Maybe property taxes are nearly as good as land value taxes, so swapping them for each other won't change as much as we think. Oh, and land prices will rise too!
> If the same total tax revenue is sustained, but the base is shifted from property value to land value, then land values will rise, not fall.
This is correct and is a basic illustration of a revenue-neutral tax-shift leading to higher capitalisation through ATCOR (All Taxes Come Out of Rent).
> Less tax revenue from developed homes will increase home values. An increase in home values, without any change to development/construction costs, means an increase in land values by the same amount, and hence by a greater proportion (as we saw earlier).
I can't see how you came to this conclusion—and this paragraph seems to be the main caveat behind the article. It seems this section is implying that the value of both land and improvements rise and fall together at the same rate, and shouldn't diverge at all. I think you've made a mistake here.
Edit: are you including land into "home values"? I figured you was just referring to improvements, but maybe I'm mistaken.
Put another way. When the sum of land and improvements rises or falls the incident of that is the land if construction cost of improvement Is unchanged
Real estate prices need not rise with land taxes. The tax is not the source of the price level, the structure for mortgage credit is the source, which ultimately boils down to government policy. (Governments could, if it served some public purpose and was democratically desirable, make home housing entirely free. It is a political choice.)
Also, land tax is simple to implement, hard to evade. That's the rationale, so if the same rationale applies to another form of taxation that would also drive demand for the otherwise worthless currency so would also be a valid a policy option.
By "entirely free" I mean in terms of home owner buying. Not in terms of real resources. But public housing construction would be an add to the non-government sector money supply, so a good thing. It would be a loss of labour and materials from the private sector. That's a political choice to be made.
> If the same total tax revenue is sustained, but the base is shifted from property value to land value, then land values will rise, not fall.
This is correct and is a basic illustration of a revenue-neutral tax-shift leading to higher capitalisation through ATCOR (All Taxes Come Out of Rent).
> Less tax revenue from developed homes will increase home values. An increase in home values, without any change to development/construction costs, means an increase in land values by the same amount, and hence by a greater proportion (as we saw earlier).
I can't see how you came to this conclusion—and this paragraph seems to be the main caveat behind the article. It seems this section is implying that the value of both land and improvements rise and fall together at the same rate, and shouldn't diverge at all. I think you've made a mistake here.
Edit: are you including land into "home values"? I figured you was just referring to improvements, but maybe I'm mistaken.
I am including land. It is not construction value.
Put another way. When the sum of land and improvements rises or falls the incident of that is the land if construction cost of improvement Is unchanged
? Did I miss something? A land tax could go on unimproved land. To tax speculation. That’s one sort of positive land tax. We could have more.
Real estate prices need not rise with land taxes. The tax is not the source of the price level, the structure for mortgage credit is the source, which ultimately boils down to government policy. (Governments could, if it served some public purpose and was democratically desirable, make home housing entirely free. It is a political choice.)
Also, land tax is simple to implement, hard to evade. That's the rationale, so if the same rationale applies to another form of taxation that would also drive demand for the otherwise worthless currency so would also be a valid a policy option.
By "entirely free" I mean in terms of home owner buying. Not in terms of real resources. But public housing construction would be an add to the non-government sector money supply, so a good thing. It would be a loss of labour and materials from the private sector. That's a political choice to be made.