I'll not dispute the impact on expansion and consolidation, but I will say in recent months I have seen a number of hit pieces on the 340B program, mostly bankrolled by pharma companies (not this one just calling out the trend).
The exact implementation might be flawed, but if 340b is eliminated it will kill many hospitals in underserved communities.
So any plan to change 340B should really also explain how to fund these critical hospitals.
In the way that surgeries used to be the "money maker" to subsidize other expensive service lines like an ED, pharmacy has filled that gap in recent years.
It is less hospitals getting rich off overcharging insurance for drugs and more hospitals overcharging insurers for drugs since everything else they do is a drain on finances.
Hi, I wrote this article and largely agree with you. 340B is important and without it many hospitals likely wouldn't survive. However, it's pretty evident at this point that 340B has expanded beyond its original intent.
For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program.
Moreover, it's grown extremely rapidly over the past ~5 years, and the gravity of the program is starting to create bizarre second-order effects like the one outlined.
My intent with this article is just to highlight some of those effects, not to advocate for eliminating 340B.
Also, not bankrolled by pharma, just a researcher for Turquoise Health (a healthtech startup). I get to dig around in their data and publish occasionally, but editorial control / opinions are my own.
For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program.
This is also a bit misleading though right? Northwestern was obliged to put 11 other hospitals and something on the order of like 150 to 200 clinic/other locations on its books largely for the purposes of access. So that rural communities across northern Illinois can also have the same access as people in Chicago.
The fact is, they are a rural healthcare system. Because the options that were in those locations previously were unable to make a long term go of it.
I was being a bit glib/imprecise before, but I'm specifically talking about the Northwestern Memorial campus downtown Chicago [0]. That location qualifies for 340B as a Rural Referral Center (RRC), and got itself reclassified by CMS/HRSA as rural to do so, despite being in the middle of downtown. RRCs need to meet a lower threshold of Disproportionate Share Hospital (DSH) adjustment percentage (8% vs the usual 11.75%). Northwestern Memorial needs to be an RRC because it doesn't meet the higher DSH threshold.
AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B (insofar as they all have their own CCNs and qualify independently). In this case, Northwestern Memorial qualifies because it a) got reclassified as rural b) became an RRC (likely based on its staff specialty mix) c) meets the RRC DSH threshold of >= 8%.
Northwestern Memorial does treat a lot of rural patients, so maybe it does deserve 340B. That said, it seems clear that it's not they type of struggling safety-net/rural hospital 340B was originally intended to subsidize.
AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B
The money is shared at the system level. The referrals are to/from other hospitals/clinics in the system. Many of the other facilities in the system, exist because of Northwestern Memorial. This is what needs to be done to ensure access.
> it will kill many hospitals in underserved communities.
At some point it makes more sense to move every person from their remote hamlet than to create a hundreds different programs and exceptions to deliver broadband, groceries, and healthcare there. Many of these towns are leftover from when farming was 100x more labor intensive or industry had to be located next to a river.
It's incredible how far we'll bend over backwards as a country to avoid single payer healthcare. It's especially ironic that the most common argument against it is "taxes" when ...the outcome here is higher taxes.
Single payer would reduce choice and increase costs. People fantasize that price caps would fix everything, but they can't. Healthcare is just a resource and people pay high prices for it due to limited availability and regulatory requirements.
Really seems to me that there should be no exemption for land tax for non profits or religious reasons. It is just far too subject to abuse, and it means that we have large churches in the middle of incredibly dense cities that pay almost nothing in taxes.
In my metro area it irks me to see the churches with large empty parking lots empty most of the week. We have a housing shortage and they seem to have no little incentive to convert their parking to more productive use.
I agree, the whole ruse that these 501s meaningfully does charitable work for our communities is laughable and their tax exemption should be revoked, at least with regard to land taxes.
There are almost no places where a housing shortage is due to a lack of land. Housing shortages have all sorts of reasons, from constructions cost, to zoning, to restrictions on what can be built, but it's virtually never a lack of land.
And parking is a productive use - they have services once a week, and parking means people can come to the service. That's the definition of productive use. Something does not need to be used 24/7 to be productive.
Church goers using parking lots like this is a use, but I doubt it's a productive charitable use that should to be subsidized by localities.
Every other contemporary development in my area that faces real economic reality is ground floor retail, commercial/residential on top, and optionally underground parking.
There are certainly productive religious charitable efforts using facilities like this: homeless shelters, community low-cost/free clinics, soup kitchens. I think these uses should be tax subsidized, but other mystical efforts should not be whether they generate a profit or not.
I think a good reform to the 501c3 system would be to make non-profits like these churches and hospitals classify their actual charitable activity and separate it from their other activity, just like individuals with a mix of personal/small business income/expenses are required to do.
Why should churches get great real estate in central locations but not housing? If people only come to church once a week, surely they can spend the extra time driving further.
The issue is that, most of the time, "incredibly dense cities" are not the places where this is hitting the hardest. It's the smaller towns where the impact of hospital rollups hits hardest on the property tax rolls.
Problem is, of course, that if we don't get one of the hospitals in, say, Houston, to put a facility in, say, Nacogdoches, on its books; then that facility may go away entirely. In which case you'd have issues in the market with inequity of access for the very populations who may need that access most. (Elderly and poor.) But if you do allow it, well, you have issues with property tax rises.
So local leaders are put in a position of having to weigh the value of having a hospital or clinic be available locally, against any potential decrease in property tax revenues. Now you hope they get that cost-benefit analysis correct, but there's no guarantee.
The idea is that we give up the land tax revenues in exchange for the services the non-profit provides. (And of course the government does not decide which services are useful or not, the people do.)
One thing I might agree with is land tax for non-profits that charge fees for services, as opposed to those who work off of donations. I think that would fix the issue without destroying non-profits.
