|
|
|
|
|
|
by hundt
2334 days ago
|
|
|
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. |
|
|
I'm actually pretty curious now, and might be go looking for data. It's surely not precisely 1, but I bet it's not all that far off. Especially if you limit the sample to residences.
Your list of outliers is a good one (I particularly like the natural resources one), but I think they're probably mostly exceptions to the rule.
In the end though sure, property taxes aren't precisely consumption taxes. But they clearly aren't wealth taxes either. They're something in between and, I think, much closer to consumption that wealth.
I've really enjoyed thinking about the points you brought up. Thank you for doing that.