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Comment by seanalltogether | Hacker News Reader

LVT has to be mixed with an occupancy tax however. If I own a large field capable of supporting 10 homes right in the middle of the suburbs, I shouldn't be paying the equivalent taxes that 10 households should be paying. You have to separate out the taxes used to pay for services like trash from the taxes meant for ownership of the land. (although you could argue that large parts of the government are needed to service, protect, and legislate ownership of land)

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That's the whole point. If you want to sit on an acre of land in a dense area, you should be taxed at the highest and best value of that land.

You make a valid point about services that can be measured, but the point of a Georgist land value tax is that land is the thing that is least distortionary to tax.

I'm not fully bought in and think a transition would be very difficult, but this is one of the reasons I don't like California's Prop 13 (even if I think all the proposed reforms would leave us in a worse state).

> If you want to sit on an acre of land in a dense area, you should be taxed at the highest and best value of that land.

Isn't that what property tax already codifies?

Also aren't market forces already essentially doing this? If I sit on an acre of land in a dense area I will have developers knocking at my door and everyone has a price.

This is true (though since land is a finite resource, market forces can also encourage landowners not to sell the land to someone wanting to put it to efficient use now if the shortage of suitable development land in the area is likely to grow worse)

The theory behind LVT is that the increase in a land's value from it becoming the centre of a bustling city should accrue to funds the government spends on the city's population (which helps make land more valuable) and not the person that's sitting on the land

> If I own a large field capable of supporting 10 homes right in the middle of the suburbs, I shouldn't be paying the equivalent taxes that 10 households should be paying.

Yes you should, that's literally the entire point of an LVT. If you can generate enough productive economic activity on the land to equal/surpass that of ten households, then the tax is no problem, otherwise you should sell it so the houses can use it better.

> I shouldn't be paying the equivalent taxes that 10 households should be paying

Why not? You may not be making use of the services because of your inefficient use of land, but you do benefit from those services being available in the form of higher land value.

The idea is that once the denser buildings, the value of land from the city centers will also decrease far more rapidly.

There is a temporary transition period when shit is weird because we don't have the density/land value gradient to make farming not suffer. The best thing to do is re-plan where the density ought to be to come up with

> pre_plan(x, y) * current_value(x, y)

But I'm not sure how to do this in a way that isn't a political clusterfuck.

You most certainly should be paying the equivalent of 10 households. You deny 9 others the ability to use the land.

If you have real use for the land, paying the lvt won’t be an issue. If you can’t use it efficiently, an lvt will incentivise you to sell what you don’t use.

I disagree, if a town with 1000 households are interspersed with 100 farms, those 100 farms should not be paying an equal amount of money to the town finances as the 1000 households. It just doesn't make sense. They should certainly be paying for the right to have exclusive access to that land, but those 100 farmers do not put as much of a financial strain on the town budget as those 1000 households

They do - if there could be 5000 more households on the land occupied by the farmers, and paying that much more tax revenue to the town, that could be viewed as a financial strain.

It's unlikely that there is pent-up demand for 5000 more households in a rural farm area. Farm land just sits there. It doesn't "cost" the local town/county anything.

> It's unlikely that there is pent-up demand for 5000 more households in a rural farm area.

Okay, then all the more reason for those farms to sell off some unused acres to alleviate what little pent-up demand there is. And if there are no unused acres, then it's best to work on getting more productivity per acre to make some unused acres.

The agricultural sector is in dire need of a kick in the rear to encourage better land efficiency; LVT is one heck of a kick.

> Farm land just sits there.

Then it ain't a farm, in which case all the more reason to sell off that land and make it available to someone else.

> It doesn't "cost" the local town/county anything.

It imposes an opportunity cost on everyone who would more effectively use that land, including other farmers with better methods (and also, more broadly, anyone else wanting places to live and/or work and/or play).

Would that happen? 100 smallish farms can be a pretty big area, it would be atypical for 1000 additional residences to be mixed in (they would tend to concentrate).

Also, when I lived in a rural township there weren't any household services, the township did things like look after a couple of roads and zoning and had a little park. We had a well and septic and contracted with a private trash hauler.

> those 100 farms should not be paying an equal amount of money to the town finances as the 1000 households.

If those 100 farms take up the same land area as 1000 households, then yes they absolutely should. Hell, they'll even have an easier time doing so, since they're (ostensibly) using that land productively (and if not, they absolutely should be) and thus be more able to internalize that opportunity cost they've imposed on others.

And if they can't produce enough to internalize that opportunity cost, then all the more reason for someone else to be given the opportunity to do so.

Not to endorse a particular point of view, but I believe land value taxes are based on assessed land value. If you're saying that your hypothetical land shouldn't pay the tax the neighboring 10 homes are paying, I think the economist would say something like that clearly isn't the most productive use of the land and you should build on it, I guess. Again, not an endorsement, just my view of the argument.

Also I think "occupancy taxes" as referred to by policy people means a tax on unoccupied land/homes (e.g. pied a terre laws). But I could be mistaken.

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