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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?

#261

Post by truculent »

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…

Taxes aren't an objective truth handed down from on high; so, in some sense, all taxes could be considered arbitrary. In this case, taxing one kind of wealth more than another is a lever the state has to (dis)incentivise certain behaviours and thus create a better society (although in some cases, you may fairly ask - better for whom?).

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

#262

Post by dnautics »

ineptech wrote: post #113
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.

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 f…

Inaccuracy in the end is a HUGE component of this. If you can't have an accurate value for the land, the long-run incentives converge to a system where the land value assessors have a lot of power, and could use that power to screw you over.

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

#263

Post by pydry »

neilwilson wrote: post #259
pydry wrote: post #233

Earlier quoted context omitted.

>Once you realise the latter are a myth, then the entire concept of taxing land makes no sense. Government, in a country with its own free floating currency, has no need of tax money to spend. Tax keeps a lid on inflation and can be used to discourage socially undesirable activity. It absolutely makes sense to keep inflation down and prevent productive land from being hoarded or used inefficiently with a tax at the s…

Inflation is handled by superior spend side auto-stabilisers, like a Job Guarantee, and socially undesirable activities are done with levies and duties, not tax. The latter being a political position, not an economic one. If you have sufficient saving in society , then you hardly need to tax at all - as Japan demonstrates.

It feels like you read about MMT but didnt really... get it? You're mixing up all the concepts.

A job guarantee doesnt help keep a lid on inflation at all - quite the opposite (it keeps a lid on deflationary pressures).

Levies and duties are...uh, taxes.

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

#264

Post by someguydave »

dragonwriter wrote: post #225
AnthonyMouse wrote: post #210

Earlier quoted context omitted.

> The deadweight loss of property taxes is the economic loss of having resources devoted to filling out property tax filings. This is true, but it's minor. The main one is this: > Property taxes also distort incentives. If you improve your property, then you pay more tax. Property taxes can discourage you from using your land to its highest and best use. In particular, it's what happens after the incentives are disto…

> It becomes unprofitable to increase the housing stock, so housing becomes more expensive There's no way that this occurs with actual property taxes at the levels they are in the US. Sure, an improvement may result in higher property taxes which go into effect before the value of the improvement begins being realized, but overall effective property tax rates in the US range between 0.37% and 2.22% per year; this pla…

Yeah it is likely with heavy LVT there would be huge funds that would purchase land and let it out for a small profit (“ground rent”).

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

#265

Post by pydry »

jorge-fundido wrote: post #207

I'm not commenting on the merits of Georgism or the article. I found it curious that Krugman was quoted 5 times in the article. Is that someone to be taken seriously? Wondering if he was used as a straw man. He (Krugman) seems like a paid shill to me. While I loves me some Asimov Foundation, how is it that the mainstream takes him seriously after things like: https://www.forbes.com/sites/modeledbehavior/2016/11/19/pa…

Krugman is kind of a Democratic party cheerleader. Sometimes that means what he says aligns with what's actually progressive.

Other times quite the opposite. He own comment section once schooled him on the regressive contents of the TPP (when the dems were pushing it), which ought to have been humiliating given his credentials. He is supposed to understand how international trade functions.

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

#266

Post by thesausageking »

TulliusCicero wrote: post #73
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…

Okay. Does that interrupt their point though? It seems like what would happen with a land tax in this case is that if an area got rezoned to allow buildings 20x the height, the land value would skyrocket and thus so too would the land tax. That would then incentivize actually building a really tall building on that land, which is probably what you want (both in the sense of what land tax proponents want, and what you…

Development rights are made up by cities and don't have a fixed supply like land, so can't be taxed in the same way. For example, cities often grant development rights over highways, creating them literally out of thin air. This gets even messier in cities like SF or Boston where the zoning rules are basically never followed and instead development rights are granted a on per-project basis, often based on how hard various groups lobby for or against a project.

That makes a land tax not make any sense in large cities.

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

#267

Post by ukoki »

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.

What if you had a system where anyone can bid any amount on any piece of land. Whether the owner refuses the bid or not, the land is now valued at the price of the bid for tax purposes.

To avoid frivolous bids, bidders must place funds in escrow before making a bid which is then returned to the bidder if the owner refuses the bid or fails to respond within some number of days.

All bids are reported to the public although bidders can be anonymous.

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

#268

Post by bradleyjg »

ineptech wrote: post #113
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.

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 f…

> but there's no obvious reason to think we're way better at one or the other.

There’s a very good reason. Sales of buildings plus land happen all the time, whereas sales of just land are virtually non-existent in a lot of the places with the most valuable property (e.g. Manhattan). Without real sales to tether the analysis you are just guessing.

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

#269

Post by wrycoder »

mmdoda wrote: post #194
whakim wrote: post #183

Earlier quoted context omitted.

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.

It is? It’s “Life, liberty, and the pursuit of happiness”, not life, and purported happiness under socialism, where you are assigned housing and a job.

Housing was guaranteed in the old Soviet Union, but if you didn’t cooperate, the housing was in the gulag.

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

#270

Post by bradleyjg »

ukoki wrote: post #267
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.

What if you had a system where anyone can bid any amount on any piece of land. Whether the owner refuses the bid or not, the land is now valued at the price of the bid for tax purposes. To avoid frivolous bids, bidders must place funds in escrow before making a bid which is then returned to the bidder if the owner refuses the bid or fails to respond within some number of days. All bids are reported to the public alth…

Buying land that has buildings on it but not the buildings is an awkward situation that requires a further negotiation of a lease transaction to the building owner. Even if you could set something super complicated up with this bidding system I don’t think it would accurately value what the land would be worth empty.
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