What's is the first duty of a politician? To keep land values high.
What is the goal of the LVT campaigns? To get land values low.
When LVT campaigns ask politicians to adopt LVT what do you think is the answer every time?
The irony is that LVT would actually raise land values contrary to LVT doctrine.
So there is a win win sitting there on the table ready to be grasped.
When will the campaign wake up I wonder? Do they really want it?
What is the goal of the LVT campaigns? To get land values low.
When LVT campaigns ask politicians to adopt LVT what do you think is the answer every time?
The irony is that LVT would actually raise land values contrary to LVT doctrine.
So there is a win win sitting there on the table ready to be grasped.
When will the campaign wake up I wonder? Do they really want it?
12 comments:
Your statement is ambiguous. I think I understand why you frame it in the way that you do, but nonetheless the fact remains that taxing/covenanting land value must reduce the *capital* value of the land, and at the end of the day, it is the capital value that politicians are elected to maintain. That the *rental* value would increase as the economy is boosted is of no consequence, especially as that's what would be taxed...
fraggle
Your response is ambiguous.
The "capital" value (I assume you really mean the capitalised value not the bricks and mortar) IS the rental value rolled up.
See here for more logic on this:
http://gco2e.blogspot.com/2010/10/lvt-will-raise-price-of-houses.html
LVT campaigns are indoctrinated to say house prices will fall. It is a false theory.
My bad, I was referring to the selling price. If the rent doesn't go to the owner, then the land has no selling price on the market. Only the price of the structures remain sellable.
If you have 'partial' LVT, then in theory the selling price could at some point increase nominally due to economic growth (depending on how it's handled monetarily), but the greater (ie more useful/beneficial) the LVT, the longer that will take, and the initial effect *will* be downwards, especially as we're in a bubble as it is.
Yes, LVT would before long raise rental values because the economy would be better, but the landowner sees as a greater tax burden. Land values will rise, but not the kind you can sell. Those aren't rising values that someone who's paid a mortgage for xx years wants to hear about.
There's always the option of inflating I suppose ;)
Print money through the CI, and then everyone's house will be nominally higher :)
That'll get the selling price up! Shame they're already wise to that one though...
fraggle
Yes this might be the case in a theoretical world starting form a clean sheet.
We live in the real world. Can you give me some self evidence that shows what you are trying to say might be true?
For example imagine an LVT was introduced tomorrow morning. Show me how you think it will play out in simple clear steps. No jumping to conclusions. Explain every step clearly?
Make it all other things being equal. Do not introduce confusing ideas around money.
Cheers
Happy to. I invite you to do the same.
So we're clear on our starting conditions: What percentage LVT is being introduced? I'm assuming spending is unchanged?
Good stuff. Already done my bit:
http://gco2e.blogspot.com/2010/10/lvt-will-raise-price-of-houses.html
Conditions are:
1) Abolish 100% taxation
2) Collect 100% rents
The practical politics I will leave at your discretion.
Ahhh... okay, I think I see our disconnect. Your final bullet is
A good economy increases rents and thus house prices
I agree, but as I understand it, one of the effects of LVT is to break the link between rents and house prices. Lunch is nearly over, and I'm out tonight, so I'll try and get my full thought process posted Thursday night.
btw, I haven't forgotten about our LVC discussion. I keep getting distracted, but I will come back to it.
I should have said "an advancing economy"
I have never heard the doctrine say "break that link". LVT is a practical policy to remedy the moral injustice and unjust founding social organisation of private property in land... once everyone has agreed that it is indeed unjust and unsustainable. This is not pedantry. It is an essential axiom that most LVT'ers refuse to discuss. If it does other things lets see what it does do exactly.
Nonetheless so what? Lets see where it goes.
You do realise we will be the first to ever examine these effects don't you?
No, of course that's not the *purpose* of LVT, but if you think about it, land selling prices represent money on the table. If they are zero, then you have successfully taken the money off the table!
Anyway, enjoy...
http://fraggle.wordpress.com/2011/05/06/lvt-v-house-prices/
You do realise we will be the first to ever examine these effects don't you?
I seriously doubt that...
"I seriously doubt that..."
OK - evidence please, not opinion.
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