[303uru]

I'm a huge proponent of land tax. Here's why I think it's worth considering:

1. Economic Efficiency: Unlike income or consumption taxes, an LVT is non-distortionary. It doesn't discourage productive activities like work, saving, or investment. Land is a fixed resource; its supply doesn't change with price or tax fluctuations. Therefore, an LVT wouldn't distort market incentives, unlike other taxes. By shifting the tax burden onto land, we could potentially reduce the distortionary effects of other taxes and promote economic growth.

2. Wealth Inequality Reduction: Land ownership in the U.S. is highly concentrated. A significant portion of the country's land is owned by a small percentage of the population. An LVT would primarily affect these large landowners, redistributing wealth more evenly across society. Plus, land can't be hidden or moved offshore, making an LVT difficult to evade and an effective tool for wealth redistribution.

3. Sustainable Land Use: Many landowners hold onto vacant or underutilized land as a speculative investment, waiting for its value to increase. This leads to urban sprawl, inefficient land use, and higher housing costs. An LVT would make this kind of speculation less attractive, encouraging landowners to develop or sell their land. This could lead to more efficient land use, less urban sprawl, and potentially more affordable housing.

[AnimalMuppet]

Re non-distorionary: It distorts along a completely new axis - whether or not economic activity uses land.

It's unclear (at least to me) why Google, say, whose business activity is very non-land-intensive, should be in a favorable tax position compared to, say, farming. You say "because the farmers use more land!" And it's true; they do. But if you don't already believe that land should be the determinant of tax, that explanation doesn't give you any reason to start believing.

Re wealth inequality: No, this tax will make the wealthy hold less of their wealth in the form of land. They'll just hold it in some other form, and that other form will be taxed less or none. That might redistribute land more evenly across society, and that might be a net win, but it won't redistribute wealth very much.

[303uru]

Sure, the LVT is not designed to be a wealth tax, but rather a tax on the unimproved value of land. Its primary purpose is to encourage efficient use of land and discourage speculative land holding, which can lead to artificial scarcity and inflated property prices.

If the wealthy do decide to hold their wealth in other forms, this could potentially free up land for more productive uses or for those who might not have had access to land ownership before. This could lead to a more equitable distribution of land, which is a form of wealth in itself.

The argument that the wealthy will simply shift their wealth to other less-taxed or non-taxed forms is not necessarily a critique of the LVT, but rather a critique of the overall tax system. If other forms of wealth are undertaxed, the solution would be to reform these areas of the tax system, rather than reject the LVT.

[AnimalMuppet]

As best as I recall, every time I've heard people argue for LVT, they have wanted to replace other taxes, not supplement them. If you're going to keep the other taxes, well, land is usually already taxed in most places, and the tax is usually somewhat proportional to the value of the land. If you keep other taxes, what does an LTV do that we aren't already doing?

And your original claim was:

> Therefore, an LVT wouldn't distort market incentives, unlike other taxes. By shifting the tax burden onto land, we could potentially reduce the distortionary effects of other taxes and promote economic growth.

If you keep the other taxes, that benefit is reduced, compared to if other taxes were eliminating. (Though, on re-reading, I do see several bits of language that indicate you were thinking about not eliminating other taxes.)

[tzs]

> Its primary purpose is to encourage efficient use of land

"Efficient" by one specific measure--how much money you can make from the land. But who says that's the best measure to guide land use?

[yeos_]

Land ownership currently also encourages making the most money from the land, but an LVT makes speculative holding more expensive encouraging landowners and developers to actually utilize the land effectively in urban spaces.

What do you propose is the best measure to guide land use and what policies can be put in place to align those principles?

[virgildotcodes]

Presumably farmland would be worth much less, and be thus taxed much less, than land in San Francisco, NYC, etc where Google's offices would typically lie.

[zozbot234]

> It distorts along a completely new axis - whether or not economic activity uses land.

It actually doesn't, because if you hold unused land it's already fully rational for you to sell or lease it, so that some other activity can take place on it instead - any land that's taxed by LVT must by definition have some economic value. LVT may discourage pointless speculation in land values, but that's a benefit and far from a 'distortion'.

[tzs]

The difference is opportunity costs versus real costs.

Say I've got a few acres of forest that I want to keep as forest for carbon capture and as a place for birds to rest during the annual migration, and say there are logging, mining, and oil companies that want to log, mine, or drill on that land.

Under the present system keeping it as a forest doesn't make my position worse. It just means I don't reap the profits that I could reap by selling or leasing. Its an opportunity cost, not a real cost.

Under LVT my taxes go up because of those valuable potential uses. That's a real cost to me for keeping the forest.

[Turing_Machine]

If you're really dead set on the land never being developed, you could always donate it to the government with the proviso that it remain parkland, or donate it to a non-profit land trust.

