Using up land is an externality, and thus should be taxed accordingly.

I don't understand your use of externality here. How is it imposing costs on others?

smallmancontrov 4 hours ago | parent | next [-]

If you exclude others from a rectangle of land, you are imposing that exclusion on others and the others are due consideration. The rest of the property stack is good -- improvements require investment, investment requires returns, so binding the returns to the investment is important and creates incentives for good stewardship and skin-in-the-game decision making etc -- it's "just" the foundation that is problematic.

Georgists want to tackle this with a Land Value Tax, I tend to think it would be difficult to make this robust against highly motivated attack and the better approach is long-term leases with similar duration to building depreciation schedules. In either case, the idea is that capital appreciation of the dirt (which is really capital appreciation of the right to exclude others from the dirt) goes to public coffers, improvement value goes to the people who made the improvements. That's fair.

Of course, there's also the question of how to get there from here, and one way to do it without guillotines would be to tie the extraordinary tax treatment of property to conversion into a 99 year lease (and then, after 99 years, new issuance could target the ~30 year range). "Sure, you can have your 1031 capital gains tax exemption and pay no tax on the money you obtained by holding on to the right to exclude others from an increasingly popular rectangle of land, but only if you sign up to eventually be part of the solution rather than part of the problem."

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ahartmetz 4 hours ago | parent | prev | next [-]

They can't use the same land anymore.

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twoodfin 4 hours ago | parent [-]

That’s true of everything in limited supply.

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kraken_cult 4 hours ago | parent | next [-]

And what's being litigated here is how people deal with limited supply when "just make more money" isn't a real option.

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twoodfin 4 hours ago | parent [-]

So owning anything that’s in limited supply produces “externalities” that should be taxed?

	▲	kjshsh123 3 hours ago \| parent [-]
		If it's also a necessity for life, then honestly, yes? Also, even when not a necessity, taxes are often just more efficient than the alternative. Think about taxi licenses before Uber. The government thought there were too many taxis. They made a limited supply of medallions therefore. The government gave them away to existing taxi drivers for free. Eventually they reached $1,000,000. Eventually there were too few taxis. Existing owners complained about trying to expand the supply because maybe they just took out a loan to buy one. People were even renting out medallions. Something the government handed out for free. The whole mess could have been avoided if the government just taxed taxis until the quantity matched what they wanted. In a way, you'd end up in a position similar to just handing out the medallions for free. The differences are the government is getting the money and the rate can be more easily changed. This is a pretty close metaphor for land value tax. All LVT really does is instead of paying the prior owner or a bank for land, you pay the government in installments.

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VirusNewbie 10 minutes ago | parent | prev [-]

Not if there are either substitutes or financial incentive to make more. Capitalism is pretty great, it just doesn't work for certain natural resources that have a very finite supply.

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Teever 4 hours ago | parent | prev [-]

We’re all on this world for a little while and then we die and leave behind the detritus of our lives.

For some people that’s a house full of crap that their kids need to clean out after the funeral and for others that’s a dilapidated apartment building that’s soon to be condemned and will require asbestos abatement and demolition.