Georgism • Hacker News Board

Re: Georgism

#41

Post by MiroF » Sun, May 17, 2020, 1:44 PM UTC

toohotatopic wrote: post #18

nabla9 wrote: post #12

Earlier quoted context omitted.

"The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give." — Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter XI "Of the Rent of Land"

This assumes that the farmer has to remain a farmer. This can be true for one generation, but the next generation can choose another profession. People don't become farmers if they have to pay too much.

> This assumes that the farmer has to remain a farmer.

How does it assume that?

Re: Georgism

#42

Post by CydeWeys » Sun, May 17, 2020, 1:44 PM UTC

LVTfan wrote: post #36

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.

They generally locate where they can draw on a pool of talented people, and those people are drawn by social amenities, good schools, good infrastructure. All those things contribute to land value.

You're not being concrete. How do you properly tax a tech company whose land allocation is negligible compared to the overall value of the company? Tech companies have less than 1% of their value tied up in land. If they're all-remote and cloud-based, then they have $0 in land. How would you even tax them if the only tax is based on land?

Also, I live in an apartment. Should my tax be $0? Or if I owned and lived on land way out in a rural area where a small plot is only worth a few thousand bucks, do I only pay tax on that despite my income being mid six figures? The point is, as a knowledge worker, my economic productivity is entirely divorced from land. This is true of most white collar workers. Land value taxes may have made sense as the primary tax hundreds of years ago but they don't make sense for that purpose now.

Re: Georgism

#43

Post by CydeWeys » Sun, May 17, 2020, 1:46 PM UTC

nabla9 wrote: post #38

CydeWeys wrote: post #37

Earlier quoted context omitted.

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.

> once you own land, it's yours. Idea that you can buy a monopoly is generally a bad idea.

Clearly people don't think so, as the vast majority do agree with private property exclusive ownership.

Re: Georgism

#44

Post by epistasis » Sun, May 17, 2020, 1:46 PM UTC

zozbot234 wrote: post #15

alexmingoia wrote: post #11

The problem with georgism is that “unimproved value” is a non-market price. It’s just made up by whoever is appointed assessor. Georgism conflates made up “value” with market “value”. Ultimately some person has to assess the value of the unimproved land, meaning someone anointed to write down whatever number they want. Value is subjective. There is no such thing as “unimproved land value”, unless you’re talking about…

Isn't that true of any assessment? With the ordinary property tax, you have to assess both the land value and the improvements. (There are of course ways of taxing property that don't involve that kind of outside assessment, but they're not commonly used.)

Yes, this, most definitely. And the land versus structure value is already calculated for most properties for insurance purposes.

Even places (like California) that do not assess tax based on value still have massive fleets of property value assessors that are used during the course of normal market transactions, since those who lend mortgages use them to prevent fraud.

Re: Georgism

#45

Post by tlholaday » Sun, May 17, 2020, 1:46 PM UTC

aww_dang wrote: post #13

EGreg wrote: post #3

There was a time - for over half a century - when Progress and Poverty was the best known economics book in the world. If you buy one, it has a who’s who of people endorsing it, from famous economists to writers to presidents. And somehow, in the last 50 years, we have all forgotten it, and some people only remember the land tax. Not only that, but the same debates rage today, about why there is still so much poverty…

"Rather than nationalize land outright, the single taxers would levy a 100 percent tax on the annual land rent — the annual income from the site — which amounts to the same thing as outright nationalization." --Murray Rothbard Georgism is reasonably well known among free-market enthusiasts and libertarians.

Rothbard's error: under land nationalization, state actors decide who uses the land; under single tax, who uses the land is determined by auction.

Re: Georgism

#46

Post by MiroF » Sun, May 17, 2020, 1:46 PM UTC

roenxi wrote: post #22

JSavageOne wrote: post #14

Earlier quoted context omitted.

> If you had a choice, you would choose to be poor today, than to be poor a century or two ago. The classic false dichotomy that somebody always feels the need to point out in justifying the status quo.

The status quo is a jawdroppingly fast and totally unprecedented reduction in poverty [0]. If my goal were to reduce poverty; my strategy would be to defend the status quo. [0] https://ourworldindata.org/extreme-poverty

You see how that's non-responsive to the parent, right?

Re: Georgism

#47

Post by snidane » Sun, May 17, 2020, 1:48 PM UTC

CydeWeys wrote: post #32

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.

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 government provided services appropriately then you don't need taxes.

Eg. to build infrastructure (roads, networks) you can predict that it'll benefit owners of nearby properties. They will benefit by landfall increase to the value of their property because the land on which it stands becomes more valuable.

So you collect the money for the infrastructure project by land "tax" before you begin with construction.

("tax" because it's not a tax but payment for exclusive land ownership rights)

Re: Georgism

#48

Post by javitury » Sun, May 17, 2020, 1:49 PM UTC

LVTfan wrote: post #36

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.

They generally locate where they can draw on a pool of talented people, and those people are drawn by social amenities, good schools, good infrastructure. All those things contribute to land value.

The goal is to make the tax system not to reduce incentives to increase skills, labor, or technology.

"George preferred taxing unimproved land value"

Re: Georgism

#49

Post by PeterisP » Sun, May 17, 2020, 1:50 PM UTC

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.

Some time ago wealth and production of wealth was heavily tied to land, agriculture and various natural resources were key to the wealth of a nation.

This is not the case any more - only a tiny fraction of our economy is tied to the land, primary production (agriculture/forestry/fishing and mining including oil) is just a few percent of the total economy; real estate/rents/leasing is perhaps 15% but most of that is related to the value of buildings, not the value of land. For extremely wealthy people, almost nothing of their wealth or income is in the form of land, because land is not worth that much. The current billionaires aren't major landowners, we're not Victorian age with most of the upper class being rentiers living off the rents of their land estates; the upper class is living off the dividends of their capital which is not tied to land and would be tax-free in a land-tax-only regime.

Extremely large taxes on land (or are we talking about an orders of magnitude reduction in the toal tax burden, and not just about the type of taxation? If we want to drastically cut the total volume of taxes, then that becomes the main topic, not the means of collecting taxes) while not the taxing the other 90% of the economy at all is not really a reasonable solution for modern times. It may have been reasonable in 1870s, but right now all it would just remove pretty much all taxes from all the very wealthy people and corporations, while putting all the tax burden on owners of farms and homes, and the 1.5% of USA economy that handles mining.

Re: Georgism

#50

Post by zozbot234 » Sun, May 17, 2020, 1:50 PM UTC

oDot wrote: post #24

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.

It actually makes much more sense to use a uniform sales tax: (1) If you spend more, you're taxed more. Obviously this is better for poorer people, who spend less, but also for rich yet reserved people, who keep most of their money in the bank (which lends it) and are earning an income (=productive). Both will not penalized. (2) It's much hard to raise, because people will just stop buying stuff, which is much easier…

Really, the thing is that the whole "single tax idea" is a bit misguided. A consumption tax (sales tax) is great, but there are some sensible reasons to tax capital income/investment to some extent, too. Mostly, because it correlates somewhat with basic ability-to-pay; also, because people might try to disguise income/expenses as investment-related in order to shield them from taxation, and having a more uniform tax base helps prevent this.

But the broad principle that capital investment should bear a lower tax burden is quite correct. And one you've accepted that general principle, it makes a lot of sense to tax rent-generating assets like land and spectrum rights (since those are not really "capital" in the first place), which is pretty much the Georgist idea.