You could even add a life tenancy for yourself to the deal -- you'd probably get out of paying any taxes at all.

[unshavedyak]

As an aside, i'd be curious how this strategy would work for long term farming. Ie 40+ year tree farms, where they own thousands (millions?) of acres which sit for 40 years, harvest, and then go back to being idle.

You could say that they can set the land to being a special tax code for tree farming or w/e. Which is something that already exists. I've been looking for a 10 acre plot (being picky on location, shape, etcetc) for a couple years now and most plots are already taxed at a lower rate due to this sort of tax code.

So my question/point is, people who are selling land (presumably as part of an investment) would be muddled in with people who are holding thousands of acres for tree farming. At least, in my experience.

What's the solution in this area? Be more restrictive on who gets the relaxed tax incentive? Perhaps not care, and assume wood prices will go up dramatically since tree farming is now much more expensive? Just curious on your thoughts

[Turing_Machine]

If I'm not mistaken, the Georgist model taxes the unimproved land value.

Your hypothetical tree farm would be taxed at the same rate as a neighboring parcel that didn't have a tree farm on it.

But you don't have to wait 40 years to realize a return on your investment if you don't want to... the sale price of the land would be going up every year, because the trees would be growing (a tree farm with 20 year old trees on it would be worth a lot more than a tree farm with 1 year old trees on it, yes?).

I myself am not fully persuaded by Georgism, but as far as I can see, there's no disincentive to things like tree farms under a Georgist model.

[dfxm12]

It's rare that demand is so high to live so close to such big tree farms, no? The value of that land is likely lower than you are picturing, and thus the tax as well. That said, implementations of LVT vary. Some have lower rates or exemptions for ag.

[unshavedyak]

Depends on the area, i imagine. In Washington, literally 100% of the lots i looked at were within a mile of hundred+ acres of tree land. A few big companies own a _ton_ of land in WA.

Also, i'm picturing the value of the land literally by what i'm trying to buy it as. Not sure how much more accurate it can get than that (at least, it's as practical as it can get. Since it's literally the sell price). These are pretty rural, fwiw. 5-10 acres, ranging from 150-250k. Heavily depends on distance to towns, interstates, etc.

Fun fact, a couple of the companies that own these lands i refer to also have a few (very limited) special gated communities. Lots that are ~20 acres, with a ton of HOA-like (CCRs) restrictions on preserving the trees. It looks a lot like living _in_ a park. Trails everywhere, etc. I was really close to getting one of those, but wetlands make a lot of purchases difficult here in WA.

[dublinben]

The value of farm land versus land in the city is several orders of magnitude different.

An average value for farmland might be something like $5000 / acre.

The average value for land in even a low cost of living city can be $2.5m / acre.

[AlexandrB]

> Sustainable Land Use

Hmmm, I don't get this point. If the incentive is to sell of develop your land what happens to "fallow" land that serves as a habitat for plants or animals? Seems like this would encourage developing land even if it's in a suboptimal location and would otherwise remain fallow, which seems less sustainable than the status quo.

[kdmccormick]

It's a good concern to bring up.

The market will help to a certain extent, because land in the countryside is not going to be assessed (and therefore taxed) nearly as highly as land in the city center. "Vacant lots" out in the countryside are great, but in the city they are a scourge.

That said, the government will need to step in to protect urban and semiurban greenspaces/greenways, because LVT would indeed encourage development of those. (Extreme example, Central Park would be assessed as worth billions of dollars and taxed many millions a year).

I think, ideally, local and state gov'ts would either buy or grant tax easements on urban green areas. If done right, LVT could then incentivize developers to either use the land for buildings, or turn it into a greenspace, avoiding the gross middle-ground of parking lots and other low-value and use.

[detourdog]

We specifically had to sell the third generation farm due to 10x increase in taxes one year.

We were under utilizing it and now its a hospital among other things.

[Obscurity4340]

So...happy ending ?

[detourdog]

I have no right to complain but most people like to maintain the status quo. I was fortunate but my kids will not know what farm like was like.

[Obscurity4340]

Farms are nothing but death and misery. You're lucky you got to be on the owner side of that. Lots of kids work their entire lives on other peoples farms, often for $0 or any upside, and end up having nothing. I think the right call was made.

[sokoloff]

The strongest incentive to develop land exists for land which has a high value owing to its location.

Land out in the countryside would not be hugely taxed under this system.

[robertlagrant]

But it'd still be taxed.

[kdmccormick]

Any good LVT in my mind would robustly employ "conservation easements", which lower/waive taxes on land that is preserved for environmental protection. These are a common tool of land trusts today, and IMO they would fit great alongside LVT.

[sokoloff]

It's taxed now as well (in almost all jurisdictions). It's just also taxed on any buildings that sit on top of it (that latter portion of which provides a disincentive to development).

