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Does Georgism work? Is land a big deal?

astralcodexten.substack.com

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

#111

Post by tmnvix »

Hermitian909 wrote: post #47
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…

> all seem to be presented in a way that deliberately ignores any downsides If I understand correctly, the point of this article (one of several) is just to establish that a land tax would constitute a large amount of money. I get the impression the article was supposed to merely establish whether a land tax would generate a substantial amount of money whether good or bad, though admittedly the author tips his hand a…

This book review on the same site does a pretty good job in my opinion: https://astralcodexten.substack.com/p/your-book-review-progr...

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

#112

Post by larsiusprime »

PragmaticPulp wrote: post #77
thesausageking wrote: post #32

> 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 bu…

> This is missing a key element:... This is where I get frustrated with Land Value Tax articles: They tend to ignore all of the complexity by sweeping it into the idea that Land Value is something that can be accurately and arbitrarily assessed in a vacuum, without influence from politics, zoning or other real-world factors.

Part III will address this.

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

#113

Post by ineptech »

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.

Inaccuracy isn't a very big component of this; assessing the value of land and structures isn't perfect but there's no obvious reason to think we're way better at one or the other. The point of this is that taxing the land only would lead to land being used differently, which would benefit society.

Suppose there is a plot of land which (from some omniscient point of view) would offer maximal benefit to society if a four-plex were developed on it. The point of a LVT is that, under a LVT, a four-plex would be developed on it, not because anyone forces it but just because that's what's in the landowner's best interest; whereas under the current system (in which the structure is also taxed) the landowner might find it more profitable to build a duplex instead. The deadweight loss is the loss to society when the landowner builds something that's in their best interests but not society's.

That's hard to prove for any specific piece of land, since we don't know what the omniscient-view "right" use of the land is. But if you accept the idea that there is an optimal use, and you you trust the whole idea of free market price discovery, it's reasonable.

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

#114

Post by smnrchrds »

PragmaticPulp wrote: post #72
Hermitian909 wrote: post #47

Earlier quoted context omitted.

> all seem to be presented in a way that deliberately ignores any downsides If I understand correctly, the point of this article (one of several) is just to establish that a land tax would constitute a large amount of money. I get the impression the article was supposed to merely establish whether a land tax would generate a substantial amount of money whether good or bad, though admittedly the author tips his hand a…

> If I understand correctly, the point of this article (one of several) is just to establish that a land tax would constitute a large amount of money. We could make a land value tax constitute any amount we’d like. Just take the value you want it to produce, divide by the assessed value of all of the land, and you have your tax rate. That’s not an interesting question, though. The interesting part is whether or not t…

> Just take the value you want it to produce, divide by the assessed value of all of the land, and you have your tax rate.

That's how my city determines property tax rates! Cities in my province are not allowed to run a deficit. So every year, the city look as assessed value of all properties, how much budget it needs for the year, divides the two, and voila! Tax rate!

It's actually a bit more complicated because the residential and commercial tax rates are different and the city has revenue sources other than property taxes, but it is largely like that.

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

#115

Post by larsiusprime »

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

This is a fully general argument against change.

As for the elderly couple, you can defer taxes until after they die and attach it as a lien on the property.

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

#116

Post by dsizzle »

MrPowers wrote: post #102
aeternum wrote: post #90

Earlier quoted context omitted.

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…

I agree that different factors cause some land to be more valuable than others. I'd argue that the factors you've listed are relatively easy to factor into an appraisal. Property taxes, in comparison, are really hard to compute. Each jurisdiction has different rules. There are different valuation methodologies. If you add a 2 car garage, what the useful life. What depreciation schedule should be used. How should infl…

Yeah, and these features are easier to track than the interior of the house.

As an aside, I've often been surprised how little some of these features get valued. For instance, I've looked at neighborhoods where one side of the street backs to other houses and the other side backs to parkland. The nicer side is generally more expensive, but it's not a huge effect, and often homes on the bad side go for more money (because of the building itself).

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

#117

Post by MrPowers »

throwaway98211 wrote: post #104
MrPowers wrote: post #80

Earlier quoted context omitted.

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

https://en.wikipedia.org/wiki/Williamson_Act

Yes, definitely agree that California's random property tax laws (like Prop 13) are the opposite of free market, libertarian tax policies like a land tax

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

#118

Post by pdonis »

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...

> it's really easy to calculate the value of the land.

No, it's really easy to wave your hands and come up with a number that you claim is "the value of the land". But since that number is not based on actual sales of the land in question, it's just hand-waving. Not to mention that if you ask five different economists to do the estimating, you'll get more than five different answers. Much of the article that prompted this thread is trying to deal with this problem: there are so many widely varying estimates of land value, and no compelling reason to believe any one more than the others, because none of them are based on actual sales of the land whose value they're trying to estimate.

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

#119

Post by hellbannedguy »

chrismcb wrote: post #101
whakim wrote: post #91

Earlier quoted context omitted.

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…

If I buy a hamburger should the sales tax depend on my wealth? The property tax should be based on the value of the property, period. If you want to tax mythical wealth do it via some other means. And whether the person owns the property outright or borrowed money shouldn't have any bearing on the value of the tax.

I have felt for awhile societal fees/fines should be tied to income.

A wealthy man gets a $270 red light ticket. (This is the one where turning right on a red light is illegial. It seems like they arbitrarily decide which intersection to enforce?). The wealthy man casually mentions it over din din. Goes to sleep, and has the help drive his spawn to private schools. Yea--I live in a county filled with rich people, and they are obnoxious on so many levels.

To the poor man it might be part of his rent.

So yes--if I ran things; The wealthy would pay more at DMV, bail, patent fees, incorporation fees, etc., and especially property taxes. You want a third mansion so you don't have to look at your neighbors---get ready to pay Zuck.

I would love to see Jay Leno pay a $100,000 speeding ticket.

(I believe they are trying this in Sweden?)

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

#120

Post by whakim »

yaacov wrote: post #96
whakim wrote: post #91

Earlier quoted context omitted.

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.

That seems like a bit of a murky distinction, though, right? Taxing land disincentives economic activity a large component of which is in the land value (running a parking garage or hotel in downtown Manhattan, or a farm in a fertile region, etc.) but incentivizes other types of economic activity.
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