By Benjamin Hayllar
Likewise, in our neighborhoods, the land value tax discourages yards because they would become so much more expensive.
This is like saying that people will drive less or stop buying SUVs because the price of gasoline is now $2.05 a gallon (yesterday) instead of $.90 per gallon the way it was last year. Yeah, maybe they will in 5 or 10 years, but don't hold your breath till then.
A land value tax encourages abandonment of vacant property in neighborhoods. People who own vacant lots often refuse to pay the real estate tax on their property because the lot has no value to them. It's hard to believe that this problem could get worse. But clearly, the higher the tax on vacant lots, the greater the incentive to abandon it and let the city take the property.
The man mixes his facts here -- vacant properties have suddenly become vacant lots. If that were true, it would be a VERY good thing. (Demolition costs big bucks.) There is a big difference between the two! Obviously, the property had no value to them because the structure on it had no value to them, not because of the taxes on the land. If it was a vacant lot, they could build a McMansion or tenement housing to their hearts content and collect rents or government payments for section 8 tenants. Not only that, but a vacant lot is potentially a lot more pleasing to they eye than a vacant building. At least with a vacant lot, the community can put a garden in, and if the owner of the lot wants to walk and let the city take it... so much the better for the Gardeners. It is much easier to get a city owned property converted to a permanent trust owned garden than one owned by some absentee who refuses to talk to anyone about it.
The study assumed three things: the assessed values of the property and of the houses were accurate; a single tax would be applied equally to both; and the single tax was revenue-neutral to the city.
The results of the study were stunning. Changing from a land value tax to the single tax increased the property taxes in the wealthiest neighborhoods and decreased the tax in poorer neighborhoods. In other words, under the land value tax Pittsburgh's poor citizens subsidized the real estate tax of wealthier citizens.
The major flaw in this study is that the results were jiggered to produce a particular outcome... "revenue neutrality." Changing tax systems cannot produce revenue neutrality without playing.
Naturally, the taxes on the so-called wealthy neighborhoods had to go up because the taxes on the so-called poor neighborhoods were going to go down.
A "single tax" is not a flat tax.
To have any relevancy we need next is the follow up study which determines how much the "wealthy neighborhoods" declined and how much the "poor neighborhoods" increased in value when the wealthy residents moved out of their overpriced neighborhoods to cheaper ones because their taxes increased dramatically.
The purpose of tax policies such as this is to change people's behaviors. So the clear message here is -- if you want to pay less in taxes, you move out of the expensive neighborhood and into the cheap one. The process is called gentrification.
Also, the difference between Philadelphia and Pittsburgh is striking when one considers the "wealthy neighborhood" vs "poor neighborhood" demographics. They are DRAMATICALLY further appart in Pittsburgh than in Philadelphia.
How many "wealthy" neighborhoods exist in Philadelphia? -- Center City, Chestnut Hill, University City... any more? How much of the city do they occupy? How high would taxes have to go in those neighborhoods to pay for decreases in Fishtown, Kensington, South Philadelphia, Juniata, Logan, North Philadelphia, the rest of West Philadelphia ... ?
The idea is also facetious that property taxes had anything to do with this paragraph:
After the collapse of the steel industry, McKeesport has experienced only demolition despite its land value tax. Pittsburgh had downtown construction growth in the 1950s and the late 1970s. If the land value tax was effective, one would assume more consistent new construction patterns. Instead, Pittsburgh had construction generated by market factors, pent-up demand, tax deferrals, and outright tax forgiveness.
The idea that ANY tax policy (including "sin taxes") fosters development (or any positive behavior) is simply and utterly bogus. The idea that "tax policy" can successfully be used to coerce people into doing something which they don't want to do is so rampant at all levels of the political system as to be an obvious cancer. The only time that "Tax Policy" succeeds in influencing behavior is exactly as Hayllar describes it -- when the taxes are negated by deferrals and forgiveness programs -- it doesn't matter one hoot wether that tax is a land tax, property tax, or an income tax.
The reality remains -- the type of tax in and of itself is not particularly relevant. Taxes in and of themselves are opium to politicans. What is relevant is the rate of taxation and the "structure" of the Tax Collector. The Land tax is less open to manipulation by politicians than the current property tax system -- which is why the politicians oppose it.
T.T.F.N. William H. Magill [EMAIL PROTECTED] [EMAIL PROTECTED] [EMAIL PROTECTED]
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