[eru]

> Because their tenant can just go down the street and rent from another landlord whose costs did not increase by $10-20K/yr.

Well, that only works iff landlords can pass down these taxes. That's exactly what we are discussing. So this is begging the question.

> In a world where LVTs increased taxes on all nearby landlords, that threat is an empty one. [...]

It doesn't matter. Even if only left-handed landlords paid LVT, rents wouldn't change depending on the handedness of your landlord. (However, left-handed landlords would likely sell to righthanded landlords, because the property is worth more to them.)

[sokoloff]

It is not begging the question to identify that a key economic factor would change under an LVT to be different from today. This change would affect the number of landlords who could profitably offer units for rent at today’s prices, which I posit would affect their willingness to supply units at that price, shifting their supply curve.

Your own observation that rents would not change based on handedness of your landlord implies that you understand this.

[eru]

The supply of land is fixed.

(You can change the supply of land on the market, by eg giving a tax subsidy for keeping land off the market. That's what the British council tax does in many counties: you get a rebate, if your property ain't occupied.

But LVT specifically does not depend on what you do with the property. It's due one way or another, thus it has no influence on the supply of land.)

[protocolture]

>The supply of land is fixed.

The supply of land is not fixed, its highly regulated.

In my country, the state governments have land release targets roughly matching population growth, they have never met these targets.

Then there's zoning. We have wild agricultural zoning practices that prevent agricultural land, even shitty agricultural land, from becoming residential.

Zoning and Regulation limit land supply.

[eru]

The land that is 'released' also already exists. It's just in government hands.

> Then there's zoning. We have wild agricultural zoning practices that prevent agricultural land, even shitty agricultural land, from becoming residential.

Yes, there are land restrictions. But that limits land use. Not the total amount of land.

[sokoloff]

In 2025, a certain supply of units is available for rent in some relevant market. In 2026 an LVT is enacted shifting taxes onto land owners (and away from income earners).

Do you expect rents at the end of 2026 to be higher or lower than now in that market?

[eru]

In your scenario, we are enacting an LVT and lowering some other tax (say, income taxes).

The LVT itself will have no impact on rents. However, lowering income taxes will increase rents, independent of LVT. (Eg if they'd just lowered income taxes, because some rich sheikh wrote the government a big check for fun.)

That's assuming all else being equal, eg number of units available for rent.

[protocolture]

>The LVT itself will have no impact on rents.

Any tax levied on landlords will impact rents. Any business where the input costs increase, has an effect on prices. If you have a heck of a lot of competition AND the businesses can eat the increase you might get away with it. But LVT is a regressive tax that doesnt care about income, so the "businesses" aka landlords in this scenario can (and probably will) have tax that reduces their income to a deficit. Theres no getting around this, you need to stop pretending that LVT is magic.

[eru]

Why do you care so much about 'regressive'?

Yes, only an income tax cares about your income. Eg a capital gains tax also doesn't care about your income.

So you are also arguing conversely that giving landowners some free gifts will lead to a drop in rents? Colour me skeptical.

Prices are set by demand and supply. For a cost to be passed on, supply must shrink.

There's nothing in the LVT that would cause supply to shrink.

[sokoloff]

"Landlords will just eat the LVT" makes as much sense as "China will pay the tariffs".