[TimPC]

Can you make a strong case for transitioning just property taxes to land value taxes without transitioning other forms of taxation? I'd argue that this would result in a fairly sizeable wealth transfer from homeowners to condo developers. To me it feels like the decrease in sales and income taxes underpins the whole structure to make it feasible for the average American.

[geocon]

I think you have a mistaken view of who is actually making money in this equation. Developers do not make all that much money from building housing, which is actually a productive contribution to society. Homeowners, on the other hand, make hand over fist by simply sitting on land absorbing rents: https://pbs.twimg.com/media/EyJN_g3UUAIW0f0?format=jpg&name=...

https://www.wsj.com/articles/homes-earned-more-for-owners-th...

[TimPC]

There are a number of big developers in my province most of which have generated substantial returns to their investors. In the current environment where property values are high and increasing holding onto land is quite profitable. All developers do this. They also create proposals to develop land and that activity has some returns to it as well. I agree that building housing is productive, I just see large numbers of proposals and projects in my region to the point that many stakeholders in the community want to see less development not more. Economic theory says developers are making enough money to continue to propose developments so I don't see why we need to change taxation laws to make those developers generate even higher returns at the expense of homeowners. Property tax in my region is a sizeable expense for many homeowners and seeing it undergo a sizeable increase would be a hardship for many in the community.

[bombcar]

I think the argument is to switch it so things remain the same at first - 10% tax on 100k land is the same as 1% tax on 1m land+improvements. Coincide with an appropriate drop in income taxes and you could get something.

The key would be people agreeing in principle and then boiling the frog over a hundred years.

[TimPC]

The percentages will work out to what they need to be to generate sufficient revenue for government. I disagree fundamentally with the idea you can tweak them independently solely to be fair to certain groups.

The tax on land+improvements is fundamentally different from the tax on land when different users are considered. Large condo buildings are high value improvements so taxing only land value represents a huge savings for them. Single family houses are generally structures worth only a small fraction of the land they are on, often less than 20% so the savings are marginal. If you adjust the land value tax to generate current property tax revenues the buildings will pay less than they do currently and the homeowners will pay more.

I agree you need the whole system, perhaps implemented gradually. If you change just the property tax portion you offer homeowners increased expenses without any benefit.

[bombcar]

That varies widely in different areas - California houses are often not worth the land they’re sitting on but in the Midwest the lot may be worth only about as much as the cost to get sewage and power to it.