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Georgism

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Re: Georgism

#261

Post by mythrwy »

LVTfan wrote: post #180
grey-area wrote: post #57

Earlier quoted context omitted.

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 ta…

Another thing worth mentioning is you incentivize efficiency and proper use of physical resources by doing that.

And you don't de-incentivize productive labor (as our current tax scheme does to an extent).

If all tax were things like use of land, use of aluminum in a can, burning of a unit of fossil fuel instead of "you worked an extra hour or invented something, now you owe a greater percent!" I believe society would become much more innovate and efficient.

Re: Georgism

#262

Post by nybble41 »

neilparikh wrote: post #178
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…

> 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…

> … 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?

That logic only works in a non-competitive market. The reason they don't raise rates is obvious: There are other landlords around and any one landlord raising rates would lose business to the others. If you raise costs for all landlords, however—for example, by imposing a LVT—then there is no risk of defection. Landlords either raise their rates or lose money with every rent payment. Any that don't raise their rates will go out of business to be replaced with others who do. And if you use price controls to prevent them from raising rates despite losing money then they would go out of business without being replaced, leaving individuals and businesses to buy their own property outright rather than renting, in which case they will be paying the LVT along with all the other costs formerly handled by the landlord.

TL;DR: Don't assume that the market equilibrium price is fixed and independent of cost!

Re: Georgism

#263

Post by LVTfan »

brudgers wrote: post #248
LVTfan wrote: post #210

Earlier quoted context omitted.

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.

The risk when extrapolating from Manhattan is when extrapolating to places significantly unlike Manhattan. When Central Park was started, Manhattan already had a population density in excess of 10,000 people per km^2. Even Boston today is little more than half that. Munich, less than half. San Jose little more than one fifth. Central Park worked because the existing density was already high and there was no way for M…

most of that population was still well south of the Central Park area. Streets had been laid out, and the occasional building erected in the area. But the population density was downtown, in the tenements.

Astor and others benefited as population expanded north.

Re: Georgism

#264

Post by LVTfan »

nostrademons wrote: post #258
CydeWeys wrote: post #139

Earlier quoted context omitted.

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…

One of the other consequences of an LVT is that it creates incentives to "right-size" the government, since the people who benefit from public goods are the ones funding them. It's very likely that the government is wrong-sized right now. We should expect a pretty dramatic change in the structure and size of government with the adoption of Georgism (or more likely, we shouldn't expect to adopt Georgism within the exi…

and likely we won't need the huge safety net that is absolutely necessary now.

And tax revenues reach the government without middlemen collecting their share, so the cost will be lower to those who pay.

Re: Georgism

#265

Post by djannzjkzxn »

nostrademons wrote: post #254
naravara wrote: post #205

Earlier quoted context omitted.

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…

There is a theorem (called the "Henry George Theorem", but ironically discovered by Joseph Stiglitz in 1977) [1] that an LVT in the presence of democratic government results in an optimal tax rate and allocation of public/private benefits, and that an LVT can solely fund government. The idea behind the theorem is that all of these public benefits - open space, parks, museums and cultural attractions, mass transit, tr…

It sounds like the argument is that voters are rational and therefore must vote for the correct level of LVT. Doesn’t the evidence show that the ideal LVT rate is zero, since that’s what they have in fact enacted?

Re: Georgism

#266

Post by LVTfan »

nybble41 wrote: post #260
snidane wrote: post #179

Earlier quoted context omitted.

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…

Perhaps individual landlords can't raise rents but the burden will still be passed to the tenants in the end. If you cut the profits of landlords enough to be statistically significant then it will cease to be profitable to be a landlord. (Former) landlords will then invest their money elsewhere, leaving people to buy their own property instead of renting, which incidentally means that they're paying the LVT themselv…

In the US, the profitability of being a "land" lord is highly dependent on the income tax deductibility of depreciation on the building.

Yes, tenants will be better able to afford to purchase a home -- and will be able to sell it more easily should they choose to, either to upgrade to a fancier house or a better location within the community, or to move to another part of the country.

Yes, they will be responsible for replacing the refrigerator and other appliance, and doing the maintenance (said to be estimated at 1% of the cost of the property, but of course that would vary a lot according to whether land value is 20% of the total, or 80% of the total value of the house-plus-land or condo-plus-share-of-the-land.