Or property taxes should be eliminated because they are subject to abuse, and instead sales tax should be the primary source of income for all governments.
Do you think a government should be able to seize property under eminent domain if they believe that selling it to a third party to commercially develop would lead to higher tax revenue?
The government already has and does do exactly this. Is this suppose to be a gotcha? If you have very valuable property, you should pay taxes on it. Claiming that you have ownership over land on this planet is odd, you didn't create the land and governments change overtime.
Property taxes are the most evil of taxes because they force you out onto the street if you're unable to pay them. Qualifying it with the words "very valuable" to solve the problem creates an arbitrary two-tier system that is inherently unfair.
>Claiming that you have ownership over land on this planet is odd, you didn't create the land and governments change overtime.
There's no such thing as a free lunch. Because it is politicaly unpalatable to tax landowners, we tax economic activity instead.
The result is that return on effort are reduced. That mean labor, entrepreneurs, and capital bear the burden of supporting government budgets as opposed to landowners who benefit from the economic activity making their land valuable.
Taxes as a rule discourages whatever get taxed. The exception to this is land, because land isn't created. It already exists in nature.
Property taxes are the most just of all taxes because they are the most correlated with your consumption. Speficially, the land value tax portion of property tax (ideally, that is the whole component).
>The government didn't create the land either.
The government did create the peace and order that allows you to sleep at night on your land without having to worry about another tribe taking your land from you. Without an ability to defend it, "your" land is a tenuous label.
The government, and the rest of society, also pays a hefty price routing utilities, police, ambulances, and people around your property's borders. The more property you have, the more it costs the rest of society, not just in money, but in time.
Earned income taxes are the most evil of all taxes. Why would you have to pay for the act of providing value to society?
Historically speaking, I am not sure if humans argued that they have created the land and therefore they should be allowed to use it. Ownership of the land and its use is, rather, simply tied to one's ability to retain it ( possession being 9/10ths of the law and all that ).
Yes, you are correctly identifying that all land rights stem from one's ability to claim nature's productive power as his own and monopolize all output from it.
This was self-evident in the feudal era, when landlords (Lords) had to at least raise their own militaries to assert this monopoly right. But the modern State and the landlords reached a compromise: the State will provide security to protect the lords' monopoly on nature so long as the landlords don't raise armed forces.
It may be absurd, but do you have a workable framework that can replace it? If not, it makes zero to no difference whether it is absurd or not. It works for the society in place.
Yes. A high land value tax prevents the capture of unearned wealth by owners of land without introducing market inefficiencies or price distortions.
The current arrangement demonstrably does not work for society in place, and as AI (whether in this wave of innovation or the next) increases productivity further, it will work less and less by virtue of further increasing land rents, thereby pricing out larger and larger swaths of society from a place to live, work, or otherwise exist.
Huh? Last time I checked, municipalities big and small fight for every bit of investments they can get and they typically get it by offering a swath of incentives at the cost of the actual taxpayer. That high value land ends up being tax free for the actually wealthy while a schmuck like me get his bill increased and argues with otherwise well-meaning people that akshually high taxes are good for me.
I think that what I am saying is that, in practice, the well-intended solutions like the one that was listed above are effectively nullified as they do not seem to anticipate real world human reactions. What ends up happening is that it is only a subset of the people, who own land that pay higher taxes. The solution is to remove any and all subsidies. Governments of all levels have not exactly proven to be a reliable steward over the past few centuries..
Well it's pretty easy to have a useless conversation if you're going to act as if the words your interlocutor are saying are "effectively nullified."
My solution does anticipate real-world human interactions: don't give rich landowners tax breaks. This is baked into the premise of having a high tax. A tax that is effectively not-high is by definition not a high tax, ergo is not the solution I am proposing. If I proposed a solution of "have a tax that is claimed to be high but actually is not," then your response would be valid. But my solution was: have a high land value tax.
Your solution is dismissible by your same logic. "While removing any and all subsidies is well-intended, in practice real-world human interactions dictate that will not occur."
At least the early comments seem very focused on churches despite this article literally mentioning "religious" uses once and focusing nigh exclusively on hospitals.
Universities and hospitals are some of the worst offenders in situations like this, especially in urban cores, likely empowered by their clear transformation into state-sanctioned "non-profit" businesses that provide a good we are compelled to consume if we are a normie who wants a reasonable guarantee of a comfortable, healthy economic existence.
There's nothing funnier than a lot of people taking some absurd principles for granted when they make no sense at all, property taxes being one of them. So imagine you grind at least 30 years of your life working extra hours or two jobs to pay for an already inflated asset based on speculated prices rather than the actual cost, only to end up with that asset in a perpetual rent agreement where if you stopped paying it you basically don't own it anymore, a rent that also isn't controlled, so you can get screwed in the future like how a lot of people ended up selling their house because their retirement isn't enough to cover such rent.
Make it make sense, the only real winners here are the banks after they collect all that compound interest throughout all these years, and the government taking all these taxes.
Where's the money for local services supposed to come from?
Why should you be allowed to monopolize a piece of finite and scarce resource, land, for free?
Since you think it's a scam, surely you support 100% capital gains taxes on homes? Since old people getting rich off of an unproductive asset, blocking supply to "preserve neighborhood character", and inflating the price of their artificially-scarce goods would be more of a scam?
There's nothing wrong with retirees being forced to sell and downsize. You don't need a family-sized home when you live alone. Property tax is the least unfair tax of them all.
The government already takes enough taxes. I am sure they can figure it out. In fact, you are already double taxed: once on income tax (which was temporary and only paid on corporate profits, not yours, but that's another story) and then taxed again on what was already taxed through GST, sales tax, VAT, you name it.
