The Instigator
Willoweed
Pro (for)
Losing
0 Points
The Contender
TheTruthAnalyst
Con (against)
Winning
14 Points

Empty apartments/homes and unused land should be subjected to a tax.

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Post Voting Period
The voting period for this debate has ended.
after 3 votes the winner is...
TheTruthAnalyst
Voting Style: Open Point System: 7 Point
Started: 11/19/2011 Category: Economics
Updated: 3 years ago Status: Post Voting Period
Viewed: 1,045 times Debate No: 19371
Debate Rounds (4)
Comments (4)
Votes (3)

 

Willoweed

Pro

I think the topic is self explanatory. I will allow my opponent to accept and then I proceed with the debate.
TheTruthAnalyst

Con

I accept the position of Con for this debate. Empty apartments/homes and unused land should not be subjected to a tax.
Debate Round No. 1
Willoweed

Pro

1) The sole reason for a tax on unused land is to help improve the economy by creating incentives to increase production, and reduce the amount of idle land.
For example say corporation ALFA owns 100 acres of arable land, and say that the corporation only plants crops on 25 acres of that land. A as result we have 75 acres of land that could be used to increase production, provide jobs and feed people. Increasing those 3 things would help the economy.
2) The sole reason for a tax on empty homes/apartments is to improve the economy by creating incentives to reduce homelessness, foreclosures, rent costs, and to decrease overproduction of apartments/homes.
For example there's an apartment complex down the street and only around 75% of the apartments are filled yet they just built another complex right next to the old one which only has half its apartments filled. All those empty apartments are currently going to waste, and it was a waste to build a new complex when there were enough empty apartments in the old one to accommodate the growing population.
3) A tax on unused land, empty apartments and homes makes it more expensive to have unused land, apartments and homes. Because of these extra costs the current owners of the unused land/apartments will either sell off the land to someone who's willing to use it, use the land, or pay extra taxes for their wasting of valuable land that could be used to increase employment, and production.
TheTruthAnalyst

Con

1 - In the example of ALFA corporation, Pro assumes that it would be beneficial for the corporation to utilize the other 75 acres of land. To use those acres, ALFA would have to incur expenses such as planting, watering, pesticides, consulting, harvesting, processing, and distribution of final product. These expenses are only offset, resulting in profit, if there is sufficient demand for the product. If there isn't enough demand, ALFA will incur a loss by using those extra acres. Why then is ALFA corporation only using 25 acres? I can only think of two reasons: There isn't enough demand to justify planting more crops, or ALFA corporation doesn't have the capital to carry the expenses through harvest. In the first case, taxing ALFA corporation won't do any good, in fact the tax would hurt a corporation that is already running below capacity due to poor economic conditions. In the second case, taxing ALFA corporation would only contribute to their capital problems, making future expansion more difficult.

2 - In the example of the two apartment complexes, there is obviously a reason for the second complex to have been built. Demand drives an economy, and the current demand trends in housing call for larger, open floor plans, modern appliances, modern fixtures, higher ceilings, and other such modern attributes to homes. Many people will choose to pay more to live in a newer, larger, modern apartment than a cheaper, older apartment. This demand is what causes new complexes to be built when others are still vacant. The only way to change the natural supply/demand process of the free market would be to take away the freedom and force people to move into existing complexes. Taxing the empty apartments would only hurt those who are trying to turn a profit in an area of housing where there is less demand. It would do nothing to incentivize people to consider housing that they don't desire.

3 - Pro states that increasing taxes on unused land and apartments would somehow stimulate the economy, without giving any reasons as to how such taxes would increase demand. Without demand, there can be no profit.


