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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?

#11

Post by pasquinelli »

sokoloff wrote: post #2

I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent. In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. https://constitutioncenter.org/interactive-constitution/inte...

Just make it a constitutional ammendment.

I mean, obviously nothing of significance is going to change in terms of public policy, at all. This should be obvious after Obama->Trump->Biden, and covid, and on and on really. So, given that fact, it's a little funny to poo-poo a public policy thought experiment (which is all it is) on the grounds that the courts would strike it down-- as if any change of any significance will survive to that point.

But if we're talking thought experiment, just make it a constitutional ammendment.

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

#12

Post by epistasis »

lr4444lr wrote: post #6

It's used as the primary source of funding for county and town level government in most parts of the USA already. Does it "work"? Like any other tax system, it has its pros and cons. But one of the big drawbacks I see to federalizing it is the extremely relative value of property from region to region. It even dwarfs the relative difference in income taxes for similar jobs in dissimilar places. Yeah, you could have w…

No, it is not. What is generally used is a property tax, not a land value tax. The difference is whether the tax is based in the value of the location, or whether improvements to the land are included.

Economically, these behave very differently, and the percentage of the property tax is typically too low to tax away the land rents.

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

#13

Post by pasquinelli »

hammock wrote: post #4
sokoloff wrote: post #2

I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent. In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. https://constitutioncenter.org/interactive-constitution/inte...

Why does everyone assume new policy has to be enacted at the federal level? Whatever happened to states rights? This is a perfect use case, have a couple states try it and a couple not and see what happens.

Just have them do it!

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

#15

Post by wffurr »

lr4444lr wrote: post #6

It's used as the primary source of funding for county and town level government in most parts of the USA already. Does it "work"? Like any other tax system, it has its pros and cons. But one of the big drawbacks I see to federalizing it is the extremely relative value of property from region to region. It even dwarfs the relative difference in income taxes for similar jobs in dissimilar places. Yeah, you could have w…

Property taxes in most of the United States are not land value taxes in the Georgist sense.

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

#16

Post by runnerup »

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 understand and (mostly) agree with rebuttals to (1) and (2). At least in areas of constrained housing. But I fail to see how (3) would work out.

To me, I think setting the LVT higher than the value of the land would be disastrous because people wouldn't want to own that land, let alone improve it. Setting it lower than the value of the land wouldn't be as disastrous, but seems like it could still encourage similar behavior that we have today (under-develop the land, NIMBYism, hold land passively and wait for scarcity price gains). Perhaps any amount of "getting close" to the true LVT is at least helpful, as long as you don't go over.

Or maybe I'm mis-thinking this and accidentally settings taxes higher than the "true" LVT isn't disastrous?

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

#17

Post by TulliusCicero »

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…

> In real life you can't accurately assess land value separately from improvements

Hmm, is this true? It seems to me like the value of owning that 'space' wouldn't be that hard to evaluate separately from the stuff on it.

When you say improvements here, do you mean improvements to land itself, like removing poison from the soil or reshaping it to be more flat, or 'improvements' meaning properties built on the land?

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

#18

Post by PragmaticPulp »

I was excited to read this article, but by the end it felt like a jumble of unrelated conjectures examined in isolation from each other that all seem to be presented in a way that deliberately ignores any downsides:

For example:

> Also, keep in mind that LVT would see the elimination of the portion of property tax that falls on buildings. I just checked my own property tax records (I live in the suburbs of a medium-sized town far from any major urban cores). If the assessed land share more than doubled to 40%, under a 100% LVT regime I'd actually save $545.05 on my property taxes every year–and that's without a Citizen's Dividend.

Picking the author’s house, applying arbitrary land value tax numbers to it, and declaring a net tax savings for the author as a victory for LVT is not really a useful data point. It seems that actually analyzing the winners and losers of a LVT would require a more thorough simulation, but that’s outside the scope of the article.

The article also had an unsettlingly high number of “If we assume that X is true, then Y is a reasonable conclusion” while completely sidestepping an examination of whether or not “X” was true or even reasonable.

The second part looks to be more interesting: I’d like to see some arguments for why a LVT wouldn’t just be passed along to the renters like every other expense is currently.

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

#19

Post by kiba »

klipt wrote: post #3
sokoloff wrote: post #2

I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent. In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. https://constitutioncenter.org/interactive-constitution/inte...

You'd really need to combine land tax with zoning reform to make it work properly. The idea is that since the land under a house and under a skyscraper is taxed the same, more valuable land (eg in city centers) would be built up, which means the tax per tenant could still be very low. Also you don't need to do it federally, states could do it fine too.

If we're talking about no political restriction, I would go even further. Get rid of the mass market cars and implement trams as the basic suburban and urban feature. It could even carry some light freight for last mile logistics.

As for the rest, it's bicycles, even velomobiles.

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

#20

Post by ghaff »

epistasis wrote: post #9
runnerup wrote: post #5

Earlier quoted context omitted.

> In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. I'm really quite sure this would be a state-level thing.

Further, I think such a tax would provide absolutely huge economic benefits to the states that passed them. Much like California's restrictions on non-competes allowed a much more dynamic tech industry to develop than what developed in Massachusetts.

People moved between computer companies all the time in Massachusetts--albeit at a time when engineers job-hopped much less than today. I never had a non-compete until EMC bought the company I worked for and that non-compete was pretty reasonable and didn't keep me from getting a job elsewhere.

I don't like non-competes and MA has fairly recently made some worthwhile (although insufficient) changes. But the differences between CA and MA (which still has some of the highest VC investments in the country, albeit less than CA) are hard to square with being primarily about non-competes.

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