[KingMachiavelli]

The ideal solution for this is the LVT is split between each level of government and it's parent. Each level receives tax revenue based on the market value after it's own zoning and all other restrictions apply. But each level must pay it's parent government based on the land value without any of local zoning or restrictions imposed.

For example, Aspen Colorado can certainly just ban all new construction outright and collect taxes accordingly. But it would owe the state Colorado tax revenue based on the theoretical land value of Aspen's total land.

This preserves local control as much as possible but forces communities to fairly compensate the rest of the country should they choose to purposely under utilize their land. E.g if SF doesn't build more housing then Austin now has to build more, etc.

At the same time, since the Federal gov owns 90% of Nevada, Nevada as a state wouldn't be forced to make up the tax revenue for that land since all of its rules and restrictions come from a parent government (Federal/BLM rules).

[eru]

> The ideal solution for this is the LVT is split between each level of government and it's parent. Each level receives tax revenue based on the market value after it's own zoning and all other restrictions apply. But each level must pay it's parent government based on the land value without any of local zoning or restrictions imposed.

Sounds interesting, but I wonder how you would get at those values?

Also, you would probably also want to extend what you say to include both locally enforced restrictions but also locally provided amenities.

But how do you decide who gets to benefit from eg having the Google campus next door? Or having a famous artist live in your community?

> For example, Aspen Colorado can certainly just ban all new construction outright and collect taxes accordingly. But it would owe the state Colorado tax revenue based on the theoretical land value of Aspen's total land.

> This preserves local control as much as possible but forces communities to fairly compensate the rest of the country should they choose to purposely under utilize their land. E.g if SF doesn't build more housing then Austin now has to build more, etc.

That seems much more convoluted and prone to abuses than just letting Aspen collect its land value tax and keeping the whole thing, but also having that level of government pay for most things by itself.

Have a look at Switzerland: their system minimises vertical transfers, ie every level of government mostly only spends what it earns (in taxes).

(They do have some horizontal transfers between richer and poorer regions of the country, or richer and poorer people. But not much between eg Cantons and the federal level.)