Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Letter from a Young Distributist: Georgism and Distributism

progressandpoverty.substack.com

Post reply on HN
Print view View original

11–20 of 165 posts

Re: Letter from a Young Distributist: Georgism and Distributism

#11

Post by TimPC »

brightly-salty wrote: post #5
TimPC wrote: post #4

Georgism and Distributism is interesting but short of a plan to actually transition the tax infrastructure in that direction this article reduces to an unactionable history lesson. Still worth reading, but not powerful enough for those who want economic change. I'd argue that transitioning is an extremely hard problem. The Georgist system taxes property at extreme rates. In particular, the taxes on property ownership…

I think you might misunderstand Georgism, or maybe I did a poor job explaining it. Georgism does not propose taxing improvements (buildings etc), only the actual land. So many peoples tax burden would be decreased, and if the bank owns the land as in a mortgage, they are the ones paying the tax, not the people taking out the mortgages.

Total Federal US Tax Revenues in 2021: $4.05 trillion Total US Mortgages in 2021: $17.1 trillion

Once you add the taxes for other jurisdictions of government I can see taxes reaching 30% of total mortgage value. It's fairly clear to me that owning land is extremely expensive in a Georgist society that needs to generate the levels of taxation that fund current government. If land value tax replaces income tax it needs to be fairly large, taking over 20% of mortgage value for just federal costs.

Some number of homes are owned outright and no longer have mortgages so the mortgage number may be a bit misleading. If we account for this we might get to a level that suggests 10% of mortgage value in taxes federally, raising to 15% of mortgage value when accounting for other levels of government. Such numbers suggest you'd need to be able to pay for your current property with an 8-year mortgage in order to pay the Georgist taxes on it.

I think a modern society that kept existing levels of government spending would see widespread downgrades in housing quality in a Georgist society.

Re: Letter from a Young Distributist: Georgism and Distributism

#12

Post by geocon »

TimPC wrote: post #6
brightly-salty wrote: post #5

Earlier quoted context omitted.

I think you might misunderstand Georgism, or maybe I did a poor job explaining it. Georgism does not propose taxing improvements (buildings etc), only the actual land. So many peoples tax burden would be decreased, and if the bank owns the land as in a mortgage, they are the ones paying the tax, not the people taking out the mortgages.

I get that Georgism doesn't tax the improvements. I think we have a fundamental disagreements about how mortgages work. A mortgage doesn't make the bank the owner of the land. Even if we strangely ruled that it did, that would lead to strange situations where as long as people were paying a mortgage they could live tax free on their land. But the minute that mortgage disappeared they'd be on the hook for the tax valu…

This is a good point but it's not a problem with georgism per se so much as the transition to get there. There are a multitude of policies that can be used to ameliorate the change from a system based on taxation of labor and capital to that of land; a common one is giving tax credits equivalent to mortgages so that lendees are not underwater. But any shift to land value taxation will be gradual anyways, so it would be less dramatic than people imagine.

Re: Letter from a Young Distributist: Georgism and Distributism

#13

Post by brightly-salty »

ogogmad wrote: post #8

Does this have anything to do with the land reforms of Pyotr Stolypin?

I wasn’t aware of the reforms before I just looked it up, but from what I see, it looks like he had distributist goals. He was almost definitely not aware of the concurrent academic movement in England, but many thinkers individually came up with similar ideas.

Re: Letter from a Young Distributist: Georgism and Distributism

#14

Post by skybrian »

brightly-salty wrote: post #5
TimPC wrote: post #4

Georgism and Distributism is interesting but short of a plan to actually transition the tax infrastructure in that direction this article reduces to an unactionable history lesson. Still worth reading, but not powerful enough for those who want economic change. I'd argue that transitioning is an extremely hard problem. The Georgist system taxes property at extreme rates. In particular, the taxes on property ownership…

I think you might misunderstand Georgism, or maybe I did a poor job explaining it. Georgism does not propose taxing improvements (buildings etc), only the actual land. So many peoples tax burden would be decreased, and if the bank owns the land as in a mortgage, they are the ones paying the tax, not the people taking out the mortgages.

Uh, you might want to learn about tax incidence.

If the bank pays the tax, why wouldn't they pass it on to the mortgage holder in the form of higher interest rates or other fees?

There are exceptions when businesses are investing for growth and expenses are paid by investors, but normally no business is going to agree to a contract where they lose money. The money to pay expenses comes from customers.

