Does Georgism work? Is land a big deal? • Hacker News Board

Re: Does Georgism work? Is land a big deal?

#31

Post by runnerup » Thu, Dec 09, 2021, 3:31 AM UTC

lr4444lr wrote: post #6

It's used as the primary source of funding for county and town level government in most parts of the USA already. Does it "work"? Like any other tax system, it has its pros and cons. But one of the big drawbacks I see to federalizing it is the extremely relative value of property from region to region. It even dwarfs the relative difference in income taxes for similar jobs in dissimilar places. Yeah, you could have w…

Ignoring the confusion over "property tax" vs "land-value tax" I think your complaint about:

> extremely relative value of property from region to region

would apply equally to income tax and sales tax. Is there some other tax that you feel doesn't have high variance between regions? You did note:

> It even dwarfs the relative difference in income taxes for similar jobs in dissimilar places

It may be worth noting that Mississippi has a per-capita GDP of $40,000 (income per person), whereas New York State is $90,000 per person. The median home sale price in Mississippi is $163,600 whereas in New York (state) it is $336,000. It would appear that the ratio between incomes-actually-worked matches the ratio between homes-actually-lived-in. Each are a bit over twice as high in New York as in Mississippi.

As an aside, one of the benefits of property tax (especially over sales tax) is the relative stability of it. Property values don't change nearly as much year-to-year as consumer spending does. Therefore, school districts can more easily plan 5-to-10 year budgets when they derive their income from property taxes rather than sales taxes.

Re: Does Georgism work? Is land a big deal?

#32

Post by thesausageking » Thu, Dec 09, 2021, 3:31 AM UTC

> It's more expensive to live in the heart of New York City than in the middle of Nebraska. That's not because construction costs are orders of magnitude more expensive in New York, but because the land is orders of magnitude more expensive.

This is missing a key element: The value of a parcel in NYC is partly from the land itself but most of it comes from the development rights. If you have parcel which a 5 story building could be built on, that parcel is worth 2-5x more if the city grants you the right to build a 100 story building there. The limiting factor in cities tends to be zoning and development rights more than land itself.

Re: Does Georgism work? Is land a big deal?

#33

Post by Schiendelman » Thu, Dec 09, 2021, 3:32 AM UTC

runnerup wrote: post #16

The pro-Georgist essayist lists the three biggest challenges to Land-Value Tax as: > 1) Land might have been a big deal in 1879, but it just doesn't matter much today > 2) Landlords will just pass Land Value Tax (LVT) on to tenants, so it won't work > 3) In real life you can't accurately assess land value separately from improvements, so even if LVT would work in theory, it doesn't work in practice I personally under…

Most places already assess the value of land separately from improvements; when you get your property tax bill they’re often broken out. The process of separate assessment is well established!

Re: Does Georgism work? Is land a big deal?

#34

Post by harimau777 » Thu, Dec 09, 2021, 3:32 AM UTC

slibhb wrote: post #28

I think the biggest problems with Georgism are 1. in some sense it calls for the expropriation of land by the government 2. it's unfair to change the rules in the middle of the game and 3. it's logistically difficult to carry out. As far as unfairness goes, imagine a couple, 65, retired, paid off their mortgage, paid income taxes all their lives until retirement, now living off their savings. It's unfair to start tax…

I think that's a good point. On the other hand, it's unfair that all of the valuable land has been claimed by people before I was even born.

Re: Does Georgism work? Is land a big deal?

#35

Post by hahaxdxd123 » Thu, Dec 09, 2021, 3:33 AM UTC

MisterMower wrote: post #26

“But won't landlords just raise the rent to make up for the LVT, passing the burden of the tax on to the tenants? Georgists say no, because land is special in that it is scarce and nobody can make any more of it. Indeed, LVT is a rare form of taxation that actually boosts the economy, because it discourages rent-seeking and speculation. Some Georgists even go so far as to say that LVT can raise enough revenue to repl…

Landlords in California might benefit from Prop 13, in which case their property taxes might be 10% of the landlord across the street. Yet all things equal, they charge the same. Landlords already charge what the market will bear. Taxing them more or less does not change that or else there would be $600/mo 4BRs in SF for rent.

