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Does Georgism work? Is land a big deal?

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Re: Does Georgism work? Is land a big deal?

#351

Post by MisterMower »

pydry wrote: post #242
MisterMower wrote: post #26

“But won't landlords just raise the rent to make up for the LVT, passing the burden of the tax on to the tenants? Georgists say no, because land is special in that it is scarce and nobody can make any more of it. Indeed, LVT is a rare form of taxation that actually boosts the economy, because it discourages rent-seeking and speculation. Some Georgists even go so far as to say that LVT can raise enough revenue to repl…

>That means landlords will suddenly act irrationally and not pass costs onto their tenants, choosing instead to operate at a loss. Businesses never choose to operate at a loss. They just do. Rents are set by supply and demand. LVT affects neither the supply of housing nor the demand for a place to live. Landlords would scramble to do a number of things but their hands would be tied on rents since supply and demand is…

Choosing to continue to lose money is a thing, too. And landlords won't do that for very long.

Is supply and demand for housing elastic? That seems to be the central assumption in this whole theory. Georgists assume it's very inelastic. They're wrong.

If you want to shatter that illusion, go drive from Dallas to Fort Worth and take a look at all the apartment buildings and housing subdivisions that are getting built.

I can see how folks that live in CA might think that assumption is valid. But just because zoning laws and the property tax regime out there are broken doesn't mean we should adopt a new, even more broken, tax policy.

Re: Does Georgism work? Is land a big deal?

#352

Post by MisterMower »

pydry wrote: post #247
CryptoPunk wrote: post #88

Any transition to a LVT should accompany one-time compensation to existing land owners. The same should apply to any other repeal of rent-seeking institutions, whether it's anti-labor-competitive laws privileging labor unions, licensure barriers privileging taxi medallion holders, etc. The British used this method to end slavery throughout their empire, which meant: 1. much more rapid end to slavery, due to less poli…

This is essentially saying that the rich must be kept rich to prevent them from hurting us. You're saying that they must be paid protection money. Slavery wasn't as big a part of the economy of the British Empire as it was to the American south. In any case the US made back a lot of the losses of the war during the period of reconstruction.

This is going to blow your mind, but some of those rich people created value commensurate with their wealth. Some of them are no doubt entitled clowns, but you don't often get to Jeff Bezos's kind of money without adding some value along the way.

No clue what your slavery quip has to do with anything.

Re: Does Georgism work? Is land a big deal?

#353

Post by d3ckard »

whakim wrote: post #345
d3ckard wrote: post #253

Earlier quoted context omitted.

I’d like to add here that the biggest fallacy is assuming rich pay income tax at all, which leftists across the world all seem to universally believe. I would argue that in 21st century the definition of rich is actually „achieves most of his income through sources which are not subject to income tax”. Progressive income tax mostly hurts well qualified proffessionals nowadays (people actually working for that income)…

This isn't true. If you define "income" as the sum of an individual's income from capital plus income from labor, it is only in the top 0.1% of the distribution that capital income dominates labor income. (This percentile threshold changes slightly based on country; in countries such as the United States it'll be a bit higher.)

And? Due to power-law distribution that 0.1 % holds disproportional amount of riches.

I really don’t get that people talk about rising income inequality all the time, but actually noticing it (i.e. very strong minority holding many assets) suddenly doesn’t make sense.

Re: Does Georgism work? Is land a big deal?

#354

Post by Zacru »

dane-pgp wrote: post #92
tormeh wrote: post #37

Earlier quoted context omitted.

It only takes one such case to make the tax look bad. But a LVT for corporate owners makes sense. Maybe one for young people too, only excepting retirees.

> Maybe one for young people too If we're concerned about fairness in the housing market, a special tax which only applies to young people isn't the policy I'd recommend. As an alternative, you could give each person an allowance of land area/value (perhaps based on the median value, or an equal share of the nation's land territory) and say that anyone who uses more than that (with a mansion, or multiple homes) would…

Taxing different entities at different rates just opens the door for a middle-man with a lower tax rate to profit from simply renting the land to the entities with higher tax rates.

Re: Does Georgism work? Is land a big deal?

#355

Post by pydry »

MisterMower wrote: post #352
pydry wrote: post #247

Earlier quoted context omitted.

This is essentially saying that the rich must be kept rich to prevent them from hurting us. You're saying that they must be paid protection money. Slavery wasn't as big a part of the economy of the British Empire as it was to the American south. In any case the US made back a lot of the losses of the war during the period of reconstruction.

