Renters are close to out-numbering non-renters by double digits.
Those are incredibly new phenomena. It's hard to over-state how different things are now compared to even 5 years ago.
I will be surprised if there isn't an open electoral revolt against land owners in my community over the next 10 years. And not just pro-housing policy, but policy explicitly designed to punish.
I don't have an opinion on LVT, but the idea that home owners are the primary organized electoral power base is, I think, shifting quickly in many communities. Landowners, I think, I have two options: find ways to fracture/disempower the rent base in the communities where they invest or else find a way to keep the number of non-renters well over 50%.
I would say they already are disempowered. It is unfortunately pretty hard to organize anything when you have to worry about high rent, not losing your job or having to move every few years. What we have seen in the last decades is that it is now hard to do much at all through organizing unless you can somehow affect the economy. Which you can't if you risk getting fired or evicted doing so. Look at Japan, South Korea, Singapore, Hong Kong etc. for the results.
It's more prudent to look at the ratio of owners and renters, which is 1.85:1, there are almost twice as many owner households than renters.
This didn't sound right to me - according to the census bureau there are nearly twice as many owners as renters in America (1). So I'm not sure what discrepency you're pointing out there.
And anecdotally there was an explosion in demand last year while interest rates were crazy low and the rate of first time home purchasing was similarly crazy in my area. It was very easy for people to get the money to buy homes, but there was a shortage of housing stock.
(1) https://www.census.gov/housing/hvs/files/currenthvspress.pdf
"A greedy land speculator (middle class home owner) refuses to develop a vacant parking lot (refuses to sell to a McMansion developer) because he can let land appreciation pay for his refusal to develop (let him stay in his home).
Since the villainous speculator and the heroic homeowner are economically the same, any consistent LVT has to essentially force the home sale. That is the entire point of the LVT"
I think LVTs are a great idea for a brand new society, and they certainly would work- by making land too valuable for SFHs, so that it has to be used for its highest & best usage. But if you're not forcing homeowners to do that, you're not capturing any of the efficiency gains, so LVT just becomes another tax. It's either forcing landowners to develop apartment buildings on valuable land or it isn't- you have to pick one
https://www.theguardian.com/commentisfree/2015/aug/19/donald...
A family of four would then have an inherent tax advantage against Blackrock etc. accumulating family housing.
Property tax isn't THAT different, and one component of it is a tax on land.
Are we seeing the LVT effects in locales with high property taxes?
That may not last long if the Texas GOP continues to emulate California housing policies by seeking to repeal property taxes; if they do that they will soon start to also imitate the California-style housing crisis.
Implementing the change more narrowly would allow you to test that assumption.
You’re reframing tax-policy to shape landowner behavior towards your desired outcome on the presumption that this will be an improvement of the land by increasing the cost of owning it by fiat. Sin taxes exist for a similar reason and have similar problems.
Taxes should not be conceded as an instrument of power to reorient society into a form viewed by a subset of society as correct, but recognized as what they are sold as: a levy to provide revenue for an unprofitable but necessary organization (“the government”) to raise revenue in order to service its obligations to society. To the extent that this shapes behavior, it is as an unavoidable side effect. When you treat the side effect as the goal, you lose sight of the fact that regardless of reason, taxation is a taking of assets from its owners, and this is a moral compromise we tolerate in service of having a government at all.
Why? If taxes are going to have side effects anyway, I think we should try to make those effects positive instead of negative.
> Regardless of reason, taxation is a taking of assets from its owners, and this is a moral compromise we tolerate in service of having a government at all.
I don't think I agree with that.
For example, I also think we should have a (revenue neutral) carbon tax. Part of the tax's purpose would indeed be to fund the government, but the other purpose would be to make people pay for the actual social cost of emitting carbon into the atmosphere, as opposed to passing them on to the broader public. This would allow the free market actually work properly.
Simply put: it’s a moral hazard. When the goal of the tax is in service to something other than the cost of government, then the tax rate can be arbitrary, and manipulated to the benefit of those in political favor. That sort of arbitrariness is intolerable in a free and just society as we should aspire to be.
>> Regardless of reason, taxation is a taking of assets from its owners, and this is a moral compromise we tolerate in service of having a government at all.
> I don't think I agree with that.
> For example, I also think we should have a (revenue neutral) carbon tax. Part of the tax's purpose would indeed be to fund the government, but the other purpose would be to make people pay for the actual social cost of emitting carbon into the atmosphere, as opposed to passing them on to the broader public. This allows the free market to work properly.
You are free to disagree, but what is the purpose of the disagreement here? It is possible to both recognize taxes as both a taking of assets (often cash, but historically could be anything) and a necessity. You can view this on your own paycheck: every single dollar that goes to your government is a dollar that you personally earned and was taken from you (“withheld”) by your employer and paid to your government.
You have some influence over how those dollars are then expensed by your government, by only to the extent allowed by the law through a power-sharing agreement (“the Constitution”, both Federal and your State’s). The larger the government, the less influence you have, and the more likely a higher percentage of the earnings which were taken from you will go to benefit folks you would rather it didn’t (“wasted”).
But you raise a good point about the side effects: we are going to have taxes anyway, and the side effects are going to matter in the discussion. Where they matter though is not in the purpose of the tax—that is and should remain to cover the cost of government—it matters in which taxes are implemented to cover the cost of government. As long as that remains the basis, there is much room for improvement in the way we levy taxes.
Because in the case of a carbon tax, the government isn't taking assets that are rightfully yours; they're taking assets that rightfully belong to the public.
Let's say that I bulldoze your house in order to expand the size of my factory. The factory might generate lots of additional revenue, but that revenue would not be rightfully mine.
