Focusing on that one issue presents an incomplete picture, to say the least. LVT has been tried many places, and has been no less successful than other tax systems. Here's a pretty thorough analysis and discussion of empirical results.

https://www.lincolninst.edu/sites/default/files/pubfiles/ass...

Of course there are secondary and/or orthogonal problems that need to be solved. Of course there are some people who complain, either because they are truly being overtaxed or (more often) because they think they personally would do better under some other system. Just like literally every other tax system including the ones most of us live under right now. LVT is no panacea, but there are legitimate reasons to believe it's a fundamentally better starting point than the mishmash of income, sales, and property taxes we have now.

Huh. Property tax is already a thing of course, but I guess if the LVT was going to replace all taxation the stakes would be much higher.

In an urban setting, it seems to me that the land value should be... reasonably uniform, unlike property, which should make assessing much easier, right? But that's just getting the number. Whether people are happy with the number is a whole 'nother problem.

Doesn't work that way. A subway gets built near your property. The benefit of greater access accrues to you more than it does someone 10km away. So your LVT has to go up.

Now you can't afford the taxes, and you're forced to sell and move to somewhere with lower LVT. It's bought by someone who will put it to better use. Maybe an apartment block instead of your single family home.

Over time, every piece of land is put to its most productive use. But before it gets there, there will be some pain for the individuals who choose (or are forced) to move because they can't afford to the improvements made to the infrastructure in their locality.

> Now you can't afford the taxes, and you're forced to sell and move to somewhere with lower LVT. It's bought by someone who will put it to better use. Maybe an apartment block instead of your single family home.

> Over time, every piece of land is put to its most productive use. But before it gets there, there will be some pain for the individuals who choose (or are forced) to move because they can't afford to the improvements made to the infrastructure in their locality.

Which is why I think it makes sense that the LVT shouldn't be re-evaluated on a rolling basis. It would only be re-evaluated (or at least put into effect) when it changes owners (sale, gift, inheritance, etc). Otherwise you get bad incentives for people to vote against improvements that price them out of living where they currently are.

Corporate land ownership would likely need different rules, as the owner could theoretically be the same forever.

Over time, land is still put to it's most productive use, there is just a delay introduced that considers the human condition.

This is basically Prop 13 in California which the world outside of California conclusively thinks is stupid. It’s incredibly unfair to give people massive tax breaks for buying a long time ago. The alleged benefits don’t reflect the immense cost.

In this case you’re trying to replace the majority of all taxation with a value that doesn’t change with time. People get massive economic incentives to never move. People get massive economic incentives to resist change.

I’d rather deal with a range of options from people selling and moving to introducing liens upon the property due at sale than have to deal with the mess that is 50 year stale land values and the associated negligible taxes that result.

Nah, that won't work. Needs to be re-evaluated every 5 years at least.

I would have assumed exactly the opposite in terms of urban land being uniform in value.

10 acres that are 30 minutes from Des Moines, IA are going to be very similar in value (price people are willing to pay) compared to 10 acres that are 10 miles down the road. Rural land is generally quite uniform and more likely to be functionally the same. In an urban area, say Los Angeles, 10 acres in Malibu (an area with very high demand for property) is going to have a totally different value (again, price people are willing to pay) as compared to 10 acres 10 miles away in skid row.

The problem, that other people have highlighted, is how do you (the government/IRS/agency in charge) determine the value of each of those land areas? Letting some city planners in LA decide that those two areas should have the same LVT, or allowing them to determine what tax each should have, is gifting a lot of power to people who may or may not be qualified, and may or may not experience any sort of consequence for poor decision making/ biased value assessment/ etc.

The exact way that sort of value/tax-setting would play out would be very interesting, but the unintended consequences could end up being pretty bad.

I've always thought it was interesting that property tax assessments don't just use the previous purchase price, and instead rely on a relatively arbitrary valuation. That could be one way to more accurately determine an LVT - make it a set percent of the previous purchase price of the land, that would allow the taxes to be priced in to land transactions.

I still just don't love the idea at its core.

With a land value tax we could at least come up with pretty straightforward equations, right? Some starting value from being in town, then add something for oceanfront property, then add something some extra bump based on distance from some set of amenities provided by the community (parks, subways, etc). It is at least possible to come up with something, unlike, what, the assessor's gut feeling about how nice your house is? This seems like it is putting much more arbitrary power in the hands of some random person.

> Some starting value from being in town, then add something for oceanfront property, then add something some extra bump based on distance from some set of amenities provided by the community (parks, subways, etc).

How do you know you weren't also supposed to take the floor plan or exterior paint color into consideration? How do you account for the value lost from having obnoxious neighbors? What happens when, in the future, a nice bookstore/coffee shop is opened up down the street, or alternatively a liquor store? Ultimately, how do you know if whatever equation you've constructed is exhaustive or "correct"?

