Comment by scyclow
19 hours ago
The first two arguments he makes here miss the point of a LVT entirely
> An LVT discourages searching for new uses of land
> An LVT implicitly taxes improvements to nearby land
If I find oil on my land, or if someone builds a park across the street from me, then I should be taxed more. The land is more valuable to me! At a 100% LVT I essentially break even. Anything less then that, and I still come out on top.
The only valid arguments in here are the last two. If people buy a piece of property with certain assumptions and the government turns around implements a 100% LVT, then I can understand why they would be upset.
So sure, there are some practical considerations to implementing a 100% LVT immediately tomorrow with no exemptions, and it probably wouldn't raise enough revenue to eliminate all other taxes. But the government could still raise a ton of tax revenue with minimal deadweight loss by phasing in a 75% LVT over 30 years with a handful of common sense exemptions.
That's assuming you actually own the mineral rights, which are not necessarily the same as the land ownership itself. These are quite often separated and held by different entities. In practice, the extraction of oil under a parcel of land has almost no relation to what the land is being used for.
Sure, so I guess if the owner of the land doesn't own the mineral rights then they have no incentive to look for oil with or without a LVT.
The author's assertion was that LVT disincentivizes one from using the land productively, and used oil specifically as an example. This example is basically completely divorced from the realities of oil extraction. Nevermind that nobody is building wells in the middle of cities, where LVT matters.
So, that argument seems to rely on a contrived, unrealistic example. I can't see how LVT disincentivizes productive use of lands.