In article <cmuqvsFgvheU1@mid.individual.net> you write: >>http://www.aei.org/publication/mind-the-gap-us-and-european-train-safety/
"If we end federal subsidies to Amtrak, and require it to liquidate,
then private companies would buy up its stations and routes. These
companies could then begin running our trains with a level of
professionalism that Americans now experience only when traveling
abroad."
Wow.
On Thu, 19 Mar 2015 03:06:20 +0000 (UTC), John Levine<johnl@iecc.com>
wrote:
In article<cmuqvsFgvheU1@mid.individual.net> you write:
http://www.aei.org/publication/mind-the-gap-us-and-european-train-safety/ >>"If we end federal subsidies to Amtrak, and require it to liquidate,
then private companies would buy up its stations and routes. These
companies could then begin running our trains with a level of
professionalism that Americans now experience only when traveling
abroad."
Wow.
I was gonna pick out the same portion.
As if Euorpean passenger-rail services run without government (i.e.
taxpayer) investment/assistance/subsidies/handouts (check your
favourite expression).
On Thu, 19 Mar 2015 03:06:20 +0000 (UTC), John Levine <johnl@iecc.com>
wrote:
In article <cmuqvsFgvheU1@mid.individual.net> you write: >>http://www.aei.org/publication/mind-the-gap-us-and-european-train-safety/
"If we end federal subsidies to Amtrak, and require it to liquidate,
then private companies would buy up its stations and routes. These
companies could then begin running our trains with a level of
professionalism that Americans now experience only when traveling
abroad."
Wow.
I was gonna pick out the same portion.
As if Euorpean passenger-rail services run without government (i.e.
taxpayer) investment/assistance/subsidies/handouts (check your
favourite expression).
W dniu 2015-03-19 o 21:06, Robert Heller pisze:'tourist'
Are there any *privately* owned passenger-rail services (other than
governmentrailroads) *anywhere* in the world? Ones that operate without ANY
thatsubsidies?
There are private railroad companies Leo Express and Regiojet operating without subsidies on long distance trains in Czech Republic.
Actually: are there any *privately* owned passenger services of any mode
operation without ANY government subsidies (direct or indirect)?
And lots of bus services in Poland (and other Eastern European countries too). Scottish-owned Souter Holding is operating under the brand name
Polski Bus on long distances, and many small companies with silly names
(one of them is actually named Garden Service) on short distances.
Although someone can argue that buses of any kind don't count as
"without subsidies", because, in their case, roads are subsidized.
Are there any *privately* owned passenger-rail services (other than 'tourist' railroads) *anywhere* in the world? Ones that operate without ANY government subsidies?
Actually: are there any *privately* owned passenger services of any mode that operation without ANY government subsidies (direct or indirect)?
W dniu 2015-03-19 o 21:06, Robert Heller pisze:
Are there any *privately* owned passenger-rail services (other
than 'tourist' railroads) *anywhere* in the world? Ones that
operate without ANY government subsidies?
There are private railroad companies Leo Express and Regiojet
operating without subsidies on long distance trains in Czech
Republic.
Not to mention that Amtrak was created BECAUSE the private companies
were going bankrupt running passenger trains, and that service under
Amtrak is in many ways, better than it was before.
What do we want to replace corporate welfare? More corporate welfare!!
W dniu 2015-03-20 o 20:26, Stephen Sprunk pisze:
There are private railroad companies Leo Express and Regiojet
operating without subsidies on long distance trains in Czech
Republic.
Do they run on the tracks of Czech Railways, which is govt-owned?
Yes, but they have to pay for it.
And lots of bus services in Poland (and other Eastern European
countries too). Scottish-owned Souter Holding is operating under the
brand name Polski Bus on long distances, and many small companies with
silly names (one of them is actually named Garden Service) on short
distances. Although someone can argue that buses of any kind don't
count as "without subsidies", because, in their case, roads are
subsidized.
Right: an 'indirect' subsidy.
There are private railroad companies Leo Express and Regiojet
operating without subsidies on long distance trains in Czech
Republic.
Do they run on the tracks of Czech Railways, which is govt-owned?
Do they run on the tracks of Czech Railways, which is govt-owned?
Yes, but they have to pay for it.
Full market price?
Although someone can argue that buses of any kind don't count as
"without subsidies", because, in their case, roads are subsidized.
Right: an 'indirect' subsidy.
At Thu, 19 Mar 2015 11:49:01 -0700 Nobody <jock@soccer.com> wrote:
On Thu, 19 Mar 2015 03:06:20 +0000 (UTC), John Levine <johnl@iecc.com>
wrote:
In article <cmuqvsFgvheU1@mid.individual.net> you write:
http://www.aei.org/publication/mind-the-gap-us-and-european-train-safety/ >>>"If we end federal subsidies to Amtrak, and require it to liquidate,
then private companies would buy up its stations and routes. These
companies could then begin running our trains with a level of
professionalism that Americans now experience only when traveling
abroad."
Wow.
I was gonna pick out the same portion.
As if Euorpean passenger-rail services run without government (i.e.
taxpayer) investment/assistance/subsidies/handouts (check your
favourite expression).
Are there any *privately* owned passenger-rail services (other than 'tourist' railroads) *anywhere* in the world? Ones that operate without ANY government subsidies?
Actually: are there any *privately* owned passenger services of any mode that operation without ANY government subsidies (direct or indirect)?
W dniu 2015-03-20 o 17:32, Robert Heller pisze:
Although someone can argue that buses of any kind don't count as
"without subsidies", because, in their case, roads are subsidized.
Right: an 'indirect' subsidy.
On the other hand, European (Eastern European too) fuel taxes are way
higher than American, so one might argue that it evens out.
Considering that things like compulsory purchase powers over land are a
form of subsidy (because the buyer of that land is forcing the owner to
sell it at less than they would otherwise chose to sell it at), I would >extend that to any transportation infrastructure of any kind.
Transportation infrastructure is the classic case of the economic
benefits being almost entirely external to the owner of the
infrastructure. In cases like this, it is pretty much universally
recognised that government provision (or interference in the market to
bring about the required objective) is beneficial to all.
On 2015-03-21 13:51:50 +0000, Adam H. Kerman said:
bob <rcp27g@gmail.com> wrote:
Considering that things like compulsory purchase powers over land are a >>>form of subsidy (because the buyer of that land is forcing the owner to >>>sell it at less than they would otherwise chose to sell it at), I would >>>extend that to any transportation infrastructure of any kind.
Transportation infrastructure is the classic case of the economic >>>benefits being almost entirely external to the owner of the >>>infrastructure. In cases like this, it is pretty much universally >>>recognised that government provision (or interference in the market to >>>bring about the required objective) is beneficial to all.
Dude, you have a logic gap there:
You lept from "benefits are external", which is correct, to "beneficial
to all", which is false.
In the general case it is false, but in the specific case of
transportation infrastructure it is true. There is not a single person
alive in the developed world today who does not have a better quality
of life than they would if there were no transportation infrastructure.
Something as simple as being able to buy a whole week's worth of
groceries in one place, for an afordable cost, and bring them home
would be impossible without transportation infrastructure.
The benefits of transportation go to land
value, and it depends on the proximity of the land to the transportation >>infrastructure. Also, if one owns residential land, one might not >>appreciate being under an airport landing approach path.
What would be universally beneficial to all would be if there was a
strict relationship between costs and benefits, so that those with a >>proportionate benefit pay a proportionate share of costs; a bit of
hedging as it's difficult to avoid outside subsidy whenever government
has its hand in anything.
It would be lovely if the word were simple enough that every benefit
every person gains could be assigned a dollar value, and these could be >neatly attributed to specific bits of government spending.
Unfortunately the world doesn't work like that. There are an awful lot
of things where I benefit from something existing that I don't use. I >benefit from the military existing. I hope the military never has to
be used, and in some ways it won't need to be used *because* it exists.
How much is that benefit worth? I benefit from the fact that it is
economically viable for a car company to make a car that I can afford.
I don't own a car right now, but nevertheless I benefit from that. I
benefit from the education system. I finished school years ago and
have no kids, but I still benefit from the education system because it
means the other people I depend on in society are better educated. . . .
With government, most of the time, there's no direct relationship between >>taxation and benefit, which is exactly what prevents government "good" >>being universally beneficial and can distort the economy.
The relationship between taxation and benefit is evaluated through the
ballot box.
People offer a proposal for what they thing we should do and what it
will cost us, and we decide whether to support that proposal or not.
bob <rcp27g@gmail.com> wrote:
Considering that things like compulsory purchase powers over land are a
form of subsidy (because the buyer of that land is forcing the owner to
sell it at less than they would otherwise chose to sell it at), I would
extend that to any transportation infrastructure of any kind.
Transportation infrastructure is the classic case of the economic
benefits being almost entirely external to the owner of the
infrastructure. In cases like this, it is pretty much universally
recognised that government provision (or interference in the market to
bring about the required objective) is beneficial to all.
Dude, you have a logic gap there:
You lept from "benefits are external", which is correct, to "beneficial
to all", which is false.
The benefits of transportation go to land
value, and it depends on the proximity of the land to the transportation infrastructure. Also, if one owns residential land, one might not
appreciate being under an airport landing approach path.
What would be universally beneficial to all would be if there was a
strict relationship between costs and benefits, so that those with a proportionate benefit pay a proportionate share of costs; a bit of
hedging as it's difficult to avoid outside subsidy whenever government
has its hand in anything.
With government, most of the time, there's no direct relationship between taxation and benefit, which is exactly what prevents government "good"
being universally beneficial and can distort the economy.
bob <rcp27@nospam.ac.uk> wrote:
On 2015-03-21 13:51:50 +0000, Adam H. Kerman said:
bob <rcp27g@gmail.com> wrote:
Considering that things like compulsory purchase powers over land are a >>>> form of subsidy (because the buyer of that land is forcing the owner to >>>> sell it at less than they would otherwise chose to sell it at), I would >>>> extend that to any transportation infrastructure of any kind.
