As I understand it, one of the biggest issues with a land value tax is that the existence of the tax instantly makes owning land much less desirable—reduced by the net present value of the total future taxation. This is obviously in some sense part of the plan but it causes some pretty large sudden shifts in wealth—in particular away from anyone who has a mortgage but also just from home owners in general.
Implementing it in a fair/politically acceptable way then seems to require either a far-off starting date, a very slow taper in or a very large series of handouts to compensate, and all of these are difficult for a government to implement given the time horizon of elections and a large, wealthy group who will be opposed to this, likely including inside the governing party.
This isn’t especially relevant to your variant but if you’re thinking about how to get efficient taxation then this is something to think about trying to find a solution to :)
Yep, I think a far-off starting date would be required. And maybe a modest one-time redistribution of wealth toward people for whom a large fraction of their wealth is in real-estate.
As I understand it, one of the biggest issues with a land value tax is that the existence of the tax instantly makes owning land much less desirable—reduced by the net present value of the total future taxation. This is obviously in some sense part of the plan but it causes some pretty large sudden shifts in wealth—in particular away from anyone who has a mortgage but also just from home owners in general.
Implementing it in a fair/politically acceptable way then seems to require either a far-off starting date, a very slow taper in or a very large series of handouts to compensate, and all of these are difficult for a government to implement given the time horizon of elections and a large, wealthy group who will be opposed to this, likely including inside the governing party.
This isn’t especially relevant to your variant but if you’re thinking about how to get efficient taxation then this is something to think about trying to find a solution to :)
Yep, I think a far-off starting date would be required. And maybe a modest one-time redistribution of wealth toward people for whom a large fraction of their wealth is in real-estate.