Book Review: Progress and Poverty • Hacker News Board

Re: Book Review: Progress and Poverty

#111

Post by t0suj4 » Sat, May 14, 2022, 3:00 PM UTC

imtringued wrote: post #102

t0suj4 wrote: post #90

Earlier quoted context omitted.

The trouble with value assessment is good enough to dismiss LVT altogether. I don't want to be forced to liquidate my house to cover LVT bill only because the land value shot up thanks to being a part of future promise from a developer project that doesn't have to fall through.

What? Assessing the value of land is a much simpler problem than processing income taxes or sales taxes or VAT.

Assessing value for the purpose of sale is much easier than for the purpose of tax.

Land owners need to assess value when they want to sell. Taxmen need regular value assessment so they can tax it.

Does renting out a room in your house to students influence the taxes you and your neighbors pay? How does it change your relationships if they never plan to sell?

Re: Book Review: Progress and Poverty

#112

Post by rufus_foreman » Sat, May 14, 2022, 4:19 PM UTC

TimPC wrote: post #110

rufus_foreman wrote: post #70

Earlier quoted context omitted.

>> land doesn’t have freedom of choice the way people do I mean that's your best argument, but it's not as clear cut as that to me. What I do with my property and what I do with my labor are both matters of freedom of choice. But yeah, I get you. I don't want to be told what to do with my labor. But I don't want to be told what to do with my land either. >> We also currently tax land based on its market value which c…

The portion of property taxes that tax the land tax it at its market price though. And we know from economics that the market price is set based on the best economic use. So the entirety of your disagreement seems to be “we also tax buildings” not that the portion of the tax on land doesn’t work the way I said. What you do with your labour is a strong right that is deeply connected to bodily autonomy. Bodily autonomy…

>> What you do with your labour is a strong right that is deeply connected to bodily autonomy

Taxing people at different rates based on the decisions they make is not taking away bodily autonomy. Taxing someone at a higher rate if they choose not to have children does not force them to have children. The teacher isn't forced to become a software developer. There are just tax implications for the decisions one makes, as there are already now.

And I don't agree that property rights are weak rights. Property rights are at the very core of a free society.

Re: Book Review: Progress and Poverty

#113

Post by notahacker » Sat, May 14, 2022, 4:19 PM UTC

zozbot234 wrote: post #109

notahacker wrote: post #101

Earlier quoted context omitted.

Proposing children are kicked out of family homes isn't necessarily more politically palatable, and deferrals introduce revenue issues (especially if LVT causes land value to fall over time, which is often mooted as an advantage by Georgists...) But that's a minor issue compared with the second part of my post, which is that if a proposed tax reform reduces the tax burden on almost every corporation and high net wort…

"Corporations" don't bear the incidence of any tax, they merely pass it along to something else. And taxing high net worth individuals on their savings reduces investment significantly, making everyone worse off. That's why it makes sense to single out "land"-like assets for taxation in the first place. Much of the value locked in "shares" is itself land, and would of course be taxed. Unlike with ordinary corporate t…

Sure, much of the value locked in shares is land or land-like assets but a much higher proportion of the value of the average middle class person's property is land. So as taxes go it's incredibly favourable to most one percenters, and ordinary homeowners are amongst those whose taxes must make up the difference. (And Single Taxers have to raise 1/3 of GDP from someone so its not like the possibility of the middle classes actually paying less tax providing they kiss goodbye to their homes and move into a high rise or rural Nevada is a solution and not a different category of problem)

Efficiency arguments that the average middle class homeowner would still be better off materially even with a much higher personal tax bill because the Zuckerbergs and Dorseys of this world would retain more untaxed profits and dividends to use their superior resource allocation skills to invest in land-free Bigger Adtech might appeal to the armchair neoclassical economist but for obvious reasons the public are more sceptical.

Re: Book Review: Progress and Poverty

#114

Post by TimPC » Sat, May 14, 2022, 4:40 PM UTC

prichino wrote: post #72

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…

That's the gist of it. If land is so worthless even rich people don't want anything to do with it, why would it make someone poor better off to have it?

Because you can put structures on the land and capture the entire value of the structure?

There is a difference between something being intrinsically worthless and the taxes driving the market price to $0.

Re: Book Review: Progress and Poverty

#115

Post by TimPC » Sat, May 14, 2022, 4:59 PM UTC

its_ethan wrote: post #64

TimPC wrote: post #36

Earlier quoted context omitted.

Interestingly because the supply of land is inelastic its supply curve is a straight vertical line. If you charge the tax directly to tenants they lose say $20,000 in LVT tax. This lowers their demand for land by $20,000. Because the supply curve is a straight vertical line the intersection of the supply and demand curve is now $20,000 lower. They literally pay $20,000 less for land rent. This doesn't work with anyth…

> Interestingly because the supply of land is inelastic its supply curve is a straight vertical line. If you charge the tax directly to tenants they lose say $20,000 in LVT tax. This lowers their demand for land by $20,000. This might sound good in theory, but it is a very hard sell to say that's how it pans out in practice. You even say: "This doesn't work with anything that has elastic supply like buildings" - so a…

No the building on the property isn’t taxed. You pay $0 more in taxes for building it.

If you have a fundamental objection to how the established theory of supply and demand curves works I can’t really help you. Large parts of economics have shown it to be successful and I certainly trust it over anecdotal arguments about how landlords will pass on the tax.