Transportation infrastructure is the classic case of the economic
benefits being almost entirely external to the owner of the
infrastructure. In cases like this, it is pretty much universally
recognised that government provision (or interference in the market to >>>> bring about the required objective) is beneficial to all.
Dude, you have a logic gap there:
You lept from "benefits are external", which is correct, to "beneficial
to all", which is false.
In the general case it is false, but in the specific case of
transportation infrastructure it is true. There is not a single person
alive in the developed world today who does not have a better quality
of life than they would if there were no transportation infrastructure.
Something as simple as being able to buy a whole week's worth of
groceries in one place, for an afordable cost, and bring them home
would be impossible without transportation infrastructure.
There are plenty of people alive who don't benefit from transportation infrastructure, say paraplegics traumatically injured in crashes
in highway traffic, or pedestrians who find life dangerous and
inconvenient because of highway traffic.
Of course benefit from transportation is widespread, but you can't even hint that benefits are equally distributed, because that's wrong.
What would be universally beneficial to all would be if there was a
strict relationship between costs and benefits, so that those with a
proportionate benefit pay a proportionate share of costs; a bit of
hedging as it's difficult to avoid outside subsidy whenever government
has its hand in anything.
It would be lovely if the word were simple enough that every benefit
every person gains could be assigned a dollar value, and these could be
neatly attributed to specific bits of government spending.
Yeah, but it's not necessary. Change in land value is so easy to measure,
so taxing land value is close enough to pay for government, especially transportation infrastructure.
Unfortunately the world doesn't work like that. There are an awful lot
of things where I benefit from something existing that I don't use. I
benefit from the military existing. I hope the military never has to
be used, and in some ways it won't need to be used *because* it exists.
How much is that benefit worth? I benefit from the fact that it is
economically viable for a car company to make a car that I can afford.
I don't own a car right now, but nevertheless I benefit from that. I
benefit from the education system. I finished school years ago and
have no kids, but I still benefit from the education system because it
means the other people I depend on in society are better educated. . . .
If you own a house, if your local schools are excellent, it means that
you can sell your house for more money to a family with school-age
children. That's actually a direct benefit to you, despite not
being in school or having children attending that school.
And it's for the reason that you stated, that there's a value to society
that its citizens are better educated.
With government, most of the time, there's no direct relationship between >>> taxation and benefit, which is exactly what prevents government "good"
being universally beneficial and can distort the economy.
The relationship between taxation and benefit is evaluated through the
ballot box.
Hardly. Almost never. Voters can be pretty stupid sometimes.
People offer a proposal for what they thing we should do and what it
will cost us, and we decide whether to support that proposal or not.
Well, I'd like to do a lot more referendums for major spending, yes.
On 2015-03-21 17:23:19 +0000, Adam H. Kerman said:
bob <rcp27@nospam.ac.uk> wrote:
On 2015-03-21 13:51:50 +0000, Adam H. Kerman said:
bob <rcp27g@gmail.com> wrote:
Considering that things like compulsory purchase powers over land are a >>>>>form of subsidy (because the buyer of that land is forcing the owner to >>>>>sell it at less than they would otherwise chose to sell it at), I would >>>>>extend that to any transportation infrastructure of any kind.
Transportation infrastructure is the classic case of the economic >>>>>benefits being almost entirely external to the owner of the >>>>>infrastructure. In cases like this, it is pretty much universally >>>>>recognised that government provision (or interference in the market to >>>>>bring about the required objective) is beneficial to all.
Dude, you have a logic gap there:
You lept from "benefits are external", which is correct, to "beneficial >>>>to all", which is false.
In the general case it is false, but in the specific case of >>>transportation infrastructure it is true. There is not a single person >>>alive in the developed world today who does not have a better quality
of life than they would if there were no transportation infrastructure. >>>Something as simple as being able to buy a whole week's worth of >>>groceries in one place, for an afordable cost, and bring them home
would be impossible without transportation infrastructure.
There are plenty of people alive who don't benefit from transportation >>infrastructure, say paraplegics traumatically injured in crashes
in highway traffic, or pedestrians who find life dangerous and
inconvenient because of highway traffic.
I would think the survivors of major traumatic injury are some of the
people who have gained the most from good transportation
infrastructure. If they did not receive medical attention quickly, and
have access to high quality hospital facilities, it is highly likely
they would have died. Ambulances can't drive quickly on dirt roads.
Of course benefit from transportation is widespread, but you can't even hint >>that benefits are equally distributed, because that's wrong.
I don't claim the benefits are equally felt, but they are universally
felt: there is nobody who has not benefited from transportation >infrastructure to some extent.
What would be universally beneficial to all would be if there was a >>>>strict relationship between costs and benefits, so that those with a >>>>proportionate benefit pay a proportionate share of costs; a bit of >>>>hedging as it's difficult to avoid outside subsidy whenever government >>>>has its hand in anything.
It would be lovely if the word were simple enough that every benefit >>>every person gains could be assigned a dollar value, and these could be >>>neatly attributed to specific bits of government spending.
Yeah, but it's not necessary. Change in land value is so easy to measure, >>so taxing land value is close enough to pay for government, especially >>transportation infrastructure.
Change in land value offers one method of evaluating the benefit, but
it is a fairly blunt instrument. For a start, it is hard to establish
the value of land when it is not sold. If I bought a house 20 years
ago and still lived in it today, with no great desire to move, how do
you actually establish the value of that house?
Unfortunately the world doesn't work like that. There are an awful lot >>>of things where I benefit from something existing that I don't use. I >>>benefit from the military existing. I hope the military never has to
be used, and in some ways it won't need to be used *because* it exists. >>>How much is that benefit worth? I benefit from the fact that it is >>>economically viable for a car company to make a car that I can afford.
I don't own a car right now, but nevertheless I benefit from that. I >>>benefit from the education system. I finished school years ago and
have no kids, but I still benefit from the education system because it >>>means the other people I depend on in society are better educated. . . .
If you own a house, if your local schools are excellent, it means that
you can sell your house for more money to a family with school-age >>children. That's actually a direct benefit to you, despite not
being in school or having children attending that school.
And it's for the reason that you stated, that there's a value to society >>that its citizens are better educated.
And if I don't own a house, or own a house in an area with poor
schools, I still benefit from living in an educated society.
If you tie taxation to land value, some other guy who owns the expensive >house takes the tax hit, and I get the benefit.
People offer a proposal for what they thing we should do and what it
will cost us, and we decide whether to support that proposal or not.
Well, I'd like to do a lot more referendums for major spending, yes.
Ah well, you see, I happen to live in Switzerland where we have not
only possibly the best railways in the world, but certainly the most >referendum-heavy system going. Interestingly when the present Swiss >constitution was enacted in 1847 it was modelled on the US one.
Somehow things have diverged in the intervening years.
bob <rcp27@nospam.ac.uk> wrote:
On 2015-03-21 17:23:19 +0000, Adam H. Kerman said:
bob <rcp27@nospam.ac.uk> wrote:
On 2015-03-21 13:51:50 +0000, Adam H. Kerman said:
bob <rcp27g@gmail.com> wrote:
Considering that things like compulsory purchase powers over land are a >>>>>> form of subsidy (because the buyer of that land is forcing the owner to >>>>>> sell it at less than they would otherwise chose to sell it at), I would >>>>>> extend that to any transportation infrastructure of any kind.
Transportation infrastructure is the classic case of the economic
benefits being almost entirely external to the owner of the
infrastructure. In cases like this, it is pretty much universally >>>>>> recognised that government provision (or interference in the market to >>>>>> bring about the required objective) is beneficial to all.
Dude, you have a logic gap there:
You lept from "benefits are external", which is correct, to "beneficial >>>>> to all", which is false.
In the general case it is false, but in the specific case of
transportation infrastructure it is true. There is not a single person >>>> alive in the developed world today who does not have a better quality
of life than they would if there were no transportation infrastructure. >>>> Something as simple as being able to buy a whole week's worth of
groceries in one place, for an afordable cost, and bring them home
would be impossible without transportation infrastructure.
There are plenty of people alive who don't benefit from transportation
infrastructure, say paraplegics traumatically injured in crashes
in highway traffic, or pedestrians who find life dangerous and
inconvenient because of highway traffic.
I would think the survivors of major traumatic injury are some of the
people who have gained the most from good transportation
infrastructure. If they did not receive medical attention quickly, and
have access to high quality hospital facilities, it is highly likely
they would have died. Ambulances can't drive quickly on dirt roads.
The point would be that they're casualties of transportation to begin with.
I noticed that you qualified your original statement to persons who are alive. I mean, if someone was killed in a highway collision, it's not
helpful to note that his funeral procession uses roads.
Of course benefit from transportation is widespread, but you can't even hint
that benefits are equally distributed, because that's wrong.
I don't claim the benefits are equally felt, but they are universally
felt: there is nobody who has not benefited from transportation
infrastructure to some extent.
I'm bringing up a critical issue that you didn't address.
What would be universally beneficial to all would be if there was a
strict relationship between costs and benefits, so that those with a >>>>> proportionate benefit pay a proportionate share of costs; a bit of
hedging as it's difficult to avoid outside subsidy whenever government >>>>> has its hand in anything.
It would be lovely if the word were simple enough that every benefit
every person gains could be assigned a dollar value, and these could be >>>> neatly attributed to specific bits of government spending.
Yeah, but it's not necessary. Change in land value is so easy to measure, >>> so taxing land value is close enough to pay for government, especially
transportation infrastructure.
Change in land value offers one method of evaluating the benefit, but
it is a fairly blunt instrument. For a start, it is hard to establish
the value of land when it is not sold. If I bought a house 20 years
ago and still lived in it today, with no great desire to move, how do
you actually establish the value of that house?
