I believe that some things which are necessary for a healthy society are, are not, and cannot be made to be, profitable by themselves. Nightclubs was my guess as to what one of those things could be, parks was another. Other examples which are usually brought up are public transit and the postal service. These might never earn enough income to afford the space they take up in a city center, but it is still vital that they exist there.
> To argue that commercial tenants will be charged more is to argue that commercial landlords are leaving money on the table, which I don't believe.
Getting more money might involve tearing down and rebuilding (which is expensive) and forgoing income while the rebuilding is taking place. If one were cynical, one could assume that most landlords simply don’t have the capital on hand to do this, and/or can’t get rid of their current tenants easily enough. A more charitable view might be that the landlord likes having a nightclub where it is.
Hang on, what does loss-making public infrastructure paid for by taxes have to do with the taxation of the land it sits on? If the government already pays for railway stations and parks and post offices, why would it be a problem for the government to tax itself more?
I agree that there are things which have positive externalities that are not profitable in themselves. Those things already exist and the government pays for them using taxes.
> A more charitable view might be that the landlord likes having a nightclub where it is.
If the business owners were accepting below market rate because they wanted to keep a business there, then they're effectively spending money on charity. In that case, yes, raising taxes on them might cause them to give less. Suggesting that we leave the surplus value of land with landlords because they're going to use some of it on charitable giving, instead of to the government, is a coherent position.
I'm not sure I agree with it, though. I think a small fraction of landlords will give low rents to businesses they like, but most of them will just charge tenants close to market rate. I think in that case, I'd rather give most of the surplus value to governments instead.
> I'd rather give most of the surplus value to governments instead.
Sure. But are you arguing that all use of current buildings are already at their theoretical maximum profit limit, and therefore no real estate property tax could incentivize landlords to convert a building from a museum to, say, lofts? If so, I am doubtful, but I have no evidence to present against your position.
> To argue that commercial tenants will be charged more is to argue that commercial landlords are leaving money on the table, which I don't believe.
Getting more money might involve tearing down and rebuilding (which is expensive) and forgoing income while the rebuilding is taking place. If one were cynical, one could assume that most landlords simply don’t have the capital on hand to do this, and/or can’t get rid of their current tenants easily enough. A more charitable view might be that the landlord likes having a nightclub where it is.