Since your comment is deliberately inflammatory, I will do the same - do you have any basic economic training?

Re: Does Georgism work? Is land a big deal?

#36

Post by Schiendelman » Thu, Dec 09, 2021, 3:33 AM UTC

slibhb wrote: post #28

I think the biggest problems with Georgism are 1. in some sense it calls for the expropriation of land by the government 2. it's unfair to change the rules in the middle of the game and 3. it's logistically difficult to carry out. As far as unfairness goes, imagine a couple, 65, retired, paid off their mortgage, paid income taxes all their lives until retirement, now living off their savings. It's unfair to start tax…

Many places already have protections for people on fixed or low incomes, that reset when a property is sold. Property tax can vary widely today; LVT can lower it for an owner as much as raise it.

Re: Does Georgism work? Is land a big deal?

#37

Post by tormeh » Thu, Dec 09, 2021, 3:33 AM UTC

slibhb wrote: post #28

I think the biggest problems with Georgism are 1. in some sense it calls for the expropriation of land by the government 2. it's unfair to change the rules in the middle of the game and 3. it's logistically difficult to carry out. As far as unfairness goes, imagine a couple, 65, retired, paid off their mortgage, paid income taxes all their lives until retirement, now living off their savings. It's unfair to start tax…

It only takes one such case to make the tax look bad. But a LVT for corporate owners makes sense. Maybe one for young people too, only excepting retirees.

Re: Does Georgism work? Is land a big deal?

#38

Post by kiba » Thu, Dec 09, 2021, 3:34 AM UTC

tormeh wrote: post #24

kiba wrote: post #19

Earlier quoted context omitted.

If we're talking about no political restriction, I would go even further. Get rid of the mass market cars and implement trams as the basic suburban and urban feature. It could even carry some light freight for last mile logistics. As for the rest, it's bicycles, even velomobiles.

Trams suck, IMO. The only good thing about them is they often get right of ways, which can also be given to busses. Subways are where it's at. Long trains that don't have to deal with traffic lights.

Subways are expensive to construct, and only make sense once density become high enough.

So, in my conceptualization, towns start out with trams, which then connect to larger urban center.

Re: Does Georgism work? Is land a big deal?

#39

Post by floober » Thu, Dec 09, 2021, 3:34 AM UTC

slibhb wrote: post #28

I think the biggest problems with Georgism are 1. in some sense it calls for the expropriation of land by the government 2. it's unfair to change the rules in the middle of the game and 3. it's logistically difficult to carry out. As far as unfairness goes, imagine a couple, 65, retired, paid off their mortgage, paid income taxes all their lives until retirement, now living off their savings. It's unfair to start tax…

> 2. it's unfair to change the rules in the middle of the game

Is that not the very purpose of legislation? Laws are not written in stone

Re: Does Georgism work? Is land a big deal?

#40

Post by SR2Z » Thu, Dec 09, 2021, 3:34 AM UTC

MisterMower wrote: post #26

“But won't landlords just raise the rent to make up for the LVT, passing the burden of the tax on to the tenants? Georgists say no, because land is special in that it is scarce and nobody can make any more of it. Indeed, LVT is a rare form of taxation that actually boosts the economy, because it discourages rent-seeking and speculation. Some Georgists even go so far as to say that LVT can raise enough revenue to repl…

You've totally missed the point. Landlords are ALREADY passing the land rents off to tenants. The difference here is that the tax would prevent the land rent from accruing to the landlord by taxing it away from them.

It doesn't cause competition for scarce resources to stop - instead, it makes the market more efficient because everyone has to pay their land rents. A single story house in the middle of a forest of skyscrapers would suddenly be faced with a gigantic tax bill and be forced to sell.

The entire goal of the tax is to ensure that profits go to the people who generate them. Landowners are almost never responsible for large increases in the value of their land.