[HN Gopher] Georgism
___________________________________________________________________
Georgism
Author : timurlenk
Score : 158 points
Date : 2020-05-17 09:28 UTC (13 hours ago)
(HTM) web link (en.wikipedia.org)
(TXT) w3m dump (en.wikipedia.org)
| heymartinadams wrote:
| https://www.progress.org/articles/a-more-prosperous-vancouve...
| acd wrote:
| I think commons like fish in the ocean and air quality in cities
| should be priced. If of you fish its not free you pay to the
| country whos fish you fish. If the fish is extinct or heavily MSC
| on the red list the price is sky high in the millions this is to
| protest the species and our eco system so future generations can
| enjoy that fish.
|
| By pricing eco systems and sustainable common resources. We avoid
| tragedy of the commons where few extract all value from common
| resources for free.
|
| Ie such a new economic system would price the rain forest at its
| true value to humans and earth eco systems.
|
| Carbo emissions would also be priced differently.
|
| Tradegy of the commons
| https://en.m.wikipedia.org/wiki/Tragedy_of_the_commons
| travisporter wrote:
| The Marine Stewardship Council (MSC) is an independent non-
| profit organization which sets a standard for sustainable
| fishing.
| spangry wrote:
| Sounds like you're describing Pigovian taxes:
| https://en.wikipedia.org/wiki/Pigovian_tax
| acd wrote:
| Thanks for point out Pigovian taxes!
|
| It seems to be a field of Environmental Economics.
| thruflo wrote:
| The UN did a major study on the economics of ecosystem
| biodiversity, ie the value of nature and how to price it
| into the economy: http://www.teebweb.org
| emilfihlman wrote:
| Why should only bigger communities together own something? If I
| want to fuck out in the middle of nowhere and do my own thing,
| why should others be allowed to harass me there?
|
| Additionally the government printing money, giving it to us and
| then requiring us to give it back does not create value, it
| creates a loop that causes work for nothing.
| neilparikh wrote:
| Under Georgism, in practical terms, you would still be able to
| do that. The value of land in the middle of nowhere would be
| essentially 0, so you wouldn't need to pay much LVT. You may
| still need to pay some LVT, to reflect that the state is still
| providing you some services (in particular, enforcing your
| claim to the land).
| perilunar wrote:
| For a libertarian take on Georgism, see Geolibertarianism:
|
| https://en.wikipedia.org/wiki/Geolibertarianism
| LVTfan wrote:
| May I suggest that if you've not read Henry George's thought
| yourself yet, you take some time with them? There are two
| sections of the Schalkenbach site devoted to them -- first, the
| books, articles and speeches themselves, and then an introduction
| to HG's thought, with perspectives from a number of writers,
| mostly recent. With the latter group is a short version of
| Progress and Poverty entitled "Significant Paragraphs."
|
| His vision and clarity are remarkable and inspiring. 120 years
| ago, his ideas were widely understood throughout the English
| speaking world. (There were also a lot of hilarious
| misinterpretations by people who hadn't read, as is often the
| case.)
|
| And if you explore a bit, you'll find some good websites and
| blogs devoted to his thought.
| rikroots wrote:
| Back in a different life, I worked on the Lyons Inquiry which
| looked at English Local Government finances. Final report was
| issued in 2007[1]. As part of the work we had to look into Land
| Value Taxes as a supplement/alternative to Council Tax and
| Business Rates.
|
| There's nothing wrong with the idea. The big issues were mainly
| around introducing a new tax system and the massive upheavals and
| uncertainties businesses and people would face as part of the
| change. Winners and losers, etc. Given the uproar surrounding the
| later introduction of Universal Credit I'm glad Sir Michael chose
| not to recommend LVT in his report.
|
| Anyway - anecdote time. One of the big questions we asked at the
| start of the Inquiry was: "Why tax property?" After long
| consultations with the most senior Experts and Gurus across
| Government and Academia the answer came back: "Because it's
| there."
|
| [1]
| https://www.webarchive.org.uk/wayback/en/archive/20070411120...
|
| (I'm mainly commenting because it's an opportunity to show off
| the Inquiry's website. I built that! I had to do it in my "spare
| time" because we didn't have a budget for the work. This version
| is from 2007, but the original code was written in 2004 in PHP
| and after that most of the work was adapting the site to add
| events, display responses received, etc. Simpler times!)
| perilunar wrote:
| > "Why tax property?"
|
| Because its appreciation in value is largely unearned wealth,
| _especially_ in a country like England with a long history of
| aristocracy and landed gentry.
| rikroots wrote:
| No seriously. The answer was: "Because it's there."
|
| The whole thing about tax is to extract the maximum number of
| feathers from the goose with the minimum amount of hissing.
| Taxing property is easy "because it's there" - you can't hide
| a house, or a barn, or a factory.
|
| Though deciding _how_ to tax property is a bit more
| difficult. At one time they tried taxing by the number of
| chimneys a house had[1]. Another was the Window Tax[2].
|
| Have you ever heard of the phrase "They got away with it scot
| free"? I was born in the village which (by legend) introduced
| the Scot Tax - not a per-head levy in our Friends born north
| of Hadrian's Wall but rather a tax on properties across the
| Romney Marshes, specifically raised to pay for maintenance of
| the sea wall. Houses below sea level had to pay the tax,
| houses above sea level were 'scot free'.[3]
|
| ... And people think tax policy is boring!
|
| [1] Technically they taxed hearths, but it's a lot easier to
| count chimneys from the outside of a house than it is to gain
| entry to the house to count the number of fireplaces -
| https://www.nationalarchives.gov.uk/help-with-your-
| research/...
|
| [2] You can still see many houses in the UK with bricked up
| windows. It wasn't done for aesthetic purposes; it was done
| to limit the level of tax that could be levied on the
| property - https://en.wikipedia.org/wiki/Window_tax
|
| [3] https://theromneymarsh.net/newhall
| LVTfan wrote:
| And as Adam Smith pointed out, it is there, and visible. It
| can't be hidden, can't be spirited out of town or offshore
| during the dark of night. You don't even need to know who it
| is that owns it; as long as they pay their land value tax,
| they can remain anonymous.
|
| You might search for the term "unearned increment." It was a
| common expression to point out what people who reaped but did
| not sow receive due to our failure to collect the economic
| rent.
|
| One person's unearned increment is another's -- and likely
| many others' -- lost birthright. Who is entitled to it? All
| of us! How do we implement this? Land value taxation.
| pydry wrote:
| If I were representing the wishes of extremely wealthy
| landlords I'd try and make sure the rationale for killing LVT
| were something like "it would introduce upheavals and
| uncertainties" too.
|
| I'm certainly not going to say something like "because me and
| my mates and people like me would lose a stream of unearned
| income".
| rikroots wrote:
| The Inquiry didn't kill LVT, and efforts to promote it
| haven't stopped just because Lyons didn't recommend it as a
| solution going forward.
|
| > ... extremely wealthy landlords ... killing LVT
|
| LVT would not be an appropriate method for targeting tax
| extraction from extremely wealthy landlords. They would
| (probably) make up their losses through rent increases and
| additional service charges - effectively passing on the tax
| to renters and leaseholders. If you want to target the rich
| you need to use tools that target their personal and/or
| business income streams - in the UK, for example: Income,
| Capital Gains, and Corporation taxes.
| pydry wrote:
| >LVT would not be an appropriate method for targeting tax
| extraction from extremely wealthy landlords. They would
| (probably) make up their losses through rent increases and
| additional service charges
|
| Seriously?? If your inquiry concluded this then it
| certainly _was_ being run on behalf of landlords.
|
| They would no more be able to make up their losses through
| rent increases than I could make up the loss of being
| charged extra for a loaf of bread at the supermarket by
| unilaterally raising my wages. One does not drive the
| other.
|
| When the supply of housing remains constant and the demand
| of housing remains constant then prices remain constant.
| LVT changes none of these variables directly.
| Mirioron wrote:
| > _When the supply of housing remains constant and the
| demand of housing remains constant then prices remain
| constant. LVT changes none of these variables directly._
|
| Doesn't LVT increase the cost of providing the already
| existing housing and wouldn't that decrease the supply of
| housing? This would apply one time when the LVT comes
| into effect.
| pydry wrote:
| >Doesn't LVT increase the cost of providing the already
| existing housing
|
| No, it just shifts where the land rents go.
|
| Depending on how it was implemented it could lead to a
| wave of property developers going spectacularly bankrupt
| and a lot of mortgages secured on the value of land would
| be defaulted on. Stock market would likely take a
| hit/tank.
| neilparikh wrote:
| No, LVT adds no cost to providing housing. All land is
| taxed, so a landowner has to pay the same tax whether the
| land is empty, or has a single floor house, or a 30 story
| apartment.
|
| If anything, it encourages building more, so that the
| income from the rent can be used to the pay the LVT.
| Mirioron wrote:
| > _No, LVT adds no cost to providing housing._
|
| I'm not talking about long-term, but the initial effect
| of LVT coming into effect. If the landlord has to pay
| more then that's an increase in cost. Landlord income was
| likely at equilibrium before LVT. Those that could afford
| to lower prices to outcompete others probably already did
| so. As a result I don't see how we can expect landlords
| to eat the cost instead of passing it on.
|
| > _If anything, it encourages building more, so that the
| income from the rent can be used to the pay the LVT._
|
| Sure, but this also requires housing to be as profitable
| (or more) as other uses of the land. It might make sense
| to turn that housing into something else.
|
| Just to be clear, I'm not arguing about what it would be
| like in the long-term. I'm talking about the transition
| between going from not having LVT to having LVT. It's not
| at all clear to me that this wouldn't disrupt housing.
| neilparikh wrote:
| > I'm not talking about long-term, but the initial effect
| of LVT coming into effect. If the landlord has to pay
| more then that's an increase in cost.
|
| Right, but how does that lead to less housing? It's not
| like the landlord would stop renting the apartment and
| just hold it empty right after an LVT is implemented,
| since they would to pay the LVT either way. Most likely,
| the landlord would sell the building and land to someone
| else, who would then develop it to something that would
| provide enough income to cover the LVT obligations (say,
| a taller apartment).
|
| Your claim also assumes that the LVT will be greater than
| the current property tax obligations. I don't think
| that's a given. The LVT for buildings that are using land
| efficiently probably would be lower, since the would no
| longer have to pay tax on the building (which is higher
| for a multi-unit building compared to a SFH).
|
| As a side note, I am in favour of the government
| providing a subsidy to current landowners when a LVT is
| implemented, to compensate them from the lost land value
| (essentially "buying them out"), but I don't think that
| would be economically necessary.
|
| > It might make sense to turn that housing into something
| else.
|
| Yes, this is a possibility. But if that happens, then
| it's a sign that the demand for new housing is a low, so
| it makes sense to not build new housing (or convert
| existing housing). In regions where there's a housing
| shortage, a developer would be able to make a large
| profit building new housing, and thus would do so.
| pydry wrote:
| >Those that could afford to lower prices to outcompete
| others probably already did so.
|
| Why on earth would you assume that a landlord charging
| market rent would lower their prices when there's nothing
| forcing them to?
|
| >As a result I don't see how we can expect landlords to
| eat the cost instead of passing it on.
|
| Heavily leveraged landlords would be able to pass the
| costs on in the form of defaulting on mortgages. Non-
| leveraged landlords being forced to eat the costs would
| likely be very unhappy about being forced to "eat the
| costs" (lose their stream of unearned income), but they
| would have few other options. Violence would be a
| significant possibility.
| rikroots wrote:
| > They would no more be able to make up their losses
| through rent increases than I could make up the loss of
| being charged extra for a loaf of bread at the
| supermarket by unilaterally raising my wages. One does
| not drive the other.
|
| Do you have research, or an evidence base, for this?
|
| > [...] it certainly was being run on behalf of
| landlords.
|
| It certainly was not.
| snidane wrote:
| It might have not been directly funded by landlords but
| it might have been approved for publishing with the same
| motives as opposed to the other studies which came to
| opposite conclusions.
| pydry wrote:
| >Do you have research, or an evidence base, for this?
|
| Economics by Paul Samuelson:
| https://archive.org/details/economics00paul/page/603
|
| Do you have research that indicates the opposite is
| likely to be true? I'd be _really_ interested in seeing
| what that is based upon.
|
| >It certainly was not.
|
| It's not unusual among for economists to do this
| subconsciously due to the incentive structure of the
| profession.
| neilparikh wrote:
| > They would (probably) make up their losses through rent
| increases and additional service charges - effectively
| passing on the tax to renters and leaseholders.
