an answer is yes, we should - the primary function of government is to defend claims on the use of land, and having the "land" pay directly for this is at least of a nice sounding symmetry. And theoretically, people would then be forced to productive investment rather than land speculation.
> the primary function of government is to defend claims on the use of land, and having the "land" pay directly for this is at least of a nice sounding symmetry.
Some claim that to be the primary function of government but it certainly isn't the primary element of the government budget.
> And theoretically, people would then be forced to productive investment rather than land speculation.
Thwarting land speculation is literally the same thing as not allowing land values to increase. LVT reduces land values because of the overhang of the future tax payments, but it also has various negative consequences. If you want to keep land values down, enact policies that encourage the construction and occupation of high density housing. In particular, don't explicitly impede it through zoning regulations etc.
The value increases. It's just gathered as taxes. Since what is to be done with the rents value is taken care of, you no longer have to concern yourself with it.
The improvements - buildings, the like - are still yours. The only thing that is taxed is the increase in value due to position of the land, due to proximity to other such improvements.
> The value increases. It's just gathered as taxes.
In other words, from the perspective of the land owner, the land value doesn't increase because the added value goes to the tax collector instead of the land owner. Which is true for both the owner/seller and prospective buyers of the land, so the value (meaning market value) of the land doesn't go up. Assuming the tax is perfectly calibrated and the land value estimate is correct before the existence of the tax reduces the market value of the land.
Here's the problem right now. Rents are too damn high and people can't afford to live in the city. You pass the land value tax and land market values decrease accordingly because property buyers won't pay as much for land they can't collect as much rent from. But the rents are still too damn high, they're just going to the tax collector instead of the land owner. And people can't build new housing to alleviate the high rents for the same reason they don't already, because zoning regulations prohibit it.
Suppose instead we change zoning regulations to allow builders to build several dozen new 50 story skyscrapers full of residential housing in the city. Supply goes up, price goes down. So property values go down and rents go down and now people can afford housing. How is that not better? It gives the "rents" to the tenants instead of the tax collector.
The interesting thing about land value/rents taxation is that it cannot be passed on to tenants. I think this covers that:
http://rationalwiki.org/wiki/Georgism
Hopefully, the rents that are too damn high go to the tax collector instead of an income tax. There is the Henry George "theorem" which states that land rents are always equal to the cost of government.
Curiously, I don't really know how this interacts with zoning. I suspect zoning would be completely different if there was no influence from land speculation.
I don't hold Geotaxation to be utopian. It's just interesting. Might be an improvement.
> The interesting thing about land value/rents taxation is that it cannot be passed on to tenants.
In theory. In practice the problem is that it gives governments a vested interest in rents remaining high to maintain their tax base, which makes them avoid policies that would lower rents (and thus the government's share thereof). But maintaining high rents is extremely regressive, regardless of whether the money goes to the government, because rents are paid like a poll tax.
> There is the Henry George "theorem" which states that land rents are always equal to the cost of government.
Things like that are weird because they have the potential to be "true" since a more prosperous country can afford to spend more on both government and housing, but then what is supposed to follow from that?
> Curiously, I don't really know how this interacts with zoning. I suspect zoning would be completely different if there was no influence from land speculation.
Well, it would turn the government into the land speculator, so they would be the ones trying to keep land values high and generate artificial scarcity.
I don't expect there's anything a government can do to manipulate the value of rents. SFAIK, the general case of county assessor's offices is that they're honest and transparent.
If taxes are too high here, I can move. That sets a mechanism for keeping equilibrium in prices.
> If taxes are too high here, I can move. That sets a mechanism for keeping equilibrium in prices.
Couldn't you say the same thing about rent, under the current system? If rents are too high, people can move to Des Moines or wherever; that fact hasn't made many people feel ok about how high the rents are (because of course not all places you could live are equally desirable).