I assert that unused apartments, homes, and land should not be taxed, because doing so only adds additional financial burden in an economy with low demand and struggling balance sheets.
Debate Round No. 2
Willoweed

Pro

1) My opponent asks, "Why then is ALFA corporation only using 25 acres?" He could only think of two reasons for that but there are more,
A)one being that ALFA is to inefficient to properly utilize that land,
B) two being that ALFA's profit gain wouldn't be too minimal (such as $1) to warrant the effort to develop that land, and
C) three being that ALFA doesn't want to utilize the land because it will make a larger profit by creating food shortages.
The point of the tax isn't to help corporations get richer; it is to help the overall economy and society. If ALFA has to pay a tax on its unused land because it is to inefficient to develop on it then this tax will provide incentive for ALFA to either sell the land to someone who believes they can grow crops on it; or it will provide ALFA incentive to develop the land themselves instead of leaving it idle.
Second the taxes gained from taxing idle land could be used for two things either reducing the deficit, or reducing taxes on other things. For the time being I postulate that the tax revenue made from taxing idle farm land be used to cut farm taxes, and that the tax revenue made from taxing empty apartments be used to cut apartment owners taxes. This means that corporations overall will not see an increase in their tax burden. The only corporations who will see an increase in their taxes are ones who refuse to use the land to produce goods.

2) It is cheaper to install "modern appliance" then to build a whole new apartment complex. A) The major reason the second apartment complex is made is because the owner of the first one has rent so high that the builder of the second one know he/she can build it and maintain a lower rent that is able to turn a profit. This is bad for the economy because it results in an overproduction of apartments meaning resources are wasted.
B) My opponent argues that we shouldn't put a financial burden on apartment owners; but he is missing the point that in doing so we actually save the economy money. A tax on empty apartments gives incentive for the apartment owner to lower rent so that people move into those apartments; the only reason he would pay the taxes is either because he build a crappy apartment complex that no one wants to live in, or because he is to stubborn change business practices in order to increase the amount of renters. Both those things are bad for economy and society at large.
C) The incentives also apply to new apartment builders. They will know that if they have empty apartments that they will be taxed, meaning they will have more incentives to build the proper amount of apartments that is required for the area.

3) As I mentioned before, the taxes on unused land and buildings provides incentives to use those buildings, and land. The economy is better off when land and buildings are used to produce goods. Food costs are a major financial strain on most Americans, and millions of Americans currently are jobless. Those Americans could be working growing crops in idle land; keeping that land and their labor idle doesn't help society.
TheTruthAnalyst

Con

1A - If a company is inefficient, taxing them won't help them to increase efficiency. Efficiency in business increases profit margin, so an inefficient company will have a smaller profit margin. Adding tax to that reduced profit margin can damage or destroy a struggling balance sheet.

1B - If a company will only make $1 from an endeavor, then it isn't worth pursuing. Corporations have to turn profit, and can't waste time, money, and resources on large projects that result in little to no profit.

1C - If ALFA is purposefully creating food shortages, then a competitor will step in and undersell them. This is one of the strengths of a free market. A sole corporation can try to manipulate prices, but anybody can jump in and steal their base by selling cheaper. Pro's premise for the debate didn't focus on corporations not using land for price manipulation, but rather unused land in general. Even if one corporation was manipulating prices, a tax on unused land would hurt any corporation who couldn't currently operate at full capacity due to lack of capital or lack of demand.

Taxes won't be used to reduce the deficit. All taxes except for income taxes are used for the areas in which they are taken. Gas taxes are used for transportation expenditures. Local taxes are used for police, fire fighters, and schools. Taxes on unused land would have to be used in the development of land in some way. Pro's idea of using taxes on idle land to reduce taxes on farms is counter-intuitive. Taxing someone who isn't making money, to reduce the taxes of someone who is making money doesn't do any good for those who aren't making money. It would be the same as increasing taxes on the bottom 50% of Americans in order to reduce taxes on the top 1% of Americans.

Further, Pro states that corporations who 'refuse' to use their lands will be the only ones taxed more. In any economy, corporations will try to get the best profit that they can. If a corporation isn't running at full capacity, it is either due to lack of capital, or lack of demand. Adding tax will not increase demand.

2 - The demand is for newer construction, not just newer appliances. Renters and buyers know that a new building will have less upkeep than an old building on average. The reason the developer made the new complex is because there is a demand for it. The existing complex would need renovation and perhaps price reduction to try and compete with that same demographic. Anyway, in a free market, the government can't force a company to increase or decrease their prices. Otherwise, the free market is lost, and that is not what we have built America upon.

