Land value tax

[Waddy]

There would still be sprawl due to population increase, just not to the extent we see it today. NYC, alone, has over 22 square miles of vacant land. Imagine how many people can live within those 22 square miles. Imagine how many businesses can be set up within that space. Our current tax system encourages poor land use which leads to more sprawl.

Funny you should mention poor land use. I have a friend, business acquaintance really, who builds strip malls. I asked him once why he didn't just rehab the dozen or so abandoned strip malls in our neck of the woods, instead of building new. He said, because of all the combined costs of actual rehab, and the maze of permits, regulations, inspections, etc., it was a lot cheaper to build new a couple miles down the road. Ironically, a couple of the abandoned ones are strip malls he built not so many years ago.

 

[Waddy]

They wouldn't be 'giving up' on revenues, simply reallocating the funds and 'investing' in the citizens. The Alaska Permanent Fund is wildly popular. Any smart politician would advocate a similar dividend towards its state's resources/land.

Don't hold your breathe waiting for government to make that "investment".

 

[Geoist]

Funny you should mention poor land use. I have a friend, business acquaintance really, who builds strip malls. I asked him once why he didn't just rehab the dozen or so abandoned strip malls in our neck of the woods, instead of building new. He said, because of all the combined costs of actual rehab, and the maze of permits, regulations, inspections, etc., it was a lot cheaper to build new a couple miles down the road. Ironically, a couple of the abandoned ones are strip malls he built not so many years ago.

Yeah, the red tape one has to go through for that is insane. I have a friend who lives right across from broken up asphalt of what used to be a mall's parking lot. The mall had been gone since the late 90s and the company that owned the land did nothing with it for decades. Finally, they sold and the new owner is building condos there. But to think of how that land just sat there un-utilized for all those years is crazy.

 

[Geoist]

Don't hold your breathe waiting for government to make that "investment".

Well, as a libertarian I really don't trust most politicians to do the right thing. That won't stop me from promoting what I believe is best for our communities.

 

[Waddy]

Yeah, the red tape one has to go through for that is insane. I have a friend who lives right across from broken up asphalt of what used to be a mall's parking lot. The mall had been gone since the late 90s and the company that owned the land did nothing with it for decades. Finally, they sold and the new owner is building condos there. But to think of how that land just sat there un-utilized for all those years is crazy.

So this Vietnamese lady wanted to open a nail parlor in one of his strip mall locations. She had some savings from working 30 years and wanted her "dream" business. Thought she could open it for around $50K and hire a couple of women to work there. Around $200K later, after compliance with a dozen agencies, a new special HVAC system and Disability doors, etc., she now has to work by herself 60+ hours a week to pay the debt off. She can't afford help. My business friend told me the story as we stood in front of her shop. That was a few years ago. I sometimes wonder how she's making it through Covid. I assume she was, maybe still is, shut down.

 

[Waddy]

Well, as a libertarian I really don't trust most politicians to do the right thing. That won't stop me from promoting what I believe is best for our communities.

Carry on, Don Quixote.

 

[skeptic llc]

From what I've seen, the IRS taxes everybody at their rate, regardless of where they reside. It's the state and local taxes that vary so much. That there answers the question.

Absolutely. The IRS taxes everybody at their rate, regardless of cost of living differences where they reside, and the Blue areas just pay a whole lot more (to subsidize the red "takers") because they have more advanced economies.

 

[OrphanSlug]

Georgism is a preventative measure against bubbles. Our current economic system allows the rampant land speculation we see over and over again.

Georgism does no such thing, does not even have plausible influence into dealing with economic fault or economic bubbles.

 

[ttwtt78640]

Absolutely. The IRS taxes everybody at their rate, regardless of cost of living differences where they reside, and the Blue areas just pay a whole lot more (to subsidize the red "takers") because they have more advanced economies.

Hmm... the more advanced the economy becomes, the more homeless it has.

