> Property taxes, after all, punish development because they factor in the value of the house or whatever other structure happens to be built on top.6 Instead of abolishing property taxes, shifting to land value taxation (LVT) would constitute an actual improvement.

We need both.

We need land value taxation to reflect that land is a limited resource, and incentivize building tall apartment buildings downtown instead of wasteful parking lots.

On the other hand, we still need to tax houses and buildings because they correlate to usage of local government services. Whether it's the fire department where 20 apartments are 20x more likely to catch fire than a single tiny home, or the police where a large rich mansion is more likely to be targeted by theives than a tiny home, or schools where the larger a building is, the more likely it is to have more kids needing education (or more adults who once benefited from public schooling and are now paying it forwards).

Taxes are for allocating originally public resources efficiently (whether radio spectrum or land), and for paying for mandatory government services which you're not allowed to opt out of.

▲ sixo 9 hours ago | parent | next [-]

It seems like you could straightforwardly unbundle the property tax into a bunch of specific fees and insurances. We're comfortable requiring car insurance, why not fire and police?

This would probably make it more palatable to MAGA, but also I think to most other people too. It would probably destabilize municipalities: I have to imagine that most properties are dramatically over- or under-priced at present; on net I'd guess overpriced wins.

School districts are particularly tricky, though, for all the usual reasons.

▲ triceratops 8 hours ago | parent | next [-]

> We're comfortable requiring car insurance, why not fire and police?

For police, specifically because law and order is a core function of the state and to be provided to every resident regardless of ability to pay. If the state can't do that, it's called a failed state.

For fire, because just like car insurance there will be people who will evade the requirements, endangering others' lives and property. And we don't want firefighters to decide whether or not to save lives or neighboring properties based on coverage.

▲ sixo 8 hours ago | parent | next [-]

We get around both of those by requiring buildings be insured, just like cars. That word was in my original post, but you missed it and gave the standard counter-arguments to a different (and bad) idea instead.

This isn't meaningfully different from property taxes, many break out costs by service anyway, but I find it compelling to view these as insurances.

▲ maxbond 8 hours ago | parent | next [-]

That's a very regressive tax. Despite what was asserted earlier in the thread, the people who are victims of crime are usually lower class, not those living in mansions. Lower class people will get hit with a double whammy of being robbed and having higher insurance premiums as a result. Their neighbor's premiums will go up, as well.

I would speculate this would lead to a feedback loop of neighborhoods pushed into poverty or out of their homes by higher premiums, creating incentives for crime, leading to even higher premiums.

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sixo 8 hours ago | parent [-]

Oh, I know, that's the destabilization I mentioned in the first case.

I don't think you do this in isolation. Ideally you rationalize the property tax while compensating for its progressive/welfare effects with other policies at the same time; certainly you don't just naively lower property taxes and hope for the best. (MAGA would never.)

	▲	maxbond 8 hours ago \| parent [-]
		How you would we compensate for such effects?

▲ triceratops 5 hours ago | parent | prev | next [-]

> That word [requirement] was in my original post, but you missed it

I didn't miss it. I said "just like car insurance there will be people who will evade the requirements" (meaning: not buy insurance). Maybe you missed that? :-)

	▲	sixo 3 hours ago \| parent [-]
		Ha I did. But only because, your arguments only make sense if it's not really required, or if it's implemented so poorly as to be effectively not required. I don't see the point of criticizing a policy idea with an argument like "it will be implemented badly so it will be bad". Like, obviously, yes, if you do it badly it will be bad. That applies to anything, including the status quo.

▲ eightysixfour 6 hours ago | parent | prev [-]

And yet >15% of cars on the road are not insured, and those with insurance are punished by this fact. Functionally, the state is in the best position to capture the necessary revenue to support these services.

Let's "unbundle it" from the property tax in the way you suggest. How do the police and fire departments set the fees? Are they fixed for everyone in their area, which is extremely regressive, or do they set a variable fee based on your property value?

What about people who don't own property. Do they not get police services? Does the state pay if a park is on fire? The federal government if it was public land? Where does that revenue come from?

How do the police and fire departments assess your property value? Does someone make a fortune building a software system for police and fire departments to manage all of this?