2B - Taxing those who are running under full capacity(which means they aren't making as much money as they could) will not help the economy, and Pro hasn't stated any arguments as to why these taxes would help. More likely, corporations and complex management companies would go under financially due to having an added financial burden. Pro doesn't acknowledge the possibility that the complex management *can't* reduce prices. Perhaps if they did, they would be able to rent 100% but not be able to balance their sheet, causing them to go under more quickly. Pro wants to decide for businesses that they must lower prices if demand is low, but if demand is low, increased taxes will only hurt.

2C - New developers already have incentive to build the correct amount of apartments. They know that if they build too many they will lose money. They don't need a tax to teach them effective business practice.

3 - Pro is correct that the economy is better when land and buildings are utilized, but confuses cause and effect. When there is more demand in a market, more businesses are created and expand to meet that demand. When there is more demand for houses, developers build more houses to meet that demand. You can't stimulate demand by taxing land that isn't used. The land will only be used when the demand is there.

In other words, supply is designed to match the demand. You can't increase demand by increasing supply.

Pro hasn't stated a single example of how these taxes would stimulate demand in the economy. Without demand, the economy won't improve. Forcing people to pay more when there isn't enough demand, or sell their unused property when there isn't demand, is against the fundamentals of a free market and won't help in any way.

As an example, if there is a corporation ACME that decides it wants to use ALFA's unused land for a new factory in which they will make a product that is in demand, they will approach ALFA and make an offer. If ALFA is losing money on the land due to lack of demand, they are likely to sell. This is how the market works. You can't force someone to sell unused land to someone else who needs it if the demand isn't already there.
Debate Round No. 3
Willoweed

Pro

1A)Actually yes taxing them will help make them be efficient enough to cultivate the land or make them sell the land to someone efficient enough to cultivate it.
1B)So according to my opponent something that will create hundreds of jobs and feed hundreds of people isn't worth it because it benefits those people instead of benefiting a large corporation. I will have to disagree with my opponent. And that is why taxing unused land will improve the economy because for ALFA it's not worth it but for other people those jobs and that food is worth it.
1C)It is impossible for a competitor to step into the market when there isn't any land for them to cultivate crops on. The reason ALFA is able to purposely create shortages is because they own so much land and are not using it. A good way to make it so a competitor can more easily step into the market is to put incentives on ALFA to make them either cultivate the land or sell it to a competitor so that competitor can cultivate it.

My opponent is misunderstanding what is being taxed in my proposal. The tax has nothing to do with who is making money. It taxes corporations who are not using land. The profit of that corporation could be billions. For example many of the largest oil companies currently have millions of acres of leased land with billions of cubic feet of oil in the land yet those oil companies are not drilling for that oil. This tax would tax them for not using that land, and give them incentives to actually drill for oil.
http://www.knoxviews.com...
http://dailycaller.com...
http://wyofile.com...

Cons comparison of increasing taxes on the bottom 50% of Americans to reduce taxes on the richest 1% of Americans is completely incomparable given that my proposed tax isn't a tax on corporations who don't make money; it's a tax on corporations who don't use land. I ask my opponent to stop being dishonest.

2)There is no demand for "new construction" there is only demand for the goods being constructed. Again I repeat modernizing a building is far cheaper and more efficient than building a new one. There can't be a demand for something when there are thousands of said something still in the market with no one willing to buy them. You saying so is dishonest.
My proposal is to increase taxes on unoccupied apartment buildings not to force owners to change their prices. Stop misleading us about what the proposal is.
2b)My opponent replies, "Pro hasn't stated any arguments as to why these taxes would help." My opponent is lying Given that I've posted these arguments as to why these taxes would help TWO times already (this will be the third).
This tax will provide incentive for ALFA to either sell the land to someone who believes they can grow crops on it; or it will provide ALFA incentive to develop the land themselves instead of leaving it idle.
A tax on empty apartments gives incentive for the apartment owner to lower rents and provide people with a roof over their heads.
The incentives also apply to new apartment builders. They will know that if they have empty apartments that they will be taxed, meaning they will have more incentives to build the proper amount of apartments.
2C)If they didn't need the tax to teach them effective business practice then they wouldn't currently be building hundreds of apartments when there is no one to occupy them.
My opponents second to last paragraph is another lie I've provided plenty of examples of how these taxes would create incentives to increase the production of goods and to reduce the overproduction of unneeded goods.
ACME will have a more likely chance to acquire ALFAs land under my proposal because selling the land to ACME will not only gain ALFA money from the selling of the land but it will lower their taxes. Meaning even my opponent just gave another example of how this tax will help the economy. He has shown that this tax will speed up transactions on the free market, allowing corporations to speed up the production of goods.
My opponent's last paragraphs last sentence is again another lie about the proposal. The proposal is not that corporations not using land have to sell it, it is that when they don't use that land it is taxed in order to create incentives to use that land.
TheTruthAnalyst