 

[ludin]

In the 19th century, there was an economic philosophy known as Georgism (or Geoism). To sum it up, they believe in socialism for land and capitalism for everything else. The logic is that while people can produce many stuff with their labor, they did not produce the land. Thus by paying a land value tax, they would be paying rent to mother nature. Georgists use this to argue that there should be a tax on land and that it should be the only tax. The movement died out after the early 20th century and very few jurisdictions ended up embracing this kind of tax.


A land value tax is a tax on land value. It differs from property taxes in that it only taxes the value of land, not anything built on it. I'm somewhat doubtful that this tax could collect enough revenue to replace everything else but it could have positive results. With the revenue collected, it could help reduce fiscal deficits, increase spending, or lower existing taxes. LVT would be progressive in nature because rich people tend to own more total land value with multiple houses and because poor people are more likely to rent. It would also discourage land speculation and instead encourage the efficient use of land. It's also less susceptible to tax evasion because of the full transparency of land value as opposed to personal or corporate income tax. The one issue I see is the potential negative effect on people who are land rich but cash poor such as on independent farmers and on people living in expensive cities (the cost being passed down as increased rent).

You may remember me posting about the consumption tax. A bunch of people pointed out that luxury goods tend to have elastic demand and that rich people would simply cheat the system by importing such goods. This is actually what happened in the early 90s when such as tax was implemented in the US; revenue turned out to be lower than expected. LVT doesn't have this problem because it cannot be moved and because it's not a commodity which is subject to supply and demand.

We have such a thing it is called property taxes. Sorry private property is a right guaranteed by the constitution of the US.
Therefore we cannot have what you want.

No a land tax is a double tax on the property taxes that you are already paying for the land. That is unconstitutional.
Sorry no tax the government has ever collected has ever lowered the deficit, but it has let them increase spending more than the tax.
a new tax has never lowered other taxes. Also the biggest land holder in the US is the government so how do you suppose that they pay this tax?
by having a new tax that taxes us more so they can pay for the land tax they passed?

Land value is highly volatile. One day your property could be worth 1 million dollars and in the next year it is worth 200k.
Importing any good would be hit with the consumption tax. as it would be considered a new good sold in the US.
the only exception would be if you were using it in a manufacturing process or something like that and it was not a finished good.

 

[Vadinho]

So this Vietnamese lady wanted to open a nail parlor in one of his strip mall locations. She had some savings from working 30 years and wanted her "dream" business. Thought she could open it for around $50K and hire a couple of women to work there. Around $200K later, after compliance with a dozen agencies, a new special HVAC system and Disability doors, etc., she now has to work by herself 60+ hours a week to pay the debt off. She can't afford help. My business friend told me the story as we stood in front of her shop. That was a few years ago. I sometimes wonder how she's making it through Covid. I assume she was, maybe still is, shut down.

Most of what really affects the average small business is local to the area and controlled by local politicians. This is where libertarians and I agree, we need to take a hard look at some of these regulations and ask ourselves once again, what is the problem and is this the right solution?

 

[Geoist]

Georgism does no such thing, does not even have plausible influence into dealing with economic fault or economic bubbles.

The link I provided explains exactly how it deals with the problem with bubbles.

But I can always provide more links to people who know what they are talking about. Do you really think you, some random DP poster, is going to convince me otherwise?

Not only would a land value tax (LVT) drastically shrink that Wall Street bloat, it would have prevented the housing bubble in the first place. Land, after all, was the speculative commodity at play, not the houses themselves, which, as “Arrested Development” incisively suggested, were a bunch of crap. With an LVT, the cookie-cutter McMansions in suburban housing developments would only be worth the cost of their cheap paneling, artificial marble and the rest of it. Without one, they were wrongly assessed as being worth the value of the land they stood upon, which speculators bid up and up and up.

End the 1 percent's free ride: Taxing land would solve America's biggest problems

Want a real overhaul of the tax code? Here's an elegant way to reduce inequality and mitigate poverty -- in one tax

www.salon.com

Pittsburgh and Cleveland have adopted diametrically opposed strategies, with dramatically different results. In Pittsburgh, foreclosure rates are low despite the downturn, home prices are climbing slightly and construction rates are increasing. Cleveland, meanwhile, is struggling to stem a complete collapse of its housing market. The difference lies in the fact that Pittsburgh has had a site-value tax, which steadies the market, and Cleveland has not.

