Mr. Moser sent this explanation to Chip Buchholtz and me about land value
tax. It helps to answer Brian Siano's concerns.
Melani Lamond
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Dear Chip,
Melani Lamond has passed me your comment on LVT. I highly applaud you for
your use of common sense. Yes, Land Value Taxation, taxes a location
according to its value. Thus, downtown would pay a higher taxes than the
rest of the city. The value of a lot is all in its location and the use
permitted. You might sit on a oil well, but it is pretty
useless/valueless, unless you are permitted to drill and extract the oil.
Additionally, the location also predetermines the use. No one is going to
build Liberty Place in the middle of the Nevada desert. Similarly, there
should not be surface parking lot where there could be building. There
should not be one boarded up building in West Philly while students are
desperately seeking housing.
LVT would be so simple and straight forward it would spare the city and its
inhabitants lots of aggravation. Every house on the block would basically
pay the same, as long as they sit on the same lot size. The sides of the
block might vary slightly due where the sun shines from and what is on the
backside of the block. But again, prices would be very transparent. There
is no cheating with LVT. No tax evasion what so ever.
I often compare LVT to the situation on a parking lot. You pay for the
space. Point period. You choose your parking lot, but once you enter the
lot, you are one among many, paying the exact same rate. We do not care
whether you leave your space empty (in economic terms that would pretty
stupid), deposit a rustmobil (if that is all you can afford or care for) or
park a Mercedes (it is nice to have lots of nice car/houses around you).
Thus, as long as you pay up your (user fee), a designated space is yours
and you can call on our police to remove anyone who dares to put his tires
on it.
And back to value setting. Go to any mall and check out where people park.
Obviously the ones in front of the entrance seem more "valuable" since
everybody jams in right there. LVT would make sure that the ones who get
privileged to be right next to the entrance pay more than the poor guys who
have to schlep themselves half a mile across the lot. In fact, at the
outskirts of the lot, taxes might even be zero. So it "pays" not to be at
the center of it.
I hope these explanations help you further in your understanding of the
"scheme" as the Mr. Siano put it. There is no scheme, just common sense.
The more you think about it, the more fascinating it gets.
Feel free to contact me if you have any further questions.
bruno
Bruno Moser
Assistant City Controller
1401 JFK Blvd, Suite 12-121
Philadelphia, PA 19102
Phone: 215-686-3885
Fax: 3832
http://www.philadelphiacontroller.org
----- Forwarded by Bruno Moser/Controller's Office/Phila on 10/17/2003
03:22 PM -----
[EMAIL PROTECTED]
To: [EMAIL PROTECTED]
10/17/2003 12:07 cc:
PM Subject: Fwd: [UC] Fw:
[nolphiladelphia] Philadelphia Inquirer, Daily News Stories on
Tax Commission Recommendations
----- Message from "Charles H. Buchholtz" <[EMAIL PROTECTED]> on Fri, 17
Oct 2003 11:06:48 -0400 -----
To: Brian Siano <[EMAIL PROTECTED]>
cc: university City List <[EMAIL PROTECTED]>
Subject: Re: [UC] Fw: [nolphiladelphia] Philadelphia Inquirer, Daily News Stories on
Tax
Commission Recommendations
From: Brian Siano <[EMAIL PROTECTED]>
Date: Fri, 17 Oct 2003 09:44:37 -0400
(In other words, if you're going to charge the same tax for the land on
which Liberty Place sits as you would for a block of row homes, then the
row homes are going to cost more in taxes.)
I haven't really been following this closely, but I assume that they
aren't going to charge the same for the land on which Liberty Place
sits as you would for a block of row homes, because the land on which
Liberty Place sits is worth a whole lot more than the land that my
house sits on.
I think the idea is that they charge the same for the condemned,
abandoned house across the street from me as they do for my house.
This should discourage people from buying properties and letting them
sit vacant and fall apart.
The situation where it doesn't work is when you have a lovely historic
fixed income widow living in a lovely historic owner-occupied
rowhouse, next to Liberty Place. But all simple tax structures have
some situations where they don't work; perhaps they will put in some
exceptions. One approach would be to calculate the value of the lot
based on use: commercial, owner-occupied residential, or rental
residential. Vacant property could be classed as commercial (to keep
people from bying a rowhouse, letting it sit vacant for several years,
and then turning it into an office building). A residential lot on
Rittenhouse Square would still be taxed higher than a residential lot
in West Philly, but it wouldn't be taxed at the same rate as the
Rittenhouse Hotel.
As I said, I haven't been following this issue. If anyone has more
info on what exactly is being proposed, I'd appreciate hearing about
it.
--- Chip
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