That’s actually the beauty of LVT – the government already knows who owns what land (the landowner has the deed), and land can’t be hidden or offshored. You may try having shell companies, but the tax bill comes due regardless. The reason shell companies work for avoiding other taxes is because they can allow you to offshore your on-paper profits to tax havens. LVT doesn’t tax you on profits, so it doesn’t matter where the profits are on paper. Similar for income or sales taxes, income and sales can be done cash-only and hidden.
Off the top of my head I’m imagining the infinite loan scheme, but modified a bit, where the vast bulk of your wealth is in securities and then you “rent” a property from a company for like $1 a year. The company doesn’t pay its taxes, it goes bankrupt, a new company is created, and the process starts again. YOU never owe taxes, the COMPANY owes taxes and could get deductions on any number of bogus things and then worst case just declare bankruptcy and fold.
This could be addressed, but it’s similar to people saying Mac or Linux is immune to viruses. If they get popular enough, they’ll need antivirus software.
Similarly, no tax scheme is immune to loopholes, but as long as they’re addressed, it’s not a point against it.
You’re correct that you could have a loophole through that method, but property taxes also have that method. I think the most logical solution would be for the city to be able to repossess the land if the taxes have not been paid on it in, say, 2 years, regardless of ownership. Gives one year of leniency in case of genuine liquidity issues, but avoids being able to skirt the law with corporate bankruptcies.
But, of course, if you write an LVT law with exemptions, deductions, special cases, etc., you make it very prone to evasion like any tax system with those does. At the end of the day, it does definitely come down to implementation.
![[meme] How would you rather see this land developed?](https://lemmy.world/pictrs/image/f6ec67a5-2636-4875-8dd4-fa5241a3083c.jpeg){kind=link}
That’s actually the beauty of LVT – the government already knows who owns what land (the landowner has the deed), and land can’t be hidden or offshored. You may try having shell companies, but the tax bill comes due regardless. The reason shell companies work for avoiding other taxes is because they can allow you to offshore your on-paper profits to tax havens. LVT doesn’t tax you on profits, so it doesn’t matter where the profits are on paper. Similar for income or sales taxes, income and sales can be done cash-only and hidden.
Off the top of my head I’m imagining the infinite loan scheme, but modified a bit, where the vast bulk of your wealth is in securities and then you “rent” a property from a company for like $1 a year. The company doesn’t pay its taxes, it goes bankrupt, a new company is created, and the process starts again. YOU never owe taxes, the COMPANY owes taxes and could get deductions on any number of bogus things and then worst case just declare bankruptcy and fold.
This could be addressed, but it’s similar to people saying Mac or Linux is immune to viruses. If they get popular enough, they’ll need antivirus software.
Similarly, no tax scheme is immune to loopholes, but as long as they’re addressed, it’s not a point against it.
You’re correct that you could have a loophole through that method, but property taxes also have that method. I think the most logical solution would be for the city to be able to repossess the land if the taxes have not been paid on it in, say, 2 years, regardless of ownership. Gives one year of leniency in case of genuine liquidity issues, but avoids being able to skirt the law with corporate bankruptcies.
But, of course, if you write an LVT law with exemptions, deductions, special cases, etc., you make it very prone to evasion like any tax system with those does. At the end of the day, it does definitely come down to implementation.
To somebody else’s point, how would this compare to the what single family home owners pay now?
Where I live we have about .09 acres of land our house sits on and we pay ~$3000/year.