Georgism • Hacker News Board

Re: Georgism

#151

Post by epistasis » Sun, May 17, 2020, 4:16 PM UTC

alexmingoia wrote: post #123

zozbot234 wrote: post #15

Earlier quoted context omitted.

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.)

None of that changes the fact that there is no inherent value to land (improved or unimproved). Different people value the same piece of land (or any good) differently. This is just reality, regardless of whether someone is appointed to imagine a price for the purposes of taxation.

You may as well say that nothing has inherent value. The concept of "inherent value" is a bit broken, as the same thing that gives land value (somebody else wants it) is exactly what gives anything else value (somebody else will give you something for it).

Valuations in currency are an abstraction for how we deal with this really tricky and intractable problem. But like all abstractions, it's leaky. A $100 bill has no "inherent" value yet it's value is very precisely known.

Re: Georgism

#152

Post by epistasis » Sun, May 17, 2020, 4:25 PM UTC

sudosysgen wrote: post #133

xiphias2 wrote: post #54

Earlier quoted context omitted.

The whole point of this tax type is encouraging efficiency. Tech companies are usually efficient, and taxing them less increases their efficiency even more. At the same time their harmful effects should be regulated (GDPR is an example of such regulation). Countries and states that let tech companies thrive are winning the race for capital.

The point of taxes is absolutely not to encourage efficiencies. The point of taxes is to fund the state in order to provide for defense and palliate the ills of capitalism.

But what if we could do both!

Markets need massive amounts of legal structure and regulation to make them efficient. Including taxation as part of that is an excellent idea.

And if we get to Piketty-inspired corrections for r>g, part of that will include eliminating economic rents the way a LVT does.

Re: Georgism

#153

Post by snidane » Sun, May 17, 2020, 4:32 PM UTC

aww_dang wrote: post #62

tlholaday wrote: post #45

Earlier quoted context omitted.

Rothbard's error: under land nationalization, state actors decide who uses the land; under single tax, who uses the land is determined by auction.

The single quote is understandably a narrow view of the larger article. My view is that the 100% tax on income from the land removes profit motive and price discovery in a way which is similar to outright nationalization. However, I agree with your assessment of the quote as a stand alone item. https://mises.org/library/single-tax-economic-and-moral-impl...

It removes profit incentive of reselling land to somebody who wants to use it. It doesn't remove profit incentive of the activity you'd want to perform on that land.

Land under 100% LVT only becomes an input to production. And makes it unprofitable for holding it for somebody else.

When you are in business of making apple pies you simply buy apples as input. You don't need any middlemen holding them for you if you can hold them yourself.

Re: Georgism

#154

Post by jrs235 » Sun, May 17, 2020, 4:33 PM UTC

free_rms wrote: post #124

LVTfan wrote: post #114

Earlier quoted context omitted.

An acre of farmland might be worth $2500 or $5000, and that land has been improved by clearing, draining, fencing, etc. (improvements done by the current or an earlier owner or his tenant). LVT is based on the UNIMPROVED value of the land, so if there were an as-yet-uncleared acre nearby, it and the acre of farmland would be assessed at the same value. An acre in midtown Manhattan might be worth $250 million to as mu…

So it's all on the assessor to decide the 'proper' unimproved land values to raise enough revenue while not driving the wrong people out of business? At a national scale? On that note, is the inherent land value of a lot in Bushwick way higher then 20 years ago now that they've gentrified? Is neighborhood desirability an 'unimproved' attribute? I very much get where you guys are coming from in a philosophical sense,…

>On that note, is the inherent land value of a lot in Bushwick way higher then 20 years ago now that they've gentrified? Is neighborhood desirability an 'unimproved' attribute?

Yes. Desirability and infrastructure near land increases it's unimproved value.

Re: Georgism

#155

Post by epistasis » Sun, May 17, 2020, 4:38 PM UTC

sudosysgen wrote: post #134

bluecalm wrote: post #84

Earlier quoted context omitted.

Who do you think should pay more taxes: someone sitting on 10M worth of land and doing nothing or a factory worker with no assets making 20$/hour? Income tax is unfair. It taxes productive people instead of those who benefits the most from the stable system (land owners).

Who do you think should pay more taxes: someone with a house in Brooklyn or a multi millionaire tech worker with a remote SaaS company?

By occupying that space in Brooklyn, that landowner excludes others from the opportunities that they enjoy. The land, which the homeowner didn't create, has tons of benefits that accrue only to the owner that come not from the owner's labor, but from the labor of others that are nearby, merely by being close to all those other people.

So how much does that Brooklyn homeowner owe to the rest of society for excluding others from what they enjoy? How much does the SaaS millionaire exclude others from opportunities?

