> The land value tax can’t be dodged by leaving nor can it be passed on to renters.
In what sense can't it be passed to renters? Esp if all landlords in the market were faced with a new land tax that they had not previously planned for, why would it not be passed on?
Rent is a function of supply and demand, not a landlord's costs, otherwise we would expect changes in e.g. mortgage interest costs to be passed on to, but in practice we don't see this effect. We also don't see landlords who own their properties outright (and thus don't have mortgage interest costs) charging lower rents than landlords in the neighborhood with identical properties who have mortgages. When landlords' costs drop, do they drop the rent in response?
Taxes can be passed on when the tax induces a change in supply. Conventional property taxes are partially passed through because the component of the tax that falls on the building. Tax buildings, get less buildings.
Taxes on land do not affect the supply of the land, this implies they are not passed on and the research literature largely agrees with this.
> Taxes on land do not affect the supply of the land, this implies they are not passed on and the research literature largely agrees with this.
Taxes may not affect the amount of land that physically exists, but they absolutely can and do affect the amount of land available for rent as opposed to other income-generating use cases.
On top of that, a tax that applies equivalently to all of the land available to the rental market in a given area will simply push prices upwards across the board, which is likely to just be absorbed by renters given the usually low price elasticity of demand for housing.
These are assertions, not arguments. Respond to points in the post you replied to. Be sure you understand them first; your assertions do not hold in the case of LVT.
In fact, they are indeed arguments derived from applying well-understood economic principles to the specific -- and purely speculative -- claims posited by the preceding comment.
> Be sure you understand them first; your assertions do not hold in the case of LVT.
Indeed I have, and indeed they do. Rather, your own response attempting to dismiss rather than engage with counter-arguments betrays a likely ideological rather than pragmatic interest in the concept of LVT.
abeppu · · focus · HN ↗
In what sense can't it be passed to renters? Esp if all landlords in the market were faced with a new land tax that they had not previously planned for, why would it not be passed on?
larsiusprime · · focus · HN ↗
Taxes can be passed on when the tax induces a change in supply. Conventional property taxes are partially passed through because the component of the tax that falls on the building. Tax buildings, get less buildings.
Taxes on land do not affect the supply of the land, this implies they are not passed on and the research literature largely agrees with this.
Gormo · · focus · HN ↗
Taxes may not affect the amount of land that physically exists, but they absolutely can and do affect the amount of land available for rent as opposed to other income-generating use cases.
On top of that, a tax that applies equivalently to all of the land available to the rental market in a given area will simply push prices upwards across the board, which is likely to just be absorbed by renters given the usually low price elasticity of demand for housing.
jeremyjh · · focus · HN ↗
Gormo · · focus · HN ↗
In fact, they are indeed arguments derived from applying well-understood economic principles to the specific -- and purely speculative -- claims posited by the preceding comment.
> Be sure you understand them first; your assertions do not hold in the case of LVT.
Indeed I have, and indeed they do. Rather, your own response attempting to dismiss rather than engage with counter-arguments betrays a likely ideological rather than pragmatic interest in the concept of LVT.