and used oil specifically
| as an example. This example is basically completely
| divorced from the realities of oil extraction. Nevermind
| that nobody is building wells in the middle of cities,
| where LVT matters.
|
| So, that argument seems to rely on a contrived, unrealistic
| example. I can't see how LVT disincentivizes productive use
| of lands.
| FuriouslyAdrift wrote:
| No mention that Pennsylvania implemented LVT decades ago and was
| highly successful. Their version is a split rate tax system (land
| taxed much higher than the property on it) and it is city by
| city.
|
| https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...
| bluecalm wrote:
| Not a very convincing article in my view.
|
| >>Take, for example, the case of surveying land for oil. Imagine
| a landowner invests significant time, money, and effort into
| exploring their property to determine whether it contains
| untapped oil reserves. If they do find oil, the value of their
| land would skyrocket because the presence of oil dramatically
| increases its economic potential.
|
| Is the author aware that in many countries the owner of the land
| doesn't own the resources if they are discovered there? Is the
| author seriously claiming discovering oil is not profitable under
| LVT? Does he prefer making people who happen to stumble on oil
| not pay % of the value of it as tax? (and thus presumably prefers
| taxing other things). It seems so unlikely to me that someone
| reasonable would make that argument that I have trouble taking it
| seriously.
|
| >>An LVT implicitly taxes improvements to nearby land
|
| That's one of the two major points behind it: tax wealth that you
| got without building it yourself. In other words it limits land
| speculation.
|
| >>An LVT is unlikely to replace many existing taxes
|
| The argument the author is making here ("government will not get
| rid of other taxes") applies to any tax discussion and kills it
| before it even starts.
|
| >>Another major issue is that a full or near-full land value tax
| would likely establish a troubling precedent by signaling that
| the government has the appetite to effectively confiscate an
| additional category of assets that people have already acquired
| long ago through their labor and purchases.
|
| Yeah but we need to tax something. The alternative is to tax the
| very labor which must certainly be worse. Land owners are
| benefiting from work done by others without contributing to it
| and thus should be taxes accordingly.
|
| >>The concern here--which, to be clear, is not unique to the LVT
| --is that the introduction of an LVT set at a high rate
| (especially near 100%)
|
| Amazing, 100% rate for LVT doesn't make sense!
|
| >>For instance, individuals buy stocks, businesses invest in
| capital goods like machinery, and developers improve real estate
| --all with the expectation that they will retain most of the
| value of their assets and any future returns from them. This
| confidence in the protection of property rights encourages
| entrepreneurship, innovation, and economic growth.
|
| And yet all of those are taxed in the current system!
|
| The author seems to be assuming the proposed LVT rates are very
| high (when in practice they would be in low single digits).
| Remove that assumption and the whole article makes no sense at
| all.
| jlhawn wrote:
| > ... These assessments would require intricate and subjective
| valuations that are very difficult to quantify accurately.
|
| I continue to believe that "full cash value" assessments which
| try to ascertain the market purchase price of real estate are
| very foolish. And there are so many inputs and methods of
| formulating an assessment. What all of them have in common
| though, is that they consider the rental value of the property.
| It would be so much simpler if the tax was only assessed on the
| rental value. It eliminates things that effect the sale price
| estimates like interest rates, subjective risk tolerances,
| speculative premiums, and even the tax itself. The tax rate on
| the rental value would of course be much higher than the tax rate
| on the purchase price (25% compared to 1% for example) but it's a
| much more stable assessment with a lot more reliable data backing
| it up.
|
| disclosure: I am a Georgist and former president of Common Ground
| California.
| jlhawn wrote:
| I found some more to nitpick, from the section on "LVT
| implicitly taxes improvements on nearby land":
|
| > For instance, if a developer owns multiple adjacent parcels
| and decides to build housing or infrastructure on one of them,
| the value of the undeveloped parcels will rise due to their
| proximity to the improvements. As a result, the developer faces
| higher taxes on the remaining undeveloped land, making
| development less financially appealing in the first place.
|
| This analysis misses the point. It doesn't make development
| less financially appealing, it makes owning land you're not
| planning on using any time soon less appealing. It disrupts (in
| a good way) the current land development model where one entity
| buys a large tract of land and develops and sells it off one
| piece at a time. That's a model based on land speculation. They
| may see it as the development of the first 20% of land
| increases the value of the remaining 80% (which they feel
| justified in profiting from) but that is neither guaranteed nor
| is it an accurate description of what causes the remaining 80%
| of land to increase in value. It's more accurate to say that
| the agglomeration effects of the people who moved into that
| first 20% (and their interaction with the existing local
| economy) are more responsible for it.
| thayne wrote:
| > it inherently discourages landowners from searching for new and
| innovative uses for their land
|
| That seems like a feature to me, as long as the tax enough less
| than the increased value of the land, and using up a funite
| resource, lime oil, correspondingly decreases the evaluated value
| of the land. If you discover oil on your land, I think you
| _should_ be taxed more. And I think that adding a reasonable
| dicencentive to things like drilling for oil isn 't a bad thing.
|
| Also, for non-renewable resources found on a property that are
| sold, not rented, I think it could make sense to tax them
| differently, such as based on the sold value, when it is sold,
| rather than increasing the taxes on the land itself.
|
| > Another issue with the LVT is that it acts as an implicit tax
| on nearby land development.
|
| This is the case for property taxes, regardless of whether it
| includes "improvements".
|
| Also, it doesn't remove the incentive. If an improvement on one
| parcel increases the value of a nearby parcel, that means you can
| rent or sell that property for more, and the ducentive isn't
| really any worse than a tax on that increased income being a
| disencincentive to increase the value of nearby land.
|
| There is a related problem where increased value can result in
| families no longer being able to afford taxes on their residence.
| Although its not like gentrification isn't already a problem, and
| I'm not sure it's any worse than the problems with other tax
| systems. It could also be combatted somewhat by lower tax rates
| or deductions on primary residences (possibly with a limit on the
| area that qualifies).
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