>finite
You think land is finite? You do realize you can fit the entire human race - both the ~8 billion people currently alive and the estimated ~100 to 117 billion people who have ever lived- inside the Grand Canyon? We have enough land that every single person could have an entire farm of their own, not to mention the "land isn't enough" argument makes no sense in a country with giant parking lots, and no exceptions are made for people living in apartment blocks.
The solution is simple for what you mentioned at the end: make houses a depreciated asset, not an investment. Investment by concept must always go up, scale, and grow, making it inevitably unsustainable. Japan did it and fixed the entire housing issue for the next generations to come. I am sure we are smart enough to do the same. Housing and land are made to live in, not to invest in, and keeping them empty to gauge prices up.
Is the deficit a scam too? It does not take enough taxes, you are heavily subsidized and want to be subsidized further.
The argument is simple. Land ownership with no property tax privatizes gains that others must subsidize. Land value comes from government infrastructure for water, electricity, roads, public transportation, which are expensive to maintain. That, and artificial scarcity, is why your house grows in value, which is why people treat it as an investment.
Japan fixed it by having a dying population, which causes other problems.
The deficit argument is a deflection. The government doesn’t have a revenue problem, it has a spending and priority problem. Canada (but also applies to other countries) runs deficits while handing out billions in corporate subsidies and mismanaging public funds consistently. Asking citizens to pay yet another layer of taxation to cover institutional inefficiency isn’t a solution, it’s a blank check with no accountability.
On land value coming from government infrastructure: that’s a partial truth dressed up as a complete argument. In Canada, most land is technically owned by the Crown, meaning you’re already leasing it under various terms depending on how title is held. So the “you’re privatizing public gains” framing already falls apart at the foundation. But let’s humor it anyway: what if I’m fully off-grid? Septic tank, solar panels, private road, self-maintained everything. Does my land value drop? No, it doesn’t, because the value is also artificially inflated by government-controlled permitting, zoning restrictions, and intentional supply suppression. The government is simultaneously the cause of inflated land value and the entity collecting taxes on that inflation. That’s not a neutral tax, that’s a racket.
On Japan: you’re conflating two separate timelines. Japan implemented its housing policies and saw prices stabilize and even decline well before its fertility crisis became the dominant economic story. The Akiya (vacant homes) problem and price normalization were underway as a direct result of policy choices, treating housing as shelter rather than an investment vehicle. The fertility decline accelerated consequences but didn’t create the policy. Meanwhile, Canada’s fertility rate is already comparable to South Korea, one of the lowest in the world, and Canadian housing prices haven’t corrected meaningfully. That alone dismantles whatever argument of “Japan only worked because of demographics”.
And here’s where it gets uncomfortable: the Canadian government has effectively admitted (look it up online, they don’t even hide it) that preserving housing values was a deliberate policy consideration in pushing back against remote work. Commercial real estate, residential landlords leveraged to the hilt, and an economy where housing represents a disproportionate share of GDP all created an incentive to force people back into urban cores. This isn’t conspiracy, it was acknowledged. When your economy is structurally dependent on a housing ponzi scheme, every policy bends toward keeping prices elevated, including taxation that forces lower-income retirees to sell, which conveniently frees up supply without crashing prices.
The honest conclusion is that property tax doesn’t exist to fund services equitably. It exists to keep the machine running for the people who benefit most from it, and that isn’t the person who spent 30 years paying off a mortgage.
Yes you should not be able to own something you had no hand in creating, such as the earth beneath your feet or the productivity of that earth created by your community.
>There's nothing funnier than a lot of people taking some absurd principles for granted when they make no sense at all, property taxes being one of them.
>Make it make sense
The cops/judges/prisons/schools/military/etc that maintain a mostly peaceful and ordered society that prevents someone else from walking onto your property and throwing you out costs money, and costs more money every year. The more land you have, the more it costs, since more time, materials, and energy have to be spent moving around all of that surface area you have "own". Surface area is the costliest thing people consume.
Tax on the improvements on the land, as well as earned income tax are the absurd principles.
TL;DR taking properties off the tax roll costs the remaining taxpayers more. Pretty basic stuff. I've been talking this up to local electeds for decades, with very little progress. The only success I've had is ending the local program that makes "historic" properties tax exempt, but the huge whale exemptions for hospitals and whatnot remain.
Universities are just as bad or worse on this front. They will buy up properties with no plan simply because they have the cash to throw around and don't have to pay tax.
People say that in Berkeley but usually the specifics of the deal they are taking about are incorrect, so I generally ignore such people. For example the properties owned by the U.C. wealth fund are taxed like any other.
Although they key thing here is that it's not just that effect, but emergent unintended consequences. In the article, it describes how non profit healthcare institutions have an incentive to buy for profit clinics, because (alongside the other incentives), when they do so, the real estate becomes tax exempt because now it's owned by a non profit, even if the work being performed stays the same.
That's not "unintended" that is the core of what they call the NPIC, the non-profit industrial complex. They do the same activity, with the same financial outcome, but they do it under a different corporate form and pay no taxes. The public does not benefit. Medical care is not the only player in this game. You also get it with "community land trusts" that take a property off the tax roll but don't lower rents.
Only if you keep the things those taxes were paying for. I have no public roads anywhere near me, ~no police, no fire service, no public utilities, basically no county services -- maybe it is not for everybody but once I experienced it I would never go back to having these public services. I basically pay a pittance for the local school and that is it. Once property taxes are eliminated the other voters can push to not have their taxes raised and just shitcan what property taxes were paying for.
Property tax is an emerging issue. There are movement to end property taxes or limit them across the US.
There is some opposite momentum toward the land value tax, which is a good thing, but these are less visible and likely weaker than a tax revolt by landowners.
