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Land Tax

 
 
gollum
 
Reply Sun 4 Feb, 2024 06:25 pm
People often advocate that the government provide various services to people, and others often advocate that the government lower taxes on the people.

I suggest that the land tax be increased and all other taxes be reduced or eliminated. The increase in the land tax will generate funds that can be used to meet societal needs.

A drawback of a tax on anything other than land is that it causes people to pursue tax avoidance strategies that skew the economy.
 
View best answer, chosen by gollum
neptuneblue
 
  3  
Reply Sun 4 Feb, 2024 08:34 pm
@gollum,
Nope, don't like that idea.

-Renters can vote to increase taxes but don't have to pay into the system
-Those on fixed incomes would be overtaxed that they cannot afford
-Who decides how much and how often the tax base goes up
-Who decides which societal need is greater than another
0 Replies
 
engineer
 
  5  
Reply Mon 5 Feb, 2024 12:58 pm
@gollum,
Property taxes, just like most taxes, is regressive. Percentage wise, it hits the poorest the hardest. If you make that the only tax, you will trap people in perpetual poverty. Imagine if your rent included taxes to fund the entire government. You wouldn't be able to afford it. Middle class home ownership would disappear. The idea of having a backyard for your kids to play in would only exist for the rich.
gollum
 
  -1  
Reply Mon 5 Feb, 2024 04:26 pm
@engineer,
engineer-

Thank you.

Do "the poorest" own land?

If relatively rich people own land, then my idea will result in those rich people paying the aggregate cost of government, taking it off the backs of the rest of us.

Though nominally, the land owner pays the tax, you might think of it as the land itself paying the tax, leaving the land owner no worse off than he would be if he did not own the land.
hightor
  Selected Answer
 
  3  
Reply Tue 6 Feb, 2024 05:02 am
@gollum,
This article may be helpful: Georgism

Quote:
The concept of gaining public revenues mainly from land and natural resource privileges was widely popularized by Henry George through his first book, Progress and Poverty (1879). The philosophical basis of Georgism draws on earlier thinkers such as John Locke,Baruch Spinozaand Thomas Paine.Economists from Adam Smith and David Ricardo, to Milton Friedman and Joseph Stiglitz, have observed that a public levy on land value does not cause economic inefficiency, unlike other taxes. A land value tax also has progressive tax effects. Advocates of land value taxes argue that they would reduce economic inequality, increase economic efficiency, remove incentives to under-utilize urban land and reduce property speculation.


0 Replies
 
engineer
 
  2  
Reply Thu 8 Feb, 2024 09:14 pm
@gollum,
The poorest don't own the land, they just pay the tax. Taxes are passed through to the tenants by the landlords
hightor
 
  2  
Reply Fri 9 Feb, 2024 04:49 am
@engineer,
There's also the situation in rural areas where once prosperous farming families held large amounts of land and their descendants, no longer prosperous, become "land poor". Large tracts of land are then sold off, subdivided – often numerous times – and become housing plots for suburbanites and people who can afford second homes. Potentially productive farmland is removed from cultivation, the remnants of the original settlers living on postage stamp sized lots in manufactured housing.
0 Replies
 
RPhalange
 
  3  
Reply Fri 9 Feb, 2024 08:55 am
@gollum,
Well wouldn't that then cause more people to avoid this tax by not owning land and rent instead; thus avoidance of paying taxes.

Also, if you need taxes to pay for various services, shouldn't the tax be on all those use these services rather than just those that own land? So those that are renting and have 10 kids would not be paying at all for their children's education.

Really not a fair tax.

gollum
 
  -2  
Reply Sat 10 Feb, 2024 05:45 am
@RPhalange,
RPhalange-

As more people sell land, the market price of land may fall. Society may use less resources to acquire land and more for productive uses. The aggregate amount of land would stay the same to the square inch.

Land is different from all other investments. When Bill Gates created Microsoft, he created new wealth. When someone buys a plot of land, the aggregate amount of land stays the same.
vikorr
 
  2  
Reply Sat 10 Feb, 2024 09:10 pm
@gollum,
Quote:
As more people sell land, the market price of land may fall.
This would apply in a system where the divide between the rich and the poor...the professional couples and the working class couples wasn't continually growing.

The professional couples continually end up with more and more free cash, and they look to make that money work for them (to create more cash). Rental Properties is one of the ways of doing this, which is what is driving up the cost of housing. Placing or increasing a land tax would certainly mean housing prices could come down (if the tax was large enough), but wouldn't necessarily achieve what you think it would achieve in the long term (because it doesn't solve the growing divide between the rich and the poor)
gollum
 
  0  
Reply Sun 11 Feb, 2024 02:18 am
@vikorr,
The rich people would sell their land at prices whereby they would not have profited from their ownership of land.
vikorr
 
  2  
Reply Sun 11 Feb, 2024 06:07 pm
@gollum,
I think you either didn't read my post properly, or.....

- you haven't considered how long the divide between rich and poor has been continually growing and what that means when doubled (in the case of married poor vs married professionals)
- you don't understand why this massive income divide has continually been driving housing prices up so dramatically againt the wage of the poor
- you haven't considered / don't understand rich peoples mindset to investment

These will still exist in a higher land tax system, meaning you get a short term drop in price, but not a long term drop....but it also means they pass on the tax to the poor, who then struggle even more to get out of poverty.

My view is some 'poor' who are better off may be able to afford a home in the temporary drop in pricing...but that such a scheme would cause signficantly increased / extreme hardship in the poorest sections of a nation. [
gollum
 
  0  
Reply Tue 13 Feb, 2024 04:27 am
@vikorr,
vikorr-

I think you are largely right about the advantage professional couples have in their earnings from work.

I think my idea (or Henry George's) is right and would remove their earnings from land.
vikorr
 
  2  
Reply Tue 13 Feb, 2024 01:25 pm
@gollum,
Quote:
I think my idea (or Henry George's) is right and would remove their earnings from land.
The bottom end of landlords who use negative gearing to obtain investments, Sure. It won't affect the higher paid professional couples, as those landlords would just pass on the tax in the rent. Ie. it is a meaningless tax to them, but is significant to their tennants (the tax gets passed to them to pay, through rent)

You lalso don't appear to have considered how much land tax would have to be per year to replace the current system. The amount of tax, passed on (as all landlords will do) - I would suggest that it would be significantly more than the very poor currently pay in tax per year (because the lowest earners don't pay income tax due to the threshhold).

Further, the lowest earners still would not be able to buy a house (because they won't have the savings, and won't be able to get a loan from the bank), meaning they are entirely reliant on landlords for housing...who will pass on the land tax costs to them (I have to keep mentioning this because it leads to a major issue)

Further, the less well off professionals may well offload investment properties, which would in your scheme be snapped up by the better off poor...diminishing the rental pool in affordable suburbs (they still won't be able to afford it in good suburbs), which in turn drives up the rental price in those affordable suburbs (supply vs demand)

It is very likely your scheme would create a great deal more financial distress and homelessness amongst the poorest.
0 Replies
 
 

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