There are many, many things government could do that are economically better, not just in areas of taxation, but pretty much every area. Also, I'm not talking about the things crackpot far left/right wing blog readers consider obvious, these are perfectly orthodox Econ 101 insights.
They aren't implemented because they are incompatible with political dogma (I won't even call it ideology, as this implies a level of intellectual consistency), and these issues are used as tribal rallying calls which are much more valuable to politicians than implementing better policy ever was.
Land use tax, no matter how economically efficient, won't get implemented because the villains of taxation these days aren't heavy land users. I can run a hedge fund from a few floors in a Manhattan sky scaper. It would have the land footprint of perhaps 10 large coffeeshops. Google and Apple have barely any land footprint compared to any factory of any size. Any land tax implementation that would see hedgefunds, Google and Apple "pay their fair share" (while raising enough revenue to replace income and sales taxes) would be grotesque and certainly not economically efficient.
> I can run a hedge fund from a few floors in a Manhattan sky scaper. It would have the land footprint of perhaps 10 large coffeeshops. Google and Apple have barely any land footprint compared to any factory of any size.
That hedge fund skyscraper is on a prime plot of land in Lower Manhattan. The factory is in an industrial zone in rural South Carolina. The hedge fund gets taxed more – LVT is not regressive.
First, I don't care if LTV is technically regressive, I care if political opponents of LTV can claim it is, and they can.
Second, I actually included meaningful comparisons. My hedge fund gets taxed the same per sqft as the coffee shop in the same building (probably less, because the storefront property is more valuable, a 56th floor coffeeshop doesn't get the same foot traffic as the street level one, my hedge fund works equally well whatever floor it's on). Also, I'd put my back office operation in SC, which is great for me and SC, but looks a lot like me dodging my fair share. This might be economically efficient but it's not politically efficient.
Googles datacentres are in the same industrial zones as those factories. Google's offices are right next to malls and cinemas who would get billion-dollar tax bills if Google were to be taxed "fairly".
The coffeeshop already pays more through conventional rent than the hedgefund in this example. Google also would pay substantially. More importantly, the people who have speculated the nearby city because of Google would pay a lot more.
Let's not forget the coffeeshop also make more money from being where it is.
The hedge fund would still pay less tax then the paper company in the adjacent office. And both would pay less than the coffee shop on the street which has really valuable real estate.
As Koolhaas points out in "Delirious New York", skyscrapers are a way of multiplying plot area. This does pose problems for a taxation scheme based on land use.
George didn't originally intend that, and he also intended for land tax to replace all other taxes. I'd be interest to hear a source on the desirability of "things like skyscrapers".
(Koolhaas argues that not only was the elevator essential for the development of the skyscraper, but the telephone was necessary too, since it obviated the need to leave the office during the day. Is the original requirement for density still valid today?)
I understood the steel frame was the critical technology. Brick could only go 20 stories high; then the walls on the bottom were so thick it was essentially a brick pedestal with no usable interior space.
Steel skeleton skyscrapers have the same issue, but with elevators. After 100 floors, the bottom floor becomes essentially an elevator plaza.
They aren't implemented because they are incompatible with political dogma (I won't even call it ideology, as this implies a level of intellectual consistency), and these issues are used as tribal rallying calls which are much more valuable to politicians than implementing better policy ever was.
Land use tax, no matter how economically efficient, won't get implemented because the villains of taxation these days aren't heavy land users. I can run a hedge fund from a few floors in a Manhattan sky scaper. It would have the land footprint of perhaps 10 large coffeeshops. Google and Apple have barely any land footprint compared to any factory of any size. Any land tax implementation that would see hedgefunds, Google and Apple "pay their fair share" (while raising enough revenue to replace income and sales taxes) would be grotesque and certainly not economically efficient.