But those checks and balances have been eroded over time, or weren't strong enough to begin with, so then the majority e.g. votes to constrain new construction because they value their own short-term financial gain over the greater harm they're causing to the minority.

And then the same dynamic plays out for some other issue, but this time you're in the minority and you take -50 damage instead of a +10 gain. So the problem is that it's in everyone's interest to stop this from happening in general, but only in the minority's interest to do it on any particular issue, and democracy in and of itself isn't structured to handle that.

Isn't it?

80% of people own a home, so they vote for policies that increase housing costs. Then 70% of people can afford to own a home, so they vote for policies that increase housing costs.

Eventually only 45% of people can afford a home, so the now-majority of renters vote for different policies. The entire edifice built on ever-increasing home values collapses because policies to support their continued increase are no longer favored by the majority. Without the expectation of continued price increases, speculators divest. There is a massive housing crash and all the people who did own a home end up underwater on their mortgages, but they're no longer in the majority so the now-majority only cheers because housing costs have finally come down and they're no longer paying two thirds of their income in rent. The now-underwater homeowners hand the keys back to the bank, because why pay a $500,000 mortgage when you can now get a house for $250,000?

That's a pending disaster. Maybe we should consider policies that get housing prices down in a controlled way, instead of causing a giant recession?

> There is no right to ownership of a property (despite it being called the american dream). As long as rental vacancy is sufficient to not cause mass homelessness, it isnt a problem.

"As long as there isn't mass homelessness, having landlords milk workers for everything they have is fine"? You get "can't afford medicine" and "can't afford nutritious food" long before you get homelessness. You get "can't afford to start a business" long before even those things. That's bad. That's a problem.

> And if does become a problem, the issue becomes one of production of supply and density (related to allowed zoning), and not the price and taxation (of land).

Those things are related. If taxation is higher then investment in new construction goes down.

Land value tax also does something extra weird. Suppose the annual tax on a plot of land is a million dollars. Meanwhile the amortized construction cost of putting one house on it is $30k annually, a 10 unit complex is $400k and a 25 unit complex is $1.5M annually, because taller buildings cost more per unit. Then the annual cost per unit with the LVT is $1.03M for the house, $140k for the 10 unit complex and $100k for the 25 unit complex. Even though the 25 unit complex costs twice as much per unit than the house to build, and 50% more per unit than the 10 unit complex, and even though the local population density may only require 5 housing units on each plot of land.

So the result is that you get a lot of 25+ unit condos/apartments, and then a lot of abandoned plots with nothing on them at all, because it's not cost effective to build on them unless you're going to build at least 25 units, but it's also not worth the construction cost of 25 units unless rents stay above $100k/year/unit. So you get enough towers to get rents down to the cost of the tower plus the LVT on the land under it and then construction stops because it both costs too much to build more towers (higher construction cost per unit) and costs too much to build smaller structures on the remaining land (LVT kills you with fewer units per plot).

> And it is through the fight to afford to buy property that productivity and innovation can be forged.

High rents cause poverty and crime, not productivity and innovation.

I hope your new landlord will lower your rent, when they refinance to a cheaper mortgage. (Or are only higher mortgage rates pass through? What's the difference?)

unless you're imagining they're destroying the property, you cannot "remove" it from the market (or they decide to leave it vacant deliberately - an illogical a choice as destroying the property).

If they sell to a owner occupier, it removes that buyer's original rental demand, by the same amount as the removal of the rental property from the market.

If they live in it themselves, it's the same (just no money changing hands).

(You can change the supply of land on the market, by eg giving a tax subsidy for keeping land off the market. That's what the British council tax does in many counties: you get a rebate, if your property ain't occupied.

But LVT specifically does not depend on what you do with the property. It's due one way or another, thus it has no influence on the supply of land.)

They didn't take their own advice, that they previously gave to the Japanese central bank in the 1990s. Instead, they started paying interest on excess reserves to neuter their own buying.

> Inflation never took hold no matter what they tried.

