Landlords are taxed. Their rental income is subject to income tax, when they sell the home they have to pay a lot more taxes than if they were selling their primary residence, and they have to pay property tax.
Now, I do think residential real estate rental corporations should be straight up outlawed.
They are taxed, but I think they could be taxed more and better. Specifically, I — and many others, including many an economist — think we ought to be implementing a land value tax.
In fact, it’s so well-regarded a tax that it’s been referred to as the “perfect tax”, and is supported by economists of all ideological stripes, from free-market libertarians like Milton Friedman — who famously described it as the “least bad tax” — to social democrats and Keynesians like Joseph Stiglitz. It’s simply a really good policy that I don’t think is talked about nearly enough.
It reveals that much of the anticipated future tax obligations appear to have been already capitalised into lower land prices. Additionally, the tax transition may have also deterred speculative buyers from the housing market, adding even further to the recent pattern of low and stable property prices in the Territory. Because of the price effect of the land tax, a typical new home buyer in the Territory will save between $1,000 and $2,200 per year on mortgage repayments.
Detroit is trying to, largely at the behest of their mayor, Mike Duggan. Detroit would especially benefit from the proposed tax, as it has a ton of vacant land, much of it owned by the ultra-wealthy Illitch family:
Ilitch Holdings has been criticised for leaving many properties in Detroit untenanted, allowing them to decay, and for demolishing historic buildings and leaving lots empty, or only using the lots as car parking, rather than developing them.[11][12][13][14][15]
The top line of what you just linked me is saying they’re going to drop property taxes on occupied buildings by 17% and raise taxes on unoccupied land. This isn’t about changing the math for renters this is about shrinking the city’s sprawl to save money on infrastructure.
And that’s not to say taxing landlords is going to do anything. My point is about the political economy of going after people whom you give half your money for years and years first (for centuries). Our political system is designed to protect these people. From the constitution on down.
Not quite. The point is to raise taxes on the unimproved value of land. For example, two identical lots with the same underlying land value – one vacant and one with an apartment building – would both pay the land tax, but it would be the same amount. They key idea being to heavily incentivize the owner of the vacant lot to do something with it (like build housing) rather than just sit on it as a speculative investment. It should cost speculators money to keep valuable land idle.
It reveals that much of the anticipated future tax obligations appear to have been already capitalised into lower land prices. Additionally, the tax transition may have also deterred speculative buyers from the housing market, adding even further to the recent pattern of low and stable property prices in the Territory. Because of the price effect of the land tax, a typical new home buyer in the Territory will save between $1,000 and $2,200 per year on mortgage repayments.
How so? Land value tax is just supremely good tax policy, and we should be striving to replace our broken property tax system with it.
Any progressive tax system that incentivizes new housing development, disincentivizes speculative land holding, empirically makes housing cheaper, and cannot be passed on to tenants is an absolute win in my book.
Who gives a fuck how cleverly the administration of ‘free market solutions’ through tax policy is targeted towards ‘incentivizing’ landlords. This is a post about the parasitic relationship between landlord and tenant. I made a (glib) point about how it’s difficult to legislate against landlords because they get to use your money to lobby against you. What does your point have to do with any of that?
It’s difficult, yes, but our society has fought and won battles against vested interests before. Good policy can be fought for and achieved, as evidenced by basically every successful country on earth.
I just want to advocate for good policies in this thread so that we can solve some of our problems. In my experience, a lot of people can identify that there is a problem with the landlording class, but many people don’t know a whole lot about the underlying reasons why this dynamic exists or what we can do policy-wise to fix it.
the parasitic relationship between landlord and tenant
This is also part of the goal of land value taxes. If we all can agree that landlords’ hoarding and monopolization of finite land is what allows them to extract unearned profits from the rest of us, the land value tax is the mechanism to reclaim those rents. The idea is to turn landlording – a position of power and privilege with access to economic rents – into mere property management – a regular job where you earn income based on the labor you do in maintaining properties.
what does illitch gain from this tactic? is it a political power move over detroit to hold sway in lawmaking? parking lots can generate an autistic savant worth of money, but to not develop the rest of the lots? 🤔 fishy
me at age 35
taxing didn’t work I have a modest proposal for landlords
yes 🍴🫢
Landlords are taxed. Their rental income is subject to income tax, when they sell the home they have to pay a lot more taxes than if they were selling their primary residence, and they have to pay property tax.