That it's hard to evaluate land is not true at all. Appraisal and
assessment estimates fair market value based on recent sales. Obviously there's bad work, but land and building/improvement value are estimated separately. It's more than adequate for fair assessment for tax purposes.
The nice thing about property taxes is that it's all out in the open, so
if some land owner's land assessment is completely out of whack, the public knows about it and there's a pretty good idea as to who got bribed.
btw, land is a lot easier to assess than buildings as you just need to
know square footage and buildable characteristics and what surrounding properties are used for. With buildings, you have to keep up with changes
in the building's characteristics over time and correctly entering
building permits and the like. From a quick drive by, the number of
bathrooms in a house isn't possible to estimate.
Unfortunately the world doesn't work like that. There are an awful lot >>>> of things where I benefit from something existing that I don't use. I >>>> benefit from the military existing. I hope the military never has to
be used, and in some ways it won't need to be used *because* it exists. >>>> How much is that benefit worth? I benefit from the fact that it is
economically viable for a car company to make a car that I can afford. >>>> I don't own a car right now, but nevertheless I benefit from that. I
benefit from the education system. I finished school years ago and
have no kids, but I still benefit from the education system because it >>>> means the other people I depend on in society are better educated. . . .
If you own a house, if your local schools are excellent, it means that
you can sell your house for more money to a family with school-age
children. That's actually a direct benefit to you, despite not
being in school or having children attending that school.
And it's for the reason that you stated, that there's a value to society >>> that its citizens are better educated.
And if I don't own a house, or own a house in an area with poor
schools, I still benefit from living in an educated society.
Sure; renters benefit.
If you tie taxation to land value, some other guy who owns the expensive
house takes the tax hit, and I get the benefit.
Well, the house itself is exempt from a land value tax. Building an
oversized home won't increase one's own land value. But if your neighbors start replacing more modest homes with more expensive homes, your land
value will increase.
Anyway, we're not tying government services to consumption but to benefit.
A kid from an upper middle class family consumes two semesters of education per school year, same as the kid from the lower middle class family does. It's free public education. If it were tied to consumption, then it couldn't be free.
The benefit to residential land exists whether one sends any children
to school. btw, a nearby private school that's really good would also
have a positive effect on land value.
Land taxes tax value that the land owner hasn't created. The value is
created by society in general; part of the value created by society is through government spending.
People offer a proposal for what they thing we should do and what it
will cost us, and we decide whether to support that proposal or not.
Well, I'd like to do a lot more referendums for major spending, yes.
Ah well, you see, I happen to live in Switzerland where we have not
only possibly the best railways in the world, but certainly the most
referendum-heavy system going. Interestingly when the present Swiss
constitution was enacted in 1847 it was modelled on the US one.
Somehow things have diverged in the intervening years.
The referendums must have been amended in. Our Founding Fathers didn't
really consider direct democracy.
On 2015-03-21 20:25:46 +0000, Adam H. Kerman said:
bob <rcp27@nospam.ac.uk> wrote:
On 2015-03-21 17:23:19 +0000, Adam H. Kerman said:
bob <rcp27@nospam.ac.uk> wrote:
On 2015-03-21 13:51:50 +0000, Adam H. Kerman said:
bob <rcp27g@gmail.com> wrote:
Considering that things like compulsory purchase powers over land are a >>>>>>>form of subsidy (because the buyer of that land is forcing the owner to >>>>>>>sell it at less than they would otherwise chose to sell it at), I would >>>>>>>extend that to any transportation infrastructure of any kind.
Transportation infrastructure is the classic case of the economic >>>>>>>benefits being almost entirely external to the owner of the >>>>>>>infrastructure. In cases like this, it is pretty much universally >>>>>>>recognised that government provision (or interference in the market to >>>>>>>bring about the required objective) is beneficial to all.
Dude, you have a logic gap there:
You lept from "benefits are external", which is correct, to "beneficial >>>>>>to all", which is false.
In the general case it is false, but in the specific case of >>>>>transportation infrastructure it is true. There is not a single person >>>>>alive in the developed world today who does not have a better quality >>>>>of life than they would if there were no transportation infrastructure. >>>>>Something as simple as being able to buy a whole week's worth of >>>>>groceries in one place, for an afordable cost, and bring them home >>>>>would be impossible without transportation infrastructure.
There are plenty of people alive who don't benefit from transportation >>>>infrastructure, say paraplegics traumatically injured in crashes
in highway traffic, or pedestrians who find life dangerous and >>>>inconvenient because of highway traffic.
I would think the survivors of major traumatic injury are some of the >>>people who have gained the most from good transportation
infrastructure. If they did not receive medical attention quickly, and >>>have access to high quality hospital facilities, it is highly likely
they would have died. Ambulances can't drive quickly on dirt roads.
The point would be that they're casualties of transportation to begin with. >>I noticed that you qualified your original statement to persons who are >>alive. I mean, if someone was killed in a highway collision, it's not >>helpful to note that his funeral procession uses roads.
I didn't qualify it, you did.
You invited me to consider the case of the victim of accidents,
in crashes in highway traffic," which I have.
Of course benefit from transportation is widespread, but you can't even hint
that benefits are equally distributed, because that's wrong.
I don't claim the benefits are equally felt, but they are universally
felt: there is nobody who has not benefited from transportation
infrastructure to some extent.
I'm bringing up a critical issue that you didn't address.
Well I have addressed it, and made it abundantly clear.
What would be universally beneficial to all would be if there was a >>>>>> strict relationship between costs and benefits, so that those with a >>>>>> proportionate benefit pay a proportionate share of costs; a bit of >>>>>> hedging as it's difficult to avoid outside subsidy whenever government >>>>>> has its hand in anything.
It would be lovely if the word were simple enough that every benefit >>>>> every person gains could be assigned a dollar value, and these could be >>>>> neatly attributed to specific bits of government spending.
Yeah, but it's not necessary. Change in land value is so easy to measure, >>>> so taxing land value is close enough to pay for government, especially >>>> transportation infrastructure.
Change in land value offers one method of evaluating the benefit, but
it is a fairly blunt instrument. For a start, it is hard to establish
the value of land when it is not sold. If I bought a house 20 years
ago and still lived in it today, with no great desire to move, how do
you actually establish the value of that house?
That it's hard to evaluate land is not true at all. Appraisal and
assessment estimates fair market value based on recent sales. Obviously
there's bad work, but land and building/improvement value are estimated
separately. It's more than adequate for fair assessment for tax purposes.
The nice thing about property taxes is that it's all out in the open, so
if some land owner's land assessment is completely out of whack, the public >> knows about it and there's a pretty good idea as to who got bribed.
btw, land is a lot easier to assess than buildings as you just need to
know square footage and buildable characteristics and what surrounding
properties are used for. With buildings, you have to keep up with changes
in the building's characteristics over time and correctly entering
building permits and the like. From a quick drive by, the number of
bathrooms in a house isn't possible to estimate.
The downside of land value tax is that the owner of the land will find >himself liable for this tax as a result of events entirely outside of
his own control.
Suppose I buy a house in the "rough" end of town
because I can't afford a big enough house int the expensive end of
town. Suppose my part of town then goes up in the world and suddenly
my home becomes expensive. Is it really reasonable that I should be
liable for a huge tax demand that, perhaps, I can't afford, because
some other factors have come to bear on my neighbourhood?
Perhaps a
farmer buys a field in the middle of nowhere, to grow some crops on.
Then a highway gets built and suddenly his field is in the middle of >expensive commuter-land. Sure, if the farmer sold his land, he could
realise a huge profit, but if all the farmland in the area suddenly
becomes suburbia, he has nowhere to go. That farmer has lost his job
and his future simply because somebody else has built a highway. Land
value tax is definitely not without its problems.
Unfortunately the world doesn't work like that. There are an awful lot >>>>> of things where I benefit from something existing that I don't use. I >>>>> benefit from the military existing. I hope the military never has to >>>>> be used, and in some ways it won't need to be used *because* it exists. >>>>> How much is that benefit worth? I benefit from the fact that it isIf you own a house, if your local schools are excellent, it means that >>>> you can sell your house for more money to a family with school-age
economically viable for a car company to make a car that I can afford. >>>>> I don't own a car right now, but nevertheless I benefit from that. I >>>>> benefit from the education system. I finished school years ago and
have no kids, but I still benefit from the education system because it >>>>> means the other people I depend on in society are better educated. . . . >>
children. That's actually a direct benefit to you, despite not
being in school or having children attending that school.
And it's for the reason that you stated, that there's a value to society >>>> that its citizens are better educated.
And if I don't own a house, or own a house in an area with poor
schools, I still benefit from living in an educated society.
Sure; renters benefit.
If you tie taxation to land value, some other guy who owns the expensive >>> house takes the tax hit, and I get the benefit.
Well, the house itself is exempt from a land value tax. Building an
oversized home won't increase one's own land value. But if your neighbors
start replacing more modest homes with more expensive homes, your land
value will increase.
Anyway, we're not tying government services to consumption but to benefit. >> A kid from an upper middle class family consumes two semesters of education >> per school year, same as the kid from the lower middle class family does.
It's free public education. If it were tied to consumption, then it couldn't >> be free.
The benefit to residential land exists whether one sends any children
to school. btw, a nearby private school that's really good would also
have a positive effect on land value.
Land taxes tax value that the land owner hasn't created. The value is
created by society in general; part of the value created by society is
through government spending.
Sure, land value tax is one way of taxing the benefit an individual
person gains from wider societal improvements. It is not the only one, >though, and in certain circumstances may not be the fairest one.
People offer a proposal for what they thing we should do and what it >>>>> will cost us, and we decide whether to support that proposal or not.
Well, I'd like to do a lot more referendums for major spending, yes.
Ah well, you see, I happen to live in Switzerland where we have not
only possibly the best railways in the world, but certainly the most
referendum-heavy system going. Interestingly when the present Swiss
constitution was enacted in 1847 it was modelled on the US one.
