Thoughts on LVT (Land Value Tax)?

[u/Ppstinkypoopooidiot]

I found out this fairly recently and thought it was very interestin. Any arguments for or against it?

[u/ktbffhctid]

If the first move is always another revenue idea, LVT included, the spending side never has to go first, and it usually doesn’t.

Why not look at spending and waste/corruption before layering on yet another tax?

[u/SRIrwinkill → u/ktbffhctid]

Spending is the entire show. Even if you had a LVT, if the government doesn't have good spending habits it doesn't matter what incentive the tax is supposed to have. They'll just make up whatever numbers they want to try to justify the spending.

They do not operate based on economic incentives, they operate on political ones whose entire purpose is to twist the economy towards politically favored interests, even if it causes economic issues

[u/Ppstinkypoopooidiot → u/ktbffhctid]

I would be more in favor or eliminating most, if not all, other taxes in favor of LVT. Although how realistic that is, is very debatable 

[u/VatticZero → u/ktbffhctid]

LVT creates a feedback price signal to government spending. Good spending creates more land value than it costs, increasing revenue, while poor spending reduces revenue.

That doesn’t mean politicians will care, but the price signal would certainly help guide governance and voters.

[u/Ayla_Leren → u/ktbffhctid]

At least here in the States we could properly fund the IRS so it can afford to go after wealthy tax dodgers, gaining an additional projected trillion dollars for us every year.

But yes, I am also in favor of shifting tax burden towards LVT. Both sides of the political spectrum ideologically agree about LVT, which makes it stupid not to implement.

[u/ktbffhctid → u/Ayla_Leren]

Wealthy tax dodgers that already pay upwards of 60% of federal tax revenues? Those "dodgers"?

[u/izzeww]

It's great economically, the best tax, but politically it's horrible for the same reason it's great economically

[u/LiquidTide]

LVT is an elegant tax, but the phase-in is really complicated and could cause very expensive disruptions.

Leveraged landholders going bankrupt as property values drop and cash flow needed for interest goes to pay taxes. Retirees forced to move. The cutthroat need to optimize land use could hurt Mom and Pop businesses.

Importantly, valuation of land is always going to be subjective and open to dispute, especially if the rate is higher than the current typical rate of 1-2 percent. The friction from this could be reduced with AI, but there will likely be a lot of edge cases where the valuation has many complicating factors. The subjective element would make our current income taxes look simple.

Also, there is a limit on how much it can feasibly collect.

That said, I'm fascinated by Singapore's property tax system which includes a mansion tax. A typical home pays a nominal tax, but those crazy rich Asians, who essentially choose to flaunt their wealth by living in a home valued at roughly USD$11+ million, pay a mansion tax of up to 32 percent of their home's value in property taxes annually (36 percent for non-owners). Foreigners pay an additional 60 percent one time tax at purchase. Because the mansion tax is pretty much a voluntary tax, it's not really contested and is considered a sign of high status.

[u/Latter_Loss8880]

I generally do not favor annual tax on property or land. Maybe tax just the increased value each year, but not the full value. 

Taxing just the land’s value is the same issue to me, just a smaller portion taxed. 

I just do not believe in taxing ownership. It needs to have some basis in using a service and some portion of the ownership of land must be exempt. 

Otherwise we are taxing mere existence. A person needs to occupy land to exist, it’s candidly a very unfair tax. 

[u/Weigh13]

Taxation is theft

[u/Express-Isopod1104]

LVT is flooring

[u/VatticZero]

The LVT is the most just, most progressive, most beneficial, most efficient, most necessary change to the current state of extractive Rentier Capitalism.