Eventually, if the current trend continue for property taxes, we will see a disruption in government funding for basic service, and the contraction of the economy through increased taxation of economic activity to compensate for lost revenue from property taxes. It will be a disaster.
This is the endgame of the expansion of land ownership in the post WW2 era. Exemption from property taxes worsen this crisis.
> There is some opposite momentum toward the land value tax, which is a good thing, but these are less visible and likely weaker than a tax revolt by landowners.
You're breaking my heart here. A land value tax is embraced by anti-tax advocates like Milton Friedman as the "least bad tax" as well as by actual Marxists. However, it does seem like in the current moment a land-owner tax revolt is the likeliest end game.
And if there is a big push towards eliminating property tax, those states will rush towards California-like real estate disasters.
I just wish that all the people who had a hard time purchasing a home or paying rent would act on their own self-interest in reducing the share of our economy that flows to the rentierism of the land owner. Rentierism is bad in all economies, yet we have enabled an overclass to exploit young people and the poor. We live in an asset economy, where there's a big class divide between those who must work to survive, and those who own real estate (especially if it's their own home) and those who own financial assets like stocks. Making capitalism work better requires more class mobility and less inequality than we currently have.
I'm more convinced that the LVT is the least invasive than it being the least bad in economic action, although I can somewhat understand the argument for it. If you eliminated all the other taxes and only used LVT then a large part of the financial surveillance apparatus wouldn't have a leg to stand on. The part about bean counting every bit of income, profit, and gain and then being made to report it to the government under the auspices of just paying your tax is absolutely dystopic compared to LVT.
The biggest challenges of Georgism are that it is basically communism for land (George straight up admits this in one of his books) and creates some issues with efficiently allocating land resources, especially bad with the fact that it can wipe out land speculators which perform an important role in doing time-allocation of land. But it's probably worth the tradeoff if you can eliminate the other taxes.
> creates some issues with efficiently allocating land resources, especially bad with the fact that it can wipe out land speculators which perform an important role in doing time-allocation of land
Interesting, I have always thought the opposite. My undertsanding/reasoning: It's extremely difficult to find land for good purposes because speculators maintain land banks, preventing better uses of it. The speculator causes a ton of market friction, and the tendency for people to hold onto land because of limited supply are a fundamental hindrance to so much economic activity.
If there's a high carrying cost to land, a lot more of it will be on the market and available for people to use when they need it. Especially as land values rise, which is the most important time to reallocate land. Rising land values are exactly the time that the land speculator holds tightest, because they want to sell at the peak, not on the way up.
It is the only tax without deadweight loss. Speculators are detrimental in this case because they make land more expensive without increasing supply and are loathe to make efficient use of the land.
Taxes going up for shittier and shittier return is unfortunately something we are seeing across the US. Regardless of ideological viewpoint, the relative advantages of just buying the services you need on your own rather than playing into a broken system will appeal to larger and larger subsets. I was in the majority "subset" until I was tired of being squeezed dry by a system that always squandered my tax money.
Maybe the government can be fixed, or even "must" be fixed for the sake of the poors that we always pretend we're thinking about (no doubt some are, but most are just using them as a prop for political persuasion), but in the meanwhile contingency plans must be made.
It'll get worse. The US has lived above its means for a while, and it would need a big tax increase to only maintain the current level of service, no fancy extras.
reducing or removing property taxes for legitimate historic properties seems like a good thing to me. I don't want every community to look like a slightly randomized version of every other community. Historic stuff is interesting. If we can encourage it to stay interesting and not get torn down to build a TGI fridays that sounds like a good thing to me. How much did your crusade to tax local historic structures save the average taxpayer? How many of those places will be lost?
Strong disagree. If something has value, then the community should decide to preserve it as a group or the state should preserve it for us. I suspect that most of these schemes are some form of tax avoidance for wealthier people. The idea that some politically connected and likely wealthy group of people need some sort of help "preserving" historic buildings seems... dubious.
What do you think the community deciding to preserve it looks like? The government is the community. It's made out of the community. It's elected by the community. What mechanism are you suggesting?
Then they should be owned by governments outright. Provided that the community consent to it and are aware of the cost.
Government provides crucial services that increases land value, offsetting any losses in tax revenue through public utility. Perhaps the same thing can happen with historical buildings.
However, let us note that cities are for living in. It is not a museum.
Ultimately, only the public can determine the balance of concerns to be struck.
None of the covered properties in Berkeley are legitimate landmarks of genuine architectural merit or historical importance. Every one of them was established by flim-flam for the purpose of claiming the tax abatement. Over the years this lovely property claimed more tax breaks than any other. Judge for yourself whether the public interest was served.
I'll not dispute the impact on expansion and consolidation, but I will say in recent months I have seen a number of hit pieces on the 340B program, mostly bankrolled by pharma companies (not this one just calling out the trend).
The exact implementation might be flawed, but if 340b is eliminated it will kill many hospitals in underserved communities.
So any plan to change 340B should really also explain how to fund these critical hospitals.
In the way that surgeries used to be the "money maker" to subsidize other expensive service lines like an ED, pharmacy has filled that gap in recent years.
It is less hospitals getting rich off overcharging insurance for drugs and more hospitals overcharging insurers for drugs since everything else they do is a drain on finances.
Hi, I wrote this article and largely agree with you. 340B is important and without it many hospitals likely wouldn't survive. However, it's pretty evident at this point that 340B has expanded beyond its original intent.
For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program.
Moreover, it's grown extremely rapidly over the past ~5 years, and the gravity of the program is starting to create bizarre second-order effects like the one outlined.
My intent with this article is just to highlight some of those effects, not to advocate for eliminating 340B.
Also, not bankrolled by pharma, just a researcher for Turquoise Health (a healthtech startup). I get to dig around in their data and publish occasionally, but editorial control / opinions are my own.
