Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Does Georgism work? Is land a big deal?

astralcodexten.substack.com

Post reply on HN
Print view View original

291–300 of 375 posts

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

#291

Post by amablue »

mcny wrote: post #249
lmm wrote: post #190

Earlier quoted context omitted.

The value of gold is mostly the cost of labour etc. to extract it; to the extent that it's just the value of the land that it was dug out of, sure, I'd support taxing it. Most Georgists support extending the land value tax to other kinds of economic land e.g. slices of radio spectrum. But physical land is the big one that affects society (particularly because everyone needs some land to live on), so it's the most imp…

» Most Georgists support extending the land value tax to other kinds of economic land e.g. slices of radio spectrum. This makes me wonder, do roads pay land tax? I think railway tracks do but I'm not sure about roads. Personally I think more of the spectrum should be like 2.4GHz, 5 GHz (and soon 6GHz?). No auctions. No owners.

If we are going full Georgist, yes, even the government would pay taxes on its own land, which includes the land for roads and railways.

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

#292

Post by DarylZero »

bradleyjg wrote: post #268
ineptech wrote: post #113

Earlier quoted context omitted.

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.

Buildings are demolished in Manhattan on a regular basis, granted not that often. There are real sales of empty plots.

Also if you know a building would cost $X to replace, but the plot with it sells for $X+$Y, you have some real information, not just guesses!

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

#293

Post by epistasis »

AnimalMuppet wrote: post #134
epistasis wrote: post #100

Earlier quoted context omitted.

Did you read the rest of the article where it established the fraction of wealth in the nation that is due to land? Why are all the dumpy and decrepit houses in Silicon Valley worth 10x what they would be in the rest of the country? What is the value of the lane in Silicon Valley versus the market caps of the various companies there? If there's a trillion dollar company, and the houses around it go for 2 million each…

No, I did not in fact read the whole thing. My life is too short. Only 400k houses? I don't think that supports your point very much. Apple, Amazon, or Google have land footprints that are far smaller than 400,000 houses. And, the growth in inequality is coming from land? The top 0.01% have what percent of their assets in land? And, which came first? Did they make their money on stocks and then buy the land to divers…

By the "growth in inequality" what I'm really talking about is the share of the economy that's distributed to capital rather than labor.

Section 1.4 presents extensive documents that land represents a majority of the assets in nearly all advanced economies. And not agricultural land, residential land. This comes from Piketty and others.

It also shows the analysis that other tacked on to Piketty to show that the increase in the share of the economy returning to capital comes from housing.

Finally, the linked article compares the size of the LVT to a 100% tax on all billionaires, and it turns out that the billionaires don't have that much of a share of the economy. It took decades for their billionaires to build their wealth, but that wealth would only fund about a year of US gov expenditures. Whereas the LVT serves to almost fund every year in perpetuity. (Though I also support additional taxes too)

To actually alleviate inequality, we don't need to just tax the billionaire capitalists, we also need some amount of tax on the multimillionaires that have also been taking money away from labor through increased returns to their housing assets.

All this is to say is that perhaps your intuitions about the economy might not be right, and if you evaluate some of the data here, you might come away with a radically changed view of who has all the wealth in our nation, and where it is held (largely in land).

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

#294

Post by DarylZero »

AnimalMuppet wrote: post #124
TulliusCicero wrote: post #63

Earlier quoted context omitted.

> But if we go to a land tax, don't you have similar problems? Can you really say that land that has a 20-story highrise condo on it has the same value as the same land with a house on it? Yes, because we're talking about the land -- really, more like the geographic space than the literal land -- and not the buildings. > Because if you're going to buy the land - no matter what you intend to do with it - you get the l…

Yes, they do that, or at least they claim to. Out where I live, they can probably come close, because there is still some vacant land out here. When it sells, you get an idea of what nearby land would sell for if it were vacant. But here's a building across the street from Central Park in Manhattan. What's the land price? When was the last time that a vacant lot sold in Manhattan? I mean, I guess you can go by the co…

They demolish buildings in Manhattan regularly, then build new ones.

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

#295

Post by mindslight »

sagarm wrote: post #196
mindslight wrote: post #110

Earlier quoted context omitted.

