Comment by larsiusprime | Hacker News Reader

Comment by larsiusprime | Hacker News Reader

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I'm actually not a single-taxer, for the record.

> The author mentions Decentraland. The whole point of Decentraland, which is a crypto metaverse, was to make land prices go up. They didn't. Decentraland is boring and nobody goes there. But it does work, and it's up and running all the time. There are other crypto metaverses. Most of them never got beyond the hand-waving stage or the occasional demo of a small virtual world, but that didn't stop them from trying to sell overpriced land. Despite all the noise from the metaverse crowd, few of them got very far on implementation.

We are in agreement. I thought the crypto metaverses were stupid and said so loudly at the time and predicted they would fail for many reasons; the point about land speculation with crypto games is that charging for the right to upload UGC is literally the dumbest idea in the world.

The difference between a crypto metaverse and the real world is you can opt out of existing in any individual virtual world. This is all mentioned in the article.

> The supply of land is not limited [in Second Life].

This is mentioned in the article.

> Despite doing things the way this author likes

> You pay Linden Lab a fixed fee per square meter, regardless of what you're doing with the land

A fixed fee per square meter without regard to land use or location is literally the opposite of the system I have described.

As for evidence real-world cities, you might observe from evidence real world cities that have done the opposite of an LVT -- proposition 13 in California for instance. And you might notice states with very high property taxes (an imperfect tax to be sure, but one that definitely puts a higher holding cost on land, despite the inefficient tax on buildings).

Tell me, is housing more affordable in states with high property taxes, or in states with very low property taxes?

To answer your last question: it depends!

Cranking up property tax or land tax still sucks. Sure, maybe you can buy land now, but what if you want to live on it? Your house doesn't earn you income (i.e. what you build on your land is not "productive"), so you're stuck paying taxes on something that doesn't give you any fiscal value.

In practice, this doesn't help housing crises very much, but it _does_ increase wealth disparity! People who could previously afford a home now have to sell their property and either rent from somewhere, or buy a cheaper, presumably worse property.

The increased property taxes also get passed from landlord to renter, up to what the market will bear. This is also bad, because it significantly increases the cost of living.

Overall, there's no direct relationship between more expensive/less expensive housing and whether land/property is taxed. It's usually a challenge of efficient zoning etc.

Now, one alternative that I'm interested in would be an "surplus land tax", i.e., if you own a property for the purposes of living on it, there is minimal or no taxation. Then if you buy more property for some reason, the tax is significantly higher (why do you, as an individual, need more land?). This discourages people from owning a surplus of land, while (hopefully) avoiding the increase in wealth disparity. If you want land for the purpose of a business, the revenue from the business should ideally cover any applicable land taxes.

The tax doesn't really increase wealth disparity, as your example with no tax requires someone being able to buy the land in the first place. If the land is still very desirable, the person that owns a very well located plot is extremely wealthy by investing when it was cheap, or having a lot of money. The wealth disparity is still there, just with a different winner.

Your surplus idea has significant problems: First, good luck if you aren't owning a single family home, as then you aren't tax free. Second, that you can still massively speculate by buying the highest valued land you can, in the largest plot possible, and then have the best leverage. So prices of land don't go down, but way up! And that's while the land is also less useful to neighbors, as a large plot with a house in it is far worse than, say, a corner store, a park, or an office. So you are rewarding the land use that is the lowest value to neighbors, while theoretically calling that affordability.

If you want more desirable land to be available to more people, the only sensible alternative is to make more people be able to use it at a time: Anything else is just picking a different favorite way to decide who gets to use it/buy it. It also makes the land more useful in general: The bay area would be much lower balue than it is now if it was occupied by a sole proprietor who is the only one traversing its current streets and buildings.

> The tax doesn't really increase wealth disparity[...]

Counterpoint:

Where I live the land values have, at minimum, 4x'ed in the last couple of decades. This used to be a sleepy little retirement town, where retirees lived far away from the city, where nobody was interested in living except for those retirees -- hence why it was so inexpensive.