Now let's say that instead, I dump refuse from my factory into a river that runs through both of our properties. The refuse flows downstream and ruins your drinking water. I would argue that again, the revenue from my factory is not rightfully mine.
That's still pretty obvious. But now let's say that instead of polluting the river, I pollute the air with greenhouse gases. Long-term, this is also going to be detrimental to your property, such as by increasing the likelihood of extreme weather.
And so some portion of the revenue I generate by releasing greenhouse gasses does not actually belong to me. The government should take that revenue, both to allow the free market to correct for those social costs, and to compensate those affected.
Taxes are a cost from a business accounting perspective. Costs are not borne by the business but paid for by their customers in a manner which is usually obscured to them. A “carbon” tax would effectively be a tax on all goods and services that use energy (all of them).
Now my understanding (when I’ve raised this cost of governance issue with advocates prior anyway) of a lot of carbon tax proposals is that the taxes paid would be remitted back to taxpayers or citizens in some way in a kind of Robin Hood-like manner rather than actually used to cover the cost of government, but this doesn’t actually accomplish anything and I disagree with that kind of scheme on prudential grounds (inappropriate use of tax authority). In any case it would be cash seized from someone who earned it first. A power plant doesn’t emit hydro-carbons needlessly, it emits them as a function of a customer downstream paying for it: to power your refrigerator or to pay for the manufacture of the phone you purchased.
Whether you are levying the tax against the business operating the plant, the customer at the point of sale or any and all of the intermediaries, what you are effectively doing is raising business costs no matter how you phrase it or rhetorically justify it. This informs the final product and service price, so if costs go up including taxes, you should also expect prices to go up.
Unless one company could find a way to produce goods with less energy than their competitors, or obtain its energy from cleaner sources, perhaps by investing in solar power. This would of course incentivize competitors to do the same.
Yes, it would cause prices to go up, but those prices would reflect the actual cost of the good. As you noted, you could offset the price increases by redistributing the tax revenue to the public. This redistribution doesn't make the tax pointless: you're giving a discount to individuals who make greener choices. People who pollute more (whether directly or indirectly via the products they buy) will pay more of the tax but not receive more back.
(This reasoning can apply to a LVT as well, but I prefer the carbon example because I think it's more clear-cut. Clearly, no one person owns the air. People do own land, so I'm more conflicted.)
Sure. Let’s take that solar power investment: under your proposed regime, the cost of the supplies and materials and electronics of the R&D employees would be bear a carbon tax. The electricity to power the lightning and electronics would beat a carbon tax. Any transport they use will bear a carbon tax. The food they eat will bear a carbon tax. The mines the materials for the panels will bear a carbon tax. The transport of the materials will bear a carbon tax. The equipment for extraction will bear a carbon tax. The factories which produce the panels will bear a carbon tax. The intermediaries that ship and handle the panels will bear a carbon tax. The infrastructure to connect it to the grid will bear a carbon tax. And I’m sure I’m leaving out several thousand items, but that’s probably why the serious proposals say to just do it at the plants and refineries, I.e. increase the cost of energy directly.
Taxes are not a cost in the way supplies and materials are and a carbon tax doesn’t make the “cost of the good” more real, just higher. They are a fiat cost, hence the need to tie to something real: the cost of governance. Consumers do not accept lightly increases in their cost of living, as you can see in the present moment with the current price of fuel in the US and the likely parties to suffer in upcoming elections.
Let me ask: do you think it's possible in a literal sense for society to emit greenhouse gases?
If it's not possible, your argument makes sense to me. But if it is possible, we should financially reward people who make greener choices.
Every single thing you just listed would take energy to produce and would bear a carbon tax because a carbon tax is really just an energy tax. The electric vehicles need batteries, the batteries need lithium, and the lithium has to come out of the ground. This results in a product with much more mass than your typical ICE, thus has more energy put into its production, but to offset this the electricity can theoretically come from some solar farm in the Mojave desert. In practice it probably comes from a gas fired plant, but that is still a lot better than if it were to come from a coal powered plant (and sometimes it does).
Everything we do by living has an impact on the planet. Actually to be more exact anything any living creature does has an impact on the planet, but we’re the only species that thinks on a planetary scale (except maybe birds, I’m sure there’s a fun philosophical discussion there but we’ll have to table it) and therefore care about this ecosystem we have conceptualized as a planet.
So when I eat some beans or drink milk and or a cow eats some grass or “feed”, we both emit a GHG with a global warming potential of 27-30 over 100 years. You should be happy to note that as a responsible citizen of this planet, I have omitted both beans and milk from my diet. Unfortunately my hypothetical methane account is probably overdrawn on account of my love of steak as my primary source of protein.
No. We cannot live without waste as a necessary product of living, and since there’s a lot of us, we waste a lot of energy. What we can do is get a lot more efficient with our energy usage and reduce the total amount of waste, but we will continue to be GHG emitters for as long as we have civilization. Either we find some way to get the planet to absorb more of our emissions or we naturally die off until we reach an equilibrium with the planet. That could be billions of us or it could be zero of us. I’m unconvinced tax policy will be our silver bullet, nor will cronyism.
> we should financially reward people who make greener choices.
Which brings me to my final point. If you mean this in a private market sense, that’s fine. If you mean this as an extension of tax policy and the course of government business, this is called cronyism—the government picking winners and losers and is a fine example of why our tax code is already so complex. We have plenty of that already, and I would like to see less to the point that it approaches or eventually achieves zero but I’m not holding my breath.
Only if the supply of the thing being taxed is elastic. The supply of land is inelastic, so (returning to the original topic) there is no way to price LVT into downstream rents; attempting to do so would mean pricing the thing above the value set by its demand, which would mean even less profit.
