[HN Gopher] Book Review: Progress and Poverty
___________________________________________________________________
Book Review: Progress and Poverty
Author : TimPC
Score : 49 points
Date : 2022-05-13 18:11 UTC (4 hours ago)
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| a9h74j wrote:
| FWIW, John Michael Greer recently outlined[1] some alternative
| philosophies in political economy (including cooperatism,
| distributism and social credit), aiming to spur increased
| imagination. He cites numerous alternative resources, enough to
| suggest a study list or initial-study guide.
|
| [1] https://www.ecosophia.net/reimagining-political-economy/
| TimPC wrote:
| I think Georgism's main appeal is that if you interfere as best
| as possible in the mechanism by which land captures the value
| of labour and use that to reduce other capture of the value of
| labour you remove the worst excesses of capitalism. You
| literally don't have to change the rest of the system.
|
| Tenants pay the same rents they do now (perhaps slightly lower
| due to removal of speculation) but no longer have to pay any
| income tax. Property owners pay more in LVT but no longer pay
| income tax as well. No one gets to hold land value unearned and
| benefit from the work of others except the government who uses
| it to reduce other taxes and provide services we've come to
| depend on in modern society.
|
| This is quite different from various radical re-imaginings of
| the entire economic system. Those systems are looking to solve
| almost entirely different problems and introduce far more new
| ones.
| ur-whale wrote:
| For the horse's mouth:
|
| https://cdn.mises.org/Progress%20and%20Poverty_3.pdf
|
| https://www.gutenberg.org/ebooks/55308
| at_compile_time wrote:
| For the audio-inclined:
|
| https://librivox.org/progress-and-poverty-by-henry-george/
| jmole wrote:
| It seems like the biggest challenge to Georgism is that
| municipality/county/state/federal regulations on land use would
| have a significant effect on land value.
|
| A landlord might lobby for restrictive land use policy while
| sitting on a parcel, and then lobby for opening those
| restrictions when it comes time to sell. Essentially avoiding the
| tax by using government policy to suppress the true land value.
|
| There are solutions to this of course, but they come down to
| zoning and land use regulation, which is sort of the core of all
| our other problems with real estate in America.
| TimPC wrote:
| The problem is current speculation on land is relatively easy.
| Having to lobby for a change in zoning one-way when you buy the
| land and having to take on the risk of not being able to get
| the change of zoning back the other way when you sell it is a
| significant risk. I'd also argue because LVT rates are much
| higher as percentages than property tax rates, holding the land
| would still be more expensive than the solution.
|
| I agree there are also significant issues with zoning, but
| zoning alone won't solve the problem. A bunch of people capture
| a bunch of economic rents unearned, and it would be much better
| for government to capture these economic rents as part of the
| system and charge us less tax on things that actually are
| earned.
| zozbot234 wrote:
| > municipality/county/state/federal regulations on land use
| would have a significant effect on land value.
|
| That's not "a challenge" it's a positive side effect. Those
| government institutions would be enabled to internalize the
| value that they create, which is presently being captured by
| random private parties that did not create it.
| jmole wrote:
| Look at the case of Atherton, CA - multi-million dollar home
| values due to city ordinances around minimum lot size and
| land usage. The land value here is created by scarcity, and
| driven largely by the success of the greater metro area.
|
| But if you are trying to value this land from a Georgist
| perspective, and one that takes into account property zoning
| and use requirements, the land is worth much less than it
| should be due to the restrictions, and would be taxed lower
| than parcels of similar size in nearby cities.
|
| This seems, in theory, to reward obstinate enclaves of low-
| density development within larger metros. The homeowners have
| no reason to elect a council that would vote against their
| interests in this respect, and their taxes would stay low.
| TimPC wrote:
| I agree that there is a positive side effect here in that
| municipalities now have a strong incentive to rezone in ways
| that increase land value since they capture a portion of that
| value from their share of the LVT.
| MiddleEndian wrote:
| On a personal level, I like the LVT as a single tax because then
| I wouldn't have to do any paperwork. They give me a bill, I pay a
| bill, there's no exceptions, I can improve (or fuck up) my
| property, and overall the numbers won't change (unless a ton of
| people improve or fuck up their properties around me as well).
