How could a close to 100% LVT fairly handle people who recently purchased land?
One problem with implementing a high LVT is that it would cause current landowners to lose much of the land value they previously paid for, even if they only recently purchased it.
I think the fairest solution, would be to allow current owners to charge for reimbursement from previous owners, such that each owner effectively pays the tax on the land value increase during their time of ownership. This would lead to a chain of claims that would ideally end at the last unlawful acquisition. But could end earlier due to a lack of documentation or bankruptcies.
Example:
Let's say someone bought a property, she paid 200,000$ for the land, by now the land is worth 250,000$. Inflation over the time period was 20%. Meaning the increase is 40,000$ from inflation and 10,000$ from the appreciation of the land value. Now a 90% LVT is introduced and the value plummets to 25,000$. However she can file a reimbursement claim against the previous owner worth:
initial buying price • inflation • tax rate.
Which comes out at 216,000$. Her net worth would go from 250,000$ to 241,000$ (land+reimbursement). She therefore loses out on the value the land gained under her ownership times the tax rate.
What other ideas do you have to address this?