|
| Since no land can be created or destroyed, the supply-
| demand curve is fixed. This means that the land tax cannot
| be passed onto the renter, because the market conditions
| haven't changed. The rent is not calculated based on the
| landlord's costs plus some extra, but instead is whatever
| the market equilibrium price is.
|
| Another way to think about it: if landlords have the market
| power to raise rents, why wouldn't they just do it now,
| rather than wait until an LVT is passed?
| snidane wrote:
| > Another way to think about it: if landlords have the
| market power to raise rents, why wouldn't they just do it
| now, rather than wait until an LVT is passed?
|
| Exactly. Because they hold monopoly pricing power over
| tenants they could in theory increase the rents 10 times
| even today. They don't do that, because better strategy
| for a parasite is to maximize profit and not to kill the
| host.
| snidane wrote:
| This has been shown to be false already. Landlords cannot
| pass tax burden of LVT to tenants.
|
| "The producer is unable to pass the tax onto the consumer
| and the tax incidence falls on the producer. In this
| example, the tax is collected from the producer and the
| producer bears the tax burden. This is known as back
| shifting."
|
| From section "Inelastic supply, elastic demand"
| https://en.m.wikipedia.org/wiki/Tax_incidence
|
| If the landlords decided to increase rents expecting
| tenants would foot the bill, they would find out tenants to
| leave the location because it would be unlivable for them
| at that cost.
|
| More likely scenario is by introducing LVT the landlord
| would be forced to do the opposite - ie decrease rent - as
| other landlords would dump their uninhabited properties
| back to the market.
| neutronicus wrote:
| As I understand it the point of LVT is to punish landlords
| with few or no tenants in localities with high demand for
| housing and commercial space (where land values tend to be
| high).
|
| The problem it targets is not the wealth of landlords. The
| problem it targets is land owners _who are not landlords_
| making money, often as a by-product of consuming a luxury
| good (a home in a city center), without actually providing
| the social functions which in principle justify their
| compensation (anticipating demand, managing housing at
| scale, high-quality construction on a budget, etc).
| somewhereoutth wrote:
| I'm from the UK - Council Tax was always a real pain, its based
| on property price but paid by the occupiers (i.e. renters) NOT
| the owners. When you are house-sharing this becomes very
| problematic as its the largest and not insignificant shared
| bill - especially when housemates are moving in/out frequently.
| Collection is also a nightmare for the councils - sure they
| know the address and the amount owed - but who was living there
| in the period in question?
|
| Its a shame the inquiry didn't recommend formula funding from
| central government receipts (couple of pennies on income tax?)
| - so much grief could have been saved.
| rikroots wrote:
| > Its a shame the inquiry didn't recommend formula funding
| from central government receipts
|
| The Inquiry's main objective was to investigate possible
| revenue streams that could be raised locally, to help local
| councils free themselves from the tyranny of central
| government funding. At the time local government revenue came
| from Council Tax, Business Rates (though the level was set by
| central government, not local authorities themselves),
| licence and other fees (eg to open a tattoo parlour, or
| register a death), small fines (dog mess and other litter)
| and car parking charges. Altogether the revenue raised
| covered less than 10% (I think) of all local government
| spending. The rest of the money was supplied by central
| Government - making the UK one of the most centralised states
| in the world.
|
| A "couple of pennies on income tax" would've made the
| situation worse - though one of the things the Inquiry looked
| at was the possibility of localising (some) income tax.
| MiroF wrote:
| > The big issues were mainly around introducing a new tax
| system and the massive upheavals and uncertainties businesses
| and people would face as part of the change. Winners and
| losers, etc.
|
| It's funny how we introduce massive upheavals all the time -
| ending this social program here, injecting trillions of dollars
| there, but this one addition is considered infeasible.
|
| I suspect that the primary problem with George's theory is that
| he underestimated the political power of rent-seekers.
| rikroots wrote:
| The Inquiry didn't happen in "splendid isolation", and the
| recent history of property taxes across the UK was not a
| happy one. Property rates were replaced in 1990 by the Poll
| Tax (Community Charge) which led to protests and riots across
| the country. Council Tax was introduced in a rush in 1993 ...
| and the poor design of the system is not easy to hide.
|
| The Inquiry was set up in 2004 because there was a legal
| requirement to undertake a property revaluation before 2005
| which, as things stood, would have led to massive changes in
| people's tax burdens (winners and losers). The Government
| wanted a way out of the problem - but the Inquiry didn't give
| them one: Lyons decided that revaluation was essential and
| should go ahead.
|
| The Government sorted the issue in time-honoured fashion by
| changing the legislation to remove the need for a
| revaluation, and changing the Inquiry's terms of reference.
| And so it goes ...
|
| > It's funny how we introduce massive upheavals all the time
| - ending this social program here, injecting trillions of
| dollars there, but this one addition is considered
| infeasible.
|
| My understanding is that things are done in at least 51
| different ways in the US. Maybe one of the smaller, more
| progressive States in the Union will be willing to try out
| some form of LVT in the near future?
| grey-area wrote:
| Why tax capital instead if income?
|
| The reason to do so is because it reduces inequality and leads
| to a fairer society.
| andi999 wrote:
| Well, if you tax potential capital (like house prices), then
| gentrification is the consequence. Think somebody living in a
| modest house mixed neighbourhood. Rich ppl buying houses
| there, property tax shoot so high (because the small house is
| now worth millions) that the person has to sell. As far as I
| understand that happened in Vancouver.
|
| Not sure if it leads to a fairer society. (of course one
| could argue it is fair for a not so rich person not to live
| in a rich area :-) )
| LVTfan wrote:
| Were we to treat Land -- sites, and natural resources,
| including clean air, clean water, and things like
| geosynchronous orbits, fisheries, electromagnetic spectrum --
| as our COMMON treasure, our source of natural public revenue,
| instead of something to be privatized, our wealth
| concentration problem would be much much smaller.
|
| Instead, we permit individuals and corporations and trusts to
| privatize the value and we tax it only very lightly --- they
| get to keep the lion's share, just as if they made it
| themselves.
| revnode wrote:
| > The main Georgist policy recommendation is a tax assessed on
| land value. Georgists argue that revenues from a land value tax
| (LVT) can be used to reduce or eliminate existing taxes (for
| example, on income, trade, or purchases) that are unfair and
| inefficient.
|
| Fine in theory, the reality is that you get nailed for property
| taxes AND income taxes AND sales taxes AND everything else. If a
| government CAN tax it, it will and will not restrain itself.
| firloop wrote:
| A great essay on Georgism:
|
| "Georgism is an accelerationism, as it attempts to unchain
| capital--not from the restraints of humanity, but those of land,
| which eats cake in the stands as it watches capital and labor
| fight over crumbs."
|
| https://gravitylobby.club/trashcan.html
| badrabbit wrote:
| Ends justify means?
| [deleted]
| yufeng66 wrote:
| The founding father of the Republic of China, Dr. Sun Yat-sen,
| was heavily influenced by Georgism. He believed all income
| derived from land, including appreciation of the land, should be
| heavily taxed. He incorporated it into three principle of the
| people, which is the cornerstone Kuomintang ideology.
|
| But nobody would argue Taiwan is a Georgism heaven right now.
| Why? Rich and political powerful people own the land. Georgism as
| a practical matter is very difficult to push through.
| WilliamEdward wrote:
| It is because the rich and powerful own the land that georgism
| is hard to push through. You could implement georgist laws
| simply, but the rich and powerful have connections that you
| don't and politics will always favour them, so you won't get
| any of that policy to hold. This isn't georgism's fault in
| particular, but the fault of just about any tax scheme.
| zozbot234 wrote:
| Doesn't Taiwan (in common with other Asian countries) mostly
| allocate land to the private sector via long-term leases, as
| opposed to ownership of indeterminate duration? That would be
| enough to regard it as quite Georgist.
| em500 wrote:
| No, most of Taiwanese property is freehold. You might be
| thinking of Hong Kong and mainland China, where almost all
| private property is leasehold.
| sudosysgen wrote:
| Leasehold land is mostly a thing in communist countries that
| claim to temporarily implement capitalism.
| neilparikh wrote:
| One example (maybe the only example?) of a capitalist
| country with leasehold land is Singapore. The land policy
| there seems to have worked relatively well.
| JadeNB wrote:
| Monopoly was based on, or one might say perverted from, a game
| created to inculcate Georgist ideas in children:
| https://en.wikipedia.org/wiki/The_Landlord%27s_Game .
| snidane wrote:
| This part about Georgist economics is quite startling.
|
| You have an economical theory following in the footsteps of
| classical economists at the beginning of industrial revolution
| like Adam Smith and David Ricardo. It becomes incredibly popular
| with massive amount of followers. You were not an intellectual
| back then unless you knew about this school.
|
| Somehow it offered a way out of the societal mess, but costing
| great fortunes to the economical parazites - monopolies (neo-
| aristocracy).
|
| Some people in the school argue it was strategically removed from
| the society by funding a competing economical theory which
| removed land from the 3 factors of production and kept only 2 -
| labor and capital. Thus divert the attention from the real
| parazite (monopolist, rentier and landlord - someone who
| monopolizes land) to the conflict between employer and employee
| as depicted in the Marxist view on societal problems - which
| actually never existed.
|
| So the new aristocracy (Rockefellers, Carneggies and others)
| decided to fund and found universities with the main purpose of
| destroying Georgism and promoting red herring economical theories
| instead - such as Marxism and neoclassical economics, both of
| which remove the parasitic monopolist and landlord out of the
| picture.
|
| By not fighting with their enemy directly and thus making the
| georgist theory indirectly more popular it was a smart move for
| them to silence it down by promoting other theories instead,
| which is exactly what happened - from the most popular theory of
| economics to nonexistent to this day. No mention of it in
| economics curricula around the world - which suggests economics
| as taught in universities today is a fraudulent wannabe science
| or form of propaganda or both.
|
| http://dollarsandsense.org/blog/2017/04/the-dissing-of-henry...
|
| Mason Gaffney (famous Georgist) wrote a lengthy piece on this
| topic - Neoclassical Economics As a Stratagem against Henry
| George
|
| http://masongaffney.org/publications/K1Neo-classical_Stratag...
| alexmingoia wrote:
| The problem with georgism is that "unimproved value" is a non-
| market price. It's just made up by whoever is appointed assessor.
|
| Georgism conflates made up "value" with market "value".
| Ultimately some person has to assess the value of the unimproved
| land, meaning someone anointed to write down whatever number they
| want.
|
| Value is subjective. There is no such thing as "unimproved land
| value", unless you're talking about the last sale price of a
| particular unimproved lot. Property taxes in general have this
| problem, but it's very acute with unimproved land. Unimproved
| land is one of the most non-fungible goods there is.
| nabla9 wrote:
| There is brilliant way to solve it so that value and market-
| value meet. Keep the land always in market.
|
| It's called Common Ownership Self-Assessed Tax (COST).
|
| Land owner would self-assess the value of assets they possess,
| pay a tax on that value. The owner would be required to sell
| the asset to anyone willing to purchase them at this self-
| assessed price.
|
| If you value the land high for any reason and want to keep it,
| you must self-assess the value higher than anyone is willing to
| pay for it and pay tax for it. If value it too low, someone
| might buy it.
| andruby wrote:
| That would mean anyone who has enough money can buy the land
| that people live on just to harass them.
|
| It's an interesting idea, and I like it in principal, but I
| also like living in my house on my land knowing that I need
| to give permission before someone can buy it.
| nabla9 wrote:
| There would be likely exception for normal sized houses
| where people actually live or if there is way to asses the
| value other way. Pay normal n% tax and they can't buy it.
|
| Mansions and expensive property would be always on the
| market.
| jl2718 wrote:
| It works if everybody puts up a defensive value because tax
| rates would drop for constant revenue. Also consider how
| much value would be assessed for all property, e.g.
| google.com.
|
| In the US there is $16T currency, $38T stocks plus a
| roughly equal amount in corporate internal valuation, ~$30T
| small business, $33T houses, $17T commercial real estate,
| plus commodities, any other mark to market securities,
| vehicles, collectibles, intangibles like copyrights,
| patents, operating licenses, and really anything else that
| a court can adjudicate possession of.
|
| I would expect somewhere around $250-500T with defensive
| valuation, so tax rates <1%. If your house is worth $1M,
| it'll cost you $800/mo. By comparison, a US top 5%-er pays
| the same in property tax, plus income tax of about
| $7000/mo.
|
| And it seems amazingly efficient. List and pay. If you like
| it, pay more. If you want to sell, just pay less and
| somebody will inquire. Market liquidity and order book
| depth transparency would be amazing. Capitalizations would
| be accurate for liquidation rather than estimated by float
| pricing.
