> Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me, especially since businesses already pay taxes.
And it doesn't sound appealing to me, as an individual. I don't want to feel like a peasant constantly paying a tax to the monarch/state: so at very least the first property an individual owns should be tax free (not annual land value tax / property tax). I happen to live in a country where that's the case (but it's not the reason I moved there): no yearly property tax.
> If you bought it, it should be yours. I'm deeply uncomfortable with the notion that you must always pay rent to the government on something you ostensibly own, or you get the boot.
> There are so many ways this could be addressed. Property taxes could be eliminated and other taxes raised for a revenue neutral solution.
I made this same argument in my high school civics class. As I recall, the deal is you're not paying 'rent' on the property but for the services that property receives courtesy of the state/nation (e.g. fire, police, protection from invading armies, etc).
Real estate taxes are a pretty progressive tax, I'd hate to see landowners (generally in the upper echelons of income distribution) get a tax break and have that passed down to the lower tiers with something horribly regressive like sales tax (which is the general go-to funding scheme). It'd be a lot better to eliminate all other taxes and make all government revenues come from a flat land value tax.
> Property taxes in general are a complete sham, what other item do you continually need to pay for after you own it?
City infrastructure needs constant maintnence, city services need to be constantly funded. And local schools (where most property tax in much of the USA goes) keep going even after your house is built (suffice it to say, areas with the best schools have the highest property taxes).
> And why is the amount you need to pay pegged to what other people in the neighborhood around you are doing?
The more developed your property is, the more city services you consume. And this is ignoring the speculation deterrence that property tax enforces, which is very important also.
>Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me
Eternal wealth to those lucky enough to have been born and bought in the past or born to families who bought in the past sounds plenty dystopian to me; pay up regularly or let someone else who will contribute to society step in.
> If you house goes up in value by 10% every year, you shouldn't have to pony up that much tax each year.
Why not? Obviously not 100% of the unrealized gain, but in most jurisdictions property tax (a subset of wealth tax) is a percentage of the market value (or some proxy) of the house.
And while people might think that they are not receiving government services just for owning land, they would be wrong. Owning land means nothing if you cannot defend it, or you cannot pay someone else to defend it for you.
All those courts/lawyers/police/military cost money, as well as other government services necessary to maintain social order.
If anything, the current situation of income taxes making up most of government revenue means that people who work are disproportionately paying for expenses that disproportionately benefit people who own.
> However, taxing unrealized gains means I will have to pay tax on additional $1000 that I never had.
But would you say you derived a benefit from a society that allowed you to maintain title to something peacefully? Because that mechanism is not free.
I disagree with this. This idea is based on the implicit assumption that the purpose of taxation is to change behavior.
As I alluded to earlier, I think the purpose of property tax is to help fund the local government. We need waste disposal, food inspectors, schools, police, fire department, etc. These things are, in part, funded by property taxes.
If people value my house at a greater rate, that doesn't change the amount of education local kids need, I don't get better police protection, and the amount of government services don't necessarily increase. Why am I paying more in property taxes then?
>You seem unrealistically worried about government coming in and removing people from houses they own at gunpoint
My main concern is the idea that we would use property taxes as a tool for taking people's property.
> Why do you want me to pay extra property tax because my home is split in two?
This is like asking why I want to make sure everyone gets a slice of cake before you go for a second slice.
I absolutely have nothing against you having two properties, but while homeless people exist in these societies, I absolutely think it should be expensive for you to do so. If we get to a place where homelessness doesn't exist, then I'd absolutely want you to be able to own a second property at no financial penalty.
> It sounds like hold this view that anybody who owns anything is necessarily evil.
I never said any such thing. I described adding taxes to a behavior that I think leads to a bad social outcome.
There are lots of things that I think we should tax as a means of changing behavior without saying someone who engages in those behaviors is evil.
Frankly, I don't know why you'd have this perception from my comment, but it's certainly not accurate. I own things! I don't think it's evil. There are lots of activities that I personally do that I think should be taxed at a higher rate.
I own a home, and think my property taxes should be higher. I own a business, and think my business taxes should be higher. Just because I advocate for higher taxes on things I personally do, doesn't lead me to believe I'm evil.