Property taxes do go into the cost of business by the way; and that would be true for an LVT as well. The land itself may be inelastic but that isn’t necessarily true of the products and services that are produced on it.
Yes but that requires a majority to want to abolish said LVT, whereas the majority would stand to benefit from an LVT as close to 100% (of economic rent) as possible.
> Property taxes do go into the cost of business by the way; and that would be true for an LVT as well.
Most businesses (last I checked) lease from commercial landlords, which means property taxes and LVT would both be part of rent - which, again, can't be raised to account for LVT without violating supply v. demand constraints and hurting profits as a result.
Even for those businesses which do own land outright, land prices are also currently a factor in the cost of business; they're no worse off by replacing a giant lump sum with LVT.
I mean as close to 100% is probably like maybe 4-5% at most, if the LVT on the land and the property tax on the structure were added up to that going by this Strongtown article someone linked me somewhere in this comment chain about how some PA towns have done it.
I think you’re reading me and getting the wrong idea about what it is I’m arguing against. LVT’s as a tax are okay in lieu of other taxes, provided they’re in lieu of other taxes and also the rate is not set arbitrarily high to accomplish nebulous other social goals. That last part is requirement for every sort of tax, and excessive government revenue should dollar for dollar be returned to the people it was levied from.
I don't think I am. Rather, I think our disconnect is that I disagree with your implication that fully internalizing the negative externalities produced by the ownership of land as property is a "nebulous other social goal".
The endgoal - i.e. the full internalization of those opportunity costs externalized onto every other member of society - is 100% LVT with all surpluses disbursed evenly as a citizens' dividend (a.k.a. "UBI" in more modern parlance). Anything short of that is theft by landowners from everyone else (including other landowners, but especially those without land at all); the question is how much theft the general public will continue to tolerate, and for how much longer.
We are fundamentally at odds then with irreconcilable differences of opinion on private property. The protection of private property is a core justification for the State, because as I replied to you elsewhere, private property doesn’t cease without the State but the situation around it becomes more volatile. I do not seek to re-base the State on the socialization of land value and you probably couldn’t with an extreme amount of State violence.
In that same exact way, a land value tax is correcting the capture of the positive externality that is coming from your neighbors for your particular location because of your monopoly over it.
I will read your link this evening.
You're ignoring the reductions/eliminations of other taxes. For example, replacing property taxes with LVT is the usual "first step", and would reduce costs for most homeowners (whose land is typically less valuable than the house sitting on it). Same with sales tax, or income tax, or any other non-LVT tax; non-LVT taxes are less efficient than LVT, so replacing them with LVT would maximize tax revenue while reducing individual tax burdens for all but the largest landowners (namely: landlords, be they residential or commercial/industrial).
> taxation is a taking of assets from its owners
The private ownership of land is itself theft from the commons, and is itself the product of state power and authority. A tax on the value of that land is therefore compensation for that theft, and is more than fair.
Modern society has gone on long enough letting land owners have their cake and eat it too. If land owners expect society to respect their exclusive claims over land, then it's on them to compensate society accordingly.
I’m not against replacing other taxes with LVT. I’m against the misapplication of tax authority for purposes which are not subordinate to covering the cost of governance.
> The private ownership of land is itself theft from the commons, and is itself the product of state power and authority.
No.
Yes. Or do you believe land titles to be magical artifacts that the rest of society obeys for the hell of it? Land ownership would not exist (and therefore wouldn't need taxed) if not for the state using its monopoly on violence to enforce your piece of paper; given that state-issued privilege, it should be entirely unsurprising that you might be called upon to pay accordingly.
Yes it is. Any attempt to enforce private property ownership itself entails the attempted creation of a monopoly of violence in respect to that land - also known as "a state".
> try something more akin to a cross between Europe in the Middle Ages and drug cartels
Both feudal lordships and drug cartels (well, the ones that are actually worth fearing, at least) entail the creation and enforcement of a monopoly of violence over a given geographic area (a.k.a. "land"). That would make them states. They collect(ed) taxes, they raise(d) armies, and they generally control(led) the local populace under threat of violence. The latter case is only exceptional due to it competing with another state over control of a given geographic area; that hardly precludes a cartel from being a state, for the same reason that two states at war continue to be states even when they're being invaded by each other.
> private property rights are recognized by the State by custom (or “common law” if you prefer), not derived from the State, even though they can be deprived from you by the State by due process per the compromises we made in our Constitutional order.
If the State can deprive you of your "private" property, then how does that not in and of itself demonstrate rather plainly that the State is the thing from which said property derives? By what authority do you get to claim a piece of land as your own except with the State giving you a piece of paper saying it's yours?
So in that case would a drug cartel that excludes the government from enforcing its sovereignty over a piece of land be recognizable as a state? I won’t argue, but I’m going to go out on a limb and suggest to you that maybe while a fiefdom could in modern parlance be considered a “state” if it were large enough or managed to make it into the present day with internationally recognized borders (like Liechtenstein), not all fiefdoms were states. I’ve made that mistake too so I won’t knock you for it, but a State as you and I know it is a very very recent invention that entails a bit more than Capitol Hill in lieu of a lord. France prior to their revolution and France post-Napoleon provide the starkest contrast between a feudal Kingdom and a State (in both Kingdom and Republic flavors because they’re restless like that).
> If the State can deprive you of your "private" property, then how does that not in and of itself demonstrate rather plainly that the State is the thing from which said property derives? By what authority do you get to claim a piece of land as your own except with the State giving you a piece of paper saying it's yours?