|
| The big monkey wrench I see is privacy. I believe this can
| be solved with zero-knowledge proofs. Maybe this is my next
| project.
| AnimalMuppet wrote:
| OK, wait a minute. The tax is on the value of the _land_
| , right? It's not supposed to change just because I build
| a house on it, right? (Though having power and sewer to
| the lot may improve the value.)
|
| So if I don't value it highly enough myself, someone else
| can come in and take the land. But the house is on the
| land. So I'm going to have to adjust the price to the
| actual price of the house + land, or someone else will
| outbid me and take it, thereby getting both the land and
| the house.
|
| Or else, when they outbid me, they only get the land but
| I keep the house. But how's that actually going to work
| in practice?
|
| The net effect is that this scheme stops being Georgism.
| It becomes a tax on the total value of the land plus
| improvements.
| snidane wrote:
| You solve this easily by assessing value and buying the
| land rights for a period of time - say 7 years.
|
| So basically you lock down the price in an auction once
| every 7 years giving you enough predictability and time to
| justify your investment.
|
| This is how these groups operate in present day already
|
| 1. businesses renting space in cities - they lock down rent
| for say 10 years
|
| 2. individual apartment renters - price is usually locked
| down for 1 year
|
| 3. domain name system - you lock down piece of land in
| "string space" for a year
|
| 4. electromagnetic spectrum auctions (LTE, 5g spectrum
| bands for telephone companies) every several years usually
| when new technology is deployed
|
| 5. technology patents locked down for 20 years
|
| 6. Government LAND to LANDOWNERS - locked down once, with
| expiration time at infinity and passable down through
| generations
|
| It helps to see what Georgists actually want to achieve
| with LVT - proper auction mechanism for something everybody
| needs and there is scarcity of it - land.
|
| For political reasons they attack it from the position of
| tax, not from the position of an auction. Which makes it a
| bit convoluted and confusing unfortunately.
| np_tedious wrote:
| The land most people live on does have market precedent so
| this would be unnecessary.
|
| This idea could still be workable for unimproved land
| tsimionescu wrote:
| Then we're back to square 1: how do you determine the
| unimproved land value of improved land, so you can tax it?
| CydeWeys wrote:
| This seems to be directly in conflict with the idea that once
| you own land, it's yours. I don't see this flying at all, at
| least not with the current expectations of most people.
|
| Any sizable company could easily bully any number of people
| out of their homes to acquire the land. It's hard to
| overstate how much people would hate this.
| abdullahkhalids wrote:
| Easily fixed by having an exception for people's primary
| place of residence. And other reasonable exceptions.
| nabla9 wrote:
| > once you own land, it's yours.
|
| Idea that you can buy a monopoly is generally a bad idea.
| CydeWeys wrote:
| Clearly people don't think so, as the vast majority do
| agree with private property exclusive ownership.
| em500 wrote:
| Ownership of land by individuals within any national
| border is always subject to local government power
| (taxation, eminent domain, police power, escheat). True
| exclusive land ownership is prohibitively expensive for
| individuals, since it would require military defense.
| neilparikh wrote:
| > the idea that once you own land, it's yours.
|
| This idea is the problem. Taken to its logical conclusion,
| we get feudalism, where those who don't own land will
| forever pay rent the landed gentry, only because they were
| fortunate enough inherit land.
|
| Property tax fixes this somewhat, but California decided to
| weaken that with Prop 13, and now is approaching feudalism.
| For example, in the apartment I lived in California, the
| rent paid would cover the landlord's property tax
| obligations in a month, and the remaining rent is the
| landlord's (minus whatever costs they have for
| maintenance).
| alexmingoia wrote:
| Someone being able to take my house or business away at any
| time because they have more money doesn't sound brilliant or
| practical. It's also not market based at all. Trades are
| willing.
| tlholaday wrote:
| Yes, trades are willing; and when you turn down a bona-fide
| offer to buy your house for $X, that is very strong
| evidence that you value your house at more than $X.
| sudosysgen wrote:
| The issue with that is that you then have the exact same
| issue with assessing the value of the improvements made in
| order to determine non-improved value from improved value. No
| issue is fixed, it's just moved around.
| thechao wrote:
| This is exactly how non-private copyright & patents should
| work. That is copyright/patent "for hire" would be COST, with
| the rate of taxation increasing by a small amount each year
| until tax rate was 100%. This would given Disney the ability
| to keep the mouse for 120 years, but also free up less
| lucrative works for public enjoyment.
| tlholaday wrote:
| What is the benefit of increasing the rate?
|
| If you like 100 years of ownership, set the rate at 1% per
| year, calculated on the copyright/patent holder's self-
| assessed price. Every century, the polity collects 100% of
| the value. What the polity does with the money collected is
| up to the polity.
| tsimionescu wrote:
| Why is it a goal to allow the Disney corporation to keep
| the mouse to itself for 120 years?
|
| This notion of copyright has basically destroyed the idea
| of folklore in the last few hundred years, relegating it
| from one of the main areas of human expression to a corner
| of the internet.
|
| I think even 20 + 20 copyright is problematic. People
| should be free to use characters and stories while they are
| still relevant, and create their own variations that may
| even become more popular than the 'original creation' (in
| quotes because so much of creativity rests on the shoulder
| of others).
| thechao wrote:
| This is a pragmatic approach to the reality of the
| situation: Disney and other large copyright holders have
| historically been able to leverage their position to
| increase copyright _universally_ to absurdly long levels.
| The idea of a COST based mechanism for copyright tries to
| address a few practical approaches to copyright:
|
| 1. Copyright that's not assigned value defaults to the
| public domain; this provides an avenue for copyright to
| devolve to public domain _immediately_ which does not
| currently exist;
|
| 2. Copyright that's no longer maintained by its owner
| devolves to the public domain (similar to 1), taking it
| out of "copyright limbo";
|
| 3. Any group with sufficient resources can take a
| copyright into the public domain as a public good, e.g.,
| "we" could _buy_ Wolverine into the public domain;
|
| 4. Copyright can be maintained for very long durations
| for entities that choose to do so;
|
| 5. The ever-increasing cost means that _eventually_ the
| copyright "buys itself out", that is, when the COST is
| assessed at 100%, the Fed has sufficient funds to simply
| buy the copyright outright (this is a _choice_ , btw, the
| Fed could happily accept 130% of COST!); and,
|
| 6. Absurd copyright lengths no longer universally apply.
|
| I _think_ (but I 've not completely thought this through)
| that such a system could help with patent litigation.
| Specifically, consortia of entities can buy out a patent
| if the patent is weaponized. Mind you, the patent holder
| can no longer "squat" on a patent for free: they must pay
| the COST of a patent portfolio! This _naturally_ handles
| the asymmetry of costs between NPEs and regular old
| entities.
| corpMaverick wrote:
| What happens if I build a house in the land ? Is the house is
| still mine ? It seems like it would keep me from improving
| the land.
| LVTfan wrote:
| Your possession would be just as secure as it is today. If
| a huge city grew up around it, your property taxes would
| rise over time, and at some point, your single family home
| would be surrounded by skyscrapers, and no longer be using
| the land effectively. But if you were wedded to that house
| in that location, and had the funds to continue to pay your
| property tax, or your land value tax, you could stay
| forever. No one would stop you.
|
| Occasionally one sees a diner in a skyscraper neighborhood.
| Under LVT, their incentive would be to find another place
| to conduct business, perhaps on the 1st floor of a taller
| building, and let the site be redeveloped to meet current
| needs.
| [deleted]
| [deleted]
| zozbot234 wrote:
| Isn't that true of any assessment? With the ordinary property
| tax, you have to assess both the land value and the
| improvements. (There are of course ways of taxing property that
| don't involve that kind of outside assessment, but they're not
| commonly used.)
| alexmingoia wrote:
| None of that changes the fact that there is no inherent value
| to land (improved or unimproved). Different people value the
| same piece of land (or any good) differently. This is just
| reality, regardless of whether someone is appointed to
| imagine a price for the purposes of taxation.
| epistasis wrote:
| You may as well say that nothing has inherent value. The
| concept of "inherent value" is a bit broken, as the same
| thing that gives land value (somebody else wants it) is
| exactly what gives anything else value (somebody else will
| give you something for it).
|
| Valuations in currency are an abstraction for how we deal
| with this really tricky and intractable problem. But like
| all abstractions, it's leaky. A $100 bill has no "inherent"
| value yet it's value is very precisely known.
| epistasis wrote:
| Yes, this, most definitely. And the land versus structure
| value is already calculated for most properties for insurance
| purposes.
|
| Even places (like California) that do not assess tax based on
| value still have massive fleets of property value assessors
| that are used during the course of normal market
| transactions, since those who lend mortgages use them to
| prevent fraud.
| LVTfan wrote:
| The valuation for insurance purposes is generally not the
| current, depreciated value of the building, but the cost to
| rebuild, at today's material and labor prices, and with
| modern materials and systems.
|
| A 50 year old building, with old systems, may be fully
| depreciated, but if one had to rebuild, one would need far
| more than the current building is worth.
|
| When one buys a home with a mortgage, the bank requires an
| appraisal. In some places, the forms don't even break out
| land value from building value, or they do it badly. An
| appraisal merely compares the subject house with others
| that have sold recently in the same area. Better location?
| $15,000 more (or, in California, $100,000 more) Inferior
| location? subtract $15k or $100k. 1 more bathroom? Add
| $5,000 (CA: might be $5k or $50k) new kitchen vs 20 y/o
| kitchen? Add $10k, $50k or $100k, or more, depending on
| what is typically spent in that neighborhood. For each
| "comparable" add up all the pluses and minuses, and add
| that to the transaction price for that property. Average
| those, and the subject house value is estimated. Land value
| is in there, but not explicit.
|
| California has assessors, too, who, after a property has
| sold, update the assessment on it to equal the transaction
| price. Some goes to land, some to the building. (check out
| listings at realtor.com, and fully expand the property
| history info. Notice when the previous transaction was, and
| look at the increases. They are in reality mostly land
| value. Buildings don't appreciate. Land rises and falls in
| value --- mostly rises.)
|
| But appraisers and assessors are very different.
| yesbabyyes wrote:
| Allegedly, Karl Marx called Georgism "capitalism's last ditch ".
| I can't find a source, but this was an interesting collection of
| historical thoughts: https://merionwest.com/2019/06/02/through-
| letters-the-gap-be...
| axlee wrote:
| Is it what Norway is doing with their Sovereign wealth fund
| financed by nationalizing oil surplus?
| JSavageOne wrote:
| I've yet to see a single valid objection as to why LVT (Land
| Value Tax) should not be the primary tax, yet it's nowhere to be
| found in the political dialogue. Such a shame that the majority
| of the tax burden instead falls on the working class while the
| landowners get a free ride.
| crazygringo wrote:
| I mean... the objection is that it's incredibly arbitrary,
| greatly affecting one part of the economy and leaving others
| untouched.
|
| Why not a radio spectrum tax as the primary tax instead? Or an
| oxygen tax proportional to your lung size? Or a clean water
| tax, or a tax on the weight of your grocery consumption, or a
| tax on the weight of the garbage you produce, or the carbon you
| consume?
|
| All of those are valuable resources.
|
| That's why it's not found in the political dialog, because it's
| super-arbitrary and would therefore have grossly distorting
| effects. Why should a low-margin supermarket which people need,
| occupying tons of space, pay huge taxes, while a tiny very
| profitable ultra-luxury boutique hotel pays only 5% of the
| taxes?
|
| Taxation needs to be applied with some combination of
| minimizing distortion and achieving some level of
| progressivism. A land value tax is absolutely terrible at both
| of those.
| balfirevic wrote:
| Land value tax is considered among the economists as being
| one of the least distortionary taxes.
| crazygringo wrote:
| I don't believe so. It's considered to remove distortions
| _in land use_ , as compared to property taxes that include
| the value of structures. In other words, you get less
| vacant lots and more productive use of land. Which there
| are good arguments for.
|
| But proposing to replace income and sales taxes with land
| value taxes, making it the _primary_ tax -- which would
| necessarily skyrocket the land value tax to produce the
| same tax revenue at the end of the day -- would be
| _extremely_ distortionary.
| [deleted]
| LVTfan wrote:
| The radio spectrum -- those airwaves we say belong to the
| American people -- should be treated as our common treasure,
| not purchaseable by corporations. Lease them out for, say, 5
| years or 10 years, and then put them up for bids again.
