[perl4ever]

How is this relevant except for a hypothetical person who owned land since before there was a city? That person would indeed be profiting unjustly from value created by others, but that doesn't seem like real life. What am I missing?

[neilparikh]

https://www.latimes.com/politics/la-pol-ca-california-proper...

Another example I wrote in different comment:

> Let me give you concrete scenario of where the current system breaks down. Let's say I own an apartment building on the edge of town, and the city decides to build a new transit line to the community. Rents in my apartment building will go up; let's say by $100. Renters are willing to pay an extra $100 because they value living near a transit line more than the being far from one. But why should that extra $100 go to my pockets, while the government has trouble even paying for transit system? It's not like I was the one who built transit system, it was funded by the income taxes of the people who work there, and then built by the government.

This applies to all infrastructure spending of course.

[perl4ever]

As I said in another comment, this is why there are property taxes. I don't think it's any different than income taxes. You own real estate, the society around you is a multiplier, so you owe a percentage. You make a salary, the society around you is a multiplier, so you owe a percentage.

In practice the percentage could be off, but the basic way the system works makes sense to me and I don't get the people who are sure that it's terribly wrong (whether because they are against taxes or against owning property).

[neilparikh]

If property taxes are normal (not capped like in California), some of the effect is mitigated, but the property value increase is still greater than the tax increase. Real estate investing as an industry only exists because of the existence of property gaining value.

Most infrastructure spending requires income taxes and transfers from the federal government, so clearly there is wealth transfer happening to the landlords.

[perl4ever]

Well, maybe it just isn't true that real estate is a perpetual money machine. If it was, yes, that would be a problem because it would eat the world. But people always exaggerate the permanence and universality of any bubble.

You can dismiss it as anecdotal evidence, but I live very far away from SF, in a place built in the early 90s, within city limits, and it has not increased in value faster than inflation in all these years.

[neilparikh]

Sorry, I replied too fast to see your part about raising rates. Yes, that's roughly in line with I propose. We raise the tax on the land to exactly how much rent you land derive from the land. And then you don't tax the structures on top at all, since we want to incentivize people building on top. This is the Georgist policy of a land value tax.

I don't doubt there are places where rent-seeking from land is not occurring. But we still need to address the places where it is a problem. And this will remain a problem as long as people require land to live, as long as centralization to cities keeps occurring (which we want more off, given its benefits).

My point is not that being a landlord has no risk or guarantees absurd returns. Rather, I'm saying that the returns from land do not come at all from the value that the landlord provides, so we should make sure those returns go back to the community that created them.