Georgism • Hacker News Board

Re: Georgism

#81

Post by oDot » Sun, May 17, 2020, 2:07 PM UTC

blahbhthrow3748 wrote: post #29

oDot wrote: post #24

Earlier quoted context omitted.

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…

Sales tax fails to capture the accumulation of capital, so (1) is kind of bogus. If you make 100 billion dollars and invest it you and several generations of your family coild live comfortably without ever working and your tax burden would only depend on your spending. A sales-only tax incentivized rent seeking, basically, because the rentiers pay the same taxes as the renters while accumulating capital.

But what is investing other the attempt (aware or unaware) of creating wealth? When people make money, it means someone bought something from them. This means they had to create something other want. That can be a service, a good, or a house for rent. Remember that those who rent houses are people who can't afford to buy them, so they need someone with capital to manage the house. I am renting myself and I much prefer it at the moment to owning a house.

You want billionaires to keep their money, because unless they put it under their mattress, they are growing the economy, which means lowering prices and raising quality.

Re: Georgism

#82

Post by zozbot234 » Sun, May 17, 2020, 2:07 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.

It is often considered a "narrow" tax base - just not enough for a "single" tax, all things considered. (That's largely because the burden of existing taxes is already being borne by land, at least to a significant extent. They just have additional disincentive effects, quite separate from that sort of final tax incidence.) But even then, it's clearly enough to fund local government expenses, so there's really no excuse for why we aren't using it.

Re: Georgism

#83

Post by oDot » Sun, May 17, 2020, 2:08 PM UTC

LVTfan wrote: post #40

blahbhthrow3748 wrote: post #29

Earlier quoted context omitted.

Sales tax fails to capture the accumulation of capital, so (1) is kind of bogus. If you make 100 billion dollars and invest it you and several generations of your family coild live comfortably without ever working and your tax burden would only depend on your spending. A sales-only tax incentivized rent seeking, basically, because the rentiers pay the same taxes as the renters while accumulating capital.

and so often it gets invested in land, which includes not just the sites under our feet, but vital natural resources, the kind that are finite in supply.

If you take a look at the data, "investing in land" wasn't as luxurious as it is today, due to government actions inflating the market.

Re: Georgism

#84

Post by bluecalm » Sun, May 17, 2020, 2:09 PM UTC

CydeWeys wrote: post #65

xiphias2 wrote: post #54

Earlier quoted context omitted.

The whole point of this tax type is encouraging efficiency. Tech companies are usually efficient, and taxing them less increases their efficiency even more. At the same time their harmful effects should be regulated (GDPR is an example of such regulation). Countries and states that let tech companies thrive are winning the race for capital.

The whole point of taxes is to fund government spending. That is a large amount of money you need to bring in every year. Taxing based on income seems to make the most sense for that, not "taxing based on efficiency". If tech companies have billions of dollars but aren't paying taxes just because their business doesn't happen to use land, how does that make sense? Why is land efficiency the only thing that matters? T…

Who do you think should pay more taxes: someone sitting on 10M worth of land and doing nothing or a factory worker with no assets making 20$/hour? Income tax is unfair. It taxes productive people instead of those who benefits the most from the stable system (land owners).

Re: Georgism

#85

Post by LVTfan » Sun, May 17, 2020, 2:10 PM UTC

epistasis wrote: post #44

zozbot234 wrote: post #15

Earlier quoted context omitted.

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.

The valuation for insurance purposes is generally not the current, depreciated value of the building, but the cost to rebuild, at today's material and labor prices, and with modern materials and systems.

A 50 year old building, with old systems, may be fully depreciated, but if one had to rebuild, one would need far more than the current building is worth.

When one buys a home with a mortgage, the bank requires an appraisal. In some places, the forms don't even break out land value from building value, or they do it badly. An appraisal merely compares the subject house with others that have sold recently in the same area. Better location? $15,000 more (or, in California, $100,000 more) Inferior location? subtract $15k or $100k. 1 more bathroom? Add $5,000 (CA: might be $5k or $50k) new kitchen vs 20 y/o kitchen? Add $10k, $50k or $100k, or more, depending on what is typically spent in that neighborhood. For each "comparable" add up all the pluses and minuses, and add that to the transaction price for that property. Average those, and the subject house value is estimated. Land value is in there, but not explicit.

