[RP TownTalk] Who pays, more or less, et cetera
Jack R. Jones
jrjones at smart2.net
Fri Apr 14 08:27:13 UTC 2006
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>Today's Topics:
>
> 1. Re: Land Value Tax Calculator (david lingua)
> 2. Re: Land Value Tax Calculator (Nancy)
> 3. Marylandlandtax.org (Jack R. Jones)
> 4. Re: Land Value Tax Calculator (Regina M. Kreger)
> 5. Re: Land Value Tax Calculator (david lingua)
> 6. Land Value Tax Calculator (David Hiles)
> 7. Re: Land Value Tax Calculator (fwd)
> (Alan Thompson and Sarah Wayland)
>
> 9. Re: Land Value Tax Calculator (Andrew Farrington)
> 10. Re: Land Value Tax Calculator (bruce.wernek at mindspring.com)
>
>
>
>Message: 2
>Date: Wed, 12 Apr 2006 22:45:43 -0500
>From: "Nancy" <ng_md at verizon.net>
>Subject: Re: [RP TownTalk] Land Value Tax Calculator
>To: <TownTalk at riverdale-park.org>
>Message-ID: <007001c65eac$bdd35f50$0201000a at DDBT4981>
>Content-Type: text/plain; charset=us-ascii
>
> Wait a minute. If some folks' taxes are going down, then whose taxes are
>going up? Or is this mainly a mechanism to reduce tax revenue for local
>government?
>
>Nancy
>Riverdale Road
Jack here:
These figures are based on a revenue neutral 100% shift to Land Tax
These are figures for December 2003
20 Vacant Industrial Lots would pay a total of $76, 904 more in taxes
42 Vacant Commercial Lots would pay a total of $25,391 more in taxes
7 Vacant Multifamily Lots would pay a total of $3,965 more in taxes
60 Vacant Residential Lots would pay a total of $25,391 more in taxes
These are figures for December 2004
20 Vacant Industrial Lots would pay a total of $103,597 more in taxes
42 Vacant Commercial Lots would pay a total of $34,204 more in taxes
7 Vacant Multifamily Lots would pay a total of $5,341 more in taxes
60 Vacant Residential Lots would pay a total of $26,877 more in taxes
How much speculators made on vacant lots in 2004
Industrial speculator $26,693/20 = $1,335 each
Commercial speculator $8813/42 = $210 each
Multifamily speculator $1376/7 = $197 each
Residential speculator $1486/60 = $25 each
Now there are those who will say this is not much, but add those
commercial properties at Building to Land ratio of
Average
0.033 to 0.50: 22 would pay a total of $24,667 $1,121
0.501 to 1.00: 10 would pay a total of $33,991 $3,399
1.001 to 1.50 15 would pay a total of $24,432 $1,629
1.501 to 2.00 49 would pay a total of $32,279 $659
2.001 to 2.50 9 would pay a total of $1,053 $117
2.501 to 3.00 4 would save a total of $871
Total of Commercial under developed is $121,646 per year for 2004
The under developed commercial properties are costing the residents
of Riverdale Park $121,646 dollars a year in additional tax so that
buildings can be taxed instead of land, personally, I would like to
see them paying their fair share of the infrastructure and public
service cost.
It will be interesting to see what the 40% real estate bubble of 2005
has done to things.
>
>
>Message: 5
>Date: Thu, 13 Apr 2006 06:12:30 -0700 (PDT)
>From: david lingua <inkywaterbears at yahoo.com>
>Subject: Re: [RP TownTalk] Land Value Tax Calculator
>To: TownTalk at riverdale-park.org
>Message-ID: <20060413131230.86382.qmail at web84002.mail.dcn.yahoo.com>
>Content-Type: text/plain; charset=iso-8859-1
>
>Currently the underutilized commercial property on
>Rhode Island Avenue owned by Mr. Jemal's company would
>net Mr. Jemal $110.- in decreased taxes under LVT as
>the property stands right now.
>A cursory glance at at the town shows a large number
>of residential properties, if not a majority, would
>see their tax rates increase. One sees more red than
>green as one looks at page after page at the site
>provided by Mr. Hiles. While Mr. Hiles did provide the
>caveat emptor ("might look like"), the examples
>demonstrate negligible incentive for adopting LVT.
