Henry George had it right: Use land value tax to fund UBI. Abracadabra, all the birds get killed with one stone: Real estate prices calm down, income inequality calms down, environmental costs are valued into use, and poverty is eliminated.
Only calling out the problem with taking someone’s property tax and increasing it 5-10x.
The goal is to make the land unattractive unless you optimize the use of the land and build high density.
That's right and it should be that way. The value of the land is a function of the success of the local community - it shouldn't be captured by a private investor while workers continue to pay income taxes to service and improve that land.
But if your only objection is that elderly/disabled landowners shouldn't be pressured to pay taxes many states already have laws like that in place, eg https://www.state.nj.us/treasury/taxation/ptr/
Or more realistically, for every grandma who owns a single-family home in manhattan, there are a million property speculators sitting on vacant lots.
> You realize millionaires would never vote for that or the politicians that support it?
So? What percentage of the electorate consists of millionaires?
I agree it sucks to force people out of their primary residence, even if they would be nicely compensated. But residential property should be more focused on the residential part than it is these days.
If it’s a $10k land value tax, they can construct an ADU on the property and not have their taxes go up. Seems like a good incentive structure to help the housing shortage.
If they sell it won't that just mean they have to pay 800k in taxes on their 1m house and then have to find another house for $1m?
Some things don't really add up.
Ideally, IMO. Simply owning land is not a meaningful contribution to society. Rent from land ownership therefore disincentivizes meaningful contributions to society by creating reliable sources of income to those that don't contribute, disproportionately among the rich (who otherwise have the best means to contribute) because they disproportionately own land from which they can extract rent.
> If they sell it won't that just mean they have to pay 800k in taxes on their 1m house and then have to find another house for $1m?
Well, if land value was taxed on sale, grandma could just sit on the property until she died and not be affected by the policy at all. This is IMO not ideal because much of land value will then be lost until the next generation comes along. LVT should instead be collected on a regular basis.
Ideally, with single-tax LVT, land value is completely consumed by taxes. Any money grandma makes on the sale will be from the value of her own development and the excess value over land value the buyer expects.
That said, I believe that there are important criticisms that can be raised against Georgism. I believe that it would have to be accompanied by strict zoning laws to avoid displacing people and exploiting natural resources. I'm less concerned about grandma's little house than I am about a tax that makes things like fracking or deforestation to extract what makes the land valuable inevitable.
Whenever I see inflation adjusted prices, I feel like I'm getting robbed.
This is trivially solved with a home equity loan. (If this proposal were broadened, non-recourse home equity loans for purposes of paying this tax would need to be expanded.)
You're selling part of the upside. That's the point of the land value tax. Someone who owns a $1mm house from a $100,000 purchase didn't do $900,000 of productive work. Those gains are rents, in the economic sense, not income. Giving those up--or downsizing, as you suggest--isn't ridiculous and is the point of the land value tax.
I would rather we deflate house prices by making it unprofitable to own a home that you don't live in, and have a massive oversupply of new homes.
I assume a land value tax would be many multiples of that for a highly desirable plot.
So granny has $900,000 in equity and is facing a $50,000/yr tax bill, so granny has 18 years to burn through it all.
So you'd likely see a $1M plot of land taxed at $100,000+ per year. It would make zero sense to sit on the empty plot or build a single family home. It would incentive someone to building a $10M building on it.
Otherwise your argument is "children and grandchildren of her everybody else pay $50,000 annual tax so she can keep living in this single family home and god forbid it were a multi-family or apartment building".
You are building equity - maybe your monthly profits are 0 early on, but your total value is increasing m/m. You can sell your rental property once your mortgage is paid off. If you back calculate your monthly profit is essentially ~ (selling price) / months owned.
Also, by all observation, the market is restricting the freedom of people to live under a roof in their own city.
If you believe that it does, you should look further into the LVT proposal.