Thanks for the response, I'll update my post to be clear I was not calling this post an astroturfing attempt.
Thanks! Good to see other health policy wonks on HN
For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program.
This is also a bit misleading though right? Northwestern was obliged to put 11 other hospitals and something on the order of like 150 to 200 clinic/other locations on its books largely for the purposes of access. So that rural communities across northern Illinois can also have the same access as people in Chicago.
The fact is, they are a rural healthcare system. Because the options that were in those locations previously were unable to make a long term go of it.
I was being a bit glib/imprecise before, but I'm specifically talking about the Northwestern Memorial campus downtown Chicago [0]. That location qualifies for 340B as a Rural Referral Center (RRC), and got itself reclassified by CMS/HRSA as rural to do so, despite being in the middle of downtown. RRCs need to meet a lower threshold of Disproportionate Share Hospital (DSH) adjustment percentage (8% vs the usual 11.75%). Northwestern Memorial needs to be an RRC because it doesn't meet the higher DSH threshold.
AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B (insofar as they all have their own CCNs and qualify independently). In this case, Northwestern Memorial qualifies because it a) got reclassified as rural b) became an RRC (likely based on its staff specialty mix) c) meets the RRC DSH threshold of >= 8%.
Northwestern Memorial does treat a lot of rural patients, so maybe it does deserve 340B. That said, it seems clear that it's not they type of struggling safety-net/rural hospital 340B was originally intended to subsidize.
[0] https://340bopais.hrsa.gov/CeDetails/78783
AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B
The money is shared at the system level. The referrals are to/from other hospitals/clinics in the system. Many of the other facilities in the system, exist because of Northwestern Memorial. This is what needs to be done to ensure access.
> it will kill many hospitals in underserved communities.
At some point it makes more sense to move every person from their remote hamlet than to create a hundreds different programs and exceptions to deliver broadband, groceries, and healthcare there. Many of these towns are leftover from when farming was 100x more labor intensive or industry had to be located next to a river.
It's incredible how far we'll bend over backwards as a country to avoid single payer healthcare. It's especially ironic that the most common argument against it is "taxes" when ...the outcome here is higher taxes.
Single payer would reduce choice and increase costs. People fantasize that price caps would fix everything, but they can't. Healthcare is just a resource and people pay high prices for it due to limited availability and regulatory requirements.
Really seems to me that there should be no exemption for land tax for non profits or religious reasons. It is just far too subject to abuse, and it means that we have large churches in the middle of incredibly dense cities that pay almost nothing in taxes.
In my metro area it irks me to see the churches with large empty parking lots empty most of the week. We have a housing shortage and they seem to have no little incentive to convert their parking to more productive use.
I agree, the whole ruse that these 501s meaningfully does charitable work for our communities is laughable and their tax exemption should be revoked, at least with regard to land taxes.
There are almost no places where a housing shortage is due to a lack of land. Housing shortages have all sorts of reasons, from constructions cost, to zoning, to restrictions on what can be built, but it's virtually never a lack of land.
And parking is a productive use - they have services once a week, and parking means people can come to the service. That's the definition of productive use. Something does not need to be used 24/7 to be productive.
Church goers using parking lots like this is a use, but I doubt it's a productive charitable use that should to be subsidized by localities.
Every other contemporary development in my area that faces real economic reality is ground floor retail, commercial/residential on top, and optionally underground parking.
There are certainly productive religious charitable efforts using facilities like this: homeless shelters, community low-cost/free clinics, soup kitchens. I think these uses should be tax subsidized, but other mystical efforts should not be whether they generate a profit or not.
I think a good reform to the 501c3 system would be to make non-profits like these churches and hospitals classify their actual charitable activity and separate it from their other activity, just like individuals with a mix of personal/small business income/expenses are required to do.
Why should churches get great real estate in central locations but not housing? If people only come to church once a week, surely they can spend the extra time driving further.
Yes. And then after many years, the appreciated land is sold for a profit.
A profit for who? It's a non-profit. If the sale netted extra money it goes back to the people who donated, or to another non-profit.
Non profits pay salaries.
The Mormon church has nearly $300 billion dollars in assets, mostly land. "Non-profit" indeed.
Pastor, I mean the church, needs a new Ferrari.
I don't know man?
The issue is that, most of the time, "incredibly dense cities" are not the places where this is hitting the hardest. It's the smaller towns where the impact of hospital rollups hits hardest on the property tax rolls.
Problem is, of course, that if we don't get one of the hospitals in, say, Houston, to put a facility in, say, Nacogdoches, on its books; then that facility may go away entirely. In which case you'd have issues in the market with inequity of access for the very populations who may need that access most. (Elderly and poor.) But if you do allow it, well, you have issues with property tax rises.
So local leaders are put in a position of having to weigh the value of having a hospital or clinic be available locally, against any potential decrease in property tax revenues. Now you hope they get that cost-benefit analysis correct, but there's no guarantee.
But churches? Yeah. Not so much.
The idea is that we give up the land tax revenues in exchange for the services the non-profit provides. (And of course the government does not decide which services are useful or not, the people do.)
One thing I might agree with is land tax for non-profits that charge fees for services, as opposed to those who work off of donations. I think that would fix the issue without destroying non-profits.
Or property taxes should be eliminated because they are subject to abuse, and instead sales tax should be the primary source of income for all governments.
Is there a term for this approach? I don’t think it’s ludicrous enough to be flagged and buried at least…
Do you think a government should be able to seize property under eminent domain if they believe that selling it to a third party to commercially develop would lead to higher tax revenue?
The government already has and does do exactly this. Is this suppose to be a gotcha? If you have very valuable property, you should pay taxes on it. Claiming that you have ownership over land on this planet is odd, you didn't create the land and governments change overtime.
