You could actually do a lot to adapt existing property tax regimes into something like a very close approximation of an LVT. Step 1 would just be improving the quality of assessments to take advantage of the state of the art of the latest mass appraisal methods (which requires no change in law, just requires you to influence the training and/or appointment/election of local assessors) from the last 15 years. Step 2 would be lowering the tax rate on improvements and shifting the burden off of buildings and onto land; this is barred in certain states but is perfectly legal in others.

Lowering the tax rate on improvements would probably have the side effect of having more remodeling work be inspected. Much of the avoidance of building permits (and associated inspections) is about avoiding increased assessments and associated taxes. This in turn would likely lead to less totally slipshod remodeling work, at least by people who weren’t aiming for that outcome.

Wait why would LOWERING the tax rate on improvements INCREASE the amount of building inspections? Are you assuming that this would lead to an increased reliance on the cost approach for assessments?

With a high tax on improvements (as is the case today), there is incentive to make improvements in a way that the municipality won’t know about (as is the case today). The easiest way for the municipality to learn about improvements is via the building department permitting and inspections process, so a lot of work is done without pulling permits.

Lowering or removing this disincentive would increase the amount of work that gets inspected.

As an owner-occupant, I want the inspections and am willing to pay one-time for an impartial second set of eyes.

As an owner-occupant, I do not want to pay a recurring subscription fee (in the form of higher property tax) as a result of the inspection.

Given how many properties have obviously recent remodels and no permits pulled in the last 30 years, it’s fair to say that at least some of the market has decided that permits aren’t worth the tax increases.

that’s right, appraisal/assessment methods can be changed more easily than tax law, and could be a potential avenue for more equitable/productive taxation. the barrier is, of course, working with the ~5000 property taxing jurisdictions in the US, each its own special form of opaque bureaucracy, averse to any and all risk-taking (not saying this to discourage, but to show the magnitude of the challenge).

lars's article is what made it fully click for me on how important this topic is, so I'm going to mostly leave it to him here, but I just want to stress one thing.

One thing the Bitcoin issue has shown me is just how pivotal that 'number go up' is to society. When 'number go up', that thing gets bought in, which brings more people to it. I think many look at the LVT like medicine, yes, this thing is good and important, but it tastes bad, so we can't get the collective buy-in, and never will. But we all know what's going to happen to Bitcoin, it's a bubble, and it will crash, crash hard. But so is the real estate market.

Real estate has gone up as interest rates have come down. With our interest rates at 0%, there is now no more room for the interest rates to go down, and thus real estate market to go up. We've reached the end, as we come out of CO-VID they might go up another 10% or so, but the easy money is gone - but the downside is now massive. If rates go back to 5% we will see real estate prices go back to where they were at when interest rates were last at 5%. Investors have a huge risk disparity.

And this is where the Land Value Tax can help. If we can implement the Land Value Tax, and at the same time implement a one-time tax credit equal to the price of the land, not only will no one lose out, but those that have the most at risk will now de-risk, and have the most to gain. All in the meantime instantly incentivizing the correct behavior.

Gotta start somewhere! Change is never easy.

yes, but like most things worth pursuing, its a thorny problem, largely for economic and sociopolitical reasons, but also technical.

as you probably know, AVMs (automated valuation models) have been the hotness over the past few decades, but zillow (recently, but all along too) has shown the real limitation of AVMs. in theory, the likes of google and apple have enough geospatial data to create good land value AVMs, but you really still need appraisers on the ground for hyperlocal adjustments that just don't get captured in the AVM data and/or model. and that's all before the politicians, bureaucrats, and competing public interests get involved.

Indeed! Would love to start, do you have a good email address to reach you? Mine’s in my bio

The current federal property tax was deemed unconstitutional in Germany. The new law has an opening clause for states to regulate the property on their own. The state of Baden-Württemberg has introduced a land value tax.

> realistically something like a LVT is too radical to implement

That's what they said about the French Revolution, American democracy, the abolition of Russian serfdom, the abolition of US slavery, the Paris Commune, the Bolshevik Revolution, Prohibition, the Holocaust, the establishment of the State of Israel, the Great Leap Forward, the Iranian Revolution, etc.

I mean, that's also what they said about lots of other changes that actually didn't get implemented. And, as the examples above illustrate, it's easy for radical changes to have unintended effects...

That's what Pennsylvania did and it worked very well