It might sound like "well then you just adjust the equation" but this wouldn't be without consequence. One outcome of getting that equation incorrect is that a home is valued at a point where the imposed tax prices out anyone from purchasing the home - it would sit empty/foreclosed for as long as it takes a local government bureaucracy to come in and attempt to re-assess its value. So you could effectively be removing houses from a competitive home buying market, which is going to increase the price of other homes until they too have priced people out of the area. Multiply that by entire zip codes, and while you're working on adjusting that equation, you could end up having a real shit show on your hands with a bunch of people being displaced or in worse financial positions.

> It is at least possible to come up with something, unlike, what, the assessor's gut feeling about how nice your house is? This seems like it is putting much more arbitrary power in the hands of some random person.

I agree with the point that a home assessment is strange and arbitrary, but you're really just saying we should replace the assessor who goes and visits a property with a group of assessor's that just come up with an equally arbitrary equation that gets blanket applied to entire cities? Why is that preferable to something like just using the previous home sale price or, honestly, just staying with the current system that we know is generally very functional?

You don't know the equation you came up with is correct, but it is at least describable, so if someone doesn't like it they can live elsewhere I guess, or argue about it at the next town hall session. If a bad equation is designed, then that's a problem, but it is a general bad governance problem that effects everyone, rather than an arbitrary lightning-strike problem like a bad assessment.

Floor plan or paint color -- the point of a land value tax is that it is based on the value of the land. Floor plan and paint color would be improvements on the property, so they would be excluded.

The current system is not very functional. Housing is not very affordable in most cities due to speculative real estate investment and under-development. I mean, we clearly get by, but just because the alternative is being homeless.

Now you've brought the horror that is prop 13 to a tax that is supposed to replace all other taxes. Things change in value, we have to account for that.

Someone came up with this delicious game:

Landowners decide for themselves what value their land has, and pay tax accordingly. But whatever they say the value is, someone else is allowed to buy it for.

It's certainly a fun game, but does that mean if I decide my property is worth $100,000, accurate or not, I am forced to sell it just because someone comes along and decides they want to buy it? Also, is this a game that happens every year to allow for appreciation?

For a realistic implementation, why not just use the fact that the landowner already decided what the value their land has when they purchased it and/or paid people to develop it. Why not just use those values?

I think you need a new value each year, otherwise of course if the economy goes well people will buy your land off you cheaply.

So you get to decide your tax each year but if you save yourself too much someone else will grab the excess value.

This game is terrible because even yearly is too slow. The property market went up 30% in my city this past year. If I set a fair price at the beginning of the year I’m forced to sell my house at a loss. Only if guess that I should overpay by at least 30% at the beginning of the year does my house remain unsold.

> Property tax is already a thing of course

Yes, but note that property taxes are extremely unpopular:

> America's most hated tax: Local property tax (42%) By far, America's most hated tax is your local property tax! It's almost ironic that your home, perhaps the single greatest source of taxable deductions on your federal income taxes, is also the greatest source of dislike when it comes to taxes in general among the American public with 42% responding that they felt it was the least fair tax of all.

Source: https://www.fool.com/investing/general/2013/11/02/americas-5...

It looks like that 42% number comes from this Gallop poll: https://news.gallup.com/poll/1714/taxes.aspx

They have a sort of purity and logic that appeals to economists, but they're intuitively hated by everyone else.

Lobbyists, PR professionals and the people who pay them own lots of property and pay property taxes. They're far harder for the wealthy to dodge than income or capital gains taxes. Of course the public has been trained to hate them, like they've been trained to hate estate taxes, and in some years public polls would show near-majorities against progressive taxation in general.

edit: it seems obvious because of the thread topic, but property taxes are the most easily and intuitively justifiable tax. People with more property use more public services.

I'm thinking of my buddy back in Missouri -- not wealthy; not a lobbyist, PR professional, or any kind of professional -- who told me (more or less):

"It's unfair. It's the one tax you can't avoid. No matter what you do, you can't opt out. It's like you don't even own your own property. The government owns it. You never really own anything, as long as they can tax you just for existing on your own land."

That's the intuitive, everyman objection.

It is a sort of silly objection -- you can avoid property tax by having no property, in the same way that you can avoid income tax by having no income. I guess it is probably easier to evade income tax, than property tax, though.

People who disagree with their assessed value should be given the option to declare whatever value they like. If they take this option, the state should have the option of buying their property at the declared value, plus some extra to cover transaction costs.

At the surface it seems there should be a market solution for this.

One approach might be to do something clever with mortages and property rights. Basically keep trying to keep the current mechanics of borrowing and just shifting around the parties involved so that the all the interest gets collected as LVT.

Might even let the central bank handle both collection and dividends of it all.

Another option might be to create economic incentives for some party to get the assessment right. Like insurance companies and banks loose either customers or revenue when getting it wrong.

Perhaps can play with some margin for speculation such that lender and borrower get to share some profit.

Or just make lenders outbid each other on who can extract most rent for the property.

I guess one concern here is to make sure the commons have a representation, so that not all land get appropriated to private use

This is a 'clever' solution to property taxes. But a land value tax specifically just taxes based on the value of the land. This is supposed to incentivize people to use their land as productively as possible -- with a property tax, any improvements you make increases your tax bill, with a land value tax, it doesn't.

