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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?

#61

Post by lalaithion »

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…

That's not quite what deadweight loss is; deadweight loss is when you can produce apples for $1, but a tax induces you to have to sell them for $1.10, preventing everyone who would be able to buy them at $1.05 from getting apples.

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

#62

Post by nabla9 »

Adam Smith’s definition of 'free market' wasn’t freedom from governments, it was freedom from rentiers.

Land is big deal. Value of land comes mostly from it's surrounding infrastructure. Taxing it is one of the least harmful taxes.

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

#63

Post by TulliusCicero »

AnimalMuppet wrote: post #51
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…

> 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?

Yes, because we're talking about the land -- really, more like the geographic space than the literal land -- and not the buildings.

> 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.

Okay. And?

> So, if you want to disentangle the price of the land from the price of the building

For property tax purposes I think it's already common to value both the land and the buildings and then sum them up for the total property value.

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

#65

Post by MrPowers »

lalaithion wrote: post #61
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…

That's not quite what deadweight loss is; deadweight loss is when you can produce apples for $1, but a tax induces you to have to sell them for $1.10, preventing everyone who would be able to buy them at $1.05 from getting apples.

I'm using the textbook definition of deadweight loss: https://en.wikipedia.org/wiki/Deadweight_loss

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

#66

Post by AnimalMuppet »

sokoloff wrote: post #10
hammock wrote: post #4

Earlier quoted context omitted.

Why does everyone assume new policy has to be enacted at the federal level? Whatever happened to states rights? This is a perfect use case, have a couple states try it and a couple not and see what happens.

In part because the article makes the very common argument “[LVT would raise] a bunch of revenue that can lower or even eliminate other less efficient taxes, such as sales and income taxes.” It’s often argued (more strictly than above) that LVT could replace or substantially reduce income taxes and that pretty much means it’s federal or it won’t offset much.

There is no federal sales tax. There are states that have income taxes, too.

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

#67

Post by [deleted] »

AnimalMuppet wrote: post #53
MrPowers wrote: post #44

Earlier quoted context omitted.

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"...

[deleted]

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

#68

Post by temp8964 »

I always hate those kind of policy discussions. They assume the world is a dead water. They make some policies and small changes follow, like throw a small rock into a pond. The reality is that if their proposed policy changes really get implemented, the change in the real world will be chain reactions. Not the changes you want to see will happen, lots of things will happen. People will change their behaviors. Developers, land owners, renters, factory builders, city planners will all change their behaviors, because of the inventive structure is changed.

In the end, this kind of armchair discussion is just a mind game for "rational thinking." What really matters is people who discover and develop new frontiers.

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

#69

Post by PragmaticPulp »

MrPowers wrote: post #55
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.

> There are no tax loopholes to evade land taxes.

Of course there is! You just lobby or bribe your politicians to value your land at a lower amount. They make up for it by valuing someone else’s land at a higher amount.

So much of the LVT discourse assumes perfect valuations, but if you reduce everything to these variable valuations then the politics will just start modifying the valuations. We’d have an entire book full of LVT modifiers, exceptions, and tax breaks in no time.

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

#70

Post by nwah1 »

MrPowers wrote: post #55
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.

That's the real reason it "won't work." Enormous vested interests oppose it.

Of course, an engaged and educated populace could overcome that.

Or an enlightened elite class who realized they could boost overall wealth and technological advancement with efficient fiscal policy... short run pain for elites in exchange for long run benefits (for them and everyone else).

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