How do we know that?
> And now the FED can't really reverse it.
By the way, Fed is not an initialism, so it doesn't really make sense to write about them in all-caps.
> We need to erode all that capital concentration, and the only way to do it without hurting the regular guy is through heavy taxation.
What do you want to tax? Land Value Taxes are pretty neat (or rather, the least bad taxation).
Are they? From what I read they’d heavily mess with anyone that bought a family home anywhere near a city more than 10 years ago.
You can argue that their net worth has increased, but their salary is still the same, so increasing their taxes based on the current value of their house just makes them lose the house (and forces them to buy a new house much further from city center).
Maybe exclude property that’s actually lived in?
Alas, that would be a terribly idea, because all of a sudden you have the government snooping into your living arrangements. Especially for grey areas where people share their time between multiple apartments. Way too complicated.
And, people living in bigger places would get effectively get a discount this way.
Your argument does highlight a problem with the transition phase of the introduction of the tax, though. There's a few ways to solve this, eg by slowly phasing the tax in over a decade or more.
(It's not a problem in the long run, because land prices will drop until the financial burden of tax plus mortgage payment is the same as today.)
... not really. Most folks only own one house, so nothing complicated. A few folks own multiple houses. These folks already need to establish residency in one house for tax purposes in a lot of places: Taxes vary from city to city and state to state. It isn't a new grey area, and we can use this established system to tax. The folks can, in general, just use one house or apartment or pay more for more than one house.
I'd personally only give it out to folks with longer terms: The place should still be someone's primary residence, and only give a discount if it has been rented out x months out of the year. This would be to discourage airBNB units (for example) and encourage landlords to make their units affordable and attractive to the residents of the area.
Your scenario plays out just the same. The opportunity cost difference between any two uses is exactly the same.
There's a small difference in a detail of accounting: in one case you see a higher LVT bill, in the other case you pay more for your mortgage. (Or alternatively, if you own out right, your opportunity cost for holding onto the land increases.)
> Land Value Taxes are pretty neat
...if you want to encourage concentration of land in the same hands in which capital is concentrated, yes. (Heavy LVT harshly punishes any land use that isn't maximally efficient at financial value extraction, which is often extremely capital intensive—encouraging upward transfer of land to those able to apply the most capital to it to optimize extraction.)
The opportunity costs between different land uses is exactly the same with LVT as without.
To illustrate more:
Without LVT, when you use a plot of land costing x dollars that you own outright, you 'pay' the opportunity costs of not being able to employ those x dollars elsewhere (or rent the land out etc).
With LVT, the price of that plot of land will adjust to y << x, so that the total of LVT on a plot of land costing y and the opportunity cost of y, will equal the opportunity cost of x amount of capital.
(This discussion ignores risk and other taxes for simplicity.)
Slightly off-topic: I'm also against capital gains taxes. We want more capital employed, so that workers become more productive, and so that the different providers of capital compete. So if anything we should encourage more deployment of capital, and capital formation rather than consumption of wealth.
(Also thanks to international mobility of capital, I suspect that a big part of the burden of capital gains taxes mostly falls on the users of capital, less on the providers. But I am not sure there.)