Con

1A - Pro states that taxing a corporation for the land it doesn't use will help them to be efficient enough to cultivate the land, or to sell it. There is no argument provided for why a corporation would suddenly become more efficient due to a tax increase, and no argument addressing demand. If there is sufficient demand for the land to be used, then the corporation will use it if able. If somebody wants to purchase the land(also demand), then the corporation will do so if it is in the corporation's benefit. Pro has still failed to show how the tax will affect demand.

For a lesson on supply and demand, I refer to investopedia. Supply and demand naturally reach a point of equilibrium, where the amount of supply is at it's greatest efficiency when it meats the amount of demand.[1] As an example: ALFA corporation plants, harvests, and sells alfalfa. During market research, they determine, due to historic sales and polling, that there is a solid demand for up to 10,000 bales of alfalfa at $50 per bale. They also know that they can yield 400 bales per acre. They can then determine that the greatest efficiency is in harvesting 25 acres to achieve 10,000 bales to meet the demand. In years past, they reduced prices from $60 per bale to $40 per bale, but from the drop from $50 to $40 they saw no increase in the number of sales, which is why $50 per bale is determined the best price. Adding a tax to ALFA for the other 75 acres will do nothing to increase demand, productivity, or the economy.

1B - Pro states that if a corporation can undergo a major, year-long endeavor, which will yield hundreds of jobs, is a worthwhile endeavor even if it only nets the company $1 of profit. This is poor business sense. If an especially hot summer arrives, or if grasshopper populations spike, or any other number of problems arise, ALFA corporation could stand to lose hundreds of thousands of dollars, all in an attempt to earn $1. If every corporation took such risks, more corporations would face bankruptcy due to emergencies or problems. Pro also fails to consider that ALFA corporation might not be able to even sell the end product if the demand isn't enough.

1C - Pro assumes that there is no land available for a competitor to use, even though the entire premise is based on an abundance of unused land. This is a contradiction, either all the land is being used, or some of it isn't. If some of the land isn't being used, there is opportunity for a competitor to acquire the land and use it. Adding tax won't increase demand for the land if the demand isn't currently in the market.

Pro's link to knoxviews.com has an article with no references for data, and a link to a bill that is a bad link. This citation cannot be considered as it has no substantial information. Similarly, dailycaller.com has no references for its information. The last link, wyofile.com only has a table comparing the number of drilling permits to the number of sites drilled. There is no information on reasons why not all of these permits aren't currently being used. Regardless, this is starting to stray from the initial premise.

Pro says I am being dishonest. There is no room for that in a debate. I ask Pro to stick to the topic and arguments. Taxing unused land to subsidize land that is being used is like taxing the poor to subsidize the rich. A corporation may have a positive balance sheet, but the operations for the unused land are at a loss. These losses shouldn't be taxed more than another corporation's gains.

2 - Pro states that there is no demand for new construction, with nothing to back up his argument except for a new apartment complex being built next to an existing, mostly vacant complex. I propose that developers wouldn't risk millions of dollars in building new complexes unless there were a demand for the new construction. Pro also states that 'modernizing' is cheaper than building new homes, but again, the demand seems to be in new home construction. If you had the choice between a new home and a remodeled home for the same price, the new home would appear to be the better option. Having all new materials means less maintenance than an old building that has been updated.