Those retirees are now being driven out en masse because they can no longer afford their property taxes.

These people retired on salaries and retirement packages (if they were lucky) from twenty and thirty years ago. They do not have an income beyond that. They are not millionaires, or anywhere close. Often, they're retired blue collar workers, barely getting by. They cannot actually purchase an equivalent property if they sell their own even at the higher rates--

--because they can no longer afford the taxes on it, and all the other properties around them have gone up just as much in value. They were driven up by the vastly wealthier tech types. These people have nowhere reasonable to move.

Bear in mind, we're not necessarily talking about multi-acre properties here, btw; we're talking modest homes that these people have been living in for fifty or more years.

They're being driven out because the much richer folk value their property. And to make matters worse? If they do sell the property, they instantly lose what little tax cap protection they had, so they'll be paying even more in taxes.

How is that not wealth disparity? If the tax hadn't gone up, they'd still be happily living there. They're only being pushed out because the younger, richer folk want their land.

If that's not increasing wealth disparity, then I don't know what is.

I think you'll find that even as land values have increased, your local city or county has been slashing tax rates, such that taxes paid have not gone up for these people at all, or only slightly. Heck, if you're in California they're probably paying about $10 in property taxes due to Prop. 13.

No, I really won't. This is a well known issue in my area. Considering that I haven't said where I live, you shouldn't make assumptions.

To be fair, anyone that wants to know where you live can go to your website (that you put not only in your bio, but even in your nickname) and visit the "about" section. But I doubt parent did that.

True. Though I've not been that specific, and there's a lot of variability even in the general area. Texas is odd that way.

Should give an idea how much values have shot up, though, and how fast. A $75k home in 2010 can easily be over $500k now. It's crazy.

LVT is not property tax.

By its intrinsic structure LVT discourages speculation.

Georgian proponents would say that this should not happen that pensioners are being driven out because land values don't rise as much because there is no land speculation, and they pay the LVT instead of rent, mortgage and/or property tax.

I personally am afraid LVT is unimplementable, as for why, see top comment (LVT being self-defeating): https://news.ycombinator.com/item?id=40677483

That's not a problem with land taxes, that's a problem with the pensioners declaring that they should stop working at what turned out to be an economically unfeasibly low age after we extended life expectancy. Often with crazy stuff like final salary pensions that they obviously never paid anywhere near enough for. That no generation, before, and probably after, will be able to afford to be economically inactive for 20-30 years + the 15(+) years from childhood in unskilled or low skilled jobs.

At least until we (hopefully) make a post-scarcity economy.

Young people used to be able to afford a home at 25. Old people used to be able to afford property taxes in their retirement for their family sized home. The old people are in the same boat as everyone else. It's just manifesting differently for them. And the root cause is having to pay for an aging population, which is them!

On top of that, that home might have been modest when they had a family and a job, now it's extravagant. Now they should downsize out of the family sized home they're occupying with 1-2 people. And they'll still make a ton of money out of it.

Again, this is the first generation that can live like that. On previous generations the family home would have had the next generation living in it by now, instead 1 or 2 people are taking up a huge amount of land and rooms when they could be living in a flat.

> In practice, this doesn't help housing crises very much, but it _does_ increase wealth disparity!

Is your claim that LVT increases wealth disparity? Would it be accurate to assert the flip side of that, that laws like Prop 13 in CA help with wealth disparity? Because, uh, that doesn't seem to be how it's worked out, in practice.

Yes that is my claim, no I don't think Prop 13 would fix wealth disparity.

Since higher demand results in higher prices, you could rephrase that line as: is housing (and land) more desirable in states with higher or lower property taxes? I think it's mainly unrelated. Other things like available jobs, climate, amenities, and so on seem more important?

I've never quite understood whether the land value tax advocates wanted taxes to be higher or lower on average, or how they expect economic activity to vary with tax rates. They seem to expect tax policy to have large effects all on its own, though, and I'm more skeptical that it will make much difference.

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