[leafmeal]

This is a fun analysis, but that's not traditionally how a land value tax works. Land is taxed based on (surprise) its value. Land in cities is obviously more valuable than a big farm in Missouri.

The general idea is that two plots of land in the middle of a city, one with a sky scraper, and its neighbor, a bare parking lot, are taxed the same. You don't pay more for development.

This general scheme makes intuitive sense. It prevents speculation, and encourages development (if your parking lot costs the same in taxes as the sky scraper, you might as well get some more rent from it and make it more productive.

It's nice from a "libertarian" perspective as well because it doesn't force you to develop your land. It just puts incentives in the right places.

Finally, if land is taxed more uniformly, as you described, a landlord in the city, who owns their property outright, is collecting far more in revenue than one with a similar building somewhere more remote, simply because of it's location. Nothing the landlord did justifies the higher prices, it's the restaurants near by, the subways, the well employed people in need of homes that demands higher prices. Since all that value is produced by society, it makes sense to tax it and spend it on the public good. That value, is exactly the land tax.

[MrLeap]

Since you know more about this than me, are there any proposed methods to prevent manipulating value in order to reduce tax burden?

I'm thinking of schemes like, and more sophisticated than, "I'm selling 250,000$ T-shirts, buy now and receive a free house on worthless land."

[_dain_]

The land value would be determined by surveyors based on the characteristics of the plot itself, the values of the plots around it, and the values of similar kinds of plots elsewhere. So if you tried such a stunt it'd be pretty obvious because your plot would be a crazy outlier wrt everything around it for no good reason. Or you'd need to agree to some conspiracy with your neighbours to drive down the value. Of course this isn't a perfect system because surveyors can be wrong or corrupt. There would be a lot more litigation about fair land-values because more is at stake. This might or might not outweigh the reduction in legal fights over other kinds of taxes once LVT displaces them.

Another strategy is to make it so that if you want your land to be worth X for tax purposes, you're not allowed to refuse a good-faith offer to buy it for some multiple of X (plus the value of improvements). Although, this amounts to an expansion of the idea of eminent domain, which is politically difficult.

LVT is a dilution of what we currently understand as property rights. It would necessarily come with a lot more government oversight of what kinds of land sale agreements are legal, to prevent the kind of chicanery you mentioned. You wouldn't really "own" the land in the sense currently understood, it's more like "stewardship". You'd still own the things built on top of it though. I think this tradeoff is worth it (especially if other taxes are abolished), but it's important to admit the tradeoff exists and not everyone would like it.

[Loughla]

Land is assessed for value when it's sold. That's the number you pay taxes on. In some states they assess annually.

If you tried to drive the property value down to avoid taxes, your neighbors would lose their shit and report you (because most people have their "wealth"in the form of their home). It's a neat system of weird incentives.