| Nice and easy.
|
| But it also seems effective overall. After I quit my last job and
| before I got my current job, I did not work for several years
| (some due to choice, some due to circumstance). During this time,
| I obviously paid no income tax. But I still paid my mortgage
| (some of which obviously went to property tax, but mostly to the
| bank). Presumably with a land value tax, my payment to my
| mortgage company would be notably less less and the tax would
| notably be more, so during that time instead of paying a bank I
| would be paying taxes that go to infrastructure and welfare and
| whatnot.
|
| I think this sort of thing is more accurate than an income-based
| source of taxes, because I obviously wasn't really in the same
| economic situation as an underemployed person who truly couldn't
| find a job for several years. It also allows you to assess your
| own level of taxation. For instance, I could have sold my place
| or rented it out, and moved elsewhere to a cheaper place (or I
| guess a more expensive place, were I so inclined to do so while
| not having a job).
|
| Of course, the big disadvantage, as mentioned elsewhere in this
| thread, is that it is difficult to assess land value sometimes.
| It also seems like it may force people to move a bit more often,
| and moving is exhausting. And also presumably you'd have to
| convince people to pair this form of taxation with more lax
| zoning laws (with some stricter exception for farmland or
| something to keep the value per square foot low enough for it to
| still make sense).
|
| Even weighing these factors, it seems like an improvement over
| the current system. But I guess the real issue is that in the
| current world of mortgages and such, even if 90% of the
| population decided it truly did make sense as a form of tax, the
| transition seems nearly impossible.
| TimPC wrote:
| The transition is hard. I'm convinced it has to be both gradual
| and compensated.
| zozbot234 wrote:
| Since all taxes are ultimately borne by land (specifically,
| by resources in fixed supply), it's not at all clear that
| compensation is required for a neutral tax shift.
| TimPC wrote:
| Some people argue no compensation is required but I think
| in reality an LVT at 100% reduces the price of all land to
| $0. Given that land is substantial portion of retirement
| savings in our current economy, completely obliterating
| land prices without any compensation seems morally dubious.
| Perhaps if you do it slowly enough that you give everyone
| time to adjust and make the market adjustments gradual
| enough that people who need to sell land for retirement can
| still get something like 90% of the value initially it
| could work.
| zozbot234 wrote:
| Nobody is arguing for a literal 100% LVT. You'd want to
| still leave a fraction of land rent (say 10% or so)
| untaxed, since this introduces a desirable market
| mechanism in property assessment - and George even
| acknowledges this. What's nutty is to let land
| speculators capture _all_ of that value for no real
| reason.
| TimPC wrote:
| I think the group that is capturing the most value is
| actually landlords, followed by speculators. I also agree
| that 90% LVT may be better in practice, although I do
| know people who still argue for 100% and various auction
| mechanisms to determine the LVT.
| MiddleEndian wrote:
| As much as I think LVT makes sense, having to go to some
| sort of annual auction for my own land does seem worse
| than just paying taxes. Along with that being a tedious
| process, that could put you at the mercy of malicious
| actors who may just dislike you and have enough cash to
| outbid you.
|
| Any implementation would have to not include this for
| people to be able to have stable lives.
| AnimalMuppet wrote:
| > Since all taxes are ultimately borne by land ...
|
| Objection, your honor. Assumes facts not in evidence.
|
| How is income tax ultimately borne by land? Sales tax?
| Inheritance tax? Gasoline tax? Corporate income tax on
| corporations like SpaceX, Goldman Sachs, and Intel?
|
| "Ultimately borne by land" may have made sense a century or
| three ago, when (almost) all income ultimately came from
| the land. That's not the world we live in any longer.
| TimPC wrote:
| Progress and Poverty was once the most popular economics book
| ever written. The Georgist Theory in it, and the land value tax
| proposed by it is still endorsed by economists today.
|
| This review clearly illustrates the ideas from George that land
| captures gains that in a more fair society we'd want to go to
| labour.
