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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?

#71

Post by TulliusCicero »

mindslight wrote: post #43
MrPowers wrote: post #7

I'm not a huge fan of how deadweight loss is defined in the article: > virtually all economists agree that land value tax has zero "deadweight loss"–a fancy word for a drag on the economy that makes certain activities no longer profitable Property taxes tax the land + the building. Building taxes are complicated to assess. They require tax assessments, appraisers, tax code, accountants to compute depreciation schedul…

> Property taxes can discourage you from using your land to its highest and best use I agree. > Land taxes offer the opposite incentives. They encourage you to make your property better. But it doesn't make the converse true. At most, you can say that high enough land value taxes encourage making real estate generate more revenue, to pay the tax. But given the current economy's tendency to optimize everything legible…

> But it doesn't make the converse true.

It does work that way, though. Except it's not exactly 'better', but rather 'more economically productive', which may or may not be better depending on your value system and the specific cases that arise.

> For a rural example, a single house on several acres is much nicer than a ticky-tack suburban panopticon (or even worse a HOA).

Arguably nicer, yes, but the suburban hellscape is definitely a lot more economically productive.

> Economically it's hard to prevent the latter from occurring over time (eg parents die and kids want the most money possible, so they subdivide), but we shouldn't be encouraging it through policy.

This feels like an orthogonal issue to me, that US-style suburbia is bad. Though honestly the rural living you describe is probably no better. Oh sure, it's nice in some ways, but there's problems a plenty there too: it's more destructive for the environment per capita, and it causes problems with the intersection of the social contract and social services.

For an example of that last bit, look at the struggle with rural high speed internet. Arguably necessary for economic activity as well as educational purposes, but it's much more expensive to wire up and service super low density areas, and yet people in those areas have less money, not more. So you end up with either a) left to the free market, they have shit internet access, or b) people in urban and suburban areas subsidize them getting better internet, even though for most people there it's an explicit choice to have that lifestyle (as opposed to, say, the urban poor).

And it's not just internet: most infrastructure and services are harder to deliver in rural areas, and you can end up in shitty situations because of that. Even if you accept that it's fine for adults consenting to it, what about kids who grow up with fewer opportunities?

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

#72

Post by PragmaticPulp »

Hermitian909 wrote: post #47
PragmaticPulp wrote: post #18

I was excited to read this article, but by the end it felt like a jumble of unrelated conjectures examined in isolation from each other that all seem to be presented in a way that deliberately ignores any downsides: For example: > Also, keep in mind that LVT would see the elimination of the portion of property tax that falls on buildings. I just checked my own property tax records (I live in the suburbs of a medium-s…

> all seem to be presented in a way that deliberately ignores any downsides If I understand correctly, the point of this article (one of several) is just to establish that a land tax would constitute a large amount of money. I get the impression the article was supposed to merely establish whether a land tax would generate a substantial amount of money whether good or bad, though admittedly the author tips his hand a…

> If I understand correctly, the point of this article (one of several) is just to establish that a land tax would constitute a large amount of money.

We could make a land value tax constitute any amount we’d like.

Just take the value you want it to produce, divide by the assessed value of all of the land, and you have your tax rate.

That’s not an interesting question, though. The interesting part is whether or not that’s reasonable or fair, and to explore who wins and loses.

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

#73

Post by TulliusCicero »

thesausageking wrote: post #32

> It's more expensive to live in the heart of New York City than in the middle of Nebraska. That's not because construction costs are orders of magnitude more expensive in New York, but because the land is orders of magnitude more expensive. This is missing a key element: The value of a parcel in NYC is partly from the land itself but most of it comes from the development rights. If you have parcel which a 5 story bu…

Okay. Does that interrupt their point though? It seems like what would happen with a land tax in this case is that if an area got rezoned to allow buildings 20x the height, the land value would skyrocket and thus so too would the land tax. That would then incentivize actually building a really tall building on that land, which is probably what you want (both in the sense of what land tax proponents want, and what you'd want if you just did that rezone).

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

#74

Post by TulliusCicero »

endisneigh wrote: post #64

Land is already taxed, Georgism is already in play. If one is arguing for higher property (addition + land) tax then that’s another discussion. The housing issue is a zoning issue, and consequently solely a political one, not a tax one.

