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Book Review: Progress and Poverty

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Re: Book Review: Progress and Poverty

#41

Post by zozbot234 »

TimPC wrote: post #38
zozbot234 wrote: post #35

Earlier quoted context omitted.

Since all taxes are ultimately borne by land (specifically, by resources in fixed supply), it's not at all clear that compensation is required for a neutral tax shift.

Some people argue no compensation is required but I think in reality an LVT at 100% reduces the price of all land to $0. Given that land is substantial portion of retirement savings in our current economy, completely obliterating land prices without any compensation seems morally dubious. Perhaps if you do it slowly enough that you give everyone time to adjust and make the market adjustments gradual enough that peopl…

Nobody is arguing for a literal 100% LVT. You'd want to still leave a fraction of land rent (say 10% or so) untaxed, since this introduces a desirable market mechanism in property assessment - and George even acknowledges this. What's nutty is to let land speculators capture all of that value for no real reason.

Re: Book Review: Progress and Poverty

#42

Post by xboxnolifes »

markdown wrote: post #18
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.

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…

> 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.

Which is why I think it makes sense that the LVT shouldn't be re-evaluated on a rolling basis. It would only be re-evaluated (or at least put into effect) when it changes owners (sale, gift, inheritance, etc). Otherwise you get bad incentives for people to vote against improvements that price them out of living where they currently are.

Corporate land ownership would likely need different rules, as the owner could theoretically be the same forever.

Over time, land is still put to it's most productive use, there is just a delay introduced that considers the human condition.

Re: Book Review: Progress and Poverty

#43

Post by TimPC »

aesh2Xa1 wrote: post #11
nickff wrote: post #3

Earlier quoted context omitted.

> "... 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?

It's hard to measure precisely how popular it was historically but he campaigned for Mayor of NYC as a Georgist and finished 2nd ahead of Teddy Roosevelt who finished 3rd. So Henry George at least was well liked.

The book itself was the best selling economics book of the 19th century. It inspired art demonstrations and some governments throughout the world even adopted LVT for a while. So yes, it was pretty popular.

Re: Book Review: Progress and Poverty

#44

Post by TimPC »

mcguire wrote: post #39
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.

Absolutely! The biggest advantage for most, particularly readers of HN, is described in part II ( http://gameofrent.com/content/can-lvt-be-passed-on-to-tenant... ): "...landlords cannot pass Land Value Tax (LVT) on to their tenants..." Renting an apartment in SF would therefore both be cheap, because the LVT encourages high-density, and tax-advantaged, especially if the LVT is (as it is supposed to be) the only tax.…

Renting the apartment in SF will not be cheap because the land has extremely high value. It's just the government will capture the high value of that land instead of landlords and that high value land capture will be used to remove other taxes like income tax and property tax. Land prices in SF would fall slightly as the LVT removes most speculation. So likely rents go from $6000/month to something like $5400/month. But the government might capture $4500 of that to reduce other taxes.

If we still had 1870's small government the idea would be to put most of the LVT into a Citizen's Dividend which functions like a UBI and helps people pay for their cost of living (including some of the land taxes).

Re: Book Review: Progress and Poverty

#45

Post by TimPC »

a9h74j wrote: post #16

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/

I think Georgism's main appeal is that if you interfere as best as possible in the mechanism by which land captures the value of labour and use that to reduce other capture of the value of labour you remove the worst excesses of capitalism. You literally don't have to change the rest of the system.

Tenants pay the same rents they do now (perhaps slightly lower due to removal of speculation) but no longer have to pay any income tax. Property owners pay more in LVT but no longer pay income tax as well. No one gets to hold land value unearned and benefit from the work of others except the government who uses it to reduce other taxes and provide services we've come to depend on in modern society.

This is quite different from various radical re-imaginings of the entire economic system. Those systems are looking to solve almost entirely different problems and introduce far more new ones.

Re: Book Review: Progress and Poverty

#46

Post by TimPC »

zozbot234 wrote: post #27
jmole wrote: post #19

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 solu…

> municipality/county/state/federal regulations on land use would have a significant effect on land value. That's not "a challenge" it's a positive side effect. Those government institutions would be enabled to internalize the value that they create, which is presently being captured by random private parties that did not create it.

I agree that there is a positive side effect here in that municipalities now have a strong incentive to rezone in ways that increase land value since they capture a portion of that value from their share of the LVT.

Re: Book Review: Progress and Poverty

#47

Post by SilasX »

aesh2Xa1 wrote: post #11
nickff wrote: post #3

Earlier quoted context omitted.

> "... 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?

Paul Birch had a long essay criticizing it. Here’s where I mentioned it on HN to summarize the key points:

https://news.ycombinator.com/item?id=17605751

Re: Book Review: Progress and Poverty

#48

Post by TimPC »

zozbot234 wrote: post #41
TimPC wrote: post #38

Earlier quoted context omitted.

Some people argue no compensation is required but I think in reality an LVT at 100% reduces the price of all land to $0. Given that land is substantial portion of retirement savings in our current economy, completely obliterating land prices without any compensation seems morally dubious. Perhaps if you do it slowly enough that you give everyone time to adjust and make the market adjustments gradual enough that peopl…

Nobody is arguing for a literal 100% LVT. You'd want to still leave a fraction of land rent (say 10% or so) untaxed, since this introduces a desirable market mechanism in property assessment - and George even acknowledges this. What's nutty is to let land speculators capture all of that value for no real reason.

I think the group that is capturing the most value is actually landlords, followed by speculators. I also agree that 90% LVT may be better in practice, although I do know people who still argue for 100% and various auction mechanisms to determine the LVT.

Re: Book Review: Progress and Poverty

#49

Post by colinmhayes »

mcguire wrote: post #39
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.

Absolutely! The biggest advantage for most, particularly readers of HN, is described in part II ( http://gameofrent.com/content/can-lvt-be-passed-on-to-tenant... ): "...landlords cannot pass Land Value Tax (LVT) on to their tenants..." Renting an apartment in SF would therefore both be cheap, because the LVT encourages high-density, and tax-advantaged, especially if the LVT is (as it is supposed to be) the only tax.…

Rental prices would not change, it's just that more of the money would go to government instead of the landlord, especially for low density housing.

Re: Book Review: Progress and Poverty

#50

Post by mynameishere »

danbolt wrote: post #23
mynameishere wrote: post #21

Earlier quoted context omitted.

It seems extremely unappealing to me. It seems like something a wealthy apartment-dweller in a tall building in a dense city would come up with to move taxation from himself to the guy in the country with two acres and a mobile home. The more I think about it, the more I'm sure that's the actual motivation.

Wouldn’t a LVT mean that the taxes on the mobile home be much less than the apartment in the dense city?

I'm just going by the headline definition: "A land value tax is a levy on the value of land without regard to buildings, personal property and other improvements." That's the basic idea.

I think people need to keep in mind the actual purpose of taxation: One group is taking resources from another. Nobody is pushing this tax (or any) because it's "efficient" or whatever. They are pushing it because they will come out ahead.

A person who lives in a 600 square foot apartment in a 60 story tower will effectively be paying taxes on 10 square feet of actual land. That land might be very valuable, but I suspect no matter how you twist the numbers, it's going to be less than two acres anywhere in the country. Especially if you go by the spirit of the LVT, which is to ignore improvements.

I could be wrong. I'm just guessing at "who fucks over whom" here.

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