|
| We all need clean air. We all need clean water. Those who use
| lots of water are usually charged by their local utility for
| what they take. Some farms and water bottlers deplete the
| local resource, and they ought to be charged for what they
| take from the commons, if the carrying capacity can't handle
| it.
|
| Supermarkets in Manhattan are amazingly inventive in
| providing a lot of groceries in a space whose smallness would
| be unimaginable in suburbia -- and is difficult to "social
| distance" in today.
|
| In the city, that supermarket woudl not be a single-story
| building; it would have a 20- or 40- or more story building
| overhead, and all those users would share the land value tax.
|
| And the building would not be taxed, so no downside to fully
| developing, and regularly redeveloping, the lot to serve
| human needs.
| neilparikh wrote:
| LVT is least distortionary tax, because you can't create or
| destroy land.
|
| > Why should a low-margin supermarket which people need,
| occupying tons of space, pay huge taxes, while a tiny very
| profitable ultra-luxury boutique hotel pays only 5% of the
| taxes?
|
| Because the supermarket is using more land compared to the
| hotel. Every bit of land the supermarket owns is land you and
| I can't use. It's only fair that the supermarket compensate
| the community for this, since the land could have been used
| for something else instead (like an apartment building, or an
| office building).
|
| It's also not a given that the ultra-luxury hotel will pay
| less tax. It's likely that a luxury hotel will be in a more
| desirable area of town, where land values are higher, and so
| tax there will be higher.
| crazygringo wrote:
| That's an argument for pricing land according to market
| value, which we already have.
|
| It's not an argument for why we should rely solely on a
| land tax _in lieu of_ e.g. taxes on corporate profits,
| income taxes, or sales tax.
| AnimalMuppet wrote:
| And I have yet to see a single valid reason as to why LTV
| _should_ be the primary tax. I 've seen a lot of words, but
| they all seem to start by assuming that LTV would be fair and
| the current system is not. That forms a very poor basis for
| convincing people who don't already agree.
|
| Here's my argument against LTV: Warren Buffet owns one modest
| house in Omaha. Should he be taxed based on the land value of
| that modest house, _and nothing more_? That hardly seems
| _fair_.
| LVTfan wrote:
| Most of his stock holdings occupy land in very valuable
| places, and aren't paying much in property tax.
|
| The principle is to pay for what you take, not for what you
| make. His modest home, likely on a modest lot, in a not-huge
| city, is worth little.
|
| For a while, he had a couple of places in Malibu, and he told
| the WSJ what he thought of Proposition 13, keeping the taxes
| ridiculously low. Arnold Schwarznegger told him to go do
| pushups. Buffett saw the injustice.
| AnimalMuppet wrote:
| Sure, his home is worth little, but he's worth billions.
| Should he be taxed based on his billions, or _only_ based
| on his home? I see the injustice in your proposal.
|
| And, most of his stock holdings occupy land in very
| valuable places? True to some small degree, but not all
| that true overall. Take Coca-Cola, for instance. They own
| some very valuable land in Atlanta. But the value of Coca-
| Cola is much more than the value of the land, and is mostly
| unrelated to the value of the land. Should Coca-Cola be
| taxed based on the value of _Coca-Cola_ , or on the value
| of Coca-Cola's _land_?
| LVTfan wrote:
| To the degree that Coca-Cola is harming people, they owe
| something. Coke likely occupies a very valuable site in
| Atlanta, and perhaps has O&O bottlers on locally valuable
| sites, near centers of population, served well by
| transportation infrastructure that brings ingredients in
| and finished products to the customers. When communities
| start collecting the full value of those sites (and stop
| burdening the buildings and equipment with taxes) who
| will be harmed?
|
| Should Coca-Cola be taxed on its good will? or for adding
| to people's satisfaction?
|
| The biggest promoters of Henry George's single tax were
| business people who saw a way to a more just society in
| which all could prosper. But there were others --
| railroad, steel, other monopolies -- whose continued
| position depended on keeping their monopolies, and they
| were less than enthusiastic about the concept.
|
| Who owns the land in the central business district of
| most cities? Often it is the corporations that use it,
| but frequently it is trusts of people long dead, whose
| heirs just keep enjoying the ever-rising land rent. They
| didn't create the value. The corporations should pay for
| the value of the land they use; so should the trusts who
| collect the land rent of our most valuable sites.
|
| And the value of Warren Buffett's holdings might be
| affected, but the freer market it will create will
| provide opportunities for all sorts of entrepreneurs to
| work their business plans.
|
| And recall the data on how concentrated stock ownership
| is.
| AnimalMuppet wrote:
| > The corporations should pay for the value of the land
| they use; so should the trusts who collect the land rent
| of our most valuable sites.
|
| OK, but why _just_ the land? Trusts hold stock, too, that
| some long-dead person bought. Their heirs receive the
| dividends from that stock, for not having done anything
| whatsoever. By your logic, why should that _not_ be
| taxed?
|
| What is so magical about land, that _only_ that should be
| taxed? What makes it different from all other assets?
|
| > And recall the data on how concentrated stock ownership
| is.
|
| Yes, I recall the data on how concentrated stock
| ownership is. The _exact same logic_ you are using on
| land tax applies to stock ownership. So... what was your
| point?
| oDot wrote:
| It actually makes much more sense to use a uniform sales tax:
|
| (1) If you spend more, you're taxed more. Obviously this is
| better for poorer people, who spend less, but also for rich yet
| reserved people, who keep most of their money in the bank
| (which lends it) and are earning an income (=productive). Both
| will not penalized.
|
| (2) It's much hard to raise, because people will just stop
| buying stuff, which is much easier than quitting a job to not
| pay income tax
|
| (3) Being uniform, it doesn't choose favorites. Everything is
| taxed the same
| blahbhthrow3748 wrote:
| Sales tax fails to capture the accumulation of capital, so
| (1) is kind of bogus. If you make 100 billion dollars and
| invest it you and several generations of your family coild
| live comfortably without ever working and your tax burden
| would only depend on your spending.
|
| A sales-only tax incentivized rent seeking, basically,
| because the rentiers pay the same taxes as the renters while
| accumulating capital.
| oDot wrote:
| But what is investing other the attempt (aware or unaware)
| of creating wealth? When people make money, it means
| someone bought something from them. This means they had to
| create something other want. That can be a service, a good,
| or a house for rent. Remember that those who rent houses
| are people who can't afford to buy them, so they need
| someone with capital to manage the house. I am renting
| myself and I much prefer it at the moment to owning a
| house.
|
| You want billionaires to keep their money, because unless
| they put it under their mattress, they are growing the
| economy, which means lowering prices and raising quality.
| LVTfan wrote:
| and so often it gets invested in land, which includes not
| just the sites under our feet, but vital natural resources,
| the kind that are finite in supply.
| oDot wrote:
| If you take a look at the data, "investing in land"
| wasn't as luxurious as it is today, due to government
| actions inflating the market.
| geofft wrote:
| > _rich yet reserved people, who keep most of their money in
| the bank (which lends it) and are earning an income
| (=productive) ... will not penalized._
|
| This goes against just about every standard defense of the
| ability to be rich: that rich people are job creators, that
| they power the economy by buying things, etc. Why should we
| discourage them from employing people and buying things? I
| don't want a loan (that needs to be repaid) from a bank from
| a rich person, I want the rich person to either employ me or
| buy goods and services from me.
|
| Actually, that's another point - does employment incur your
| "sales" tax? If not, it's more advantageous to hire a private
| chef or driver than to pay for a restaurant meal or a taxi
| trip, which makes the tax regressive - there's a
| discontinuity when you're able to hire someone instead of
| getting a service from a business.
| oDot wrote:
| An economy is driven by production, not consumption.
| geofft wrote:
| Sure. But the standard way of driving production is
| private consumption. Given that you have disincentivized
| the poor from consuming, what is the counterbalance that
| incentivizes the rich to produce?
|
| (There are a couple of standard answers, including
| government consumption / public works projects, that can
| address this.)
| oDot wrote:
| Note that a sales tax as only tax means no income tax, so
| overall a gain to production incentives.
| tryptophan wrote:
| Private consumption is only possible due to productivity
| gains due to capital investment. Venezuelans can't just
| vote to redistribute nonexistent wealth or declare food
| to be a human right and magically have sufficient food
| appear.
|
| Food comes from capital investment in farms, factories,
| etc. That is real wealth.
|
| >There are a couple of standard answers, including
| government consumption / public works projects, that can
| address this.
|
| These answers don't work, and are great at destroying
| wealth.
| andrepd wrote:
| Replace "the rich" with "Lords" and your post is an
| adequate defense of feudal society. In other words, you're
| thinking "inside" the system, i.e. justifying the system
| with itself.
| geofft wrote:
| Well, the position I'm arguing _against_ is that the
| lords should be left alone, that it 's better for them to
| have their fiefdoms be isolated places than to actually
| employ anyone or purchase anything, and that we should
| use tax law to incentivize the lords to never interact
| with the peasants.
|
| (Or in other words - my actual position that the nobility
| should be abolished. I'm just surprised to see someone
| say not only that it should stay, but that the world
| would be better if they didn't provide any of the
| benefits people usually claim in defense of feudal
| society, so I'm trying to understand what their position
| is.)
| DrAwdeOccarim wrote:
| The issue I've always had with the uniform sales tax idea is
| that poorer you are, the larger percentage of your money you
| pay in taxes. As a total cost, it's ultimately regressive.
| zozbot234 wrote:
| Really, the thing is that the whole "single tax idea" is a
| bit misguided. A consumption tax (sales tax) is great, but
| there are some sensible reasons to tax capital
| income/investment to _some_ extent, too. Mostly, because it
| correlates somewhat with basic ability-to-pay; also, because
| people might try to disguise income /expenses as investment-
| related in order to shield them from taxation, and having a
| more uniform tax base helps prevent this.
|
| But the broad principle that capital investment should bear a
| _lower_ tax burden is quite correct. And one you 've accepted
| that general principle, it makes a lot of sense to tax rent-
| generating assets like land and spectrum rights (since those
| are not really "capital" in the first place), which is pretty
| much the Georgist idea.
| oDot wrote:
| > Mostly, because it correlates somewhat with basic
| ability-to-pay;
|
| What do you care about ability-to-pay?
|
| > ...also, because people might try to disguise
| income/expenses as investment-related in order to shield
| them from taxation, and having a more uniform tax base
| helps prevent this.
|
| You can't shield from that tax. All entities pay, for every
| sale, no refunds.
| zozbot234 wrote:
| > What do you care about ability-to-pay?
|
| Because it helps align incentives. You can have a 7% tax
| on sales, or a 5% tax on sales plus a 2% tax based on a
| noisy correlate. The latter will raise more revenue at a
| lower excess cost.
|
| > You can't shield from that tax. All entities pay, for
| every sale, no refunds.
|
| That would make it a tax on _revenue_ , which is quite
| distortionary indeed and generally considered a last-
| resort. (Or you could have a VAT, where all entities pay
| but tax paid on non-final sales _is_ refunded. VATs are
| quite good but not totally free of this kind of gaming.)
| oDot wrote:
| > Because it helps align incentives. You can have a 7%
| tax on sales, or a 5% tax on sales plus a 2% tax based on
| a noisy correlate. The latter will raise more revenue at
| a lower excess cost.
|
| I see. Well we seems to have different goals. As I see
| it, government is mostly good at destroying wealth, and
| so I aim to minimize their revenue.
|
| > That would make it a tax on revenue, which is quite
| distortionary indeed and generally considered a last-
| resort. (Or you could have a VAT, where all entities pay
| but tax paid on non-final sales is refunded. VATs are
| quite good but not totally free of this kind of gaming.)
|
| I am essentially suggesting a non-refundable, uniform VAT
| zozbot234 wrote:
| > As I see it, government is mostly good at destroying
| wealth, and so I aim to minimize their revenue.
|
| The "excess cost" I was referring to is precisely a
| matter of destroying wealth. It's all well and good to
| limit government involvement in the economy but clearly,
| whatever revenue it does collect should be collected
| efficiently.
| zozbot234 wrote:
| It is often considered a "narrow" tax base - just not enough
| for a "single" tax, all things considered. (That's largely
| because the burden of existing taxes is _already_ being borne
| by land, at least to a significant extent. They just have
| _additional_ disincentive effects, quite separate from that
| sort of final tax incidence.) But even then, it 's clearly
| enough to fund local government expenses, so there's really no
| excuse for why we aren't using it.
| alexmingoia wrote:
| Land value (like all value) is subjective. There is no inherent
| value to land. What one person is willing to pay is not the
| same for everyone. Appointing someone to imagine a price for
| the purposes of taxation doesn't change this fact.
