[ethanbond]

It’s getting hard to label all these straw men!

1) I don’t know what “typical argument” that Disney pays too little you’re referring to. I find it completely believable that Disney pays too much, but haven’t run the numbers to figure that out. More important than how much they pay is why they pay it, as the latter controls the nature of their incentives.

2) Of course it’s not true that “no one” thinks public services that benefit private entities should be considered tax dollars doled back out to those entities. You’re talking to at least one such person right now, and I strongly suspect there are others.

3) No, I do not believe that all improvements have positive value, which is why I said no such thing and is also why your superfund example is not that tricky. If an improvement incurs negative value and cannot be easily separated from the land (such as pollution), then it becomes, effectively for all purposes (not just taxation) a feature of the land itself. In this case that would, as is reasonable, yield a reduced land value and thus a reduced tax basis. In cases where the negative improvement is easy to remove, the reduction would be less or nonexistent — as would be reflected automatically in the market price for that plot.

4) Yes we agree that determining the exact $ value separation between land and improvements is nontrivial.