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PaperclipPerfector  3d ago (text post)   1790 thread views

Small-Scale Question Sunday for August 2, 2026

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I am skeptical of how much of it sounds too good to be true, but I think that if the theory holds it would be good. Ideally, to actually test it empirically, and to avoid shocks with suddenly crashing land prices, I'd like to see something like 1-2% increased LVT (and ~1-2% decrease in every other tax simultaneously) every year on an ongoing basis, and then we'll have decades to actually see how it works, what goes wrong and what doesn't. But I think the economic theory is very sound and needs to be actually tested in real life to actually verify or debunk, and to refine and see what epicycles it might need to avoid the possible problems that a naive version would cause that a clever version might not cause.

It can only really be done at the city level. You simply don’t have high land prices outside of a few locations. It’s basically not relevant for most of the US. You don’t have land appreciation in most places. I guess you could still do it elsewhere but then you would basically be doing wealth confiscation from farmers instead of assets in general.

San Francisco could do this and replace other taxes because land prices are a significant portion of wealth.

Isn’t a big part of this discussion the actual percent value of the LVT? Like the point of it is, I gather, cheaper property tax on heavily improved property in hot markets (because improvements aren’t taxed) but higher tax rate on unimproved property in hot markets. This makes sense to me, but it’s unclear to me whether Georgists are anticipating a base-rate LVT that is higher or lower than your typical county property tax rate, and what would be done with agricultural land.

If higher, then it seems both pointlessly punitive on “cold” markets where there is unlikely to be development regardless, where if it’s lower then it may not actually impact much at all.

Also seems important how assessment works, given that currently assessment mostly just doesn’t, at least where I’m at (properties often sell for several multiples of assessed value).

Old improved land is an area that I am not sure how they could deal with it. In Miami they just blew up the Mandarin Oriental Hotel which was like 10-20 stories to build something much bigger. But the physical investment in the Old hotel is still 100-300 million. Land values have been rising. What’s the tax rate on that? Land values went up enough that it makes sense to tear it down now. But for a while maybe the property was worth 300m with 200m in capex. Raw land was worth 280m. Now the raw land is worth 400m so you blow up the old building.

Even though they have 200m in capex in the property and it’s worth 300m would they be taxed at the raw land value of 280m? Which would have basically zeroed their 200m in capex.

Yeah it would work as you say, but that’s kind of the point, as it forces an even higher amount of development to justify the tax burden, thus pushing such valuable property to ever higher heights. Again whether or not this is crippling is a matter of the tax rate rather than the tax system I think

Wouldn’t the LVT discourage development in area with expected high land appreciation? Building too early in a neighborhood means your capex gets zeroed by rising land values

Ordinary property tax that we already have would be even worse in that case, because the developer would be paying higher tax from the land appreciation plus the tax from their improvements. LVT just removed the improvement tax.

No it wouldn’t. Ordinary property taxes do total value. A LVT does land (presumably at a high rate).

In this case a property tax would do the tax at market value as built. Existing Capex can get hurt bad in a lvt.

This isn’t making any sense to me. My understanding is that normal property tax taxes market value (or at least an assessed opinion of market value) as built, which necessarily includes the value of the land plus the value of the improvements. LVT taxes just market value (or assessed opinion thereof) of the land excluding improvements. LVT could be set at such a higher rate that it eclipses the differences between the two but that’s just a question of rates, not an actual LVT vs. property value tax question. It’s just not possible that appreciation of land value would result in a greater tax increase than appreciation of land value PLUS the tax on the improvements directly.

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