Comments on: Honduras shrugged

By: BC

BC — Mon, 19 Dec 2011 17:53:52 +0000

The French government pays me to farm. We get property taxes too but the farm subsidies easily outweigh that by a factor of about four.

By: Matthew Walker

Matthew Walker — Thu, 15 Dec 2011 19:45:24 +0000

Farmland produces less revenue per square foot than a rental house. If you taxed it at the same rate, farms would cease to exist.

By: Jehu

Jehu — Wed, 14 Dec 2011 22:35:36 +0000

Hmm — if I recall, the big budget items are schools, police, and prisons at the state and local level. How much marginal cost does an average acre of farmland add to those metrics? It seems that the answers to this are actually quantifiable.

By: Isegoria

Isegoria — Wed, 14 Dec 2011 15:08:04 +0000

It’s amazing how politically powerful farmers can be. I can imagine that farmland does not receive the same level of public services as more developed residential land, but by a factor of 10,000?

By: Dave

Dave — Wed, 14 Dec 2011 02:54:03 +0000

In Maryland I live in a suburb in an efficient townhouse on 0.035 acres. Magically the state divides my tax valuation between “land” and “improvements”. My land is valued at a rate of of $2.8 million per acre.

Not far from my house there is a “farmer” who holds his ~100 acres of land at agricultural valuation, which is about $250 per acre.

If this isn’t a regressive tax, I don’t know what is.

By: Isegoria

Isegoria — Tue, 13 Dec 2011 15:43:42 +0000

Making property investments tax-deductible is certainly a simple solution, but it works better for large commercial properties than for private homes, where it misses implicit labor expenses from home-owners doing DIY projects and it requires more interaction with the tax authority.

By: Sconzey

Sconzey — Tue, 13 Dec 2011 15:26:59 +0000

"The simplest solution is..." LVT! ;)

By: Devin Finbarr

Devin Finbarr — Tue, 13 Dec 2011 14:57:45 +0000

“Thus, rents would go up as property values go up, but no one property-owner would face the disincentive that comes with ordinary property taxes — doubling his own property’s value through improvements wouldn’t double his property taxes; it would only increase his property taxes infinitesimally.”

The simplest solution is to make property investments tax deductible. So if you invest $100k in building a home, you can deduct that $100k from the property value for the next 40 years.