Totally, the ability to move is definitely present. The incentive to move if one chooses is a great benefit of increasing land value, we're absolutely agreed on that front.
The problem that I'm trying to point out is the converse disincentive to stay which these policies can introduce. For instance, my family, friends, social and professional networks, and history are all within the region I currently live. If I'm priced out of this current region but am okay with moving to a different region, then this is a great situation: everyone's happy.
If, on the other hand, I want to keep living the life I've built over decades, the ability to cut-and-run with the increase in my property value is little consolation; I'll be a richer man, but I'll be forced away from my home.
I've mentioned it a few times in the thread, but just want to clarify: I'm not saying that from a policy perspective we shouldn't force these people to move in order to accommodate the needs of more people. All I'm saying is that we are giving those people who want to stay in their homes the short end of the stick with these policies.
If we look at towns and cities with super-restrictive policies (e.g. single-family zoning, locked in property tax bills, rent control, etc.), they are objectively inefficient in how they allocate land. Being a resident in one of these places, though, would lead to a pretty good and stable life.
To the residents of these locations, heavy land and property tax policies are essentially telling them "Other, richer people want to live here but it's too full, so you should find somewhere else to live". It's not hard to imagine the human aspect of the opposition (including restrictive zoning in the status quo), which conversely say "Other, richer people want to live here but it's too full, so they should find somewhere else to live.".
Again, inefficient in the aggregate, and I wouldn't argue that it's the foundation we should build policy on, but it's hard to blame someone for taking that stance.
The point is not to force people to move, the point is to cover the state's revenue by land tax instead of income tax or sales tax.
The average Californian (could not find median) pays about 6945 USD to the state in income tax (using 106916 USD as the income figure). The median California home was about 650000 USD in 2020; it is projected to be 800000 USD in 2022. Assuming an LVT of 1% (the actual property tax rate is somewhat lower in California), the taxes would be 6500 USD in 2020 or 8000 USD in 2022. These are of the same order as the income tax they would replace.
This is remarkable, given that we are considering an LVT in the context of a badly overheated housing market -- the situation an LVT is designed to prevent.
In California, there is not only high income tax but high sales tax, capital gains tax, and many other miscellaneous costs. If the government is too expensive, it's too expensive; you may be forced to move because of that, but it's not because of a particular tax strategy. Any tax strategy can be used to charge you too much money. This is one of many reasons that a dysfunctional property tax regime does not support a good and stable life.
The problem that I'm trying to point out is the converse disincentive to stay which these policies can introduce. For instance, my family, friends, social and professional networks, and history are all within the region I currently live. If I'm priced out of this current region but am okay with moving to a different region, then this is a great situation: everyone's happy.
If, on the other hand, I want to keep living the life I've built over decades, the ability to cut-and-run with the increase in my property value is little consolation; I'll be a richer man, but I'll be forced away from my home.
I've mentioned it a few times in the thread, but just want to clarify: I'm not saying that from a policy perspective we shouldn't force these people to move in order to accommodate the needs of more people. All I'm saying is that we are giving those people who want to stay in their homes the short end of the stick with these policies.
If we look at towns and cities with super-restrictive policies (e.g. single-family zoning, locked in property tax bills, rent control, etc.), they are objectively inefficient in how they allocate land. Being a resident in one of these places, though, would lead to a pretty good and stable life.
To the residents of these locations, heavy land and property tax policies are essentially telling them "Other, richer people want to live here but it's too full, so you should find somewhere else to live". It's not hard to imagine the human aspect of the opposition (including restrictive zoning in the status quo), which conversely say "Other, richer people want to live here but it's too full, so they should find somewhere else to live.".
Again, inefficient in the aggregate, and I wouldn't argue that it's the foundation we should build policy on, but it's hard to blame someone for taking that stance.