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Should a Land Value Tax Replace a Property Tax?

Not sure i understand your question ... what would make up the difference in revenue for Counties? Or would you shift school and other local funding over to income tax (and thus increase income taxes)?
 
I think you'd have to raise the land tax rate to remain revenue neutral.
 
BiffTannen said:
I think you'd have to raise the land tax rate to remain revenue neutral.
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yea this, and it doesn't disincentivize people making improvements to their homes for property tax reasons
 
Yeah, I guess. So what would be the point of doing that?
I could see the commie-libs wanting to ADD an LVT at the federal level in addition to income tax and local proeprty taxes in an effort to soak the rich, but I can't figure out why anyone would want to replace property taxes with an LVT.
 
TownieDeac said:
yea this, and it doesn't disincentivize people making improvements to their homes for property tax reasons
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Does anyone actually not make a home improvement for property tax reasons? That seems like a strange thing to try to address.
 
I mean you can read the article to find arguments for it:

"Land value taxation is so beloved of economists because, in theory, it does not distort decision making. Suppose a land value tax of one per cent on land value is introduced tomorrow. There can be no supply response: there would still be as much land as there is today. Neither would consumers’ preferences change, as land would be no more useful, either. So if the market for land is competitive, no transactions would be deterred or encouraged. All that changes is the price, which falls until it exactly offsets the discounted cost of paying the tax forever. The buyer assumes the burden of paying the tax, so all things considered is no better or worse off. Landlords are unable to pass the tax on to tenants, because the supply and demand of rented land is unchanged too. Furthermore, if LVTs replaced property taxes, incentives against improving homes and developing land would be removed. Yet LVT would continue to account for "undeserved" gains landowners make on the investment of others, such as the government improving nearby transport links (this feature of the tax appealed to Winston Churchill)."
 
Wakeforest22890 said:
I mean you can read the article to find arguments for it:

"Land value taxation is so beloved of economists because, in theory, it does not distort decision making. Suppose a land value tax of one per cent on land value is introduced tomorrow. There can be no supply response: there would still be as much land as there is today. Neither would consumers’ preferences change, as land would be no more useful, either. So if the market for land is competitive, no transactions would be deterred or encouraged. All that changes is the price, which falls until it exactly offsets the discounted cost of paying the tax forever. The buyer assumes the burden of paying the tax, so all things considered is no better or worse off. Landlords are unable to pass the tax on to tenants, because the supply and demand of rented land is unchanged too. Furthermore, if LVTs replaced property taxes, incentives against improving homes and developing land would be removed. Yet LVT would continue to account for "undeserved" gains landowners make on the investment of others, such as the government improving nearby transport links (this feature of the tax appealed to Winston Churchill)."
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Maybe that makes sense in the British system where the author is writing from, but again that doesn't make much sense here. We're already taxing the value of the land within the property taxes. It is a component of the taxable value.
 
If you don't do something like this universally, it could make local markets minefields.

Let's take the Philly where you live. What would happen if Philadelphia and Delaware Counties didn't do it, but Chester, Montgomery and Bucks Counties did? How will prices be impacted? How will schools be funded?

Plus anything like this would take years to phase in.

Would it cause rampant land speculation?
 
2&2 Slider To Leyritz said:
Maybe that makes sense in the British system where the author is writing from, but again that doesn't make much sense here. We're already taxing the value of the land within the property taxes. It is a component of the taxable value.
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Georgism is a very American idea; Henry George himself was an American.
 
The reason it hardly catches on anywhere is because disentangling land and structure values is legitimately very difficult and LVT is most unfriendly towards local notables like auto dealers. Tough to do stuff at local level that targets those kinds of people.
 
TuffaloDeac10 said:
The reason it hardly catches on anywhere is because disentangling land and structure values is legitimately very difficult and LVT is most unfriendly towards local notables like auto dealers. Tough to do stuff at local level that targets those kinds of people.
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Would there be different scales of LVT for personal vs. business usage for land? Would there also be different valuations for a shopping mall versus land that is zoned for warehouses? Would five acres of tract housing with twenty homes be taxed the same as five acres with two hundred condos on it?
 
RJKarl said:
Would there be different scales of LVT for personal vs. business usage for land? Would there also be different valuations for a shopping mall versus land that is zoned for warehouses? Would five acres of tract housing with twenty homes be taxed the same as five acres with two hundred condos on it?
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1. LVT is commonly advocated as a single rate.

2. Zoning does impact land values. One effect of an LVT is that the public and not developers would capture the value of upzoning.

3. That would depend on zoning and location of the two parcels, obviously.
 
You lost me on zoning not affecting land value. Is a tract zoned for 200 apartments not more valuable than a similar tract zoned for 150 apartments?
 
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