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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?

#191

Post by parineum »

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…

>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.

In theory. IMO the practical biggest issue with property tax is that it is usually spent locally, keeping rich neighborhoods well funded and poor neighborhoods poor.

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

#192

Post by FeepingCreature »

parineum wrote: post #191
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…

>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. In theory. IMO the practical biggest issue with property tax is that it is usually spent locally, keeping rich neighborhoods well funded and poor neighborhoods poor.

That sounds like you want a tax on communities, not a tax on land. Inasmuch as this is due to a location/group-based "neighbourhood value-add", it seems better to tax the neighbourhood as an organization than to tax the ground they happen to be on.

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

#193

Post by lmm »

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.

Most paintings sit in museum storage and are hardly ever seen by anyone (maybe the occasional grad student specialising in that particular artist).

Obviously I'm assuming an equal monetary value of paintings vs land; my point is not about how many acres equal how many paintings but about the impact on other people that taking $1M of paintings vs $1M of land out of circulation has.

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

#194

Post by mmdoda »

whakim wrote: post #183
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.

So why not tax gold or bitcoin or the Mona Lisa if the main difference between taxable assets and non-taxable assets is scarcity?

This isn't connect to just the scarcity of the land. People can live without bitcoin and the Mona Lisa, but you can't live without land. If you want to take this to the extreme imagine if somebody owns the whole country. Housing is a human right.

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

#195

Post by larsiusprime »

jl2718 wrote: post #181

Income tax persists because it avoids the problem of valuation. These ideas are largely moot with a robust mechanism for value discovery. One such possibility is the open auction. In a value tax system, somebody puts money into an escrow bond as a bid on the property, and the owner has a choice of either paying the tax for the duration of the escrow, or exchanging the property for the escrow. The escrow bonds themsel…

Part III deals with valuation, and comes out on Friday.

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

#196

Post by sagarm »

mindslight wrote: post #110
throwaway6734 wrote: post #98

Earlier quoted context omitted.

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

Well either way they're paid with real estate taxes. So the question is should someone on two acres be paying four times as much as someone on a half acre. Or the same as a 16 unit apartment building? Cost proportional to area doesn't even make sense for utilities or roads (average distance only goes up as the square root), never mind straightforward per-resident costs such as public school or trash disposal.

Density increases the costs of public schools and trash disposal as well due to transportation.

The rural lifestyle is heavily subsidized by productive urban Americans -- telecom, housing, hospitals, roads, electric networks, and on and on.

https://www.downsizinggovernment.org/agriculture/rural-subsi...

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

#197

Post by larsiusprime »

intrasight wrote: post #169

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 po…

What is the county, and what is the rate, and what is the assessment policy?

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

#198

Post by brendoelfrendo »

tofukid wrote: post #188
jl2718 wrote: post #181

Income tax persists because it avoids the problem of valuation. These ideas are largely moot with a robust mechanism for value discovery. One such possibility is the open auction. In a value tax system, somebody puts money into an escrow bond as a bid on the property, and the owner has a choice of either paying the tax for the duration of the escrow, or exchanging the property for the escrow. The escrow bonds themsel…

Doesn’t that enable hostile takeover of land? If I own a school or restaurant, and Apple wants to replace it with a store, they can place a bid such that I can no longer afford the taxes and am forced to sell to them. Wouldn’t such a system just exacerbate business and the wealthy being able to snatch up land?

Hm, hostile in that you'd be forced to sell, yes. In theory, though, Apple has to put their money where their mouth is: they're not going to make an absurd offer out of spite, they're going to offer what they're willing to pay.

In that sense, this system would just a market alternative to property appraisal: allowing the market to decide the price of something that's not (currently) for sale.

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

#199

Post by larsiusprime »

dredmorbius wrote: post #131
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.

Out of curiosity, where specifically do you find this definition within Smith's writings?

Here's some

https://www.goodreads.com/quotes/6536394-as-soon-as-the-land...

https://www.adamsmithworks.org/documents/chapter-xi-of-the-r...

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

#200

Post by sagarm »

tofukid wrote: post #188
jl2718 wrote: post #181

Income tax persists because it avoids the problem of valuation. These ideas are largely moot with a robust mechanism for value discovery. One such possibility is the open auction. In a value tax system, somebody puts money into an escrow bond as a bid on the property, and the owner has a choice of either paying the tax for the duration of the escrow, or exchanging the property for the escrow. The escrow bonds themsel…

Doesn’t that enable hostile takeover of land? If I own a school or restaurant, and Apple wants to replace it with a store, they can place a bid such that I can no longer afford the taxes and am forced to sell to them. Wouldn’t such a system just exacerbate business and the wealthy being able to snatch up land?

> they can place a bid such that I can no longer afford the taxes and am forced to sell to them.

Sell for multiples of the assessed value? What hardship!

Businesses can already purchase land for multiples of market value if they wish: very few people would refuse the offer. For the few that would, money clearly isn't a huge problem.

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