Somehow things have diverged in the intervening years.
The referendums must have been amended in. Our Founding Fathers didn't
really consider direct democracy.
The Founding Fathers were a bunch of privileged landowners seated in
late 18th century economic realities. That they failed to see how the
world would develop in the following 200+ years is hardly surprising.
On 2015-03-21 17:23:19 +0000, Adam H. Kerman said:
bob <rcp27@nospam.ac.uk> wrote:
It would be lovely if the word were simple enough that every
benefit every person gains could be assigned a dollar value, and
these could be neatly attributed to specific bits of government
spending.
Yeah, but it's not necessary. Change in land value is so easy to
measure, so taxing land value is close enough to pay for
government, especially transportation infrastructure.
Change in land value offers one method of evaluating the benefit, but
it is a fairly blunt instrument. For a start, it is hard to
establish the value of land when it is not sold. If I bought a house
20 years ago and still lived in it today, with no great desire to
move, how do you actually establish the value of that house?
If you own a house, if your local schools are excellent, it means
that you can sell your house for more money to a family with
school-age children. That's actually a direct benefit to you,
despite not being in school or having children attending that
school.
And if I don't own a house, or own a house in an area with poor
schools, I still benefit from living in an educated society. If you
tie taxation to land value, some other guy who owns the expensive
house takes the tax hit, and I get the benefit.
http://www.aei.org/publication/mind-the-gap-us-and-european-train-safety/
"If we end federal subsidies to Amtrak, and require it to liquidate,
then private companies would buy up its stations and routes. These
companies could then begin running our trains with a level of
professionalism that Americans now experience only when traveling
abroad."
On 2015-03-21 20:25:46 +0000, Adam H. Kerman said:
btw, land is a lot easier to assess than buildings as you just need
to know square footage and buildable characteristics and what
surrounding properties are used for. With buildings, you have to
keep up with changes in the building's characteristics over time
and correctly entering building permits and the like. From a quick
drive by, the number of bathrooms in a house isn't possible to
estimate.
The downside of land value tax is that the owner of the land will
find himself liable for this tax as a result of events entirely
outside of his own control. Suppose I buy a house in the "rough" end
of town because I can't afford a big enough house int the expensive
end of town. Suppose my part of town then goes up in the world and
suddenly my home becomes expensive. Is it really reasonable that I
should be liable for a huge tax demand that, perhaps, I can't afford,
because some other factors have come to bear on my neighbourhood?
Perhaps a farmer buys a field in the middle of nowhere, to grow some
crops on. Then a highway gets built and suddenly his field is in the
middle of expensive commuter-land. Sure, if the farmer sold his
land, he could realise a huge profit,
but if all the farmland in the area suddenly becomes suburbia,
Land taxes tax value that the land owner hasn't created. The value
is created by society in general; part of the value created by
society is through government spending.
Sure, land value tax is one way of taxing the benefit an individual
person gains from wider societal improvements. It is not the only
one, though, and in certain circumstances may not be the fairest
one.
On 21-Mar-15 16:58, bob wrote:
On 2015-03-21 20:25:46 +0000, Adam H. Kerman said:
btw, land is a lot easier to assess than buildings as you just need
to know square footage and buildable characteristics and what
surrounding properties are used for. With buildings, you have to
keep up with changes in the building's characteristics over time
and correctly entering building permits and the like. From a quick
drive by, the number of bathrooms in a house isn't possible to
estimate.
The downside of land value tax is that the owner of the land will
find himself liable for this tax as a result of events entirely
outside of his own control. Suppose I buy a house in the "rough" end
of town because I can't afford a big enough house int the expensive
end of town. Suppose my part of town then goes up in the world and
suddenly my home becomes expensive. Is it really reasonable that I
should be liable for a huge tax demand that, perhaps, I can't afford,
because some other factors have come to bear on my neighbourhood?
It's reasonable because you benefit (perhaps yet unrealized) from an
increase in property value through no effort of your own. If you can't afford to pay the higher taxes, sell the property for a nice profit and
move somewhere cheaper--and let someone else pay those higher taxes.
Perhaps a farmer buys a field in the middle of nowhere, to grow some
crops on. Then a highway gets built and suddenly his field is in the
middle of expensive commuter-land. Sure, if the farmer sold his
land, he could realise a huge profit,
That's the point; farming is no longer the best use of that land, so he _should_ have an incentive to sell it to someone who will use it more productively--and pay higher taxes on it to fund the higher level of
public services that will be needed.
but if all the farmland in the area suddenly becomes suburbia,
He might have to move a few miles further away from the city, but that's
it. Or he could just take the millions he made selling his farm to developers, invest it and retire.
Land taxes tax value that the land owner hasn't created. The value
is created by society in general; part of the value created by
society is through government spending.
Sure, land value tax is one way of taxing the benefit an individual
person gains from wider societal improvements. It is not the only
one, though, and in certain circumstances may not be the fairest
one.
Land is the scarcest resource we have (as the saying goes, God ain't
creating any more of it), and it's also the simplest to tax, the
toughest tax to evade and the most stable tax base, all of which easily overcome the various factors that make other tax systems appear better
on paper but much worse in practice.
Stephen Sprunk <stephen@sprunk.org> wrote:
The house is more interesting. Take the lot's last selling price,
subtract the land value, and what remains must be the
improvements' value.
There's a factor for changes to the property to consider to
accomodate the house.
I suppose if one doesn't wish to use the existing building, or the
current building is a wreck due to fire, but it's still desireable to
build on the site, once money is spent to clear the site, the value
of the vacant site could be higher than the value of the site that
requires clearance.
(Note that the current vogue is to tax the combined value of land
and improvements, with no distinction. It would be better to tax
just the land value at a higher rate, but AFAIK nobody actually
does that.)
Well, various towns in Pennsylvania until recently; Pittsburgh was
the largest.
The house is more interesting. Take the lot's last selling price,
subtract the land value, and what remains must be the improvements'
value.
(Note that the current vogue is to tax the combined value of land and >improvements, with no distinction. It would be better to tax just the
land value at a higher rate, but AFAIK nobody actually does that.)
If the current use is not the highest and best use of the land, then the total property value should be less than the land value, to account for
the cost of clearing the current improvements. IOW, the improvements'
value would be negative--yet another reason to tax only land value.
Also, improvements depreciate (absent major remodeling), so they should naturally be less and less of the property's value over time, eventually turning negative as above. My jurisdiction gets this wrong, increasing
my home's value every year but leaving the land value constant--despite
a new freeway, major commercial developments, etc. nearby that have
pushed up the value of every property in the city. It isn't worth
arguing about, though, since the tax is on the total value; if they
taxed only my land value, I bet they'd get it right.
On 28-Mar-15 18:39, Adam H. Kerman wrote:
Stephen Sprunk <stephen@sprunk.org> wrote:
The house is more interesting. Take the lot's last selling price, >>>subtract the land value, and what remains must be the
improvements' value.
There's a factor for changes to the property to consider to
accomodate the house.
I suppose if one doesn't wish to use the existing building, or the
current building is a wreck due to fire, but it's still desireable to
build on the site, once money is spent to clear the site, the value
of the vacant site could be higher than the value of the site that
requires clearance.
If the current use is not the highest and best use of the land, then the >total property value should be less than the land value, to account for
the cost of clearing the current improvements. IOW, the improvements'
value would be negative--yet another reason to tax only land value.
Also, improvements depreciate (absent major remodeling), so they should >naturally be less and less of the property's value over time, eventually >turning negative as above.
My jurisdiction gets this wrong, increasing my home's value every year
but leaving the land value constant--despite a new freeway, major
commercial developments, etc. nearby that have pushed up the value
of every property in the city. It isn't worth arguing about, though,
since the tax is on the total value; if they taxed only my land value,
I bet they'd get it right.
(Note that the current vogue is to tax the combined value of land
and improvements, with no distinction. It would be better to tax
just the land value at a higher rate, but AFAIK nobody actually
does that.)
Well, various towns in Pennsylvania until recently; Pittsburgh was
the largest.
Ah, okay. I knew there were some in Europe a long time ago, but I
didn't know there were any in the US. Why did they change?
Stephen Sprunk <stephen@sprunk.org> wrote:
On 28-Mar-15 18:39, Adam H. Kerman wrote:
I suppose if one doesn't wish to use the existing building, or
the current building is a wreck due to fire, but it's still
desireable to build on the site, once money is spent to clear the
site, the value of the vacant site could be higher than the value
of the site that requires clearance.
If the current use is not the highest and best use of the land,
then the total property value should be less than the land value,
to account for the cost of clearing the current improvements. IOW,
the improvements' value would be negative--yet another reason to
tax only land value.
Quite so. You've done some reading on this since last we spoke.
Also, improvements depreciate (absent major remodeling), so they
should naturally be less and less of the property's value over
time, eventually turning negative as above.
Hah! Try arguing about the concept of depreciation with the
assessor, and why brand-new homes should be assessed at a higher
value... Assessors typically take the position that it gets fully
assessed until something happens to it that requires a major
replacement or it's unusable.
I suppose a homeowner that needs a new
roof but can't afford it for a year could get a one-time reduction,
but good luck.
My jurisdiction gets this wrong, increasing my home's value every
year but leaving the land value constant--despite a new freeway,
major commercial developments, etc. nearby that have pushed up the
value of every property in the city. It isn't worth arguing about,
though, since the tax is on the total value; if they taxed only my
land value, I bet they'd get it right.
Assessors like to use automatic inflation factors calculated from
comparable real estate sales. Given that the improvement tends to be
about 2/3 of the real value, and the land 1/3 (simply a wild-assed
guess), if they impose automatic inflation on the 2/3 bit, this tends
to result in owners of existing buildings paying more than their proportionate share of taxes than owners of newer buildings.
So when the arguments were made that X was partially responsible for
the transformation instead of Y (Y being differential tax on land
value), people went for the mix of taxes that most cities like to
impose.