[robertlagrant]

Understood, although not much of a disincentive. I think I have an aversion to just taxing what people own. When it's a building, at least that is related to services they're likely to consume; it's not just "we want a cut".

[artimaeis]

I think that's the jib though - in a lot of countries you don't really "own" the land. You and the government(s) get to just agree that it's your responsibility for a while.

LVT cleans up this incentive some by putting taxes in place in areas where the land is more valuable. I think Georgists would argue for doing that _and_ removing property taxes, specifically so you aren't taxed for the things you own.

[voisin]

Is there somewhere where land isn’t taxed? I am in Canada and all privately held land is taxed.

[dirtyhippiefree]

Land taxes in the US pay for services like fire and other emergency responders.

The discussion is about shifting more of the burden on those profiting so greatly off the land they own.

[outside1234]

Land in a suboptimal location would have a much lower value and lower taxes presumably.

This is targeted at that parking lot in San Francisco that really should be an underground parking lot with 1 story of retail at the ground floor and 4 stories of housing above it.

[bastawhiz]

I'm not sure that matters. If you're holding your land to cash out on it in the future, it's going to get developed regardless. Whether the land remains undeveloped for an extra few decades seems like it makes little difference either way. Plus, not every property will be paved over edge to edge. Suboptimal locations will probably get developed into something which doesn't turn the land into something that completely destroys its ecological value.

[pjc50]

Is there much of that in private hands? You can't develop land in a vacuum, you still have to do something profitable with it and transport the result to some market.

In the EU there are "set-aside" payments to encourage farmers to do this, and national parks and other restrictions to protect the more valuable habitats.

[robertlagrant]

Just some possibly ill-thought out comments:

> Unlike income or consumption taxes, an LVT is non-distortionary. It doesn't discourage productive activities like work, saving, or investment

It's not great for anyone who chose to invest in land based on the current rules, and then the rules change.

> Many landowners hold onto vacant or underutilized land as a speculative investment, waiting for its value to increase

This is a symptom, not a root problem.

> encouraging landowners to develop or sell their land

The land may now be worth less than it was, as it has an instant and recurring negative sign attached to it.

[TMWNN]

>> Unlike income or consumption taxes, an LVT is non-distortionary. It doesn't discourage productive activities like work, saving, or investment

>It's not great for anyone who chose to invest in land based on the current rules, and then the rules change.

Taxing land is intended to change current land investment behavior.

[jeezfrk]

a symptom of rent-seeking?

speculation... wasteful monopolization and other rotten externalities ARE the problem.

and since when are prices of land decreasing suddenly a terrible thing?

[robertlagrant]

Due to the way you phrase your comments, I'm struggling to pull any neutral points out to respond to. Maybe this one:

> and since when are prices of land decreasing suddenly a terrible thing?

Because if it decreases, then it will discourage people from selling. You think it will increase selling (and for some reason think that's good); I'm saying that this might counteract that.

[AnimalMuppet]

No, if the price of land decreases, it only discourages people from selling if they think that the price will come back some time in the future. A permanent tax change won't make people think that.

More: If the tax rate has gone up enough that the price has gone down, then if I hold it, I'm also having to pay the higher taxes year after year. That's going to encourage selling, not discourage it.

I don't like Georgism for other reasons, but I think that part will work as advertised.

[Obscurity4340]

> other reasons

What might those be? Can you expand on why you don't "like" it...

[AnimalMuppet]

1. The whole thing has a "one weird trick to fix your economy" vibe to it. On that ground alone, it feels like snake oil. (If you want to argue that "vibe" is not an intellectually rigorous criticism, I will admit the truth of that point.)

2. Why land, specifically? Why land only? It's not the 1800s anymore, and land is not either the primary asset or the primary source of wealth. Why single it out as the thing to tax? It feels like a theory stuck in the past. It needs to explain why, in 2023, land is the one thing that should be taxed. I've seen handwaving, but nothing that feels all that solid. (The one argument that has at least some merit is that no more land can be created, unlike everything else. True, but so what? There's a maximum number of bitcoin, but Georgism doesn't say to tax them. Why is land the one magic thing to get taxed?)

3. It is easy for the rich to have a smaller proportion of their assets in land than it is for the middle class. (Unless they rent - and then they wind up getting charged for the tax without having the benefits of owning the land.) LVT - if it's the only tax - means that the rich can easily wind up paying little or no tax. I'm not of the "confiscate all the rich's assets" crowd, but letting them pay almost nothing doesn't sit right with me, either.

[voisin]

Questions: 1) How does Land Tax differ from Property Tax?

2) How do you account for the difference in land value (seaside versus downtown versus suburban, views versus no views, etc)?