| moreaccountsplz wrote:
| There are ways to address value being subjective: use an
| incentive compatible revelation mechanism. E.g.
| http://radicalmarkets.com/chapters/property-is-monopoly/
| where the property-owner appraises his own property, pays a
| fraction of his given value as a tax, and anyone can buy his
| property at the appraised price.
|
| Whether it would be /accepted/ is another matter. But it's
| not impossible in the squaring-the-circle sense.
| pydry wrote:
| >In my opinion property taxes are terrible because they
| aren't in the owners control at all. There's no way to know
| what your tax bill will be next year and no way to control
| for it.
|
| So it's no different to rent in this respect. It IS
| effectively rent, it just spreads the unpredictability of
| renting across the whole society instead of concentrating the
| negative downside among one portion of society.
|
| Unimproved land is pretty fungible. If you have two empty
| lots across the road or even in the same area they will
| usually end up costing about the same.
| LVTfan wrote:
| Every teardown provides a clear picture of the land value for
| that neighborhood: the transaction price plus the cost of
| clearing off the old building. The similar sized lot next
| door is worth just as much. And the value of whatever
| improvement is on it is the difference between what the
| building-plus-land is currently worth, and the value of the
| land -- pretty much the depreciated value of the existing
| improvements.
|
| Map these values, and you have a pretty good tool for good
| land assessments. And for lots a wider or narrower, or deeper
| or shallower, there have been very usable tables for over 100
| years. NYC was doing this in the first decade of the 20th
| century.
|
| A tax on land values asks us to pay to exclude others from
| our site. In the middle of nowhere, that price can be $0. On
| valuable sites, it can be quite high.
|
| Today, a lot of city land is leased, and the tenant pays the
| landlord for the use of the land. The higgling of the market
| sets the price. There is a lot of revenue potential there,
| and collecting it for public purposes doesn't take from
| anyone something he created.
|
| And that can't be said for sales taxes, or wage taxes, or
| taxes on buildings.
| snidane wrote:
| Property taxes are bad because they punish labor and effort.
|
| Land tax (important to distinguish) doesn't inhibit labor and
| effort. On the contrary cities implementing land taxes see
| increase in output because land gets better allocated to who
| need it. Simply because people sitting on vacant and absent
| land in the middle od cities drop it and sell it somebody
| else.
|
| Land is not subjective but perfectly objective. It is a
| necessary input to all production - whether it is
| agricultural (obvious) or manufacturing (your factory has to
| be placed somewhere) or services (you need access to
| concentrated area for qualified workers in big cities).
|
| You can't even survive without standing on land.
|
| 100% of people need land to survive so how can it be
| subjective? It might be subjective to birds.
| _0ffh wrote:
| Yup, tax sounds problematic. Another way would be to declare
| all land common property and rent any piece of it out to the
| highest bidder. The market solves the problem of pegging it
| to a value.
| neilwilson wrote:
| The primary purpose of taxation in a sovereign economy is to
| free goods and services up for deployment by the public sphere.
|
| What does the government want with all that land?
|
| Are you sure you have enough fungibility in your economy so
| that it will free up doctors, judges, refuse collectors or
| whatever and all the real goods that their salaries actually
| represent so that you can achieve the public purpose that is
| the reason you are taxing in the first place?
|
| In any Modern Money informed Targeted Taxation regime what you
| really want to tax is whoever is using the things government
| wants to use instead.
|
| And that, paradoxically, means the ideal tax is likely a Wage
| tax paid by businesses for the use of labour. That reduces the
| demand for labour in a controlled way, and those people are
| then hired (directly or indirectly) by government to do
| whatever the polity asked them to do when they were elected.
|
| Do that and you can probably scrap any income tax completely -
| meaning whatever an individual earns they get to keep.
|
| Bear in mind that if the labour resource is already free (aka
| unemployed) then there is no need to tax to free them up in the
| first place...
| tlholaday wrote:
| > What does the government want with all that land?
|
| You are correct that the government does not want land. What
| the government wants is a share of the economic value that
| control of the land makes possible.
|
| Consider "vacant storefronts." The government does not want
| to operate stores. The government wants those storefronts put
| to good economic use, where what is good use is determined by
| bona fide auctions.
| jabl wrote:
| Do you have any references for further reading on this topic?
|
| And how is a wage tax different from an income tax? It might
| not show up on an employee's payroll, but the end result is
| the same, no?
|
| And if you're not taxing capital/capital gains in any way,
| won't this cause inequality to shoot up even more than it
| already is?
| CydeWeys wrote:
| What tax should tech companies pay then, given that the only
| land they really need is cheap rural land for data centers?
|
| This taxation system does make sense for land, but there's way
| more economic activity happening that isn't associated with
| land than there is that is.
| bluecalm wrote:
| If they don't pay anything it's not really a problem. Their
| owners will and their employees will. Corporate income tax is
| the worst possible tax as it creates incentives for all the
| things at both don't want and which are very hard to police
| in a fair way (is this 1M they paid for licensing really a
| fair price or is it tax evasion?).
| LVTfan wrote:
| They generally locate where they can draw on a pool of
| talented people, and those people are drawn by social
| amenities, good schools, good infrastructure. All those
| things contribute to land value.
| CydeWeys wrote:
| You're not being concrete. How do you properly tax a tech
| company whose land allocation is negligible compared to the
| overall value of the company? Tech companies have less than
| 1% of their value tied up in land. If they're all-remote
| and cloud-based, then they have $0 in land. How would you
| even tax them if the only tax is based on land?
|
| Also, I live in an apartment. Should my tax be $0? Or if I
| owned and lived on land way out in a rural area where a
| small plot is only worth a few thousand bucks, do I only
| pay tax on that despite my income being mid six figures?
| The point is, as a knowledge worker, my economic
| productivity is entirely divorced from land. This is true
| of most white collar workers. Land value taxes may have
| made sense as the primary tax hundreds of years ago but
| they don't make sense for that purpose now.
| LVTfan wrote:
| How much of the rent on your apartment is due to its
| location? might be 10% in a small town, but it is likely
| more like 50% in most cities (unless the landlord is
| providing a lot of services -- doorman, flowers in the
| lobby). In his land value tax, he'd be paying for the
| value of the site. In a highrise, that value gets used by
| dozens of housing units in each column.
|
| You wouldn't see a tax bill because you're not a
| landowner. But you'd be paying your share via your
| monthly rent. And your rent would not rise: your landlord
| is already charging what the market will bear.
|
| And if there is a vacant lot next door, its owner would
| be motivated to build on it or sell to someone who would.
| That would likely reduce the rise in your monthly rent.
| xiphias2 wrote:
| The whole point of this tax type is encouraging
| efficiency. Tech companies are usually efficient, and
| taxing them less increases their efficiency even more. At
| the same time their harmful effects should be regulated
| (GDPR is an example of such regulation).
|
| Countries and states that let tech companies thrive are
| winning the race for capital.
| sudosysgen wrote:
| The point of taxes is absolutely not to encourage
| efficiencies. The point of taxes is to fund the state in
| order to provide for defense and palliate the ills of
| capitalism.
| epistasis wrote:
| But what if we could do both!
|
| Markets need massive amounts of legal structure and
| regulation to make them efficient. Including taxation as
| part of that is an excellent idea.
|
| And if we get to Piketty-inspired corrections for r>g,
| part of that will include eliminating economic rents the
| way a LVT does.
| xiphias2 wrote:
| I didn't write about the point of taxes, but about the
| point of a type of taxation. A government can collect the
| same amount of tax with different rules and procedures.
|
| I agree with you, providing defense and protecting real
| capitalism, stopping oligarchies/long term monopolies
| from forming is important, to be able to have a return on
| investment on the taxed capital in the country.
|
| As I wrote before, countries are competing for investor
| money, that's why it's important how they collect and
| distribute taxes. The counterforce is usually corruption
| inside the political system though.
| CydeWeys wrote:
| The whole point of taxes is to fund government spending.
| That is a _large_ amount of money you need to bring in
| every year. Taxing based on income seems to make the most
| sense for that, not "taxing based on efficiency". If
| tech companies have billions of dollars but aren't paying
| taxes just because their business doesn't happen to use
| land, how does that make sense? Why is land efficiency
| the only thing that matters? The government needs to fund
| its spending, and they're not going to ignore large
| profitable tech companies for taxation merely because
| said industries happen to not be land-intensive.
| [deleted]
| bluecalm wrote:
| Who do you think should pay more taxes: someone sitting
| on 10M worth of land and doing nothing or a factory
| worker with no assets making 20$/hour? Income tax is
| unfair. It taxes productive people instead of those who
| benefits the most from the stable system (land owners).
| sudosysgen wrote:
| Who do you think should pay more taxes: someone with a
| house in Brooklyn or a multi millionaire tech worker with
| a remote SaaS company?
| epistasis wrote:
| By occupying that space in Brooklyn, that landowner
| excludes others from the opportunities that they enjoy.
| The land, which the homeowner didn't create, has tons of
| benefits that accrue only to the owner that come not from
| the owner's labor, but from the labor of others that are
| nearby, merely by being close to all those other people.
|
| So how much does that Brooklyn homeowner owe to the rest
| of society for excluding others from what they enjoy? How
| much does the SaaS millionaire exclude others from
| opportunities?
|
| Many proposed economic systems distinguish between
| property that comes from your own labor, and profits that
| come from idly owning an asset and restricting its use by
| others in certain ways. The slogan "property is theft"
| doesn't refer to the bookshelf that a person crafted, it
| refers to real estate and the economic systems of the
| time that excludes so many people from the opportunity to
| escape the economic rents of those who were born with
| more wealth and privilege.
|
| There are many reasons to tax things: to make life more
| fair, to raise funds for government, to improve economic
| efficiency, to reduce pollution. It's so hard to say who
| should be taxed more without baseline values!
| javitury wrote:
| The goal is to make the tax system not to reduce incentives
| to increase skills, labor, or technology.
|
| "George preferred taxing unimproved land value"
| snidane wrote:
| George was for removing taxes altogether which is
| possible if you fund government services properly in a
| pay for what you use scheme.
|
| It is not good politics to start your political campaign
| by proclaiming that you will remove all taxes altogether
| because it is so far out of anyone's reality that he
| would have been considered crazy.
| LVTfan wrote:
| And those who are late to the game and buy a piece of land
| comparable to their entrenched competitor who bought years
| ago are paying multiples of the property tax.
|
| Those late to the game who decide to rent are paying rents
| based on current land values, but their landlords, who may
| have owned the property for 10, 20, 30, 40 years, are
| paying to the community based on their purchase price. It
| becomes a form of sharecropping. Landlording can be very
| profitable, especially in California, if you own or inherit
| property from someone who bought it decades ago. Cui bono?
| snidane wrote:
| Tech companies should pay for what they use.
|
| They are efficient at not consuming too many resources while
| producing a lot of value? Probably shouldn't pay much then.
|
| But this applies not only to big tech companies but to
| individuals too - they shouldn't pay much if they don't
| consume or extract from others.
|
| Taxes are only a last-resort mechanism to raise money in
| absence of proper funding model.
|
| If you can price government provided services appropriately
| then you don't need taxes.
|
| Eg. to build infrastructure (roads, networks) you can predict
| that it'll benefit owners of nearby properties. They will
| benefit by landfall increase to the value of their property
| because the land on which it stands becomes more valuable.
|
| So you collect the money for the infrastructure project by
| land "tax" before you begin with construction.
|
| ("tax" because it's not a tax but payment for exclusive land
| ownership rights)
| AnimalMuppet wrote:
| I'd like to see your "proper funding model" for the
| military.
|
| Or you'd have to say that the military is part of your
| "last resort". But then you need to raise enough money to
| pay for all your last resorts. If LTV is your method, the
| numbers may not work (as others have said here).
|
| Or, instead of raising all that money, you could say that
| we don't need that big of a military. That's not an insane
| position. But using desire for an LVT as the basis for
| deciding on the size of your military seems to me to be
| putting the cart before the horse.
| snidane wrote:
| Military is actually a great example for LVT.
|
| If you mean defence part of it. Invading other countries
| is likely profitable for select groups so who else should
| pay for it if it gets approved.
|
| But let's focus on defence. It's not that much individual
| people, who need protection, because they can flee to
| another country in case of war.
|
| What actually needs protection is property which you
| cannot take with you. And voila that happens to be real
| estate (locational value).
|
| So who should be footing the bill for defence more than
| owners of land who are desperate for its protection when
| shit hits the fan?
