All of pineappledragon's Comments + Replies

Death is foreseeable?

(Well, okay, yes, but the timing often isn't.)

> Owners hate property taxes and land values are less than property values. Why not slowly switch to using land values and lower everyone's property tax bill?

Separately, I would suggest being very careful about claims like this. 

  1. Lower values for the tax base don't mean lower taxes in dollar amounts. The previous state I lived in assessed property at about half the market value but more than made up for it in the rates.
  2. A non-trivial revenue-neutral tax reform by definition has to produce some losers. Yes, technically we'll be paying less "property"
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>This proposal doesn't involve any forced moves, owners only auction when they want to sell their land.

The article already lists two counterexamples that aren't uncommon situations...

 

>There will be situations where the valuation growth from point 5 outpaces the true value of the house. The owner can update the land value by putting the land up for public auction, but they have to win that auction fair and square. If they win the auction, the land value is updated to their new bid, but no money changes hands (essentially, they pay themselves for... (read more)

1harsimony
Note that these sorts of situations are perfectly foreseeable from the perspective of owners. They know precisely what they will pay each year in taxes based on their bid. It's prudent to re-value the home every once in a while if taxes drift too much, but the owner can keep the same schedule if they want. They can also use the public listing of local bids, so they know what to bid and can feel pretty safe that they will keep their home. They truly have the highest valuation of all the bidders in most cases. The thing is, every system of land ownership faces a tradeoff between investment efficiency and allocative efficiency. This is a topic in the next post, where I'll discuss why the best growth rate of taxes closely follows the true growth rate of land values. Essentially, you want people to pay their fair share. Unfortunately, any system that has taxes move along with land values will risk "taxing people out of their homes", there are legitimate ways to do land policy on either end of the spectrum. The neat thing about this system is that you can choose where on the spectrum you want to be! If you want high investment efficiency (i.e. people can securely hold their homes and don't have to worry about re-auctioning) then just set the tax growth rate to zero; that way the owner pays a fixed amount each year indefinitely. In net present value terms, the indefinite taxes will be finite and the tax rate can be set to adjust this amount up or down. If for some reason you want allocative efficiency, you can crank the growth rate high enough to trigger annual auctions. This is bad for physical land, but this could be valuable for other types of economic land like broadband spectrum.

The tragedy is our continued focus on the symbolically superior pure electrics over the vastly better for the planet hybrid vehicles.

 

Pure electric vehicles can have non-symbolic benefits too, though maybe not environmental ones. In our case, we would very rarely have use for the option to use gasoline. By going purely electric, we avoid: 1) a bunch of maintenance, such as oil changes; 2) worrying about the price of gas, where convenient gas stations are, or even about the shelf life of gas (if you go through it slowly enough it can actually go bad in... (read more)

This strikes me as something akin to a not-quite alternating Prisoners' Dilemma. The party in power can unilaterally take the selfish option (goose the economy for electoral benefit) or not. Over time there are three types of outcomes. 1) if you act selfishly when given the chance and I don't, I'm a chump (and vice versa); 2) if neither of us act selfishly, we're even; and 3) if we both act selfishly we're still even, but the economy is worse overall because we keep flooding the information system (prices) with noise.

One natural solution would be for all p... (read more)