Well you dropped the due process provision I put in there. Did you know for example that Bills of Attainder are illegal under the Constitution? This would be a legislative instrument where a parliamentary body can simply vote to declare someone guilty of a crime, and simply take their property and even life by majority vote. Those have existed at various points in time, but they are off-limits to Congress (and the States too).
But also a title is not just a piece of paper from the State. Think of a title as a record or evidence of the transaction. It is the agreement between buyer and seller that transfers property rights over a piece of land between two parties, but there isn’t a step where the State steps in and says “I approve this transfer”. The contract is between two parties, not two parties plus the State (unless the State is actually one of the parties to the transaction). Where did the buyer get the rights from? There’s a record of that too, and the State’s role is to keep a record. Maybe it was originally a State grant, but the State forfeited it’s rights with the transfer.
That said, yes, there are ways for the state to take property, so long as due process is followed. This might follow a criminal conviction, or maybe someone died without next of kin and it was determined there was no one to inherit the land, or it was debt collateral, or it was compensated for after an eminent domain action. It isn’t arbitrary.
It ain't a matter of recognizability. It's a matter of function and action - and in both of those senses, a drug cartel is a state.
> not all fiefdoms were states
All landed fiefdoms entailed a monopoly on violence over their geographic territories a.k.a. land, be it directly (by raising their own armies) or indirectly (by relying on a superior lord to whom they swore fealty). All such fiefdoms were either states outright or parts of larger states. You're literally the first person I've encountered who claims otherwise - and I've met a lot of people with very diverse perspectives on European medieval history.
> Well you dropped the due process provision I put in there.
Because it's irrelevant. That the State has constrained its own powers to revoke land deeds does not change the rather basic fact that private ownership of land is fundamentally derived from and dependent upon the state and its monopoly on violence.
You still haven't answered my question: in the absence of the state, who enforces your piece of paper claiming some portion of land to be yours? By what obligation do I have to respect it?
> there isn’t a step where the State steps in and says “I approve this transfer”.
There are actually many such steps. At the bare minimum, the local courthouse usually needs to sign and notarize the new deed. There's also typically a rather hefty stack of documents for (among other things) various state and local requirements.
> Maybe it was originally a State grant, but the State forfeited it’s rights with the transfer.
No, the State pinky-promised that it wouldn't revoke the privilege of land "ownership" except under certain conditions. Laws can and do change.
If income tax drops by X% and a LVT of Y% is implemented to, theoretically, keep the same revenues - some people will win and some will lose.
The idea that all of the middle class, upper class, and wealthy will lose seems absurd.
Some people seem poised for a loss - all the people living in SFH in the middle of a city where lots are worth $2M. All the parking lot operators, etc. And that's kind of the point...
Perversely, it's easy to imagine a poorly implemented LVT that incentives the opposite of what proponents want - it reduces overall tax burdens on suburbs because the "land" is less valuable than the cut land - driving people to leave the city and live in the suburbs.
It all comes down to implementation. Blanket statements seem out of touch
I'm not sure that's actually what the upper middle class is.
The US is >50% urban. Wealth MASSIVELY skews urban. Home values massively skew urban.
I would not be surprised if >50% of the "upper middle class" does not own an expensive SFH in the suburbs.
And, again, this is beside the point.
If income tax is reduced by 50% for the average upper middle class family, and then a LVT makes up the difference - there is no change. You're just incentivizing different behaviors.
It comes down to implementation.
Source? My understanding is that most Americans live in suburban areas. I live in Chicago, where the suburbs have 3x as many people as the city. The city population is largely split between the poorest in the region and richest, most white collar workers live in the suburbs. Seems to be true to a lesser extent in NYC, and it's hard to say there's any urban area in LA, the whole place is suburban.
> Source? My understanding is that most Americans live in suburban areas.
One variable is that it really depends on the definition of "suburb" each person is using.
Take the greater Silicon Valley area. There's only three small urban cores, San Francisco, Oakland and San Jose. Even within those, a lot of the area is suburbs and even semi-rural and agricultural. So by that viewpoint, most of Silicon Valley is suburbs.
If you count places like Evanston, Yonkers, and Pasadena as Urban - then you get ~56% urban. If you pretty much only count places where the vast majority of buildings are multifamily - then you only get ~30%.
Fewer people could afford 2% of land value + mortgage costs + insurance + … at current prices which means there are fewer buyers at those prices. That price drop scales with the LVT so at 10% you would pay more than at 2%, just nowhere close to 5x as much.
Well it would depend on why the land is expensive. What it would do (at least in theory which I do agree with) is force the expensive land to be developed for a useful economic purpose instead of just sitting there.
For single-family homes and such a LVT is likely to be neutral or slightly positive b/c a lot of those homes weren't built on particularly valuable or useful land (which is why it was cheap in the first place).
I really like the idea of focusing taxes on more of a "what am I actually paying for in my community" which LVT and variations of that tend to support, but it'll never happen in the US.
This tends to minimize the distance people travel to work, but it’s hardly go to force a billionaire to sell land they want to keep.
I’m sure we can come up with contrived examples of things, but be open-minded to how things could work.
Anyway, it’s not that property taxes are 1:1 with population, however it does broadly correlate with density. A farmer next to a subdivision is a more extreme version of the same thing that only represents which farmer happened to sell their land. Meanwhile a farm is less value per acre than a housing development. Just as high rises represent more value per acre than garden style apartments and garden style apartments beat single family homes.
Land value taxes on the other hand ignore all such differences by design. The farmer pays the same amount per acre as the subdivision next door. LVT can capture increases in value as regions develops, but those increase don’t line up with political borders.
Beachfront vs non beachfront isn’t equivalent, but two random fields in Northern Virginia next to each other with similar features should be. Anyway, LVT definitely doesn’t care about what you built on the property so this distinction just doesn’t matter.
