Georgism • Hacker News Board

Re: Georgism

#161

Post by tom_mellior » Sun, May 17, 2020, 6:00 PM UTC

snidane wrote: post #47

CydeWeys wrote: post #32

Earlier quoted context omitted.

What tax should tech companies pay then, given that the only land they really need is cheap rural land for data centers? This taxation system does make sense for land, but there's way more economic activity happening that isn't associated with land than there is that is.

Tech companies should pay for what they use. They are efficient at not consuming too many resources while producing a lot of value? Probably shouldn't pay much then. But this applies not only to big tech companies but to individuals too - they shouldn't pay much if they don't consume or extract from others. Taxes are only a last-resort mechanism to raise money in absence of proper funding model. If you can price gove…

> If you can price government provided services appropriately then you don't need taxes.

This is absolute nonsense. It's somewhat true for roads, provided you can efficiently price every single piece of road (which you can't). But it's horribly wrong for things like the police or fire fighting.

Re: Georgism

#162

Post by pydry » Sun, May 17, 2020, 6:06 PM UTC

rikroots wrote: post #159

pydry wrote: post #19

Earlier quoted context omitted.

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…

>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

Seriously?? If your inquiry concluded this then it certainly was being run on behalf of landlords.

They would no more be able to make up their losses through rent increases than I could make up the loss of being charged extra for a loaf of bread at the supermarket by unilaterally raising my wages. One does not drive the other.

When the supply of housing remains constant and the demand of housing remains constant then prices remain constant. LVT changes none of these variables directly.

Re: Georgism

#163

Post by rikroots » Sun, May 17, 2020, 6:14 PM UTC

perilunar wrote: post #132

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…

> "Why tax property?" Because its appreciation in value is largely unearned wealth, especially in a country like England with a long history of aristocracy and landed gentry.

No seriously. The answer was: "Because it's there."

The whole thing about tax is to extract the maximum number of feathers from the goose with the minimum amount of hissing. Taxing property is easy "because it's there" - you can't hide a house, or a barn, or a factory.

Though deciding _how_ to tax property is a bit more difficult. At one time they tried taxing by the number of chimneys a house had[1]. Another was the Window Tax[2].

Have you ever heard of the phrase "They got away with it scot free"? I was born in the village which (by legend) introduced the Scot Tax - not a per-head levy in our Friends born north of Hadrian's Wall but rather a tax on properties across the Romney Marshes, specifically raised to pay for maintenance of the sea wall. Houses below sea level had to pay the tax, houses above sea level were 'scot free'.[3]

... And people think tax policy is boring!

[1] Technically they taxed hearths, but it's a lot easier to count chimneys from the outside of a house than it is to gain entry to the house to count the number of fireplaces - https://www.nationalarchives.gov.uk/help-with-your-research/...

[2] You can still see many houses in the UK with bricked up windows. It wasn't done for aesthetic purposes; it was done to limit the level of tax that could be levied on the property - https://en.wikipedia.org/wiki/Window_tax

[3] https://theromneymarsh.net/newhall

Re: Georgism

#164

Post by acd » Sun, May 17, 2020, 6:14 PM UTC

spangry wrote: post #55

acd wrote: post #21

I think commons like fish in the ocean and air quality in cities should be priced. If of you fish its not free you pay to the country whos fish you fish. If the fish is extinct or heavily MSC on the red list the price is sky high in the millions this is to protest the species and our eco system so future generations can enjoy that fish. By pricing eco systems and sustainable common resources. We avoid tragedy of the…

Sounds like you're describing Pigovian taxes: https://en.wikipedia.org/wiki/Pigovian_tax

Thanks for point out Pigovian taxes!

It seems to be a field of Environmental Economics.

Re: Georgism

#165

Post by rikroots » Sun, May 17, 2020, 6:24 PM UTC

somewhereoutth wrote: post #98

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…

I'm from the UK - Council Tax was always a real pain, its based on property price but paid by the occupiers (i.e. renters) NOT the owners. When you are house-sharing this becomes very problematic as its the largest and not insignificant shared bill - especially when housemates are moving in/out frequently. Collection is also a nightmare for the councils - sure they know the address and the amount owed - but who was l…

> Its a shame the inquiry didn't recommend formula funding from central government receipts

The Inquiry's main objective was to investigate possible revenue streams that could be raised locally, to help local councils free themselves from the tyranny of central government funding. At the time local government revenue came from Council Tax, Business Rates (though the level was set by central government, not local authorities themselves), licence and other fees (eg to open a tattoo parlour, or register a death), small fines (dog mess and other litter) and car parking charges. Altogether the revenue raised covered less than 10% (I think) of all local government spending. The rest of the money was supplied by central Government - making the UK one of the most centralised states in the world.

