Does Georgism work? Is land a big deal?
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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?
#2I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent.
In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment.
https://constitutioncenter.org/interactive-constitution/inte...
Re: Does Georgism work? Is land a big deal?
#3I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent. In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. https://constitutioncenter.org/interactive-constitution/inte...
You'd really need to combine land tax with zoning reform to make it work properly. The idea is that since the land under a house and under a skyscraper is taxed the same, more valuable land (eg in city centers) would be built up, which means the tax per tenant could still be very low.
Also you don't need to do it federally, states could do it fine too.
Re: Does Georgism work? Is land a big deal?
#4I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent. In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. https://constitutioncenter.org/interactive-constitution/inte...
Why does everyone assume new policy has to be enacted at the federal level? Whatever happened to states rights? This is a perfect use case, have a couple states try it and a couple not and see what happens.
Re: Does Georgism work? Is land a big deal?
#5I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent. In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. https://constitutioncenter.org/interactive-constitution/inte...
> In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment.
I'm really quite sure this would be a state-level thing.
Re: Does Georgism work? Is land a big deal?
#6It's used as the primary source of funding for county and town level government in most parts of the USA already. Does it "work"? Like any other tax system, it has its pros and cons. But one of the big drawbacks I see to federalizing it is the extremely relative value of property from region to region. It even dwarfs the relative difference in income taxes for similar jobs in dissimilar places. Yeah, you could have weightings and such in the formulas, but then there's even more complexities like how you assess condos vs. Single family houses vs. Gated communties... property is a much more diverse asset, and I don't think our Congress would come to any kind of majority needed to legislate such a tax.
Re: Does Georgism work? Is land a big deal?
#7I'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 schedules, etc. The deadweight loss of property taxes is the economic loss of having resources devoted to filling out property tax filings. Appraisers and accountants would do other productive economic activities if they didn't spend all their time filling out tax forms.
Property taxes also distort incentives. If you improve your property, then you pay more tax. Property taxes can discourage you from using your land to its highest and best use.
Land taxes offer the opposite incentives. They encourage you to make your property better.
Land taxes would arguably help a lot of the housing crises. Landowners have to pay a lot more taxes if they want to convert a lot with a single family home to a 4-plex. A land tax wouldn't impose an additional tax to the landowner for improving the value of their land.
Re: Does Georgism work? Is land a big deal?
#8I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent. In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. https://constitutioncenter.org/interactive-constitution/inte...
> tenants will somehow be able to use the land without paying the land rent.
I believe proponents of Georgist Land Taxes generally believe that rents are already as high as they can be. This seems reasonable for areas with housing shortage, as housing is a very inelastic commodity as far as commodities go. However, it might not be a good assumption for areas with a surplus of housing.
I do know (multiple!) people who each have multiple properties in Austin (e.g. a suburb house and a downtown condo) who are not renting them out after moving to California. Currently the property tax is offset by rising property prices and its not worth the hassle/risk to put tenants into the properties. A higher property tax would absolutely cause them to either rent out the units or sell them, increasing housing supply.
Saudi Arabia finally created their first tax ever while I was there. It was a tax on un-developed land inside city limits. Saudi oligarchs would buy empty land and just leave it barren, because the property value would go up and there was no cost to hold it. This led to a big housing shortage. By taxing unimproved land, Saudi was able to encourage a big boom in condominium development.
I believe proponents of higher land taxes are trying to do something similar, but instead of taxing "undeveloped" land, they are aiming to tax "under-developed" land to try to spur additional unit construction.
Re: Does Georgism work? Is land a big deal?
#9I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent. In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. https://constitutioncenter.org/interactive-constitution/inte...
> In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. I'm really quite sure this would be a state-level thing.
Further, I think such a tax would provide absolutely huge economic benefits to the states that passed them. Much like California's restrictions on non-competes allowed a much more dynamic tech industry to develop than what developed in Massachusetts.
Re: Does Georgism work? Is land a big deal?
#10I look forward to reading the second part, especially if it’s going to argue that tenants will somehow be able to use the land without paying the land rent. In any case, I believe a land value (or other property) tax would face significant (possibly insurmountable) Constitutional challenge to levy this federally in the US absent an amendment. https://constitutioncenter.org/interactive-constitution/inte...
Why does everyone assume new policy has to be enacted at the federal level? Whatever happened to states rights? This is a perfect use case, have a couple states try it and a couple not and see what happens.
In part because the article makes the very common argument “[LVT would raise] a bunch of revenue that can lower or even eliminate other less efficient taxes, such as sales and income taxes.”
It’s often argued (more strictly than above) that LVT could replace or substantially reduce income taxes and that pretty much means it’s federal or it won’t offset much.