Big fan of land value taxes. They apply pressure to make the best use of the land rather than sitting on it. However, I'm not sure it will help cities like Baltimore, where they were unable to turn things around even by giving away houses for $1 and no taxes for a few years.
In a city, you're more dependent on the government to take care of things, and in most US cities, with single party control, it does not happen. They don't take care of crime. They let infrastructure decay. The schools are crap (despite high per-pupil spending). They make crony deals with the unions on pensions and benefits that are not possible to fund.
Not feeling safe and with a bleak future for their kids, people move out. I've seen this happen over and over again with coworkers who initially were big on city living, but eventually moved out when they got mugged or had kids.
The result is insane taxes as population leaves, and subsidies from the surrounding areas to try to keep the failed city afloat.
The high taxes and obvious government incompetence then act as a moat to keep people out.
> Big fan of land value taxes. They apply pressure to make the best use of the land rather than sitting on it.
I like that Land Value Taxes hurt anyone hoarding land to ride the rising assessments (which is a major problem today). But I don't like that LVT punishes people for productively using land. Land Value Taxes apply pressure to make the highest capital return on every piece of land, which is not the same thing as the best use of the land, and would hurt many good uses of land that are not profitable.
> In a city, you're more dependent on the government to take care of things, and in most US cities, with single party control, it does not happen.
Yep. And what's worse, most cities intentionally want to make all of these things worse.
Cities are often intentionally destroying their infrastructure (tearing down useful-but-unloved infrastructure for useless-but-pretty replacements) and intentionally destroying their affordable housing (purposefully gentrifying areas of their cities, to drive out residents deemed undesirable)
The cycle of driving people out of the city by attacking housing/transportation/services is not an accident, it's not happenstance. This is an intentional design goal baked into how they frame every problem and how they approach every change. It's not something anyone will admit to upfront, but if you travel through Urbanist circles long enough, you can get into the behind-doors conversations they have and see this in action.
> I've seen this happen over and over again with coworkers who initially were big on city living, but eventually moved out when they got mugged or had kids.
Yep. And if you escape the crime or the school problem, they'll hit you on housing or transportation instead. There's no escaping the never-ending list of problems forced upon residents.
Suburbs are the place for affordable housing. Suburbs are for functional schools. Suburbs are for sustainable living. Suburbs are for decent infrastructure. Suburbs are for diversity, especially on the low-income/working-class side of things. Suburbs are the place you begin your startup in a garage, because Suburbs are the only place cheap enough that a regular person could have a garage at all.
Cities aren't for people. Cities are for the conglomeration of capital, and capital alone. Humans need not apply.
They weren't "giving houses away for $1". They were requiring people to assume the liabilities related to code and zoning compliance, along with a remediation schedule, in order to take ownership. And those expenses couldn't be paid by a mortgage loan; the city had to issue its own loans.
Typical monthly payment was $300/month, and they had a low default rate, so it was still a decent deal. But it wasn't just $1.
House flipping is a career for some people. Every last one of them look at probable resale value after remodel in comparison to expenses required to reach marketable condition. No flipper would do $100k of work on a house when the neighboring properties simply don't sell at any price, and tend to remain vacant after foreclosure.
And that's the "location" factor talking. I don't know if it's the first, second, or third "location" in the list, but if a city culture or city government sucks, people and businesses don't want to move there.
I have seen it in every city I have lived in. The local government takes ever-increasing amounts of your money, and digs entirely separate holes to throw that money into, rather than any of the naturally-forming potholes on every street that isn't part of some councilman's route to city hall. The governance that worked with steadily increasing population doesn't work with stagnant or decreasing population.
At some point, a declining city needs to de-annex some of its former territory and prune its own deadwood. And it needs to fire its municipal employees that are not absolutely essential to keeping the city infrastructure running. Some shut down their city police and fire departments, reverting to sheriff's deputies and volunteer firefighters, who may even operate out of the same buildings. But the problem is the politics. Admitting the city is insolvent and promising to cut some services to save the rest doesn't get you re-elected when your opponent simply denies the problem exists and lies about the city's condition to make people feel better about still living in it.