>My main issue with a marginal property tax is that the areas with high property values already have enough taxes generally for the things property tax covers.
The big issue in my opinion is defining property/wealth (not just land and cars, but also intellectual property, art, etc), and then the feasibility of appraising all of that, and then litigating those appraisals (for the populace as a whole).
Seems like it could get into quite a bit of the country’s resources going to refereeing the game, which at some point takes away from productivity.
> what is the government's justification for taxing the value of land I own outright?
Well, where I live (which is not in the USA) value-based land taxes go to the municipality and the school board. They pay for municipal services I benefit from: fire, police, EMTs, road maintenance, waste collection and processing, recreational facilities like a park, a library, and a swimming pool. Also schools, but that gets more complicated since some funding for education also comes from a higher level of government which collects income taxes.
Now mind, I live of 25 ha of swampland. But I get excellent value for my land-value-based land taxes.
> Besides, doesn't the US already have sales taxes? Or are they state-only?
State. City. County. Sub-divisions of same that are special sales tax districts and have extra sales tax applied. Not every instance of those entities applies a sales tax, but any could and many do. Basically everything except federal. The sales tax where I am, in a "red" state, is about 11% (we actually have a really high effective all-inclusive tax rate in this state, for how entirely shitty government services and infrastructure are)
> I'm starting to favor a tax on real estate and/or land value, since that's physically impossible to hide.
The challenge with that is the system for assigning value—everything else about it is easy. We already have something close to what you'd need in the US because real estate property taxes are common. That system's not perfect but it may still be good-enough, despite its flaws. It seems to work kinda OK. That might change if that became a more important revenue source, and for more levels of government, though.
> Landowners should be paying a land value tax equivalent to the value of their property. That way local services are well-funded.
Why is that a good way to fund local services? The costs to provide most services have nothing to do with the value of the property, so why should my neighbor pay more for them than I do just because their house is on a bigger lot?
Maybe in the 19th century, where this idea originated. Economics of business have changed too significantly to use it as a one size fits all taxation scheme.
It may have made sense when revenue was somewhat proportional to the amount of land a business occupied, but that no longer holds true in the age of skyscrapers and digital revenue generation.
An internet company in a 10-story building would love this scheme, though, because they could generate billions in revenue but be taxed at the same rate as a local neighborhood of people who owned their homes for a few decades.
Land-only taxes may have been an interesting idea in the 19th century, but they aren’t relevant to a modern economy.
> But this is a fact. We have property tax to discourage under utilization of scarce resources.
I'm going to have to ask for a citation on that. In places where land is cheap and plentiful, and there not even remotely a problem with under utilization of scarce resources, they still tend to have property taxes. Property tax rates tend to be set at a level that correlates almost perfectly with local government funding needs. That suggests that we have property taxes to fund local government.
> Imagine property tax is 0. Why would anyone ever sell? All the land would effectively be owned by hereditary feudal lords.
You'd sell for the usual reason, i.e. you'd prefer having money rather than that particular piece of land? That money would be then spent on either consumption or an investment with higher yield than land-holding.
In my home country Poland the land tax is negligible and yet the market for land exists, it's not held forever by "feudal lords".
> What would be this persons incentive to own all this land under this model?
It would lower their taxes.
> This doesn't follow from anything. Land would have very low costs only if it is land that nobody wants, just like today. And selling your land will not lead to higher taxes on your remaining land unless the land that you sold gets improved in such a way that it increases the value of your land.
Please don't bother responding if you have no idea what you're responding to.
> It doesn't seem like a good idea to base city revenue on something that is so undependable, especially something that is so often treated as a speculative investment.
Isn't property tax a pretty reliable source of income?? I thought the income tax was an unreliable source of income because people can't always be relied on to generate income... but they do tend to pay their property tax.
And it doesn't sound appealing to me, as an individual. I don't want to feel like a peasant constantly paying a tax to the monarch/state: so at very least the first property an individual owns should be tax free (not annual land value tax / property tax). I happen to live in a country where that's the case (but it's not the reason I moved there): no yearly property tax.
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