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Georgism

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Re: Georgism

#201

Post by neilparikh »

CydeWeys wrote: post #37
nabla9 wrote: post #20

Earlier quoted context omitted.

There is brilliant way to solve it so that value and market-value meet. Keep the land always in market. It's called Common Ownership Self-Assessed Tax (COST). Land owner would self-assess the value of assets they possess, pay a tax on that value. The owner would be required to sell the asset to anyone willing to purchase them at this self-assessed price. If you value the land high for any reason and want to keep it,…

This seems to be directly in conflict with the idea that once you own land, it's yours. I don't see this flying at all, at least not with the current expectations of most people. Any sizable company could easily bully any number of people out of their homes to acquire the land. It's hard to overstate how much people would hate this.

> the idea that once you own land, it's yours.

This idea is the problem. Taken to its logical conclusion, we get feudalism, where those who don't own land will forever pay rent the landed gentry, only because they were fortunate enough inherit land.

Property tax fixes this somewhat, but California decided to weaken that with Prop 13, and now is approaching feudalism. For example, in the apartment I lived in California, the rent paid would cover the landlord's property tax obligations in a month, and the remaining rent is the landlord's (minus whatever costs they have for maintenance).

Re: Georgism

#202

Post by tryptophan »

geofft wrote: post #121
oDot wrote: post #94

Earlier quoted context omitted.

An economy is driven by production, not consumption.

Sure. But the standard way of driving production is private consumption. Given that you have disincentivized the poor from consuming, what is the counterbalance that incentivizes the rich to produce? (There are a couple of standard answers, including government consumption / public works projects, that can address this.)

Private consumption is only possible due to productivity gains due to capital investment. Venezuelans can't just vote to redistribute nonexistent wealth or declare food to be a human right and magically have sufficient food appear.

Food comes from capital investment in farms, factories, etc. That is real wealth.

>There are a couple of standard answers, including government consumption / public works projects, that can address this.

These answers don't work, and are great at destroying wealth.

Re: Georgism

#203

Post by crazygringo »

balfirevic wrote: post #185
crazygringo wrote: post #176

Earlier quoted context omitted.

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 resou…

Land value tax is considered among the economists as being one of the least distortionary taxes.

I don't believe so. It's considered to remove distortions in land use, as compared to property taxes that include the value of structures. In other words, you get less vacant lots and more productive use of land. Which there are good arguments for.

But proposing to replace income and sales taxes with land value taxes, making it the primary tax -- which would necessarily skyrocket the land value tax to produce the same tax revenue at the end of the day -- would be extremely distortionary.

Re: Georgism

#204

Post by crazygringo »

neilparikh wrote: post #189
crazygringo wrote: post #176

Earlier quoted context omitted.

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 resou…

LVT is least distortionary tax, because you can't create or destroy land. > 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? Because the supermarket is using more land compared to the hotel. Every bit of land the supermarket owns is land you and I can't use. It's only fair that the superm…

That's an argument for pricing land according to market value, which we already have.

It's not an argument for why we should rely solely on a land tax in lieu of e.g. taxes on corporate profits, income taxes, or sales tax.

Re: Georgism

#205

Post by naravara »

NumberWangMan wrote: post #67

A lot of people focus on the fairness of the Land Value Tax, but the consequences of using one are just as interesting if not more. This tax has been put into practice in some cities in Pennsylvania, and there's evidence that it has a whole bunch of positive effects on the city, due to the way that it incentivises improving your property and making the most of your land (since you're going to be taxed on it pretty mu…

You would probably want to include some tax advantaged incentives to maintain a bit of public space, public art, parks, or just green spaces. Giving over some portion of your land for public benefit, even if limited use, should be encouraged rather than penalized. It would also encourage more interesting usage patterns and development than pure land-use maximization would do. The latter might have you end up with block after block of square high rises, which might glide us past the point of diminishing returns to density.

Re: Georgism

#206

Post by AnimalMuppet »

snidane wrote: post #195
AnimalMuppet wrote: post #171

Earlier quoted context omitted.