Pardon the negative knee-jerk reaction, but I have seen land value taxes used abusively and in the most coercive manner you can imagine. It still makes my blood boil.
Back when I lived in Minnesota, the metro area interests were rezoning farm land as residential, and then taxing it at residential property rates, even though it was still used for corn fields and pasture. This was utterly destroying family farms.
Now before you accuse me of NIMBY-ism leading to housing shortages.... this was to create new ex-urban housing areas with 2.5 to 5 acre minimum lot laws. There was no shortage of places to build houses. Houses for sale sat on the market for months. This was driven by politicians and developers in cahoots to shove aside people that were in their way, and coerce them to disgorge their property and give up their lively-hood through unjustified perversion of the tax code.
Using the tax code to rob people of their property rights is not the answer. If you want to live in a kleptocracy, there are several you can move to. Maybe you will be one of the lucky ones and the state won't rob you.
>They don't take care of crime. They let infrastructure decay. The schools are crap (despite high per-pupil spending). They make crony deals with the unions on pensions and benefits that are not possible to fund.
To expand on this point, why would there be any institutional will to take more than a token effort to do any of those things? It's not like they risk getting voted out by someone who isn't on the same side and will leave the root system of the party's power to control government mostly intact (doing the opposite would anger enough people to not be in the self interest of anyone who gets elected).
Even if you keep voting in different politicians who actually want to do anything you're never actually getting a major refresh until you get someone from a different party who aggressively appoints a different set of cronies.
That won't always help. Look at Bay Area. Best value and economic return would be investment banks and tech companies. And then people would start complaining of even more gentrification. The metric governments should be aiming for is making cities MORE affordable than e.g. suburbs. Cities can offer a higher quality of life (in the sense of easy access to food and transportation) due to higher productivity and scale. Home ownership should be priority and subsized (apartments aren't that expensive to build at scale if you are willing to go prefab and pull in workers from Mexico.) Also, aesthetics complaints need to be disregarded. Most cities would end up looking like Seattle and New York anyways, complaining about tall buildings is just short sighted. Trying to have both economic benefits of a dense population and a "pretty" (i.e. rustic-looking small town hippie style architecture) is just not feasible on a large scale. Sure you can have a few pockets here and there but making it the central tenet of your urban planning will just cause more homelessness. You can't both have your cake and eat it too.
Harrisburg, Pennsylvania adopted a split-rate property tax system which penalized land more heavily than improvements. They saw improvements across the board, including in terms of crime rates, the rates of fire, etc.
"At the same time, the city's infrastructure is aging and requires more maintenance than it once did."
The thing which is aging is more likely the base of city employees and retirees who were promised defined benefit pensions which were underreserved for and routinely looted, over a period of decades.
Erie, for example, has an unfunded liability of about $90 million against a total annual budget of ~$115 million. (As is typical, the lion's share is police/firefighters.)
Another article from Strong Towns made the point that infrastructure like roads tends to only last about 30 years before needing complete replacement. In many towns this infrastructure is paid for by assessing fees on new development.
Once the city stops expanding, you now have no tax base to pay for all the existing roads needing replacement. All those replacement bills come due: the "aging infrastructure" needs more maintenance.
>The thing which is aging is more likely the base of city employees and retirees who were promised defined benefit pensions which were underreserved for and routinely looted, over a period of decades.
Let me ask: How were those pension banks supposed to be funded?
The reason I ask is because my state has a defined pension plan for many public workers. The benefits are defined irrespective to how the market performs. We're also one of the highest income tax states out there. Yet the pension is underfunded. No one's been "looting" it. No one takes money out of it for some other purpose. The tax rate simply isn't enough to fund it. And we have a high tax rate.
Whoever designed this for our state did so with the assumption that market returns would be enough to fund it. It never was a plan of simply collecting tax money. They were wrong. The market returns were not enough.
Current retirees are getting their pensions. We just won't have enough for the next batch at current funding rates.