>
>-DJL
>
>--- "Regina M. Kreger" <regina at kreger.net> wrote:
>
>
>
>Message: 6
>Date: Thu, 13 Apr 2006 08:41:14 -0400
>From: David Hiles <hilesd at mindspring.com>
>Subject: [RP TownTalk] Land Value Tax Calculator
>To: TownTalk at riverdale-park.org
>Message-ID: <d46662769097ca20dcff313d8a4944dd at mindspring.com>
>Content-Type: text/plain; charset=US-ASCII; format=flowed
>
>My messages to this list are being moderated because I was judged to
>have violated the posting standards.
>************************************
>
>The LVT proposal says NOTHING (say it loud!) about increasing or
>cutting total town tax revenues. The LVT proposal is one that changes
>the base of taxation to a better footing. The calculator is presented
>using rates which yield a REVENUE NEUTRAL result for the town as a
>whole. Alternatively, it could be set to cut revenue or to raise it.
>Raising or cutting revenue is a SEPARATE TOPIC.
>
>For a simple example of how a LVT would work for a commercial property
>see [ http://www.marylandlandtax.org/lvt ].
>
>To see how the LVT would redistribute some of the tax load away from
>improvements and toward undeveloped property, open up the calculator [
>http://www.marylandlandtax.org/calculator ] and put in a street like
>Riverdale or Baltimore or Kenilworth, or even your own street. If you
>don't put in the street number, you will see a list of all the
>addresses on that street along with the tax change for each property.
>The calculator is set at rates which would not change the overall tax
>revenue coming into the town. It shows what happens when you shift
>more of the payment onto undeveloped land.
>
>The shifted amounts are small in most cases, which I think is what Mr.
>Lingua noticed. This small initial shift is intentional, so that there
>is not a big disruption at the beginning. The first change is
>something like a 20 percent cut in the tax rate on improvements, with
>the revenue made up by increasing the rate on land. Over time, more of
>these changes are made so that the town eventually gets to the target
>high rate on land and the target low rate on improvements. Making the
>change all at once is unnecessary and would be cause more problems than
>it would solve.
>
>Thinking that the change would have to be either
> a) too small to be effective or
> b) so big that it would be disruptive
>is one of the mistaken assumptions made when this topic was raised
>years ago. Reasonable ideas like "make a small change for the better
>which becomes big over time" were lost in the noise and drama of the
>past.
>
>
>WE are who we have been waiting for.
>http://riverdalepark.blogspot.com/
>
Jack here:
As Senator Everett Dirkson used to say "A decimal here, a decimal
there, pretty soon you're talking about real money" Pete Seeger "1
and 1 makes a million"
A little Land Tax here and a little Land Tax there and pretty soon
we'll be talking about real development. Well said David.
>
>
>------------------------------
>
>Message: 7
>Date: Thu, 13 Apr 2006 09:49:05 -0400 (EDT)
>From: Alan Thompson and Sarah Wayland <twacks at his.com>
>Subject: Re: [RP TownTalk] Land Value Tax Calculator (fwd)
>To: towntalk at riverdale-park.org
>Message-ID: <20060413094821.R99584 at mail101.his.com>
>Content-Type: TEXT/PLAIN; charset=US-ASCII; format=flowed
>
>[Sarah here, speaking only for myself.]
>
>While I *do* support the idea of a Land Value Tax, I worry about two issues.
>
>The first is that the current assessed value of the land does not reflect size
>or location.
>
>The second is that the differential incentive is small, and I wonder
>whether it
>will be effective.
>
>Let me give some examples to illustrate.
>
>(1) The value of land (versus the improvements on the land) is
>currently set by
>the state, and those values do not reflect lot size or location.
>
>Example 1: On my street are 3 houses: A is on one lot, B is on two lots, and C
>is on three lots. Each address has only one house on it. The land value for
>each property is set at:
>
>A (9000 sq ft) = $55,500
>B (18000 sq ft) = $56,400
>C (22500 sq ft) = $56,850
>
>So my neighbors all pay roughly the same tax on their land, even though the
>smallest lot is 13,500 feet smaller than the biggest lot.