Property taxes are the most evil of taxes because they force you out onto the street if you're unable to pay them. Qualifying it with the words "very valuable" to solve the problem creates an arbitrary two-tier system that is inherently unfair.
>Claiming that you have ownership over land on this planet is odd, you didn't create the land and governments change overtime.
The government didn't create the land either.
There's no such thing as a free lunch. Because it is politicaly unpalatable to tax landowners, we tax economic activity instead.
The result is that return on effort are reduced. That mean labor, entrepreneurs, and capital bear the burden of supporting government budgets as opposed to landowners who benefit from the economic activity making their land valuable.
Taxes as a rule discourages whatever get taxed. The exception to this is land, because land isn't created. It already exists in nature.
Don't tax what people make, tax what people took.
Property taxes are the most just of all taxes because they are the most correlated with your consumption. Speficially, the land value tax portion of property tax (ideally, that is the whole component).
>The government didn't create the land either.
The government did create the peace and order that allows you to sleep at night on your land without having to worry about another tribe taking your land from you. Without an ability to defend it, "your" land is a tenuous label.
The government, and the rest of society, also pays a hefty price routing utilities, police, ambulances, and people around your property's borders. The more property you have, the more it costs the rest of society, not just in money, but in time.
Earned income taxes are the most evil of all taxes. Why would you have to pay for the act of providing value to society?
Historically speaking, I am not sure if humans argued that they have created the land and therefore they should be allowed to use it. Ownership of the land and its use is, rather, simply tied to one's ability to retain it ( possession being 9/10ths of the law and all that ).
Yes, you are correctly identifying that all land rights stem from one's ability to claim nature's productive power as his own and monopolize all output from it.
This was self-evident in the feudal era, when landlords (Lords) had to at least raise their own militaries to assert this monopoly right. But the modern State and the landlords reached a compromise: the State will provide security to protect the lords' monopoly on nature so long as the landlords don't raise armed forces.
Totally absurd arrangement.
It may be absurd, but do you have a workable framework that can replace it? If not, it makes zero to no difference whether it is absurd or not. It works for the society in place.
Yes. A high land value tax prevents the capture of unearned wealth by owners of land without introducing market inefficiencies or price distortions.
The current arrangement demonstrably does not work for society in place, and as AI (whether in this wave of innovation or the next) increases productivity further, it will work less and less by virtue of further increasing land rents, thereby pricing out larger and larger swaths of society from a place to live, work, or otherwise exist.
Huh? Last time I checked, municipalities big and small fight for every bit of investments they can get and they typically get it by offering a swath of incentives at the cost of the actual taxpayer. That high value land ends up being tax free for the actually wealthy while a schmuck like me get his bill increased and argues with otherwise well-meaning people that akshually high taxes are good for me.
What are you arguing here?
It seems like you're arguing that the people who own high value land should pay higher taxes than those who don't.
I agree!
I think that what I am saying is that, in practice, the well-intended solutions like the one that was listed above are effectively nullified as they do not seem to anticipate real world human reactions. What ends up happening is that it is only a subset of the people, who own land that pay higher taxes. The solution is to remove any and all subsidies. Governments of all levels have not exactly proven to be a reliable steward over the past few centuries..
Well it's pretty easy to have a useless conversation if you're going to act as if the words your interlocutor are saying are "effectively nullified."
My solution does anticipate real-world human interactions: don't give rich landowners tax breaks. This is baked into the premise of having a high tax. A tax that is effectively not-high is by definition not a high tax, ergo is not the solution I am proposing. If I proposed a solution of "have a tax that is claimed to be high but actually is not," then your response would be valid. But my solution was: have a high land value tax.
Your solution is dismissible by your same logic. "While removing any and all subsidies is well-intended, in practice real-world human interactions dictate that will not occur."
340B is half the reason hospitals can even help treat homeless individuals, people who can't afford their bills, people on end of life care, etc.
I've consulted with two large health systems that begin with A and they use 340B to subsidize all sorts of treatment.
Unfortunately American healthcare naturally seeks to socialize treatment, but instead of it being direct its in the most round about ways.
Really well executed one page executive summary at the top of the article for anyone interested. Despite the oddity of being a gdrive link:
https://drive.google.com/file/d/1wzGqzWHDQA4m8DIo174yqx-eYDk...
At least the early comments seem very focused on churches despite this article literally mentioning "religious" uses once and focusing nigh exclusively on hospitals.
Universities and hospitals are some of the worst offenders in situations like this, especially in urban cores, likely empowered by their clear transformation into state-sanctioned "non-profit" businesses that provide a good we are compelled to consume if we are a normie who wants a reasonable guarantee of a comfortable, healthy economic existence.
I'm thoroughly perplexed as what is this doing on HN and how it connects to any Hacker News?
>property taxes
Call it what it is, a perpetual rent.
There's nothing funnier than a lot of people taking some absurd principles for granted when they make no sense at all, property taxes being one of them. So imagine you grind at least 30 years of your life working extra hours or two jobs to pay for an already inflated asset based on speculated prices rather than the actual cost, only to end up with that asset in a perpetual rent agreement where if you stopped paying it you basically don't own it anymore, a rent that also isn't controlled, so you can get screwed in the future like how a lot of people ended up selling their house because their retirement isn't enough to cover such rent.
Make it make sense, the only real winners here are the banks after they collect all that compound interest throughout all these years, and the government taking all these taxes.
Where's the money for local services supposed to come from?
Why should you be allowed to monopolize a piece of finite and scarce resource, land, for free?
Since you think it's a scam, surely you support 100% capital gains taxes on homes? Since old people getting rich off of an unproductive asset, blocking supply to "preserve neighborhood character", and inflating the price of their artificially-scarce goods would be more of a scam?