It's gone to court, and the courts have ruled that there are no loopholes: People will get their pensions, no matter what. So now we're dealing with the "no matter what". We have one of the worst high school graduation rates in the country, and the quality of education overall is rated fairly low. Yet, we can't solve that problem with money. Because for the next decade or two, pretty much all increases in education funding are going to fund the pensions. A number of cities are growing, and the mayors are very clear about the problems: They cannot afford more police officers and other similar employees to keep pace with the growing cities - because all the extra revenue they are collecting in taxes is going to fund the retirement funds.
The only solution the courts will allow is to change retirement plans for those just entering the workforce. But we will have to deal with this problem for a few decades where we must increase all kinds of taxes to pay for pensions, and allow the rest of the infrastructure to decay.
There's no cap on the defined benefits for high income folks, BTW. University football coaches, and retired presidents, get a lot of money (at least one of them gets over $70K/month). Of course, these are outliers. The median is under $40K/year.
Defined benefits is a bad idea. They need to switch to defined contributions from employers, and let the investments dictate their pay (and probably give employees more choices for the investments).
What I don't get is how on Earth that was ever legal. A defined benefit retirement service must require you to purchase an annuity, so how is it possible to underfund those retirement founds?
Can we close the book on this "unfunded pension liability" nonsense? The government can create the raw dollars needed to fund the pensions. Just listen to Alan Greenspan himself shut down Paul Ryan's perverse anti-social security zealotry:
Similar piece from The Economist a few years back, but looking at the opposite side of the coin, wildly successful cities with ridiculous housing costs due to poor land use, but still prescribing LVT as part of the solution:
LVTs would impose concentrated costs on today’s landowners, who face a new tax bill and a reduced sale price. The benefit, by contrast, is spread equally over today’s population and future generations. This problem is unlikely to be overcome. Economists will continue to advocate LVTs, and politicians will continue to ignore them.
There should also be a portion of the land tax that comes from the relevant part of the city-owned road network which needs maintenance. Buying a lot in the suburbs which necessitates massive highways and arterials built and maintained should have that factored in the land tax to balance the gap between suburbs and downtown.
In the downtown your land tax would be higher because of demand of lots and higher land value, and in the suburbs it would be higher because of higher per-lot costs to the city.
Aren't the infrastructure and service needs (fire department for example) different for no building vs. a one story building vs. a forty story building?
I always wonder why these articles about growing infrastructure costs and shrinking tax bases are about cities and not the suburbs. You would think the issues would be worse in the suburbs because the lower density would drive up the amount of required infrastructure per house.
Infrastructure costs don't scale up linearly with distance, they scale up exponentially with complexity.
Suburban infrastructure, while spread further apart than city infrastructure, is usually far simpler to build and simpler to maintain and simpler to replace.
Costs go up a little bit in raw resources (longer wires, longer pipes, etc). But costs drop dramatically in amount of labour, length of time, installation costs, and so on. So usually, it's net-cheaper overall.
This particular article was about rust belt cities, but most Strong Towns stuff focuses on the suburbs, specifically inner-ring suburbs which are now facing rust-belt like problems all over the country, even in fast-growing metros.
And you’re right, in those places the infrastructure cost per-capita is much worse and the problems are more acute.
Probably because people have been leaving the city and flocking to the suburbs for a few generations now. People leaving the cities plus all the new people means the suburbs are (probably) absorbing all that growth.
I find the idea of taxing one’s primary residence utterly distasteful. People live and work and buy things..all of which is taxable.
A house sits and does nothing. It doesn’t ‘consume’ anything and if it does consume or it’s residents consume, that’s taxed. We should have consumption tax..not property taxes for one’s primary residence.
We have road tax, gas tax, sales tax, income tax ..we pay for utilities, essential services, schools. But why should we pay taxes for living under a roof and getting married and giving birth and I guess when we die. That’s being taxed for existing.
Property consumes limited space. If anything, property taxes are too low! Look at all the underdeveloped lots that provide a few parking spots next to tall apartment buildings.
