Further, it’s not a tax on capital; it’s a tax on land. It’s very explicitly designed to target land, as land has distinct economic properties that make it a prime target for taxation.
And yes, it does target speculative investments like those of Blackrock:
It reveals that much of the anticipated future tax obligations appear to have been already capitalised into lower land prices. Additionally, the tax transition may have also deterred speculative buyers from the housing
market, adding even further to the recent pattern of low and stable property prices in the Territory. Because of the price effect of the land tax, a typical new home buyer in the Territory will save between $1,000 and $2,200
per year on mortgage repayments.
It’s not, though. The classical factors of production, whence we get the concept of “capital” as a factor of production, has land and capital as clearly separate:
Land or natural resource — naturally occurring goods like water, air, soil, minerals, flora, fauna and climate that are used in the creation of products. The payment given to a landowner is rent, loyalties, commission and goodwill.
Labor — human effort used in production which also includes technical and marketing expertise. The payment for someone else’s labor and all income received from one’s own labor is wages. Labor can also be classified as the physical and mental contribution of an employee to the production of the good(s).
Capital stock — human-made goods which are used in the production of other goods. These include machinery, tools, and buildings. They are of two types, fixed and working. Fixed are one time investments like machines, tools and working consists of liquid cash or money in hand and raw material.
And it’s an important distinction. The fact that land is not made and inherently finite makes it zero-sum. Meanwhile, the fact that capital such as education, tools, factories, infrastructure, etc. are man-made and not inherently finite makes them not zero-sum. This distinction has truly massive implications when it comes to economics and policymaking. It’s the whole reason LVT is so effective, so efficient, and so fair: it exploits the unique zero-sum nature of land.
It seems you’re using a more technical definition than I was. I was thinking something along the lines of definition 1a(3) in this dictionary entry. I agree there are important differences between land and other money-making assets.
Property taxes != Land value taxes
Further, it’s not a tax on capital; it’s a tax on land. It’s very explicitly designed to target land, as land has distinct economic properties that make it a prime target for taxation.
And yes, it does target speculative investments like those of Blackrock:
https://osf.io/preprints/osf/54q68
A tax on land is a tax on capital. Land has been capital longer than the concept of capital has existed.
It’s not, though. The classical factors of production, whence we get the concept of “capital” as a factor of production, has land and capital as clearly separate:
https://en.m.wikipedia.org/wiki/Factors_of_production
And it’s an important distinction. The fact that land is not made and inherently finite makes it zero-sum. Meanwhile, the fact that capital such as education, tools, factories, infrastructure, etc. are man-made and not inherently finite makes them not zero-sum. This distinction has truly massive implications when it comes to economics and policymaking. It’s the whole reason LVT is so effective, so efficient, and so fair: it exploits the unique zero-sum nature of land.
It seems you’re using a more technical definition than I was. I was thinking something along the lines of definition 1a(3) in this dictionary entry. I agree there are important differences between land and other money-making assets.