A "couple of pennies on income tax" would've made the situation worse - though one of the things the Inquiry looked at was the possibility of localising (some) income tax.

Re: Georgism

#166

Post by jabl » Sun, May 17, 2020, 6:26 PM UTC

neilwilson wrote: post #88

JSavageOne wrote: post #17

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.

The primary purpose of taxation in a sovereign economy is to free goods and services up for deployment by the public sphere. What does the government want with all that land? Are you sure you have enough fungibility in your economy so that it will free up doctors, judges, refuse collectors or whatever and all the real goods that their salaries actually represent so that you can achieve the public purpose that is the…

Do you have any references for further reading on this topic?

And how is a wage tax different from an income tax? It might not show up on an employee's payroll, but the end result is the same, no?

And if you're not taxing capital/capital gains in any way, won't this cause inequality to shoot up even more than it already is?

Re: Georgism

#167

Post by rikroots » Sun, May 17, 2020, 6:30 PM UTC

pydry wrote: post #162

rikroots wrote: post #159

Earlier quoted context omitted.

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…

>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 Seriously?? If your inquiry concluded this then it certainly was being run on behalf of landlords. They would no more be able to make up their losses through rent increases than I could make up the loss of being charged…

> They would no more be able to make up their losses through rent increases than I could make up the loss of being charged extra for a loaf of bread at the supermarket by unilaterally raising my wages. One does not drive the other.

Do you have research, or an evidence base, for this?

> [...] it certainly was being run on behalf of landlords.

It certainly was not.

Re: Georgism

#168

Post by banads » Sun, May 17, 2020, 6:32 PM UTC

roenxi wrote: post #22

JSavageOne wrote: post #14

Earlier quoted context omitted.

> 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.

The status quo is a jawdroppingly fast and totally unprecedented reduction in poverty [0]. If my goal were to reduce poverty; my strategy would be to defend the status quo. [0] https://ourworldindata.org/extreme-poverty

And yet, there are more people living in poverty than the entire global population in 1950.

Re: Georgism

#169

Post by NumberWangMan » Sun, May 17, 2020, 7:00 PM UTC

LVTfan wrote: post #127

NumberWangMan wrote: post #112

Earlier quoted context omitted.

I agree. I think the single tax was conceived in a time where most productive activities took the same amount of land. Nowadays, you have farms on the one hand, and something like tech companies on the other. It would be kinda crazy to tax them both based on the amount of land they use.

It isn't the AMOUNT of land they use, but the value of what they use. An acre of good farmland might be $2500. An acre in Manhattan might be $250 million and up. The rental value of the land is proportional to the value of the land. And when the Single Tax was conceived, it was already abundantly clear that urban land values were far above rural land values, and rising much faster. Few tech companies will want to loc…

Hmm, that's a good point.

Though, wouldn't an LVT that encourage companies to push all their employees to work from home, where possible? There are certainly benefits to that, but it might mean that certain industries get taxed much more heavily than others. Is it ok if distributed work-from-home software companies pay no tax at all, because they have no offices? The workers would pay tax on their own houses and apartments, but the company wouldn't.

I guess it depends on whether you want to consider taxes to be a tool for limiting rent on scarce resources, or for balancing out wealth disparities. (aside from the main goal of raising revenue, of course) The two things are related, but not identical. The first seems like more of a proxy for what we actually want to do, which is to prevent concentration of wealth. Or is it more about the fact that collecting rent isn't an economically productive activity, so if we incentivize everyone to gain wealth by producing value, it'll make us all wealthier?

To be fair, the hurdle that LVT has to pass is not to be perfect, but just to be better than what we have, which isn't a high bar. But it is worth thinking about the possible loopholes and edge cases.

Should we also assume that switching to a single tax wouldn't exclude things like cigarette taxes and carbon taxes? These taxes are designed intentionally with particular incentives, just like the LVT, and unlike property taxes and income taxes. It would be a shame to take away the single best tool we have for fighting climate change, for example.

Anyway, no obligation to reply, a lot of these questions are just me thinking out loud.

Re: Georgism

#170

Post by AnimalMuppet » Sun, May 17, 2020, 7:33 PM UTC

JSavageOne wrote: post #17

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.

And I have yet to see a single valid reason as to why LTV should be the primary tax. I've seen a lot of words, but they all seem to start by assuming that LTV would be fair and the current system is not. That forms a very poor basis for convincing people who don't already agree.

Here's my argument against LTV: Warren Buffet owns one modest house in Omaha. Should he be taxed based on the land value of that modest house, and nothing more? That hardly seems fair.