There's nothing wrong with retirees being forced to sell and downsize. You don't need a family-sized home when you live alone. Property tax is the least unfair tax of them all.
The government already takes enough taxes. I am sure they can figure it out. In fact, you are already double taxed: once on income tax (which was temporary and only paid on corporate profits, not yours, but that's another story) and then taxed again on what was already taxed through GST, sales tax, VAT, you name it.
>finite
You think land is finite? You do realize you can fit the entire human race - both the ~8 billion people currently alive and the estimated ~100 to 117 billion people who have ever lived- inside the Grand Canyon? We have enough land that every single person could have an entire farm of their own, not to mention the "land isn't enough" argument makes no sense in a country with giant parking lots, and no exceptions are made for people living in apartment blocks.
The solution is simple for what you mentioned at the end: make houses a depreciated asset, not an investment. Investment by concept must always go up, scale, and grow, making it inevitably unsustainable. Japan did it and fixed the entire housing issue for the next generations to come. I am sure we are smart enough to do the same. Housing and land are made to live in, not to invest in, and keeping them empty to gauge prices up.
> The government already takes enough taxes.
Is the deficit a scam too? It does not take enough taxes, you are heavily subsidized and want to be subsidized further.
The argument is simple. Land ownership with no property tax privatizes gains that others must subsidize. Land value comes from government infrastructure for water, electricity, roads, public transportation, which are expensive to maintain. That, and artificial scarcity, is why your house grows in value, which is why people treat it as an investment.
Japan fixed it by having a dying population, which causes other problems.
The deficit argument is a deflection. The government doesn’t have a revenue problem, it has a spending and priority problem. Canada (but also applies to other countries) runs deficits while handing out billions in corporate subsidies and mismanaging public funds consistently. Asking citizens to pay yet another layer of taxation to cover institutional inefficiency isn’t a solution, it’s a blank check with no accountability.
On land value coming from government infrastructure: that’s a partial truth dressed up as a complete argument. In Canada, most land is technically owned by the Crown, meaning you’re already leasing it under various terms depending on how title is held. So the “you’re privatizing public gains” framing already falls apart at the foundation. But let’s humor it anyway: what if I’m fully off-grid? Septic tank, solar panels, private road, self-maintained everything. Does my land value drop? No, it doesn’t, because the value is also artificially inflated by government-controlled permitting, zoning restrictions, and intentional supply suppression. The government is simultaneously the cause of inflated land value and the entity collecting taxes on that inflation. That’s not a neutral tax, that’s a racket.
On Japan: you’re conflating two separate timelines. Japan implemented its housing policies and saw prices stabilize and even decline well before its fertility crisis became the dominant economic story. The Akiya (vacant homes) problem and price normalization were underway as a direct result of policy choices, treating housing as shelter rather than an investment vehicle. The fertility decline accelerated consequences but didn’t create the policy. Meanwhile, Canada’s fertility rate is already comparable to South Korea, one of the lowest in the world, and Canadian housing prices haven’t corrected meaningfully. That alone dismantles whatever argument of “Japan only worked because of demographics”.
And here’s where it gets uncomfortable: the Canadian government has effectively admitted (look it up online, they don’t even hide it) that preserving housing values was a deliberate policy consideration in pushing back against remote work. Commercial real estate, residential landlords leveraged to the hilt, and an economy where housing represents a disproportionate share of GDP all created an incentive to force people back into urban cores. This isn’t conspiracy, it was acknowledged. When your economy is structurally dependent on a housing ponzi scheme, every policy bends toward keeping prices elevated, including taxation that forces lower-income retirees to sell, which conveniently frees up supply without crashing prices.
The honest conclusion is that property tax doesn’t exist to fund services equitably. It exists to keep the machine running for the people who benefit most from it, and that isn’t the person who spent 30 years paying off a mortgage.
Yes you should not be able to own something you had no hand in creating, such as the earth beneath your feet or the productivity of that earth created by your community.
Totally absurd to think that you should!
>There's nothing funnier than a lot of people taking some absurd principles for granted when they make no sense at all, property taxes being one of them.
>Make it make sense
The cops/judges/prisons/schools/military/etc that maintain a mostly peaceful and ordered society that prevents someone else from walking onto your property and throwing you out costs money, and costs more money every year. The more land you have, the more it costs, since more time, materials, and energy have to be spent moving around all of that surface area you have "own". Surface area is the costliest thing people consume.
Tax on the improvements on the land, as well as earned income tax are the absurd principles.
TL;DR taking properties off the tax roll costs the remaining taxpayers more. Pretty basic stuff. I've been talking this up to local electeds for decades, with very little progress. The only success I've had is ending the local program that makes "historic" properties tax exempt, but the huge whale exemptions for hospitals and whatnot remain.
Universities are just as bad or worse on this front. They will buy up properties with no plan simply because they have the cash to throw around and don't have to pay tax.
People say that in Berkeley but usually the specifics of the deal they are taking about are incorrect, so I generally ignore such people. For example the properties owned by the U.C. wealth fund are taxed like any other.
It does kind of suck for Albany though that something like 10% of its population lives in the untaxable University Village.
Although they key thing here is that it's not just that effect, but emergent unintended consequences. In the article, it describes how non profit healthcare institutions have an incentive to buy for profit clinics, because (alongside the other incentives), when they do so, the real estate becomes tax exempt because now it's owned by a non profit, even if the work being performed stays the same.
That's not "unintended" that is the core of what they call the NPIC, the non-profit industrial complex. They do the same activity, with the same financial outcome, but they do it under a different corporate form and pay no taxes. The public does not benefit. Medical care is not the only player in this game. You also get it with "community land trusts" that take a property off the tax roll but don't lower rents.
