Posts Tagged ‘Economics’

Land Value Taxes

I’m not an Econ major, but I’ve always wondered why we don’t tax land values by themselves instead of taxing land values plus the values of buildings on them. Specifically, I wonder why we have so many surface parking lots in downtown Minneapolis. For example, according to Hennepin County, the surface lot just north of the downtown library, between 3rd Street and Washington Ave, and Nicollet and Hennepin Avenues, pays about $30,000 in property taxes per year on its 1.7 acres, or about $18,000 per acre. Move one block east, between Nicollet and Marquette, and that building pays almost $2 million in property taxes on 2.45 acres, or almost $800,000 per acre. Even the surface lot east of the library pays $379,000 in taxes on 2.52 acres, or about $150,000 per acre, because there are no buildings on the lot.

This is ridiculous. Is a surface lot the best use of that land? By charging more taxes for building on the lot, the tax code certainly discourages development. That’s why Altoona in Pennsylvania has moved to property taxes based entirely on the land value instead of land plus building value. There is debate on how well it is working, but I’m happy to see that others have thought about this issue as well.

It would be nice to have Minneapolis move towards this property tax model. I’d like to see more development downtown instead of setting aside so much room for storing vehicles.

The Deal

I saw this article a couple of days ago and it piqued my interest so much, I had to buy the e-book (it’s only 1.99!). I haven’t yet read it, so I’ll give my full review later, but the top 10 takeaways from Ezra Klein were true enough to make me want to comment already…

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I’m with Atrios on this one. Last night, I heard a story on Marketplace about a guy who was long-term unemployed, and then got a job writing for Mad Men. The end. It was a wholly unfulfilling story, essentially saying nothing other than “This guy found a way.” Nothing on how, or what is happening to those who aren’t as lucky. Incidentally, this is not really surprising for Marketplace of late: last week I heard somebody say “Not paying your mortgage is a moral choice” and I wanted to smash the radio.

These stories are far more common than the guy who came out all right. People who did the right thing, who went to college, who had good jobs, who saved some money, and now can’t find a job to save their lives, literally. Sure, it’s easy to poke holes in each individual story, saying “Maybe you should have gone to a cheaper school” or “Maybe you shouldn’t have bought that house”, but let’s be honest: these are the decisions that we all make in our lives, and there is nothing wrong with them. Except when the economy falls apart and we collectively let it.

There are millions of people who can contribute to society and are unable to right now. This is not only an economic disaster, it’s a human one. Productivity is being lost that will never, ever return. Years of making, innovating, and creating are being lost. This is a national emergency and nobody in power is doing anything about it.

A few thoughts

A few random thoughts and links from the past couple weeks:

  • Obama the Communist has presided over a shrinking of the government workforce. You don’t see that reported very often.
  • Once again, more proof that we need to disassociate health insurance coverage from employment entirely (a personal story along these lines will be posted later…)
  • As Kevin Drum correctly points out, we don’t have a spending problem. We have a revenue problem: Popular programs are popular and need to be paid for.
  • John Kline didn’t vote to raise taxes. Everybody in Congress voted to cut taxes. The issue is that taxes weren’t cut as much as some people like. Boo-hoo. See bullet #3.
  • The debt ceiling vote gives a vocal extremist group in Congress the ability to say “Nice country you’ve got there; it would be a shame if something happened to it.” Get rid of it. Because otherwise, we’ll be in crises forever.

Happy New Year, America!

I’m unelectable!

NPR’s Planet Money decided to talk to a bunch of economists of all stripes to ask what they would like to see in an economic platform for a presidential candidate. They came up with this: eliminating the mortgage interest and health care deductions, corporate income tax, income tax, a carbon tax, and legalized marijuana. Aside from moving to a consumption tax, which I could see as good in some circumstances, these are all things I believe in. They are also all things that would get a politician booted from office.

It’s nice to know that I am pretty much unelectable. Not that over a decade in politics hasn’t already taught me that, though. For added fun, the link above has a fake TV commercial for that decidedly-unpopular platform. Enjoy!

Squaring the Circle

Surprise, surprise: the Romney tax plan to cut taxes for the richest Americans can only be paid for if you raise taxes on the other 95% of people. Predictably, Romney is saying that the study is “biased”, because it doesn’t count for the massive economic boom that would result. So who is right? Let me suggest to you a journey through the facts as they are largely agreed to on both sides, and when that journey is complete, there really is no conclusion other than Romney’s numbers don’t add up.

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The Roulette Wheel

Lots of digital ink has been spilled about JP Morgan’s $2 billion trading loss. I don’t want to add too much more, except to call out one issue that I think has been downplayed through all of this: the notion that JP Morgan “lost” the money.

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Being Right

There’s a lot of commentary about the French and Greek elections this week. Some of it is rather apoplectic (more deserved in Greece than France), but for all the talk of extremism, a lot of the debate misses the mark. What really matters, and what is just as applicable in this country as elsewhere, is that this election should be about who is being proven right about the economy, and who is not.

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The Mortgage Deal

The $26 billion mortgage settlement announced recently has several shortcomings. It doesn’t throw any banksters in jail, although apparently that’s still a possibility down the road. It won’t put people illegally foreclosed back in their homes, and the roughly $2,000 such people may get is not going to be enough for a down payment for a new place. It only covers some mortgages. And previous mortgage assistance programs have helped far fewer people than they should have, so there is reason for some pessimism.

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The misappropriation of morality

It’s been pretty fun to watch the GOP presidential race and all of the non-Mitt-on-Mitt violence going on, as you may imagine. However, never did I expect to hear people like Newt Gingrich and Rick Perry attack Mitt Romney using language that sounds like it would be more at home coming out of the Occupy Wall Street protesters: “vulture capitalist”, “crony capitalism”, and everything else. It’s evident that those barbs are creating some sting, since Romney is firing back that anybody who attacks him for Bain Capital is attacking capitalism itself. I find that particularly odd, especially from a party that essentially takes the opposite approach when liberals attack, for example, guns. Here’s a hint to Romney: you’re not doing it right.

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