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Letter from a Young Distributist: Georgism and Distributism

progressandpoverty.substack.com

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Re: Letter from a Young Distributist: Georgism and Distributism

#81

Post by skybrian »

brightly-salty wrote: post #80
skybrian wrote: post #79

Earlier quoted context omitted.

I'm not sure what you mean by "recreating the frontier?" Are you talking about cities, suburbs, or rural areas? Changing property tax rates doesn't change cities or suburbs into something else, at least not at first. All the property is still owned by the same people. People still live in the same houses.

Perhaps I'm explaining it poorly, that's entirely possible. The frontier is where land value is zero, at the margin of production. It is possible to get value out of the land, but only with hard work. Currently this land may be held without using it for production, but it largely doesn't exist. This is because the lack of a land value tax incentivizes landholders to own all land for the purpose of speculation rather…

It seems like the idea is to increase property taxes so much that the land value is zero. However, the tax isn't zero. You are effectively paying rent, but to the government. In desirable areas like cities, the rent on the land may be quite high, because the land is desirable.

A Manhattan where the property owners pay huge taxes to the government (because that's what it would take the drive the land value to zero) would still be an extremely expensive place to own property. This might be a good way for the government to raise revenue, but it's not really a "cheap land" situation. It's one where the government is effectively the landlord and everyone pays high "rents" to the government.

It's plausible that such a scheme would lower the cost of living in some places when it's due to speculation, by popping the bubble. But it doesn't lower the cost of living when it's due to the fundamental value of owning property there.

Re: Letter from a Young Distributist: Georgism and Distributism

#82

Post by brightly-salty »

skybrian wrote: post #81
brightly-salty wrote: post #80

Earlier quoted context omitted.

Perhaps I'm explaining it poorly, that's entirely possible. The frontier is where land value is zero, at the margin of production. It is possible to get value out of the land, but only with hard work. Currently this land may be held without using it for production, but it largely doesn't exist. This is because the lack of a land value tax incentivizes landholders to own all land for the purpose of speculation rather…

It seems like the idea is to increase property taxes so much that the land value is zero. However, the tax isn't zero. You are effectively paying rent, but to the government. In desirable areas like cities, the rent on the land may be quite high, because the land is desirable. A Manhattan where the property owners pay huge taxes to the government (because that's what it would take the drive the land value to zero) wo…

Yes, I agree with you on what will happen in big cities where the land value is already high. The idea is more that in the Montana's and the Kansas's - where they already give land away free to people who promise to build improvements - there will be even more of an economic incentive to move to underdeveloped states, giving more families economic opportunities, which will then cause network effects as more families move out, causing housing prices to fall in the big cities. Housing prices will become more equal across the nation, and vertical development will be incentivized over urban sprawl.

Re: Letter from a Young Distributist: Georgism and Distributism

#83

Post by zozbot234 »

skybrian wrote: post #7

It seems like the US already has widespread ownership of property? Home ownership isn't exactly rare. NIMBYism is a consequence of widespread ownership; it's small land owners exercising political power. In the cities, converting apartment buildings to condos is another form of this. Of course, many people believe this is inadequate and we need to go further, with low-income housing and the like. But it's been a long…

Large firms can actually be very efficient in select cases. So public control of them should only extend to genuine antitrust concerns, and then mostly by vertically separating any of the inherently monopolistic and non-contestable "platform" components from the remaining firm, that can remain lightly regulated being inherently open to prospective competition from lower-cost entrants.

Re: Letter from a Young Distributist: Georgism and Distributism

#84

Post by skybrian »

brightly-salty wrote: post #82
skybrian wrote: post #81

Earlier quoted context omitted.