>
>Example 2: The Town of Riverdale Park sold a 649 square foot commercial lot on
>the southeast corner of East-West Highway and Route 1 for $36,000 to Riverdale
>One LLC (Mr. Caputo) on 6/4/2003. That same property has a
>state-assessed value
>(last updated on 1/1/2004) of $200.
>
>Clearly the state will have to reassess the value of the land before a "land
>value tax" can have any real meaning.
>
>(2) The amount of money a commercial property will pay, with the current
>assessment structure, will not change by enough to motivate a change in
>behavior.
>
>Example: The old Crestar Bank Building at 6200 Baltimore Avenue, currently
>owned by Jemal Riverdale Citizens LLC, currently pays the following in taxes:
>
>STATE: $946
>COUNTY: $8508
>MUNICIPAL: $7173
>
>Under a Land Value Taxation scheme, Jemal Riverdale Citizens LLC would pay:
>
>STATE: $1469
>COUNTY: $8936
>MUNICIPAL: $7534
>
>For Riverdale Park, this means Jemal would pay $361 more to the town
>under Land
>Value Taxation. He bought the building for $1,350,000. I don't know that $361
>will motivate any changes in behavior on his part. David Hiles says that this
>argument (that the incentive is too small (or a different version too large))
>was not relevant to the merit of the proposal, but I think it is
>worth considering nonetheless.
>
>----
>
>To summarize, the main point is that the state will have to change how land is
>valued before Land Value Tax can truly work. A secondary point is that the
>amount of money we are discussing here will not have much impact on
>a developer
>who is used to dealing with millions of dollars at a time, and doesn't seem to
>mind lost revenue on the order of many thousands each month.
>
>-Sarah
Jack here:
The State of Maryland has the reputation of being among the best in
Land and Improvement Assessments: on Example 2 I'd want to see what
they do after the sale information is applied and given SDAT
reassesses every three years and the increase is spread out over
three years I would expect it to show a change bringing it in to line
with other adjacent commercial property at about $27 per sq ft, but
not the $55.47 per square foot of the purchase. That additional $$$
was probably spent to reduce the RP pain in the derriere.
The reason there is not much tax difference on the residential lots
is that additional land over the "standard" lot is that it is
assessed as agricultural land which has an annual rental value of $50
to $150 per acre depending on tilth or about $15 to $45 tax value for
a 1/3 acre...and probably $15 because high tilth has not been
demonstrated.
On the other had in the other use codes a square foot is a square
foot in that use.
>
>
>------------------------------
>
>
>Message: 10
>Date: Thu, 13 Apr 2006 10:16:42 -0400 (GMT-04:00)
>From: bruce.wernek at mindspring.com
>Subject: Re: [RP TownTalk] Land Value Tax Calculator
>To: david lingua <inkywaterbears at yahoo.com>,
> TownTalk at riverdale-park.org
>Message-ID:
>
> <11089026.1144937802821.JavaMail.root at mswamui-billy.atl.sa.earthlink.net>
>
>Content-Type: text/plain; charset=us-ascii
>
>Dave
>
>Thanks for the very informative counter point. This may explain why
>there are no municipalities in the state which have adopted the LVT.
>
>Bruce
>
Jack here:
I still favor a working hypothesis of the phobia of being first, so
prevalent in Maryland municipalities as the reason none have gone
with LVT...it is so Maryland, if you have seen "1776" or read the
Oxford History of the American People. Unlike the Virginia County I
am from...they couldn't prove it but we were instigators in Bacon's
Rebellion...a 1620 effort to throw the English Governor out and have
the House of Burgesses (longest continuously meeting legislature in
the world, 400th anniversary coming up soon) take over running the
colony with out English interference. God we are sooo provincial!! A
friend told me that on a trip to Europe he found two types of
tourists...those from the United States and those from Virginia.
>
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>End of TownTalk Digest, Vol 9, Issue 16
>***************************************
--
"We have met the enemy, and he is us!" Pogo Possum
http://theriverdaleobserver.blogspot.com
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