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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?

#331

Post by _dain_ »

dnautics wrote: post #326
_dain_ wrote: post #276

Earlier quoted context omitted.

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.

this is a far better situation than rich neighbors moving in next to a lower-middle-class family and driving them out of the neighborhood by bringing up the assessed value.

Since rich people are rare, by definition this wouldn't happen very often. Unlike with the current situation in California where it happens _everywhere_. And such a lower middle class family would still be selling their house at a higher value than for which they bought it, so it's hard to see how they are being robbed.

And don't you think it's funny: we can't have rich people moving here because that would drive up land taxes, and we can't have poor people moving here because that would drive down the total resale value. I guess people should only be allowed to live among their exact socioeconomic equals ...

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

#332

Post by BirdieNZ »

caeril wrote: post #316

Land Value Taxes are an immediate nonstarter for anyone who cares about the environment or conservation. Imagine wanting to start an urban community garden and make your city a nicer place to live, but the taxes are prohibitive because you could have built a concrete monstrosity there instead. Taxes predicated on the money you could have hypothetically made by paving over everything is a great way to ensure that you'…

Isn't increased density good for the environment? Georgism/LVT would encourage increased density, which means fewer roads, more compact cities, and probably less driving.

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

#333

Post by spurgu »

panick21_ wrote: post #303
spurgu wrote: post #281

Earlier quoted context omitted.

> Well its % based so its already progressive as in you pay far more if you are richer. So if you want to also pay higher % if you are richer. This is just flat out wrong. With a flat tax you don't pay a higher % if you are richer, you pay a higher amount . It stings just as much to lose 10% if you make 1k/month as when you make 100k/month. Whereas with the latter you're left with 90k, arguably much more than needed…

> With a flat tax you don't pay a higher % if you are richer, you pay a higher amount. That's literally what I wrote. The Flat tax is not fixed. Its incremental up to a a limit. So you only pay the full amount once you reach a certain level. Below that you pay increasingly less. And as I suggested, if you want higher % you can make that slightly slanted as well.

Ok maybe we're getting stuck on definitions here. When I think "progressive taxation" I'm thinking something like:
Whereas "flat tax" is just a set percentage, for example 20% (like what Estonia has), regardless of how much you make.

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

#334

Post by BirdieNZ »

vannevar wrote: post #299
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 eco…

I believe the next article in the series will explain it, but you can search google for "tax incidence land value tax" to find an explanation as to why. The short answer is that if you pass on the lvt to the tenant that means you just increased the land rent, so the land value goes up and then the land valye tax goes up. You can't repeat that into perpetuity because the tenant is already paying as much as they can afford (in aggregate). So you lose your tenant if you try to pass it onto them.

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

#335

Post by aeternum »

caeril wrote: post #316

Land Value Taxes are an immediate nonstarter for anyone who cares about the environment or conservation. Imagine wanting to start an urban community garden and make your city a nicer place to live, but the taxes are prohibitive because you could have built a concrete monstrosity there instead. Taxes predicated on the money you could have hypothetically made by paving over everything is a great way to ensure that you'…

Cities can use the tax revenue to create community gardens or parks.

Property taxes in many places currently tax improvements, so if that concrete monstrosity wanted to build a nice community garden on the premises it would often result in a tax bump. That typically isn't the case with LTV.

In contrast, if the land owners surrounding the concrete monstrosity build higher density housing with gardens and public areas then they may drive up the LTV such that the concrete monstrosity is no longer economically viable and must be torn down and updated.

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

#336

Post by mrep »

pydry wrote: post #235
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?

This question is out of the scope of land value taxation. The overall tax burden would fall on the institution running the condo (HOA/company/whatever). How they decide whom to charge and how much, etc. would be a separate question government by different rules and laws. Which is not to say that the outcome would be fair, but whether it is or not would depend upon how these organizations are regulated and run.

I don't think it is out of scope though because wether the government or your HOA/whatever is deciding how to appropriate the LVT is at the whims of someone else. I'm mostly for LVT but it gets supper messy with multiple ownership properties on land.