|
| Similar argument can be used to justify LVT for funding
| of other protective services such as police and
| firefighters.
| AnimalMuppet wrote:
| First: "They can flee to another country in case of war"
| is _terrible_ reasoning. You expect the other country to
| let them in? _All_ of them? Yeah, that 's not the way
| things actually happen in this flawed world. _Most_ of
| them will not have the opportunity to flee. So... they
| should just die?
|
| No, the military is there to protect the _people_ , not
| just the wealth. So your post seems like it's trying to
| rationalize a not-up-for-debate position, rather than
| actually reasoning based on reality. Georgism claims to
| be motivated by compassion for those who are at the mercy
| of rentiers, but your position shows an immense lack of
| compassion. "Let them flee to a different country" is the
| most cold-hearted thing I've heard in a _long_ time.
|
| Second: that wasn't my point. My point was, let's see the
| plan where you actually produce $800 billion (or whatever
| the military budget is) _just_ from a land tax. Let 's
| see what the actual rates would have to be, and what the
| effects of those rates would be.
| scatters wrote:
| Since when has the purpose of invasion been genocide?
| AnimalMuppet wrote:
| The point of invasion has been to kill people until the
| other government will do what you want. "Kill people" is
| supposed to be just the military, but there are
| inevitably civilian casualties. A big part of the point
| of a military (namely defense) is to keep anybody else's
| military from getting inside our borders, where it's
| _our_ people being killed.
|
| Both snidane and I assumed that there would be danger to
| civilians in case of an invasion. The invader doesn't
| have to intend genocide for that to be true.
| jrs235 wrote:
| *exclusive land possession rights
| tom_mellior wrote:
| > If you can price government provided services
| appropriately then you don't need taxes.
|
| This is absolute nonsense. It's somewhat true for roads,
| provided you can efficiently price every single piece of
| road (which you can't). But it's horribly wrong for things
| like the police or fire fighting.
| rswail wrote:
| If you follow MMT, taxes are the way governments withdraw
| money from circulation.
|
| > So you collect the money for the infrastructure project
| by land "tax" before you begin with construction.
|
| No, you use land taxes after completion to pay back the
| debt incurred to create the infrastructure. Adjustments of
| valuations based on the advantages of the infrastructure
| result in a greater burden of that repayment on those that
| receive the greatest benefit, but everyone contributes.
| MiroF wrote:
| > there's way more economic activity happening that isn't
| associated with land than there is that is.
|
| First, that is an actively contested claim. Pointing to tech
| companies as "way more economic activity" is laughable
| because (even though they occupy a huge proportion of public
| discourse) tech companies are a very small percentage of
| economic activity globally.
|
| Second, intellectual property holdings would be considered
| "land" in the Georgian sense.
| CydeWeys wrote:
| > tech companies are a very small percentage of economic
| activity globally.
|
| This flat-out isn't true. Tech companies alone are a
| significant part of economic activity globally (e.g. they
| make up the majority of the top 10 largest companies in the
| world by market cap). Once you include all white collar
| work, which generally tends to be similarly divorced from
| land value, you're talking about the majority of the world
| economic activity at this point.
|
| > Second, intellectual property holdings would be
| considered "land" in the Georgian sense.
|
| Oh really? How the hell do you value that if not based on
| the actual income derived from said intellectual property?
| I.e. this is just the taxation regime that already exists.
| MiroF wrote:
| > market cap
|
| Market cap doesn't measure economic activity. https://en.
| wikipedia.org/wiki/List_of_largest_companies_by_r...
|
| Look at this. Among the tech companies that are high,
| most of those are consumer electronics or something else
| not purely related to tech.
| CydeWeys wrote:
| Sort by profit, not be revenue, and you see the tech
| companies appearing again. Profit (or even just total
| corporate spending) is a better measure of economic
| activity than revenue.
| MiroF wrote:
| > Profit (or even just total corporate spending) is a
| better measure of economic activity than revenue.
|
| Profit is a terrible measure of economic activity because
| it is unrelated to the amount of goods changing hands.
| Indeed, in industries where lots and lots of goods change
| hands, profit is likely to be lower.
|
| e: Also, real estate is extremely profitable, it's just
| not as consolidated as the major tech companies are.
| bluecalm wrote:
| Your focus on profit is misguided. It's neither measuring
| economic activity nor is a good base for taxation.
|
| If someone makes a painting in 5 minutes and another guy
| pays 10M USD for it very little happened. 10M changed
| hands and the other guy has a painting on his wall. Yet
| somehow income tax proponents thinks it's fair to now
| take 50% from that transaction just because money changed
| hands. It's just not a good way to organize your tax
| system.
| pydry wrote:
| An extremely heavy tax on holding patents.
|
| Patents are essentially the "land" of the tech industry. With
| weaker patents there probably wouldn't be any such thing as
| "big tech" as it would be constantly disrupted from below.
|
| The exception is google's search index, which is, given its
| capital intensity and power requirements, practically a form
| of of heavy industry on a par with aerospace or automotive.
| sudosysgen wrote:
| Do you tax all patents equally? If so, the issue is
| obvious. If not, how do you determine how much?
| AnimalMuppet wrote:
| That's an interesting idea. It would cut down on the
| number of garbage patents, which is a huge positive in my
| view.
| tryptophan wrote:
| You let the free market decide the price of patents. Each
| year they are all put up for sale. Highest bid wins and
| gets the patent, and they can license it to others or
| keep it for themselves.
|
| 1% of patent value is paid each year as compensation for
| the government protecting the IP.
|
| Similar system could work for copyright property.
| pydry wrote:
| Probably equally, but the tax should be a function of
| age.
| logicprog wrote:
| Don't know if you'll consider these valid, but here are some
| critiques of the LVT and Georgism:
|
| - https://mises.org/wire/murray-rothbard-and-henry-george -
| https://mises.org/library/single-tax-economic-and-moral-impl...
| - https://www.econlib.org/archives/2012/02/a_search-
| theore.htm...
|
| The best criticism I've found, however, is here: https://www.or
| ionsarm.com/fm_store/Critique%20of%20Georgism..... It's from a
| more mainstream economist POV (I think?) than the other links
| and is far more fair and detailed.
| snidane wrote:
| Thanks for the articles providing feedback to georgist ideas
| - I've read some of these but some are new to me.
|
| The authors seem not to understand the topic unfortunately
| and have to use long prose as they are trying to wrap their
| head around it.
|
| The core problem and idea for solution is actually quite
| simple. Let me condense the topic into a tweet or two.
|
| ---
|
| Problem: You have a naturally occuring resource which is
| scarce and which nobody created. How do you allocate it to
| humans?
|
| Solution: Georgist simply say you can use an auction granting
| you possession for some amount of time instead of giving you
| time unlimited rights just because you were first to ask to
| use it.
|
| ---
|
| This is not a theory as it is applied in many systems such as
| DNS allocation or electromagnetic spectrum allocation.
| Georgists point out that similar allocation problem is for
| "land" (think location) and the same auction mechanism can be
| applied.
|
| Land was considered abundant in the past, especially as new
| continents were being discovered. Therefore nobody though
| about allocation, same as nobody considers allocation of air.
| If air got severely polluted (say by radioactivity) and only
| small fraction remained usable for humanity, you can be
| assured that the same allocation problem would exist for air.
|
| After discovering all continents on Earth land ceased to be
| abundant and now requires a proper allocation mechanism.
| Otherwise landlord monopolies will continue piling up profits
| because of their luck in winning the infinitely durable
| possession rights allocated years, decades and centuries ago
| in badly structured auction.
|
| Either we start inhabiting new planets or we solve problem of
| allocation of important scarce resources.
|
| What's funny - you solve this allocation problem and many
| societal problems disappear as if by magic. Somehow this
| suggests that land allocation is a major root cause of
| society.
|
| That's why Georgists dwell on it so much. You should start
| solving problems from the most serious ones with high impact.
| PeterisP wrote:
| Some time ago wealth and production of wealth was heavily tied
| to land, agriculture and various natural resources were key to
| the wealth of a nation.
|
| This is not the case any more - only a tiny fraction of our
| economy is tied to the land, primary production
| (agriculture/forestry/fishing and mining including oil) is just
| a few percent of the total economy; real estate/rents/leasing
| is perhaps 15% but most of that is related to the value of
| buildings, not the value of land. For extremely wealthy people,
| almost nothing of their wealth or income is in the form of
| land, because land is not worth that much. The current
| billionaires aren't major landowners, we're not Victorian age
| with most of the upper class being rentiers living off the
| rents of their land estates; the upper class is living off the
| dividends of their capital which is not tied to land and would
| be tax-free in a land-tax-only regime.
|
| Extremely large taxes on land (or are we talking about an
| orders of magnitude reduction in the toal tax burden, and not
| just about the type of taxation? If we want to drastically cut
| the total volume of taxes, then _that_ becomes the main topic,
| not the means of collecting taxes) while not the taxing the
| other 90% of the economy at all is not really a reasonable
| solution for modern times. It may have been reasonable in
| 1870s, but right now all it would just remove pretty much all
| taxes from all the very wealthy people and corporations, while
| putting all the tax burden on owners of farms and homes, and
| the 1.5% of USA economy that handles mining.
| snidane wrote:
| Land is still necessary for production.
|
| Maybe it will help to think of "land" as "location" since it
| is not the actual soil but the location which Georgists keep
| talking about.
|
| If you are a modern services company you need to have access
| to large pool of qualified people - which happens to be in
| big cities. So you need a great location for your office to
| attract people from this talent pool. Location (aka land)
| therefore is an important input to your business and you will
| pay a lot for it.
|
| Second, wealthy people park their money (regardless of
| origin, good or bad) in real estate. That drives living costs
| for non wealthy people.
|
| It turns out it is non-wealthy workers who pay taxes which
| fund infrastructure development which benefits wealthy owners
| of real estate by increasing value of their property.
|
| Georgists promote reversal of the present day funding scheme
| from nonwealthy workers to wealthy land owners with money
| parked in real estate. With the alternative being simple
| "taxing" of locational value to fund government services with
| two main outcomes
|
| 1. reducing tax burden on workers and small business 2.
| reducing cost of living (rents) by properly allocating land
| (mostly city land, not agricultural)
| MiroF wrote:
| "Land" for George is just things you can rent-seek on and are
| fixed in supply, that includes stuff like intellectual
| property, etc.
|
| > real estate/rents/leasing is perhaps 15% but most of that
| is related to the value of buildings, not the value of land.
|
| Not at all clear that most of that is related to the value of
| the building and also you conveniently neglect to mention
| that that is _the largest_ share of GDP out of any industry
| in the world.
|
| Further, land includes a lot more stuff that is not counted
| in the economic measures you are using. [0]
|
| [0]: https://www.emerald.com/insight/content/doi/10.1108/0306
| 8290...
| CydeWeys wrote:
| How do you determine the value of intellectual property if
| not by looking at how much income is actually being derived
| from said IP? And at that point, don't you just have the
| same income-based corporate taxation that we already have,
| with extra steps?
| jrs235 wrote:
| You hold an annual auction for the exclusive rights to
| the property that the tax will be derived from. The
| current owner can choose to keep the rights and pay the
| tax or they can choose to sell the exclusive rights to
| the highest bidder who must pay and then becomes the
| holder of the exclusive use rights and the new owner
| would then also pay the tax based on the known value.
|
| This might also usher out IP trolls and IP squatters.
| sudosysgen wrote:
| This will not help determine the true price of IP, as
| such a system will be endlessly exploited by bad faith
| actors.
| MiroF wrote:
| > exploited by bad faith actors
|
| What? How?
| MiroF wrote:
| > How do you determine the value of intellectual property
| if not by looking at how much income is actually being
| derived from said IP?
|
| I agree that determining the value of IP is difficult.
| Georgists would probably advocate that there is no reason
| for IP to be in private hands in the first place, nor any
| need for a system of IP.
|
| Alternatively, you could give temporary ownership of the
| IP to the creator (like we already do, except without the
| absurd lengths of time), then when that expires, put it
| up for auction to determine the pricing, then tax based
| on that.
| wazoox wrote:
| An interesting and derived point of view is geolibertarianism :
| http://geolib.com/essays/sullivan.dan/royallib.html
| watertom wrote:
| All income should be taxed the same.
|
| We should move to a a progressive tax system with zero
| deductions, eliminate capital gains, and inheritance taxes. Make
| the top tax rate of over $5M be 54%.
|
| We already know the effective tax rate for each bracket. Once we
| factor in the additional tax revenue from the top bracket we can
| adjust the other rates.
