No way that would be manipulated and abused by the politicians and the wealthy. I think at some point we have to accept that people are going to game any system (on all sides and angles). Resource competition is the base problem.
I live in an area with high property taxes, and there's an entire little industry of firms who will fight your assessment battles.
This works both ways. If the government overvalues your land at $X then you can force them to purchase it from you for that much, for example.
That doesn't work. Just because I inherited my fathers beloved VW Beetle[1] that's only worth $1000 doesn't mean that I want to part with my father's beloved VW Beetle; it means much more to me than the official valuation.
Same goes for any other property - boats, land, etc.
[1] Example only, I did not
No, but you could be forced to sell at exactly $1000.
And, of course, some people are just mean.
A person who wanted to punish their ex could, by force, buy a beloved item for more than what it is valued for, simply as retaliation against their ex.
Your wedding gifts are typically as close to worthless as possible as far as money goes, and yet someone with a grudge against you could simply take it off you for a small cost to themselves.
So, no, confiscating things from people with "fair reparations" to give them to other people is simply a no-go.
If you cannot understand the objection at this point, then you never will.
No you couldn't. You can't be forced to sell at all unless you are unwilling to pay land value tax on the offered value.
Anyway, I'm proposing a simple game theoretic construct that can address the problem of under- and overvaluation of property with regard to property taxes. I am not a president about to sign a bill into legislation. I acknowledge that this idea requires refinement before it would work in practice. I just thought people would find it interesting.
So, under your proposal, you would have to value your property at the sentimental value it has for you, which for some things is infinite.
My theoretical dad's VW would have to be "valued" at $1500, and if I think someone with a grudge against me is willing to pay that, I'd have to progressively increase the tax I pay on it just to keep it?
This is a very bad idea; in fact, I cannot think of a single state that ever experimented with such an idea. If no state, even failed states, thinks it's a good idea I don't see what refinement you could make that turns it from a bad idea into a good idea.
Property taxation being used to unfairly seize objects of mere sentimental value seems an easy to problem resolve compared to the problem of imposing property taxation at all. The real reason land value tax hasn't seen much use in any jurisdiction is that it massively advantages the common person above the wealthy landowner, so there are huge structural pressures against it.
1. Sell it to them for $10M
2. Pay land value tax on it as though it were worth $10M
What other meaning does "land value" have than what someone is willing to pay for it?
(Roughly. There has to be some hysteresis and other frictional factors inserted to make it workable. My comment was not supposed to be interpreted as a finished piece of legislation, just a rough idea of how to prevent gaming.)
Firstly, the tax will be nowhere near 10% p.a.. The order of magnitude yield on real estate is 5%. Unimproved land will be less, of course. 1% seems to be a more likely order of magnitude for LVT rate.
Secondly, would "Big Ag" really offer 20x the intrinsic value of the property? Seems unlikely.
Thirdly, who wouldn't be dancing for joy to receive 19x the value of their property in cash (after paying off a possibly hefty mortgage)?
Finally, if you are sitting on land that has economic value but you are refusing to unlock that economic value then yes, LVT is a pressure to sell. That's (part of) the point of LVT.
The rate was, of course, fictitious. Feel free to use a different estimate.
> Unimproved land will be less, of course.
Unimproved land would be more since a higher tax rate is needed to bring in the same tax revenues if you exclude the value of the improvements.
> Secondly, would "Big Ag" really offer 20x the intrinsic value of the property?
To eliminate a competitor? I don't find that implausible at all. They wouldn't pay that much for an arbitrary plot of land, but it's not the land that they're paying for here.
> Thirdly, who wouldn't be dancing for joy to receive 19x the value of their property in cash…?
Presumably the owner who didn't want to sell the land at the ordinary market value in the first place. Maybe it's been in their family for generations, or they just really despise Big Ag and don't want them to get it. Maybe cash just isn't all that valuable to them.
> …then yes, LVT is a pressure to sell. That's (part of) the point of LVT.
And that is part of what is wrong with LVT. Property owners have the right to keep their property no matter who wants it or how much they are willing to offer. Regardless of the reason.
> The rate was, of course, fictitious. Feel free to use a different estimate.
The scenario fails with a different estimate. If one chooses 1% p.a. then it's even less plausible that "Big Ag" is going to offer 200x the value of the property!
> > Unimproved land will be less, of course.
> Unimproved land would be more since a higher tax rate is needed to bring in the same tax revenues if you exclude the value of the improvements.
Interesting. I hadn't considered that. I'm hard for me to understand the implications. Anyway, you seem to be suggesting 10% of the total property value (including improvements), which is far higher than would occur in practice.
> Property owners have the right to keep their property no matter who wants it or how much they are willing to offer. Regardless of the reason.
Right, so I think your objection is to LVT at all, not this particular strategy of countering under- and overvaluation. That's a reasonable position. I don't agree, but I'm sympathetic. Your particular objection about "Big Ag" buying the family farm seems a too precise and implausible objection to the very vague system I laid out.
(Or intended to lay out. If readers misinterpreted my comment then I take full responsibility and apologise!)
In both cases if you keep your property if and only if you pay your land value tax! Of course, this method needs some work to be palatable, but that's negligible compare to making land value tax itself palatable.
Earth existed, then humans existed: why does any one human have a claim to this finite resource of planetary surface area?
LVT says no human has intrinsic ownership of land, that it is “held in common”, and so no one ought to be able to monopolize the gains of its unimproved benefit. Make as much money as you want by your productive use of the land, or pay the market value if you don’t: but don’t horde it to yourself without paying your share.
No, thanks.
How is that worse when that's how you are currently taxed? The more value you create, the more money you make, the wealthier you are, the more you get taxed. Except if you're currently a billionaire tax dodger, you can't dodge any more.
It's worse from the point of view of the LVT proponents' argument that the tax is based on the "intrinsic value" of the land and not improvements contributed by the property owner. You're correct that it's not that different from an income tax, but LVT is supposed to be more "fair" than an income tax specifically because it taxes "unearned" natural resources and not the owner's contributions. An income tax, of course, is designed to be exactly the opposite: a tax on earnings from economic activity.
This is not to say that an income tax is objectively better than LVT, just that LVT and property tax have more in common than some prefer to admit, mostly because the practical/legal definition of "improvement" (i.e. buildings and other physical changes to the property) does not encompass all economic value created by the owner.
LVT ensures that each unit of land is put to its most productive purpose.