Also, LVT don't fix zoning as the value of your land is based on what you can make from it. If your land is zoned for only single floor parking, nobody is going to buy it for more than they can earn through single floor parking so the land won't be that valuable thus it won't have a high land value tax.

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

#337

Post by caeril »

aeternum wrote: post #335
caeril wrote: post #316

Land Value Taxes are an immediate nonstarter for anyone who cares about the environment or conservation. Imagine wanting to start an urban community garden and make your city a nicer place to live, but the taxes are prohibitive because you could have built a concrete monstrosity there instead. Taxes predicated on the money you could have hypothetically made by paving over everything is a great way to ensure that you'…

Cities can use the tax revenue to create community gardens or parks. Property taxes in many places currently tax improvements, so if that concrete monstrosity wanted to build a nice community garden on the premises it would often result in a tax bump. That typically isn't the case with LTV. In contrast, if the land owners surrounding the concrete monstrosity build higher density housing with gardens and public areas…

Right. And the political process being what it is, it sounds great that you need to have pull with the city council or county government to do what you'd like with your property.

I'm sure we all look forward to a world in which buying hookers for the Mayor's son and keeping it all on the DL, or contributing to a few Town Selectmen's "nonprofits" is what you have to do to in order to inject a half-acre of greenery into an otherwise desolate dystopian concrete hellscape.

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

#338

Post by Qub3d »

neilwilson wrote: post #203

It gets the purposes of taxes wrong, and assumes the usual economic myths of a fixed amount of money and a loanable funds structure, with money being a veil over barter. 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. In fact spending causes taxation from the induced transact…

You should really give the original book review that preceded this a read.[0]

> assumes the usual economic myths of a fixed amount of money

Not at all. Henry George's original ideas included defining money as essentially an IOU pointing to an underlying wealth; and wealth can indeed be increased.

> The problem with land is not rent, it is the power of exclusion, which leads to hoarding

This sentence makes me suspect you've confused the antecedent of LVT with its result.

Fixing hoarding is The Point of LVT.

You're misunderstanding the term "rent", which unfortunately refers to both the common "I charge you X money on a recurring basis in exchange for occupation" and the more precise economic rent[1]. LVT would disincentivize economic rent, which would kill speculation and encourage more productive use of land overall, which would decrease exclusion and force hoarders to sell off their holdings.

[0]:https://astralcodexten.substack.com/p/your-book-review-progr...

[1]:https://en.wikipedia.org/wiki/Economic_rent

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

#339

Post by Qub3d »

caeril wrote: post #316

Land Value Taxes are an immediate nonstarter for anyone who cares about the environment or conservation. Imagine wanting to start an urban community garden and make your city a nicer place to live, but the taxes are prohibitive because you could have built a concrete monstrosity there instead. Taxes predicated on the money you could have hypothetically made by paving over everything is a great way to ensure that you'…

Consider that LVT prevents urban sprawl (which happens because speculation drives people out of urban centers).

But yes, that is a consideration that must be made. Georgism is a very logical, mathematical train of thought, and as such does not effectively (in isolation) address human subjective needs, which certainly includes living in beautiful (or at least, non-terrible) places.

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

#340

Post by doubleunplussed »

alexitorg wrote: post #274

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 sec…

The rent isn't based on the sale price of the land, it's based on the value of the land. If land comes with a tax obligation, they're not the same thing anymore.

    sale_price_of_land = underlying_value_of_land - how_much_you_would_pay_as_a_one_off_to_avoid_paying_the_tax_forever
So no, you wouldn't update the tax rate to be a fixed percentage of the new sale price of the land after bringing the tax in. That's not the value of the land, it's just the sale price.

Instead, you would update the tax rate in order to ensure the sale price of unimproved land was zero. If the sale price is zero, that means the tax rate is correctly set so as to cancel out the land value as per the above equation.

It's weird having the value of the land plus tax obligation be exactly zero, which is one of the reasons many Georgists propose merely a 85% tax instead of a 100% one.

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