They tried approximately nothing. As I said, if you found a way to keep printing money without raising inflation, that's actually an opportunity, not a problem: just keep printing money and gradually buy the rest of the world for a bit of paper and ink. (Well in reality, it's only database entries. Which are even cheaper.)

If they can't create inflation, they should go and take lessons from Argentina, Turkey or Zimbabwe.

> the Feds can never be out of assets, as they just print more.

The Fed prints liabilities, not assets. Domestic money is a liability for the Fed. Assets are the stuff they bought with the money, like eg bonds or gold.

Yes, just like you gain the land rent from the land you own every year.

> If I am a bank, and joe blo has a 200k tax bill, and 20k income, [...]

My broker doesn't care about my income one bit when they lend me money: they lend against my stock portfolio. Similar, here you could lend against the real estate. Why would the lender care about income?

> However a normal bank might lend him the money just to receive his land as collateral to take it on when he inevitably defaults. But I thought LVT was about the reduction of land banking, not shifting ownership of land to the banks?

No, not at all. That's a common misconception, especially prevalent amongst fans of LVT.

As I said earlier, the LVT changes no opportunity costs between land uses at all. So if for some reason it's a good idea to 'land bank' without an LVT, then it'll still be a good reason to 'land bank' with an LVT.

However, being able to finance the government with an LVT might have second order effects on other taxes and regulations, that might make land banking less (or even more?) appealing. I don't know, it depends on what else is happening.

I already accounted for that in the original comment https://news.ycombinator.com/item?id=44188857 so I see that it was perhaps a bit too implicit:

> (In taxation and income, medians tend to be lower than averages, so the above system would leave money left over to use for general government revenue. If you want more of that, instead of paying the median amount, you could pay UBI at eg the 20%-ile level. That would still protect those people who only 'have 1 good thing going' from net outflowing payments.)

The less UBI you pay, the more you have left over for general government revenue. The more UBI you pay, the less you have left over for general government revenue.

> Land value as it stands is fucked in large part because the government holds so much of it. The solution is to release more land, not lock more of it up in state ownership.

It doesn't really matter, as long as they lease it out to the highest bidder.

> Its highly likely that people will end up with a significantly increased tax bill, especially if they had low/no income previously. Again this is stated intention, its just the flip side of encouraging more efficient use, is discouraging people from living within their means on a block of land they own that's near things property evaluators value.

LVT does not encourage (or discourage) any land use, efficient or otherwise. It makes no change to opportunity costs between different uses.

> You need to solve for the entire budget, not a number you made up.

I have no clue what you are on about?

If you want a clear suggestion of what I would prefer:

Auction off all the plots of land for eg 30 years at a time. Do the auction for the next lease 5 years before the old lease ends. Stagger the auctions to have around 0.28% of plots being auctioned off every month.

(Don't bother with UBI etc, unless you want UBI for other reasons anyway. Those were just suggestions to solve specific concerns about orphans and widows you brought up. I would suggest to just use the regular, existing means-tested social safety net for them, instead of spinning up something bespoke.)

Singapore does something reasonably similar, but I think 99 year leases are too long, especially since the country is young enough that the giving back at the end of leases has essentially never been tested.

I'm not sure why you bring up the US government spending? I don't know how much LVT could raise in the US. But some people have tried to figure that one out.

> If someone lives in a caravan sitting on a 200k valued piece of land that they own outright (hoping to develop one day), making minimum wage, and they get a tax bill for 20k, or even 10 or 5k their life just ended. If you want them to borrow with no income to offset their tax, they wont get that loan.

That's fine. They can sell the land to get rid of those hopes and dreams and tax obligations.

You can write similar sob stories about any tax at all. And most are worse than what you get with LVT.

With an established LVT, your caravan dweller would never get this weird idea in the first place.

And I admit that whenever you make an adjustment to the tax system, the people who made plans based on the previous system will have those plans torpedoed. Them's the breaks.

So we have to decide what we want to discuss: how an LVT system would work in the steady state, or how we could (or could not) transition to one.