Yes… but you can’t just look at vacant lots in abstract. If you have two lots and they are taxed the same or similarly, either the owners pay the tax, or they sell the lot because they aren’t providing enough economic value to afford the tax, or someone who has a better economic idea buys the lot to improve it.
In your example of the similar lots you demonstrated this, but drew the wrong conclusion. You realize economic value from the 10,000 people on Lot A because the owner had to either improve it or sell it so that it produced economic value.
> Beachfront vs non beachfront isn’t equivalent
Right, which is why they’d be taxed differently… depending on other factors. L
> Anyway, LVT definitely doesn’t care about what you built on the property so this distinction just doesn’t matter.
That’s exactly the wrong conclusion! LVT cares more than any other tax system because the tax revenue is reflective of the economic value of the property.
This is false, LVT only cares about the hypothetical economic value not the actual economic value.
Let’s say you buy some farms in the middle of nowhere for 10k/acre and put a theme park on it. Your LVT taxes are in theory unchanged, though depending on how it’s calculated the value of land around that property increases because it’s near a theme park. Then your LVT increases when people start to build hotels etc around your property.
What’s interesting about this model is your incentivized to develop land as a single unit. A sports stadium with associated shops and hotels is valued as if none of it was there, but split it up and each pays more due to proximity to other businesses.
And of course what improvements are included or excluded is rather arbitrary. Do you value a natural or artificial pond differently?
No, it’s not false. It’s the fundamental characteristic of LVT. There is no separation of the hypothetical and actual.
> Let’s say you buy some farms in the middle of nowhere for 10k/acre and put a theme park on it. Your LVT taxes are in theory unchanged, though depending on how it’s calculated the value of land around that property increases because it’s near a theme park. Then your LVT increases when people start to build hotels etc around your property.
Right. That’s the point. You buy land and the taxes are such that you must improve the land or otherwise produce economic value to be able to hold it. As land around the theme park becomes more valuable taxes eventually go up and then the economic value of the park must continue to increase in order to support the taxes (at the same profit level).
> What’s interesting about this model is your incentivized to develop land as a single unit. A sports stadium with associated shops and hotels is valued as if none of it was there, but split it up and each pays more due to proximity to other businesses.
I’m not following this very well. I think it makes you think more holistically, but I am not tracking well that building a sports stadium and shops and hotels would cause the value to be as though nothing is there. Can you elaborate? I would think that someone developing the parcel to include all of these things would be doing so to decrease risk, increase economic engagement so they can afford taxes at a specific, desired profit level.
To simplify.
If it’s the actual economic value then the city would include your neighbor who’s brown lawn slightly decreases your property values and a million other factors nobody can actually account for. It’s always going to be calculated based on some simplified model or the best guess of some accessor.
Even stepping into the abstract some choices are just arbitrary. Do you decrease the LVT of a superfund site? What if someone drained swampland so the land it’s self is more valuable?
So sure, it’s of course possible for properties next to each other to have significantly different values per acre, but nothing says the higher density one must have a higher or lower value so let’s just assume their identical for simplicity. Any way you slice it it’s clear LVT doesn’t care about the actual population on the land.
Local population (incl. the density thereof) is arguably the driver of value, moreso than any other factor besides sheer size and maybe location (in exceptional cases, e.g. adjacent to a coastline). If you could build a store or a restaurant anywhere, then all else being equal, would you build it where there are 10,000 potential customers within walking distance or where there are merely 1,000? Likewise, are you going to move where there are lots of places to eat and shop or where there are few? Generally people want to be where other people are, and this produces a positive feedback loop between local population and demand for land; there are exceptions, of course (some people like to live away from population centers instead of in the middle of them), but they ain't numerous enough to meaningfully suppress that feedback loop.
Assuming all things where equal the lower population density one might be assessed at a higher LTV because it’s next to a higher population density and the higher population density one would be assessed lower because it’s next to a low population density one.
But the actual effect depends on many factors, being next to poor people generally lowers property values etc.
This seems trivially fixable by making the tax revenue neutral (ie. every additional dollar collected by the LVT is counterbalanced by one less dollar in taxes collected elsewhere).
2. Make it revenue neutral? Who's going to do that? Some legislature somewhere? Are they actually going to do it? Or are they going to say "Yay, more money!" and find new things to spend it on?
I have zero confidence that a Georgist tax would be revenue neutral, no matter what theory says should happen, and no matter what promises are made.
It's pretty trivially easy to make any tax revenue neutral. Just return 100% of the tax revenue to the people split evenly between every person or adult in the country.
(Also, giving tax money "back" to the population is surprisingly nontrivial given political complications over which people qualify to get the rebate, political and practical complications over actually getting the money, and an expected ultimate impact - positive and negative - on the net recipients)
Not if it's paired with a citizen's dividend or other form of UBI, which is what most Georgists (myself included) advocate. The idea is that if you're occupying your equal share of land value, then at a 100% LVT rate the tax you pay should be equal to what you're getting back in dividends + public services.
LVT+UBI therefore represents a tax savings for everyone except the wealthiest of land owners.
what's an equal share? land is not fungible.
a ranch somewhere vs a shoebox in the middle of manhattan quite likely will not be considered "equal" by prospective owners, even if the dollar valuation is exactly the same.
The same things were said with market value assessment was in introduced in Ontario, Canada:
* https://en.wikipedia.org/wiki/Municipal_Property_Assessment_...
Municipalities were forced to used the market value, but could determine rates themselves. Not much happened IIRC.
Given the fact that renters (who generally have less income than homeowners) can manage to pay the annual land rent every year, homeowners will manage just fine.
