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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?

#141

Post by derekjdanserl »

nickff wrote: post #132
lmm wrote: post #128

Earlier quoted context omitted.

Owning huge amounts of land is uniquely antisocial in a way that owning huge amounts of other stuff isn't. If Mr Moneybags buys ten thousand paintings, we can always produce more paintings (and the rising price of paintings will push more people to take up careers in art). But if Moneybags buys ten thousand acres, the rest of us are ten thousand acres worse off in a way that we can't really fix.

Those are ten thousand paintings which the public cannot experience or enjoy! In many ways, the paintings are more precious, as they could go on worldwide tours, and be experienced by millions of people; most land has virtually no uniqueness, and cannot be shared.

See: Owning huge amounts of land is uniquely antisocial.

The point here is to maintain a society and some things must come first, namely material things which paintings are not. Of course, art history shows us time and time again the vital importance of material sustenance in creating and preserving works of art. If you really care about art, you have to care about the material foundations that make rich and meaningful social livelihoods possible.

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

#142

Post by gnopgnip »

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…

A big issue is a pure land value tax is politically unpopular. That would mean significantly raising taxes for agricultural land. For most single family homes

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

#143

Post by sooheon »

whakim wrote: post #120
yaacov wrote: post #96

Earlier quoted context omitted.

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.

Read this to understand the distinction: https://astralcodexten.substack.com/p/your-book-review-progr...

George goes to great lengths to distinguish these factors of production. They are fundamentally different.

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

#144

Post by abathur »

whakim wrote: post #120
yaacov wrote: post #96

Earlier quoted context omitted.

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.

This is roughly the point, though.

It doesn't _absolutely_ disincentivize these things unless they are operating at a loss. It certainly disincentivizes "economic activity" like opening an at-grade parking lot in a bustling city-center in order to minimize the property tax you pay while the land appreciates in value more than it disincentivizes opening a parking garage there (assuming there's actually enough parking demand to pay to build and maintain).

(I don't entirely disagree with you--it seems like this would shunt some investment away from investments that need expensive land. It's less clear to me whether that is good, neutral, or bad.)

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

#145

Post by aesh2Xa1 »

aunty_helen wrote: post #135

I would like to table a point about how this will prevent urban sprawl. The maps showing land value peaking in cities should be a good indicator of this but the opposite conclusion is being formed. If land is expensive, it will be taxed at a considerable amount per year driving people out of these areas or into condos where they can share the costs with those on the floors above and below them. Perhaps there will be…

I’d like to see the same. Your comment got me to think about it for a couple minutes. If another claim about LVT is true – that speculation is defeated and thus prices are driven downwards – then the most valuable land becomes more generally affordable. Because of that, you’ll see _more_ people able to move into cities. Perhaps then the city also grows naturally/securely (rather than sprawls).

You’ll still have people that prefer privacy and property, of course. But would a government need to or want to service them with roads and utilities? I think these are some of the “dynamic effects” hinted towards in the article. Anyway, though, the point is that more people can afford to live in the city.

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

#146

Post by spurgu »

panick21_ wrote: post #133

A simple flat tax is clearly a far superior system in every single way. If you are really hardcore about richer people paying even larger part then simply make the curve slightly progressive. If you want poorer people to pay even less make the minimum number required for max tax higher. This would make the overall tax system 1000x simpler releasing a gigantic amount of labor and would allow IRS to actually check effe…

I tend to agree, and definitely on the surface of it. But what about for example incentives to cut down on carbon emissions, how would you achieve those? Or stopping investors for buying up all the great real estate in an area and boost up the rent prices?

I believe that there needs to be some "punishment" taxes, to regulate things that might otherwise go out of hand (which is important in order for capitalism to function well). But I do recognize the issue that it's probably what has lead most governments down that exact path towards an overly complex taxation system.

Also I don't think you have to be "really hardcore" to support progressive taxation. It just makes sense. As long as it's not "overly progressive".

Edit: A too simple of a system makes it too easy to game the system. I wish there was a clear way out of it.

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

#147

Post by larsiusprime »

nverno wrote: post #136

> It's the market value that derives from the benefits the land itself provides (crops it can grow, proximity to a desirable job, etc) Do they really lump profitability from agriculture in with location, rent profit, etc.? It seems unfair to tax farming, a labor intensive job, equivalently to passive income propositions.

The land value on farm land is really low compared to urban land.

The status quo right now is that we tax farming -- a labor intensive job as you say -- with income (labor) taxes and sales taxes.

Shifting even partially to a land value tax would be a major savings for farmers.

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

#148

Post by SilasX »

aunty_helen wrote: post #130
SilasX wrote: post #87

Earlier quoted context omitted.

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.

“Worthless” is a false dichotomy, people will still need, use and pay for land. And progressively levying a LVT would make a lot more sense than flipping a switch and upside downing the economy.

Yes, but it’s worthless to the owner on the market, as the entire point of Georgism is to drive said land value to zero. Yes, people would pay for it, but those payments would not go to the owner, as they would be diverted to the government via tax, functionally the same as if a tax made your retirement account worthless.

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

#149

Post by larsiusprime »

gnopgnip wrote: post #142
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…

A big issue is a pure land value tax is politically unpopular. That would mean significantly raising taxes for agricultural land. For most single family homes

Agricultural land is of low value compared to urban land. And this policy would remove or at least offset the income and sales taxes that fall directly upon farmers' labor.

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

#150

Post by davjhan »

I really liked this article. I had a question about it.

Could there be a case where existing unpleasant rental properties in highly dense urban cities suddenly have negative rental value?

For example, imagine there was a run-down house that is livable, but is one of the most undesirable in SF. Adjacent to it, let's say there's a shiny desirable house with the same land characteristics. If I understand correctly, these 2 apartments would have the same land value tax right?

What kind of effect will this have on the rental price of the bad house? What will dictate the floor of it?

- Would it be the cost of the LVT? - Would it be the lowest rent transaction that occured in the market? - Would it be zero?

If it is one of the last two, I can't imagine the land-owner renting it out except for speculation on the desirability of living in SF right?

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