> This tax is not going to increase the cost of a new home 1:1 as markets still exist. It's going to reduce the profit of a new home construction and thus the value of existing land.
Reducing the profit of new construction increases the value of land, as it reduces the supply of housing. Study case, san francisco. It has a 0.1 supply elasticity: if rental prices went up 100%, construction units move by 10%.
Any tax that is put on construction reduces construction.
> The ideal amount of growth is where the total cost of new construction balances the demand for new construction. I am simply including externalities as part of that cost. Any other system makes some group richer at the cost of everyone else.
Your system makes local homeowners with very old large houses very rich: not for the house, but the land they have that appreciates because it is harder to build around it.