"Furthermore, as we discuss in more detail in our paper, the number of net winners from this reform would far exceed the number of net losers, who, if necessary, could be exempted or compensated at little budgetary cost." https://voxeu.org/article/post-corona-balanced-budget-fiscal...
The premise behind a land value tax is to take an increasing amount of the land rent in taxation, which at the extreme end would reduce the selling price of land to $0.
The objective is both to make the land markets work better and one of distributive justice. It isn't to punish homeowners. It is to redirect the privatization of land rent and return it to the rightful recipients (those who are excluded from using a location with the public acting on their behalf).
In other words, if the Georgist solution had been in place, the price of land would have been close to $0. I can assure you this is nowhere near the case. In fact, here in Salt Lake City, the land share of real estate value is around 70%.
Of course, transitions can be challenging. The prior owners of the land got away with legalized theft and you can trace this back in time from each former landowner capturing the land rent from the next buyer. This is what Georgists aim to stop.
I think the core of it is that taxes are for the people to pay the government for services, and the value of land does not correlate to the amount of services used.
for example, a single person, dwelling on an acre of land may consume very little water, school usage, police assistance, etc. A 40 story apartment on an acre will consume a great deal more of those services. The value of the land is not taxed right now because it is understood that the improvements to the land dictate the cost of the services that the government needs remuneration for.
The government derives its mandate to tax from private property owners' demands that they provide services. Not vise versa.
Meanwhile, taxing people's labor is a way of collectivizing people's labor, which violates the right to self-ownership.
As for the 'payment of services', this is simply a narrow view of the services land provides.
"The consumption tax that best fits Smith’s criteria is on that of spatial services. A tax on spatial services also best applies the Ramsey rule of taxing inelastic items. Space does not get used up, but space generates a flow of site services over time that do get used up, and is measured as the implicit market rent. For example, suppose the rental of a house includes a back yard. The yard offers a continuous flow of service as a place to enjoy the outdoors. The user consumes that flow over time. Though the space remains, every hour of yard service is an hour of spatial service that is gone as soon as that time passes. As a flow, the spatial service is simultaneously generated and consumed. It has been well known by economists since the classical economics of Ricardo that the taxation of land rent does not affect the economic rent. Since the supply of land, within some jurisdiction, is fixed, a tax on land rent does not alter the amount of land. Since a tenant does not care who gets the rent, the tax on land rent does not change the demand, i.e. the quantity of land demanded at various amounts of rent." https://sor.senate.ca.gov/sites/sor.senate.ca.gov/files/Fina...
Whether you personally use a service or not is irrelevant. If the land provides a service and you choose not to use that service, you are still depriving others from enjoying that service.
Amusingly, levying a land value tax alongside the Wright Irrigation Districts in California is what broke up the large landholders who were monopolizing access to water. This was widely viewed as an enormous success in policy, even as the large landholders screeched that it wasn't fair that they should have to pay for the water whether they were using it or not. https://www.henrygeorge.org/caldes.htm
A private lump sum payment is simply a private tax. How we treat land ownership is ultimately an ethical question, without the state your title to land means nothing.
"THE TREATMENT of rent as public revenue is part and parcel of an organic theory of the State.
In the contractual theory, government is a kind of business which extends services to landowners. They only need pay for benefits received, which are construed in the narrowest possible terms.
In the organic theory, landowners hold title to land as a privilege. In return, they owe the State - acting on behalf of the community - certain obligations. The entire value of land is regarded as a benefit received from government. This is in keeping with the definition of land as "Public Value" offered by Alfred Marshall, the distinguished Victorian economist.
Land and its value is the joint product of at least three things:
• nature, which created it;
• government, which acquired it from other sovereigns and protects it from other powers and extends public works for the public's benefit; and
• synergism, which is the increment to value that spills over from social and economic activity in the neighborhood of each parcel of land. Value stemming from all these elements is regarded as unearned by the individual landowner. It is the product of outside forces and therefore a fit object of taxation."
https://masongaffney.org/publications/G44Philosophy_of_Publi...
You're welcome to believe otherwise of course, but trying to dispute the ethical position of land value taxation is like trying to argue against the laws of physics.
I'm not sure I'm sold on the idea that ethics are somehow extra-cultural constants, but, we can table that discussion.
I haven’t fully thought through all the incentives it brings though. However, it seems like a better solution than telling people to reverse mortgage their houses. Especially given how predatory that industry seems to be.
https://dor.wa.gov/sites/default/files/2022-02/PTDeferral_Se...
Forget politics, who thinks its a good idea to force people into economic transactions? I could see a whole new line of blackmail, akin to patent trolls, looking for people who under-priced their property or really don't want to move. It sounds terrible.
Any billionaire could kick you out of your home in a moments notice. Sure you get paid, but you probably don't want to move. How could you even say the property is yours? People get upset with government forces them to sell their property using eminent domain. This strikes me as a hundred times worse.
You are thinking more of something like Glen Weyl's Radical Markets proposals.
My taxes are assessed as land and property, with the majority of the valuation coming from the land. Is LVT a big departure from what we currently have in most US states?
That's one approach. Another is for property appraisers to determine the land value - something which is already pretty commonly done.
> How could you even say the property is yours?
It never was. All land "ownership" consists of borrowing a portion of a nation-state's sovereign territory. LVT makes that explicit, requiring land "owners" to pay what's actually due to society (rather than a tiny fraction thereof as is the status quo).
Estonia has an LVT of 0.1—2.5%.
https://www.emta.ee/en/private-client/taxes-and-payment/othe...
>>So it’s kind of just basically a shorthand for I think, being kind of selfish. valuing your property value, your view, your neighborhood character that you want more than building a neighborhood that is welcome for all people or for more people. To be able to afford and live in. So, unfortunately, nimbyism, it’s like a consequence of, I think incentives.
