Which according to economists is the wrong way around: it's better to have taxes on land (because it doesn't discourage land existing - land is fixed) than to have taxes on work income (which on the margin, discourages working)
Anyone, residential or commercial, with a mortgage would simultaneously find a massive amount of their net value erased while stuck with huge monthly payments on top of massively increased tax bills, unable to sell assuming the higher taxes drive down property prices.
In a state with fully implemented LVT, you would expect most people in dense cities to be living in multilevel housing that makes more efficient use of land. Eg if your condo building has 5 floors, you're splitting your land tax 5 ways.
Sprawling single level houses would be a relative luxury.
It's not difficult conceptually to come up with schemes to tax wealth which doesn't unduly harm non-wealthy individuals (however you would define that level for these purposes). It's just that for one reason or another these schemes are not implemented, and one of those reasons is (plausibly) the political influence of wealthy individuals
Nimbyism would become even more extreme.
You're gonna fight hard against your neighbor adding a Duplex, triplex, fourplex, etc. because with an LVT your taxes very likely go up as a result.
Imagine the uproar when a developer comes in and converts some of the SFHs next to granny's house into a 4-plex and now granny's social security doesn't cover her taxes and she has to move to the old folks home. Sure she can theoretically take out a mortgage or second mortgage against the theoretical increased land value but now you're forcing granny into debt.
How are you proposing to calculate land value?
Land is worth money because of improvements or detrimental choices. Manhattan and Staten Island have dramatically different valuations because of what’s there.
California needs a sane taxation system that doesn’t allow squatters to pay nothing for property taxes, but harshly punishes new homeowners.
It's worth money because of what's around the land. Otherwise identical houses in different locations would sell for the same price.
Improvements represent applications of labor and capital that produce value.
Is a 1 acre empty lot in Palo Alto worth the same as a 1 acre empty lot in Mobile, Alabama? No improvements on either one so they should go for the same price, right?
That land wasn’t valuable when it was orange groves. The improvements make the place.
I wouldn’t call moving to another place to pay less in taxes a virtue.
Are you talking about the very generous pensions for government officials?
If you have say 4 million USD and invest in stocks expecting say 7% per year you will pay 103k USD in cap gain tax and then 44k in wealth tax for a grand total of almost 150k/year.
That's enough to fund Switzerland lifestyle let alone life in multiple other countries that levy 0 or close to 0 cap gain tax for long term gains. It's difference between comfortable retirement and having to work.
Maybe it doesn't make much difference if you're very wealthy but for those who just managed to get financial independence it's huge.
That’s only on realised gains, surely?
And if that’s the case, it’s likely cheaper than having worked for that income.
>>And if that’s the case, it’s likely cheaper than having worked for that income.
How is that relevant? You are investing money already heavily taxed as income before. Anyway, I am just pointing out it makes a significant difference for someone who struck a bit of gold and gained financial independence but is not yet rich.
Because income is income.
That's pretty neat if you ask me
I've come to realize the answer is nearly always NO. They want (and believe they need) more.
But I don't really understand why they spend it on useless baubles. If you spend £50m on a fancy London house, a yacht and a some super cars, most people (British people anyway) will think you are a wanker. But if you spent some of that money on schools and hospitals in a poor country, you would probably be treated like a minor god in that country.
He could move and supposedly save money (no income tax in WA, but there are some Capital Gains taxes).
The moving will absolutely happen, and it isn't all or nothing. If you're very wealthy the CA tax board already tracks the number of days you spend in CA so the choice will be to spend fewer.
Of course, there are lots of other reasons why out-of-staters might choose to move to MA.
NY sources taxes to the employer's office location in NY if a worker works remotely under certain circumstances, for example [1]. If geography can be used to shift or avoid tax exposure to income, I see no problem with using the law to prevent that, depending on the target outcome. My global income is subject to US federal taxes, regardless of my residency (although foreign exclusions apply under a reasonable income threshold, ~$120k/year, under the assumption I am paying taxes where I reside outside the US) [2].
[1] https://www.anchin.com/articles/remote-workers-and-the-conve...
[2] https://www.irs.gov/individuals/international-taxpayers/fore...
I'm not sure how you reasonably allocate state/local taxes other than by physical presence. Any reasonably large company has an economic nexus in many states and even countries.
The people who actually act on this stuff are usually not really wealthy, mostly just retirees finding themselves with a windfall of time and cash, who usually don’t math well.