| Here's a sketch of the landlord situation with probably wrong numbers. Just to show the mechanics: Options for landlord: Slum:
investment: 5$
Monthly income 100$ Decent landlord:
Investment: 500$
Monthly income: 180$ In a world without LVT the slum option is quite attractive, especially if you don't have much capital, don't want to do effort, or expect to sell soon. If you introduce an LVT, that might turn out at about 90$.
All of a sudden, investment becomes much more profitable. And it isn't inconceivable the LVT comes out at 105$ . At that point the slumlord is forced ti either improve, or divest. The issue with LVT here, is that it will wreck the financials of anyone with significant landownership. It will be a massive transfer of wealth and incine. It will be a totally fair transfer of income. No one is working to earn the money LVT taxes. The transfer of wealth is more hairy, people have worked hard to buy their land. It was at worst a slightly immoral decision if they invested most of their wealth in land, but it is harsh to destroy that wealth. Regardless of fairness tho, it will face a loooooot of opposition from self interested parties, with a lot of power and influence. |
At a 90, the slumlord option is still much better than the decent option (100% return on investment in the former, less than 20% in the latter). An LVT would just further highly extractive land use - that might not be by existing landowners but not sure why that would matter much.