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PaperclipPerfector  3d ago (text post)   1805 thread views

Small-Scale Question Sunday for August 2, 2026

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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.

You are forgetting about the tax rate. Georgists aren’t talking about the current rates. They want to capture 100% of the land value. So the appraised land value on that property would be a little lower than market value but the tax rate my guess would be 3-4x. (Florida is like 1.2-1.5% of property value. Real estate typically trades around a 5 cap, but that’s post current taxes. So a LVT is likely about 6.5%)

I initially used the Mandarin Oriental in Miami as an example of how this could occur. Since construction costs on the prior building is probably 200m. They just tore it down which means land values increased over property values. And are building much taller (from 10-15 stories to 50+).

Under the current regime they would have paid about 1.5% tax on 200m or $3m a year. Under an LVT their taxes would have been going up as land values increased. At the point of tearing it down the land value would need to be worth 200m but under LVT their tax would be 13m a year (estimate on 6.5% rate).

The tear down point wouldn’t be the painful time since without tax you’re still tearing it down. It’s the point where the raw land value climbed to 150m and your tax is like 9.75m. When you built the Hotel it was like 30m land + 170m capex for a total value of 200m. Your income on the hotel isn’t increasing because land values went up because you still have the same fixed supply of hotel rooms. But now your tax has increased a lot and is capturing most of your profits.

This is actually a fair description of land values in Miami. They have appreciated 5-15X in the last 15 years.

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