So land tax is fair and progressive (the more land you own, the more tax you pay).
Did you even read the WaPo article? Do you not see how the existence of a property tax has come around to hurt exactly the most vulnerable population (and in this case, through no directed malice) I promise you, people living in Palisades (the richest part of DC) are not worried about property tax liens because they can pay people to deal with paying the taxes (either legally, say hiring an admin, or extralegally). It's not progressive because the bureaucracy and the hammer of the state causes a greater fundamental inconvenience to those of less means than to those of greater means.
As to the hammer, do you think the DC government would have sent "armed US marshals" to recover the house if it were in the Palisades? Why or why not?
Many countries have land taxes which work reasonably well. There can be some proscribed formula (based on a regression on nearby property). Or they can do valuations. There'll always be problems, but it's not more evil than many other taxes (unless they enforce it by stealing property).
Maybe the government will send in SWAT teams to collect unpaid land tax bills from poor people, and a friendly note to rich people; but that's not because it's a land tax. How do you think they treat unpaid parking tickets?
The advantage of taxing the use or consumption of a scare resource (land) instead of income should be obvious. If Bill Gates wants a mansion, he's making it harder for normal people to buy a home. If Bill Gates makes a billion dollars selling some operation system, he's presumably creating jobs, and making a lot of people happy (since they can get on the internet without buying an expensive Mac, or having to figure out how to configure their modem using Linux). (Note - some rich people make their money by being parasites, but capitalism works because this usually isn't the case).
Finally, there's the stabilising effect that a land tax has. Property is a huge investment, driven by unsophisticated retail investors (who may be putting most of their life's savings into a single home), prone to stupid fluctuations, which can destroy the lives of normal people when it does something funny. Taxing it helps keep it a little rational (as the taxes will encourage people to avoid it when it starts heating up).
What happens if they refuse to pay the tax, then? As an agent of the state, how do you make them pay? You might send them some letters with warnings. Of course then they might continue to shirk the law. You can ratchet up the tax, by charging interest. Ok, but that's a number. They still refuse to pay. How do you make them pay?
2. your logic is questionable:
>Property is a huge investment, driven by unsophisticated retail investors (who may be putting most of their life's savings into a single home), prone to stupid fluctuations, which can destroy the lives of normal people when it does something funny. Taxing it helps keep it a little rational (as the taxes will encourage people to avoid it when it starts heating up).
Having children is a huge investment, driven by unsophisticated people, prone to stupid fluctuations, which can destroy the lives of normal people when it does something funny. Taxing childbirth helps keep it a little rational (as the taxes will encourage people to avoid sex when it starts heating up)
Does that sound like reasonable public policy?
And aside from the policy ethics I strongly doubt your model that property taxation is a significant 'tempering agent'. If you're going to call the buyer an 'unsophisticated retail investor', it's unlikely to presume that they will have a 'sophisticated' concept of property taxation, either, especially when the government can change its parameters at will.
Finally, if you're going to argue that property taxation is supposed to be a detterent for people who you are codedly calling 'unsophisticated' (whether or accurate or not, that reads to me as 'poor people') to 'rash' purchases, well, thank you for demonstrating my point that it's tax with regressive outcomes.
If you can show me a citation indicating that property tax keeps housing prices 'rational', I'd give it a second thought.
OK, in extreme circumstances then seizing the land, selling it, then giving any residual (after taxes are paid) back might be necessary. The problem in this thread is, the residual didn't get given back, and it doesn't seem they followed due process.
> Having children is a huge investment, driven by unsophisticated people, prone to stupid fluctuations, which can destroy the lives of normal people when it does something funny
There's no "child bubble", in which people all want to have children when the price of children goes up. I don't follow the analogy. Wait ... you mean it's a financial risk? Good point, maybe children should be taxed, but since having children isn't always voluntary, and there's no way you can stop a person who can't afford the tax from having a kid (at least, no ethical way), then it's' probably not such a great idea.
> And aside from the policy ethics I strongly doubt your model that property taxation is a significant 'tempering agent'.
It just makes sense. As you've asked, I can find some economists who think it's a good idea. Here's some review - http://www.enhr2011.com/sites/default/files/Paper-Haffner%20...
One of the things it cites:
Basically, yes a tax on value reduces volatility. Maybe. It's a credible idea, though it would be nice to have some more research. Transaction taxes are not such a great idea. Tax breaks on houses increase volatility.
And it's not a tax with regressive outcomes. Really poor people rent. I'm just saying "unsophisticated" to mean "people who don't trade for a living". Most people who invest in housing aren't professional real estate investors.
For instance, if I had 5 acres in the middle of nowhere, I might be expected to chip in to a fund to keep a fire on my land from spreading to adjacent BLM property. However, my acreage is likely to be taxed more or less based on the quality of the view, or another similarly cosmetic factor in land value. Why not just calculate my share of the public fire suppression expenses based on area? Assuming, of course, that sufficiently many of my neighbors feel compelled to intervene in cases of wildfire.
> there is no "rules scheme" you can construct that will be as progressive as you want.
What you propose may be 'fair', in the context of providing services*. But that is not the goal of progressivism, which is redistribution of wealth and creation of an more outcomes-equal society (a concept I'm personally not opposed to, if the state doesn't do it).
but even fair in your example isn't quite correct. Because area is not proportional to fire risk. Let's say I live in the valley, where a stream runs through, the vegetation is green, and the area never gets hit by lightning. And my rich neighbors a mile away are on the mesa, which has a great view, but is brown and always dry, and up high, so lightning hits there regularly? Should area be a fair assessor of fire risk? Is it fair to have me subsidize the fire protection of the rich people who live closer to where fires happen? (this is a simplified description of the very real LA county fire system where rich people live out on the hills where there are far more brushfires)
I can think of a few solutions* to your counterexample though, and that's the point. There's no reason to expect a solution to be fair in all cases, or perfectly fair in any. I'd only argue that there is often, or perhaps always, a more equitable and direct way to provide for common services than property taxes.
*I choose the BLM as a neighbor purposefully. The rich people in your example would almost certainly prefer to fund their own municipal utility than settle for the type of response I would expect the state or county to provide.
And the unfairness will always over time become skewed towards the wealthy and powerful (municipal authority:'well obviously we are authorized to make exceptions like X as precedented by our rules system in code ZZZ, subparagraph Q; if we give an advantage to corporation Y by implementing change T, it may not necessarily be in the spirit of total fairness - but we will create jobs! and thus it will be in the public interest'). If fairness is your dominant value, the only perfectly fair and sustainable solution is zero. If progressive redistribution is your dominant value, you will wind up with a lot of difficulty over the 'how much is enough' question, and the implementation will almost always find a way to be anti-progressive.
Would you at least agree that things don't have to be quite so complicated once you get out of the city?