Land in Detroit is cheap already. This sounds like a way for investors to build big things and not increase their tax bill.
But what has the investor taken from the public when they build? The best possible answer, in my opinion, is the value of the land they occupy. This exclusive use of a portion of land deprived all others from using it. That is the value of the land, and there are roughly two sources of that value: proximity to all the other things that others have built, or access to natural resources. And importantly, the investor is not the source of that land value, that comes from society as a whole or from nature.
So that's why the land value is an appropriate object of taxation: it's a payment to us all for what we have been deprived of. A person who builds a massive structure of great value on a piece of land has built that structure, but they didn't build the land or the bounty that the land provides.
Shifting the tax burden from homeowners and productive businesses onto idle land holders means that those that drive the community will penalize investment less and use limited resources in more effective ways.
Efficiency helps the wealthy, but it can help those with less even more, as it matters more.
Take a look for yourself[0]. This is just outside of the downtown area. Loads of vacant lots. This is theoretically prime real estate, and would be ripe for development. The problem is, it's the fucking hood and no one wants to live there. Detroit emptied out over the decades and those empty lots _used_ to be decaying crack houses. So several years ago Detroit had them leveled to reduce blight. Now they're whining that people are just "speculating" by sitting on the empty land. If there was even the slightest hint that developing this land made sense economically, someone would have done it by now. It's just too convenient to the downtown area. And yet, no one has. Perhaps there's more at play than just people trying to sit on empty land.
0: https://www.google.com/maps/place/Detroit,+MI/@42.3370378,-8...
Build a 200 unit apartment complex in an area with a housing problem and jobs currently unfilled ... yep.
Build a gigantic house to be occupied by a single very wealthy family .. not so much.
But how to measure the difference? The simple market value of the improvements is not going to be accurate.
> In FY 2023, the Department of Education (ED) had $271.01 Billion distributed among its 10 sub-components.
Maybe they just burn that quarter trillion, but I suspect it ends up in the districts eventually.
https://peecs.net/2021/03/10/how-are-california-school-budge...
So federal is...7%?
Of course it's all academic in a way, because money is fungible.
I think a local income tax is the correct way to handle it theoretically but I don’t know any specific examples.
It seems easier to just have a land value tax, so you don’t specifically disincentivize development. Then, you can spend that tax money to provide services that promote the other stuff: beautify downtown and add public transit, that sort of thing.