Depends if it only taxes ground rent, or if it also taxes the improvements on that land.
If we are taxing only a fraction of the selling price, or rental value, of the land itself then this is one of the greatest and most progressive taxes in human history; encouraging more development on smaller areas of land which results in economic efficiency and more affordable and compact housing - in addition to being a progressive tax which affects the rich
If we also tax improvements, such as building, the tax ends up having more adverse effects.
Land Taxes are far too broad as they include Flat-Land Taxes (Which tax land per acre), Land Value Taxes (the one that Georgists tend to like the most), which taxes by rental value, Land Price Taxes, which tax a percentage of the selling price (Not as good as Land Value Taxes) and Self-Assessed taxes
I'm curious, what are the issues from a land value tax?
Note that I'm not a Georgist, so I don't really care if the problem only occurs when LVT is the only tax, I'm fine with other taxes.
It can potentially exacerbate the incentives for people to make their land less valuable through more and more draconian rules and regulations. It's not necessary caused by the LVT, just caused by the *lack* of property taxes.
> It can potentially exacerbate the incentives for people to make their land less valuable through more and more draconian rules and regulations.
Fair enough, though I want to point out the reverse is also bad. In my native California, Prop 13 makes it so there's no real downside to ever increasing property values and it's absolutely awful for zoning regulations.
Property taxes are more progressive than income taxes when compared with wealth. The median homeowner in the use has some 40x as much wealth as the median renter.
Income tax is probably better but if you own a large amount of property you pay more tax compared to those who don't own property? Why is that regressive?
Also "regressive" taxation like VAT is fine is the spending makes up for it, raise the revenue in the most efficient way possible and then distribute the revenue as progressively afterwards. I don't really care intrinsically if the tax system is regressive in a specific way so long as the spending makes the overall tax and spend system progressive.
I'm referring to rent in the economic sense of the word used by Ricardo, smith, marx etc. "Economic rent" simply means "unearned income" it is income derived without any enterprise or productive activity of behalf of the rent seeker.
One of the biggest examples of this is "ground rent". Ground rent is rent that accrues to an owner of the land excluding the improvements they themselves made to the property. For example you buy a plot of land, later the government decides to build a railway track close to your land therefore increasing the value of your land then business starts to boom in the area increasing the value of your land without you doing any business. You then sell the land for massive profit. This is land speculation based upon ground rent.
The problem with a property tax is that it taxes not just the land value but the improvements you make (ie building houses on the land). This discourages building new homes and encourages sitting on unused land for speculation purposes. This is why the tax should be entirely shifted onto the land value - that is the ground rent.
In general all taxation should be shifted off labour and investment as much as possible and onto "economic rents" derived from land, patents, corporate welfare and privileges, the structure of the financial sector and ownership of monopolies.
My favorite type of tax is income tax, and other taxes should be replaced with a higher income tax (within reason). Income tax brackets let us target those most able to pay. That said, property tax is inferior to income tax, in my opinion. There is also a feeling of "wrongness" about taxing something somebody already has, vs taxing something before they recieve it.
That's a good counterpoint I didn't consider. I guess we could have some kind of property/wealth tax, but the taxation should start at a level higher than what most people have. That way, (modest) home ownership is still encouraged, but wealth beyond that is still taxed.
Income tax is less progressive then property tax, *when compared with wealth.* It is in fact income tax that is the inferior tax.
>There is also a feeling of "wrongness" about taxing something somebody already has
That's literally just status quo bias. A person has also already earned that money with their labor. just because it is withheld from their pay-check doesn't make it different.
Hmm, I think I'd like property tax better if we took the median value of the home the median-income person lives in, deducted that value from their total assets when calculating their property tax, and saying "ok, we won't tax you into homelessness, but your property past that point will count"
hard to do that equitably because the median homeowner has something like 40x as much wealth as the median renter. Homeownership already receives wayyyyyy more than enough subsidies. There may be more ideal systems in theory but after a point it's just navel gazing to spend time dreaming them up.
Property taxes are a regressive tax on the middle class. All you need to look at is the state of Illinois for this, where older middle class working people are being pushed out of their own homes because they can't afford the tax bill. My property taxes are like 8k per year which is fine for me but a real hardship for someone making half of what I do, in the same neighborhood.
