Alternatively, what if the LVT only increased when the property was sold? Buy land, and you lock in the LVT at the point in time when your deal went through.
I guess people would never sell the real estate at good location, only lease it? Thus capturing the increased value of the land without ever paying the tax.
Maybe leases are subject to increased LVT, just not owning it for personal use? I suspect there’s a way to enact something like this, but this isn’t in my wheelhouse.
Rich people and businesses are more strongly motivated and able to find loopholes than government administrators are to design robust mechanisms. Modern fractional ownership and lease arrangements are complicated enough that most any scheme based on a change in contract participants is going to be arbitraged away very quickly.
Right, but I thought the point was to avoid people balking at a law that makes it easier to evict ordinary folks who’ve lived somewhere a long time and don’t want to move? Let the rich people find their loopholes—as long as people support the system and the LVT delivers most of its promise, that’s good enough.
My point is that whatever exclusions are in place to keep poor people in their newly-valuable homes will be used by rich people to avoid taxation. There is no way to avoid this without making the tax variable based on other factors than the land value (like the “owner’s” perceived financial situation).
Either the law is the same for all “pay or GTFO”, or it’s differentially enforced, so the rich and the politically-sympathetic pay less than the middle-class.
It sounds like you think there’s no practical way to introduce exceptions to make an LVT politically palatable without also breaking its ability to motivate efficient land use and generate tax revenue.
My first thought is sure, we have a lot of tax evasion now. But we also do generate lots of tax revenue, most tax revenue comes from the very rich. Why would an LVT be so much more prone to tax evasion than the current system?
Correct, I think there’s no practical or realpolitik-theoretical way to make it work. To the extent that you make exceptions in implementation, it’s no longer a land-value tax, it’s a land-value fig leaf over a “what we can get away with” tax.
to the extent that you make exceptions in implementation, it’s no longer a land-value tax
This is true the same way that to the extent you dilute your cocoa with water, it’s no longer hot chocolate, it’s water :) I don’t know of almost any “pure” real world policies or taxes. I’d need some good evidence to believe that the LVT is that fragile.
Alternatively, what if the LVT only increased when the property was sold? Buy land, and you lock in the LVT at the point in time when your deal went through.
I guess people would never sell the real estate at good location, only lease it? Thus capturing the increased value of the land without ever paying the tax.
Maybe leases are subject to increased LVT, just not owning it for personal use? I suspect there’s a way to enact something like this, but this isn’t in my wheelhouse.
Rich people and businesses are more strongly motivated and able to find loopholes than government administrators are to design robust mechanisms. Modern fractional ownership and lease arrangements are complicated enough that most any scheme based on a change in contract participants is going to be arbitraged away very quickly.
Right, but I thought the point was to avoid people balking at a law that makes it easier to evict ordinary folks who’ve lived somewhere a long time and don’t want to move? Let the rich people find their loopholes—as long as people support the system and the LVT delivers most of its promise, that’s good enough.
My point is that whatever exclusions are in place to keep poor people in their newly-valuable homes will be used by rich people to avoid taxation. There is no way to avoid this without making the tax variable based on other factors than the land value (like the “owner’s” perceived financial situation).
Either the law is the same for all “pay or GTFO”, or it’s differentially enforced, so the rich and the politically-sympathetic pay less than the middle-class.
It sounds like you think there’s no practical way to introduce exceptions to make an LVT politically palatable without also breaking its ability to motivate efficient land use and generate tax revenue.
My first thought is sure, we have a lot of tax evasion now. But we also do generate lots of tax revenue, most tax revenue comes from the very rich. Why would an LVT be so much more prone to tax evasion than the current system?
Correct, I think there’s no practical or realpolitik-theoretical way to make it work. To the extent that you make exceptions in implementation, it’s no longer a land-value tax, it’s a land-value fig leaf over a “what we can get away with” tax.
This is true the same way that to the extent you dilute your cocoa with water, it’s no longer hot chocolate, it’s water :) I don’t know of almost any “pure” real world policies or taxes. I’d need some good evidence to believe that the LVT is that fragile.