this post was submitted on 06 Sep 2023
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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.
I think you are implying there's deductions against land value tax but there typically isn't.
Even for businesses?
Yeah nope. You have to understand the reason deductions exists for income tax is that they allow you to deduct your costs from the revenue you take in and are only paying tax on the profit.
Edit: I should add plenty of places that do have land taxes usually have a lot of exemptions like here, your primary residence is exempted as well as any land for primary production (land used for agriculture) but those exist for political reasons.
Interesting, that makes sense.