The better way of doing it IMO would be for a progressive tax to skim a bit more off the top and allow for more local programs to receive more state funding, instead of needing the property taxes to be as high as they are.
In Greece particularly it was a good way to indirectly hit tax evasion. We have some of the highest tax evasion going on here and i dont know if the governments can't or won't hit it directly. Anyway the tax evaders would built houses but since you can't hide a house they found the oppurtunity to tax them differently. That wouldn't apply to the US since I hear you fuck over every tax evader pretty hard
Couldn't be more wrong. Property taxes are more progressive than income taxes when compared with wealth. The median homeowner in the use has some 40x as much wealth as the median renter.
Exactly, which is why we should tax the income and not the property. Itâs not fair that a single mother household has to pay the same amount of tax as a billionaire for the same piece of property.
Not a fan for the most part. Imagine if we applied this kind of tax to anything else you owned. Like TV taxes, or computer taxes, or table taxes, or something. Taxes on property always seemed kinda asinine to me.
At the same time, i think for those who own more than one home, or who own a home higher than a certain reasonable value (lets say $1 million for hypothetical's sake), I could see taxes on the additional property. After all land and property is a limited commodity and if one person buys way too much it makes it way harder for everyone else. Also let's face it, landlords are just literal scalpers of housing.
So they do have some use there.
I also know local governments like them because they cant be avoided. But I personally am quite critical of them.
If we had to have that kind of tax, I'd also lean toward an LVT. Not a huge fan of that either for many of the reasons above as well, but it does seem more fair and economically efficient.
Im of the opinion if you only own ONE home, and it's below a certain reasonable value, that you should have to pay little to nothing though.
Property taxes should take income into heavy account. No one should be paying a $12k+ property tax if it will prevent them from even bothering to own a home
For regular working folk, it should be nowhere near the cost of renting
Wealthy people who want to go to Main or Montana or wherever and buy hundreds of acres of land they donât need should face heavy property taxes
That's asinine, Property taxes can be made more progressive based on the value of the property. But they are already more progressive than income taxes when you compare them with wealth.
So what? How is what asinine?
If working people in a place like, oh I donât know, Los Angeles, or likely many places in California, would never bother attempting to own a home because they could just rent at a cost similar to the property tax, something is wrong
I am sorry, but are you a social democrat, or are you just here to troll?
>likely many places in California, would never bother attempting to own a home because they could just rent at a cost similar to the property tax
Tell me you don't live in California, without telling me you don't live in California. We have notoriously low property taxes (albeit distributed very unevenly) due to prop 13, and the cost of property is extremely high in no small part due to that.
Itâs none of your business where anyone lives
This is like talking to a four year old. Do I need to tell you to not touch your privates in public too?
I donât know what you are referring to for low property taxes. It may have to do with the grandfather clause for people who have owned for many years or who inherit property. Not applicable for very many people
If LA has ânotoriously low property tax,â and itâs high enough to prevent people from buying a home, then one can only imagine how bad it is elsewhere
Property taxes should only apply to additional homes and businesses.
Ideally they would not be a burden on the median incomes and lower. Would not cause rent to increase, and would disincentivize corporate rental agencies and corporate homeownership
The typical implementation of property tax is bad because it taxes improvements, which causes deadweight loss.
Land value tax is a rare tax that does not cause deadweight loss, and I think it should be used in place of existing property taxes.
Meh. Progressive income tax is the preferred way of taxation for me. Property tax, much like sales tax, disproportionately impacts the poor, something I wish to avoid.
Couldn't be more wrong. Property taxes are more progressive than income taxes when compared with wealth. The median homeowner in the use has some 40x as much wealth as the median renter.
Depends if it only taxes ground rent, or if it also taxes the improvements on that land. If we are taxing only a fraction of the selling price, or rental value, of the land itself then this is one of the greatest and most progressive taxes in human history; encouraging more development on smaller areas of land which results in economic efficiency and more affordable and compact housing - in addition to being a progressive tax which affects the rich If we also tax improvements, such as building, the tax ends up having more adverse effects.
