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Book Review: Progress and Poverty

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Re: Book Review: Progress and Poverty

#11

Post by aesh2Xa1 »

nickff wrote: post #3
TimPC wrote: post #2

Progress and Poverty was once the most popular economics book ever written. The Georgist Theory in it, and the land value tax proposed by it is still endorsed by economists today. This review clearly illustrates the ideas from George that land captures gains that in a more fair society we'd want to go to labour.

> "... the land value tax proposed by it is still endorsed by economists today." Your comment is somewhat misleading, as it seems to suggest that all or most economists endorse Georgism, which is not true. Some vocal minority of economists are pro-Georgism, but I haven't seen any data suggesting it is the most popular taxation scheme.

I have wondered this, too. "Is/was Georgism really so popular?"

Do you have any papers/writing which specifically criticise Georgism?

Re: Book Review: Progress and Poverty

#12

Post by its_ethan »

bee_rider wrote: post #8
scythe wrote: post #6

Earlier quoted context omitted.

The biggest problem with LVT is surprisingly simple: accurately assessing the value of land is very hard, and ensuring that the assessment process is fair is therefore extremely hard. LVT experiments in history tend to run into problems when people feel that their land has been valued incorrectly, leading to a vocal minority that despises the law. That results in something like this: https://nassimtaleb.org/2016/08/i…

Huh. Property tax is already a thing of course, but I guess if the LVT was going to replace all taxation the stakes would be much higher. In an urban setting, it seems to me that the land value should be... reasonably uniform, unlike property, which should make assessing much easier, right? But that's just getting the number. Whether people are happy with the number is a whole 'nother problem.

I would have assumed exactly the opposite in terms of urban land being uniform in value.

10 acres that are 30 minutes from Des Moines, IA are going to be very similar in value (price people are willing to pay) compared to 10 acres that are 10 miles down the road. Rural land is generally quite uniform and more likely to be functionally the same. In an urban area, say Los Angeles, 10 acres in Malibu (an area with very high demand for property) is going to have a totally different value (again, price people are willing to pay) as compared to 10 acres 10 miles away in skid row.

The problem, that other people have highlighted, is how do you (the government/IRS/agency in charge) determine the value of each of those land areas? Letting some city planners in LA decide that those two areas should have the same LVT, or allowing them to determine what tax each should have, is gifting a lot of power to people who may or may not be qualified, and may or may not experience any sort of consequence for poor decision making/ biased value assessment/ etc.

The exact way that sort of value/tax-setting would play out would be very interesting, but the unintended consequences could end up being pretty bad.

I've always thought it was interesting that property tax assessments don't just use the previous purchase price, and instead rely on a relatively arbitrary valuation. That could be one way to more accurately determine an LVT - make it a set percent of the previous purchase price of the land, that would allow the taxes to be priced in to land transactions.

I still just don't love the idea at its core.

Re: Book Review: Progress and Poverty

#13

Post by notacoward »

markdown wrote: post #7
scythe wrote: post #6

Earlier quoted context omitted.

The biggest problem with LVT is surprisingly simple: accurately assessing the value of land is very hard, and ensuring that the assessment process is fair is therefore extremely hard. LVT experiments in history tend to run into problems when people feel that their land has been valued incorrectly, leading to a vocal minority that despises the law. That results in something like this: https://nassimtaleb.org/2016/08/i…

Could you tell us where these experiments were held, and how far they went? For example, were other taxes eliminated at the same time?

See my sibling comment to yours. The most notable examples are in New Zealand, Australia, and several towns in Pennsylvania. Some of those ran into problems with execution, others were abandoned for purely ideological/selfish reasons, but overall it's not a bad record.

Re: Book Review: Progress and Poverty

#15

Post by colinmhayes »

mrob wrote: post #9
scythe wrote: post #6

Earlier quoted context omitted.

The biggest problem with LVT is surprisingly simple: accurately assessing the value of land is very hard, and ensuring that the assessment process is fair is therefore extremely hard. LVT experiments in history tend to run into problems when people feel that their land has been valued incorrectly, leading to a vocal minority that despises the law. That results in something like this: https://nassimtaleb.org/2016/08/i…

People who disagree with their assessed value should be given the option to declare whatever value they like. If they take this option, the state should have the option of buying their property at the declared value, plus some extra to cover transaction costs.

