> The absolute ideal method of retirement is home ownership.
I'm sorry, but I have to intervene, because this is a stunningly strong claim.
> Its cheap ... for the home owner
Homes are unaffordable for most people today, to the point where renting can be more cost effective than buying. Housing consumes a lot of income which acts like a hidden tax - a drain on the economy.
> it requires the least services provided by the state until things seriously deteriorate
1) Things deteriorate when people can't afford housing. Labor and services become more expensive. 2) Not requiring the state to be involved is an ideological advantage, not a practical one.
> But she also owed quite a decade of rates to the council and wasn't sure what she would have left over
This is an anecdote and as such has limited value, but it's made even less useful by you not knowing the exact sums and percentages. It doesn't justify your sweeping claim in the slightest.
You also seem to be talking about property tax, not LVT.
> Land value as a mechanism to forcibly move on the elderly and hand their inner city character homes over to richer people who don't increase housing density is completely ass backwards.
There's not much wrong with moving for retirement. We don't like to do it, and residential property owners should to some extent (for a number of years) be exempt from land value tax, but the alternative (hoarding valuable land) is much worse.
> You get stuck in a cycle of paying taxes -> improving services -> improved services increase land value -> increased land value increases taxes.
Services don't improve just with tax, but with the influx of capital and development to the area, available jobs, etc. You're using an incomplete model to reason about it.
Some of the other benefits of LVT worth mentioning are that it 1) incentivises owners to use the land productively (density!), 2) discourages land speculation, 3) reduces urban sprawl.
> There's not much wrong with moving for retirement. We don't like to do it, and residential property owners should to some extent (for a number of years) be exempt from land value tax, but the alternative (hoarding valuable land) is much worse.
Totally agree. People need to live where jobs are! That's the main determinant of where you live!
When you're retired, you don't need to commute any more so forcing others to have to live further away and commute past you is a large burden being placed on productivity. We want to tax unproductive behavior so this is an entirely reasonable thing to me. All things being equal, retired people should be incentivized to move when they retire!
People also like stability and it's bad to make people's lives unstable without a really really good reason. Kicking elderly people out of their homes to save a few minutes commute for each other person doesn't seem like a good exchange. I'm sure you can come up with utility numbers that make it look good, but it still seems bad.
People liking something isn't how we should determine our incentive structure. People like gambling and smoking, but that doesn't mean they're good!
If something is a drain on productivity, we want less of it. In fact, this very argument is why LVT is so awesome! You can tax land without reducing its supply meaning it has zero deadweight loss! This is why economists love LVT, and why many call it the "least bad tax".
> Retired people need to live where shopping, health resources, and their offspring are.
Their offspring can't afford to live near them, and can't afford the time to visit with such long commutes.
Maybe if retired people moved, instead of staying where their job was 30 years ago, their kids could visit, and they could even afford more healthcare.
> Homes are unaffordable for most people today, to the point where renting can be more cost effective than buying.
Around 65% of housing is owner-occupied in the US. That doesn’t entirely preclude it from being “unaffordable for most
people” but it is evidence against that claim.
The U.S. Census Bureau's American Housing Survey (AHS) collects data on when owner-occupiers moved into their homes [1].
Out of 86 million owner-occupied homes, almost 80% (68.3 million) were moved into before 2019, before the affordability crisis. The number of owner-occupied houses that were moved into between 2022-2023 has declined by half from 2020-2021. Meanwhile, rentals raised by 50% in the same time frame.
This is evidence to the claim that house ownership is getting less affordable, and it's more solid than just looking at ownership percentage, because it shows a trend. However, even the ownership percentage number looks really poor in comparison with U.S.' greatest rivals, China, who have a 96% home ownership rate.
>I'm sorry, but I have to intervene, because this is a stunningly strong claim.
You might be different, but I have never met a retiree who wanted to rent. Its leisure time. Have a shed, build shit, store your caravan, host the grandkids.
>Housing consumes a lot of income which acts like a hidden tax - a drain on the economy.
Yeah that sucks, lets not increase the burden of home ownership with a larger, overt tax.
> Things deteriorate when people can't afford housing.
Yes, like the elderly being unable to afford housing with land value based taxes.
>You also seem to be talking about property tax, not LVT.
Property taxes determined by land value. It doesnt gain special properties as an acronym, and it doesnt decrease when it becomes the primary source of state or federal income.
> but the alternative (hoarding valuable land) is much worse.
Hoarding land is largely caused by valuable land grants from the government to property developers. It doesnt require some great big alternative taxation system.
>Services don't improve just with tax, but with the influx of capital and development to the area, available jobs, etc. You're using an incomplete model to reason about it.
Yes, land value increases via lots of terrible reasons to increase taxation thats very true.
>incentivises owners to use the land productively (density!)
Zoning laws are the big issue here, you are already incentivised to do this.
>discourages land speculation
Government land release and zoning reform discourage speculation.
You remain unconvinced, but I feel not for the right reasons.
For now, just consider that all of these benefits of house ownership will be unavailable to the current and future generations, because they won’t own, won’t have grandchildren (no space to raise kids), won’t have the means to retire and won’t have a shed to tinker in. Partly because of housing costs.
Right but you make the (exceedingly common in my experience) mistake of reading my dislike for Georgism as opposition to reducing housing costs.
In my own jurisdiction, housing costs are dictated up to 70% by zoning and regulation. Mostly, the failure of successive governments to release enough land to meet demand. But also, zoning preventing higher density construction.
I dont feel the need to implement taxation reform to resolve clear supply and regulation issues. If a bunch of wealthy people were sitting in 1960s character homes, on land thats zoned for much higher density and just chilling that would be one thing. But when I know they are largely just fighting rezoning efforts so their neighbors dont build higher density, and lobbying against land release to ensure their property remains exclusive and expensive, those are the behaviors I want to deal with, and the reforms on that front are very obvious.
I'm sorry, but I have to intervene, because this is a stunningly strong claim.
> Its cheap ... for the home owner
Homes are unaffordable for most people today, to the point where renting can be more cost effective than buying. Housing consumes a lot of income which acts like a hidden tax - a drain on the economy.
> it requires the least services provided by the state until things seriously deteriorate
1) Things deteriorate when people can't afford housing. Labor and services become more expensive. 2) Not requiring the state to be involved is an ideological advantage, not a practical one.
> But she also owed quite a decade of rates to the council and wasn't sure what she would have left over
This is an anecdote and as such has limited value, but it's made even less useful by you not knowing the exact sums and percentages. It doesn't justify your sweeping claim in the slightest.
You also seem to be talking about property tax, not LVT.
> Land value as a mechanism to forcibly move on the elderly and hand their inner city character homes over to richer people who don't increase housing density is completely ass backwards.
There's not much wrong with moving for retirement. We don't like to do it, and residential property owners should to some extent (for a number of years) be exempt from land value tax, but the alternative (hoarding valuable land) is much worse.
> You get stuck in a cycle of paying taxes -> improving services -> improved services increase land value -> increased land value increases taxes.
Services don't improve just with tax, but with the influx of capital and development to the area, available jobs, etc. You're using an incomplete model to reason about it.
Some of the other benefits of LVT worth mentioning are that it 1) incentivises owners to use the land productively (density!), 2) discourages land speculation, 3) reduces urban sprawl.