Does your private insurance actually pay the local police and fire department, kind of like escrow? What about people who don't get any kind of insurance and pay no fees? Does the state now step in and take the property from them, effectively enforcing a monopoly that the state doesn't benefit from?

When a derelict building begins to burn on a block and threatens in-use buildings around it, who pays the firefighters for stopping the derelict building's fire?

Let's go back to the fixed fee idea - what stops the new police and firefighter businesses from raising the price every year on every constituent? Will there be competing police and fire departments that offer lower rates (for lesser service?)?

When grandma on fixed social security's fire fighting fees go up too much for her to afford to live there any more, and now the state comes to take her home from her, what has changed from property taxes?

Once you really sit down and think about it, the idea that you "own" any real estate is kind of a joke. Your ownership is fully dependent on the operating paradigm of the government and society which has a monopoly on socially accepted force to establish and defend your property boundaries for you. For that, you pay rent to the state. Every discussion I've ever had with a "true" libertarian about this has had them eventually twisted up in circles to reinvent the state, with the only difference being that money (which the state currently makes meaningful) or willingness and ability to use force matters more than votes, both of which create winner-take-all feedback loops.

▲ maxerickson 3 hours ago | parent | next [-]

I would subscribe to the police department that didn't have enormous legacy pension costs.

▲ sixo 6 hours ago | parent | prev [-]

Those are all good arguments one would have to deal with to implement this thing well!

I'm not sure the case for one-big-bundle-of-property-taxes is any better, though. Where does THAT number come from?

> Every discussion I've ever had with a "true" libertarian about this has had them eventually twisted up in circles to reinvent the state

Same!

▲ eightysixfour 5 hours ago | parent [-]

> I'm not sure the case for one-big-bundle-of-property-taxes is any better, though. Where does THAT number come from?

It isn't some mysterious, unknowable thing made up out of thin air. You can, in fact, dig into your local budget and find out what these things cost, how much you are paying for them, and the history of decisions that led to them being what they are.

	▲	sixo 3 hours ago \| parent [-]
		You really missed my point. All your objections either: 1. Also apply to the present day pricing of property tax: - "How do the police and fire departments set the fees?" - "Are they fixed for everyone in their area" - "how do the police and fire departments assess your property value?" - "Does someone make a fortune building a software system for police and fire departments to manage all of this?" - "Does the state now step in and take the property from them, effectively enforcing a monopoly that the state doesn't benefit from?" - "When a derelict building begins to burn on a block and threatens in-use buildings around it, who pays the firefighters for stopping the derelict building's fire?" - "what stops the new police and firefighter businesses from raising the price every year on every constituent? - "When grandma on fixed social security's fire fighting fees go up too much for her to afford to live there any more..." 2. Or pertain only to a version of my proposal where the insurance is not effectively required, and people can freely opt out `- "What about people who don't get any kind of insurance and pay no fees?"` 3. Or, are irrelevant to the specific question of how private property is taxed `- "What about people who don't own property." - "Does the state pay if a park is on fire?" - "Will there be competing police and fire departments that offer lower rates (for lesser service?)?" - "Functionally, the state is in the best position to capture the necessary revenue to support these services." (The state simply can be the insurer! I did not even propose private insurance.)` Literally every single one! It's like you were arguing with someone else who proposed something entirely different--the libertarian you cite, perhaps, someone you argued with in the past? I think in fact a well-executed insurance-like system would be functionally equivalent to the status quo, except that it would be far more efficiently priced. I suspect the only real difference is that property tax, due to the path-dependent history by which it got this way, has wound up being substantially progressive as a tax, compared to what you would get if you tried to rationalize it. And it therefore feels impossible to replace it, because you'd set back all that progressive taxation, only to run into the problems that lead to the status quo in the first place. We really don't like to admit what it is what we're the govt paying for; the lump sum of taxes is a way of protecting the revenue streams that support public benefits from too much individual scrutiny. But surely there is some other approach to keep moral-upside public goods in tact than this "security through obscurity". Surely. > Once you really sit down and think about it, the idea that you "own" any real estate is kind of a joke. I agree with this! It would be far better to model property ownership outright as renting from the public. People are awfully attached to the fiction of "ownership", though, and I think that deserves some credit.