| nickff wrote:
| > _"... the land value tax proposed by it is still endorsed by
| economists today. "_
|
| Your comment is somewhat misleading, as it seems to suggest
| that all or most economists endorse Georgism, which is not
| true. Some vocal minority of economists are pro-Georgism, but I
| haven't seen any data suggesting it is the most popular
| taxation scheme.
| aesh2Xa1 wrote:
| I have wondered this, too. "Is/was Georgism really so
| popular?"
|
| Do you have any papers/writing which specifically criticise
| Georgism?
| TimPC wrote:
| It's hard to measure precisely how popular it was
| historically but he campaigned for Mayor of NYC as a
| Georgist and finished 2nd ahead of Teddy Roosevelt who
| finished 3rd. So Henry George at least was well liked.
|
| The book itself was the best selling economics book of the
| 19th century. It inspired art demonstrations and some
| governments throughout the world even adopted LVT for a
| while. So yes, it was pretty popular.
| SilasX wrote:
| Paul Birch had a long essay criticizing it. Here's where I
| mentioned it on HN to summarize the key points:
|
| https://news.ycombinator.com/item?id=17605751
| TimPC wrote:
| Thanks for sharing this it's interesting. The first thing
| I've noticed is that his estimate of the tax revenue is
| far lower than other far more detailed estimates I've
| seen by economists.
|
| But by far my biggest objection to his arguments is that
| he ignores the way density impacts land value over time.
| If we build huge skyscrapers in the countryside it's
| reasonable that businesses will spring up around them.
| Various economists have modelled this and land value
| increases in proportion to the income of its occupants.
| It's one of the reasons cities need to pay developers to
| get affordable housing. The allocation of people into
| housing that was once affordable in the market sense will
| naturally result in rising land values and rising rents.
| In no time and no place in history has density made land
| cheap.
|
| If we choose to dot the countryside in huge towers the
| land on which those huge towers are built and the land of
| the shops immediately beside those huge towers will have
| a high value that tapers off quickly as you head further
| into the now empty countryside. You end up with a strange
| peaky distribution. In practice, the increasing land
| rents of the building and the decreased land rents of the
| countryside would encourage occupants to leave for
| greener pastures. And the developers would know this
| would happen before even building a huge building in the
| countryside because it is economically well understood.
|
| He also makes far too big a deal out of the need for a
| negative land market. You can keep abandonment if you
| just have a 95% LVT instead of a 100% LVT and you now
| have a market where land values are overwhelmingly
| positive.
| bee_rider wrote:
| I may have to pick this up -- as someone with no economics
| training at all, a land value tax seems extremely appealing and
| intuitive to me. I'd already like to become a complete partisan
| in favor of this policy, but I guess it would make sense to
| read what the actual justification is, for it, haha.
| mynameishere wrote:
| It seems extremely unappealing to me. It seems like something
| a wealthy apartment-dweller in a tall building in a dense
| city would come up with to move taxation from himself to the
| guy in the country with two acres and a mobile home.
|
| The more I think about it, the more I'm sure that's the
| actual motivation.
| dkarl wrote:
| The land value tax incentivizes the owner of scarce,
| valuable urban land to put it to good social use, such as
| building apartments for hundreds of people to live in. You
| would have to be astronomically wealthy to own two acres in
| a dense city and keep it solely for your own enjoyment. If
| you want two acres all to yourself, you can move to the
| countryside, where land is cheap, and one person can
| conceivably pay the property taxes on an engineer's salary.
| danbolt wrote:
| Wouldn't a LVT mean that the taxes on the mobile home be
| much less than the apartment in the dense city?
| mynameishere wrote:
| I'm just going by the headline definition: "A land value
| tax is a levy on the value of land without regard to
| buildings, personal property and other improvements."
| That's the basic idea.
|
| I think people need to keep in mind the actual purpose of
| taxation: One group is taking resources from another.
| Nobody is pushing this tax (or any) because it's
| "efficient" or whatever. They are pushing it because they
| will come out ahead.
|
| A person who lives in a 600 square foot apartment in a 60
| story tower will effectively be paying taxes on 10 square
| feet of actual land. That land might be very valuable,
| but I suspect no matter how you twist the numbers, it's
| going to be less than two acres anywhere in the country.
