Figure out the median property value, make the first 50% of that tax free. Then the next 50% is taxed at the previous rates. Then tax values above that enough to make up for it.
Could apply the same idea to land value taxes too.
The value is determined in a voluntary exchange, such as a sale, and results of sales of similar property serve only as approximations.
Same problem is with the land value tax. It's like trying to buy / sell your property every time you do taxes.
There is a known mechanism to limit attempts do show an excessively low value. Back in the day, the British Empire's customs reserved the right to immediately buy the entire freight of a merchant ship for the value declared at customs. That could work with land and even realty, too, but would be much more disruptive.
Plenty of jurisdictions do market-value property taxes by using market data and creating models to approximate the rest.
It’s never perfect, but the line in the sand must be drawn.
Other taxes have the same approximation issues. Income taxes don’t really tax all the value I provide. Any social person barters plenty of value that goes untaxed, but technically should be.
Can you elaborate on this/help me out with what to google for? I've never thought of this but it's actually a brilliant idea - would love to read more about it!
And if so, how does this get applied to corporations and REITs? Do they get taxed out of existence, or do their holdings get apportioned to individual shareholders and included in their personal portfolio, so that individual progressive schedules are applied to each portion?
It seems unlikely to me that you can construct a sound set of rules for this that are workable (no glaring loopholes) and appreciably different from a progressive wealth tax, which might be much easier to formulate...
If the farmer is struggling because of property taxes driven by their own increased property value... sounds like a good position to be in.
As for passing them on, that argument could be made for all taxes. If true, at least this structure would lower rents for low-value dwelling occupants and increase for those in more luxurious situations.