Why Pittsburgh real estate never crashes: the tax reform that stabilised a city’s economy – Fleeing Vesuvius

fleeingvesuvius.org

"Property bubbles cause immense social and economic damage in the medium and long term and inflated property values merely increase indebtedness and reduce economic output"..."Well-designed land and property taxes can play a significant role in making land affordable and promoting economic growth.

Tax Land, Not Houses

NICVA's Centre for Economic Empowerment has launched a new report into the feasibility of introducing a land value tax in Northern Ireland.

www.nicva.org

 

[Geoist]

Carry on, Don Quixote.

I am a pragmatist, first. Idealist, second.

 

[Geoist]

Hmm... the more advanced the economy becomes, the more homeless it has.

Well, that's capitalism for you.

 

[Geoist]

We have such a thing it is called property taxes. Sorry private property is a right guaranteed by the constitution of the US.
Therefore we cannot have what you want.

Wait, so all taxation is unconstitutional? You do realize a big reason why we scrapped the Articles in favor of the Constitution was so it was easier for the federal government to tax. And at the time they taxed LAND.

No a land tax is a double tax on the property taxes that you are already paying for the land. That is unconstitutional.

The proposal is to replace the property tax with land value tax. Heck, many geoists want to replace all or nearly all taxes with the lvt.

Sorry no tax the government has ever collected has ever lowered the deficit,

Government needs revenue to pay its bills. It can only do that through taxes.

a new tax has never lowered other taxes.

When conservatives propose a flat tax to replace the progressive income tax, is that a 'new tax' intended to never replace the old tax? Don't be silly.

Also the biggest land holder in the US is the government so how do you suppose that they pay this tax?

Have the government pay a dividend to the citizens of town/city/state, just as they do with oil in Alaska. Real simple.

Land value is highly volatile. One day your property could be worth 1 million dollars and in the next year it is worth 200k.

Lol, oh yes, properties drop from 1 million to 200K annually all the time.

 

[ttwtt78640]

Well, that's capitalism for you.

It has more to do with government regulation and taxation than capitalism. Capitalism is responsible for the cost of the material and labor to build a house - the rest of the cost is the responsibility of the government.

 

[Geoist]

So this Vietnamese lady wanted to open a nail parlor in one of his strip mall locations. She had some savings from working 30 years and wanted her "dream" business. Thought she could open it for around $50K and hire a couple of women to work there. Around $200K later, after compliance with a dozen agencies, a new special HVAC system and Disability doors, etc., she now has to work by herself 60+ hours a week to pay the debt off. She can't afford help. My business friend told me the story as we stood in front of her shop. That was a few years ago. I sometimes wonder how she's making it through Covid. I assume she was, maybe still is, shut down.

Public banking+LVT would have saved that Vietnamese lady some serious headaches. Government can provide the tools to allow small business to flourish, but our leaders are either too corrupt or too dumb (or both).

 

[Geoist]

It has more to do with government regulation and taxation than capitalism. Capitalism is responsible for the cost of the material and labor to build a house - the rest of the cost is the responsibility of the government.

If you did a survey of homeless people, how many of them would say regulation and/or taxation put them on the street?

 

[ttwtt78640]

If you did a survey of homeless people, how many of them would say regulation and/or taxation put them on the street?

Yep, how dare that landlord demand payment of rent?

 

[Geoist]

Yep, how dare that landlord demand payment of rent?

Interestingly, we have 5 foreclosed homes for every homeless person. 'MERIKA!! But I agree with half of what you said, the rest of the cost is the responsibility of the government. But perhaps the government would be smarter to use more preventive measures rather than reactionary ones. Would cut costs, for sure.

 

[ttwtt78640]

Interestingly, we have 5 foreclosed homes for every homeless person. 'MERIKA!! But I agree with half of what you said, the rest of the cost is the responsibility of the government. But perhaps the government would be smarter to use more preventive measures rather than reactionary ones. Would cut costs, for sure.