On Saturday, March 28, 2015 at 10:12:30 PM UTC-4, Stephen Sprunk wrote:
If the current use is not the highest and best use of the land, then the >>total property value should be less than the land value, to account for
the cost of clearing the current improvements. IOW, the improvements' >>value would be negative--yet another reason to tax only land value.
There is a broader issue, and that is the ability of the landowner to
pay taxes.
Many, many years ago government got away from just taxing real estate
and taxed income and commerce. Generally, these were percentage--not
flat fee taxes--so they more money one earned or spent, the more in
taxes they paid. This was seen to be more fair.
In many states, property taxes pay only a portion of the cost of public >schools. The rest of the money comes from general municipal or state
taxes. The proportion breakdown is hotly debated.
The newly elected governor of Pennslyvania has proposed steep increases
in the state sales tax (both in rate and in items taxed) as well as the
state income tax, so as to lower property taxes. Basically, this is a
wealth re-distribution scheme.
It's important to note that external events impact nearby property
owners very unevenly. For instance, depending on where one's property
is and its layout, a new freeway interchange could cause its value to >explode. But it could--and often does--cause its value to steeply fall.
Not every property is so situated or laid out to radically change its
value. It just becomes in the way, suffering from a great deal of
noise, litter, trespassers, even crime. It was documented that when the
NJ Tpk widened, properties nearby suffered badly from the noise and >pollution, but there is NO compensation from the state for that kind of
loss. . . .
On 29-Mar-15 12:05, Adam H. Kerman wrote:
Stephen Sprunk <stephen@sprunk.org> wrote:
On 28-Mar-15 18:39, Adam H. Kerman wrote:
I suppose if one doesn't wish to use the existing building, or
the current building is a wreck due to fire, but it's still
desireable to build on the site, once money is spent to clear the
site, the value of the vacant site could be higher than the value
of the site that requires clearance.
If the current use is not the highest and best use of the land,
then the total property value should be less than the land value,
to account for the cost of clearing the current improvements. IOW,
the improvements' value would be negative--yet another reason to
tax only land value.
Quite so. You've done some reading on this since last we spoke.
P&P was the first economics book I've had that actually makes sense,
though it's so different from what I was taught in school that it took a >while (and several re-readings) for it to fully sink in.
TSoPE is brutal, though; I've been working on it for six months and
haven't even gotten halfway through.
Ah. One of the reasons real estate is so cheap in Texas is that cities, >counties and school districts get pretty much all of their funding from >property taxes. (Cities get some sales tax money too, but not a lot.)
That keeps property values low and stable, growing roughly with the
general rate of inflation. Since land values indirectly affect the
price of everything, that keeps the total cost of living down. And we
do have the usual exemptions for homesteads and seniors.
hancock4@bbs.cpcn.com wrote:
Stephen Sprunk wrote:
If the current use is not the highest and best use of the land,
then the total property value should be less than the land
value, to account for the cost of clearing the current
improvements. IOW, the improvements' value would be negative--yet
another reason to tax only land value.
There is a broader issue, and that is the ability of the landowner
to pay taxes.
You're completely missing the point. If the landowner can't afford to
pay taxes on the value of land, it's because the land isn't earning
any rent. It's not earning any rent because the landowner is
speculating in vacant land, or he's a slumlord allowing a building
to deteriorate and can't find good tenants, etc.
If the land earns rent, then a portion of that can go back to the
government in taxes, absolutely fair as part of the land value was
created by the value of government services.
Oh: There's a macroeconomic concept of "imputed rent" in which the
landowner who is also using his own property is paying rent to
himself.
Many, many years ago government got away from just taxing real
estate and taxed income and commerce. Generally, these were
percentage--not flat fee taxes--so they more money one earned or
spent, the more in taxes they paid. This was seen to be more
fair.
By landowners, yeah. By tenants, not so much.
Stephen Sprunk <stephen@sprunk.org> wrote:
On 30-Mar-15 00:16, Adam H. Kerman wrote:
hancock4@bbs.cpcn.com wrote:
Many, many years ago government got away from just taxing real
estate and taxed income and commerce. Generally, these were
percentage--not flat fee taxes--so they more money one earned
or spent, the more in taxes they paid. This was seen to be
more fair.
By landowners, yeah. By tenants, not so much.
Landowners just pass on property taxes to their tenants anyway, so
there is no reason for them to prefer any other form of tax--unless
they have no tenants, i.e. they're speculators.
In my state, whenever they argue that there should be more state
funding for schools, that means a shift from property tax support to
income tax support because the state hasn't levied property taxes in
decades (and isn't likely to in future).
So, if schools improve,
tenants pay twice: Their rent rises, because better schools mean
higher land value. Part of the rent goes toward the land tax portion
of the real estate tax (which is difficult to pass on the tenant and generally isn't); the building tax portion of the real estate tax is
paid in part by the tenant and in part in reduced net income by the
landlord.
Landowners just pass on property taxes to their tenants anyway, so there
is no reason for them to prefer any other form of tax--unless they have
no tenants, i.e. they're speculators.
If property taxes go up, the rent has to go up too because the landlord obviously isn't going to _lose_ money renting out the property; if so,
he wouldn't have bought it in the first place.
(The property's value may go up over time and his mortgage payment
shouldn't, but his taxes and maintenance costs will go up to match,
leaving him with no real profits until the mortgage is paid off.)
On 30-Mar-15 00:16, Adam H. Kerman wrote:
hancock4@bbs.cpcn.com wrote:
Many, many years ago government got away from just taxing real
estate and taxed income and commerce. Generally, these were >>>percentage--not flat fee taxes--so they more money one earned or
spent, the more in taxes they paid. This was seen to be more
fair.
By landowners, yeah. By tenants, not so much.
Landowners just pass on property taxes to their tenants anyway, so there
is no reason for them to prefer any other form of tax--unless they have
no tenants, i.e. they're speculators.
On 30-Mar-15 17:26, Adam H. Kerman wrote:
Stephen Sprunk <stephen@sprunk.org> wrote:
On 30-Mar-15 00:16, Adam H. Kerman wrote:
hancock4@bbs.cpcn.com wrote:
Many, many years ago government got away from just taxing real
estate and taxed income and commerce. Generally, these were >>>>>percentage--not flat fee taxes--so they more money one earned
or spent, the more in taxes they paid. This was seen to be
more fair.
By landowners, yeah. By tenants, not so much.
Landowners just pass on property taxes to their tenants anyway, so
there is no reason for them to prefer any other form of tax--unless
they have no tenants, i.e. they're speculators.
In my state, whenever they argue that there should be more state
funding for schools, that means a shift from property tax support to
income tax support because the state hasn't levied property taxes in >>decades (and isn't likely to in future).
So, if schools improve,
Spending more on schools doesn't improve performance; in fact, the >worst-performing schools _already_ have the highest costs per student.
The reason is that most of the money ends up going to overhead, such as >executive salaries, consultants, security and corporate welfare.
tenants pay twice: Their rent rises, because better schools mean
higher land value. Part of the rent goes toward the land tax portion
of the real estate tax (which is difficult to pass on the tenant and >>generally isn't); the building tax portion of the real estate tax is
paid in part by the tenant and in part in reduced net income by the >>landlord.
Not in the real world.
The rule of thumb is market rent should be 1% of the home's value.
At current rates, the P&I on a $150k mortgage is $760/mo. Then figure
in another $1500/yr ($125/mo) for insurance, $3000/yr ($250/mo) for
taxes, and a couple hundred per month reserved for maintenance. That's >$1500/mo, or 1%, with no profit for the landlord aside from the mortgage >principal reduction.
If property taxes go up, the rent has to go up too because the landlord >obviously isn't going to _lose_ money renting out the property; if so,
he wouldn't have bought it in the first place.
(The property's value may go up over time and his mortgage payment
shouldn't, but his taxes and maintenance costs will go up to match,
leaving him with no real profits until the mortgage is paid off.)
On Monday, March 30, 2015 at 7:34:34 PM UTC-4, Stephen Sprunk wrote:
If property taxes go up, the rent has to go up too because the
landlord obviously isn't going to _lose_ money renting out the
property; if so, he wouldn't have bought it in the first place.
But property taxes can, and do, go up faster than rents, and the
landlords do end up losing money. In the short term, they still have
a mortgage to pay, so they'll have to eat the loss in the hope rents
will eventually catch up. In the long term, the property will be
abandoned if rents don't catch up. (Other urban conditions play a
part, too).
(The property's value may go up over time and his mortgage payment
shouldn't, but his taxes and maintenance costs will go up to
match, leaving him with no real profits until the mortgage is paid
off.)
It's quite variable. In the grand scheme of things it averages out
as you describe, but on an individual basis it's very variable.
Sometimes a neighborhood becomes very desirable and rent goes up far
faster than taxes and costs and the landlord makes out very well.
Other times the reverse happens.
In addition, some smart landlords manage to get low cost financing
which keeps their costs down.
Others know how to keep maint costs low, perhaps by doing the work themselves.
Then, of course, there are foolish landlords who pay way too much
to maintain their properties.
On Monday, March 30, 2015 at 3:24:39 PM UTC-4, Stephen Sprunk wrote:
Landowners just pass on property taxes to their tenants anyway, so there
is no reason for them to prefer any other form of tax--unless they have
no tenants, i.e. they're speculators.
That assumes the tenants can afford to pay increased rent to pay the
taxes. If not, the landowner is screwed. Such is often the situation
in older cities, where the demand for taxes is high to pay for more
social services, yet the population has less money. It often ends up in >abandoned property.
Often times a city council will pass such high taxes knowing the
landlords can't do anything about it in the short run (and politicians
only care about the short-run).
Indeed, one key issue this land-use discussion has ignored is that real >estate is not a liquid asset.
A town can raise taxes overnight, but it will take a property owner much
time to adjust--be it do something different with the land, e.g. build >something or sell it off.
