Hacker News Reader

> And not just that, but typical property taxes provide a disincentive to even improve your own property, since you'll pay more tax. They encourage blight.

A land value tax still does this, albeit indirectly. If you improve your property, the area gets marginally more desirable and land value rises.

The solution for this in UK is to remove capital gains tax for the main home of owner-occupiers, and a transaction tax (stamp duty) paid by the purchaser.

View on HN

You're correct, but it's a completely different incentive. If you hold out and everyone around you improves their property, your taxes go up almost as much anyway! It punishes speculation and rewards productive use.

So a virtuous feedback cycle is created, where everyone is incentivized to improve and develop their property to the point where they're best taking advantage of the land it sits on -- or to sell it to someone who will.

I'm familiar with stamp duty -- it has a lot of problems, mainly around the fact that it discourages people from moving. It seems significantly worse than a land tax, to me.

Reply on news.ycombinator.com