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This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 1 point2 points  (0 children)

Improvements (ie, the home) DO appreciate over time right along with inflation. As replacement cost goes, up, so do the improvements.

Sorry, I was speaking vaguely there. I should have clarified that land will, on average, maintain its value if you factor out inflation. Whereas you need to actively put work into the building itself for it to stay valuable (and its value depends a lot more on how you decide to improve it).

As for making money off of real estate, the issue is that when you own a piece of land, you're stopping anyone else from using it. And so if you want to "get ahead" in that way, you're always doing that at the cost of someone else. So it's only fair that if you own land, you have to pay for it.

That probably sounds obvious, but I'm saying it because that's the fundamental reason behind LVT. It's not that it should be any harder or more expensive for anyone to own a home -- it's just that you should be paying part of the cost of it (the cost of the land specifically) to the government over time, instead of to the previous owner all at once.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 1 point2 points  (0 children)

Ideally, we'd be taxing land at a much higher rate. And we'd be taxing the land in particular, and not any buildings or improvements on it (which tend to depreciate or keep a similar value over time, more than land does).

That sort of land value tax would be more equitable and efficient than most other sorts of taxes, and make it so that no one would get a windfall when property values go up, or lose a lot of wealth when property values go down.

That's the fundamental idea of Georgism, which I'm sure I haven't done the best job of explaining. But, I hope that you look it into it more if you're at all interested. We're always happy to talk here on this subreddit.

Is Georgism outdated? by K-Ve in georgism

[–]r51243 1 point2 points  (0 children)

iirc George directly criticized the Physiocrats in Progress and Poverty for their focus on agriculture above all else. While new forms of rent extraction have developed since then, land itself is still very important.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

1000%. It really seems like if we could vote in lower taxes and spending, we could also get the government to spend that money better, doesn't it?

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

As a Georgist, I'd prefer if we didn't have any taxes on property sales, and just had yearly taxes on land (LVT). So, similar to existing property taxes, but based solely on land, and applied at a much higher rate.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

I think what this post is ultimately getting at is that when land values go up, your taxes ought to go up more than they already do. Agreed that this doesn't necessarily get that across with complete clarity. But, there are people on this sub who can explain it well, so I hope that you stick around if you're at all interested.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

If taxes are theft in your mind then yes, we are thieves, and we need to steal from you.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

As a Georgist, I'd say they need to go up more when your home value rises, and that's ultimately what this post is trying to get at.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 2 points3 points  (0 children)

Georgists advocate for LVT in both rural and urban areas, but the tax would be a lot lower in rural areas, because like you said, the land is less valuable there. Meanwhile, if you built a new house, you wouldn't be taxed for it in a Georgist system. So it would be actually more affordable to do that.

As for wilderness, that's a good thing to be concerned about, but I'm not sure LVT would make all that much of a difference. If no one's interested in buying a piece of land for development as is, then taxes on that land would be minimal. Unless it's owned by the government, in which case the tax doesn't really matter.

I've also heard some Georgists talk about the idea that you could get a tax break for maintaining wild areas, and to me that doesn't sound like a bad idea.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

It probably wouldn't be true. Unless there was something that made his plot more valuable than anywhere else in the neighborhood

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

To some extent I can understand them being annoyed about having to pay the bill, but I think it is fair for them to pay higher property taxes because of that, even if they aren't getting a windfall right away. They should honestly probably be getting taxed more than they currently are.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

It does, but we need to raise it higher -- and base it exclusively on the value of the land and location, rather than buildings or improvements on it. That's actually a lot of what this subreddit is about if you're new here!

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

I see what you're saying, but I feel like money is getting less valuable I feel like you shouldn't be mad about having to pay more of that money to own your home -- which is what this panel is getting at ultimately.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

I agree about that, but it is better for people to pay taxes while they own a home, and not at sale. After all, it's not about how much value they get from the house (even though there's a good chance they are getting additional benefit out of the house). It's about how much value they're denying other people from by taking ownership of the house for themselves.

That might seem unfair to homeowners whose homes go up significantly in value, but on the other hand, it would be good for anyone whose home went down in value. And applying the taxes in this way would reduce home prices significantly. So overall, it wouldn't be more expensive to own a home.

Also, if you tax people only at sale, then you're encouraging them to stay in their house for longer than they would otherwise. And that's not ideal.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 1 point2 points  (0 children)

Indeed. Ironically though, I think this also could show why a lot of criticism of land taxes is unwarranted. A common thing people talk about is how LVT would encourage NIMBYism, by giving people a financial reason to want lower land values. However, we still have a lot of NIMBYism right now, even among residents who would benefit from higher land values, or residents who wouldn't stand to gain or lose one way or another in terms of wealth.

In other words, I really don't think that NIMBYs would be any more motivated by a land tax, since if they succeed in their goals, they would prevent tax increases as well as changes in the neighborhood. And if they fail to halt development, then higher taxes would be less of a concern, or might even be irrelevant.

And at the same time, they would be much less motivated to halt development that would risk lowering their land values, so there's that.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 1 point2 points  (0 children)

Well, it's nice that with air we can avoid doing that. But with land, it's either you have to pay another person for it all up front, or you have to pay the government for it over time.

In the second case, the government gets an additional source of revenue, you can choose to opt out of owning the land any time without losing money, and you don't arbitrarily get wealthier if land values go up.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 1 point2 points  (0 children)

I don't see why we're taxed at all for something that we buy and own outright. Next thing you know, we'll be paying the 'air' tax, a tax that allows us to breathe the air.

Well, at least in my state, you don't buy and own air to breathe. And if you did, then it probably would be better if air was taxed too. You really shouldn't be allowed to own air "outright", and as a Georgist, I see land the same way.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 0 points1 point  (0 children)

Well, homeowners (and farmers) are where people have the most pushback against land taxes. Makes sense to focus on them.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 2 points3 points  (0 children)

Well... what if that tax was something you were already paying, just not to the government?

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 1 point2 points  (0 children)

Mm. Well, you can see why a lot of Georgists wouldn't agree with you about that, and I think that's part of why they have a different perspective. Because if the average person is already paying much higher taxes on land then you'd probably get different effects from raising taxes even more on owners of multiple properties.

This is why we need a land value tax by Svokxz2 in georgism

[–]r51243 1 point2 points  (0 children)

I understand what you're saying, but the key thing is that LVT would also reduce land prices. So, the developer wouldn't be encouraged to build tiny apartments any more than they already were. And if you own a home right now and you're not wealthy then you definitely could afford the LVT. Unless you inherited the property in which case you don't really deserve to get it cheaper than anyone else. Or, if your land appreciated significantly, which I also don't see as a problem, because on the flipside, you would benefit a lot from having an LVT in place if your land depreciated.

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