What I learned during a 40 year career in helping to put together public-private financing initiatives for revitalization of distressed and under-served communities is that the main cause of decline in the first place is a tax structure that rewards speculation in land over investment in job-creating capital goods. At the local level the main cause is the conventional property tax. The property tax is almost universally administered to foster land speculation by infrequent and inaccurate assessments. Buildings, which are depreciating assets are over-assessed. Land is generally under-assessed. Thus, the incentive to property owners is to hold land idle in anticipation of rising land values (reducing the supply of land available for development, and thereby artificially pushing up land prices even higher). All one needs to do is walk the streets in a city's central business district and nearby neighborhoods and count the hundreds of buildings that sit vacant or as empty lots. The proliferation of surface parking lots is another clear indication of a counter-productive tax structure. And, in neighborhoods populated by lower-income households, the incentive is to put as many people as possible into housing units, defer maintenance and wait for a government-funded revitalization effort to come along to purchase the land or at least stimulate the demand for land by developers seeking to attract higher income households. When gentrified, where to the low income individuals go; often, they go into the streets or the growing tent cities that plague most of U.S. cities. The optimum rate of taxation on buildings is actually zero. The annual taxation of a building amounts to the imposition of a sales tax year after year after year. The optimum AMOUNT of taxation on a parcel or tract of land is the potential annual rental value of the location, a value that exists independent of what the owner of the land does or does not do with the location. This value is societally-created and is a function of locational advantages, advantages in a town or city that are created by aggregate investment in public goods and services. It is the failure to collect the location rental values that rewards antisocial behavior on the part of property owners. When will those who govern and our civic leaders wake up to this reality? Edward J. Dodson, Director School of Cooperative Individualism www.cooperative-individualism.org
Dear Edward, I just ran into your comment during my research. I'm a bit confused about your last two points - you mention that optimum rate of taxation on buildings is zero, and optimum amount of taxation on a parcel of land is the potential annual rental value of the location. Wouldn't this keep things at roughly status-quo for most properties that are already built and renting? You mentioned the deferment of maintenance example, how would this situation change under your proposed tax scheme? I suppose I see where you're coming from in terms of the surface parking lot examples. They will be incentivized to build quickly and capture that rent (or sell to a builder) without any added incurred tax... Thanks for the insights!
It's something that moreno valley should have but Brian Lowell wasnt elected for city council. So the money for Measure L ( hotel tax) and Prop 51 will go where ???? The world logistics centers money will be lost and probably made out to the CEO of the company.
I found the animation to needlessly demonize corporate interests. If we really want to found our community resilience on Inclusion, we need to include the corporate institutions that currently exercise great political power. Ultimately, the actions corporations take are optimized to enhance profit and that means their brand is susceptible to their image in the community. I'm all for the rest of your message. I think raising awareness about corporate abuse is important. But let's also make room in our future resilience for corporations (like Boeing) that have helped build our communities in the past. They are not evil; they are focused on profit instead of resilience.
Working on "Community Wealth Building" Fairfax County Virginia Twin Project perspective, via Private Public Partnership, Fairfax DC Urban Hub Crucible. Venture Philanthropy: A Tool for Sustainable Community Development". Conversation OK ?
What I learned during a 40 year career in helping to put together public-private financing initiatives for revitalization of distressed and under-served communities is that the main cause of decline in the first place is a tax structure that rewards speculation in land over investment in job-creating capital goods. At the local level the main cause is the conventional property tax. The property tax is almost universally administered to foster land speculation by infrequent and inaccurate assessments. Buildings, which are depreciating assets are over-assessed. Land is generally under-assessed. Thus, the incentive to property owners is to hold land idle in anticipation of rising land values (reducing the supply of land available for development, and thereby artificially pushing up land prices even higher). All one needs to do is walk the streets in a city's central business district and nearby neighborhoods and count the hundreds of buildings that sit vacant or as empty lots. The proliferation of surface parking lots is another clear indication of a counter-productive tax structure. And, in neighborhoods populated by lower-income households, the incentive is to put as many people as possible into housing units, defer maintenance and wait for a government-funded revitalization effort to come along to purchase the land or at least stimulate the demand for land by developers seeking to attract higher income households. When gentrified, where to the low income individuals go; often, they go into the streets or the growing tent cities that plague most of U.S. cities. The optimum rate of taxation on buildings is actually zero. The annual taxation of a building amounts to the imposition of a sales tax year after year after year. The optimum AMOUNT of taxation on a parcel or tract of land is the potential annual rental value of the location, a value that exists independent of what the owner of the land does or does not do with the location. This value is societally-created and is a function of locational advantages, advantages in a town or city that are created by aggregate investment in public goods and services. It is the failure to collect the location rental values that rewards antisocial behavior on the part of property owners. When will those who govern and our civic leaders wake up to this reality?
Edward J. Dodson, Director
School of Cooperative Individualism
www.cooperative-individualism.org
Dear Edward,
I just ran into your comment during my research.
I'm a bit confused about your last two points - you mention that optimum rate of taxation on buildings is zero, and optimum amount of taxation on a parcel of land is the potential annual rental value of the location.
Wouldn't this keep things at roughly status-quo for most properties that are already built and renting? You mentioned the deferment of maintenance example, how would this situation change under your proposed tax scheme?
I suppose I see where you're coming from in terms of the surface parking lot examples. They will be incentivized to build quickly and capture that rent (or sell to a builder) without any added incurred tax...
Thanks for the insights!
As this movement gathers steam, I suspect that corporations will start playing the local/community card a lot more to protect their interests!
It's something that moreno valley should have but Brian Lowell wasnt elected for city council. So the money for Measure L ( hotel tax) and Prop 51 will go where ????
The world logistics centers money will be lost and probably made out to the CEO of the company.
I need help
I found the animation to needlessly demonize corporate interests. If we really want to found our community resilience on Inclusion, we need to include the corporate institutions that currently exercise great political power.
Ultimately, the actions corporations take are optimized to enhance profit and that means their brand is susceptible to their image in the community.
I'm all for the rest of your message. I think raising awareness about corporate abuse is important. But let's also make room in our future resilience for corporations (like Boeing) that have helped build our communities in the past.
They are not evil; they are focused on profit instead of resilience.
I do agree that corporations care about their image and an educated and aware consumer holds quite a bit of power.
Working on "Community Wealth Building" Fairfax County Virginia Twin Project perspective, via Private Public Partnership, Fairfax DC Urban Hub Crucible. Venture Philanthropy: A Tool for Sustainable Community Development". Conversation OK ?
I live in Fairfax County... where might I go to learn more?