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Georgism

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Re: Georgism

#171

Post by AnimalMuppet »

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…

I'd like to see your "proper funding model" for the military.

Or you'd have to say that the military is part of your "last resort". But then you need to raise enough money to pay for all your last resorts. If LTV is your method, the numbers may not work (as others have said here).

Or, instead of raising all that money, you could say that we don't need that big of a military. That's not an insane position. But using desire for an LVT as the basis for deciding on the size of your military seems to me to be putting the cart before the horse.

Re: Georgism

#172

Post by AnimalMuppet »

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?

That's an interesting idea. It would cut down on the number of garbage patents, which is a huge positive in my view.

Re: Georgism

#173

Post by AnimalMuppet »

jl2718 wrote: post #130
andruby wrote: post #28

Earlier quoted context omitted.

That would mean anyone who has enough money can buy the land that people live on just to harass them. It’s an interesting idea, and I like it in principal, but I also like living in my house on my land knowing that I need to give permission before someone can buy it.

It works if everybody puts up a defensive value because tax rates would drop for constant revenue. Also consider how much value would be assessed for all property, e.g. google.com. In the US there is $16T currency, $38T stocks plus a roughly equal amount in corporate internal valuation, ~$30T small business, $33T houses, $17T commercial real estate, plus commodities, any other mark to market securities, vehicles, col…

OK, wait a minute. The tax is on the value of the land, right? It's not supposed to change just because I build a house on it, right? (Though having power and sewer to the lot may improve the value.)

So if I don't value it highly enough myself, someone else can come in and take the land. But the house is on the land. So I'm going to have to adjust the price to the actual price of the house + land, or someone else will outbid me and take it, thereby getting both the land and the house.

Or else, when they outbid me, they only get the land but I keep the house. But how's that actually going to work in practice?

The net effect is that this scheme stops being Georgism. It becomes a tax on the total value of the land plus improvements.

Re: Georgism

#174

Post by neutronicus »

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…

As I understand it the point of LVT is to punish landlords with few or no tenants in localities with high demand for housing and commercial space (where land values tend to be high).

The problem it targets is not the wealth of landlords. The problem it targets is land owners who are not landlords making money, often as a by-product of consuming a luxury good (a home in a city center), without actually providing the social functions which in principle justify their compensation (anticipating demand, managing housing at scale, high-quality construction on a budget, etc).

Re: Georgism

#175

Post by yesbabyyes »

NumberWangMan wrote: post #169
LVTfan wrote: post #127

Earlier quoted context omitted.

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 apar…

I'm not sure if Henry George brought this up (I think he may have) but it's definitely a part of the discussion today, to also incorporate other non-renewable resources / externalities / commons in a LVT-based system. Things including the electromagnetic spectrum, noise, light pollution, pollution, carbon, and intellectual property. I would include ads (they invade my visual cortex!).

Re: Georgism

#176

Post by crazygringo »

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.

I mean... the objection is that it's incredibly arbitrary, greatly affecting one part of the economy and leaving others untouched.

Why not a radio spectrum tax as the primary tax instead? Or an oxygen tax proportional to your lung size? Or a clean water tax, or a tax on the weight of your grocery consumption, or a tax on the weight of the garbage you produce, or the carbon you consume?

All of those are valuable resources.

That's why it's not found in the political dialog, because it's super-arbitrary and would therefore have grossly distorting effects. Why should a low-margin supermarket which people need, occupying tons of space, pay huge taxes, while a tiny very profitable ultra-luxury boutique hotel pays only 5% of the taxes?

Taxation needs to be applied with some combination of minimizing distortion and achieving some level of progressivism. A land value tax is absolutely terrible at both of those.

Re: Georgism

#177

Post by Mirioron »

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…

>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.

Doesn't LVT increase the cost of providing the already existing housing and wouldn't that decrease the supply of housing? This would apply one time when the LVT comes into effect.

Re: Georgism

#178

Post by neilparikh »

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…

> They would (probably) make up their losses through rent increases and additional service charges - effectively passing on the tax to renters and leaseholders.

Since no land can be created or destroyed, the supply-demand curve is fixed. This means that the land tax cannot be passed onto the renter, because the market conditions haven't changed. The rent is not calculated based on the landlord's costs plus some extra, but instead is whatever the market equilibrium price is.

Another way to think about it: if landlords have the market power to raise rents, why wouldn't they just do it now, rather than wait until an LVT is passed?

Re: Georgism

#179

Post by snidane »

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…

This has been shown to be false already. Landlords cannot pass tax burden of LVT to tenants.

"The producer is unable to pass the tax onto the consumer and the tax incidence falls on the producer. In this example, the tax is collected from the producer and the producer bears the tax burden. This is known as back shifting."

From section "Inelastic supply, elastic demand" https://en.m.wikipedia.org/wiki/Tax_incidence

If the landlords decided to increase rents expecting tenants would foot the bill, they would find out tenants to leave the location because it would be unlivable for them at that cost.

More likely scenario is by introducing LVT the landlord would be forced to do the opposite - ie decrease rent - as other landlords would dump their uninhabited properties back to the market.

Re: Georgism

#180

Post by LVTfan »

grey-area wrote: post #57
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 capital instead if income? The reason to do so is because it reduces inequality and leads to a fairer society.

Were we to treat Land -- sites, and natural resources, including clean air, clean water, and things like geosynchronous orbits, fisheries, electromagnetic spectrum -- as our COMMON treasure, our source of natural public revenue, instead of something to be privatized, our wealth concentration problem would be much much smaller.

Instead, we permit individuals and corporations and trusts to privatize the value and we tax it only very lightly --- they get to keep the lion's share, just as if they made it themselves.

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