It’s totally just a matter of opinion, but I would argue that property tax (and especially LVT) is perhaps the only type of tax that is completely logical. It is the most justifiable form of tax, since the core role of the government is to enforce your property rights. They will come and arrest someone who is on your property without your permission. Paying for that is the most natural way you could pay a government. Stuff like sales tax and income tax is awkward, easy to game, and very messy. These types of non property taxes have nothing to do with the government’s core functions, and require a huge amount of effort spent on surveillance, reporting, enforcement, and lawyering.
Corruption and ultra high salaries of government officials and police drain the life out of these cities. This is a story playing out in small piggy-banks, ahem, cities all across the nation. I lived in a particularly egregious one called Yonkers, NY for a while. This place is the only city in NY (other than NYC) that goes after your income too in addition to ridiculously high prop taxes.
The Key and Peele Obama Meet and Greet sketch that became a huge meme platform last year has a version where the people being greeted are various areas in the Bronx and Yonkers is the person ignored at the end as Obama walks out.
Good article. The land tax is probably the preferred tax of libertarians, and it does make sense in many cases. But in the case of cities with vastly higher municipal costs than its neighboring jurisdictions, the land tax would still be high enough to ward off new residents, which would just work to keep rents too low, etc. The city will have to see where its costs are, get them under control if possible, and grow its "brand." There are a lot of things that are attractive to a city as opposed to the suburbs, but the negatives would need to be dealt with, too.
A land tax with the same total revenue of a property tax benefits those with houses that are expensive w.r.t. the landvot sits on. This means some people would be worse of, and some better of.
In general, it drives high density and quality development. I might speculate that this will increase demand for housing, which would push up land value.
I wonder if higher density living could lower costs for councils/cities. With more people living closer you would think less money needs to be spent on footpaths and such, maybe less police because they are spread out less.
Also makes me wonder what the maintenance costs of rail are. I don't know much about it but light rail tracks look like they would probably last a really long time without being replaced where as it seems roads hardly last a few years before needing to be resurfaced.
How does the property tax work in the US? How big is it? There is a similar concept in Poland but the values are relatively low and I don't think they affect the economy of cities much. Also, it doesn't get bigger if you renovate. It depends on the square meters of the building.
Each and every MoF is suggesting real estate value tax in Poland. Sooner or later they will get what they want.
In Italy Berlusconi abolished this tax I think but it works in other EU countries.
It ain't such a bad way of taxation. At the right rate it stimulates the economy - instead of being
frozen in real estate excess capital (peoples savings) moves into more productive parts of economy.
Sorry link is in Polish.
For property value, you at least have an active market to reffer to. Since most land is sold witg property on it, there is much less of a market to indicate the value of plain land.
You compare the value of a given property to that of similar properties in other locations. Let us say you have two identical apartment buildings: one in the city center, and one on the outskirts of the city. It is likely that renting an apartment in the former is more expensive, despite both building being exactly the same. The difference in rental rates between the two buildings is due to the difference in value of the land they are built on.
How it was explained to me in a business course in college is that capital should be taxed based upon it's economic yield. How much it costs a municipality to service a property shouldn't be taken into account. I've always believed that to make sense, and this article didn't sway me. If I want to sit on some empty land, then the government doesn't deserve any tax revenue from me because I'm not getting any revenue from the land. The government shouldn't be able to tax based upon "possible" revenue - because they are a poor judge of what is possible (as are most people). But they should be able to audit my books to find out what actual revenue is accruing from my ownership of capital. Taxing the rewards of capital is the basis of capitalism.
[+] [-] tomohawk|7 years ago|reply
In a city, you're more dependent on the government to take care of things, and in most US cities, with single party control, it does not happen. They don't take care of crime. They let infrastructure decay. The schools are crap (despite high per-pupil spending). They make crony deals with the unions on pensions and benefits that are not possible to fund.
Not feeling safe and with a bleak future for their kids, people move out. I've seen this happen over and over again with coworkers who initially were big on city living, but eventually moved out when they got mugged or had kids.