And for first-time homeowners, there are always some rude shocks.

Those landlords will have to find productive uses for their money, perhaps investing in young entrepreneurs, or developing land to meet the needs of their community for housing.

Re: Georgism

#267

Post by nybble41 »

snidane wrote: post #150
logicprog wrote: post #138

Earlier quoted context omitted.

Don't know if you'll consider these valid, but here are some critiques of the LVT and Georgism: - https://mises.org/wire/murray-rothbard-and-henry-george - https://mises.org/library/single-tax-economic-and-moral-impl... - https://www.econlib.org/archives/2012/02/a_search-theore.htm... The best criticism I've found, however, is here: https://www.orionsarm.com/fm_store/Critique%20of%20Georgism.... . It's from a more ma…

Thanks for the articles providing feedback to georgist ideas - I've read some of these but some are new to me. The authors seem not to understand the topic unfortunately and have to use long prose as they are trying to wrap their head around it. The core problem and idea for solution is actually quite simple. Let me condense the topic into a tweet or two. --- Problem: You have a naturally occuring resource which is s…

> You have a naturally occuring resource which is scarce and which nobody created. … Georgist simply say you can use an auction granting you possession for some amount of time …

First problem: This is a recurring process but the land is only "unimproved" at the time of the first auction. At which point no one was interested in the land, there being nothing and noone there, so the auction price is effectively zero. After that first auction you can't say how much of the market price in any later auction is due to the land itself and how much is due to improvements.

Second problem: In order to auction something off you have to own it first, but this is unowned land. No one has the right to sell it—or to prevent anyone else from using it. Land only becomes property after it has been improved. This is also the point where it first acquires economic value.

Third problem: You can't just go auctioning off already-improved land separate from the improvements. The improvements and the land are a single, unified good and in the vast majority of cases cannot be separated without incurring expense akin to rebuilding the improvements from scratch.

Fourth problem: LVT is valued mainly for being a tax on "unearned" external benefits property owners receive from the community, but the "unimproved" value of the property is a poor proxy for net external benefit received by property owners. On the one hand, the value of the improvements also depends on the community; if you build a family home or a restaurant or a warehouse the value of that building is going to depend on the demand for specific kinds of goods in that area and not just the cost to build a similar building. On the other hand, the so-called "unimproved" value of the land is readily influenced by the actions of the property owner, for good or ill. LVT punishes property owners who contribute to the surrounding community by taxing them on any increase in the value of their property which follows from their own contribution to the public good, and rewards property owners who contribute to lowering property values in their own neighborhood.

Re: Georgism

#268

Post by LVTfan »

AnimalMuppet wrote: post #232
LVTfan wrote: post #228

Earlier quoted context omitted.

To the degree that Coca-Cola is harming people, they owe something. Coke likely occupies a very valuable site in Atlanta, and perhaps has O&O bottlers on locally valuable sites, near centers of population, served well by transportation infrastructure that brings ingredients in and finished products to the customers. When communities start collecting the full value of those sites (and stop burdening the buildings and…

> The corporations should pay for the value of the land they use; so should the trusts who collect the land rent of our most valuable sites. OK, but why just the land? Trusts hold stock, too, that some long-dead person bought. Their heirs receive the dividends from that stock, for not having done anything whatsoever. By your logic, why should that not be taxed? What is so magical about land, that only that should be…

Land is finite. Capital can be created infinitely, by thriftiness of Labor.

Land wasn't created by any individual or any corporation. (Minor, and not eternal, exception: Made Land, such as by filling in a swamp or dumping fill alongside a river. After a century or so, it stops being special, and is simply land, whose value comes from its location and the services that are provided to it.

When the companies that issue stock are paying LVT on the land they occupy, and on the finite natural resources they claim for themselves and process to sell to consumers, the value of their stock will be reduced somewhat by that "pre-distribution."

Re: Georgism

#269

Post by kthxbye123 »

AnimalMuppet wrote: post #170
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 hous…

Warren Buffet may only live in one house, but he owns literally billions of dollars of real estate.

Re: Georgism

#270

Post by pharke »

So this seems all well and good for urban areas but what about rural land ownership? Or is that not a concern here?
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