The irony of not treating land as a communal resource and letting private actors such as non-profits privatize the gains.
Only if you keep the things those taxes were paying for. I have no public roads anywhere near me, ~no police, no fire service, no public utilities, basically no county services -- maybe it is not for everybody but once I experienced it I would never go back to having these public services. I basically pay a pittance for the local school and that is it. Once property taxes are eliminated the other voters can push to not have their taxes raised and just shitcan what property taxes were paying for.
You seem clearly aware that this is relevant to a small subset of the population.
Property tax is an emerging issue. There are movement to end property taxes or limit them across the US.
There is some opposite momentum toward the land value tax, which is a good thing, but these are less visible and likely weaker than a tax revolt by landowners.
Eventually, if the current trend continue for property taxes, we will see a disruption in government funding for basic service, and the contraction of the economy through increased taxation of economic activity to compensate for lost revenue from property taxes. It will be a disaster.
This is the endgame of the expansion of land ownership in the post WW2 era. Exemption from property taxes worsen this crisis.
> There is some opposite momentum toward the land value tax, which is a good thing, but these are less visible and likely weaker than a tax revolt by landowners.
You're breaking my heart here. A land value tax is embraced by anti-tax advocates like Milton Friedman as the "least bad tax" as well as by actual Marxists. However, it does seem like in the current moment a land-owner tax revolt is the likeliest end game.
And if there is a big push towards eliminating property tax, those states will rush towards California-like real estate disasters.
I just wish that all the people who had a hard time purchasing a home or paying rent would act on their own self-interest in reducing the share of our economy that flows to the rentierism of the land owner. Rentierism is bad in all economies, yet we have enabled an overclass to exploit young people and the poor. We live in an asset economy, where there's a big class divide between those who must work to survive, and those who own real estate (especially if it's their own home) and those who own financial assets like stocks. Making capitalism work better requires more class mobility and less inequality than we currently have.
I'm more convinced that the LVT is the least invasive than it being the least bad in economic action, although I can somewhat understand the argument for it. If you eliminated all the other taxes and only used LVT then a large part of the financial surveillance apparatus wouldn't have a leg to stand on. The part about bean counting every bit of income, profit, and gain and then being made to report it to the government under the auspices of just paying your tax is absolutely dystopic compared to LVT.
The biggest challenges of Georgism are that it is basically communism for land (George straight up admits this in one of his books) and creates some issues with efficiently allocating land resources, especially bad with the fact that it can wipe out land speculators which perform an important role in doing time-allocation of land. But it's probably worth the tradeoff if you can eliminate the other taxes.
> creates some issues with efficiently allocating land resources, especially bad with the fact that it can wipe out land speculators which perform an important role in doing time-allocation of land
Interesting, I have always thought the opposite. My undertsanding/reasoning: It's extremely difficult to find land for good purposes because speculators maintain land banks, preventing better uses of it. The speculator causes a ton of market friction, and the tendency for people to hold onto land because of limited supply are a fundamental hindrance to so much economic activity.
If there's a high carrying cost to land, a lot more of it will be on the market and available for people to use when they need it. Especially as land values rise, which is the most important time to reallocate land. Rising land values are exactly the time that the land speculator holds tightest, because they want to sell at the peak, not on the way up.
It is the only tax without deadweight loss. Speculators are detrimental in this case because they make land more expensive without increasing supply and are loathe to make efficient use of the land.
Taxes going up for shittier and shittier return is unfortunately something we are seeing across the US. Regardless of ideological viewpoint, the relative advantages of just buying the services you need on your own rather than playing into a broken system will appeal to larger and larger subsets. I was in the majority "subset" until I was tired of being squeezed dry by a system that always squandered my tax money.
Maybe the government can be fixed, or even "must" be fixed for the sake of the poors that we always pretend we're thinking about (no doubt some are, but most are just using them as a prop for political persuasion), but in the meanwhile contingency plans must be made.
It'll get worse. The US has lived above its means for a while, and it would need a big tax increase to only maintain the current level of service, no fancy extras.
reducing or removing property taxes for legitimate historic properties seems like a good thing to me. I don't want every community to look like a slightly randomized version of every other community. Historic stuff is interesting. If we can encourage it to stay interesting and not get torn down to build a TGI fridays that sounds like a good thing to me. How much did your crusade to tax local historic structures save the average taxpayer? How many of those places will be lost?
Strong disagree. If something has value, then the community should decide to preserve it as a group or the state should preserve it for us. I suspect that most of these schemes are some form of tax avoidance for wealthier people. The idea that some politically connected and likely wealthy group of people need some sort of help "preserving" historic buildings seems... dubious.
What do you think the community deciding to preserve it looks like? The government is the community. It's made out of the community. It's elected by the community. What mechanism are you suggesting?
Then they should be owned by governments outright. Provided that the community consent to it and are aware of the cost.
Government provides crucial services that increases land value, offsetting any losses in tax revenue through public utility. Perhaps the same thing can happen with historical buildings.
However, let us note that cities are for living in. It is not a museum.
Ultimately, only the public can determine the balance of concerns to be struck.
None of the covered properties in Berkeley are legitimate landmarks of genuine architectural merit or historical importance. Every one of them was established by flim-flam for the purpose of claiming the tax abatement. Over the years this lovely property claimed more tax breaks than any other. Judge for yourself whether the public interest was served.
https://www.google.com/maps/@37.8567746,-122.2550107,3a,60y,...
Seems like the problem is that the system is bad at identifying historic properties with genuine value.
We need a prominent [even more] obvious scam "church" to abuse the system so badly that the exemption is eliminated for all.
The largest landowner in the USA is the Mormon church and it has two or more senators in its pocket to prevent that ever happening.