The result is insane taxes as population leaves, and subsidies from the surrounding areas to try to keep the failed city afloat.
The high taxes and obvious government incompetence then act as a moat to keep people out.
[+] [-] maxsilver|7 years ago|reply
I like that Land Value Taxes hurt anyone hoarding land to ride the rising assessments (which is a major problem today). But I don't like that LVT punishes people for productively using land. Land Value Taxes apply pressure to make the highest capital return on every piece of land, which is not the same thing as the best use of the land, and would hurt many good uses of land that are not profitable.
> In a city, you're more dependent on the government to take care of things, and in most US cities, with single party control, it does not happen.
Yep. And what's worse, most cities intentionally want to make all of these things worse.
Cities are often intentionally destroying their infrastructure (tearing down useful-but-unloved infrastructure for useless-but-pretty replacements) and intentionally destroying their affordable housing (purposefully gentrifying areas of their cities, to drive out residents deemed undesirable)
The cycle of driving people out of the city by attacking housing/transportation/services is not an accident, it's not happenstance. This is an intentional design goal baked into how they frame every problem and how they approach every change. It's not something anyone will admit to upfront, but if you travel through Urbanist circles long enough, you can get into the behind-doors conversations they have and see this in action.
> I've seen this happen over and over again with coworkers who initially were big on city living, but eventually moved out when they got mugged or had kids.
Yep. And if you escape the crime or the school problem, they'll hit you on housing or transportation instead. There's no escaping the never-ending list of problems forced upon residents.
Suburbs are the place for affordable housing. Suburbs are for functional schools. Suburbs are for sustainable living. Suburbs are for decent infrastructure. Suburbs are for diversity, especially on the low-income/working-class side of things. Suburbs are the place you begin your startup in a garage, because Suburbs are the only place cheap enough that a regular person could have a garage at all.
Cities aren't for people. Cities are for the conglomeration of capital, and capital alone. Humans need not apply.
[+] [-] logfromblammo|7 years ago|reply
Typical monthly payment was $300/month, and they had a low default rate, so it was still a decent deal. But it wasn't just $1.
House flipping is a career for some people. Every last one of them look at probable resale value after remodel in comparison to expenses required to reach marketable condition. No flipper would do $100k of work on a house when the neighboring properties simply don't sell at any price, and tend to remain vacant after foreclosure.
And that's the "location" factor talking. I don't know if it's the first, second, or third "location" in the list, but if a city culture or city government sucks, people and businesses don't want to move there.
I have seen it in every city I have lived in. The local government takes ever-increasing amounts of your money, and digs entirely separate holes to throw that money into, rather than any of the naturally-forming potholes on every street that isn't part of some councilman's route to city hall. The governance that worked with steadily increasing population doesn't work with stagnant or decreasing population.
At some point, a declining city needs to de-annex some of its former territory and prune its own deadwood. And it needs to fire its municipal employees that are not absolutely essential to keeping the city infrastructure running. Some shut down their city police and fire departments, reverting to sheriff's deputies and volunteer firefighters, who may even operate out of the same buildings. But the problem is the politics. Admitting the city is insolvent and promising to cut some services to save the rest doesn't get you re-elected when your opponent simply denies the problem exists and lies about the city's condition to make people feel better about still living in it.
[+] [-] dbcurtis|7 years ago|reply
Pardon the negative knee-jerk reaction, but I have seen land value taxes used abusively and in the most coercive manner you can imagine. It still makes my blood boil.
Back when I lived in Minnesota, the metro area interests were rezoning farm land as residential, and then taxing it at residential property rates, even though it was still used for corn fields and pasture. This was utterly destroying family farms.
Now before you accuse me of NIMBY-ism leading to housing shortages.... this was to create new ex-urban housing areas with 2.5 to 5 acre minimum lot laws. There was no shortage of places to build houses. Houses for sale sat on the market for months. This was driven by politicians and developers in cahoots to shove aside people that were in their way, and coerce them to disgorge their property and give up their lively-hood through unjustified perversion of the tax code.
