I don’t see how. Remember, if JP Morgan moved their HQ out of Manhattan, that leaves room for others to move in. Maybe some other business would profit more than JP Morgan did from having an HQ in Manhattan, and would pay the higher land–value tax that comes with it. Or maybe more people would move in instead, looking for life in a busy urban area.

Of course any random change could result in NYC dwindling away and not being able to pay it’s bond obligations any more. We don’t have to posit a radical change in how taxes are collected to imagine that, we just have to look at Detroit. The whole point of a bond is that when you purchase one you are betting that the city will still exist and still be able to pay the interest on the bond. That’s never guaranteed though.

And surely the pension holders would be fine, since those obligations will be funded from investments NYC has made whose performance is independent of its own revenue.

Are you equally eager to invest your life savings in a 2053 NYC bond under both of the following scenarios:

1. NYC funding sources will remain as they are today, or

2. NYC will transition entirely by 2038 to a land value tax?

To the extent and for the entirely rational reasons that you prefer #1, that's the negative to NYC bondholders.

> surely the pension holders would be fine, since those obligations will be funded from investments NYC has made

Assuming the pension was funded to 100% of projected obligations, this would be true. That is not the case; it's around 4/5ths funded.

I am equally indifferent to NYC bonds under either taxation scheme. From a national perspective, the bond prices of one particular city are irrelevant. It’s not even clear to me that a change in bond prices is necessarily a good way to measure whether a particular type of taxation is good or not. Even if a new tax scheme caused NYC tax revenue to drop enough to affect bond prices, surely that would be offset by increasing revenues elsewhere and thus increasing bond prices for other cities. After all, the businesses are simply moving their headquarters around. McDonald’s isn’t going to stop selling burgers in Manhattan, right?

Likewise pensions. My personal opinion is that anyone accepting a pension instead of better pay is not really doing themselves a favor; they’re taking on extra risk that the politicians won’t raid the pension fund or otherwise mismanage the city. I would rather just own the underlying securities myself, and eliminate the extra steps.

The upthread point of controversy was whether this scheme would be a negative for anybody. I think I've shown that there are people for whom it would be a negative (at a minimum, increasing the risk of a current holding with no offsetting increase in return in the success case).

If you disagree, that's OK, but there's probably no way to make further progress in resolving that disagreement beyond a back-and-forth of "nuh-uh, yuh-huh".

Oh, ok. So you’re saying that changing tax systems would change the equilibrium, and some people might call that a harm. But that’s true of any major change, even if the new equilibrium is better for most people. It’s more of a fact about the _change_ than about what you changed to.

Yes. There are actual bondholders and pension holders right now who would be harmed by the change to a land-value taxation scheme.