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...

I said "trash disposal" for a reason. Rather than handwave that things cost "more" with area, the sane way to analyze it is in terms of their growth. Rather than talking in terms of lot area, it's clearer to discuss in terms of single dimension distance between houses (lot area ~= L^2), holding population constant.

Schools/hospitals/trash disposal/wastewater treatment - heavily proportional to population, with a negligible increase per area due to convenience - O(1).

Distribution (telecom, electric, trash hauling, water, sewer) - Picture a square town with a single N-S route and one E-W route per row of lots - O(L)

General transportation - The average distance between any two points also goes up linearly - O(L)

Roads themselves - probably the closest thing proportional to area, but that's not even true as in less dense areas it's easier to drive further in the wrong direction (say further east before being able to cut north). O(L^1.5) ? In the absolute worse this is O(L^2), but what else is?

Note that based on lot sizes I'm basically talking about denser or less dense suburbs here. Suburbs are their own hellhole regardless of density, but I've seen many developments with neighbors right on top of one another in areas that are otherwise more spread out. Despite the increased density, those developments are straight residential (no stores, restaurants, or even parks to walk to), and thus gain little from the increased density besides the developer packing in the maximum number of economic rent streams.

And tying this back to Georgism - what does that look like if you're a neighbor to one of these developments? The town increases their valuation to pay for the per-resident cost. Then it declares that your land is worth a similar amount. So you're either stuck paying the same real estate taxes as a multiple family development, or selling your house so another development can be built.

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

#296

Post by radu_floricica »

djokkataja wrote: post #171

Just for fun, purely as a thought experiment... Could digital "real estate" or "territory" be taxed in the same way -- not literal digital territory, like in games, but considering "ad spaces" as virtual territory? I suppose more generally, any "technology company" which primarily makes its profits by virtue of establishing a network effect, wherein they earn ever more money as more people show up. One possible objec…

If you think of georgism as a tax on commons-created-value, then yes, lots of other applications make sense. You don't tax land per se - you tax the location of the land, which is given by the surroundings and, ultimately, by the whole society. This is why it can be both very high and very fair.

Labor tax on the other hand is one of the most unfair and with the worst incentives.

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

#297

Post by kesselvon »

roenxi wrote: post #213
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?

The post didn't use the word scarcity. Land isn't even scarce, most land is effectively uninhabited compared to the population densities most people live at. Humanity at large is not short of land. Land is quite unique. It is the resource with the weakest argument that humans produce it. Gold, for example, requires human labour to be dug up. Bitcoin requires humans to run machines. The Mona Lisa requires humans to pa…

Land isn't scarce, but economically viable and productive land is scarce. Economic viability is a moving target, but for the most part pretty steady.

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

#298

Post by zajio1am »

amablue wrote: post #163
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.

> Instead of taxing land at a few percent, Georgism says we should be taxing it at 100%.

Property tax percentages are from property value, while georgism is taxing 100% of imputed rent, not value. Relation between rent and price, as mentioned in the article, is described by capitalization rate, which is estimated to be 5-8%. So georgian LVT would be 5-8% of original land value.

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

#299

Post by vannevar »

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…

I don't actually see a legitimate rebuttal to argument #2 (passing the tax on). In the article, the author simply says "...no, because land is special in that it is scarce and nobody can make any more of it." It's not clear to me that this is an argument against the proposition that the tax will be passed on. Indeed, you could argue that it makes it more likely, since the scarcity of land gives the landowner more economic leverage (ie, if you don't like our rents, go try to buy your own land). There may very well be a sound economic argument that explains why the tax wouldn't just raise rents, but I don't see it in this article.

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

#300

Post by mindslight »

presentation wrote: post #202
mindslight wrote: post #110

Earlier quoted context omitted.

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.

In rural areas though the whole point is that the land isn't very valuable, so the land tax will correspondingly be very low, so feel free to do economically inefficient things like having a giant house in those areas - the cost of your building will probably be far more than the cost of your land, so in practice you're not paying 4x more.

All the services still have to be paid for though. So unless tax districts get much larger such that each one includes a regional city, the rural/suburban taxes would still have to be significant.
Post reply on HN