Letter from a Young Distributist: Georgism and Distributism • Hacker News Board

Re: Letter from a Young Distributist: Georgism and Distributism

#61

Post by TimPC » Thu, Apr 28, 2022, 7:01 PM UTC

geocon wrote: post #32

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 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…

I think it's fair to say efficiency and fairness are sometimes competing concerns. For instance, I disagree on shifting only property taxes to LVTs because I think they benefit condo developers at the expense of homeowners. Any tax shift has winners and losers and while there might be a slight overall benefit to the shift itself the individual outcomes can vary dramatically. I'd argue that we do have to have some degree of consideration for individual outcomes as well.

Re: Letter from a Young Distributist: Georgism and Distributism

#62

Post by hushpuppy » Thu, Apr 28, 2022, 7:01 PM UTC

clairity wrote: post #9

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…

> "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…

> '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 delivery of service (in this case, housing). LVT only seeks to tax away that unproductive part (economic rents). the productive part would include the costs of mortgage(s), insurance, utilities, upkeep, and a small profit (aka risk premium).

Except the LVT premise is bullshit.

Lets say I have a house I rent out for 1800 dollars a month. About 500 dollars of that will go to taxes (income, property, etc).

Out of the rest I take 600 dollars and am in the process of fixing up two more houses that I bought from a tax sale that were made unlivable through crackhead squatters.

So that leaves me about 700 dollars more. Out of that I need to save probably about 300 dollars a month to cover costs associated with owning homes. Such as the need to replace roofs or water heaters or hire arborist to take down dying trees before they destroy my neighbor's property, etc.

Then that leaves me with 400 dollars that I reinvest in other companies. So it goes to doing thing like buying bonds, etc.

The only thing that is "unproductive" here is the money being paid to the federal governemnt to go murder brown people half way around the world.

The entire intellectual basis of this "Georgian" stuff is completely bogus. The theories about monopolies are wrong. The theories about how to solve the tragedy of the commons is wrong as well. The economic efficiency theories are wrong, etc etc etc.

Re: Letter from a Young Distributist: Georgism and Distributism

#63

Post by pyradius » Thu, Apr 28, 2022, 7:04 PM UTC

TimPC wrote: post #47

geocon wrote: post #43

Earlier quoted context omitted.

Because land has fixed supply, as you've said, the tax is perfectly efficient: it causes zero deadweight loss. But LVT actually has positive externalities as well- namely, it makes it nearly impossible to speculate, which with land consists of buying land and holding it off the market unused or underused in order to sell it later. Speculation is very inefficient and also quite common, so removing it actually makes th…

I think I need to think about this some more. It seems like the goal of government is to figure out the tax rate that counters the land value perfectly without taxing any more. The fact that it is unimproved land value means we aren't stuck in an efficiency trap since a diverse enough set of uses can improve the land sufficiently to generate a reasonable economic profit in non-rent form. Countering speculation is def…

That is not the sole purpose for the public collection of land rent. Land rent is based on demand for land. Land rent is what you would pay for a particular plot vs. some other plot that is available.

The question is to whom should this payment go, and "fee simple" is an entirely inappropriate mechanism for payment.

Everyone has an equal right to the use of land, limited only by the equal rights of others to use land. What the state does not need for the provision of public goods & services should still be collected and returned to the people on a per capita basis, as a simple matter of social & economic justice.

Re: Letter from a Young Distributist: Georgism and Distributism

#64

Post by pyradius » Thu, Apr 28, 2022, 7:09 PM UTC

brightly-salty wrote: post #29

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…

Well other taxes are not precluded by Georgism. See for instance Piguovian taxes and IP taxes. But additionally, I don’t think it can be assumed that the government will continue to need its current amount of revenue. Under subsidiary, the size of the federal government would drastically be reduced as power moves downward to local governments.

Well, many Georgists believe that All Taxes Come out of Rents, so under that belief there is no reason to keep inferior taxes in existence as opposed to collecting the higher rental value that would occur with the removal of those current taxes.

As for levies on externalities, these should be more accurately seen as correcting a market failure, the social cost that society must pay that the consumer/producer do not pay.

Notably, Frank Ramsey and A.C. Pigou can be considered crypto-Georgists -http://blog.lvrg.org.au/2013/09/ramsey-and-pigou-crypto-geor...

"As we shall see, Ramsey not only formulated a rule that leads directly to a “single tax” on land, but also anticipated the so-called Laffer curve in cases where the “single tax” is not employed. Moreover, Ramsey's rule was to be applied after any externalities had been internalized by means of appropriate taxes and bounties."

Re: Letter from a Young Distributist: Georgism and Distributism

#65

Post by geocon » Thu, Apr 28, 2022, 7:10 PM UTC

hushpuppy wrote: post #62

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…

> '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 delivery of service (in this case, housing). LVT only seeks to tax away that unproductive part (economic rents). the productive part would include the costs of mortgage(s), insurance, utilities, upkeep, and a small profit (…

Really? Care to tell that to the various Nobel laureate economists who have endorsed land value taxation? Do you really think you understand economics better than Paul Samuelson, Milton Friedman, Joseph Stiglitz, William Vickrey?

