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Does Georgism work? Is land a big deal?

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

#51

Post by AnimalMuppet »

MrPowers wrote: post #7

I'm not a huge fan of how deadweight loss is defined in the article: > virtually all economists agree that land value tax has zero "deadweight loss"–a fancy word for a drag on the economy that makes certain activities no longer profitable Property taxes tax the land + the building. Building taxes are complicated to assess. They require tax assessments, appraisers, tax code, accountants to compute depreciation schedul…

But if we go to a land tax, don't you have similar problems? Can you really say that land that has a 20-story highrise condo on it has the same value as the same land with a house on it? Because if you're going to buy the land - no matter what you intend to do with it - you get the land with the existing building.

So, if you want to disentangle the price of the land from the price of the building, then you're back to appraisers and accountants... and deadweight loss.

And:

> A land tax wouldn't impose an additional tax to the landowner for improving the value of their land.

How would it not? Do you just keep the land price from 1874 as the "value"? Or do you use the current price of raw land? What's the current price of raw land in Manhattan?

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

#52

Post by shkkmo »

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…

> 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 taxing them based on the value of the land their home is built on, which they already paid for.

Taxes don't end at retirement. I fail to see how this substantially differs from any other change to the tax code.

The retired couple if your example had the opportunity to buy real estate that most young people today will not have. Those same young people have been paying into a social security system that they will be lucky to see much if any payout from.

So what is "fair" here? Is it really fair to let those young people pay higher rents so that the old people don't face the challenge of moving to a new domicile? Indeed, those high rents directly finance the mortgages of property owners and thus increase the speculative value of the property, enriching the very same elderly couple that you are worried about being unfair towards.

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

#53

Post by AnimalMuppet »

MrPowers wrote: post #44
bradleyjg wrote: post #41

Earlier quoted context omitted.

Land taxes are far far more difficult to calculate than property taxes. Impossible to do well in some cases. To know what land and the buildings on it are worth you can look to what people are willing to pay to buy them. There’s no similarly straightforward way to value the separate parts. So you’ll end up with a lot more wasted expert time for a less accurate result.

Nah, it's really easy to calculate the value of the land. Once you calculate the value of the land, then it's pretty much applicable to the whole neighborhood too. It's a one-and-done analysis. This isn't my opinion. There's lots of economic research to back this up. EDIT: some support: https://www.progress.org/articles/the-implementation-of-land...

Some evidence would be more convincing than a glib "nah, I'm right"...

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

#54

Post by nwah1 »

Schiendelman wrote: post #33
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!

True. But the argument that assessment is subjective, and prone to error, is true. But such errors in land value are at least fairly easy to peer review. It is all a matter of public record.

But for income, if you hide it all in the Cayman Islands, who is to say how much income you made or not? The errors could be off by many orders of magnitude and we wouldn't even know.

And more importantly, taxing the right thing imperfectly is better than taxing the wrong thing perfectly.

Taxing people imperfectly for polluting is good. Taxing people for doing good deeds is bad, even if assessed perfectly.

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

#55

Post by MrPowers »

PragmaticPulp wrote: post #18

I was excited to read this article, but by the end it felt like a jumble of unrelated conjectures examined in isolation from each other that all seem to be presented in a way that deliberately ignores any downsides: For example: > Also, keep in mind that LVT would see the elimination of the portion of property tax that falls on buildings. I just checked my own property tax records (I live in the suburbs of a medium-s…

For the winners / losers computation, one thing that's clear is that land value taxes are highly progressive.

Rich people own most of the land. There are no tax loopholes to evade land taxes.

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

#56

Post by slibhb »

GavinMcG wrote: post #46
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…

Saying that something has a side effect (here: unfairness) is a really shallow criticism. The real question is whether the side effect can be productively/efficiently dealt with.

I didn't say I'm against Georgism, I just listed what seem to me the biggest obstacles in implementing it (some of which may be overcome). Sorry to hear you found my post shallow.

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

#57

Post by boomboomsubban »

PragmaticPulp wrote: post #18

I was excited to read this article, but by the end it felt like a jumble of unrelated conjectures examined in isolation from each other that all seem to be presented in a way that deliberately ignores any downsides: For example: > Also, keep in mind that LVT would see the elimination of the portion of property tax that falls on buildings. I just checked my own property tax records (I live in the suburbs of a medium-s…

>The article also had an unsettlingly high number of “If we assume that X is true, then Y is a reasonable conclusion” while completely sidestepping an examination of whether or not “X” was true or even reasonable

Those are generally after listing a range of different projections, and are something like "if we assume the lowest projection is true, we see x, with the highest we see y. Both are significant amounts."

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

#58

Post by bedobi »

I don't like how "Georgism" and any number of other literally hundreds of years old economic ideas are presented as some underdog, unknown thing. Just no. Economists know about these things, and they're pretty much universally in favor of taxing land, just like they're pretty much universally in favor of taxing carbon and any number of other things.

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

#59

Post by runnerup »

harimau777 wrote: post #42
runnerup wrote: post #21

Earlier quoted context omitted.

Indeed! Thank you. Too many people don't see the constitution as the living document it was intended to be. It's so weird to me to keep hearing "that would be unconstitutional" as if it's some ultimate argument-ender for these thought experiments. Also, in real life, I'd be happy to see a constitutional convention to resolve quite a few things - 2A, 4th amendment, abortions, 100-mile constitution-free-zone, etc. Seem…

How would we go about actually changing the constitution? It seems like there's too much polarization and entrenched interests for that to happen.

Indeed. In an environment where we can barely pass meaningful laws, we certainly cannot change the constitution. It just seems like a tragedy that we use laws and court rulings where we should be using amendments, and using executive orders where we should be using laws.

Seems it would be much, much more stable to enforce the constitution to its (letter | intent | reasonable modern interpretation) and force congress to deal with adjusting the constitution....than to short-sightedly ignore the constitution for immediate political and judicial expedience.

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

#60

Post by nwah1 »

trophycase wrote: post #27

Is Georgism the new fad philosophy? Seems like every few years you see things like this crop up and the technies go all nuts over it. Stoicism was the last big one. I know they aren't strictly related but seeing these fad philosophies is interesting.

Stoicism is hard to call a fad. It has persisted as an important philosophy for over two millennia.

Georgism is a distilled moral argument that is core to classical liberalism. Classical liberalism is centuries old, as is georgism.

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