A moral argument for it is, if you own an empty lot which is gaining in value as the community grows around it, you are essentially leeching extra value from the community through no work of your own. This sort of behavior is punished heavily with an LVT, as your taxes go up but you don't get any extra revenue from your empty lot.

The problem is that most land has stuff on top of it. The government can't buy the land without the building that comes with it.

The biggest problem with it as presented in Progress and Poverty (i.e. as a Single Tax to fund the government budget, not some small supplementary levy to fund something like local services) is that the size of the tax bears relatively little relation to the ability of someone to pay it (at least, to pay it without selling their house). Turfing pensioners out of their house because the land it sits on gained in value faster than their pension whilst others earn millions virtually tax free obviously isn't a natural vote winner.

Maybe Im heartless, but I don't see why people should be allowed to stay in a home they can't afford just because they've been there a while. Especially when the reason they can't afford it is because the community thinks it should support high density housing but they have a low density home.

> Turfing pensioners out of their house because the land it sits on gained in value faster than their pension

This is a well-known canard. If someone can't pay their tax on a primary residence, you put a lien on the property that becomes enforceable when the ownership changes hands, whether by sale or inheritance. No one gets "thrown out" of their homes.

Proposing children are kicked out of family homes isn't necessarily more politically palatable, and deferrals introduce revenue issues (especially if LVT causes land value to fall over time, which is often mooted as an advantage by Georgists...)

But that's a minor issue compared with the second part of my post, which is that if a proposed tax reform reduces the tax burden on almost every corporation and high net worth individual (bar a few land speculators and domestic oil well owners), ordinary people have to pay more to the government or get less from the government. LVT might be perfectly viable as a tax, but as a Single Tax replacing the existing set of taxes (which arent exactly optimal from the point of progressitivity to start off with) it's a wealth transfer on an unprecedented scale from people whose wealth is mainly the property they bought (including the land it sits on) to people whose wealth is mainly the shares they own. The latter category is much richer than the former.

"Corporations" don't bear the incidence of any tax, they merely pass it along to something else. And taxing high net worth individuals on their savings reduces investment significantly, making everyone worse off. That's why it makes sense to single out "land"-like assets for taxation in the first place. Much of the value locked in "shares" is itself land, and would of course be taxed. Unlike with ordinary corporate taxes, the impact of this would unambiguously fall on the owners.

Sure, much of the value locked in shares is land or land-like assets but a much higher proportion of the value of the average middle class person's property is land. So as taxes go it's incredibly favourable to most one percenters, and ordinary homeowners are amongst those whose taxes must make up the difference. (And Single Taxers have to raise 1/3 of GDP from someone so its not like the possibility of the middle classes actually paying less tax providing they kiss goodbye to their homes and move into a high rise or rural Nevada is a solution and not a different category of problem)

Efficiency arguments that the average middle class homeowner would still be better off materially even with a much higher personal tax bill because the Zuckerbergs and Dorseys of this world would retain more untaxed profits and dividends to use their superior resource allocation skills to invest in land-free Bigger Adtech might appeal to the armchair neoclassical economist but for obvious reasons the public are more sceptical.

Even if you focus on real estate alone, land is a "much higher" portion of that value only in urban cores where owning one's residence would be relatively uncommon (and that for very sensible, rational reasons). The areas that are most commonly associated with middle-class real estate ownership have significantly lower land values. While it's hard to say whether a genuine "single tax" is actually feasible given modern trends in government spending, the overall incidence of LVT is really quite favorable to the middle class and especially to the lower class.

Land values vary from place to place, but I can't think significant pockets of middle class housing in developed countries where the value of the underlying land is as insignificant to the homeowners' net worth as natural resources are to Facebook's market cap.

If we plug in something approaching real data, the UK government statistics agency assesses that the UK has £6tr in land value (more than the value of the assets that sit on it!) of which two thirds is owned by householders. And there's an annual government budget of 1tr so those land value taxes are going to be a really high proportion of the total value of the land (and property that sits on it). Good luck convincing the average homeowner who takes 30 years to pay for their home from their salary and typically retires not long afterwards that the tax incidence of a Single Tax will be favourable to them

> Good luck convincing the average homeowner who takes 30 years to pay for their home from their salary and typically retires not long afterwards

But that's exactly the point - these people are glorified renters, they don't really structurally benefit when land values go up. The fact that a Georgist tax has to be introduced gradually in order not to be punitive towards those who happen to be holding land at any given time is well known. But we already have property taxes for a start, many countries have large one-time fees on real estate transactions etc. These are taxes that could quite easily be replaced by a shift to LVT.

Most modern day versions proposed allow you to defer the tax until the sale of your home or pay it as part of the settling of your estate.

My city already does a two-factor assessment that includes land value and structure value for assessing my property tax. I don't think just doing the land value component is substantially harder although I do agree it's slightly harder.

Could you tell us where these experiments were held, and how far they went? For example, were other taxes eliminated at the same time?

See my sibling comment to yours. The most notable examples are in New Zealand, Australia, and several towns in Pennsylvania. Some of those ran into problems with execution, others were abandoned for purely ideological/selfish reasons, but overall it's not a bad record.