--- Bryan Caplan <[EMAIL PROTECTED]> wrote: > You are overlooking so much. > > 1. Property taxes bring value down just as services bring value up.
True, but currently, property taxes pay only a small fraction of government expenses, and the property tax on buildings, as distinct from land, are quite imperfectly capitalized. A new building, for example, will not sell for less than the costs of construction just because the new owner will have to pay a real-estate property tax. > 2. A lot of tax money is spent on activities that do nothing for > property values. Is is hard to see why Social Security or Medicare > would raise property value much. Perhaps they increase immigration by a > slight amount, that's about it. Payments (taxes) for Social Security, etc., add to the costs of production and reduce profitability, capitalizing down what enterprise owners are willing to bid for land and rent. On the other hand, if there is a community with a large concentration of retired people collecting Social Security and Medicare, the land value there would fall if such benefits fell. > 3. A lot of the external effects in real estate markets are voluntarily > produced by your fellow land-owners. Every time one of my neighbors > improves his landscaping, that raises my property value, but government > has nothing to do with it. Government does have some role there. A major improvement will increase the property tax, creating a disincentive to do so. The improvements themselves are made more costly because of taxation and regulation. A move towards a pure free market would thus greatly increase rent and land value, most probably by much more than the increase in the cost borne by landowners for public services. Georgist policy is fundamentally about free trade; the taxation of land value is just a means. Hence, a move to a pure market would fulfil most of the Georgist ends. Fred Foldvary ===== [EMAIL PROTECTED]