Based on the demand curve any attempt to pass on the tax will result in empty land and less overall revenue due to the mispricing. This at a minimum means some landlords will be very unhappy.

Re: Book Review: Progress and Poverty

#116

Post by TimPC » Sat, May 14, 2022, 5:07 PM UTC

rufus_foreman wrote: post #112

TimPC wrote: post #110

Earlier quoted context omitted.

The portion of property taxes that tax the land tax it at its market price though. And we know from economics that the market price is set based on the best economic use. So the entirety of your disagreement seems to be “we also tax buildings” not that the portion of the tax on land doesn’t work the way I said. What you do with your labour is a strong right that is deeply connected to bodily autonomy. Bodily autonomy…

>> What you do with your labour is a strong right that is deeply connected to bodily autonomy Taxing people at different rates based on the decisions they make is not taking away bodily autonomy. Taxing someone at a higher rate if they choose not to have children does not force them to have children. The teacher isn't forced to become a software developer. There are just tax implications for the decisions one makes,…

By weak right I mean that they are socially constructed and thus depend on society. By strong right I mean they come from nature and don’t depend on society.

Many of the classical philosophers have made strong arguments for the right of bodily autonomy extending to ownership of your labour both in the sense of owning your choice of what to do and owning the fruits of your labours. Income tax is government interfering with your ownership of your own labour which violates this sense of bodily autonomy. You might argue for a weaker notion of bodily autonomy but doing so requires some substantial moral argumentation rather than mere assertion.

As to the idea that property rights are at the core to a free society, can you provide me with an example? Since we are discussing the idea that taxation would be a violation of a property right what I’d like to see is a society where having untaxed land is core to the freeness of society.

Re: Book Review: Progress and Poverty

#117

Post by TimPC » Sat, May 14, 2022, 5:15 PM UTC

jmole wrote: post #58

zozbot234 wrote: post #27

Earlier quoted context omitted.

> 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.

Look at the case of Atherton, CA - multi-million dollar home values due to city ordinances around minimum lot size and land usage. The land value here is created by scarcity, and driven largely by the success of the greater metro area. But if you are trying to value this land from a Georgist perspective, and one that takes into account property zoning and use requirements, the land is worth much less than it should b…

No one is arguing Georgist tax policy will solve all of zoning. We will still have some issues with land use and no system is absolutely perfect. Still I think on the balance this is a vast improvement over the status quo.

Re: Book Review: Progress and Poverty

#118

Post by MiddleEndian » Sat, May 14, 2022, 7:28 PM UTC

imtringued wrote: post #106

MiddleEndian wrote: post #54

Earlier quoted context omitted.

As much as I think LVT makes sense, having to go to some sort of annual auction for my own land does seem worse than just paying taxes. Along with that being a tedious process, that could put you at the mercy of malicious actors who may just dislike you and have enough cash to outbid you. Any implementation would have to not include this for people to be able to have stable lives.

A yearly auction is overkill. Do it every 5-10 years with a fee the longer you delay the next auction. (Like banks charge more interest the longer a fixed rate loan is)

Eh still sounds pretty terrible really. The assessment people should be able to figure it out however they normally figure out taxes.

Re: Book Review: Progress and Poverty

#119

Post by zozbot234 » Sat, May 14, 2022, 8:08 PM UTC

notahacker wrote: post #113

zozbot234 wrote: post #109

Earlier quoted context omitted.

"Corporations" don't bear the incidence of any tax, they merely pass it along to something else. And taxing high net worth individuals on their savings reduces investment significantly, making everyone worse off. That's why it makes sense to single out "land"-like assets for taxation in the first place. Much of the value locked in "shares" is itself land, and would of course be taxed. Unlike with ordinary corporate t…

Sure, much of the value locked in shares is land or land-like assets but a much higher proportion of the value of the average middle class person's property is land. So as taxes go it's incredibly favourable to most one percenters, and ordinary homeowners are amongst those whose taxes must make up the difference. (And Single Taxers have to raise 1/3 of GDP from someone so its not like the possibility of the middle cl…

Even if you focus on real estate alone, land is a "much higher" portion of that value only in urban cores where owning one's residence would be relatively uncommon (and that for very sensible, rational reasons). The areas that are most commonly associated with middle-class real estate ownership have significantly lower land values. While it's hard to say whether a genuine "single tax" is actually feasible given modern trends in government spending, the overall incidence of LVT is really quite favorable to the middle class and especially to the lower class.

Re: Book Review: Progress and Poverty

#120

Post by TimPC » Sat, May 14, 2022, 8:47 PM UTC

lordnacho wrote: post #93

its_ethan wrote: post #65

Earlier quoted context omitted.

It's certainly a fun game, but does that mean if I decide my property is worth $100,000, accurate or not, I am forced to sell it just because someone comes along and decides they want to buy it? Also, is this a game that happens every year to allow for appreciation? For a realistic implementation, why not just use the fact that the landowner already decided what the value their land has when they purchased it and/or…

I think you need a new value each year, otherwise of course if the economy goes well people will buy your land off you cheaply. So you get to decide your tax each year but if you save yourself too much someone else will grab the excess value.

This game is terrible because even yearly is too slow. The property market went up 30% in my city this past year. If I set a fair price at the beginning of the year I’m forced to sell my house at a loss. Only if guess that I should overpay by at least 30% at the beginning of the year does my house remain unsold.