|
| I would consider a true capital gain exception. For the
| investment in new and private busines investment that generates
| revenue. This horseshit of buying stock and holding it for a
| period of time is NOT capital investment. The company does not
| benefit from the purchase of stock once they go public. It's a
| scam to allow the rich to avoid taxes.
| perilunar wrote:
| > All income should be taxed the same.
|
| Why?
|
| There's a big difference morally between earned and unearned
| income.
| NumberWangMan wrote:
| A lot of people focus on the fairness of the Land Value Tax, but
| the consequences of using one are just as interesting if not
| more. This tax has been put into practice in some cities in
| Pennsylvania, and there's evidence that it has a whole bunch of
| positive effects on the city, due to the way that it incentivises
| improving your property and making the most of your land (since
| you're going to be taxed on it pretty much the same either way).
|
| https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...
|
| I think we should be replacing property taxes with land value
| taxes pretty much everywhere. Aside from the benefits mentioned
| in the Strong Towns article linked above, putting the right
| incentives in place to build more densely in high-demand (aka
| high land value) areas would be a boon to making cities and towns
| more walkable and more amenable to public transit, and therefore
| reducing sprawl and pollution. It wouldn't get us all of the way,
| but it would help.
| CydeWeys wrote:
| I sort of agree that replacing property taxes with land-value
| taxes would make sense, so long as you can actually do the
| value assessments fairly and impartially.
|
| What doesn't remotely make sense to me is the suggestion that
| LVT should be the primary or even only tax, which you see
| others arguing for here in the comments.
| NumberWangMan wrote:
| I agree. I think the single tax was conceived in a time where
| most productive activities took the same amount of land.
| Nowadays, you have farms on the one hand, and something like
| tech companies on the other. It would be kinda crazy to tax
| them both based on the amount of land they use.
| LVTfan wrote:
| It isn't the AMOUNT of land they use, but the value of what
| they use. An acre of good farmland might be $2500. An acre
| in Manhattan might be $250 million and up. The rental value
| of the land is proportional to the value of the land.
|
| And when the Single Tax was conceived, it was already
| abundantly clear that urban land values were far above
| rural land values, and rising much faster.
|
| Few tech companies will want to locate where there isn't
| already broadband, good schools, cultural amenities, a
| range of interesting restaurants, and ready pool of the
| talents they need, not to mention infrastructure such was
| water, sewer, medical care, etc. And to the extent that
| they create jobs in such places, they will probably be
| quite welcome.
| NumberWangMan wrote:
| Hmm, that's a good point.
|
| Though, wouldn't an LVT that encourage companies to push
| all their employees to work from home, where possible?
| There are certainly benefits to that, but it might mean
| that certain industries get taxed much more heavily than
| others. Is it ok if distributed work-from-home software
| companies pay no tax at all, because they have no
| offices? The workers would pay tax on their own houses
| and apartments, but the company wouldn't.
|
| I guess it depends on whether you want to consider taxes
| to be a tool for limiting rent on scarce resources, or
| for balancing out wealth disparities. (aside from the
| main goal of raising revenue, of course) The two things
| are related, but not identical. The first seems like more
| of a proxy for what we actually want to do, which is to
| prevent concentration of wealth. Or is it more about the
| fact that collecting rent isn't an economically
| productive activity, so if we incentivize everyone to
| gain wealth by producing value, it'll make us all
| wealthier?
|
| To be fair, the hurdle that LVT has to pass is not to be
| perfect, but just to be better than what we have, which
| isn't a high bar. But it is worth thinking about the
| possible loopholes and edge cases.
|
| Should we also assume that switching to a single tax
| wouldn't exclude things like cigarette taxes and carbon
| taxes? These taxes are designed intentionally with
| particular incentives, just like the LVT, and unlike
| property taxes and income taxes. It would be a shame to
| take away the single best tool we have for fighting
| climate change, for example.
|
| Anyway, no obligation to reply, a lot of these questions
| are just me thinking out loud.
| epistasis wrote:
| If you take this a few more steps, what happens is that
| those employees that _can_ work more remotely without
| significantly decreasing productivity will leave, because
| of the savings. Which will decrease land prices from
| those that truly benefit from co-locating, increasing
| their profits.
|
| A LVT will generally greatly decrease the concentration
| of wealth. The massive concentration of wealth in the Bay
| Area economy comes mostly from land owners extracting an
| inordinate amount of wages, something far greater than
| the 30% that is typically considered livable. Tech takes
| from others far less than the landowners take from
| laborers.
|
| Tech is flashy and gets all the attention these days, but
| it's not the big story when it comes to exploitive
| capitalism in the Bay Area. What's really driving poverty
| and homelessness and evictions are the housing austerity
| imposed by wealthy landlords and landowners and
| homeowners to maximize their financial gains.
| LVTfan wrote:
| Paying more than 30% of one's income for housing-related
| expenses -- not just rent and utilities, or PITI plus
| utilities plus maintenance -- has become almost
| universal.
|
| It is a form of sharecropping.
|
| And then we must pay the dumb taxes on top of it. Sales
| taxes, wage taxes.
|
| Taxing land value fully would bring the purchase price of
| a home down to the depreciated value of the structure
| plus something for the lovely mature landscaping. Instead
| of a downpayment on the land and building, one would, in
| effect, be purchasing the building from its current
| owner, and taking over the stream of location-based
| payment to the community. No down payment on that.
| Mortgages would be smaller, and shorter, and the sum of
| the mortgage payment and one's land value tax would be a
| lot less than the current sum of one's housing-related
| costs plus the dumb taxes. If one wanted to move from one
| city to another, selling one's home would be easier
| because more people could afford it, and in one's new
| city, one could afford a similar home, because wages in
| the new city would support the higher tax on the higher
| land value there.
|
| Today, moving from Peoria to NYC or Silicon Valley is a
| whole other ballgame.
|
| Phase this in, removing the dumb taxes, one after
| another, and collecting an increasing share of the annual
| value of the land, and our children will have better
| opportunities to thrive.
| LVTfan wrote:
| A carbon tax and a tax on cigarettes are very consistent
| with the single tax. They're taxes on externalities
| imposed on the community.
|
| Solar energy is an infinite resource, so there is no
| reason to charge for it, but for scarce or finite
| resources, pay for what you take.
| yesbabyyes wrote:
| I'm not sure if Henry George brought this up (I think he
| may have) but it's definitely a part of the discussion
| today, to also incorporate other non-renewable resources
| / externalities / commons in a LVT-based system. Things
| including the electromagnetic spectrum, noise, light
| pollution, pollution, carbon, and intellectual property.
| I would include ads (they invade my visual cortex!).
| tlholaday wrote:
| > What doesn't remotely make sense to me is the suggestion
| that LVT should be the primary or even only tax
|
| When you were new to arithmetic, did it remotely make sense
| to you that the number of integers and the number of even
| integers was the same?
|
| If you find a surprising conclusion, consider reading the
| argument. Perhaps you will discover that you agree with the
| premises and the reasoning, and the conclusion will seem less
| surprising.
| free_rms wrote:
| If the arithmetic for this tax scheme doesn't seem to
| remotely work out, ruminations on the nature of infinity
| aren't going to set me at ease with it.
|
| Here in the finite world, most of the money moving around
| is in services, while most of the land is disconnected from
| that economy. How are you getting 1-2 trillion in tax
| revenue from land without making, say, farming economically
| unviable? Will it just be riddled through with exceptions
| and carveouts?
| LVTfan wrote:
| An acre of farmland might be worth $2500 or $5000, and
| that land has been improved by clearing, draining,
| fencing, etc. (improvements done by the current or an
| earlier owner or his tenant). LVT is based on the
| UNIMPROVED value of the land, so if there were an as-yet-
| uncleared acre nearby, it and the acre of farmland would
| be assessed at the same value.
|
| An acre in midtown Manhattan might be worth $250 million
| to as much as $1.25 billion, before we look at the
| building that is on it. (An acre is a big lot in
| Manhattan -- a whole city block.) A tiny lot in Manhattan
| sells hundreds of thousands of dollars, due to its
| location, which the seller didn't create. The old
| building on it may be worth nothing.
|
| And the 100x100 lot with a new hotel on it and the
| 100x100 lot next door with just a parking lot, or maybe
| just a chain link fence, would be assessed identically.
| The unimproved value of the land.
|
| Farmers would pay little under LVT. In fact they'd be
| advantaged, because their buildings and equipment would
| not be taxed. The owners of sites in our major cities
| would pay in proportion to the value of their site. And
| frequently the land is already leased to someone who puts
| a building on it, which gives a sense of the value of the
| land at the time the lease was negotiated -- a value
| which is not always made public.
|
| And why would we want to tax wages, or sales, if we could
| obtain from the value of land much of the revenue we
| need, while providing a boost to the economy via removing
| the deadweight loss of dumb taxes?
| free_rms wrote:
| So it's all on the assessor to decide the 'proper'
| unimproved land values to raise enough revenue while not
| driving the wrong people out of business? At a national
| scale?
|
| On that note, is the inherent land value of a lot in
| Bushwick way higher then 20 years ago now that they've
| gentrified? Is neighborhood desirability an 'unimproved'
| attribute?
|
| I very much get where you guys are coming from in a
| philosophical sense, but I feel like there are a million
| wrenches in the works that everyone's ignoring because
| the theory is so nice.
| jrs235 wrote:
| >On that note, is the inherent land value of a lot in
| Bushwick way higher then 20 years ago now that they've
| gentrified? Is neighborhood desirability an 'unimproved'
| attribute?
|
| Yes. Desirability and infrastructure near land increases
| it's unimproved value.
| Mirioron wrote:
| So if I want my tax bill to be cheap I should be against
| everything that the government does that would improve
| life around my home? Won't this take NIMBYism to a whole
| new level?
| epistasis wrote:
| Georgism was proposed in a time before we invented
| zoning, which was a system explicitly motivated by racial
| and class segregation. The Supreme Court case that made
| it constitutional is explicit about wealthy land owners
| having the right to exclude the poor from living in
| apartments nearby.
|
| So we need additional correctives to the additional
| injustices that capitalism has invented since Henry
| George's time, like our NIMBY-promoting land use decision
| system. We could, for example, adopt something like
| Japan's more federal system.
| tryptophan wrote:
| This is why its such a great tax - if the government and
| others are shelling out money to improve an area; you
| won't get to free ride off it and get huge property
| values.
|
| If you want to pay less taxes, you move to an area that
| doesn't do this sort of investment. If you want nice
| stuff, you can move in and pay for it, and be content
| that people who are against improvement are kicked out by
| higher taxes.
| scatters wrote:
| Currently NIMBYs complain about changes that they
| perceive will lower the value of their real estate.
| Complaining instead about things that would increase the
| value of their property seems like a good change.
| LVTfan wrote:
| The assessor's job is just to determine the value of the
| various sites. It is said that a group of locally
| knowledgeable people could sit around a table with a
| large map of the community, and they'd quickly reach a
| consensus about what is the most valuable site in the
| city. And then they could go block by block determining
| the relative value of the various neighborhoods. From
| that, a land value map could be derived, and likely it
| would get a few tweaks from the community.
|
| As Bushwick becomes popular, because of better transit,
| or community amenities or whatever, yes, the unimproved
| value of the sites served by them go up. A school
| develops an excellent reputation? Up go the land values.
| (Some say that in most suburban towns, the superintendent
| of schools is the highest paid employee, in part because
| s/he can influence "property values" -- more precisely,
| land values -- more than any other single person.)
|
| My first acquaintance with Elizabeth Warren came from a
| book she wrote about 2003, whose title was something like
| "The Two Income Trap: How Middle Class Parents are Going
| Broke" and in part it was from seeking the best public
| schools for their children, and paying a huge share of
| their income for it, seldom to be matched by single
| parents.
| CydeWeys wrote:
| I've never seen the numbers proposed in a way that makes
| sense.
|
| We know what the total budget is right now, at a
| national, state, and local level. And we know where that
| income is coming from -- mostly a mix of income,
| property, sales, payroll, corporate, and other taxes. And
| crucially we know exactly what the breakdown of that
| taxation burden is on various people in various financial
| situations.
|
| I want to see the numbers on this Georgian proposal that
| show the total revenue at federal, state, and local
| levels. Is the total amount of tax the same? Or are we
| talking about radically reduced tax revenue in total? And
| how does the distribution of who pays this tax change
| under the new system? Then, and only then, with these
| figures, we can look at the proposal and see if it
| remotely makes sense using the typical criteria of (a) is
| there enough funding for current levels of government
| services at all levels, (b) are the changes in who's
| paying how much in taxes fair and equitable, etc.
