However, the nice thing about land taxation is that hiding the ownership doesn't matter: you can see from the land registry that it's owned by Shady Cayman LLC, but you don't care who they really are so long as you have a corresponding payment to the tax authorities. If they fail to pay that becomes a lien and ultimately reposession.
> If they fail to pay that becomes a lien and ultimately reposession
And then someone close the the Government leases back said land for 99-years with little to no actual "rent" money and you're back at step one of the problem.
Isn't land already taxed? I believe it is, so you must be talking about increasing the taxes on land while scrapping the rest. Or even further, probably taxing property (a skyscraper doesn't have too big of a land footprint). A few questions I have about this:
How do you tax companies which rent their office/production space?
Isn't taxing land punishing companies planning for growth? It is not uncommon to buy/rent spaces which you don't need now but you know will be needed in the future?
A land value tax only taxes the lane value, not any improvements. Improvements can make it more valuable of course (e.g. via proximity to work, entertainment, subway, etc.) but the improvements are not assessed.
The idea is that taxing improvements means reducing the incentive to build and ultimately passing along the tax to renters.
A LVT doesn't allow pass through as the supply of land is fixed, and a tax cannot reduce the supply of land. It encourages more intense use of land in expensive areas and reduces land speculation.
You can think of it as a rent to the government for the land.
Growing companies who buy expensive core land are punished for making no use of the land, but if it's a soulless suburban office park or rural land kind of deal the costs are far lower.
Really what would happen is zoning would be looser as the incentives align and therefore a greater supply of housing and offices would follow, aiding growing companies.
This very much depends on your jurisdiction - the UK has local government taxation which is very roughly based on house size or commercial building use, and is capped so everything above a large family house ends up paying the same rate.
I'd be quite happy swapping the transaction tax and council tax for an ongoing property value tax, but I also know that wouldn't be very popular in the UK which is so dependent on house price inflation.
How do you tax companies which rent their office/production space?
You don't, you tax the rentier. Whether the property is let or not.
Isn't taxing land punishing companies planning for growth? It is not uncommon to buy/rent spaces which you don't need now but you know will be needed in the future?
The process of "land banking" by e.g. Tesco is controversial in itself, since it potentially results in land and buildings left idle or even rotting while everyone waits for the expansion. It obstructs the use of land by others who want to put it to immediate use.
How do you deal with real estate investors?
Real estate investment is usually heavily geared and pro-cyclical, so I'm quite happy to stick them with a tax bill. Especially if it might prevent another 2008 boom/bust cycle.
It's a form of social engineering, like everything else in the tax code, and requires a bit of attention to detail. How to avoid ruining family farmers while discouraging people from reserving vast areas for sporting estates, for example? What of property-rich but cashflow-poor pensioners (the most common objection)?
>How do you tax companies which rent their office/production space?
You don't, you tax whoever owns the land they rent and the landowner will charge rent commensurate with the expenses he incurs (including tax) by owning the land.
>Isn't taxing land punishing companies planning for growth? It is not uncommon to buy/rent spaces which you don't need now but you know will be needed in the future?
This is already the status quo, though, except now you 'punish' corporations and people for succeeding (making a profit on investments, earning a high income etc.). I don't know how to rigorously decide whether it's worse to punish someone for owning land or to punish them for owning things that aren't land, or to punish them for being personally useful to other people (i.e. profiting from their skills and effort rather than from property that is in their name), but intuitively it seems to me that punishing, and thereby discouraging people from being useful is the worst, while punishing people for owning things is not as bad. I'm not sure how society looks when people are adverse to owning land.
>How do you deal with real estate investors?
In what sense would you have to deal with them? Their investments presumably lose most of their value if all present taxes are converted into one (high) land tax.
