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Letter from a Young Distributist: Georgism and Distributism

progressandpoverty.substack.com

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Re: Letter from a Young Distributist: Georgism and Distributism

#31

Post by TimPC »

TimPC wrote: post #24
geocon wrote: post #18

Earlier quoted context omitted.

Except that's not how Georgist tax structure is decided, it is 100% of the land's rental value. If you want a good overview I recommend this exhaustive and data-heavy series of articles: https://gameofrent.com/content/progress-and-poverty-review

Okay some things don't add up. You can't have a Georgist tax as a single revenue source for the government and calculate it off something other than what the government needs for revenue. Either you calculate the Georgist tax rate on the unimproved land value, you add other taxes to government or you slash and burn through government spending to deal with the capped revenue. It's living in fantasy land to say Georgis…

I think it's extremely important to undertake a cost benefit analysis of the end state to decide if we want to transform society in that direction. So I disagree strongly with any comment of the form "don't get too caught up in the end state".

I agree there are some other things you can tax. I presume those are also taxed at precisely the economic rents they create? My point is that government needs some sort of tax with a knob that they have the ability to tweak upwards or downwards based on shifting revenue needs. It seems to me the only things in a Georgist system are taxed at precise values and fail to give government that knob. Do all Georgist societies have some sort of services cap because their tax revenues are capped?

Re: Letter from a Young Distributist: Georgism and Distributism

#32

Post by geocon »

TimPC wrote: post #31
TimPC wrote: post #24

Earlier quoted context omitted.

Okay some things don't add up. You can't have a Georgist tax as a single revenue source for the government and calculate it off something other than what the government needs for revenue. Either you calculate the Georgist tax rate on the unimproved land value, you add other taxes to government or you slash and burn through government spending to deal with the capped revenue. It's living in fantasy land to say Georgis…

I think it's extremely important to undertake a cost benefit analysis of the end state to decide if we want to transform society in that direction. So I disagree strongly with any comment of the form "don't get too caught up in the end state". I agree there are some other things you can tax. I presume those are also taxed at precisely the economic rents they create? My point is that government needs some sort of tax…

I say "don't get caught up in the end state" not because I don't think the end state is important but because the intermediate effects are hard to predict without more data. But, more to the point, if LVT is the most efficient kind of tax, why would we not want to over time, shift as much of the tax base to it as possible?

In any case, Georgism produces a very different financialization of governance than the current tax system, because public goods pay for themselves via increases in land value- see the Henry George Theorem by Nobel laureate Joseph Stiglitz: https://en.wikipedia.org/wiki/Henry_George_theorem. This means that rather than adjusting taxation to meet desired investment, desired investment is adjusted to produce optimum public returns- which has the beneficial side effect of incentivizing good and proper governance.

Re: Letter from a Young Distributist: Georgism and Distributism

#33

Post by clairity »

TimPC wrote: post #20
clairity wrote: post #9

Earlier quoted context omitted.

> "In particular, the taxes on property ownership are supposed to capture the entire value of renting the property." No. once again, invariably, multiple people make this mistake in every thread about the land value tax. 'economic rents' are not the colloquial 'rent' we pay for housing we don't own. economic rents are UNproductive , meaning simply income produced by ownership itself, rather than in the productive del…

Agreed. This is an oversimplification. We'd attempt to tax away the value of the rent of the unimproved land which is less than the value of the improved land. Of course, taxes will actually be set in accordance with what the government needs for revenue since this is supposed to be a single tax. Elsewhere in the thread I've tried to estimate Georgist land taxes based on current revenue needs and found them to be qui…

LVT has nothing to do with improved vs. unimproved land. both improved and unimproved land have productive and unproductive aspects.

LVT is solely targeted at economic rents. this is the key to understanding LVT. otherwise, the idea that it's the most economically efficient tax will not make sense, and the tax itself will not seem to make sense.

on the other hand, what the government will do tax-wise is political, not economic. constitutionally, the tax cat is out of the budget bag, so we have little hope of restraint there. politicians will always try to expand government because it benefits them, no matter what rhetoric they spout.

(i.e., taxes are high because politics, not LVT.)

Re: Letter from a Young Distributist: Georgism and Distributism

#34

Post by geocon »

Aunche wrote: post #25
TimPC wrote: post #4

Georgism and Distributism is interesting but short of a plan to actually transition the tax infrastructure in that direction this article reduces to an unactionable history lesson. Still worth reading, but not powerful enough for those who want economic change. I'd argue that transitioning is an extremely hard problem. The Georgist system taxes property at extreme rates. In particular, the taxes on property ownership…

I think to start with, we can end prop 13 and fix whatever loopholes that allow billionaire's row penthouses to be taxed a lower rate than regular apartments.

Yeah there are lots of small reforms that can be done: transitioning property taxes to land value taxes, ending property tax caps like prop 13 that just allow landowners to extract rents, putting in place land value capture for public transit, and so forth

Re: Letter from a Young Distributist: Georgism and Distributism

#35

Post by TimPC »

TimPC wrote: post #31
TimPC wrote: post #24

Earlier quoted context omitted.

