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Comment by thinkerswell | Hacker News Reader

I thought Detroit has been in decline for decades. If anything, you’d think they’d want to attract people back with _less_ taxes.

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A land value tax, in theory, discourages the mere holding of unproductive land. Encouraging the land to go into the hands of people who will actually use it could, in theory, have some regenerative value to a declining city.

Where does the land go when no one buys it or pays taxes?

Presumably to the government, who might use it -- or sell it -- later.

Under the US system, I could see this having issues if the State, Federal, or County/Municipality holds it. What if the current entity doesn't do what the other wants performed with it?

Less taxes are good, but if the taxes are there to help remove negative externalities from the market it will be a net win. I wouldn't mind paying a bit more property taxes if it meant property values weren't sky high and it discouraged land hoarding.

Land tax is good in that it still rewards developers for creating value, but not speculators or people who buy land and don't actually provide value.

This is not a problem Detroit has

40% of all land parcels in downtown are _parking lots_.

Tell me more about how nobody's hoarding land.

Have you tried to park downtown? If you want fewer lots it's gonna need structures.

This is exactly what LVT is supposed to incentivize.

>>> Have you tried to park downtown? If you want fewer lots it's gonna need structures.

>> This is exactly what LVT is supposed to incentivize.

How? If people don't think building a parking structure is going to be more profitable than keeping a parking lot, how is raising their cost going to change their mind?

I suppose some of the lots might be sold as unprofitable which might lead to less parking and higher prices, which might lead to someone building a structure. Is that the logic? It seems pretty flimsy, but I don't otherwise see how LVT would incentivize building parking structures.

If you (where "you" may be a group of businesses) need X parking spaces, and land becomes more expensive, your tradeoffs shift on how you get those spaces. You are incentivized to use less land, so you are more likely to build a parking structure rather than a sprawling parking lot.

I'm not an LVT advocate, but as I understand it, that's the theory.

It rewards people who use land in a way that produces commercial value. If you wanted to speculate on some land while operating it as a private park or a free parking lot you may be out of luck.

They're increasing taxes on land but decreasing taxes on buildings.

So most homeowners will pay less in total property taxes than they do today.

If it replaces property tax wouldn't this be lowering taxes for people who actually develop on their land?

Depends on the rates.

Kansas showed how poorly that economic theorem pans out

https://en.m.wikipedia.org/wiki/Kansas_experiment

That wikipedia article is a dumpster fire.

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