Using the tax code to rob people of their property rights is not the answer. If you want to live in a kleptocracy, there are several you can move to. Maybe you will be one of the lucky ones and the state won't rob you.
[+] [-] dsfyu404ed|7 years ago|reply
To expand on this point, why would there be any institutional will to take more than a token effort to do any of those things? It's not like they risk getting voted out by someone who isn't on the same side and will leave the root system of the party's power to control government mostly intact (doing the opposite would anger enough people to not be in the self interest of anyone who gets elected).
Even if you keep voting in different politicians who actually want to do anything you're never actually getting a major refresh until you get someone from a different party who aggressively appoints a different set of cronies.
[+] [-] sansnomme|7 years ago|reply
[+] [-] nwah1|7 years ago|reply
https://blogs.ubc.ca/rosonluo/2013/04/08/land-value-tax-poli...
[+] [-] patio11|7 years ago|reply
The thing which is aging is more likely the base of city employees and retirees who were promised defined benefit pensions which were underreserved for and routinely looted, over a period of decades.
Erie, for example, has an unfunded liability of about $90 million against a total annual budget of ~$115 million. (As is typical, the lion's share is police/firefighters.)
[+] [-] YokoZar|7 years ago|reply
Once the city stops expanding, you now have no tax base to pay for all the existing roads needing replacement. All those replacement bills come due: the "aging infrastructure" needs more maintenance.
[+] [-] freddie_mercury|7 years ago|reply
The annual required contribution is a mere $4.3 million
Their pension is 99% funded. I don't know why you'd bring it up, since it is unrelated to the article.
Fixing pensions won't change the fact that neglectful landlords get rewarded under the current taxation scheme.
[+] [-] BeetleB|7 years ago|reply
Let me ask: How were those pension banks supposed to be funded?
The reason I ask is because my state has a defined pension plan for many public workers. The benefits are defined irrespective to how the market performs. We're also one of the highest income tax states out there. Yet the pension is underfunded. No one's been "looting" it. No one takes money out of it for some other purpose. The tax rate simply isn't enough to fund it. And we have a high tax rate.
Whoever designed this for our state did so with the assumption that market returns would be enough to fund it. It never was a plan of simply collecting tax money. They were wrong. The market returns were not enough.
Current retirees are getting their pensions. We just won't have enough for the next batch at current funding rates.
It's gone to court, and the courts have ruled that there are no loopholes: People will get their pensions, no matter what. So now we're dealing with the "no matter what". We have one of the worst high school graduation rates in the country, and the quality of education overall is rated fairly low. Yet, we can't solve that problem with money. Because for the next decade or two, pretty much all increases in education funding are going to fund the pensions. A number of cities are growing, and the mayors are very clear about the problems: They cannot afford more police officers and other similar employees to keep pace with the growing cities - because all the extra revenue they are collecting in taxes is going to fund the retirement funds.
The only solution the courts will allow is to change retirement plans for those just entering the workforce. But we will have to deal with this problem for a few decades where we must increase all kinds of taxes to pay for pensions, and allow the rest of the infrastructure to decay.
There's no cap on the defined benefits for high income folks, BTW. University football coaches, and retired presidents, get a lot of money (at least one of them gets over $70K/month). Of course, these are outliers. The median is under $40K/year.
Defined benefits is a bad idea. They need to switch to defined contributions from employers, and let the investments dictate their pay (and probably give employees more choices for the investments).
[+] [-] tomjen3|7 years ago|reply
[+] [-] omegaworks|7 years ago|reply
https://www.youtube.com/watch?v=DNCZHAQnfGU
[+] [-] js2|7 years ago|reply
https://www.economist.com/leaders/2015/04/04/space-and-the-c...
Related article on LVT:
https://www.economist.com/free-exchange/2015/04/01/why-henry...
"But if LVTs are so great, why are they so rare?"