Since the government derives tax revenue from both the collection of rents and the assessed value of real property it has a vested interest in having those amounts increase.

 

[skeptic llc]

Hmm... the more advanced the economy becomes, the more homeless it has.

Not at all untrue. Especially if you add good weather to the more generous safety net. This is a legitimate problem; for obvious reasons, homeless people prefer to live in states that not only have favorable climates but also have minimal standards for human decency. So states that fail those tests effectively export their homeless, then criticize the states they go to.

 

[ludin]

Wait, so all taxation is unconstitutional? You do realize a big reason why we scrapped the Articles in favor of the Constitution was so it was easier for the federal government to tax. And at the time they taxed LAND.

Your strawman is running away.

The proposal is to replace the property tax with land value tax. Heck, many geoists want to replace all or nearly all taxes with the lvt.

So the federal government is the largest land owner in the US how do you expect them to pay the tax on all the land they own.

Government needs revenue to pay its bills. It can only do that through taxes.

Yet another strawman.

When conservatives propose a flat tax to replace the progressive income tax, is that a 'new tax' intended to never replace the old tax? Don't be silly.

Yes you are being silly.

Have the government pay a dividend to the citizens of town/city/state, just as they do with oil in Alaska. Real simple.

Alaska isn't paying a dime. the money that goes out is profit sharing that oil companies pay. The state pays 0. you have no clue what you are talking about.

Lol, oh yes, properties drop from 1 million to 200K annually all the time.

Again it is called a figure of speech. land value is not constant. it is always changing yes it can change that fast look at the 2018 real estate crash. homes worth 500k lost 50% of their value. so don't say it doesn't happen because it does.

 

[OrphanSlug]

The link I provided explains exactly how it deals with the problem with bubbles.

But I can always provide more links to people who know what they are talking about. Do you really think you, some random DP poster, is going to convince me otherwise?

Not only would a land value tax (LVT) drastically shrink that Wall Street bloat, it would have prevented the housing bubble in the first place. Land, after all, was the speculative commodity at play, not the houses themselves, which, as “Arrested Development” incisively suggested, were a bunch of crap. With an LVT, the cookie-cutter McMansions in suburban housing developments would only be worth the cost of their cheap paneling, artificial marble and the rest of it. Without one, they were wrongly assessed as being worth the value of the land they stood upon, which speculators bid up and up and up.

End the 1 percent's free ride: Taxing land would solve America's biggest problems

Want a real overhaul of the tax code? Here's an elegant way to reduce inequality and mitigate poverty -- in one tax

www.salon.com

Pittsburgh and Cleveland have adopted diametrically opposed strategies, with dramatically different results. In Pittsburgh, foreclosure rates are low despite the downturn, home prices are climbing slightly and construction rates are increasing. Cleveland, meanwhile, is struggling to stem a complete collapse of its housing market. The difference lies in the fact that Pittsburgh has had a site-value tax, which steadies the market, and Cleveland has not.

Why Pittsburgh real estate never crashes: the tax reform that stabilised a city’s economy – Fleeing Vesuvius

fleeingvesuvius.org

"Property bubbles cause immense social and economic damage in the medium and long term and inflated property values merely increase indebtedness and reduce economic output"..."Well-designed land and property taxes can play a significant role in making land affordable and promoting economic growth.

Tax Land, Not Houses

NICVA's Centre for Economic Empowerment has launched a new report into the feasibility of introducing a land value tax in Northern Ireland.

www.nicva.org

Not a one of those links makes an economic argument, in fact both make a series of assumptions without much else to back up the case.

 

[SkyChief]

Land Value Tax is unconstitutional.

It would be double-taxation. We're already paying PROPERTY TAX which is proportional to the VALUE of our property. A Land Value Tax is simply compounded Property Tax.

Phooey.

It's a rterrible idea.

We need to figure out ways to LOWER taxes - - not RAISE them! We are already over-taxed.