This is going to blow your mind, but some of those rich people created value commensurate with their wealth. Some of them are no doubt entitled clowns, but you don't often get to Jeff Bezos's kind of money without adding some value along the way. No clue what your slavery quip has to do with anything.

You believe Jeff Bezos created >= $205 billion worth of value?

(just to be clear: we were never arguing over whether he created some or none, simply whether he created north of $205 billion in value).

He also destroyed a lot of value.

Re: Does Georgism work? Is land a big deal?

#356

Post by lelanthran »

pydry wrote: post #240
lelanthran wrote: post #211

Earlier quoted context omitted.

> In areas of housing shortages, the rent with LVT would be whatever it currently is without LVT. Theoretically, landlords are already extracting the maximum rent price possible in housing-constrained markets like NYC/SF/etc. But that doesn't mean that the maximum rent (whatever the market can bear) will remain the same if all landlords had their costs go up by the same amount at the same time. It could fall as landl…

>I think that it is equally likely that landlords will first raise the rents to try to stay in business. They might try and they certainly would threaten but if they jack up rents and as a result can't get any tenants then they're in an even worse position than before as they have an LVT bill and no income to support it. Without a restriction in supply or an increase in demand (neither of which would happen), rents c…

> if they jack up rents and as a result can't get any tenants

Why won't they get any tenants? Do people have somewhere else to stay? Will they leave the city altogether?

Re: Does Georgism work? Is land a big deal?

#357

Post by CryptoPunk »

pydry wrote: post #355
MisterMower wrote: post #352

Earlier quoted context omitted.

This is going to blow your mind, but some of those rich people created value commensurate with their wealth. Some of them are no doubt entitled clowns, but you don't often get to Jeff Bezos's kind of money without adding some value along the way. No clue what your slavery quip has to do with anything.

You believe Jeff Bezos created >= $205 billion worth of value? (just to be clear: we were never arguing over whether he created some or none , simply whether he created north of $205 billion in value). He also destroyed a lot of value.

Yes, I believe he did. His contributions, in guiding the development of the Amazon marketplace and Amazon Web Services could have easily amounted to e-commerce and cloud computing adding trillions more in value than it otherwise would have.

Re: Does Georgism work? Is land a big deal?

#358

Post by whakim »

d3ckard wrote: post #353
whakim wrote: post #345

Earlier quoted context omitted.

This isn't true. If you define "income" as the sum of an individual's income from capital plus income from labor, it is only in the top 0.1% of the distribution that capital income dominates labor income. (This percentile threshold changes slightly based on country; in countries such as the United States it'll be a bit higher.)

And? Due to power-law distribution that 0.1 % holds disproportional amount of riches. I really don’t get that people talk about rising income inequality all the time, but actually noticing it (i.e. very strong minority holding many assets) suddenly doesn’t make sense.

No one is denying that income and wealth are distributed very unequally. But my point is that well more than 99.9% of individuals primarily earn money via labor and are therefore subject to an income tax, and so it isn't correct to assert that income taxes don't hurt the rich. They don't hurt the absolute richest individuals - but most people aren't defining "the rich" as only the top 0.05%.

Re: Does Georgism work? Is land a big deal?

#359

Post by jl2718 »

jl2718 wrote: post #181

Income tax persists because it avoids the problem of valuation. These ideas are largely moot with a robust mechanism for value discovery. One such possibility is the open auction. In a value tax system, somebody puts money into an escrow bond as a bid on the property, and the owner has a choice of either paying the tax for the duration of the escrow, or exchanging the property for the escrow. The escrow bonds themsel…

Edit: These ideas are largely moot [with->without] a robust mechanism for value discovery.

Seems to be understood though. Sorry.

Re: Does Georgism work? Is land a big deal?

#360

Post by trophycase »

nwah1 wrote: post #60
trophycase wrote: post #27

Is Georgism the new fad philosophy? Seems like every few years you see things like this crop up and the technies go all nuts over it. Stoicism was the last big one. I know they aren't strictly related but seeing these fad philosophies is interesting.

Stoicism is hard to call a fad. It has persisted as an important philosophy for over two millennia. Georgism is a distilled moral argument that is core to classical liberalism. Classical liberalism is centuries old, as is georgism.

Stoicism is most definitely a fad and experienced a strong revival along with the male "self-improvement" and "grind" culture. It basically popped up out of nowhere around 2015-2016 in these circles.

Georgism is also a fad. A friend of mine brought it up at a barbecue during the summer and I had never heard of it in my life, and consider myself decently aware of philosophy at a basic level. Ever since then I've seen about 10 articles/topics on HN front page about it.

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