REPLY Land Tax Dynamics (SD6088)

[M. Lehmann mlehmann1 austin.rr.com]

Posted by  "M. Lehmann" <mlehmann1 at austin.rr.com>
> How are people supposed to pay increasing land taxes?  On paper, their net

If governments were concerned, the simple thing to do is reduce accordingly 
the sales taxes and the improvement component of the property tax.

> This is a serious problem now in Florida, where increasing property values

If taxes on the land were kept high, as I outlined above, which would bring 
land prices down fast, but with some oscillation due to time-lagging reverse 
tax effects, that should do a lot to end the exodus.  With negligible taxes 
on labor --our sales tax and improvement tax--, the economy would revive.

Taxes should not be based on ability to pay, because in a downturn, exactly 
when more tax money is needed, there will be less of it. That land tax money 
comes from the free ride every landowner gets through the price increase and 
low tax on his land whose location value the community creates.  There's 
nothing new about these ideas. They've been around a long time, vigorously 
opposed by land dealers and speculators everywhere.

> Ad valorem taxes, in general, create some kinds of "unintended consequences"

I'm suggesting there wouldn't be a crisis with a high land tax largely 
replacing other taxes (I call them taxes on incentive)  If you always mean 
by value the appraised value of the property, with no high land tax to bring 
it down, yes it does keep going up and up until the "haves" can't afford it 
either.  ML

[Host's Note: This discussion, though interesting, has gone about as far
 as talking will take it. Mary has defined a number of interesting dynamic
 hypotheses and it seems incumbent on the proponents of change to demonstrat
 their validity. Since this is a System Dynamics discussion list that 
 demonstration should be done with something more formal. Less formal 
 responses shold be directed to Mary or one of the other posters, 
 not the list.]
  
Posted by  "M. Lehmann" <mlehmann1 at austin.rr.com>
posting date  Wed, 6 Dec 2006 14:47:15 -0600