LVTs would impose concentrated costs on today’s landowners, who face a new tax bill and a reduced sale price. The benefit, by contrast, is spread equally over today’s population and future generations. This problem is unlikely to be overcome. Economists will continue to advocate LVTs, and politicians will continue to ignore them.
https://www.economist.com/the-economist-explains/2014/11/10/...
[+] [-] huffmsa|7 years ago|reply
It does precisely what this article says, disincentives improvements, because "the government" is just going to take more of your money.
Seems illegal to boot (although I imagine there's plenty of precedent).
Taxing the land at least has some logic to it. "This land is serviced by this government, you pay for those services".
As well having a high land tax means you're going to build high revenue generating structures to meet your burden.
[+] [-] yason|7 years ago|reply
In the downtown your land tax would be higher because of demand of lots and higher land value, and in the suburbs it would be higher because of higher per-lot costs to the city.
[+] [-] tchaffee|7 years ago|reply
Aren't the infrastructure and service needs (fire department for example) different for no building vs. a one story building vs. a forty story building?
[+] [-] smadge|7 years ago|reply
[+] [-] JamesBarney|7 years ago|reply
[+] [-] CalRobert|7 years ago|reply
[+] [-] maxsilver|7 years ago|reply
Suburban infrastructure, while spread further apart than city infrastructure, is usually far simpler to build and simpler to maintain and simpler to replace.
Costs go up a little bit in raw resources (longer wires, longer pipes, etc). But costs drop dramatically in amount of labour, length of time, installation costs, and so on. So usually, it's net-cheaper overall.
[+] [-] burlesona|7 years ago|reply
And you’re right, in those places the infrastructure cost per-capita is much worse and the problems are more acute.
[+] [-] UncleEntity|7 years ago|reply
[+] [-] jelliclesfarm|7 years ago|reply
A house sits and does nothing. It doesn’t ‘consume’ anything and if it does consume or it’s residents consume, that’s taxed. We should have consumption tax..not property taxes for one’s primary residence.
We have road tax, gas tax, sales tax, income tax ..we pay for utilities, essential services, schools. But why should we pay taxes for living under a roof and getting married and giving birth and I guess when we die. That’s being taxed for existing.
[+] [-] Scaevolus|7 years ago|reply
[+] [-] zkms|7 years ago|reply
[+] [-] woah|7 years ago|reply
[+] [-] externalreality|7 years ago|reply
[+] [-] selimthegrim|7 years ago|reply
[+] [-] Wyndtroy2012|7 years ago|reply
[+] [-] rocqua|7 years ago|reply
In general, it drives high density and quality development. I might speculate that this will increase demand for housing, which would push up land value.
[+] [-] baroffoos|7 years ago|reply
Also makes me wonder what the maintenance costs of rail are. I don't know much about it but light rail tracks look like they would probably last a really long time without being replaced where as it seems roads hardly last a few years before needing to be resurfaced.
[+] [-] calineczka|7 years ago|reply
[+] [-] chewz|7 years ago|reply
In Italy Berlusconi abolished this tax I think but it works in other EU countries.
It ain't such a bad way of taxation. At the right rate it stimulates the economy - instead of being frozen in real estate excess capital (peoples savings) moves into more productive parts of economy. Sorry link is in Polish.
https://ksiegowosc.infor.pl/podatki/podatki-osobiste/podatek...
[+] [-] afarrell|7 years ago|reply
Is that the Sq meters of the ground floor, or sq meters when you add up the space of all the floors?
If the former, that sounds like a land value tax—-something that lots of people have suggested would improve construction incentives
[+] [-] hanging|7 years ago|reply
[+] [-] rocqua|7 years ago|reply
For property value, you at least have an active market to reffer to. Since most land is sold witg property on it, there is much less of a market to indicate the value of plain land.
[+] [-] oftenwrong|7 years ago|reply
Further reading: http://kaalvtn.blogspot.com/p/valuations-and-potential-lvt-r...
[+] [-] joncrocks|7 years ago|reply
Reconstruction costs are something that I think are frequently estimated for building insurance purposes.
[+] [-] intrasight|7 years ago|reply