LVT is a tax only on the unimproved value of the land. Property improvements are not covered: the land owner gets to keep (or pass onto the renter) 100% of the value of such improvements. No tax credit is necessary; it's a natural consequence of how the tax is structured.
Right, I understand that property improvements aren’t considered in LVT, and are naturally incentivized through the application of the tax. I’m just speculating if specific development-adverse markets could use both LVT, and credits against LVT to really get the pro-development ball rolling.
Based on the one prior attempt at LVT in the U.S., landowners don’t seem to understand its intent:
There's a pretty big risk of market distortions then. I could easily see landowners adding whatever "improvements" the tax credit incentivizes, regardless of whether it benefits the tenant or increases the potential rent charged, and then passing the cost along to the tenant. Also see a booming cottage industry of contractors & paper-pushers to get the tax credit.
I do agree that an LVT has psychological issues when proposed to voters. It's a massive change to how we currently do things (that's the point!), and it preferences groups who don't currently have political power (future developers, tenants, future residents) over those who do (land speculators, retirees, existing homeowners). I think the most likely scenario for its adoption is in the aftermath of a cataclysmic war that destroys all the existing infrastructure and redraws political boundaries. Likely one successor polity might try it out (since everything's dead & destroyed anyway), and then their pro-development advantages would draw lots of displaced immigrants to them, and eventually they'd amass more power than their neighbors through that economic dynamism. Much like how the U.S. became the pre-eminent global power through an innovative politico-economic system + immigration friendly policies + near complete genocide of the native population.
> Much like how the U.S. became the pre-eminent global power through an innovative politico-economic system + immigration friendly policies + near complete genocide of the native population
It's also invaded a crap-load of countries and defacto taken their natural resources And slavery.
No, that's a facile understanding. The loot-and-plunder style colonialism has given way to a unique variant that the US practises. It's not quite "take their resources" like the British Empire and friends did.
See Japan, a de facto US vassal state after WW2 and what they've grown into. Similarly, Korea and Israel. Also, Germany and France. They are just smaller participants in an alliance.
United Fruit style things still happen but the dominant style of US hegemony is different from VOC or EIC style imperialism.
It sounds like GP understands that point and is positing a "what if the value of certain new improvements were taxed at a negative rate?" (rather than a zero rate)
