Talk:Land value tax

Why this tax can't be passed on to tenants

The article states that this tax cannot be passed on to tenants, but doesn't explain why (there is just a citation to Adam Smith's claim that this is true). I think this needs to be properly explained. (I know the argument in general terms, namely that rents are set according to what the market will bear, but I don't find this very convincing, given that most renters presumably have other expenses that can be cut if rents go up, and competition presumably won't affect an extra cost applied to all housing in the way it would to one landlord raising rents. Of course, not being an economist, I may well be totally wrong about this, but that's all the more reason for this article to explain this). Iapetus (talk) 15:29, 27 May 2020 (UTC)

I had a look at some papers and it is believed to be true based on current economic thinking. Research and thinking says that taxes on the improved value of land (ie buildings and land) are passed on. It still seems to be an active question to find conclusive evidence that it is not (or possibly is) passed on. Maybe a citation about the current thinking is needed. Alex Sims (talk) 11:46, 12 June 2023 (UTC)

A better way of looking at it is to say that LVT doesn't affect rent because landlords generally charge whatever the market will bear. This is particularly true when the tenant is a business that leases commercial property from a commercial landlord. Two landlords owning identical neighbouring properties but one with a mortgage and one without will both charge much the same rent despite the difference in their costs. So in that case the extra cost of the mortgage is not passed on: it just results in one of the landlords making a lesser profit than the other.

If either landlord's costs rise higher than market rent, they are certainly at liberty to attempt to pass on the extra cost. However experience shows that landlords who do that, tend to lose tenants altogether and end up having to bear the whole cost of the mortgage, maintenance, taxes, and so forth. Particularly in the case of commercial property. Faced with such a choice most landlords either choose not to raise rents, or choose to sell up altogether. In the example given property taxes might rise to the point where the landlord with a mortgage will raise the rent, lose the tenant, be unable to find another, and be forced to sell while the landlord without, merely sees a reduced profit. So here too the extra cost of increased taxes has not been passed on.

However, it is certainly the case that property taxes could be raised to such a level that no landlord can cover their costs. We can see the results of this in many small towns where shops lie empty and factories become derelict because property tax valuations are done on property prices rather than property rents. In many jurisdictions property prices remain high even when rents are low because property taxes are waived on empty commercial property but charged when it is in use. This makes it profitable to own such property for capital gains reasons but not for use. In this situation, paradoxically the best solution is to charge the tax whether the property is empty or not because doing so provides an incentive to owners to put the properties into use or to sell at a lower price. Which lowers the property tax valuation for the new owner. Derek Ross | Talk 20:26, 12 June 2023 (UTC)

Lack of Source for Meji Restoration

No source was given for the claim that there was a land value tax implemented during the Meji restoration. Specifics are even given which makes it even more problematic. Maybe it is from another source in the article, but it must be made explicitly. What should be done?--MrMineHeads (talk) 22:52, 2 October 2022 (UTC)

Here's a link to an academic paper on the topic.

https://www.tandfonline.com/doi/abs/10.1080/00220387708421628?journalCode=fjds20#:~:text=THE%20MEIJI%20REFORM&text=The%20tax%20rate%20was%20initially,more%20uniform%20throughout%20the%20country.

I searched for "meiji restoration property taxes" and it was the first link returned. So there may be better articles. -- Derek Ross | Talk 20:50, 12 June 2023 (UTC)

"Generally favored by economists" is dubious

That statement cites a paper by Stiglitz favoring LVT, but "generally favored by economists" means that economists in general favor it, not that some economists favor it. The way tax economists actually discuss tax policy, you'd think LVT was a fringe theory. John Moser (talk) 23:36, 11 June 2023 (UTC)

Needs a deeper explanation

The fundamental base of LVT is reclaiming commonly created wealth to use for common purposes. Nowhere does it say this. . 152.37.76.153 (talk) 16:29, 13 October 2023 (UTC)