Okay some things don't add up. You can't have a Georgist tax as a single revenue source for the government and calculate it off something other than what the government needs for revenue. Either you calculate the Georgist tax rate on the unimproved land value, you add other taxes to government or you slash and burn through government spending to deal with the capped revenue. It's living in fantasy land to say Georgis…

I think it's extremely important to undertake a cost benefit analysis of the end state to decide if we want to transform society in that direction. So I disagree strongly with any comment of the form "don't get too caught up in the end state". I agree there are some other things you can tax. I presume those are also taxed at precisely the economic rents they create? My point is that government needs some sort of tax…

I worry that the Henry George Theorem suggests a government can spend money in order to tax more of it. It potentially solves the issue of governments not having enough revenue, since arguably they can tune unimproved land values upwards to the levels they need. Of course it also introduces the problem of governments tuning unimproved land values to the level they need. Tax revenues have grown from $3.32 trillion in 2017 to $4.05 trillion in 2021. That's nearly 22% growth in a four year window.

I'd be very concerned about governments undertaking the necessary actions to drive land value taxes up by 22% over a four-year window. I think such policies would lead to many people being forced to vacate their land.

Re: Letter from a Young Distributist: Georgism and Distributism

#36

Post by geocon »

clairity wrote: post #33
TimPC wrote: post #20

Earlier quoted context omitted.

Agreed. This is an oversimplification. We'd attempt to tax away the value of the rent of the unimproved land which is less than the value of the improved land. Of course, taxes will actually be set in accordance with what the government needs for revenue since this is supposed to be a single tax. Elsewhere in the thread I've tried to estimate Georgist land taxes based on current revenue needs and found them to be qui…

LVT has nothing to do with improved vs. unimproved land. both improved and unimproved land have productive and unproductive aspects. LVT is solely targeted at economic rents . this is the key to understanding LVT. otherwise, the idea that it's the most economically efficient tax will not make sense, and the tax itself will not seem to make sense. on the other hand, what the government will do tax-wise is political, n…

One of the nice things about LVT is that it aligns those incentives though, since what increases tax revenue the most is investment in public infrastructure and services. It's the Henry George Theorem at work: https://en.wikipedia.org/wiki/Henry_George_theorem

Re: Letter from a Young Distributist: Georgism and Distributism

#37

Post by lukifer »

hprotagonist wrote: post #2

This circumstance constitutes in itself the most eloquent "Gospel of work", showing that the basis for determining the value of human work is not primarily the kind of work being done but the fact that the one who is doing it is a person. The sources of the dignity of work are to be sought primarily in the subjective dimension, not in the objective one. Such a concept practically does away with the very basis of the…

Thanks for sharing, TIL: https://en.wikipedia.org/wiki/Laborem_exercens

Re: Letter from a Young Distributist: Georgism and Distributism

#38

Post by TimPC »

TimPC wrote: post #31
TimPC wrote: post #24

Earlier quoted context omitted.

Okay some things don't add up. You can't have a Georgist tax as a single revenue source for the government and calculate it off something other than what the government needs for revenue. Either you calculate the Georgist tax rate on the unimproved land value, you add other taxes to government or you slash and burn through government spending to deal with the capped revenue. It's living in fantasy land to say Georgis…

I think it's extremely important to undertake a cost benefit analysis of the end state to decide if we want to transform society in that direction. So I disagree strongly with any comment of the form "don't get too caught up in the end state". I agree there are some other things you can tax. I presume those are also taxed at precisely the economic rents they create? My point is that government needs some sort of tax…

Can you explain in what sense LVT is the most efficient form of tax? I do understand that normally when you tax something malleable you get less of it so it's often best to tax things that aren't malleable. But what precisely is LVT more efficient at? Does it generate the fewest negative externalities per unit of tax revenue? If so, how do we evaluate between different types of externality?

Have we accounted for the fact that with LVT it's possible to get less tax revenue from land becoming vacant because the taxes become too high for users?

Re: Letter from a Young Distributist: Georgism and Distributism

#39

Post by geocon »

TimPC wrote: post #35
TimPC wrote: post #31

Earlier quoted context omitted.

I think it's extremely important to undertake a cost benefit analysis of the end state to decide if we want to transform society in that direction. So I disagree strongly with any comment of the form "don't get too caught up in the end state". I agree there are some other things you can tax. I presume those are also taxed at precisely the economic rents they create? My point is that government needs some sort of tax…

I worry that the Henry George Theorem suggests a government can spend money in order to tax more of it. It potentially solves the issue of governments not having enough revenue, since arguably they can tune unimproved land values upwards to the levels they need. Of course it also introduces the problem of governments tuning unimproved land values to the level they need. Tax revenues have grown from $3.32 trillion in…

Most increases in land value are for the construction of infrastructure and other investments which make people more productive and increase wages, so while land values increase that investment increases wages also, meaning that it shouldn't have much of an effect on people's ability-to-pay.
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