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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?

#161

Post by gbhn »

dsizzle wrote: post #116
MrPowers wrote: post #102

Earlier quoted context omitted.

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 (bec…

Ultimately wouldn't these rates be set politically? As in, there'd be one politician who says "raise the tax and do this" and another who says "lower the tax and stop doing that" and voters just pick what they want to happen.

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

#162

Post by amablue »

temp8964 wrote: post #68

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. Develo…

I once heard someone say that land value taxes would be worth it even if we burned the tax revenue. I almost agree with that. The point of land value taxes is not just that it raises money, it's so the downstream effects. We want it to change people's behaviors. The incentive structure that it creates for developers, land owners, renters factory builders, and City planners is why the tax is so good.

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

#163

Post by amablue »

endisneigh wrote: post #64

Land is already taxed, Georgism is already in play. If one is arguing for higher property (addition + land) tax then that’s another discussion. The housing issue is a zoning issue, and consequently solely a political one, not a tax one.

Land is taxed at very low rates, and it's almost always bundled with property taxes. Instead of taxing land at a few percent, Georgism says we should be taxing it at 100%. That's a huge difference from what we have in play today.

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

#164

Post by yonran »

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 think in principle, an income tax is similar to a land value tax in that both of them are trying to capture monopoly rents. Compared to the property tax, the land value tax exempts investing in improvements, just as the income tax exempts capital investments and interest.

The important differences are in what they exempt from taxation. America’s income tax exempts imputed rent, so a business or household who happened to buy land that has appreciated gets a discount on their taxes compared to their younger neighbors (who have to pay inflated prices). Whereas a land tax would capture imputed rent, so old landowners are on a more even playing field with new businesses/households, incentivizing young people to compete, making land value tax better than income tax.

The land tax’s major additional exemption is labor. A bakery’s land taxes don’t go up at all if he puts in twice as much effort, whereas his income taxes would at least double. So LVT incentivizes work, making land value tax better than income tax.

On the other hand, progressive taxation automatically taxes other monopoly rents, whereas the land value tax depends on the government assessing the value of land and any other important monopolies.

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

#165

Post by amablue »

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…

The Georgist answer is that the government wouldn't decide the value of the land, the market would. If the government is setting it, it's almost certainly not pricing it optimally.

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

#166

Post by lelanthran »

dsizzle wrote: post #79
TulliusCicero wrote: post #49

Earlier quoted context omitted.

Property taxes are already commonly broken down into the value of the land vs buildings, IIRC.

FWIW, I just looked up my own property tax records and there's no breakdown, so not sure how common that is. That said, it is done for property insurance, so I think your point that it's already done stands.

> FWIW, I just looked up my own property tax records and there's no breakdown, so not sure how common that is.

>

> That said, it is done for property insurance, so I think your point that it's already done stands.

I dunno how useful that will be - my insurance is based on how much it would cost to rebuild the house if it burned down.

This lead to the comedic result that what I paid for the house at the time was about half what the insured value was. My property tax is calculated on the selling price, though.

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

#167

Post by dsizzle »

gbhn wrote: post #161
dsizzle wrote: post #116

Earlier quoted context omitted.

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 (bec…

Ultimately wouldn't these rates be set politically? As in, there'd be one politician who says "raise the tax and do this" and another who says "lower the tax and stop doing that" and voters just pick what they want to happen.

Aren’t all tax rates set politically?

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

#168

Post by neilparikh »

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…

> most of it comes from the development rights.

I don't think this is true. There are many part of NYC that fairly low density zoned (Long Island, SoHo, NoHo), but housing is still very expensive. New York City unfortunately still has a lot of zoning limitations.

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

#169

Post by intrasight »

We have LVT in my county. And it changes - nothing. So what am I missing? Why is this even discussed? A much more interesting discussion is to ask the question: Should there be no private land ownership. That's the case in many places. In such locals, the ownership right is in the long-term lease of that land. And it changes - nothing.

Tax on private property is the price we pay to have the property protected by a power with corporal punishment rights. A good old fashioned protection racket. Capitalism: The worst economic system, except for all the others. We'd not have all of this neat stuff without it. I like nice stuff so I'm in favor.

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

#170

Post by yonran »

Natsu wrote: post #159
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.

> value that existed before humans showed up I'm not sure that meshes with the way it's actually described in the article. They give examples of a small piece of land worth $2M and then another plot in a different location that's worth far less, purely due to proximity to other improvements on the land (i.e. being prime real estate in a city) rather than something inherent to the land itself (e.g. fertility/use for g…

You’re right. When Henry George introduced the land value tax, he made it clear that in urban areas he wished to capture the value which is created by the community while the landowner sits and collects increasing rents, not value that existed naturally (https://www.henrygeorge.org/pchp19.htm):

> All these advantages attach to the land. On this land — and no other — they can be utilized. For here is the center of population: the focus of exchange, the marketplace, the workshop of industry. Density of population has given this land productive power equivalent to multiplying its original fertility a thousandfold.… The most valuable lands on earth, those with the highest rent, are not those with the highest natural fertility. Rather, they are lands given a greater usefulness by population density.

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