▲ kiba 8 hours ago | parent | prev [-]

I don't see why fire department has to prioritize properties based on insurance coverage. They should be covered by taxes.

But it would be economically devastating to homeowners if they do not have fire coverage.

	▲	bb88 7 hours ago \| parent [-]
		It's not prioritization so much as it is providing service. Did you pay the $75 fee for the fire department to protect your house? [0] [0] https://www.nbcnews.com/id/wbna39516346

▲ 7 hours ago | parent | prev [-]

[deleted]

▲ seanmcdirmid 5 hours ago | parent | prev | next [-]

In Washington state they have a formula that factors in land value and improvements, moving the bar toward land value on the last few tax years. But ya, it’s hard to maintain schools if the needle doesn’t actually include capacity for students to service (the biggest expense paid for with property taxes here, note Washington pays for schools with statewide property taxes unlike most other states).

▲ kiba 8 hours ago | parent | prev | next [-]

Higher LVT will take care of this if you need more revenue. It is simply the most efficient way to raise tax revenue, one that encourage economic growth,

If you need additional taxes, I recommend piguovian taxes on road congestion, pollution, and other bad stuff. This cut down on bad stuff within your environment and reduces incidences like fire. Cars catches on fire all the time.

Code enforcement and insurance coverage also helps with cutting down on fire and such.

Also, local government services encourages or protect economic growth. I don't like paying taxes based on usage, because public education benefits me whether I use it or not. I'll gladly pay for public education regardless.

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seanmcdirmid 5 hours ago | parent [-]

A pure LVT would basically put all low income housing (as older housing) in high value areas out of business very quickly: those properties would have to be redeveloped for higher income purposes way sooner than they would have under a normal property tax scheme. You also have to plan projects not only for current land values, but for land values predicted 20-40 years into the future (and your building isn’t going to depreciate, although that doesn’t happen much in property tax systems either).

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novok 4 hours ago | parent [-]

Yes and no, it also encourages the development of dense housing, which ends up being cheaper housing within a few years vs causing old land inefficient housing to linger too long in a market and cause an affordability crisis. If the value of the land stays flat or goes down after inflation, this effect doesn't happen, it only happens when it goes up, because the economic market induces higher land demand for a region.

"House value always go up" is a relatively recent invention.

It's a tax system to create economic incentives for density.

	▲	seanmcdirmid 2 hours ago \| parent [-]
		Older housing stock is supposed to be for affordable housing, but if property taxes increase too quickly, they just get replaced with more luxury apartments and condos that still push people out if they are less dense. Worse still, let's say you get to build a massive low income density project, if you make pay LVT...it might not survive. > "House value always go up" is a relatively recent invention. Everyone wanting to live in a few economically hot cities is also a recent invention. If you price the LVT in those cities appropriately, then only the most income generating projects are going to be viable, and that means the lower class is basically not going to be living in those cities anymore.

▲ notherhack 9 hours ago | parent | prev [-]

People correlate to usage of services, not buildings. An empty apartment building is no more likely to catch fire than an empty house. Taxing land and taxing people, via local sales and/or income taxes, makes more sense to me.

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crazygringo 6 hours ago | parent | next [-]

> People correlate to usage of services, not buildings. An empty apartment building is no more likely to catch fire than an empty house.

No, it's both.

People correlate to things like schools. Buildings correlate to things like the fire department, precisely because -- as you put it -- an empty apartment building will catch fire too. And construction regulation, and the courts, and all sorts of stuff. There are a lot of government services that really are building-oriented as opposed to person-oriented.

IMHO schooling ought to be funded entirely at the state/federal level, not the local level, just for greater economic equality and opportunity. But since it is funded at the local level, and people don't like high sales taxes (and taxing visitors buying stuff to pay for local schools is weird), and local income taxes often don't exist, it ends up being property taxes. Still, there are some states that do have local income taxes, which is generally a much better solution.

	▲	seanmcdirmid 5 hours ago \| parent [-]
		Not every state funds education at the local level. Washington state and California being two exceptions I know about.

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xnx 8 hours ago | parent | prev [-]

> An empty apartment building is no more likely to catch fire than an empty house

If an arsonist sets fire to an apartment building this is a bigger problem (bigger fire, harder to fight) than if they set fire to a house.