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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?

#81

Post by runnerup »

PragmaticPulp wrote: post #69
MrPowers wrote: post #55

Earlier quoted context omitted.

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…

> We’d have an entire book full of LVT modifiers, exceptions, and tax breaks in no time.

Indeed, and even without these, we'd have the "LVT assessors" getting bribed or being buddy-buddy with rich landowning families. Obviously we already have that today with property taxes (not to mention permit approvals).

Paraphrasing what you said elsewhere, "The interesting part is to explore the net effects."

I suspect LVT would end up, overall, encouraging building more housing. It could even be sold as "lowering or eliminating taxes (on improvements to the land)". I also suspect there would be no end to the shenanigans played to manipulate LVT's. I doubt it would be much worse than today's situation, but I might be very surprised!

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

#82

Post by GavinMcG »

slibhb wrote: post #56
GavinMcG wrote: post #46

Earlier quoted context omitted.

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.

I didn't say you were against it, either! It's also worth criticizing the things you're for.

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

#83

Post by dsizzle »

bradleyjg wrote: post #41
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…

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.

Isn't this already done as part of property insurance?

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

#84

Post by AnimalMuppet »

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…

Well, 1 is right. Land just doesn't matter that much today.

Take Google, for instance. What does Google own? They own some land - some fairly expensive land. But they also own a bunch of code and data, and they own google.com, which is probably the most valuable of the three. Why tax the land, and not the domain name?

And, if you go by just about the first thing the article says, if your goal is to cut down on rentiers, well, land isn't the primary mechanism for rentiers any more. Intellectual property, maybe?

From the article:

> For Georgists, land is the key to understanding the whole economy.

Yeah... it really isn't. That was becoming decreasingly true even in 1879; now it's laughable.

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

#85

Post by runnerup »

MrPowers wrote: post #80
PragmaticPulp wrote: post #69

Earlier quoted context omitted.

> 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…

All the land value taxes would be public record. Think it'd be hard to have your land valued differently than your neighbor.

This LVT is lower because the land is closer to a highway, therefore less desirable due to pollution.

This LVT is higher because the land is closer to a highway, therefore more desirable due to ease of commute.

This LVT is lower because the land is closer to heavy industry, therefore less desirable due to pollution.

This LVT is higher because the land is closer to heavy industry, therefore more desirable due to being closer to the largest employer.

This LVT is lower because the land is more likely to flood.

This LVT is higher because the land is closer to the beach.

I agree these superficial "examples" would appear absurd to the people who own the land, but so much of property taxes are already shenanigans. I'm not convinced that Georgist LVT will make this any worse than it already is, but things are currently terrible in this regard and I expect they'll continue to be terrible with a Georgist LVT.

Maybe a little better because at least with LVT there would be fewer variables to hide the nepotism behind.

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

#86

Post by sokoloff »

TulliusCicero wrote: post #63
AnimalMuppet wrote: post #51

Earlier quoted context omitted.

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 l…

The last paragraph is how it appears on the property tax statement, but I think the assessment isn’t created ground-up, but rather more from a market price down, starting with a likely sale price as an input rather than an output and deriving land and improvements prices so as to sum the input figure.

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

#87

Post by SilasX »

floober wrote: post #39
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

True, but this is a case where a difference in degree becomes a difference in kind. There’s a huge difference between “taxes are higher this year” and “taxes will be specifically levied in a way to make that asset of yours worthless”. Generally, the latter is considered a taking that merits compensation like in the case of eminent domain.

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

#88

Post by CryptoPunk »

Any transition to a LVT should accompany one-time compensation to existing land owners.

The same should apply to any other repeal of rent-seeking institutions, whether it's anti-labor-competitive laws privileging labor unions, licensure barriers privileging taxi medallion holders, etc.

The British used this method to end slavery throughout their empire, which meant: 1. much more rapid end to slavery, due to less political opposition to its abolition, 2. no costly civil war and enduring sociopolitical grievances that emanated from it.

Economic analyses indicate that compensating rent-seekers at an amount equal to the expected loss of economic utility over their lifetime from the elimination of their rent-seeking opportunity, as part of a reformation to end the institutions that enable their rent-seeking, leads to net economic gains, because the economic efficiency gains from expedited abolition of the rent-seeking far outweighs the cost of the compensation.

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

#89

Post by moriwara »

hammock wrote: post #4
sokoloff wrote: post #2

I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent. In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. https://constitutioncenter.org/interactive-constitution/inte...

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.

Not pure LVT but Pennsylvania does have a two-tiered system where land is taxed at a higher rate than improvements https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...

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

#90

Post by aeternum »

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...

This really doesn't make sense. Views matter for example, land with a blocked view should be worth less than land without the blocked view.

Land immediately adjacent to a golf course or park is often valued higher. Land immediately next to railroad tracks or industry, not so much while the discount drops off steeply just a few blocks away.

Water rights, drainage, soil quality, contamination, roadway access all matter a great deal for more commercial land.

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