Georgism • Hacker News Board

Re: Georgism

#11

Post by alexmingoia » Sun, May 17, 2020, 1:04 PM UTC

The problem with georgism is that “unimproved value” is a non-market price. It’s just made up by whoever is appointed assessor.

Georgism conflates made up “value” with market “value”. Ultimately some person has to assess the value of the unimproved land, meaning someone anointed to write down whatever number they want.

Value is subjective. There is no such thing as “unimproved land value”, unless you’re talking about the last sale price of a particular unimproved lot. Property taxes in general have this problem, but it’s very acute with unimproved land. Unimproved land is one of the most non-fungible goods there is.

Re: Georgism

#12

Post by nabla9 » Sun, May 17, 2020, 1:06 PM UTC

EGreg wrote: post #3

There was a time - for over half a century - when Progress and Poverty was the best known economics book in the world. If you buy one, it has a who’s who of people endorsing it, from famous economists to writers to presidents. And somehow, in the last 50 years, we have all forgotten it, and some people only remember the land tax. Not only that, but the same debates rage today, about why there is still so much poverty…

"The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give."

— Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter XI "Of the Rent of Land"

Re: Georgism

#13

Post by aww_dang » Sun, May 17, 2020, 1:07 PM UTC

EGreg wrote: post #3

There was a time - for over half a century - when Progress and Poverty was the best known economics book in the world. If you buy one, it has a who’s who of people endorsing it, from famous economists to writers to presidents. And somehow, in the last 50 years, we have all forgotten it, and some people only remember the land tax. Not only that, but the same debates rage today, about why there is still so much poverty…

"Rather than nationalize land outright, the single taxers would levy a 100 percent tax on the annual land rent — the annual income from the site — which amounts to the same thing as outright nationalization." --Murray Rothbard

Georgism is reasonably well known among free-market enthusiasts and libertarians.

Re: Georgism

#14

Post by JSavageOne » Sun, May 17, 2020, 1:09 PM UTC

chii wrote: post #5

EGreg wrote: post #3

There was a time - for over half a century - when Progress and Poverty was the best known economics book in the world. If you buy one, it has a who’s who of people endorsing it, from famous economists to writers to presidents. And somehow, in the last 50 years, we have all forgotten it, and some people only remember the land tax. Not only that, but the same debates rage today, about why there is still so much poverty…

> why there is still so much poverty even while there has been so much progress there's been an objective improvement to the % of people in poverty over the past few centuries. It's just that there's an even larger improvement to those who were rich, relative to the improvements to the poor. If you had a choice, you would choose to be poor today, than to be poor a century or two ago.

> If you had a choice, you would choose to be poor today, than to be poor a century or two ago.

The classic false dichotomy that somebody always feels the need to point out in justifying the status quo.

Re: Georgism

#15

Post by zozbot234 » Sun, May 17, 2020, 1:10 PM UTC

alexmingoia wrote: post #11

The problem with georgism is that “unimproved value” is a non-market price. It’s just made up by whoever is appointed assessor. Georgism conflates made up “value” with market “value”. Ultimately some person has to assess the value of the unimproved land, meaning someone anointed to write down whatever number they want. Value is subjective. There is no such thing as “unimproved land value”, unless you’re talking about…

Isn't that true of any assessment? With the ordinary property tax, you have to assess both the land value and the improvements. (There are of course ways of taxing property that don't involve that kind of outside assessment, but they're not commonly used.)

Re: Georgism

#16

Post by zozbot234 » Sun, May 17, 2020, 1:16 PM UTC

yufeng66 wrote: post #9

The founding father of the Republic of China, Dr. Sun Yat-sen, was heavily influenced by Georgism. He believed all income derived from land, including appreciation of the land, should be heavily taxed. He incorporated it into three principle of the people, which is the cornerstone Kuomintang ideology. But nobody would argue Taiwan is a Georgism heaven right now. Why? Rich and political powerful people own the land. G…

Doesn't Taiwan (in common with other Asian countries) mostly allocate land to the private sector via long-term leases, as opposed to ownership of indeterminate duration? That would be enough to regard it as quite Georgist.

Re: Georgism

#17

Post by JSavageOne » Sun, May 17, 2020, 1:17 PM UTC

I've yet to see a single valid objection as to why LVT (Land Value Tax) should not be the primary tax, yet it's nowhere to be found in the political dialogue. Such a shame that the majority of the tax burden instead falls on the working class while the landowners get a free ride.

Re: Georgism

#18

Post by toohotatopic » Sun, May 17, 2020, 1:21 PM UTC

nabla9 wrote: post #12

EGreg wrote: post #3

There was a time - for over half a century - when Progress and Poverty was the best known economics book in the world. If you buy one, it has a who’s who of people endorsing it, from famous economists to writers to presidents. And somehow, in the last 50 years, we have all forgotten it, and some people only remember the land tax. Not only that, but the same debates rage today, about why there is still so much poverty…

"The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give." — Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter XI "Of the Rent of Land"

This assumes that the farmer has to remain a farmer. This can be true for one generation, but the next generation can choose another profession. People don't become farmers if they have to pay too much.

Re: Georgism

#19

Post by pydry » Sun, May 17, 2020, 1:23 PM UTC

rikroots wrote: post #4

Back in a different life, I worked on the Lyons Inquiry which looked at English Local Government finances. Final report was issued in 2007[1]. As part of the work we had to look into Land Value Taxes as a supplement/alternative to Council Tax and Business Rates. There's nothing wrong with the idea. The big issues were mainly around introducing a new tax system and the massive upheavals and uncertainties businesses an…

If I were representing the wishes of extremely wealthy landlords I'd try and make sure the rationale for killing LVT were something like "it would introduce upheavals and uncertainties" too.

I'm certainly not going to say something like "because me and my mates and people like me would lose a stream of unearned income".

Re: Georgism

#20

Post by nabla9 » Sun, May 17, 2020, 1:24 PM UTC

alexmingoia wrote: post #11

The problem with georgism is that “unimproved value” is a non-market price. It’s just made up by whoever is appointed assessor. Georgism conflates made up “value” with market “value”. Ultimately some person has to assess the value of the unimproved land, meaning someone anointed to write down whatever number they want. Value is subjective. There is no such thing as “unimproved land value”, unless you’re talking about…

There is brilliant way to solve it so that value and market-value meet. Keep the land always in market.

It's called Common Ownership Self-Assessed Tax (COST).

Land owner would self-assess the value of assets they possess, pay a tax on that value. The owner would be required to sell the asset to anyone willing to purchase them at this self-assessed price.

If you value the land high for any reason and want to keep it, you must self-assess the value higher than anyone is willing to pay for it and pay tax for it. If value it too low, someone might buy it.