Further, maximizing land use profit is limited by zoning, laws, historical >designation, etc. Laws are passed regulating land use for quality of
life reasons.
Also, the concept advanced that land is taxed based on various services
given to it is b/s.
Government needs taxes, and taxes everything--land, income, commerce--to
the extent it can get away with it. In many areas, official land
"valuation" is utter b/s.
Stephen Sprunk <stephen@sprunk.org> wrote:
On 30-Mar-15 21:20, hancock4@bbs.cpcn.com wrote:
But property taxes can, and do, go up faster than rents, and the
landlords do end up losing money. In the short term, they still
have a mortgage to pay, so they'll have to eat the loss in the
hope rents will eventually catch up. In the long term, the
property will be abandoned if rents don't catch up. (Other urban
conditions play a part, too).
Absent rent controls, rents _will_ go up to keep pace with taxes;
the tenants have no choice since _every_ landlord will be raising
rents.
This I don't agree with. Yes, there are individual cases of tenants overpaying. Generally, they won't do that.
A tenant simply doesn't care about the landlord's operating
expenses. He won't pay more than the place is worth to him. Two
buildings of approximately the same quality (ignoring location value)
should be rented for similar amounts.
Aside from slumlords, who operate on a very different financial
model, landlords _don't_ lose money or abandon properties.
Slumlords' profits come from not reserving money for normal
maintenance--and when the bill comes due, abandoning the property
is cheaper than fixing it. It's not as good a long-term return as
letting good tenants pay your mortgage off, but it works well
enough in the short term, particularly when you _want_ the building
to be condemned--or when you need a front to launder money from
another shady business. . . .
Shift taxes from the improvements to land, then slumlords pay
relatively high taxes on land that has a building with significant
deferred maintenance, since the negative incentive for having a poor
quality building goes away.
To give you a sense of scale, Warren Buffet's $1.5B development
near me is a mere 433 acres (175 ha), probably too small to assure
a profit if he had to get bank mortgages like most developers. . .
.
Hehehe. Most developers aren't in a position to buy a bank when they
need to give themselves a mortgage.
Stephen Sprunk <stephen@sprunk.org> wrote:
On 30-Mar-15 17:26, Adam H. Kerman wrote:
In my state, whenever they argue that there should be more state
funding for schools, that means a shift from property tax support
to income tax support because the state hasn't levied property
taxes in decades (and isn't likely to in future).
So, if schools improve,
Spending more on schools doesn't improve performance; in fact, the
worst-performing schools _already_ have the highest costs per
student. The reason is that most of the money ends up going to
overhead, such as executive salaries, consultants, security and
corporate welfare.
I'm not arguing that lots of spending is ineffective. I am fed up
with those who claim, We're a poor community! We can't afford to
improve our own schools (or whatever the government service is). We
need state assistance!
Well, no, what you can't afford is NOT to improve schools! That's
what keeps your land values to very low.
The rule of thumb is market rent should be 1% of the home's value.
At current rates, the P&I on a $150k mortgage is $760/mo. Then
figure in another $1500/yr ($125/mo) for insurance, $3000/yr
($250/mo) for taxes, and a couple hundred per month reserved for
maintenance. That's $1500/mo, or 1%, with no profit for the
landlord aside from the mortgage principal reduction.
If property taxes go up, the rent has to go up too because the
landlord obviously isn't going to _lose_ money renting out the
property; if so, he wouldn't have bought it in the first place.
They still count on speculative increase in land value, despite the
recent experience with land values returning to more realistic
levels.
It's quite possible for there to be a small operating loss.
Stephen Sprunk <stephen@sprunk.org> wrote:
TSoPE is brutal, though; I've been working on it for six months
and haven't even gotten halfway through.
I didn't read that till I took a class at the Chicago school. It
helps a lot to read it with the weekly lesson. Still, George's
philosophy was more advanced at this point and some of the ideas are
better spelled out. No, it lacks the beautiful prose of P&P.
Ah. One of the reasons real estate is so cheap in Texas is that
cities, counties and school districts get pretty much all of their
funding from property taxes. (Cities get some sales tax money too,
but not a lot.) That keeps property values low and stable, growing
roughly with the general rate of inflation. Since land values
indirectly affect the price of everything, that keeps the total
cost of living down. And we do have the usual exemptions for
homesteads and seniors.
Hah! Who knew the Texas legislature got some aspects of tax reform
right?
Stephen Sprunk wrote:
If the current use is not the highest and best use of the land,
then the total property value should be less than the land value,
to account for the cost of clearing the current improvements.
IOW, the improvements' value would be negative--yet another reason
to tax only land value.
There is a broader issue, and that is the ability of the landowner
to pay taxes.
Many, many years ago government got away from just taxing real
estate and taxed income and commerce. Generally, these were
percentage--not flat fee taxes--so they more money one earned or
spent, the more in taxes they paid. This was seen to be more fair.
In many states, property taxes pay only a portion of the cost of
public schools. The rest of the money comes from general municipal
or state taxes. The proportion breakdown is hotly debated.
The newly elected governor of Pennslyvania has proposed steep
increases in the state sales tax (both in rate and in items taxed)
as well as the state income tax, so as to lower property taxes.
Basically, this is a wealth re-distribution scheme.
Also, it's important to note that the market value of a property may
be very different to its value to the individual who lives or works
there. For instance, a poor elderly person may have a modest home
they're perfectly content with and can afford. But if the house is
forcibly acquired by the govt, they may get an insufficient amount
to find another adequate dwelling space.
Stephen Sprunk <stephen@sprunk.org> wrote:
On 31-Mar-15 07:42, Adam H. Kerman wrote:
A tenant simply doesn't care about the landlord's operating
expenses. He won't pay more than the place is worth to him. Two
buildings of approximately the same quality (ignoring location
value) should be rented for similar amounts.
It's not a matter of tenants caring. If every landlord's land
values (and thus taxes) go up 3%/yr due to general inflation, then
they will all increase their rents at least 3%/yr so they don't
lose money. The tenants either pay the higher rents or become
homeless.
There's no such thing as a pass-through expense that's 100% paid by
the tenant. You understand why sales and excise taxes aren't paid
100% by consumers, right?
Slumlords don't fail to maintain their properties due to taxes on
improvements; _the tenants_ provide the disincentive. Why spend
$10k remodeling a house in the slum when the tenant will just cause
$10k in damages when you evict them the next month?
One can't be the only one fixing up one's property; the first to do
something is taking a huge chance that none of his neighboring land
owners won't be encouraged to do the same thing.
If the place is no longer a slum, the landlord has the opportunity
not to look for slum tenants.
On Monday, March 30, 2015 at 7:34:34 PM UTC-4, Stephen Sprunk wrote:
If property taxes go up, the rent has to go up too because the landlord >>obviously isn't going to _lose_ money renting out the property; if so,
he wouldn't have bought it in the first place.
But property taxes can, and do, go up faster than rents, and the
landlords do end up losing money.
In the short term, they still have a mortgage to pay, so they'll have
to eat the loss in the hope rents will eventually catch up. In the
long term, the property will be abandoned if rents don't catch up.
(Other urban conditions play a part, too).
(The property's value may go up over time and his mortgage payment >>shouldn't, but his taxes and maintenance costs will go up to match,
leaving him with no real profits until the mortgage is paid off.)
It's quite variable. In the grand scheme of things it averages out as
you describe, but on an individual basis it's very variable.
Sometimes a neighborhood becomes very desirable and rent goes up far
faster than taxes and costs and the landlord makes out very well. Other >times the reverse happens.
In addition, some smart landlords manage to get low cost financing which >keeps their costs down.
Others know how to keep maint costs low, perhaps by doing the work themselves.
Then, of course, there are foolish landlords who pay way too much
to maintain their properties.
On 30-Mar-15 21:20, hancock4@bbs.cpcn.com wrote:
On Monday, March 30, 2015 at 7:34:34 PM UTC-4, Stephen Sprunk wrote:
If property taxes go up, the rent has to go up too because the
landlord obviously isn't going to _lose_ money renting out the
property; if so, he wouldn't have bought it in the first place.
But property taxes can, and do, go up faster than rents, and the
landlords do end up losing money. In the short term, they still have
a mortgage to pay, so they'll have to eat the loss in the hope rents
will eventually catch up. In the long term, the property will be
abandoned if rents don't catch up. (Other urban conditions play a
part, too).
Absent rent controls, rents _will_ go up to keep pace with taxes; the
tenants have no choice since _every_ landlord will be raising rents.
Aside from slumlords, who operate on a very different financial model, >landlords _don't_ lose money or abandon properties. Slumlords' profits
come from not reserving money for normal maintenance--and when the bill
comes due, abandoning the property is cheaper than fixing it. It's not
as good a long-term return as letting good tenants pay your mortgage
off, but it works well enough in the short term, particularly when you
_want_ the building to be condemned--or when you need a front to launder >money from another shady business. . . .
To give you a sense of scale, Warren Buffet's $1.5B development near me
is a mere 433 acres (175 ha), probably too small to assure a profit if
he had to get bank mortgages like most developers. . . .
Stephen Sprunk <stephen@sprunk.org> wrote:
On 30-Mar-15 19:13, Adam H. Kerman wrote:
Well, no, what you can't afford is NOT to improve schools!
That's what keeps your land values to very low.
The "performance" of the schools is almost entirely driven by the
income of the students' parents. Spending more (or less) on
schools has no effect, so the entire discussion is moot.
That's a whole different discussion. I have strong objections to
school performance measures, and I think they harm more than they
help.
In fact, I think standardized testing has no ability to help
students.
I just think kids from wealthier families have a better chance of
avoiding certain aspects of education that are harmful. I don't
believe that poor kids can't be educated to the best of their
ability, despite that many of them have serious family problems.
School can't overcome the latter, but better schools should help.