|
| I really want to see a full proposal on exactly what a
| typical individual and corporate tax bill for a variety
| of common situations, and I want to see that those
| numbers all add up to enough revenue.
| epistasis wrote:
| The problem with looking at it this way is that we can
| see what will happen in the first months or years of the
| new tax system, because values take a while to change.
|
| But what we really care about is what the system looks
| like a decade in, after property values have massive
| changes. And what it looks like 50 years in, after cities
| have been remade to reflect the shift in tax costs. I
| don't think any modern day Georgist argue for "single
| tax." Remember that income tax wasn't in place in the US
| when Henry George started writing!
|
| So any modern plan will Lokey include shifting tax bases,
| over time, to rely more heavily on LVT and less on sales
| tax and other regressive taxes. This will require
| adaptation and policy change over the years and decades,
| rather than saying ahead of time that they can predict
| the future with absolute certainty.
| MiroF wrote:
| > https://en.wikipedia.org/wiki/List_of_largest_companies
| _by_r...
|
| It does not seem at all clear to me that most economic
| activity is in services and not in resources/monopoly
| ownership.
|
| > farming economically unviable
|
| Farming is already unviable, that's why we subsidize it
| so heavily.
| free_rms wrote:
| If you filter that list to US companies, it does seem to
| be mostly in services, with logistics and manufacturing
| coming up next.
|
| I'm fine with taxing the hell out of Exxon, btw, or at
| least not giving them cash-in-a-briefcase subsidies, but
| you're not going to replace the income tax on that.
|
| We collected 3.46 trillion in income taxes last year. How
| do you get there on a land-value tax? Do we weight it so
| Manhattan land owners are paying more in tax than the
| entire midwest?
| snidane wrote:
| You don't need to raise as much when you don't need to
| subsidize rent-controlled housing, unemployment and other
| expenses related to high cost od living in places of
| abundant work opportunity.
|
| That said, you roll out the new policy gradually by
| reducing labor related taxes while increasing land and
| monopoly related ones.
|
| After several iterations you should expect convergence to
| a new stable position.
|
| It's better to prefer iterative deployment over big bang
| changes. Not only in software.
| pydry wrote:
| I think a lot of people don't really realize how much free
| money is creamed off by property owners and resource
| extractors.
|
| Not least because of their constant attempts to disguise what
| they do as productive.
|
| It's not like people are in a coffee shop and seeing "% of
| this product that goes to rent" built into the prices. They
| tend to assume that the price of the cup is basically the
| ingredients (which is why people balk at paying for tap water
| in restaurants).
| tryptophan wrote:
| Good point! Rent is like 12-13% of our countries entire
| GDP, which is kind of insane for just people paying others
| for owning a piece of land.
|
| If a high (but arguably appropriate and fair) land value
| tax was implemented and captured like 8-10 % points of
| that, it would fund like 70% of the government.
| DubiousPusher wrote:
| The reason Henry George thought I should be the only tax is
| because of the economic consequences. Since land is by and
| large fixed in quantity and a society's need of land a Land
| Value Tax would not create inefficiencies in the market the
| way other taxes like tariffs or an income tax do.
| naravara wrote:
| You would probably want to include some tax advantaged
| incentives to maintain a bit of public space, public art,
| parks, or just green spaces. Giving over some portion of your
| land for public benefit, even if limited use, should be
| encouraged rather than penalized. It would also encourage more
| interesting usage patterns and development than pure land-use
| maximization would do. The latter might have you end up with
| block after block of square high rises, which might glide us
| past the point of diminishing returns to density.
| LVTfan wrote:
| Frederick Law Olmsted realized early on that even a huge
| project like Central Park could be funded from the increase
| in land value it created in the neighborhoods surrounding it.
| Palomides wrote:
| some cities already do this, with, it seems, mixed results
|
| https://en.wikipedia.org/wiki/Privately_owned_public_space
|
| https://cooperativecity.org/2017/11/01/privately-owned-
| publi...
| vertex-four wrote:
| The problem with "privately owned public space" is that it
| tends to reduce demand for actual public space; the majority
| of people never do anything that would offend the land owner,
| so never see the problem, while e.g. political speech, actual
| freedom, and all the other great things we get out of public
| space are silenced.
| EGreg wrote:
| There was a time - for over half a century - when Progress and
| Poverty was the best known economics book in the world. If you
| buy one, it has a who's who of people endorsing it, from famous
| economists to writers to presidents.
|
| And somehow, in the last 50 years, we have all forgotten it, and
| some people only remember the land tax. Not only that, but the
| same debates rage today, about why there is still so much poverty
| even while there has been so much progress. Libertarian people
| know Ayn Rand and Murray Rothbard before they know Henri George,
| about whom Milton Friedman had a lot of good things to say.
| chii wrote:
| > why there is still so much poverty even while there has been
| so much progress
|
| there's been an objective improvement to the % of people in
| poverty over the past few centuries.
|
| It's just that there's an even larger improvement to those who
| were rich, relative to the improvements to the poor.
|
| If you had a choice, you would choose to be poor today, than to
| be poor a century or two ago.
| jhpriestley wrote:
| would you really choose "the wire" over "little house on the
| prairie"? How can such a comparison possibly be "objective"
| anyway?
| bsanr2 wrote:
| Why does this matter?
| MiroF wrote:
| Yes, and peasants under feudalism were much better off than
| they were as cavemen - none of that justifies economic/social
| stagnation
| JSavageOne wrote:
| > If you had a choice, you would choose to be poor today,
| than to be poor a century or two ago.
|
| The classic false dichotomy that somebody always feels the
| need to point out in justifying the status quo.
| roenxi wrote:
| The status quo is a jawdroppingly fast and totally
| unprecedented reduction in poverty [0]. If my goal were to
| reduce poverty; my strategy would be to defend the status
| quo.
|
| [0] https://ourworldindata.org/extreme-poverty
| banads wrote:
| And yet, there are more people living in poverty than the
| entire global population in 1950.
| MiroF wrote:
| You see how that's non-responsive to the parent, right?
| roenxi wrote:
| If parent wanted a direct response they should have
| posted a concrete suggestion. There wasn't a lot there to
| respond to.
|
| Technically speaking; there isn't anybody who would even
| blink at the idea of making things better. The status quo
| exists because there are a bunch of people who think
| [proposed change] makes things worse. Poverty isn't even
| a particularly important aspect of the decision making
| process and its extreme form might be eradicated in a
| generation if Africa gets hit by the same forces as Asia.
|
| It will be difficult to make such rapid improvement out
| to be in need of major changes.
| EGreg wrote:
| I upvoted you, to counteract the downvotes.
|
| You are correct... obviously science and technology have
| improved the lot of the ordinary person, and made us all
| much, much richer.
|
| The main issue is that automation tends to hurt workers while
| it helps consumers. And since most people are both -- they
| have to work harder and harder just to stay in place. Until
| we put in place a UBI and universal health insurance, pass
| overtime laws to shorten the workweek etc. we will have
| technology creating demand shocks for human labor, as
| happened before the Great Depression on farms, and has
| gradually happened in manufacturing, and is about to happen
| to white collar jobs and menial jobs.
|
| In the 50s, a single man could support an entire household on
| one paycheck. Women didn't compete with men for those jobs,
| but rather did jobs that now are not valued by the market.
| Automation didn't make employers not need their employees, so
| they would retain them for decades as they built experience.
|
| Today, we have two year stint-- wait that was 20 years ago,
| today we have temp jo-- ait no, that was last decade, now
| it's the gig economy with no protections. You see where I'm
| going with this? Automation and outsourcing is once again
| putting people in a race to the bottom.
|
| Yes, electronics are cheaper than ever. But some things like
| rent / land just go up in price, they need a UBI. Paid for by
| land taxes maybe.
|
| _Edit: funny, I am getting downvoted also, for agreeing with
| you_
| MiroF wrote:
| > Edit: funny, I am getting downvoted also, for agreeing
| with you
|
| If the parent was being downvoted for a certain view, why
| is this at all surprising?
| EGreg wrote:
| Because downvotes are not supposed to be for
| disagreement. This is HN. The standard is to downvote low
| quality comments only.
| MiroF wrote:
| Sure, but presumably if some people are using downvotes
| for a different reason, there's no reason it would be
| restricted to just one comment.
| roenxi wrote:
| Downvotes are explicitly a tool for when people disagree.
|
| > https://news.ycombinator.com/item?id=117171
|
| Although in a practical sense that is bowing to the
| inevitable.
| nabla9 wrote:
| "The rent of land, therefore, considered as the price paid for
| the use of the land, is naturally a monopoly price. It is not
| at all proportioned to what the landlord may have laid out upon
| the improvement of the land, or to what he can afford to take;
| but to what the farmer can afford to give."
|
| -- Adam Smith, An Inquiry into the Nature and Causes of the
| Wealth of Nations, Book I, Chapter XI "Of the Rent of Land"
| toohotatopic wrote:
| This assumes that the farmer has to remain a farmer. This can
| be true for one generation, but the next generation can
| choose another profession. People don't become farmers if
| they have to pay too much.
| andrepd wrote:
| That would be true in a perfect world with 0 impediments to
| social mobility. A socioeconomic "frictionless vaccum" of
| sorts. In the real world, social mobility is far from
| perfect.
| rswail wrote:
| Assume a perfectly spherical farmer in a frictionaless
| socioeconomic vacuum... sounds like physics.
| sudosysgen wrote:
| Physics before computers and differential equations
| toohotatopic wrote:
| And yet the industrial revolution has allowed children of
| farmers to take other professions.
| MiroF wrote:
| > This assumes that the farmer has to remain a farmer.
|
| How does it assume that?
| toohotatopic wrote:
| Otherwise it wouldn't be a monopoly and the farmer
| wouldn't have to accept the offer. The farmer, or rather,
| the human, can source resources from other markets and
| sell goods or services that don't depend on farmland.
|
| Once that happens, and nobody accepts the high price, the
| landlord has to lower the price until somebody accepts
| his offer.
| MiroF wrote:
| The existence of substitutes doesn't make a monopoly no
| longer a monopoly.
|
| Bell was still a telephone monopoly even if I could have
| used carrier pigeons instead.
| toohotatopic wrote:
| It's not the same. You cannot transport voice over a
| pigeon, at least not instantly.
|
| If you don' allow substitutes then every brand has a
| monopoly on the products of their brand. Technically
| that's a monopoly. But nobody complains about McDonalds
| having a monopoly on McDonalds burgers.
| MiroF wrote:
| And you can't farm without farmland. Selling other goods
| and services is a very imperfect substitute for farming.
| Other burgers are a pretty good substitute for McDonald's
| burgers.
| toohotatopic wrote:
| We are back at the assumption that farming cannot be
| substituted.
|
| For a society, it is true that farming can hardly be
| substituted. But for an individual, it's more than
| possible to have another profession.
| sudosysgen wrote:
| Well no. Becoming a farmer takes years, and our society
| needs to keep more or less the same number of farmers.
| aww_dang wrote:
| "Rather than nationalize land outright, the single taxers would
| levy a 100 percent tax on the annual land rent -- the annual
| income from the site -- which amounts to the same thing as
| outright nationalization." --Murray Rothbard
|
| Georgism is reasonably well known among free-market enthusiasts
| and libertarians.
| tlholaday wrote:
| Rothbard's error: under land nationalization, state actors
| decide who uses the land; under single tax, who uses the land
| is determined by auction.
| EGreg wrote:
| In fact it is similar to the error of those who equate
| slavery and wage slavery. With the latter, you have a
| choice of employer, even without safety nets.
| sudosysgen wrote:
| Actually, no. Land in the PRC is under state ownership, but
| except for exceptions that would tall under eminent domain
| here, it is mostly priced by auction, outside of
| agriculture.
|
| In any case, public land ownership is not in conflict with
| rent auctions.
| aww_dang wrote:
| The single quote is understandably a narrow view of the
| larger article. My view is that the 100% tax on income from
| the land removes profit motive and price discovery in a way
| which is similar to outright nationalization. However, I
| agree with your assessment of the quote as a stand alone
| item.
|
| https://mises.org/library/single-tax-economic-and-moral-
| impl...
| snidane wrote:
| It removes profit incentive of reselling land to somebody
| who wants to use it. It doesn't remove profit incentive
| of the activity you'd want to perform on that land.
|
| Land under 100% LVT only becomes an input to production.
| And makes it unprofitable for holding it for somebody
| else.
|
| When you are in business of making apple pies you simply
| buy apples as input. You don't need any middlemen holding
| them for you if you can hold them yourself.
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