California has assessors, too, who, after a property has sold, update the assessment on it to equal the transaction price. Some goes to land, some to the building. (check out listings at realtor.com, and fully expand the property history info. Notice when the previous transaction was, and look at the increases. They are in reality mostly land value. Buildings don't appreciate. Land rises and falls in value --- mostly rises.)

But appraisers and assessors are very different.

Re: Georgism

#86

Post by snidane » Sun, May 17, 2020, 2:10 PM UTC

javitury wrote: post #48

LVTfan wrote: post #36

Earlier quoted context omitted.

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"

George was for removing taxes altogether which is possible if you fund government services properly in a pay for what you use scheme.

It is not good politics to start your political campaign by proclaiming that you will remove all taxes altogether because it is so far out of anyone's reality that he would have been considered crazy.

Re: Georgism

#87

Post by oDot » Sun, May 17, 2020, 2:10 PM UTC

zozbot234 wrote: post #50

oDot wrote: post #24

Earlier quoted context omitted.

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…

> Mostly, because it correlates somewhat with basic ability-to-pay;

What do you care about 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.

You can't shield from that tax. All entities pay, for every sale, no refunds.

Re: Georgism

#88

Post by neilwilson » Sun, May 17, 2020, 2:10 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.

The primary purpose of taxation in a sovereign economy is to free goods and services up for deployment by the public sphere.

What does the government want with all that land?

Are you sure you have enough fungibility in your economy so that it will free up doctors, judges, refuse collectors or whatever and all the real goods that their salaries actually represent so that you can achieve the public purpose that is the reason you are taxing in the first place?

In any Modern Money informed Targeted Taxation regime what you really want to tax is whoever is using the things government wants to use instead.

And that, paradoxically, means the ideal tax is likely a Wage tax paid by businesses for the use of labour. That reduces the demand for labour in a controlled way, and those people are then hired (directly or indirectly) by government to do whatever the polity asked them to do when they were elected.

Do that and you can probably scrap any income tax completely - meaning whatever an individual earns they get to keep.

Bear in mind that if the labour resource is already free (aka unemployed) then there is no need to tax to free them up in the first place...

Re: Georgism

#89

Post by tlholaday » Sun, May 17, 2020, 2:12 PM UTC

CydeWeys wrote: post #74

NumberWangMan wrote: post #67

A lot of people focus on the fairness of the Land Value Tax, but the consequences of using one are just as interesting if not more. This tax has been put into practice in some cities in Pennsylvania, and there's evidence that it has a whole bunch of positive effects on the city, due to the way that it incentivises improving your property and making the most of your land (since you're going to be taxed on it pretty mu…

I sort of agree that replacing property taxes with land-value taxes would make sense, so long as you can actually do the value assessments fairly and impartially. What doesn't remotely make sense to me is the suggestion that LVT should be the primary or even only tax, which you see others arguing for here in the comments.

> What doesn't remotely make sense to me is the suggestion that LVT should be the primary or even only tax

When you were new to arithmetic, did it remotely make sense to you that the number of integers and the number of even integers was the same?

If you find a surprising conclusion, consider reading the argument. Perhaps you will discover that you agree with the premises and the reasoning, and the conclusion will seem less surprising.

Re: Georgism

#90

Post by toohotatopic » Sun, May 17, 2020, 2:13 PM UTC

MiroF wrote: post #73

toohotatopic wrote: post #64

Earlier quoted context omitted.

Otherwise it wouldn't be a monopoly and the farmer wouldn't have to accept the offer. The farmer, or rather, the human, can source resources from other markets and sell goods or services that don't depend on farmland. Once that happens, and nobody accepts the high price, the landlord has to lower the price until somebody accepts his offer.

The existence of substitutes doesn't make a monopoly no longer a monopoly. Bell was still a telephone monopoly even if I could have used carrier pigeons instead.

It's not the same. You cannot transport voice over a pigeon, at least not instantly.

If you don' allow substitutes then every brand has a monopoly on the products of their brand. Technically that's a monopoly. But nobody complains about McDonalds having a monopoly on McDonalds burgers.