(The percentage of students in a particular school failing the
state standardized exams tracks almost perfectly the percentage of
students who are eligible for the federal free lunch program. It's
all just an elaborate system to measure parents' income, not
students' or schools' performance.)
I guess.
Stephen Sprunk <stephen@sprunk.org> wrote:
Well, that's because what we're evaluating is not really schools'
performance, yet we pretend it is, and we take all sorts of
actions based on that pretense that are completely inappropriate.
If we actually _could_ measure school performance, that could be
of enormous benefit; unfortunately, nobody has really figured out
how.
Oh, I think you'd have to follow the kids for a lot of years after
they graduate, not just into the next grade.
In fact, I think standardized testing has no ability to help
students.
It does, actually. By far, the single most important thing that
improves student (and school) performance is ending "social
promotion", and since most schools have proven unwilling to do so
on their own, a regime that forces it on them is quite beneficial.
I'm not linking these two situations. Just saying that real life
isn't a standardized test, just that too much of what schools are
teaching has no real world application, just teaching to the test.
Everyone rants about NCLB, and it certainly has its problems, but
it was based on decades of experience--and proven results--in
Texas.
I didn't know that.
I just think kids from wealthier families have a better chance
of avoiding certain aspects of education that are harmful. I
don't believe that poor kids can't be educated to the best of
their ability, despite that many of them have serious family
problems. School can't overcome the latter, but better schools
should help.
That's not what the evidence says, unfortunately.
Maybe we need a new definition.
In my area, Mexican immigrants live in the suburbs, in much of the metropolitan area. It's not like the parents have better jobs or a
higher standard of living or pay higher rent, although the suburbs
that aren't drug re-distribution points have lower murder rates.
They do better in suburban public schools.
Yes, there are kids who overcome their parents' poverty and are
successful, but there are just as many kids who overcome their
parents' wealth and are unsuccessful, so it's a wash.
To hugely stereotype, children of poor Mexican immigrants are more
likely to live in two-parent households than black children in
poverty, who are more likely to live in female head of household, no
father.
If you take a poor kid and drop them in a rich school, he'll do a
lot better, but the rich kids will all do slightly worse. Once you
hit a critical mass, the rich kids all leave, and now you have just
another failed school full of poor kids--and more busing.
I know what statistic you are referring to, but I'm absolutely not
arguing for busing.
On 29-Mar-15 13:22, hancock4wrote:
Stephen Sprunk wrote:
If the current use is not the highest and best use of the land,
then the total property value should be less than the land value,
to account for the cost of clearing the current improvements.
IOW, the improvements' value would be negative--yet another reason
to tax only land value.
There is a broader issue, and that is the ability of the landowner
to pay taxes.
If he can't pay the taxes, then he's a shitty businessman, and he should
sell his property to someone who can do a better job of it.
Folks have done all sorts of longitudinal studies; there is _no_ factor
with any statistically-significant correlation other than the parents' income. For all intents and purposes, success is inherited, and schools
(and every other factor we've tried tracking) are irrelevant.
It's not a matter of tenants caring. If every landlord's land values
(and thus taxes) go up 3%/yr due to general inflation, then they will
all increase their rents at least 3%/yr so they don't lose money. The tenants either pay the higher rents or become homeless.
If politicians raise the _rate_ in a particular jurisdiction, then every
rent in that area will go up faster than inflation. Some of the tenants
will move to other jurisdictions, though, so rents will go back down,
which means property values will go down, and the total tax collected
may be more _or less_ than before the rate increase.
He's even smarter than that; his insurance businesses mean that people
_pay him_ to borrow money, so he can turn profits doing things that
others can't do profitably even with cash, much less loans/bonds.
On 31-Mar-15 07:42, Adam H. Kerman wrote:
Stephen Sprunk <stephen@sprunk.org> wrote:
On 30-Mar-15 21:20, hancock4@bbs.cpcn.com wrote:
But property taxes can, and do, go up faster than rents, and the >>>>landlords do end up losing money. In the short term, they still
have a mortgage to pay, so they'll have to eat the loss in the
hope rents will eventually catch up. In the long term, the
property will be abandoned if rents don't catch up. (Other urban >>>>conditions play a part, too).
Absent rent controls, rents _will_ go up to keep pace with taxes;
the tenants have no choice since _every_ landlord will be raising
rents.
This I don't agree with. Yes, there are individual cases of tenants >>overpaying. Generally, they won't do that.
A tenant simply doesn't care about the landlord's operating
expenses. He won't pay more than the place is worth to him. Two
buildings of approximately the same quality (ignoring location value) >>should be rented for similar amounts.
It's not a matter of tenants caring. If every landlord's land values
(and thus taxes) go up 3%/yr due to general inflation, then they will
all increase their rents at least 3%/yr so they don't lose money. The >tenants either pay the higher rents or become homeless.
Aside from slumlords, who operate on a very different financial
model, landlords _don't_ lose money or abandon properties.
Slumlords' profits come from not reserving money for normal >>>maintenance--and when the bill comes due, abandoning the property
is cheaper than fixing it. It's not as good a long-term return as >>>letting good tenants pay your mortgage off, but it works well
enough in the short term, particularly when you _want_ the building
to be condemned--or when you need a front to launder money from
another shady business. . . .
Shift taxes from the improvements to land, then slumlords pay
relatively high taxes on land that has a building with significant
deferred maintenance, since the negative incentive for having a poor >>quality building goes away.
Slumlords don't fail to maintain their properties due to taxes on >improvements; _the tenants_ provide the disincentive. Why spend $10k >remodeling a house in the slum when the tenant will just cause $10k in >damages when you evict them the next month?
On 30-Mar-15 19:13, Adam H. Kerman wrote:
Stephen Sprunk <stephen@sprunk.org> wrote:
On 30-Mar-15 17:26, Adam H. Kerman wrote:
In my state, whenever they argue that there should be more state >>>>funding for schools, that means a shift from property tax support
to income tax support because the state hasn't levied property
taxes in decades (and isn't likely to in future).
So, if schools improve,
Spending more on schools doesn't improve performance; in fact, the >>>worst-performing schools _already_ have the highest costs per
student. The reason is that most of the money ends up going to
overhead, such as executive salaries, consultants, security and
corporate welfare.
I'm not arguing that lots of spending is ineffective. I am fed up
with those who claim, We're a poor community! We can't afford to
improve our own schools (or whatever the government service is). We
need state assistance!
Well, here, the state tells them if they want more money, then they
should raise their property taxes. End of discussion. The state is >essentially permanently bankrupt--by design.
Well, no, what you can't afford is NOT to improve schools! That's
what keeps your land values to very low.
The "performance" of the schools is almost entirely driven by the income
of the students' parents. Spending more (or less) on schools has no
effect, so the entire discussion is moot.
(The percentage of students in a particular school failing the state >standardized exams tracks almost perfectly the percentage of students
who are eligible for the federal free lunch program. It's all just an >elaborate system to measure parents' income, not students' or schools' >performance.)
This is really a side effect of decentralization; most powers (and
duties) are delegated to overlapping local govt units, and the state
requires them all to be self-funding--mostly via local property taxes.
The state itself doesn't do much more than coordinate.
On 31-Mar-15 12:14, Adam H. Kerman wrote:
Stephen Sprunk <stephen@sprunk.org> wrote:
On 31-Mar-15 07:42, Adam H. Kerman wrote:
A tenant simply doesn't care about the landlord's operating
expenses. He won't pay more than the place is worth to him. Two >>>>buildings of approximately the same quality (ignoring location
value) should be rented for similar amounts.
It's not a matter of tenants caring. If every landlord's land
values (and thus taxes) go up 3%/yr due to general inflation, then
they will all increase their rents at least 3%/yr so they don't
lose money. The tenants either pay the higher rents or become
homeless.
There's no such thing as a pass-through expense that's 100% paid by
the tenant. You understand why sales and excise taxes aren't paid
100% by consumers, right?
I assume that's because it upsets the supply/demand curve, but only in a >minor way unless the tax rate is outrageous. For the purposes of this >discussion, the gap is not large enough to be relevant.
Slumlords don't fail to maintain their properties due to taxes on >>>improvements; _the tenants_ provide the disincentive. Why spend
$10k remodeling a house in the slum when the tenant will just cause
$10k in damages when you evict them the next month?
One can't be the only one fixing up one's property; the first to do >>something is taking a huge chance that none of his neighboring land
owners won't be encouraged to do the same thing.
If the place is no longer a slum, the landlord has the opportunity
not to look for slum tenants.
I addressed gentrification of entire neighborhoods in a prior post.
Other than that case, it's not a relevant factor. Slumlords aren't
usually interested in gentrification; it's not their business model.
On 31-Mar-15 12:19, Adam H. Kerman wrote:
Stephen Sprunk <stephen@sprunk.org> wrote:
On 30-Mar-15 19:13, Adam H. Kerman wrote:
Well, no, what you can't afford is NOT to improve schools!
That's what keeps your land values to very low.
The "performance" of the schools is almost entirely driven by the
income of the students' parents. Spending more (or less) on
schools has no effect, so the entire discussion is moot.
That's a whole different discussion. I have strong objections to
school performance measures, and I think they harm more than they
help.
Well, that's because what we're evaluating is not really schools' >performance, yet we pretend it is, and we take all sorts of actions
based on that pretense that are completely inappropriate.
If we actually _could_ measure school performance, that could be of
enormous benefit; unfortunately, nobody has really figured out how.
In fact, I think standardized testing has no ability to help
students.
It does, actually. By far, the single most important thing that
improves student (and school) performance is ending "social promotion",
and since most schools have proven unwilling to do so on their own, a
regime that forces it on them is quite beneficial.
The core problem is that you have to catch students when they first
start to fall behind, so they have a chance to catch up; Texas's
experience is that it can't be any later than 3rd grade (hence where
NCLB starts). That means it takes 10+ years to see the benefits,
though, and as we know, politicians rarely care about anything that pays
off beyond their next election.