The problem is that most land has stuff on top of it. The government can't buy the land without the building that comes with it.

Re: Book Review: Progress and Poverty

#16

Post by a9h74j »

FWIW, John Michael Greer recently outlined[1] some alternative philosophies in political economy (including cooperatism, distributism and social credit), aiming to spur increased imagination. He cites numerous alternative resources, enough to suggest a study list or initial-study guide.

[1] https://www.ecosophia.net/reimagining-political-economy/

Re: Book Review: Progress and Poverty

#17

Post by colinmhayes »

its_ethan wrote: post #12
bee_rider wrote: post #8

Earlier quoted context omitted.

Huh. Property tax is already a thing of course, but I guess if the LVT was going to replace all taxation the stakes would be much higher. In an urban setting, it seems to me that the land value should be... reasonably uniform, unlike property, which should make assessing much easier, right? But that's just getting the number. Whether people are happy with the number is a whole 'nother problem.

I would have assumed exactly the opposite in terms of urban land being uniform in value. 10 acres that are 30 minutes from Des Moines, IA are going to be very similar in value (price people are willing to pay) compared to 10 acres that are 10 miles down the road. Rural land is generally quite uniform and more likely to be functionally the same. In an urban area, say Los Angeles, 10 acres in Malibu (an area with very…

Now you've brought the horror that is prop 13 to a tax that is supposed to replace all other taxes. Things change in value, we have to account for that.

Re: Book Review: Progress and Poverty

#18

Post by markdown »

bee_rider wrote: post #8
scythe wrote: post #6

Earlier quoted context omitted.

The biggest problem with LVT is surprisingly simple: accurately assessing the value of land is very hard, and ensuring that the assessment process is fair is therefore extremely hard. LVT experiments in history tend to run into problems when people feel that their land has been valued incorrectly, leading to a vocal minority that despises the law. That results in something like this: https://nassimtaleb.org/2016/08/i…

Huh. Property tax is already a thing of course, but I guess if the LVT was going to replace all taxation the stakes would be much higher. In an urban setting, it seems to me that the land value should be... reasonably uniform, unlike property, which should make assessing much easier, right? But that's just getting the number. Whether people are happy with the number is a whole 'nother problem.

Doesn't work that way. A subway gets built near your property. The benefit of greater access accrues to you more than it does someone 10km away. So your LVT has to go up.

Now you can't afford the taxes, and you're forced to sell and move to somewhere with lower LVT. It's bought by someone who will put it to better use. Maybe an apartment block instead of your single family home.

Over time, every piece of land is put to its most productive use. But before it gets there, there will be some pain for the individuals who choose (or are forced) to move because they can't afford to the improvements made to the infrastructure in their locality.

Re: Book Review: Progress and Poverty

#19

Post by jmole »

It seems like the biggest challenge to Georgism is that municipality/county/state/federal regulations on land use would have a significant effect on land value.

A landlord might lobby for restrictive land use policy while sitting on a parcel, and then lobby for opening those restrictions when it comes time to sell. Essentially avoiding the tax by using government policy to suppress the true land value.

There are solutions to this of course, but they come down to zoning and land use regulation, which is sort of the core of all our other problems with real estate in America.

Re: Book Review: Progress and Poverty

#20

Post by notahacker »

scythe wrote: post #6
bee_rider wrote: post #4

Earlier quoted context omitted.

I may have to pick this up -- as someone with no economics training at all, a land value tax seems extremely appealing and intuitive to me. I'd already like to become a complete partisan in favor of this policy, but I guess it would make sense to read what the actual justification is, for it, haha.

The biggest problem with LVT is surprisingly simple: accurately assessing the value of land is very hard, and ensuring that the assessment process is fair is therefore extremely hard. LVT experiments in history tend to run into problems when people feel that their land has been valued incorrectly, leading to a vocal minority that despises the law. That results in something like this: https://nassimtaleb.org/2016/08/i…

The biggest problem with it as presented in Progress and Poverty (i.e. as a Single Tax to fund the government budget, not some small supplementary levy to fund something like local services) is that the size of the tax bears relatively little relation to the ability of someone to pay it (at least, to pay it without selling their house). Turfing pensioners out of their house because the land it sits on gained in value faster than their pension whilst others earn millions virtually tax free obviously isn't a natural vote winner.
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