It is not a consequence of incentives, it is a consequence of the fact that when someone moves to a place with a particular quality of life, pays more, and then pays high taxes and high maintenance costs for decades, they themselves have paid for decades to build that quality of life. To say that oh, your neighbor can randomly decide to make a major construction project literally in your backyard and convert a wetlands housing endangered species into a several hundred unit high-density living complex, with years of construction and two orders of magnitude greater traffic on your street forever - yeah, you can expect people to object. (this literally happened to me, and in a matter of weeks we got 10x the largest crowd to show up at a planning board meeting and we gave a presentation to shut it down; not yet permanently, but...)
And rightly so - the developer is literally stealing all the value that you and your neighbors and town created over the past few decades, and then profit from the buyers also.
Now, if you are talking about areas that are already cities and have such high density that there is effectively no wildlife, then it might be different, but again the value of walkable neighborhoods vs random massive development is not to be overlooked.
So, no this proposal is preposterous, aside from being a nonstarter. Young people who might want it are great at making noisy protests and notoriously bad at bothering to vote - the one thing that matters, while older people, and especially those who own property, tend to reliably vote.
> So, no this proposal is preposterous, aside from being a nonstarter. Young people who might want it are great at making noisy protests and notoriously bad at bothering to vote - the one thing that matters, while older people, and especially those who own property, tend to reliably vote.
In other words, "let them eat cake". The "anyone under 45 doesn't deserve to afford shelter" attitude strikes me as a "fuck around and find out" situation.
* No. I didn't build it, I bought it already built, and no wetlands were damaged, it's 100' away, and thev'e got strict measures in this town. And if you think that a single family home outside the buffer zone has the same impact as 300 units in five buildings built ON the wetlands has the same impact, that's ummm, some next-level ignorance.
The strict conservation zoning measures apply to any work - just replacing a porch footing 20 inches inside a zone requires several permits. Planning, work & expense. Everyone here incurs those costs to maintain a standard of living.
>>In other words, "let them eat cake"
Not even close
The point is that destroying value that exists, and value that people have worked significant parts of their lives to create, is a very bad idea.
It is a nonstarter because the ppl that worked to create & maintain those standards vote in far greater numbers than the people complaining. Just a relevant fact. (And threating "f around and find out" is great performance but zero votes - in how many elections have you voted?)
Accusing the people who own nice properties of being motivated by selfishness and greed is not only offensive to the people whose votes you need, it is also exactly 100% wrong.
If they were actually selfish & greedy, they would not be putting in large extra work & expense to maintain standards, they'd be tearing down zoning to build as much as they could on every square foot of their lot to extract maximum value.
They are not. I watched a town where I lived vote out zoning for just such considerations. It was driven by developers, but a lot of it was "why should I have to get permission to build a barn or an in-law apt?".
The same town voted a few years later to restore even stronger zoning.
The FACT of the matter is: while unrestrained development may initially create more units, it actually sucks, badly, for everyone but the fly-by-night developers.
Which means that the article's argument is wrong. People are spending sweat and money to actively NOT get the maximum dollar value out of their homes, because building quality of life is more important.
If you want to go after the real problems, it is not zoning, any more than it's young people having Netflix subscriptions.
A good place to start is with the problem of rental units for "passive income", for running AirBnBs, and housing being purchased by hedge funds and the like. Heavily tax anything that isn't a primary residence, and you'll get a lot of units back on the market fast, and at good prices.
With that said, there are net-neutral transition strategies.
One of them is for the government to simply give all land owners money equal to the value of their land, but that might create inflation. Another might be instead to give all land owners a tax credit equal to the value of the land that can be spent on their land tax.
We can do this fast, we can do this slow. We can give aid, we can give tax credits, we can phase things in. If the LVT advocates, which includes many of the world's top economists, are right, then small transitions will quickly yield results that we can snowball into bigger transitions. The important aspect to me, is that eventually we reach a point where incentives align.
>>government to simply give all land owners money equal to the value of their land That is already in place - it's called eminent domain, and a SCOTUS case decided that it CAN be used for private development and not only for public works like roads. So, yes, govt could literally do a forced purchase of entire neighborhoods, and they would be required to pay current values, and then rebuild it at whatever density they want.
The other thing that could actually reduce complaints is to actually compensate the owners for loss of value. E.g., if single-family tracts have a value of $100 due to quality of living (wildlife, low traffic, open spaces, etc), and someone wants to put up massive apartment units in the middle, eliminating wildlife habitat, increasing traffic and consuming the open space, that will make the single-family unit's value decline to maybe $50 right next door, and $70 500 yards away, $90 1000 yds away, and $95 between the location and the major highway. Pay them the $50/$30/$10/$5 loss of their value, maybe in tranches when the project is approved, built, occupied. It can come out of some combination of the developer's or the town's budget.
That sort of appropriate compensation would go a long way towards reducing opposition.
What the tantrum-people ignore is that they want to live in the nice places, but giving them what they want is literally doing to destroy the very thing they want.
The FACT of the matter is that people who can't afford housing don't care about any of that.
Right. You DGAF about anything past the end of your own nose, and don't really want to do the work of solving problems, you just want to have your tantrums.
Saying "I want it, other people have it, so take it from them and give it to me" will not lead to a solution.
What leads to solutions is figuring out the ACTUAL problems, and then finding solutions that work in that space.
You say "can't afford housing until they are 45" - I bought my first house at 47, 40+ miles from the nearest metropolis, and I'm not whinging about it. Before that, I rented a similar distance away, and/in the city. Yes, commuting sucks, and so does city life. But I'm not all about taking stuff from other people to give it to me.
