Wednesday, April 05, 2006

Son of George

I am not a "Georgist" but I see his theories as part of a more comprehensive and fair system of property taxation. Call me Son of George. I've long thought about this.

The basis for property taxation should be a very low flat base fee plus
an area based fee plus a very low flat base fee for any buliding plus
a building area based fee with (the kicker) a multiplier based on the
ratio of built area to lot area.

How did I dream this up? Easy, I back calculated from what a property
"costs" its municipality based on the properties' character.

Every lot costs a small amount regradless of size. Call it a management

Bigger lots consume some municipal services at a rate roughly equal to area.

Buildings likewise encumber greater external costs for both factors.

Finally, there needs to be a density penalty. If you are interested I'll
explain but I'd want to hear general comments before dredging up the
flammable compounds.


Anonymous said...

From the point of view of a pragmatical policymaker it seems to make a lot sense. But from the optimality point of view, this formulation might not ensure an optimum for two reasons:
1. Which sign for the density penality? Is the net costs of density positive for municipalities..
2. Is the optimal property tax in one county independent to the taxes of the tangent counties?

Rob Dawg said...

Excellent questions both. Leading questions as well (I'm not as stupid as my comments on this blog may imply).

1. Density is expensive. That is not a negative comment, it is a consideration. Expensive investments necessary to achieve density returns benefits as well as incurring costs. It is a common misperception amongst the pro-urbanist crowd to assume economies of scale when that isn't always the case.

Let's talk more now that you know I'm not an ogre on the issue.

2. Counties are experiments. Let them experiment. No, let me take that back; we've no business whether they experiment or not. I'd be pretty pissed if my current county, Ventura charged me as much for snow removal as my childhood county, Hampden charged. Then again, I'd be surprised if Hampden charged its residents for the hiring of 22 Mixteca to Spanish translators.