Comment by bijowo1676
2 days ago
costs are irrelevant here, imagine there was no tax hike, but just landlords decided to be greedy.
if they hike rents, whoever is more inelastic will eat the rent increase to the degree of her inelasticity.
the cost increase is shared between renters/landlords in the ratio of their elasticities. Whoever is more inelastic, will eat the cost.
Inealstic renters will pay up increased rent (like techbros in SF are eating up all rent increases).
Elastic renters will get up and move to Texas, if renter swill hike rent.
Elastic landlords will lever down and decrease number of low margin properties like rent-controlled properties, or unprofitable properties.
Inelastic landlords will eat the taxes and take a hit to profitability.
Yeah. I understand the point you’re making, but what I’m saying is that I don’t think that aligns with the authors position.
The author seems to say that costs can be passed on to the renters when the costs are a property tax, but they cannot be passed on when it’s a land tax. That seems like a really odd position to take and it doesn't align with your "costs are irrelevant" statement. I fully admit that I could be missing something, but I don’t understand how it can be true that only certain types of taxes can be passed on to renters.
I fully understand the argument you’re making and I’m neither agreeing nor disagreeing with it. It sounds logical, but I frankly don’t know enough about this topic really process it. What I’m saying is that regardless of whether you’re right or wrong, I don’t think your argument is the same one the author is making unless I’m missing something in your argument about why that only applies to land taxes and not property taxes.