Where are you living now? What is so bad about it?
Have you ever actually read on the issue, attended a town meeting, voted in a local election, worked on a board? If you haven't, you're just another statistic of a young person who wants everything and does nothing. At least the guy in the article is actually thinking about the problem and trying to find a solution that isn't something a 5-year-old would spout.
I can also guarantee that if you got what you wanted, within a decade you would be yelling even louder to recreate what already exists - I've watched it happen.
Says the guy who LITERALLY proposes that he be compensated if dense housing is built on land that he doesn't fucking own because it messes up his morning walk.
I'm not asking for anything free. I'm asking that rightful owners of property be allowed to build on that property that they own without writing a random old man a massive check for ruining his morning walk.
Strategic advice for lurkers:
0. OP is common, and people like this are NEVER going to compromise. You have to crush them with pure electoral force. This is possible.
1. Attend a few meetings and do 1:1s with every seatholder, but don't get too bogged down. Either you have the votes or you don't, and this is an issue where many council people have huge personal financial vested interest. Figure out what they do for a living, any rental income streams they have, and how they got their seat.
2. If you have seats on your side, work with the most senior friendly councilperson to draft a plan of action. They'll know how the local law works and what there are likely votes for. Contrary to parent's cloud yelling, there is no one golden solution. The levers available and the impact those levers will have is highly contextual to your community.
3. If you don't have the seats, focus on flipping seats and crushing NIMBYs. Again, work with a friendly councilperson on a strategy and figure out if there's already organizing happening.
You likely have the votes; the key is turnout. One good strategy is to target renters, who tend to be pro-housing. Be smart and use your skills.
"Does the person who owns this property live there" is the question to ask, and there are many different ways of answering that question. You'll likely need a quiltwork approach, using public property records as your starting point. In many states you can obtain county-level voter rolls for free or for a small fee. Names and addresses.
Then canvas. Don't pitch, listen. Don't try to convince or debate; that's literally doing turnout work for t he other side. Just listen, ask a couple open ended questions, walk away, and at the sidewalk tick "yes" or "no" or "doesn't care". Find your base. Make sure they know how to vote for and make sure they vote.
Only start doing the hard work of convincing people to change their minds if you don't have the votes in your base. The good news is that you likely have the votes in your base. Look at numbers from prior elections. Turnout is low.
4. Likely don't run yourself; find a candidate who is passionate about YIMY and anti-rentier. But also embedded in the community. Churches, school groups, grew up in the area, etc. Well liked. It's possible you're a good candidate, but much more likely that you can find a better candidate who agrees with you on these key issues.
5. Regarding meeting attendance: stuff like "big groups at city council meetings" only works when you have the votes anyways, or when a councilperson doesn't really GAF, which makes it kind of silly. Especially for this issue where there are likely well-formed opinions and financial conflicts of interest. Don't waste your time if the votes aren't there. Until you have a majority of friendly councilpeople, ignore the city council boomer circus. (And it really is a total circus of retired nutjobs many weeks...) Ignore it. Quietly do the work of flipping seats. Turnout in local elections is low; getting even 20% of renters in your community to vote 100% pro-housing is likely enough to flip every at-large and a good number of precincts.
6. This will likely take multiple election cycles, but if you can find one cycle where all the seats you need line up, go all in. Spend money, spend time, don't squander a rare opportunity. Slating can be incredible effective, especially with a really good at-large candidate who can carry multiple precincts on his/her coattails.
This year is an especially good year because of massive rent increases. People are angry. Capitalize.
7. If you think this helpful, thank OP. Without the strange condescension I wouldn't have bothered typing this up.
I completely agree about increasing scrutiny on and taxation of owners for whom it is not their primary residence, e.g., "passive income" rentiers, full-time AirBNB hosts, etc.. These dramatically reduce available housing stock and increase costs (renters pay not only the full costs of the property but also the owner's profits).
That said, you are now squarely in the camp of restricting what people do with property that you do not own - exactly what you didn't like about my position.
This also brings us to the reality of why zoning was created.
It was specifically because people did NOT like the results of no zoning: anyone who owns the land can do whatever the fck they want with it.
This always creates externalities that impose costs on the neighbors, whether pollution, noise, light, safety issues, traffic, blight, or whatever. I watched a town where I lived which had eliminated zoning — with the methods you described — then found that all kinds of problems happen, and then they PUT BACK STRONGER ZONING.
Also look at another contradiction in your position. You say anyone should be able to build whatever the fck they want on their land. What that likely means is many more rental units. This will not substantially improve the lot of the renters, as it will be like the highway building paradox wherein adding more lanes brings more congestion; after a possible brief reduction for new competition, the rents won't decrease.
What you probably want is more actual purchasable housing stock at more reasonable prices, so be careful what you ask for. Just killing zoning will get more of what you don't want.
I also note that you are looking at a different kind of community than mine. I'm in a quasi-rural exurb (literally horses, cows, chickens on our street) with a town meeting and select-person govt, not a town/city council. The residents actually come to town meeting — often a multi-evening or all-day affair — and vote on almost everything, instead of electing town reps that make all the decisions. It is also a very substantial commute to the nearest city and zero public transport - for example, implementing low-income housing would force any owner to own a car, which puts them kind of out of the low-income category. So we may be talking about quite different ends of the issues.
'Forcing everyone in the suburbs to sell their home to an apartment building developer due to ruinously high taxes' is the single most politically unrealistic idea ever proposed. LVT is certainly a clever way to make sure land is used efficiently, and probably a good idea in the abstract, and perhaps we could enact it when we colonize Mars. But implementing it on a country where many of the voters are living in 'inefficient' SFHs now is not ever going to happen