This post has been de-listed
It is no longer included in search results and normal feeds (front page, hot posts, subreddit posts, etc). It remains visible only via the author's post history.
In general, a land value tax is supposed to be the least distortionary tax due to the fixed supply of land, but zoning introduces the possibility of artificial supply limitations.
With the passage of an LVT, if a landowner wanted to reduce their taxes, supposing they could create a credible covenant preventing all future development on that land, future cash flows from that development would not be counted in the market value of their land. Thus, their LVT assessment is directly reduced, if it accurately meausures the market value of their land (let's say the land is completely undeveloped for simplicity). This also means less cash from a future land sale, but that may or may not be one's top priority, depending on their own personal considerations. And of course if everybody in a given neighborhood does this, it's equivalent to a zoning regulation.
People can get quite adamant about LVT being non-distortionary, and Georgism has become a big online thing (not to mention its broader intellectual history), so I just want to make sure I'm not missing something here. I haven't run into this objection to Georgism before, but it seems quite fundamental.
Subreddit
Post Details
- Posted
- 6 months ago
- Reddit URL
- View post on reddit.com
- External URL
- reddit.com/r/AskEconomic...