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Culture War Roundup for the week of October 10, 2022

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Land value taxes are good because they're extremely efficient and minimize deadweight loss in the tax system (intuition: Taxing something means you have less of it because you're causing a marginal decrease in the supply of that thing, whether it's labor, capital, or consumption goods. New land is not generally produced, so taxing land value minimizes the loss from that decrease in supply).

100% land value taxes are no more just than 100% taxation on anything else and are a form of paternalism at the end of the day.

Are you taxing land, or are you taxing land value? If it's the latter, you can definitely lower the production of land value. I could make my house look super-ugly, put bars over the windows and cover the lawns in trash to reduce it's valuation. If you think you can decouple this as an improvement distinct from the value of the land itself... good luck.

People will deliberately uglify their homes to avoid taxes. The UK has experience with this, back when we had a window tax. Intended to be a simple way to assess property taxes - larger houses have more windows, windows can be counted from the outside, can't cheat the number of windows you have. People responded by bricking up their windows and living in darkness instead of paying the tax.

Land value doesn't stem from what's built on it but rather what surrounds it. You might uglify your own house to reduce your taxes, but the majority of that loss in land value (and hence reduction in tax) will go to people around you. There's a big collective action problem that would need to be solved for that to take place.

The land value tax doesn't consider what your improvements look like. If you own a run down shack on an acre of land, and there's a skyscraper on an acre next to you, you're taxed the same. And this is meant to encourage you to rip down your shack and build a skyscraper, too, because the burden of paying tens of thousands a month in taxes is meant to penalize you for inefficiently using your land.

It's like how in Vancouver, BC, they brought in a vacancy tax and started taxing single story restaurants for not using the 'air' over their restaurant.

Yes, assessment has always been an issue with taxation, going back into the dark mists of history. The idea is indeed to tax the value of land which, no matter how difficult the assessment, is still more efficient than other kinds of taxes as long as you're not trying to hit exactly 100% like the Georgists.

100% land value taxes are no more than 100% taxation on anything else and are a form of paternalism at the end of the day.

Could you clarify this?

"We know better than you how you should use your land", is roughly analogous to, "We know better than you what you should put in your body".

They're not analogous at all because what you put in your body, by and large, mostly affects you only. The finite nature of land is such that poor land use punishes everyone. And LVT doesn't stop anyone from using their land in the manner they chose, you just don't get to leech off the rest of the community, who are the reason your land is worth anything in the first place.

If the community takes on any responsibility at all for healthcare (as pretty much every government on the planet does), this isn't true. What you put into your body effects the costs the community may need to pay in the future for the support of your health.

"We know better than you how you should use your land"

Georgism doesn't require the government know how anyone should use any land.

That's pretty much what the 'highest value use' terminology is about.

In my understanding, under a Georgist framework the land market determines what the value is - the government is not doing any sort of communist style seizing and redistributing.

Tax based nudging isn't really market based decision making.

It's not a question of seizing and redistributing. The government has to determine what it believes the "highest and best use" of the land would be in order to determine the value of the land itself. Once the government has made that determination and levied a punitive tax on that land, use of the land for anything other than the purported "highest and best use" is nothing but downside risk, so no-one will do it.

The government has to determine what it believes the "highest and best use" of the land would be in order to determine the value of the land itself.

No way, I would not support that in any fashion. The value of the land would still be decided by the market, the government would have no say in terms of what the land is used for. Why do you think the government has to come in and determine a specific use for the land before it can be valued on the market?

Because if you set a land tax at 100% of the "land value," then the market is going to price that in. Either you declare before-hand what you think the "value" is, or people who want to make money speculating on land will find ways to attribute value to assets/improvements and away from land, wrecking your signal.

So someone cant put a peanut selling stand on a piece of super prime real estate and pay peanut stand rates while the market appreciates. If the government is never going to check, then all of my properties are actually churches and church gift shops (churches dont pay property tax).

HBU is really just a component of appraising the land's value, if there's a value in the potential for a business in X location even if the current owner doesn't intend to realize that value directly, it still increases what the property is worth.