When the wish for a positive solution doesn't pan out, people turn to the spiteful negative. Turn up the pain on others, that will solve things. Never mind that many real estate tax regimes already include a component based on the land value. Presumably to LVT enthusiasts those just aren't high enough. When the right level of pain has created the perfect incentives, wasteful duplexes will vanish and high density arcologies will spring forth out of the ground!
The real root of the problem was touched upon by the OP - the past two plus decades of ridiculously low interest rates as set by the Fed in support of one talking-head crisis or another. Borrowed money can only be invested in things banksters can understand, which given their limited imaginations is chiefly single family beige spec homes.
> Never mind that many real estate tax regimes already include a component based on the land value.
It's strange, because almost all property tax systems in the US are based on ad valorem taxation.
I'm personally opposed to the concept as a matter of fundamental principle. Society can't function if people's property rights are constantly under the threat of being usurped by someone whose intended uses might generate more tax revenue for the state. People should have a right to use the property they own in the way that generates maximum value for them -- that's the point of property ownership. It's also why real-world ad valorem tax regimes usually include homestead exemptions or something similar.
Some of these LVT proposals amount to just turning the whole of society into a tax farm, and suppressing all variation and outlier use cases in the name of maximizing tax revenue. Georgism is fundamentally flawed in its precepts, and would result in a rent-seeking political state acting as a monopolist landlord.
> Georgism is fundamentally flawed in its precepts, and would result in a rent-seeking political state acting as a monopolist landlord.
Why would a democratic society tax itself needlessly? LVT is by definition limited to a certain proportion.
The entire thesis of my OP is that the last 200 years of protections of property rights are now quickly leading to a "rent-seeking state by a plurality of various oligarchies". At least the political state uniformly distributes power instead of dividing the country between land/home owners and renters.
> People should have a right to use the property they own in the way that generates maximum value for them
A LVT only encourages you to do so efficiently... you could easily move to a rural/undesirable area and have all that freedom and now much lower overall tax rate. If you aren't paying the LVT back to society you are by definition depriving someone else of the very freedom you wanted to protect. It's a fantasy to think that everyone can have the property freedoms you describe.
> Why would a democratic society tax itself needlessly? LVT is by definition limited to a certain proportion.
There is no such thing as a democratic society, only democratic states, where the state is a single institution within society, not some distillation of the whole. Political states are administered by particular fallible humans, operate under a complex of incentives that is not necessarily aligned with the interests of the surrounding society, and operate under processes that are often subject to manipulation by factions with ulterior motives.
The examples of democratic political states acting in ways that are either unrelated to or even antagonistic to the presumed interests of the societies they operate within are endless, and arguably much more prevalent than examples of markets producing outcomes that are not aligned with the interests of their particpants.
> The entire thesis of my OP is that the last 200 years of protections of property rights are now quickly leading to a "rent-seeking state by a plurality of various oligarchies".
I'd attribute that outcome to the last 200 years of erosion of property rights, largely by well-intentioned people making severe mistakes on account of failing to reconcile theoretical propositions with concrete reality.
It seems very bizarre indeed to recognize the problem of a "rent-seeking state by a plurality of various oligarchies" and to propose as a solution that the very state in question should act as everyone's de facto landlord.
This argument sounds backwards to me. Under the common ad valorem property taxes, the tax you pay goes up if you invest in increasing the value of your property, which punishes you for improving it and incentivizes leaving your land fallow. Under a land value tax, building on your land does not increase the tax you pay. That’s the point!
> Under a land value tax, building on your land does not increase the tax you pay. That’s the point!
The Georgist LVT is much more bizarre than that. Your taxes don't go up as a result of the improvements you make to your land, but rather they go up as a result of the improvements your neighbors make to their land, if such improvements lead to increased perceived market value for the entire area.
Ad valorem taxes already do this to some extent, but are tempered by assessment rules and annual caps on increases, to prevent people from losing their own property just because of external fads or the subjective feelings of others.
I guess I just don't get what benefit the LVT proposals are bringing to the table. Ad valorem taxation already exists, it's already well-developed enough to have safeguards against the worst-case outcomes, and all the Georgist LVT would do is reinvent the wheel, but this time using design principles anchored in a fundamentally incoherent ideology that brings along a lot of other dangerous implications.
I have to ask what real-world problem any of these proposals are a solution to, because from my vantage point, I don't really see one. I see devotees of an abstract doctrine going out of their way to contrive scenarios to apply their doctrine to.
I can’t speak for Georgists, but one clear problem I see worth solving in my city is empty lots downtown. And decrepit, vacant commercial property. Our city has a housing crisis. Speculators own these lots on the theory that they’ll be valuable later. Since property taxes don’t go up unless you build something, they don’t have any costs associated with this ownership, even as the need for development has grown more acute. On the other hand, significant property taxes are imposed on anyone who actually builds or significantly improves their property. You tax what you want to discourage. Our current tax system discourages development in general. LVT addresses this problem.
In short, ad valorem taxes land+improvement and LVT just taxes land. Various tweaks that have been made to ad valorem systems could also be made to LVT and don’t constitute a difference between ad valorem and LVT.
The objections you raise about how your neighbor’s development raises your taxes apply to both LVT and ad valorem tax regimes.
