Regarding, “Land Values ARE Property Values”, I initially thought LVT advocates were doing a motte-and-bailey (LVT is better because you tax land not improvements; oh actually all improvements are Land), but I think it’s more that “land” is defined as everyone else’s improvements. So, if I build a casino in the desert, my Land is just land but everyone else’s Land around the casino includes proximity to my casino.
I think this causes different problems though, including the one you mention with garbage dumps, especially once you take merging and splitting properties into account.
If Alice and Bob build casinos next to each other in the desert, Alice’s casino benefits from being on Land near Bob’s casino and Bob’s casino benefits from being near Alice’s casino, but if Alice buys Bob’s casino, she transmutes Bob’s casino into an untaxed improvement.
If Bob owns a factory with a toxic waste pool, he can transmute the toxic waste pool into (negative-value) Land by giving it to someone else. Or he can save money on taxes by intentionally creating a toxic waste pool and giving it to someone else.
(And I don’t think it’s possible to prevent these things without turning your LVT back into a normal property tax)
The bit about merging the casinos… in the limit, you’ve got an entire town/city in the desert that is completely owned by one owner, who pays nominally zero land value tax because the property itself isn’t worth anything given there’s nothing nearby. But it seems plausible to me that having an equation for tracking a multiplicity of independent improvements on a single nominal property and taxing the whole situation accordingly… would be relatively easy compared to the other LVT calculation problems. (I have not done the math here whatsoever.)
The splitting and merging thing is a great point. I sense that @Blog Alt is continuing to missing the point about the “everyone else’s improvements” by how they frame it, but once you take splitting and merging into account...
...well, for people who actually live there, hopefully the presence of a new garbage dump would itself be more costly than the decrease in tax. And in principle, if it’s NOT more costly, then it would then be correct to build it! (Maybe it’s not a dump, maybe it’s something else.) So there’s a bringing back in of externalities.
But of course, if someone doesn’t live there… maybe this can be solved by zoning? I’m normally suspicious of zoning but “you can’t put a garbage dump next to a school in a neighborhood” seems pretty basic.
That still doesn’t solve the simple notion of a factory toxic waste pool, but once again, maybe such things should be solved by directly addressing the reason why they’re bad.
Sure but ideally it would raise them an amount that’s worth it. That’s kind of the whole idea. People aren’t infinitely incentivized by money and zero incentivized by anything else.
This is a really interesting thought (which I will be using in future) but I think it arises from the fact that the tax incidence has to terminate on someone at the very end. Like say income tax (and a wealth tax), depending on how you cut the pie, there are multiple different options for the set of cash flows and corresponding total tax amounts. Moving the assets / cash flows to a business / trust / a separate business / an offshore business / another person all throw a wrench into the works. When we try reconcile infinitely complex real world processes onto paper, there will be problems.
Regarding, “Land Values ARE Property Values”, I initially thought LVT advocates were doing a motte-and-bailey (LVT is better because you tax land not improvements; oh actually all improvements are Land), but I think it’s more that “land” is defined as everyone else’s improvements. So, if I build a casino in the desert, my Land is just land but everyone else’s Land around the casino includes proximity to my casino.
I think this causes different problems though, including the one you mention with garbage dumps, especially once you take merging and splitting properties into account.
If Alice and Bob build casinos next to each other in the desert, Alice’s casino benefits from being on Land near Bob’s casino and Bob’s casino benefits from being near Alice’s casino, but if Alice buys Bob’s casino, she transmutes Bob’s casino into an untaxed improvement.
If Bob owns a factory with a toxic waste pool, he can transmute the toxic waste pool into (negative-value) Land by giving it to someone else. Or he can save money on taxes by intentionally creating a toxic waste pool and giving it to someone else.
(And I don’t think it’s possible to prevent these things without turning your LVT back into a normal property tax)
The bit about merging the casinos… in the limit, you’ve got an entire town/city in the desert that is completely owned by one owner, who pays nominally zero land value tax because the property itself isn’t worth anything given there’s nothing nearby. But it seems plausible to me that having an equation for tracking a multiplicity of independent improvements on a single nominal property and taxing the whole situation accordingly… would be relatively easy compared to the other LVT calculation problems. (I have not done the math here whatsoever.)
The splitting and merging thing is a great point. I sense that @Blog Alt is continuing to missing the point about the “everyone else’s improvements” by how they frame it, but once you take splitting and merging into account...
...well, for people who actually live there, hopefully the presence of a new garbage dump would itself be more costly than the decrease in tax. And in principle, if it’s NOT more costly, then it would then be correct to build it! (Maybe it’s not a dump, maybe it’s something else.) So there’s a bringing back in of externalities.
But of course, if someone doesn’t live there… maybe this can be solved by zoning? I’m normally suspicious of zoning but “you can’t put a garbage dump next to a school in a neighborhood” seems pretty basic.
That still doesn’t solve the simple notion of a factory toxic waste pool, but once again, maybe such things should be solved by directly addressing the reason why they’re bad.
Such zoning would itself raise the taxes you pay on your land.
Sure but ideally it would raise them an amount that’s worth it. That’s kind of the whole idea. People aren’t infinitely incentivized by money and zero incentivized by anything else.
This is a really interesting thought (which I will be using in future) but I think it arises from the fact that the tax incidence has to terminate on someone at the very end. Like say income tax (and a wealth tax), depending on how you cut the pie, there are multiple different options for the set of cash flows and corresponding total tax amounts. Moving the assets / cash flows to a business / trust / a separate business / an offshore business / another person all throw a wrench into the works. When we try reconcile infinitely complex real world processes onto paper, there will be problems.