> Taxes on land do not affect the supply of the land, this implies they are not passed on and the research literature largely agrees with this.
Taxes may not affect the amount of land that physically exists, but they absolutely can and do affect the amount of land available for rent as opposed to other income-generating use cases.
On top of that, a tax that applies equivalently to all of the land available to the rental market in a given area will simply push prices upwards across the board, which is likely to just be absorbed by renters given the usually low price elasticity of demand for housing.
> On top of that, a tax that applies equivalently to all of the land available to the rental market in a given area will simply push prices upwards across the board
Most research asserts that a land value tax decreases the selling price of land.
In a fully functioning spherical chicken market, once balancing in
If I buy land for $100k today, I can assume I'm going to make say $6k a year from renting it to someone and $2k a year from it increasing in value, giving me a 8% roi
If I instead had to pay just $4k a year in LVT, the price would reduce to $50k to keep that 8% roi. I'll still be making money for doing nothing.
Now if that LVT was returned to the population at large, it's quite possible the population has more money to spend on land, so I could increase the rental price from $6k a year, but then the LVT would increase, because the idea is it reduces unimproved land value to zero -- nobody should make money from occupying land, they should make money through improving it.
In reality though any LVT implemented would be full of loopholes which would introduce absurd incentives. Just like taxing income, and worse taxing earned income more than non-earned income.
All property owners can increase rental prices now anyway. They can only increase them to the maximum someone will pay for it. That's why average rental prices tends to track average income. If you have 5 homes and 6 people, each able to pay 2100, 2200... 2600, then the worst home will rent for 2200, and the one who can only afford 2100 will live in a box.
They can only increase rents as much as the next guy. If you're charging $2500 but next door is $2400, then nobody will rent from you. But if everybody's charging $2500, then that's what people will have to pay.
You're right that some people will get squeezed out, but in high demand markets there are enough people willing to pay that it doesn't matter. The number of properties available for rent in California isn't growing as fast as the total population is growing. Property owners will eat the 5% increase for a while - at least until the existing leases expire - but eventually they'll incorporate that 5% increase into the rent.
Why would a land value tax shift the allocation of land between uses? The amount of the tax doesn't depend on what the land's being used for. If renting is the highest-value use without the tax, it will still be the highest-value use with the tax.
These are assertions, not arguments. Respond to points in the post you replied to. Be sure you understand them first; your assertions do not hold in the case of LVT.
In fact, they are indeed arguments derived from applying well-understood economic principles to the specific -- and purely speculative -- claims posited by the preceding comment.
> Be sure you understand them first; your assertions do not hold in the case of LVT.
Indeed I have, and indeed they do. Rather, your own response attempting to dismiss rather than engage with counter-arguments betrays a likely ideological rather than pragmatic interest in the concept of LVT.
Taxes may not affect the amount of land that physically exists, but they absolutely can and do affect the amount of land available for rent as opposed to other income-generating use cases.
On top of that, a tax that applies equivalently to all of the land available to the rental market in a given area will simply push prices upwards across the board, which is likely to just be absorbed by renters given the usually low price elasticity of demand for housing.