2B - My arguments have been that increasing taxes don't increase demand. Pro decided to quote the instance where I left out the word demand, but I hoped from the arguments before and after that the importance of demand is clear. Again, I ask Pro to refrain from calling me a liar and to stick to the arguments. Pro consistently calls these taxes 'incentives', not understanding that the only reason a corporation isn't using all of the land it has available is because it can't. Either due to capital problems, lack of demand, or regulation. Corporations are designed to make money, and if they could make money off that land, they would. Pro would use tax on vacant apartments to incentivize owners to lower rates, for the purpose of giving people roofs over their heads. How far should the government take this? If a property is still vacant, should it be gifted to someone who is homeless? I propose that property is the property of the owner, and the choice for the price is up to the owner. If the owner chooses to price it too high, it won't rent and the owner misses out on money. And again, developers already have a much greater incentive to build the proper number of apartments. If they build too many they lose money. That incentive already exists, yet Pro states that an additional tax(or an additional burden on un-rented units) will somehow affect demand.

2C - Pro takes the stance that taxes will 'teach' developers to be more effective. The free market and laws of supply and demand are what teach developers to be effective. Pro provides no reference for the hundreds of new apartments that aren't being occupied, so that argument has no merit. Again, Pro calls my argument a lie, we all know where I stand on that. My second to last paragraph was that additional taxes won't increase demand, and Pro hasn't stated where this new demand would come from. Pro only states that increasing taxes on unused land will increase demand.

ALFA will sell to ACME, if the deal makes financial sense, with or without the 'incentive' of a tax. I propose that Pro's 'incentive' is actually a penalty, and a penalty on efficient business. If a business doesn't have enough demand to support 100% production, it is more efficient to operate at a lower production level. If a business keeps resources it isn't currently using, it makes sense that the business expects to use those resources in the future.

Pro finishes with another accusation of a lie. Due to the attack I won't even address that.

I would close by reiterating that demand is what drives an economy. When there is more demand than supply, corporations can increase supply(via expanding, or new corporations starting up) to meet that demand. If the demand isn't enough to justify such increase in supply, then an additional tax will do nothing to increase the demand, and will only place further burden on corporations.

[1]http://www.investopedia.com... sections A, B, C, D
Debate Round No. 4
4 comments have been posted on this debate. Showing 1 through 4 records.
Posted by wiploc 3 years ago
wiploc
Pro made promiscuous accusations of dishonesty. Thus, Con gets the behavior point.

Arguments I'd like to have seen:

- Some mention of the contradiction between wanting to force land into production and lamenting overproduction.

- Some mention of the value of "unused" land. Perhaps mention of the loss almost all the trees and windbreaks and wild animal habitat (in maybe Ohio and thereabouts?) when Eisenhower tried to artificially stimulate agricultural production?

- Some mention of the kind of adaptations that would result from such a law. "No, sir, this land is not unused. You will find that I am growing a single corn plant on each separate acre."

- Some mention of existing and historical laws intended to prevent overproduction, laws paying people not to grow crops. Were these entirely misguided, or are there sometimes good reasons for opposing the resolution?

- Mention of how such a law would accelerate destruction of rainforest if it were passed in South American, and might have similar destructive effect here.

- Mention of the virtue of not tweaking and toying with the tax code. The free market may function better when the code is simple and clear. Tinkering has unintended consequences. For instance, people used to be happy to own their homes free and clear, but a change in the tax code (allowing deduction of interest payments only on residences) has substantially aggravated our current economic problem.

But we didn't see these arguments, so we can ignore them.

Nonetheless, Con sufficiently refuted each of Pro's arguments well enough that Pro resorted to invective rather than legitimate argument.

Victory: Con.
Posted by I-am-a-panda 3 years ago
I-am-a-panda
Define "unused".
Posted by 16kadams 3 years ago
16kadams
the rich, im in the 40% bracket so I would go up to 45% with this crappy tax, or it would be for whoever owns it, in that case I am fine with it.
Posted by Renascor 3 years ago
Renascor
Then who is going to pay this "tax"?
3 votes have been placed for this debate. Showing 1 through 3 records.
Vote Placed by renji_abarai 3 years ago
renji_abarai
WilloweedTheTruthAnalystTied
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Total points awarded:07 
Reasons for voting decision: It si unfair since they own the land and its there property and they should decide if they want to be taxed or not
Vote Placed by imabench 3 years ago
imabench
WilloweedTheTruthAnalystTied
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Total points awarded:03 
Reasons for voting decision: wiploc summed it up quite nicely actually....
Vote Placed by wiploc 3 years ago
wiploc
WilloweedTheTruthAnalystTied
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Total points awarded:04 
Reasons for voting decision: RFD in comments