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It is based on 1800's economics where primary production (using raw materials) was the primary source of value creation.

It doesn't make much sense for a modern service based economy. Your typical service sector worker, programmers, doctors, CEOs, would have essentially no taxes as long as they have a small geographic footprint.

Of course it sounds good to tech b


How does this interact with the fact that housing is maybe the biggest economic issue that America is currently dealing with? That suggests to me that land is still pretty important.

This doesn't apply to what Detroit is doing, but you could probably also take the underlying logic of land taxes (rent seeking should not be protected from taxation) and apply it to other more modern forms of property.

The housing shortage is the result of under-building over the past fifteen years, exacerbated by labor shortages in the construction industry and trades. On the land side of the equation, the problem is zoning not bad tax incentives. LVTs could move the housing supply needle in some locales but if you want to increase the supply of housing there are bigger dragons to slay.
Under building is caused by NIMBYISM which exists without opposition because we don't value and tax land fairly.

Stop letting low tax paying SFHing leech off the system, and we will be incentivized to build more.

Lvt would just make nimbyism worse, it doesn't punish it. Up zoning and public infrastructure increases property value.

The best way to keep your land value tax low is to ensure that zoning restricts its use and Light Rail never gets built.

Under the existing system you are incentivized for your own land to be zoned as highly as possible while your neighbors land is restricted as possible to keep supply low. Since everyone votes against you and you vote against everyone, zoning is low just about everywhere.

Under a land value tax this flips, and the majority vote would go to up-zoning.

It would make housing far less accessible.

It would be like a flat tax (in dollars, not percent) on every homeowner. Currently the top 5% of income earners pay 65% of taxes, and the bottom %50 pay %2.

Instead of this, every homeowner would pay basically the same. Bezos and Musk would pay more, but they don't own a million houses each, so it wouldn't be much more.

It isn't the size of their geographical footprint. Rather, it is the location. Actually, locations, for the individual practitioner: their business and their home. They want to be in a good school district that educates all its students well and sends them to good colleges? They pay for the privilege.

They want to be close to high-paying jobs? They want to be close to highly-paid homeowners? They want to be close to their own workplace? Location, location, location!

But instead of paying the previous owner, who didn't create the land value, they pay the community, year in and year out, for those services.

Makes sense to me.

So Elon musk works remote out of his 50k shack in boca chia, paying no tax. Tech employees live in some beautiful remote locations and pay no tax.

Meanwhile, blue collar workers tied to living in urban centers pick up the bill.

Lvt would completely decouple income from tax burden

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