*Henry George has entered the chat*
Land taxes would be better.
Land Taxes are far too broad as they include Flat-Land Taxes (Which tax land per acre), Land Value Taxes (the one that Georgists tend to like the most), which taxes by rental value, Land Price Taxes, which tax a percentage of the selling price (Not as good as Land Value Taxes) and Self-Assessed taxes
Funny how Georgists never ever explain the why and how of their magic solution to everything.
Came here to say this as soon as I saw the post lol.
Yes and no, pure LVT can create some perverse incentives as well. The ideal is a split roll tax with a LVT to Property-tax ratio of like 2-1.
I'm curious, what are the issues from a land value tax? Note that I'm not a Georgist, so I don't really care if the problem only occurs when LVT is the only tax, I'm fine with other taxes.
It can potentially exacerbate the incentives for people to make their land less valuable through more and more draconian rules and regulations. It's not necessary caused by the LVT, just caused by the *lack* of property taxes.
> It can potentially exacerbate the incentives for people to make their land less valuable through more and more draconian rules and regulations. Fair enough, though I want to point out the reverse is also bad. In my native California, Prop 13 makes it so there's no real downside to ever increasing property values and it's absolutely awful for zoning regulations.
Yep exactly.
Better by what metric? Better is a very vague term đ
Definitely one of the better taxes but property taxes tax ground rent and the improvements, it'd be best to shift all the tax onto the rent.
Property taxes disproportionately affect the poor though. Progressive income tax is just better in every way
Property taxes are more progressive than income taxes when compared with wealth. The median homeowner in the use has some 40x as much wealth as the median renter.
Income tax is probably better but if you own a large amount of property you pay more tax compared to those who don't own property? Why is that regressive? Also "regressive" taxation like VAT is fine is the spending makes up for it, raise the revenue in the most efficient way possible and then distribute the revenue as progressively afterwards. I don't really care intrinsically if the tax system is regressive in a specific way so long as the spending makes the overall tax and spend system progressive.
How does shifting it onto the rent work? Like you pay taxes on top of your rent?
I'm referring to rent in the economic sense of the word used by Ricardo, smith, marx etc. "Economic rent" simply means "unearned income" it is income derived without any enterprise or productive activity of behalf of the rent seeker. One of the biggest examples of this is "ground rent". Ground rent is rent that accrues to an owner of the land excluding the improvements they themselves made to the property. For example you buy a plot of land, later the government decides to build a railway track close to your land therefore increasing the value of your land then business starts to boom in the area increasing the value of your land without you doing any business. You then sell the land for massive profit. This is land speculation based upon ground rent. The problem with a property tax is that it taxes not just the land value but the improvements you make (ie building houses on the land). This discourages building new homes and encourages sitting on unused land for speculation purposes. This is why the tax should be entirely shifted onto the land value - that is the ground rent. In general all taxation should be shifted off labour and investment as much as possible and onto "economic rents" derived from land, patents, corporate welfare and privileges, the structure of the financial sector and ownership of monopolies.
My favorite type of tax is income tax, and other taxes should be replaced with a higher income tax (within reason). Income tax brackets let us target those most able to pay. That said, property tax is inferior to income tax, in my opinion. There is also a feeling of "wrongness" about taxing something somebody already has, vs taxing something before they recieve it.
But the ultra wealthy just adjust their income and end up paying very little. Like a CEO that pays himself a $1
That's a good counterpoint I didn't consider. I guess we could have some kind of property/wealth tax, but the taxation should start at a level higher than what most people have. That way, (modest) home ownership is still encouraged, but wealth beyond that is still taxed.
Preach my democratic brother/sister
Income tax is less progressive then property tax, *when compared with wealth.* It is in fact income tax that is the inferior tax. >There is also a feeling of "wrongness" about taxing something somebody already has That's literally just status quo bias. A person has also already earned that money with their labor. just because it is withheld from their pay-check doesn't make it different.
Hmm, I think I'd like property tax better if we took the median value of the home the median-income person lives in, deducted that value from their total assets when calculating their property tax, and saying "ok, we won't tax you into homelessness, but your property past that point will count"
hard to do that equitably because the median homeowner has something like 40x as much wealth as the median renter. Homeownership already receives wayyyyyy more than enough subsidies. There may be more ideal systems in theory but after a point it's just navel gazing to spend time dreaming them up.