Everyone rants about NCLB, and it certainly has its problems, but it was >based on decades of experience--and proven results--in Texas.
I just think kids from wealthier families have a better chance of
avoiding certain aspects of education that are harmful. I don't
believe that poor kids can't be educated to the best of their
ability, despite that many of them have serious family problems.
School can't overcome the latter, but better schools should help.
That's not what the evidence says, unfortunately.
Yes, there are kids who overcome their parents' poverty and are
successful, but there are just as many kids who overcome their parents' >wealth and are unsuccessful, so it's a wash.
If you take a poor kid and drop them in a rich school, he'll do a lot
better, but the rich kids will all do slightly worse. Once you hit a >critical mass, the rich kids all leave, and now you have just another
failed school full of poor kids--and more busing.
If you have any interest in school performance, that is the most
important insight you'll get this _decade_. Once you truly get it, it
will change your entire perspective on the topic--similar to when you >introduced me to land value taxation.
On 31-Mar-15 13:46, Adam H. Kerman wrote:
Stephen Sprunk <stephen@sprunk.org> wrote:
I'd agree there is a problem with the typical curriculum in our public >schools, but that is only distantly related to how well students learn >whatever it is we choose to teach them.
I disagree with "college-ready" being the only goal for K-12 schools,
but that _was_ the goal chosen by the politicians, and Texas schools
have done a great job--far better than they usually get credit for.
I just think kids from wealthier families have a better chance
of avoiding certain aspects of education that are harmful. I
don't believe that poor kids can't be educated to the best of
their ability, despite that many of them have serious family
problems. School can't overcome the latter, but better schools
should help.
That's not what the evidence says, unfortunately.
Maybe we need a new definition.
In my area, Mexican immigrants live in the suburbs, in much of the >>metropolitan area. It's not like the parents have better jobs or a
higher standard of living or pay higher rent, although the suburbs
that aren't drug re-distribution points have lower murder rates.
They do better in suburban public schools.
If the same kids with the same parents went to urban public schools,
they'd perform pretty much the same, on average.
But what about retired or unemployed individuals who can no longer
afford the taxes on their homes because they went up so steeply and
their retirement income failed to keep up? That's one of the reasons
people argue for other tax sources, since something like an income tax
at least closer matches income and ability to pay.
Stephen Sprunk wrote:
On 29-Mar-15 13:22, hancock4wrote:
There is a broader issue, and that is the ability of the
landowner to pay taxes.
If he can't pay the taxes, then he's a shitty businessman, and he
should sell his property to someone who can do a better job of it.
But what about retired or unemployed individuals who can no longer
afford the taxes on their homes because they went up so steeply and
their retirement income failed to keep up? ...
Stephen Sprunk wrote:
It's not a matter of tenants caring. If every landlord's land
values (and thus taxes) go up 3%/yr due to general inflation, then
they will all increase their rents at least 3%/yr so they don't
lose money. The tenants either pay the higher rents or become
homeless.
Not exactly. Individual situations vary greatly.
We must consider the demand curve. Just because taxes go up does not
mean a particular neighborhood is more desirable to live in. Indeed,
a neighborhood could be declining in desirability and taxes go up.
(Welcome to Philadelphia). So, if rents exceed demand, people will
go elsewhere.
If politicians raise the _rate_ in a particular jurisdiction, then
every rent in that area will go up faster than inflation. Some of
the tenants will move to other jurisdictions, though, so rents will
go back down, which means property values will go down, and the
total tax collected may be more _or less_ than before the rate
increase.
Once again, property values do not necessarily coorelate to property
taxes.
hancock4@bbs.cpcn.com wrote:
Stephen Sprunk wrote:
Landowners just pass on property taxes to their tenants anyway,
so there is no reason for them to prefer any other form of
tax--unless they have no tenants, i.e. they're speculators.
That assumes the tenants can afford to pay increased rent to pay
the taxes. If not, the landowner is screwed.
A town can raise taxes overnight, but it will take a property owner
much time to adjust--be it do something different with the land,
e.g. build something or sell it off.
In my state, taxes cannot be raised overnight. They have to go
through notice and public hearings and a truth-in-taxation process.
Further, maximizing land use profit is limited by zoning, laws,
historical designation, etc. Laws are passed regulating land use
for quality of life reasons.
Then if laws limit land value to less-than-highest-and-best-use, the
land will be assessed accordingly. That's the point.
Government needs taxes, and taxes everything--land, income,
commerce--to the extent it can get away with it. In many areas,
official land "valuation" is utter b/s.
Assessments are public, hancock, so they can't hide it. That's not
true of anything else that's taxable.
Stephen Sprunk <stephen@sprunk.org> wrote:
I'd agree there is a problem with the typical curriculum in our
public schools, but that is only distantly related to how well
students learn whatever it is we choose to teach them.
What happened to teaching kids how to learn so they learn to teach
themselves and develop a life-long love of learning?
Schools tend to suck the joy out of everything.
I disagree with "college-ready" being the only goal for K-12
schools, but that _was_ the goal chosen by the politicians, and
Texas schools have done a great job--far better than they usually
get credit for.
Yes, vocational education was destroyed, and today, we turn out kids
who aren't ready to work upon graduating with a high school
education.
In my area, Mexican immigrants live in the suburbs, in much of
the metropolitan area. It's not like the parents have better jobs
or a higher standard of living or pay higher rent, although the
suburbs that aren't drug re-distribution points have lower murder
rates.
They do better in suburban public schools.
If the same kids with the same parents went to urban public
schools, they'd perform pretty much the same, on average.
It's comparable income levels. Mexican families tend to be working
class, not poor.
Stephen Sprunk <stephen@sprunk.org> wrote:
On 30-Mar-15 23:10, Adam H. Kerman wrote:
In my state, taxes cannot be raised overnight. They have to go
through notice and public hearings and a truth-in-taxation
process.
In my state, property taxes can only be raised with voter
approval, typically done as part of a bond election since the
projected revenue from the higher tax rate is needed to secure the
bonds.
I wasn't commenting on the need to go to referendum to issue bonds.
There are exceptions, but bond issues need to pass a referendum
first.
Most levies that aren't for bonds are subject to statutory caps,
unless there's a referendum.
Then if laws limit land value to less-than-highest-and-best-use,
the land will be assessed accordingly. That's the point.
Well, the "highest and best use" of land typically accounts for
zoning and other restrictions. IOW, it's the highest and best
_lawful_ use.
...
No, "highest and best use" is a concept of an ideal marketplace
without building and zoning restrictions and without the ability to
shift costs from your land use to others to prevent their full
enjoyment of their land.
Stephen Sprunk <stephen@sprunk.org> wrote:
On 01-Apr-15 11:57, Adam H. Kerman wrote:
Stephen Sprunk <stephen@sprunk.org> wrote:
Well, the "highest and best use" of land typically accounts
for zoning and other restrictions. IOW, it's the highest and
best _lawful_ use. . . .
No, "highest and best use" is a concept of an ideal marketplace
without building and zoning restrictions and without the ability
to shift costs from your land use to others to prevent their
full enjoyment of their land.
Perhaps we're talking about different things. My land is valued
(and therefore taxed) based on the "highest and best" lawful use,
which is a two-story detached house; that I actually have a
single-story house is irrelevant. I could generate more revenue by
replacing the house with a gas station, but that's irrelevant too
because it'd be illegal. I could try to get the zoning changed,
but if I succeeded, my land value (and my taxes) would go up
accordingly.
Right. Building and zoning codes are outside influences that depress
or increase land value.
I don't think the phrase "highest and best use" is found in George,
but I'm suddenly spacing out on the term he used.
Anyway, you're better off in the long running owning the smallest
house on the block, not the biggest, if you wish to profit when you
sell.
On 30-Mar-15 23:10, Adam H. Kerman wrote:
hancock4@bbs.cpcn.com wrote:
Stephen Sprunk wrote:
A town can raise taxes overnight, but it will take a property owner
much time to adjust--be it do something different with the land,
e.g. build something or sell it off.
In my state, taxes cannot be raised overnight. They have to go
through notice and public hearings and a truth-in-taxation process.
In my state, property taxes can only be raised with voter approval,
typically done as part of a bond election since the projected revenue
from the higher tax rate is needed to secure the bonds.
Further, maximizing land use profit is limited by zoning, laws, >>>historical designation, etc. Laws are passed regulating land use
for quality of life reasons.
Then if laws limit land value to less-than-highest-and-best-use, the
land will be assessed accordingly. That's the point.
Well, the "highest and best use" of land typically accounts for zoning
and other restrictions. IOW, it's the highest and best _lawful_ use.
On 01-Apr-15 11:57, Adam H. Kerman wrote:
Stephen Sprunk <stephen@sprunk.org> wrote:
On 30-Mar-15 23:10, Adam H. Kerman wrote:
Then if laws limit land value to less-than-highest-and-best-use,
the land will be assessed accordingly. That's the point.
Well, the "highest and best use" of land typically accounts for
zoning and other restrictions. IOW, it's the highest and best
_lawful_ use. . . .
No, "highest and best use" is a concept of an ideal marketplace
without building and zoning restrictions and without the ability to
shift costs from your land use to others to prevent their full
enjoyment of their land.
Perhaps we're talking about different things. My land is valued (and >therefore taxed) based on the "highest and best" lawful use, which is a >two-story detached house; that I actually have a single-story house is >irrelevant. I could generate more revenue by replacing the house with a
gas station, but that's irrelevant too because it'd be illegal. I could
try to get the zoning changed, but if I succeeded, my land value (and my >taxes) would go up accordingly.
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| Users: | 991 |
| Nodes: | 10 (1 / 9) |
| Uptime: | 126:13:59 |
| Calls: | 12,960 |
| Calls today: | 2 |
| Files: | 186,574 |
| Messages: | 3,265,864 |