Re: Letter from a Young Distributist: Georgism and Distributism

#16

Post by geocon »

Apocryphon wrote: post #3

Nice to hear examples of some economic ideologies that didn’t catch on, but speaks to material concerns that still exist today.

Georgism was extremely influential in its time, Progress and Poverty was the second best-selling book after the Bible and 200,000 people attended Henry George's funeral. Only it's been kind of written out of the history books since it doesn't fit easily in the socialist-communist-capitalist narrative people have in mind for the 19th and 20th centuries

Re: Letter from a Young Distributist: Georgism and Distributism

#17

Post by TimPC »

TimPC wrote: post #11
brightly-salty wrote: post #5

Earlier quoted context omitted.

I think you might misunderstand Georgism, or maybe I did a poor job explaining it. Georgism does not propose taxing improvements (buildings etc), only the actual land. So many peoples tax burden would be decreased, and if the bank owns the land as in a mortgage, they are the ones paying the tax, not the people taking out the mortgages.

Total Federal US Tax Revenues in 2021: $4.05 trillion Total US Mortgages in 2021: $17.1 trillion Once you add the taxes for other jurisdictions of government I can see taxes reaching 30% of total mortgage value. It's fairly clear to me that owning land is extremely expensive in a Georgist society that needs to generate the levels of taxation that fund current government. If land value tax replaces income tax it needs…

To be clear I'm not saying that Georgist taxes are based on the mortgage value I know they are not. I'm comparing the two quantities to establish a rough estimation of how expensive property in a Georgist society that provided a similar level of services would be. If government needed to generate a certain amount of tax revenue comparable to current tax revenue they likely need to charge homeowners an average tax on their unimproved land value that would roughly amount to 15+% of the value of the mortgage, across all levels of government.

Re: Letter from a Young Distributist: Georgism and Distributism

#18

Post by geocon »

TimPC wrote: post #17
TimPC wrote: post #11

Earlier quoted context omitted.

Total Federal US Tax Revenues in 2021: $4.05 trillion Total US Mortgages in 2021: $17.1 trillion Once you add the taxes for other jurisdictions of government I can see taxes reaching 30% of total mortgage value. It's fairly clear to me that owning land is extremely expensive in a Georgist society that needs to generate the levels of taxation that fund current government. If land value tax replaces income tax it needs…

To be clear I'm not saying that Georgist taxes are based on the mortgage value I know they are not. I'm comparing the two quantities to establish a rough estimation of how expensive property in a Georgist society that provided a similar level of services would be. If government needed to generate a certain amount of tax revenue comparable to current tax revenue they likely need to charge homeowners an average tax on…

Except that's not how Georgist tax structure is decided, it is 100% of the land's rental value. If you want a good overview I recommend this exhaustive and data-heavy series of articles: https://gameofrent.com/content/progress-and-poverty-review

Re: Letter from a Young Distributist: Georgism and Distributism

#19

Post by m0llusk »

It might be interesting to generate simulation data that attempts to project how these systems and transitions to them might actually play out. It is great to play around with systems thinking and alternatives, but big changes need to have serious analysis up front and robust metrics for judging progress and success.

Re: Letter from a Young Distributist: Georgism and Distributism

#20

Post by TimPC »

clairity wrote: post #9
TimPC wrote: post #4

Georgism and Distributism is interesting but short of a plan to actually transition the tax infrastructure in that direction this article reduces to an unactionable history lesson. Still worth reading, but not powerful enough for those who want economic change. I'd argue that transitioning is an extremely hard problem. The Georgist system taxes property at extreme rates. In particular, the taxes on property ownership…

> "In particular, the taxes on property ownership are supposed to capture the entire value of renting the property." No. once again, invariably, multiple people make this mistake in every thread about the land value tax. 'economic rents' are not the colloquial 'rent' we pay for housing we don't own. economic rents are UNproductive , meaning simply income produced by ownership itself, rather than in the productive del…

Agreed. This is an oversimplification. We'd attempt to tax away the value of the rent of the unimproved land which is less than the value of the improved land.

Of course, taxes will actually be set in accordance with what the government needs for revenue since this is supposed to be a single tax. Elsewhere in the thread I've tried to estimate Georgist land taxes based on current revenue needs and found them to be quite high.

Post reply on HN