Comment by epistasis
6 months ago
It would make sense to have those Pigouvian taxes no matter what. But having an LVT is orthogonal, and it doesn't make the bad economic incentives that much worse. Especially since most economic activity subject to pigouvian taxes will not be much affected by land value taxation.
> It would make sense to have those Pigouvian taxes no matter what. But having an LVT is orthogonal
It is absolutely not orthogonal; LVT by design makes doing things with property that are less financially remunerative unviable, it’s key selling point is eliminating “less productive” uses by that mechanism. This exacerbates any divergence between market incentives and social utility.