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 d…

Military is actually a great example for LVT. If you mean defence part of it. Invading other countries is likely profitable for select groups so who else should pay for it if it gets approved. But let's focus on defence. It's not that much individual people, who need protection, because they can flee to another country in case of war. What actually needs protection is property which you cannot take with you. And voil…

First: "They can flee to another country in case of war" is terrible reasoning. You expect the other country to let them in? All of them? Yeah, that's not the way things actually happen in this flawed world. Most of them will not have the opportunity to flee. So... they should just die?

No, the military is there to protect the people, not just the wealth. So your post seems like it's trying to rationalize a not-up-for-debate position, rather than actually reasoning based on reality. Georgism claims to be motivated by compassion for those who are at the mercy of rentiers, but your position shows an immense lack of compassion. "Let them flee to a different country" is the most cold-hearted thing I've heard in a long time.

Second: that wasn't my point. My point was, let's see the plan where you actually produce $800 billion (or whatever the military budget is) just from a land tax. Let's see what the actual rates would have to be, and what the effects of those rates would be.

Re: Georgism

#207

Post by neilparikh »

Mirioron wrote: post #192
neilparikh wrote: post #181

Earlier quoted context omitted.

No, LVT adds no cost to providing housing. All land is taxed, so a landowner has to pay the same tax whether the land is empty, or has a single floor house, or a 30 story apartment. If anything, it encourages building more, so that the income from the rent can be used to the pay the LVT.

> No, LVT adds no cost to providing housing. I'm not talking about long-term, but the initial effect of LVT coming into effect. If the landlord has to pay more then that's an increase in cost. Landlord income was likely at equilibrium before LVT. Those that could afford to lower prices to outcompete others probably already did so. As a result I don't see how we can expect landlords to eat the cost instead of passing…

> I'm not talking about long-term, but the initial effect of LVT coming into effect. If the landlord has to pay more then that's an increase in cost.

Right, but how does that lead to less housing? It's not like the landlord would stop renting the apartment and just hold it empty right after an LVT is implemented, since they would to pay the LVT either way. Most likely, the landlord would sell the building and land to someone else, who would then develop it to something that would provide enough income to cover the LVT obligations (say, a taller apartment).

Your claim also assumes that the LVT will be greater than the current property tax obligations. I don't think that's a given. The LVT for buildings that are using land efficiently probably would be lower, since the would no longer have to pay tax on the building (which is higher for a multi-unit building compared to a SFH).

As a side note, I am in favour of the government providing a subsidy to current landowners when a LVT is implemented, to compensate them from the lost land value (essentially "buying them out"), but I don't think that would be economically necessary.

> It might make sense to turn that housing into something else.

Yes, this is a possibility. But if that happens, then it's a sign that the demand for new housing is a low, so it makes sense to not build new housing (or convert existing housing). In regions where there's a housing shortage, a developer would be able to make a large profit building new housing, and thus would do so.

Re: Georgism

#208

Post by thruflo »

acd wrote: post #164
spangry wrote: post #55

Earlier quoted context omitted.

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.

The UN did a major study on the economics of ecosystem biodiversity, ie the value of nature and how to price it into the economy: http://www.teebweb.org

Re: Georgism

#210

Post by LVTfan »

naravara wrote: post #205
NumberWangMan wrote: post #67

A lot of people focus on the fairness of the Land Value Tax, but the consequences of using one are just as interesting if not more. This tax has been put into practice in some cities in Pennsylvania, and there's evidence that it has a whole bunch of positive effects on the city, due to the way that it incentivises improving your property and making the most of your land (since you're going to be taxed on it pretty mu…

You would probably want to include some tax advantaged incentives to maintain a bit of public space, public art, parks, or just green spaces. Giving over some portion of your land for public benefit, even if limited use, should be encouraged rather than penalized. It would also encourage more interesting usage patterns and development than pure land-use maximization would do. The latter might have you end up with blo…

Frederick Law Olmsted realized early on that even a huge project like Central Park could be funded from the increase in land value it created in the neighborhoods surrounding it.
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