Saturday , July 4 2020
Home / Real-World Economics Review / Great time for a vacant property tax

Great time for a vacant property tax

Summary:
From Dean Baker I have long been a big fan of a vacant property tax. As the old saying goes, you tax what you want less, and why would we want vacant properties. This is especially likely to be relevant in many high-priced cities where the demand for commercial real estate is likely to go through the floor due to an increase in telecommuting. As cities mull many types of tax increases to deal with pandemic caused budget shortfalls, a vacant property tax should stand out as a productive alternative. The economy would be best-served by having landlords quickly recognize that their property is not worth as much as it use to be, and therefore lower rents to keep it occupied. This will be good for keeping old businesses and supporting new ones, since rent is major expense for most

Topics:
Dean Baker considers the following as important:

This could be interesting, too:

Lars Syll writes Inequality and luxury

Editor writes Inter-generational wealth distribution

Dan Crawford writes Open thread July 3, 2020

Lars Syll writes An interview with Stephanie Kelton

from Dean Baker

I have long been a big fan of a vacant property tax. As the old saying goes, you tax what you want less, and why would we want vacant properties. This is especially likely to be relevant in many high-priced cities where the demand for commercial real estate is likely to go through the floor due to an increase in telecommuting.

As cities mull many types of tax increases to deal with pandemic caused budget shortfalls, a vacant property tax should stand out as a productive alternative. The economy would be best-served by having landlords quickly recognize that their property is not worth as much as it use to be, and therefore lower rents to keep it occupied. This will be good for keeping old businesses and supporting new ones, since rent is major expense for most businesses, especially small businesses.

At the end of the day, recognizing reality is likely to be good for  landlords, since they don’t  make money on vacant property.  Of course landlords are often not very good at economics. Both Donald Trump and Jared Kushner are major property owners.

Dean Baker
Dean Baker is a macroeconomist and codirector of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.

Leave a Reply

Your email address will not be published. Required fields are marked *