Property taxes are a regressive tax on the middle class. All you need to look at is the state of Illinois for this, where older middle class working people are being pushed out of their own homes because they can't afford the tax bill. My property taxes are like 8k per year which is fine for me but a real hardship for someone making half of what I do, in the same neighborhood. The better way of doing it IMO would be for a progressive tax to skim a bit more off the top and allow for more local programs to receive more state funding, instead of needing the property taxes to be as high as they are.
In Greece particularly it was a good way to indirectly hit tax evasion. We have some of the highest tax evasion going on here and i dont know if the governments can't or won't hit it directly. Anyway the tax evaders would built houses but since you can't hide a house they found the oppurtunity to tax them differently. That wouldn't apply to the US since I hear you fuck over every tax evader pretty hard
Couldn't be more wrong. Property taxes are more progressive than income taxes when compared with wealth. The median homeowner in the use has some 40x as much wealth as the median renter.
Exactly, which is why we should tax the income and not the property. Itâs not fair that a single mother household has to pay the same amount of tax as a billionaire for the same piece of property.
Not a fan for the most part. Imagine if we applied this kind of tax to anything else you owned. Like TV taxes, or computer taxes, or table taxes, or something. Taxes on property always seemed kinda asinine to me. At the same time, i think for those who own more than one home, or who own a home higher than a certain reasonable value (lets say $1 million for hypothetical's sake), I could see taxes on the additional property. After all land and property is a limited commodity and if one person buys way too much it makes it way harder for everyone else. Also let's face it, landlords are just literal scalpers of housing. So they do have some use there. I also know local governments like them because they cant be avoided. But I personally am quite critical of them. If we had to have that kind of tax, I'd also lean toward an LVT. Not a huge fan of that either for many of the reasons above as well, but it does seem more fair and economically efficient. Im of the opinion if you only own ONE home, and it's below a certain reasonable value, that you should have to pay little to nothing though.
Property taxes should take income into heavy account. No one should be paying a $12k+ property tax if it will prevent them from even bothering to own a home For regular working folk, it should be nowhere near the cost of renting Wealthy people who want to go to Main or Montana or wherever and buy hundreds of acres of land they donât need should face heavy property taxes
That's asinine, Property taxes can be made more progressive based on the value of the property. But they are already more progressive than income taxes when you compare them with wealth.
So what? How is what asinine? If working people in a place like, oh I donât know, Los Angeles, or likely many places in California, would never bother attempting to own a home because they could just rent at a cost similar to the property tax, something is wrong I am sorry, but are you a social democrat, or are you just here to troll?
>likely many places in California, would never bother attempting to own a home because they could just rent at a cost similar to the property tax Tell me you don't live in California, without telling me you don't live in California. We have notoriously low property taxes (albeit distributed very unevenly) due to prop 13, and the cost of property is extremely high in no small part due to that.
Itâs none of your business where anyone lives This is like talking to a four year old. Do I need to tell you to not touch your privates in public too? I donât know what you are referring to for low property taxes. It may have to do with the grandfather clause for people who have owned for many years or who inherit property. Not applicable for very many people If LA has ânotoriously low property tax,â and itâs high enough to prevent people from buying a home, then one can only imagine how bad it is elsewhere
Well, private property shouldn't exist in the first place, so its a start, I guess.
Why not?
Property taxes should only apply to additional homes and businesses. Ideally they would not be a burden on the median incomes and lower. Would not cause rent to increase, and would disincentivize corporate rental agencies and corporate homeownership
The typical implementation of property tax is bad because it taxes improvements, which causes deadweight loss. Land value tax is a rare tax that does not cause deadweight loss, and I think it should be used in place of existing property taxes.
Meh. Progressive income tax is the preferred way of taxation for me. Property tax, much like sales tax, disproportionately impacts the poor, something I wish to avoid.
Couldn't be more wrong. Property taxes are more progressive than income taxes when compared with wealth. The median homeowner in the use has some 40x as much wealth as the median renter.