• explodicle@local106.com
    link
    fedilink
    English
    arrow-up
    1
    arrow-down
    1
    ·
    1 year ago

    No it doesn’t. As you can see, market price is where the supply line meets the demand line. Since supply is perfectly inelastic (vertical), a higher tax rate cuts into producer surplus without changing where supply and demand meet.

    • OurToothbrush@lemmy.ml
      link
      fedilink
      arrow-up
      1
      arrow-down
      2
      ·
      1 year ago

      That isnt true, housing supply isn’t inelastic. Houses decay, new homes are built, and landlords remove homes from the market to artificially constrain supply.

      Also that isnt what the graph illustrates.

      • J Lou@mastodon.social
        link
        fedilink
        arrow-up
        2
        ·
        edit-2
        1 year ago

        LVT taxes the unimproved value of land, so we are talking about land itself not what is built on top of it such as housing. Since land is a product of nature, the supply of it is perfectly inelastic

        • OurToothbrush@lemmy.ml
          link
          fedilink
          arrow-up
          1
          arrow-down
          2
          ·
          edit-2
          1 year ago

          People live in housing though, which is distinct from land, and the thing they’re claiming is static