Now, I do think residential real estate rental corporations should be straight up outlawed.
They are taxed, but I think they could be taxed more and better. Specifically, I — and many others, including many an economist — think we ought to be implementing a land value tax.
Why LVT and not just leave it to income taxes? In short, LVT is just a really good tax. Progressive, incentivizes efficient use of land, discourages speculation and rent-seeking, economically efficient, and hard to evade. Plus, critically regarding landlords, land value taxes can’t be passed on to tenants, both in economic theory and in observed practice.
In fact, it’s so well-regarded a tax that it’s been referred to as the “perfect tax”, and is supported by economists of all ideological stripes, from free-market libertarians like Milton Friedman — who famously described it as the “least bad tax” — to social democrats and Keynesians like Joseph Stiglitz. It’s simply a really good policy that I don’t think is talked about nearly enough.
Even a quite milquetoast land value tax, such as in the Australian Capital Territory, has been shown to reduce speculation and improve affordability:
That’s not the point I was arguing. The rage comic said landlords should be taxed, which caries the implication that they aren’t currently taxed.
I agree. They should make it that no one person can own more than like 3 properties or something like that.
Apartments should be owned by the renters. They pay for their management and if it’s poorly managed they can choose to hire someone else.
Same with condos and the absolute nightmare costs of HOA. No HOA should own a community. The community should own the HOA.
With who’s politicians?
Detroit is trying to, largely at the behest of their mayor, Mike Duggan. Detroit would especially benefit from the proposed tax, as it has a ton of vacant land, much of it owned by the ultra-wealthy Illitch family:
The top line of what you just linked me is saying they’re going to drop property taxes on occupied buildings by 17% and raise taxes on unoccupied land. This isn’t about changing the math for renters this is about shrinking the city’s sprawl to save money on infrastructure.
And that’s not to say taxing landlords is going to do anything. My point is about the political economy of going after people whom you give half your money for years and years first (for centuries). Our political system is designed to protect these people. From the constitution on down.
As they should. Property taxes are broken and enable land hoarding and speculation.
Not quite. The point is to raise taxes on the unimproved value of land. For example, two identical lots with the same underlying land value – one vacant and one with an apartment building – would both pay the land tax, but it would be the same amount. They key idea being to heavily incentivize the owner of the vacant lot to do something with it (like build housing) rather than just sit on it as a speculative investment. It should cost speculators money to keep valuable land idle.
Even a quite milquetoast land value tax, such as in the Australian Capital Territory, has been shown to reduce speculation and improve affordability:
Yeah so I’m even less impressed now
How so? Land value tax is just supremely good tax policy, and we should be striving to replace our broken property tax system with it.
Any progressive tax system that incentivizes new housing development, disincentivizes speculative land holding, empirically makes housing cheaper, and cannot be passed on to tenants is an absolute win in my book.
Who gives a fuck how cleverly the administration of ‘free market solutions’ through tax policy is targeted towards ‘incentivizing’ landlords. This is a post about the parasitic relationship between landlord and tenant. I made a (glib) point about how it’s difficult to legislate against landlords because they get to use your money to lobby against you. What does your point have to do with any of that?
It’s difficult, yes, but our society has fought and won battles against vested interests before. Good policy can be fought for and achieved, as evidenced by basically every successful country on earth.
I just want to advocate for good policies in this thread so that we can solve some of our problems. In my experience, a lot of people can identify that there is a problem with the landlording class, but many people don’t know a whole lot about the underlying reasons why this dynamic exists or what we can do policy-wise to fix it.
This is also part of the goal of land value taxes. If we all can agree that landlords’ hoarding and monopolization of finite land is what allows them to extract unearned profits from the rest of us, the land value tax is the mechanism to reclaim those rents. The idea is to turn landlording – a position of power and privilege with access to economic rents – into mere property management – a regular job where you earn income based on the labor you do in maintaining properties.
what does illitch gain from this tactic? is it a political power move over detroit to hold sway in lawmaking? parking lots can generate an autistic savant worth of money, but to not develop the rest of the lots? 🤔 fishy
Leave some empty so you can jack up the prices on the others. You have to hire less staff and have less expenses and still make more overall.
Drop the “T”