[xboxnolifes]

1) property taxes increase when you make property improvements.

[nwah1]

To me the key issue is the Law of Rent. It helps explain issues like Elizabeth Warren's Two-Income Trap. Why does technological progress not seem to result in overall increasing leisure and standard of living? That is why Henry George titled his book "Progress and Poverty". He was explaining that paradox using the law of rent developed by Adam Smith and David Ricardo, and proposing their solution with a megaphone.

[throw0101a]

> Why does progress not result in increasing leisure and standard of living in many important ways?

First off it did: the standard of living of anyone in a Western/industrialized society is ridiculously higher than 100 years ago. And even for less well-developed countries reduced absolute poverty and the diffusion of technology (Germ Theory, vaccines, mobile phones) has done wonders.

One interesting metric is that the cost/effort of being about to produce one hour of light has absolutely plummeted over time:

* https://www.vox.com/2015/6/9/8749751/historic-cost-of-lighti...

As Terry Pratchett observed:

> You can't make people happy by law. If you said to a bunch of average people two hundred years ago "Would you be happy in a world where medical care is widely available, houses are clean, the world's music and sights and foods can be brought into your home at small cost, travelling even 100 miles is easy, childbirth is generally not fatal to mother or child, you don't have to die of dental abcesses and you don't have to do what the squire tells you" they'd think you were talking about the New Jerusalem and say 'yes'.

* http://groups.google.com/group/alt.fan.pratchett/msg/ee9e9fb...

If you're talking about working hours:

> Now it is true that the needs of human beings may seem to be insatiable. But they fall into two classes --those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to, our fellows. Needs of the second class, those which satisfy the desire for superiority, may indeed be insatiable; for the higher the general level, the higher still are they. But this is not so true of the absolute needs-a point may soon be reached, much sooner perhaps than we are all of us aware of, when these needs are satisfied in the sense that we prefer to devote our further energies to non-economic purposes.

[…]

> For many ages to come the old Adam will be so strong in us that everybody will need to do some work if he is to be contented. We shall do more things for ourselves than is usual with the rich to-day, only too glad to have small duties and tasks and routines. But beyond this, we shall endeavour to spread the bread thin on the butter-to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!

* John Maynard Keynes, "Economic Possibilities for our Grandchildren" (1930)

* http://www.econ.yale.edu/smith/econ116a/keynes1.pdf

An essay putting forward / hypothesizing four reasons on why the above did not happen (We haven't spread the wealth around enough; People actually love working; There's no limit to human desires; Leisure is expensive):

* https://www.vox.com/2014/11/20/7254877/keynes-work-leisure

[willcipriano]

> Why does progress not result in increasing leisure and standard of living in many important ways?

It did. Domestic labor went from walking down to the creek and using a wash tub to throwing it into a washing machine, coal fired stoves were replaced with gas and electric, garments made by hand are now made an ocean away, television and the internet made homes more fun to be in and gave a break to parents minding children, beating the rugs was replaced with a vacuum, the freezer and microwave made quick meals trivial to prepare..

And then, suddenly and totally organically, with no help from a media that is owned by a few large corporations that would benefit from doubling the workforce, it was decided that working in the home is slavery, now two incomes chase the same home that costs now twice as much and the population pyramid is inverting beacuse nobody had kids.

[zbrozek]

At least here in California, I'd be worried that it could get instituted with token or no reduction in other taxes. Otherwise it seems to make a lot of sense, particularly with regard to removing disincentives for development.

[PopAlongKid]

Couldn't you remove the first five words of your reply and still make a valid point?

[AnimalMuppet]

Maybe. But maybe California's government has given more reason than other governments to think that they would treat this as an additional form of income, rather than a replacement.

[PopAlongKid]

That's an interesting claim that calls out for more evidence. Just a year ago, when CA had a large budget surplus, it refunded billions of dollars to many of its taxpaying residents in the form of inflation relief payments. That doesn't seem like the behavior of a government that only wants to collect more and more tax.

[Obscurity4340]

Is there any objective and reasonable discussion on the state of CA's finances? Its like the 8th largest economy in the world or something and all I ever hear is right-wing invective about how its a "Failing State" and bankrupt etc. Come to think of it, it seems to mirror the discussion at the Federal level where all I hear the right bitch about is "deficits and interest", which never seems to come up come tax discussion time where they are all too happy to widen said concerning gulf...

[fredgrott]

I can tell you have never talked to any family farmers.

May I suggest a more accurate tax....Capital Value Added Tax...we have extremely large warping of the tax systems and political systems by uncontrolled capitalism run amok.

Start with hedge fund tax of 3%, ah ah before you complain several large hedge funds have stated they would be in favor of such a tax as it addresses inequality without damaging hedge funds.

[dzhiurgis]

What are the downsides?