Re: Letter from a Young Distributist: Georgism and Distributism

#66

Post by TimPC » Thu, Apr 28, 2022, 7:18 PM UTC

hushpuppy wrote: post #62

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…

> '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 delivery of service (in this case, housing). LVT only seeks to tax away that unproductive part (economic rents). the productive part would include the costs of mortgage(s), insurance, utilities, upkeep, and a small profit (…

So you say you have $1000/month out of $1800 that are unrelated to providing rent in the unit being rented and you feel there is no possibility that you're capturing some sort of economic rent when you have more than 50% profit margin on the rent you charge. I think something is bullshit but it's not the economic theory.

Re: Letter from a Young Distributist: Georgism and Distributism

#67

Post by pyradius » Thu, Apr 28, 2022, 7:23 PM UTC

TimPC wrote: post #6

brightly-salty wrote: post #5

Earlier quoted context omitted.

I think you might misunderstand Georgism, or maybe I did a poor job explaining it. Georgism does not propose taxing improvements (buildings etc), only the actual land. So many peoples tax burden would be decreased, and if the bank owns the land as in a mortgage, they are the ones paying the tax, not the people taking out the mortgages.

I get that Georgism doesn't tax the improvements. I think we have a fundamental disagreements about how mortgages work. A mortgage doesn't make the bank the owner of the land. Even if we strangely ruled that it did, that would lead to strange situations where as long as people were paying a mortgage they could live tax free on their land. But the minute that mortgage disappeared they'd be on the hook for the tax valu…

These are not show-stoppers, nor are they something that Georgists have failed to consider.

"Another basis on which it is argued that greatly increased taxes on land are infeasible is that if land values were to fall precipitously, the financial system would collapse. It is true that many properties have mortgages that would exceed the value of the property if land taxes were increased significantly. This makes it necessary to think carefully about who should absorb the decline in aggregate asset value that would accompany a significant shift toward taxing land. Nevertheless, it is possible to plan for a restructured financial system that would have shed its dependence on land as collateral." http://www.wealthandwant.com/docs/Tideman_CTL.html#I._Taxing...

"Furthermore, as we discuss in more detail in our paper, the number of net winners from this reform would far exceed the number of net losers, who, if necessary, could be exempted or compensated at little budgetary cost. The winners would even include almost all of the very rich, who not only hold the vast majority of US land but who as a rule are also very well diversified, with land only accounting for a small share of their portfolios. They would benefit greatly from the countervailing cuts in labour and capital income taxes." https://voxeu.org/article/post-corona-balanced-budget-fiscal...

"It came as a quite natural development that also the question of incorporating these ideas into Danish Law was raised. From the very beginning, Jakob E. Lange was convinced that the problem of indebtedness, especially the mortgage debts, must be solved when the full Land Rent, or Ground Duty (in Danish "Grundskyld") were to be collected for a public revenue.

When in 1889 Henry George was on a speaking tour in England, Jakob E. Lange made use of the opportunity and went to England to meet him and to discuss the problem with him. The memoirs of Jakob E. Lange relate that Henry George completely accepted his standpoint; an eventual full Ground Rent which were to exceed the present property taxes ought to be proportioned between the title owner and the mortgage holder. This agreement between Henry George and Jacob E. Lange is also found expressed in the later correspondance between the two." https://cooperative-individualism.org/bille-frank_danish-ame...

Re: Letter from a Young Distributist: Georgism and Distributism

#68

Post by llamaimperative » Thu, Apr 28, 2022, 7:38 PM UTC

Apocryphon wrote: post #3

Nice to hear examples of some economic ideologies that didn’t catch on, but speaks to material concerns that still exist today.

Go pick up a copy of Progress & Poverty, and you too can forward the cause (basically by annoying the living daylights out of all of your friends, like I do)

Re: Letter from a Young Distributist: Georgism and Distributism

#69

Post by klyrs » Thu, Apr 28, 2022, 7:46 PM UTC

geocon wrote: post #65

hushpuppy wrote: post #62

Earlier quoted context omitted.

> '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 delivery of service (in this case, housing). LVT only seeks to tax away that unproductive part (economic rents). the productive part would include the costs of mortgage(s), insurance, utilities, upkeep, and a small profit (…

Really? Care to tell that to the various Nobel laureate economists who have endorsed land value taxation? Do you really think you understand economics better than Paul Samuelson, Milton Friedman, Joseph Stiglitz, William Vickrey?

Regardless of my vehement disagreement with GP, you're attempting an [appeal to authority](https://en.m.wikipedia.org/wiki/Argument_from_authority) which is utterly unconvincing.

Re: Letter from a Young Distributist: Georgism and Distributism

#70

Post by adgjlsfhk1 » Thu, Apr 28, 2022, 7:51 PM UTC

TimPC wrote: post #58

geocon wrote: post #56

Earlier quoted context omitted.

I think you have a mistaken view of who is actually making money in this equation. Developers do not make all that much money from building housing, which is actually a productive contribution to society. Homeowners, on the other hand, make hand over fist by simply sitting on land absorbing rents: https://pbs.twimg.com/media/EyJN_g3UUAIW0f0?format=jpg&name=... https://www.wsj.com/articles/homes-earned-more-for-owners…

I think it's misleading to measure things in revenue per square foot. Most government services aren't provided based on the number of square feet but rather based on the number of people. The per capita revenue for denser developments is lower than the per capita revenue for single family housing. When you get to rural densities you have issues of providing services because of the lack of scale of communities but sub…

the counter examples are things like roads, pipes, wires, and Public transit which make to up a high percent of city and state budgets and scale with density.