Yes, but a pure land tax behaves differently from a property tax. A land tax punishes 'unproductive use' of in-demand space much harder, and doesn't provide a disincentive for investing in building improvements.

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

#75

Post by zapataband1 »

Really thorough argument. While it seems like a great idea, the last bit is what gets me: the wealthy owns the vast majority of the land. Our gov is effectively captured by financial interests. At what point will the rich give this up? We can come up with a million reasons for taxation but the rich will evade them like it's their job. The problem is still wealth inequality caused by greed. I had never heard of Georgism, Here's another person that thought land ownership was immensely important https://en.wikipedia.org/wiki/Emiliano_Zapata

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

#76

Post by fatbird »

slibhb wrote: post #28

I think the biggest problems with Georgism are 1. in some sense it calls for the expropriation of land by the government 2. it's unfair to change the rules in the middle of the game and 3. it's logistically difficult to carry out. As far as unfairness goes, imagine a couple, 65, retired, paid off their mortgage, paid income taxes all their lives until retirement, now living off their savings. It's unfair to start tax…

Aren't they still paying property taxes? You wouldn't be adding a tax to them, you'd be replacing a tax on them with a differently calculated tax. It might go up, or down (the auther says his would go down).

And there is no "middle of the game" here, because there wasn't a start and won't be an end... it's all middle. You don't have a right to live by the same laws your whole life. By point 2, as everything is currently in process, we couldn't ever adjust taxes, or change laws.

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

#77

Post by PragmaticPulp »

thesausageking wrote: post #32

> It's more expensive to live in the heart of New York City than in the middle of Nebraska. That's not because construction costs are orders of magnitude more expensive in New York, but because the land is orders of magnitude more expensive. This is missing a key element: The value of a parcel in NYC is partly from the land itself but most of it comes from the development rights. If you have parcel which a 5 story bu…

> This is missing a key element:...

This is where I get frustrated with Land Value Tax articles: They tend to ignore all of the complexity by sweeping it into the idea that Land Value is something that can be accurately and arbitrarily assessed in a vacuum, without influence from politics, zoning or other real-world factors.

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

#78

Post by fatbird »

tormeh wrote: post #37
slibhb wrote: post #28

I think the biggest problems with Georgism are 1. in some sense it calls for the expropriation of land by the government 2. it's unfair to change the rules in the middle of the game and 3. it's logistically difficult to carry out. As far as unfairness goes, imagine a couple, 65, retired, paid off their mortgage, paid income taxes all their lives until retirement, now living off their savings. It's unfair to start tax…

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.

The way you handle retirees is tax deferral: they don't pay the taxes every year, they pay the whole amount when the property is transferred by sale or inheritance. In this case it would just be the land transfer.

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

#79

Post by dsizzle »

TulliusCicero wrote: post #49
bradleyjg wrote: post #41

Earlier quoted context omitted.

Land taxes are far far more difficult to calculate than property taxes. Impossible to do well in some cases. To know what land and the buildings on it are worth you can look to what people are willing to pay to buy them. There’s no similarly straightforward way to value the separate parts. So you’ll end up with a lot more wasted expert time for a less accurate result.

Property taxes are already commonly broken down into the value of the land vs buildings, IIRC.

FWIW, I just looked up my own property tax records and there's no breakdown, so not sure how common that is.

That said, it is done for property insurance, so I think your point that it's already done stands.

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

#80

Post by MrPowers »

PragmaticPulp wrote: post #69
MrPowers wrote: post #55

Earlier quoted context omitted.

For the winners / losers computation, one thing that's clear is that land value taxes are highly progressive. Rich people own most of the land. There are no tax loopholes to evade land taxes.

> There are no tax loopholes to evade land taxes. Of course there is! You just lobby or bribe your politicians to value your land at a lower amount. They make up for it by valuing someone else’s land at a higher amount. So much of the LVT discourse assumes perfect valuations, but if you reduce everything to these variable valuations then the politics will just start modifying the valuations. We’d have an entire book…

All the land value taxes would be public record. Think it'd be hard to have your land valued differently than your neighbor.
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