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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?

#91

Post by whakim »

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…

IMO the biggest issue with property taxes, land taxes, or any other similar idea, is that they arbitrarily tax one kind of wealth over others. Why should a person who owns a house worth $500k (and perhaps has a mortgage on it) pay not only the exact same tax rate, but also the amount of tax as a person who owns a house worth $500k (and doesn't have a mortgage on it), but also has $5 million in other assets? (This isn't even getting into the fact that the wealthier you are, the less of your total wealth is likely to consist of land/property/etc.)

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

#92

Post by dane-pgp »

tormeh wrote: post #37
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.

> Maybe one for young people too

If we're concerned about fairness in the housing market, a special tax which only applies to young people isn't the policy I'd recommend.

As an alternative, you could give each person an allowance of land area/value (perhaps based on the median value, or an equal share of the nation's land territory) and say that anyone who uses more than that (with a mansion, or multiple homes) would pay the tax, and perhaps people who own less land than that should get a rebate.

Obviously corporations wouldn't get such an allowance, as they are not people for the purposes of this calculation. Also, you could make the tax exponentially progressive, to put a downward pressure on the size of land holdings and encourage competition between landlords.

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

#93

Post by CryptoPunk »

nabla9 wrote: post #62

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.

Taxing land:

* violates no human rights (unlike taxes on income and sales)

* costs very little to assess and enforce (unlike taxes on income and sales)

* is impossible to evade (unlike taxes on income and sales)

* causes no economic harm in disincentivizing productive activity

* enables the funding of public goods (in this respect, it is similar to all other forms of taxation), and

* increases economic efficiency by discouraging wasteful use of land.

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

#94

Post by mindslight »

TulliusCicero wrote: post #71
mindslight wrote: post #43

Earlier quoted context omitted.

> Property taxes can discourage you from using your land to its highest and best use I agree. > Land taxes offer the opposite incentives. They encourage you to make your property better. But it doesn't make the converse true. At most, you can say that high enough land value taxes encourage making real estate generate more revenue, to pay the tax. But given the current economy's tendency to optimize everything legible…

> But it doesn't make the converse true. It does work that way, though. Except it's not exactly 'better', but rather 'more economically productive', which may or may not be better depending on your value system and the specific cases that arise. > For a rural example, a single house on several acres is much nicer than a ticky-tack suburban panopticon (or even worse a HOA). Arguably nicer, yes, but the suburban hellsc…

> the suburban hellscape is definitely a lot more economically productive

Neither dense suburbs nor rural suburbs are defined by economic productivity, because they're residences. If this shifts with work from home, their focus will still be on quality of life rather than packing people in as close as possible for more "specific revenue".

> the rural living you describe is probably no better

If you have to drive everywhere anyway, do you also want to be looking through your neighbor's windows? I do miss being able to walk many places (city living), but that isn't the density tradeoff I'm talking about here.

In general your arguments seem to be extrapolating from comparing urban to rural/suburban. Comparing rural and suburban directly, I don't find your points compelling. Going from houses on 1/2 acre lots to houses on two acre lots is one half the linear density. The costs of transportation and utilities increase a little, but aren't going to double - once you're rolling or trenching, going a little further is easy.

Furthermore I'm currently in a quasi-rural area with gigabit muni fiber, so I don't buy that argument either. Whether there is the political will to build out modern Internet access or suffer the extractive oligopoly depends entirely on the politics of an area.

> what about kids who grow up with fewer opportunities?

IMO kids in suburbia are the most caged in. Having to be driven anywhere sucks, but that's a given for both areas under comparison. Once you get past the nadir of suburbia, the increased space helps - kids in rural areas can go play outside, wander in the woods, build stuff, fly drones, etc.

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

#95

Post by epistasis »

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"...

Oddly enough there was no evidence provided for the original claim, either. This despite there being many sources of this estimattioj laid out directly in the original article. The comment didn't mention why the original articles' various methods do not work.

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

#96

Post by yaacov »

whakim wrote: post #91
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…

IMO the biggest issue with property taxes, land taxes, or any other similar idea, is that they arbitrarily tax one kind of wealth over others. Why should a person who owns a house worth $500k (and perhaps has a mortgage on it) pay not only the exact same tax rate, but also the amount of tax as a person who owns a house worth $500k (and doesn't have a mortgage on it), but also has $5 million in other assets? (This isn…

Georgism makes a distinction between Capital (value produced by labor) and Land (value that existed before humans showed up). Rewarding owners of capital incentives people to make more, but rewarding owners of land benefits nobody other than the landowner.

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

#97

Post by MrPowers »

whakim wrote: post #91
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…

IMO the biggest issue with property taxes, land taxes, or any other similar idea, is that they arbitrarily tax one kind of wealth over others. Why should a person who owns a house worth $500k (and perhaps has a mortgage on it) pay not only the exact same tax rate, but also the amount of tax as a person who owns a house worth $500k (and doesn't have a mortgage on it), but also has $5 million in other assets? (This isn…

This is a great question.

Land taxes are great because there is less of a deadweight loss. Governments need money to operate. All else equal, we should get governments the money they need without wasting people's time to comply with complicated tax laws.

Humans also generally agree that progressive taxation is a good idea. Rich people should pay more to fund the government. Rich people own a lot of land, so they'd pay a lot of land tax. Poor people generally don't own any land and wouldn't be subject to this tax. Land taxes align well with what a lot of people think is fair.

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

#98

Post by throwaway6734 »

mindslight wrote: post #43
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…

> Property taxes can discourage you from using your land to its highest and best use I agree. > Land taxes offer the opposite incentives. They encourage you to make your property better. But it doesn't make the converse true. At most, you can say that high enough land value taxes encourage making real estate generate more revenue, to pay the tax. But given the current economy's tendency to optimize everything legible…

Who pays for the roads, water, electricity, internet, and postage that connects rural regions?

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

#99

Post by dsizzle »

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 quote from your link contradicts a "one-and-done" whole neighborhood analysis:

>There would be an annual value assessment for each plot of land

It seems the OP has better examples of how it would be done than that link.

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

#100

Post by epistasis »

AnimalMuppet wrote: post #84
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 rentie…

Did you read the rest of the article where it established the fraction of wealth in the nation that is due to land?

Why are all the dumpy and decrepit houses in Silicon Valley worth 10x what they would be in the rest of the country? What is the value of the lane in Silicon Valley versus the market caps of the various companies there?

If there's a trillion dollar company, and the houses around it go for 2 million each, and 80% of the value is in the land of those houses; that's only 400k houses to equal the market cap of the company.

Also take note of the other analyses of the growth of inequality in the 21st century. The growing inequality isn't coming from stock market values, it's mostly coming from housing.

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