[hundt]

You could make that argument about any property (e.g. art). I guess your definition of "consumption" is "having something someone else doesn't"? But that isn't what most people mean, I think.

Edit: I think a tax on imputed rent could maybe be considered a consumption tax, and it would indeed make sense for it to be higher or lower depending on the location of the property. But a tax on the value of the whole property is not, because it also captures the value of the property as an asset. So that's why I think your argument is too broad.

[harryh]

Imputed rent is (roughly) proportional the the value of the property, So a tax on one is the same as a tax on the other.

[hundt]

Yes, there's a consumption component and a non-consumption component. Of course when either component goes up the total goes up. But the tax is on the total value and therefore it's not a consumption tax.

[harryh]

Let's say that imputed rent is, on average, 10% of the total value of the property.

That makes a 10% tax on imputed rent the exact same thing as a 1% tax on the value of the property.

So your point is really just an argument about the rate, not an argument about the fundamentals of what is being taxed.

Note that property taxes tend to be a fraction of sales taxes for exactly this reason.

[hundt]

Yes, I understand this point but the ratio between rents and property values varies wildly. So yes you can compute an average ratio and say it is "equivalent" to a tax on imputed rent if you adjust by that ratio, just as you could average out the number of bathrooms in each house and say it is "equivalent" to a bathroom tax. But it's not a very compelling argument!

[harryh]

ratio between rents and property values varies wildly

Does it vary all that much within a specific property tax jurisdiction?

[hundt]

Sure! Here are some things that could cause the rent/value ratio to be significantly different for a single property:

- There is no usable building on your property.

- There are plans to build a highway through your neighborhood in five years.

- Amazon has announced plans to build an office in your neighborhood two years from now.

- There are harvestable (with further development) natural resources on your property.

Many of these have impacts on hypothetical future consumption, but hopefully you agree that a tax on anticipated future consumption indefinitely into the future is not a consumption tax.

I don't have data as to precisely how strong the correlation is, but I think it's pretty clear that it is not 1, and furthermore if we really wanted to tax imputed rent directly we could presumably do so (we'd have to guess what it is but the same challenge applies to valuations of properties that haven't sold recently). So I just don't think "consumption tax" is a good way to look at a tax that clearly captures, and is designed to capture, other things.