I think your position is true - it does compel people to use their land for value creation (even if they don't want to). There is a positive trade-off though; a system that derives tax from rent-seeking activities can reduce the tax it levies on value-creating/facilitating activities.

"Value creation" is euphemism for making profit. It forces use of land towards the currently most profitable in an area, which is not necessarily what is socially valuable, because if you do not get enough money to pay for the hypothetical value you cannot do anything else. Eg in places where tourism is a prevailing source of making the most money it would mean that you cannot do anything else than short renting to tourists or stuff directed to tourists, which can be destructive for a lot of local businesses and communities (there are already problems and this would make it worse). Similar to other types of using land that may or may not be always attainable for every single piece of land even.

It also sounds like a mechanism to induce appropriation of property of small landowners to big corporations and interests, and not sure this furthering of concentration of land and wealth is great for local communities either. It basically gives more power to those who already have more power.

You're absolutely right about value creation being a euphemism for profit. A gaping hole in economic theory is that we don't have a general theory of value. Our so-called theories of value are in fact theories of price, and we don't actually know how to properly value things.

If you had such a theory, you would have a much easier time using taxes to reward things that society benefits from, and dissuade things that society suffers from. It's a complicated subject.

Your concern is absolutely spot-on.

> we don't actually know how to properly value things

Nor should we! That would be like a formal theory for deriving all truth. It would be awful absolutism (and wouldn't actually be real).

Well, all moral truth, anyway. Wouldn't tell you much about physics.

Oof, agree. But we're in a fascinating time in history. In order to align AI, we'll need to formalise some idea about human values.

Holding raw land doesn't become a rent-seeking activity until it is sold. The owner could be waiting to accuse capital for development, waiting to purchase an ajoining property to expand, etc. A transfer tax fits this better than a land value tax.

There'll definitely be people in that camp, with good reasons for holding on to land. Flipside, there are many other people that know the land value mechanic and take advantage.

A transfer tax is decent, but it can be sidestepped by just holding land and selling when the tax changes. Land holding is a long game.

On the other hand you could argue that someone who had a better strategy for accruing capital should instead have purchased that land. The opportunity cost of nothing happing on that land is there regardless of the users intended future development.

> Taxing something based on hypothetical value is an extremely dangerous proposition.

You don't need to impute anything. There are ways to get the valuation of land without imputing.

> Land value taxes are fundamentally opposed to freedom and liberty by implicitly forcing an owner to do use the land for use that others want based on hypothetical uses.

Not at all. The land value tax is the same no matter what you do with the land. Land value taxes don't care what you use the land for.

"You don't need to impute anything. There are ways to get the valuation of land without imputing."

It's based on market value now. The LVT schemes usually talk about deriving it from the potential usage. This specific LVT talks about differentiating between "good" and "bad" uses even further. So it does seems to be imputing value based on potential usage.

"The land value tax is the same no matter what you do with the land. Land value taxes don't care what you use the land for."

Their whole point is to force higher density usage because the tax is high.

> Their whole point is to force higher density usage because the tax is high.

Yeah, that's stupid and it's not how LVT works. The opportunity costs are the same.

> It's based on market value now. The LVT schemes usually talk about deriving it from the potential usage. This specific LVT talks about differentiating between "good" and "bad" uses even further. So it does seems to be imputing value based on potential usage.

Formulated like that, it sounds pretty silly.

Singapore has a system that works fairly well in practice and is pretty close to some form of theoretical optimal for this. Let me describe a cleaned up version:

Basically, the government owns all the land and leases it out for something like 30 years at a time to the highest bidder. No imputing, the auction sets the price. The winner pays up front in cash, so the government doesn't have to be in the business of judging creditworthiness. Leases are freely tradable while they run.

(The main way to optimise this further would be to held the auctions 10 years before the lease starts, so that the old leaseholder has enough time to make plans, and some other nice theoretical properties.)

The obscene limitation on freedom and liberty is the idea that a person can stake a claim to earth's productive power and deny everyone else the upside under threat of injury or death.

This makes no sense at all unless you believe that nobody should own property. The government is much more likely to be the one using threat of force to take your property for lack of tax payment than anyone else is for any other reason.

The value of land is only what people make of it. It's mostly hypothetical as to what you could use it for. The driving factor in land "value" is location, which is an artificial factor created by humans. That same empty lot in a city that everyone complains about needing to have a land value tax assessed against it is pennies on the dollar our in the county. Perhaps we should look at efficient use of resources and population distribution policies rather than focusing on the symptoms rather than the problem.

No, people should own property that they created or that someone else created and willingly sold to them. Land values are by definition neither of those things.

> The government is much more likely to be the one using threat of force to take your property for lack of tax payment than anyone else is for any other reason.

Physical coercion is much more common to enforce evictions than nonpayment of taxes. This is because landlords offloaded the responsibility of enforcement and security back to the peasants in exchange for having rule of law.

> The value of land is only what people make of it.

This entire paragraph is meaningless. More valuable land is more valuable because it's more productive. It is more productive not because of the actions of the owner of that land, but because of either 1) nature's productive power, or 2) the surroundings of that land (nearby amenities, infrastructure, employers, etc). In either case, the owner of the plot of land did not produce the value of the raw land. They are not entitled to upside they did not produce.

"No, people should own property that they created or that someone else created and willingly sold to them. Land values are by definition neither of those things."

Seems irrelevant as real property needs land to exist on and is just a vehicle for use. In the vast majority of the cases, the property is sold with the land and is preserved, meaning the land value is mostly inconsequential when already built on except in a small number of cases.

"Physical coercion is much more common to enforce evictions than nonpayment of taxes."

We were talking about seizing property. Renters do not own the property, the landlord does. That's an important distinction when talking about seizing property.

"2) the surroundings of that land (nearby amenities, infrastructure, employers, etc)"

Based on what people made it, just like I said.

"They are not entitled to upside they did not produce."

We live in a world with other people. Their tax dollars produced that infrastructure. They maintained their property. It's so odd to think that someone's else did your work for you, as if you never maintained property or paid taxes.

> meaning the land value is mostly inconsequential when already built on except in a small number of cases.

Literally false. In high-cost areas the land value is the bulk of the value of a property. Properties that would have a high LVT burden are almost definitionally those where the structure on top of the land is of little or negative value. Negative-value buildings are extremely common in high-cost areas today.

I struggle to believe you’re actually having a hard time understanding this point, but “the people” who produce high land values are not the people who capture those land values. That’s the point. Just because they’re both “people” doesn’t mean they’re fungible in the question of who earned what.

It seems you have already made up your mind. Good luck in life.

> description of verifiable economic facts

> "It seems you have already made up your mind. Good luck in life."

have a good one amigo

Tax policy was never about "freedom and liberty", it's about collecting revenue for government and guiding economic development.

Yet people have to vote for the policies, and it's highly unlikely they would vote for tax policies that so forcefully reduce freedom.

At the same time, it's a tax policy that would improve the housing supply in desirable locations.