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ID: A Sophie Labelle 4 panel comic featuring Stephie in different poses, saying:
Landlords do not provide housing.
They buy and Hold more space than they need for themselves.
Then, they create a false scarcity and profit off of it.
What they're doing is literally the opposite of providing housing.
You would only pay tax on the unimproved value of land. You pay no tax on everything built on it. So an empty 1-acre lot next to an apartment building providing 100 homes on a 1-acre lot would both pay the same taxes.
So landlords would earn a profit but they wouldn't earn rent (in the neoclassical sense).
Its almost like anybody who wants exclusive access to land (for their housing or their business) has to pay society for the right to use it. And if a business (like an apartment) tried to pass on costs to customer (their renters) without providing more or better services, they are essentially just admitting their land got more valuable, so they would just pay more in land value tax (thereby providing more funding for UBI or public services)
Okay that kind of makes sense. There is a problem though, well three.
Imagine you live in a small town. Something happens (COVID for instance) and your town becomes popular and your land value goes up. Yesterday your house was worth 100k but now it's worth 500k+. Your saying those people should essentially be forced out of their homes? To be bought up by rich people?
Additionally this means only the super rich would be able to afford homes? This tax would essentially mean only the top 1% could have a home and basically give them a free for all on any land they want. Why would we want that?
Lastly if you increased land tax by that much landlords would have to increase rent prices to offset this? So even with a govt subsidy the renter is still the person paying this increase.
Honestly I'm intrigued by this idea but once you start thinking about how it would work it falls apart. There is probably some variation of this that could work. Maybe in cities they'll be an extratax if you don't build some sort of minimum housing? But this is already pretty similar to just basic property taxes.
How does this work for land for agricultural use? It’s going to increase the tax burden on producers and increase the cost of food unless I misunderstand how this works and how it’s different than property tax
No, because
Your unimproved land value may increase in that instance, but it wouldn't suddenly jump up the amount you're implying, unless the economy catastrophically collapses.
That's exactly an instance where this would happen. Since the value of the land itself not what's built on it is valuable in this instance. Look at the value of the land near any ski resort town over the last 10 years.
The assessed value of a property is only indirectly related to the property tax that the owner pays. Municipalities multiply the assessed value of a property by the mill rate to calculate the taxes. They set the mill rate essentially by dividing their budgetary revenue needs by the total assessed value of all properties in the municipality. If my assessment goes way up (say, I put an addition on my house), then my taxes go up. But if everybody's assessment goes up proportionally, then my taxes don't change, because the mill rate will drop.
The latter is the situation in those ski-resort towns. It means that property owners suddenly have a much-higher net worth, but doesn't necessarily mean they're paying more in taxes. It only means that if the rich people moving in demand more and better municipal services, and raise spending.
On the other hand, look at the perverse incentive built into the current system: Landlords can reduce their taxes by letting their properties decay (lowering their assessed value); or at least, the system disincentivizes improvements which raise the assessed value. In a popular ski-resort town, or college town like mine, we get slumlords, because the vacancy rate is so low that they know that they can get tenants even in run-down units.