Episode
30

Paul Sanderson - Optimal Property Taxation and the Land Value Tax

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About this Episode

In this episode, we're joined by Paul Sanderson, President of the International Property Tax Institute (IPTI). We talk about optimal property taxation and best practices, theoretical vs practical challenges in taxation and assessment, as well as the famous Land Value Tax.

Introduction to Assessment Matters podcast 00:00Paul’s bio and big ideas 00:35Paul’s background in assessment and valuationWhat is IPTI? 2:05Not-for-profit organization providing of advice, guidance, and training for everything property taxCompletely and strictly impartialMeeting the education and advisory needs of a wide variety of stakeholdersFundamental characteristics of a good property tax system 4:12Key principles: Simplicity, Fairness, Consistency, TransparencyMost property tax systems are unnecessarily complicatedSecond-order effects on compliance, media coverage, etc.Ideal systems vs real-world challenges 10:45Ideal world: getting rid of exemptions, abatements, appealsReality: various constituencies and special interests with exemptions and other favored tax treatments opposing ending said subsidiesSystems become more complex, opaque, and unfairMore on optimal property taxation: the Land Value Tax 16:53Relevant literature: “Progress & Poverty” by Henry GeorgeEconomic case: minimizes distortions and development biasesPrinciple case: the value is generated not by the landowner but rather by society“(Straightforward) land value tax” versus “land value capture”Practical issues of valuation and assessment — determining “unimproved” land value in already highly improved/developed areasExample: the strengths and limits of Australia’s state land taxProperty tax systems around the world 25:58IPTI-COST ScorecardMany different relevant metrics for comparison, based on key principleshttps://www.ipti.org/press-release-ipti-cost-scorecardFinding more about IPTI 28:51https://www.ipti.org

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