It seems like the idea is to increase property taxes so much that the land value is zero. However, the tax isn't zero. You are effectively paying rent, but to the government. In desirable areas like cities, the rent on the land may be quite high, because the land is desirable. A Manhattan where the property owners pay huge taxes to the government (because that's what it would take the drive the land value to zero) wo…

Yes, I agree with you on what will happen in big cities where the land value is already high. The idea is more that in the Montana's and the Kansas's - where they already give land away free to people who promise to build improvements - there will be even more of an economic incentive to move to underdeveloped states, giving more families economic opportunities, which will then cause network effects as more families…

If people move out of bigger cities to rural areas, why isn't that increasing sprawl? (That is, there is more low-density development in those places.)

To some extent this already happening. Many people moved out of the city during the pandemic. The people in desirable rural areas aren't necessarily happy about it. They are often upset about all the outsiders with more money moving in.

They probably wouldn't be very happy with their property taxes going up either? When there's increased demand for land in a certain town from newcomers, there should be higher land taxes for everyone according to Georgist theory, to keep the price of land zero.

Re: Letter from a Young Distributist: Georgism and Distributism

#85

Post by User23 »

klyrs wrote: post #69
geocon wrote: post #65

Earlier quoted context omitted.

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.

Compounded by the fact that there are no Nobel Laureate economists.

And that those supposed authorities have been teaching absolute nonsense like loanable funds.

If you want to learn about the economy, the only useful option is to look to working market participants. Some rando at the fixed income desk has forgotten more about how the economy works than those pompous frauds.

Re: Letter from a Young Distributist: Georgism and Distributism

#86

Post by 8note »

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…

By comparison to alternative housing, hotels, the housing rent is unproductive other than repairs and getting contracts.

Once you have a lease, it's unproductive as it comes, purely getting money for owning something

Re: Letter from a Young Distributist: Georgism and Distributism

#87

Post by bombcar »

pyradius wrote: post #60
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…

Yep the suburbs are a money-loser for governments as noted in https://www.youtube.com/watch?v=7Nw6qyyrTeI

The density difference between many suburbs and many so-called urban areas isn’t that great sometimes. The main defining aspect of suburbs is the lack of much besides housing.

Re: Letter from a Young Distributist: Georgism and Distributism

#88

Post by bombcar »

TimPC wrote: post #48
geocon wrote: post #39

Earlier quoted context omitted.

Most increases in land value are for the construction of infrastructure and other investments which make people more productive and increase wages, so while land values increase that investment increases wages also, meaning that it shouldn't have much of an effect on people's ability-to-pay.

Can you give examples of how this is true? I feel like the main government spending that made me more productive was some transit spending before I was born and their education spending. I feel like most government services aren't this. Even things like health care, which arguably keeps me healthy enough to work isn't distributed in any sort of uniform way so the productivity increase from it isn't likely to match th…

The obvious one is increasing the number of workers.

You have a thousand acres of farm farmed by your family and another say - ten workers in total.

The government builds a rail line and highway along one side of your farm and suddenly a portion of the thousand acres is better used as a small town - which now houses tens of families and perhaps a hundred workers.

Even if your personal income didn’t raise, the income of the area did.

Re: Letter from a Young Distributist: Georgism and Distributism

#89

Post by bombcar »

TimPC wrote: post #61
geocon wrote: post #32

Earlier quoted context omitted.

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 deg…

Arguably the whole point of the tax is to convince those homeowners who’s land would be better valued as condos to convert to condos.

You already see this in areas that don’t prop 13 tax rates - as land values rise the land gets redeveloped.

Re: Letter from a Young Distributist: Georgism and Distributism

#90

Post by bombcar »

TimPC wrote: post #75
geocon wrote: post #55

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…

There are a number of big developers in my province most of which have generated substantial returns to their investors. In the current environment where property values are high and increasing holding onto land is quite profitable. All developers do this. They also create proposals to develop land and that activity has some returns to it as well. I agree that building housing is productive, I just see large numbers…

I think the argument is to switch it so things remain the same at first - 10% tax on 100k land is the same as 1% tax on 1m land+improvements. Coincide with an appropriate drop in income taxes and you could get something.

The key would be people agreeing in principle and then boiling the frog over a hundred years.

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