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Comment by A_D_E_P_T | Hacker News Reader

People don't like land value taxes for the same reason the anti-property-tax movement is in the news these days: It reverses 100 years of pro-homeownership messaging, and it turns landowners into renters from the government.

Wouldn't a better solution be to more heavily tax voluntary vices? Gambling, drugs, prediction markets, cash-sink "luxury" products, parasitic mobile games, etc.? I think it's fine by just about everybody if those particular industries -- the real "bad capitalism" -- become almost unprofitable by default.

The secondary layer of "bad capitalism" is in finance, speculation, and even legal services. There's no reason that those, also, cannot be much more heavily taxed.

At the same time, do the extremely smart thing that Asian economies -- China and Korea foremost among them -- have been practicing: Subsidize technical and industrial innovation, strategic industries, etc. Just cut the red tape and fund it.

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“ it turns landowners into renters from the government.”

With the caveat that “the government” should somehow represent the will of society (I know, basic democracy seems like a big ask today), this seems like how it should be. The land belongs to us humans together, and if someone wants to control it exclusively, there should be something in return for the rest of us.

> With the caveat that “the government” should somehow represent the will of society

I'm going to ask you a genuine, non-rhetorical question: When was the last time this was the case? Athens, and not for long? Surely not Republican Rome, any other period in Rome's history, Feudal Europe to the 20th C., dynastic or warlord-ruled Asia, or the United States of America, though perhaps it came close for a brief period in the 18th century.

It's certainly not the case now. Feudalism is the form of government that is most natural to man, just as it is most natural to bees and ants. An LVT would be a step in the direction of feudalism again, with professional politicians and bureaucrats as the tyrants who know that they de facto own all of the land, and can charge whatever rents they like.

Spain during the revolution?

No, it is a matter of degree, it is not a binary thing. It is a measure we can put on government. It is not the only thing which matters, but there are differences between governments today. One is not the same as the other, just because none of them are ideal.

> Wouldn't a better solution be to more heavily tax voluntary vices? Gambling, drugs, prediction markets

That's just taxing the poor.

A land value tax would also tax the poor -- it's not only fat cats who own land -- and strip of some value a vast number of presently-poor people hoping for a property inheritance.

In fact, it would tax the industrious poor with little recourse.

Vices, on the other hand, don't have to be engaged in, and should absolutely be discouraged.

What "industrious poor" people are you thinking of who own extremely valuable land but don't do extremely valuable things upon that land?

The homeownership rate in France is >60% and a large fraction of those -- possibly the largest fraction -- consists of (a) people who bought small houses for their own use, to live in them (not an "extremely valuable thing," but nevertheless,) and (b) people who inherited properties or small farms.

Most of these people are middle class, many are cash-poor.

Property developers are a stark minority, you know...

So why would they have a high LVT burden?

Because LVT = site value x rate. Unless the rate on low and medium-value sites is kept very low -- too low to raise much revenue -- the average landowner would suffer from a significant new tax burden. (France already has property taxes, but they're very low.)

...And, again, without recourse. Nobody has to gamble or buy a yacht. But whether renter or owner, everybody needs a house to live in. Everybody would have to pay the LVT, one way or another, no matter how rich or how poor.

For the average landowner, the LVT is actually a sort of tax on sober industriousness or fortunate inheritance, the very opposite of a vice tax.

Wouldn't it also screw over poor people in gentrified neighborhoods who had no control over the situation? People would be forced to sell early or risk all their savings drying up and then being forced to sell anyhow.

Assuming an efficient lending market, they can take out loans with the land as collateral. As long as the land value continues rising they can continue taking out bigger and bigger loans. Only when growth slows they are forced to sell

This shifts the optimal point for sale, but if there is explosive growth they theoretically still aren't forced to sell early, they can still capture all that growth

What this scheme prevents is them holding onto the property forever after the neighborhood gentrified. Which the author likely considers a good thing in their framework, because the land generates more economic value in other hands. The original land owner gets a payout and is forced to move. Just like a renter would be forced to move, just that the land owner gets a big payout from the land value increase

> more heavily tax voluntary vices

Australia is doing that with tobacco. It worked in that it has drastically cut smoking rates and deaths, but hasn't worked it has also made the market more lucrative for smugglers/organised crime. Illegal tobacco avoids the tax, so it can be sold at a lower price whilst still raking in the profits. Today 80% of tobacco in Australia is illegal, with a consequent 80% hit to tax revenue.

https://www.abc.net.au/news/2026-08-29/expensive-cigarettes-...

The world is a complicated place, no solution is perfect. Not sure people like yourself think that an idea or movement must be perfect.

The point shouldn’t be to just raise money simply by taxing things that you personally think are ‘bad’. This is the sort of pointless politics that’s being going on for too long.

Instead, the approach should be to diagnose what is wrong with our economies (and maybe our societies) and then use the tools we have, including taxation, to address those issues. This is where people are with (variously) land taxes, or wealth tax, or others.

(Whole societies and economies aren’t struggling because of people gambling, smoking, and drinking.)

The problem with taxing vices too heavily is that it incentives a black market to emerge... and all the crime that comes with it. Australia is a great example of a place where this is causing a lot of problems.

Interesting, care to elaborate?

The explosion in KYC over the past ~20 years means that a lot of digital vices simply can't meaningfully exist in black market form. Online gaming, prediction markets, predatory financial speculation, etc., are vices that only exist because they're tolerated.

You and I can theorize how black market analogs might somehow exist, but they wouldn't have 1% of the reach they currently enjoy.

I also think that conspicuous consumption in the form of yachts and $40,000 handbags is, in truth, a vice -- and one that can generate a lot of tax revenue, and only be black-marketed away with severe difficulty.

> Wouldn't a better solution be to more heavily tax voluntary vices?

Buy a pack of cigs in New York (I think it's almost $20, now). Most of that is tax. People vape, a lot, here. I know that pre-rolled cigarettes have been heavily taxed in many countries, for decades, so they sell loose tobacco and rolling papers.

Gambling also tends to get taxed a lot.

There's lots of folks that think prostitution should be legalized, so it can be taxed. The same argument was made for pot. I'm pretty sure that legal pot is heavily taxed. I have heard that illegal pot is cheaper.

It's not an easy solution. If it was easy, it would have been done, a long time ago.

"There's always an easy solution to every human problem; Neat, plausible and wrong."

"The fact that I have no remedy for all the sorrows of the world is no reason for my accepting yours. It simply supports the strong probability that yours is a fake."

-H. L. Mencken

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