Does Georgism work? Is land a big deal? • Hacker News Board

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

#271

Post by PickledHotdog » Thu, Dec 09, 2021, 2:25 PM UTC

wrycoder wrote: post #269

mmdoda wrote: post #194

Earlier quoted context omitted.

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.

Your daily reminder that not everyone on the internet lives in the United States

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

#272

Post by opportune » Thu, Dec 09, 2021, 2:25 PM UTC

larsiusprime wrote: post #149

gnopgnip wrote: post #142

Earlier quoted context omitted.

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.

Agricultural land is low value per sq ft but not low value in itself.

For example the article (read it last night) says agricultural land is worth $3k/acre or thereabouts. So a small 100 acre farm is worth about $300k, though I’m sure it can be $1m in areas good for farming and $100k in arid areas.

A lot of people own a lot of farmland but just for leasing to actual farmers (so the entirety of the income of the property is land rent, as opposed to a regular landlord who also collects building rent). Because the only use-value of the land is land rent, under Georgian the exchange-value of the land on the open market essentially becomes $0. The exchange value is then just a bidding mechanism for who gets to use the land. There is basically no longer any reason at all to hold the land and lease it.

I think that’s good overall because I agree with the author and George himself that rentiership is destructive and warps the economy. However, you are instantly making an asset worthless. This affects not only farm-landlords but also owner-farmers who now own worthless - in the sense it has little price on the open market - land. It seems like a great idea overall but so painful in the short term that it’s a non starter politically.

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

#273

Post by wrycoder » Thu, Dec 09, 2021, 2:27 PM UTC

ac29 wrote: post #189

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?

Everyone needs a certain number of square meters to live, work, and grow food in (or indirectly, for others to grow food for them). The same isn't true for the assets you mentioned.

Fly over the US and observe that the place is mostly empty. Land is not the problem. Lack of economic opportunity and initiative are the problems.

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

#274

Post by alexitorg » Thu, Dec 09, 2021, 2:31 PM UTC

This makes my head hurt! If the value of an asset is a reflection of it's total future income at net present value, then would 100% tax on the unimproved rent value of land mean unimproved land would be worth $0. The rent on a $0 item would be 0, wouldn't it? Would land become worth the value of the improvements on it? I guess there would be some smaller value obtained for having the right to use the land and the security of ownership, but I can't see how this would be valued. Would there be much difference? Wealthy people would be able to afford the capital to improve and exploit larger amounts of land than poorer people, and so exploit more land? In the situation in say a city, where land is scarce, rent values for properties would greatly exceed the returns expected on the value of the building alone. I would guess the would government calculate the market rent rate for the unimproved land (e.g. rent paid - (interest rate+acceptable profit %) * capital cost of building = unimproved rent)? If not the market value of unimproved land would still be close to zero, so how could you value the rent? Would it just be a tax on excess rental profits for landlords and a tax on owner occupiers? Would you depreciate the cost of the building each year? If a building was depreciated entirely over a 20 year period, would the government extract 100% of rents after that, effectively passing into the government's ownership? It sounds a bit like nationalizing all the land? Does China already do this by giving out 99 year leases? What effect would nationalizing the land have? Nationalizing other asset can lead to adverse effects "reducing competition in the marketplace, which in turn reduces incentives to innovation and maintains high prices. In the short run, nationalization can provide a larger revenue stream for government" - https://en.wikipedia.org/wiki/Nationalization I'm guessing the closest analogy would be with natural resources. Nationalization of oil can end with good results like Norway (responsible management, investment of dividends) or bad results like Venezuela (diversion of resources to political ends, under investment and collapse). Would you see such divergent results with nationalizing land? Would it be in the interest of a government to restrict land usage to increase rents, like how Hong Kong sits on large land reserves and only releases small amounts of land for inflated prices to improve their budget (actually Canberra here in Australia does something similar). Sorry for rambling thoughts...

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

#275

Post by cool_dude85 » Thu, Dec 09, 2021, 2:32 PM UTC

dnautics wrote: post #260

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…

> Property taxes, in comparison, are really hard to compute Mark to market. If you sell your home, then that value is the fixed price of the home until the next sale event.

I bought my home from my pal for a dollar, and sold him my old house for a dollar too.

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

#276

Post by _dain_ » Thu, Dec 09, 2021, 2:39 PM UTC

dnautics wrote: post #260

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…

> Property taxes, in comparison, are really hard to compute Mark to market. If you sell your home, then that value is the fixed price of the home until the next sale event.