Many proposed economic systems distinguish between property that comes from your own labor, and profits that come from idly owning an asset and restricting its use by others in certain ways. The slogan "property is theft" doesn't refer to the bookshelf that a person crafted, it refers to real estate and the economic systems of the time that excludes so many people from the opportunity to escape the economic rents of those who were born with more wealth and privilege.

There are many reasons to tax things: to make life more fair, to raise funds for government, to improve economic efficiency, to reduce pollution. It's so hard to say who should be taxed more without baseline values!

Re: Georgism

#156

Post by pydry » Sun, May 17, 2020, 4:45 PM UTC

sudosysgen wrote: post #135

pydry wrote: post #106

Earlier quoted context omitted.

An extremely heavy tax on holding patents. Patents are essentially the "land" of the tech industry. With weaker patents there probably wouldn't be any such thing as "big tech" as it would be constantly disrupted from below. The exception is google's search index, which is, given its capital intensity and power requirements, practically a form of of heavy industry on a par with aerospace or automotive.

Do you tax all patents equally? If so, the issue is obvious. If not, how do you determine how much?

Probably equally, but the tax should be a function of age.

Re: Georgism

#157

Post by jhpriestley » Sun, May 17, 2020, 5:04 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.

would you really choose "the wire" over "little house on the prairie"? How can such a comparison possibly be "objective" anyway?

Re: Georgism

#158

Post by epistasis » Sun, May 17, 2020, 5:26 PM UTC

CydeWeys wrote: post #139

free_rms wrote: post #101

Earlier quoted context omitted.

If the arithmetic for this tax scheme doesn't seem to remotely work out, ruminations on the nature of infinity aren't going to set me at ease with it. Here in the finite world, most of the money moving around is in services, while most of the land is disconnected from that economy. How are you getting 1-2 trillion in tax revenue from land without making, say, farming economically unviable? Will it just be riddled thr…

I've never seen the numbers proposed in a way that makes sense. We know what the total budget is right now, at a national, state, and local level. And we know where that income is coming from -- mostly a mix of income, property, sales, payroll, corporate, and other taxes. And crucially we know exactly what the breakdown of that taxation burden is on various people in various financial situations. I want to see the nu…

The problem with looking at it this way is that we can see what will happen in the first months or years of the new tax system, because values take a while to change.

But what we really care about is what the system looks like a decade in, after property values have massive changes. And what it looks like 50 years in, after cities have been remade to reflect the shift in tax costs. I don't think any modern day Georgist argue for "single tax." Remember that income tax wasn't in place in the US when Henry George started writing!

So any modern plan will Lokey include shifting tax bases, over time, to rely more heavily on LVT and less on sales tax and other regressive taxes. This will require adaptation and policy change over the years and decades, rather than saying ahead of time that they can predict the future with absolute certainty.

Re: Georgism

#159

Post by rikroots » Sun, May 17, 2020, 5:38 PM UTC

pydry wrote: post #19

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".

The Inquiry didn't kill LVT, and efforts to promote it haven't stopped just because Lyons didn't recommend it as a solution going forward.

> ... extremely wealthy landlords ... killing LVT

LVT would not be an appropriate method for targeting tax extraction from extremely wealthy landlords. They would (probably) make up their losses through rent increases and additional service charges - effectively passing on the tax to renters and leaseholders. If you want to target the rich you need to use tools that target their personal and/or business income streams - in the UK, for example: Income, Capital Gains, and Corporation taxes.

Re: Georgism

#160

Post by rikroots » Sun, May 17, 2020, 5:59 PM UTC

MiroF wrote: post #7

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…

> The big issues were mainly around introducing a new tax system and the massive upheavals and uncertainties businesses and people would face as part of the change. Winners and losers, etc. It's funny how we introduce massive upheavals all the time - ending this social program here, injecting trillions of dollars there, but this one addition is considered infeasible. I suspect that the primary problem with George's t…

The Inquiry didn't happen in "splendid isolation", and the recent history of property taxes across the UK was not a happy one. Property rates were replaced in 1990 by the Poll Tax (Community Charge) which led to protests and riots across the country. Council Tax was introduced in a rush in 1993 ... and the poor design of the system is not easy to hide.

The Inquiry was set up in 2004 because there was a legal requirement to undertake a property revaluation before 2005 which, as things stood, would have led to massive changes in people's tax burdens (winners and losers). The Government wanted a way out of the problem - but the Inquiry didn't give them one: Lyons decided that revaluation was essential and should go ahead.

The Government sorted the issue in time-honoured fashion by changing the legislation to remove the need for a revaluation, and changing the Inquiry's terms of reference. And so it goes ...

> It's funny how we introduce massive upheavals all the time - ending this social program here, injecting trillions of dollars there, but this one addition is considered infeasible.

My understanding is that things are done in at least 51 different ways in the US. Maybe one of the smaller, more progressive States in the Union will be willing to try out some form of LVT in the near future?