Then you end up with preposterous situations like California boomers hanging onto property where the value (and thus the property tax) was last assessed in the 70s.

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

#277

Post by CryptoPunk » Thu, Dec 09, 2021, 2:41 PM UTC

pydry wrote: post #247

CryptoPunk wrote: post #88

Any transition to a LVT should accompany one-time compensation to existing land owners. The same should apply to any other repeal of rent-seeking institutions, whether it's anti-labor-competitive laws privileging labor unions, licensure barriers privileging taxi medallion holders, etc. The British used this method to end slavery throughout their empire, which meant: 1. much more rapid end to slavery, due to less poli…

This is essentially saying that the rich must be kept rich to prevent them from hurting us. You're saying that they must be paid protection money. Slavery wasn't as big a part of the economy of the British Empire as it was to the American south. In any case the US made back a lot of the losses of the war during the period of reconstruction.

It's not about rich or poor. Any group, if you threaten their economic interests, will retaliate.

Take for instance public sector unions: they have grown from strength to strength over the last 50 years, and today are owed trillions in pensions, from sweetheart collective bargaining agreements, that have massively increased their benefits, while degrading the quality of public services, like public education:

https://academic.oup.com/qje/article-abstract/111/3/671/1839...

Public school teachers in New York state have a pension that averages $88K per year upon retirement, and it is almost impossible to fire them over the course of their career:

https://www.the74million.org/article/investigation-nyc-tried...

If you were to eliminate the laws that force states into collective bargaining with their exclusive unions, without compensating them, you would get a socialist (Black Lives Matter / the 99%) revolution on your hands.

If you were to institute a LVT without compensating the millions of people whose main source of wealth is property, you would get a fascist revolution on your hands.

Conflicts are enormously costly. It is better to pay to avoid them where it can be morally justified.

And conflicts can be preceded by decades long stalemates, where no reform happens. Reaching a settlement sooner can save trillions in cumulative efficiency gains from ridding the economic structure of rent-seeking.

As for the moral justification, the Guardian in 1833 provided it:

https://www.theguardian.com/theguardian/from-the-archive-blo...

>>"The guilt of slavery attaches far more to the nation which has introduced, legalized and supported it, than to the planters"

Ironically, today it's the Guardian's journalists who extract economic rent, via laws that force their employer to limit the parties they negotiate with to members of their union, to the exclusion of all other workers. The Guardian's 1833 defense of punitive reformation would thus protect the staff of the Guardian in 2021 from a highly disruptive transformation of the legal framework.

>>In any case the US made back a lot of the losses of the war during the period of reconstruction.

The damage from the Civil War is still not fully repaired.

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

#278

Post by skt5 » Thu, Dec 09, 2021, 2:41 PM UTC

midasuni wrote: post #220

mrep wrote: post #185

Earlier quoted context omitted.

Wouldn't a land value taxes be regressive for condos as the more expensive ones are on higher floors and would pay the same rate as people on lower cheaper floors?

Do people on the lower floors pay for lift maintenance?

Generally speaking no. When there needs to be major maintenance, each condo unit owner pays N% of the cost where N% is defined as your ownership stake (also your voting weight) in the condo. N is roughly your unit's square footage / the sum of every unit's square footage.

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

#279

Post by skt5 » Thu, Dec 09, 2021, 2:45 PM UTC

entangledqubit wrote: post #105

TulliusCicero wrote: post #49

Earlier quoted context omitted.

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

At least for Seattle, the assessor's office has a breakdown but it turns out to be fairly bogus unless there's been a remodel or new building -- resulting in a new assessment. Quite a few cities also seem to have pretty bogus values on the books.

The building value by the county assessor's office is considered a standard for depreciation schedules. While it might not be useful for selling the property or building it - it does have value for accounting purposes.

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

#280

Post by intrasight » Thu, Dec 09, 2021, 2:46 PM UTC

imtringued wrote: post #228

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…

The corporal protection racket not only protects your life but also built the schools and roads that made you want to live there in the first place. Why should your money go to a land owner which forces the government to levy taxes on income instead? You'll pay twice.

Twice? We pay way more than twice. It would take another pair of hands to count all the different taxes we pay.

I am not saying that taxes are "only a protection racket". There are hard-core libertarians who think any federal taxes that aren't paying for protection are unjust. I am not one of those people. I am one, like many, who say "taxes are the price we pay for civilization"