| Especially if you go by the spirit of the LVT, which is
| to ignore improvements.
|
| I could be wrong. I'm just guessing at "who fucks over
| whom" here.
| TimPC wrote:
| Land buildings are on tends to become extremely valuable
| due to all the surrounding businesses that emerge due to
| a high density of people. If you look at land value maps
| of cities you get very noticeable spikes in cities.
|
| I've seen land as cheap as $489 an acre and land as
| expensive as $6,000,000 for a half-lot. Even assuming
| $12,000 an acre in the countryside in California which
| can be found now on the internet, it's quite believable
| that 10 square feet of land beneath a skyscraper is going
| to be worth more than $24,000. That 10 square feet is an
| underestimate as well because the unit will be
| responsible for more than 1/60th of its floor plan.
| colinmhayes wrote:
| The more I read about LVT the more clear it is to me that
| it legitimately solves many, many problems society is
| currently facing. The housing price crisis is effectively
| solved by LVT. The "greedy landlord" meme is effectively
| solved by LVT. Income tax being distortionary is solved
| by LVT. NIMBYism caused by people wanting their home to
| be worth more is solved by LVT. Yes, some are better off,
| some are worse. It's not as clear as you think though.
| Rural land is worth very little compared to urban. The
| real losers are people who have single family homes in
| desirable areas.
| zozbot234 wrote:
| Correct. Land "in the country" is worth zilch compared to
| a similar plot in a dense urban core. GP has it
| backwards, they're perhaps thinking of some flat tax on
| land based on square footage whereas LVT is based on
| assessed value.
| its_ethan wrote:
| That sort of assumes that the owner of the apartment-
| dweller's property doesn't just increase their rent (pass
| along that tax).
|
| As other people pointed out, there should/would have to be
| some mechanism to value the land for the LVT. The land the
| apartment building is built on in the city would have a
| higher value than some 2 acres out in the country. The
| owner of that land would have to pay the LVT, and the rent
| for an apartment on that land would reflect that -
| ultimately making everyone who lives in the apartment pay
| that tax, if indirectly.
| TimPC wrote:
| Interestingly because the supply of land is inelastic its
| supply curve is a straight vertical line. If you charge
| the tax directly to tenants they lose say $20,000 in LVT
| tax. This lowers their demand for land by $20,000.
| Because the supply curve is a straight vertical line the
| intersection of the supply and demand curve is now
| $20,000 lower. They literally pay $20,000 less for land
| rent. This doesn't work with anything that has elastic
| supply like buildings where the tax would lower the
| supply and the new intersection of the supply and demand
| curves would result in the tenant and owner sharing the
| tax. But it's well understood and accepted in the
| economic literature that landlords end up paying the tax
| not tenants.
| its_ethan wrote:
| > Interestingly because the supply of land is inelastic
| its supply curve is a straight vertical line. If you
| charge the tax directly to tenants they lose say $20,000
| in LVT tax. This lowers their demand for land by $20,000.
|
| This might sound good in theory, but it is a _very_ hard
| sell to say that 's how it pans out in practice. You even
| say: "This doesn't work with anything that has elastic
| supply like buildings" - so as soon as you put a building
| (apartments) on the property, this theory goes out the
| window.
|
| > But it's well understood and accepted in the economic
| literature that landlords end up paying the tax not
| tenants.
|
| I don't dispute that there would be some competition
| among landlords as to how much of their LVT they can pass
| off to tenants - it wouldn't be 100%. But to claim that
| there would be no impact to tenants strikes me as
| hilariously naive.
| mcguire wrote:
| Absolutely! The biggest advantage for most, particularly
| readers of HN, is described in part II
| (http://gameofrent.com/content/can-lvt-be-passed-on-to-
| tenant...): "...landlords cannot pass Land Value Tax (LVT) on
| to their tenants..." Renting an apartment in SF would
| therefore both be cheap, because the LVT encourages high-
| density, and tax-advantaged, especially if the LVT is (as it
| is supposed to be) the only tax.
|
| The bottom line is that this idea has literally no downside.
| TimPC wrote:
| Renting the apartment in SF will not be cheap because the
| land has extremely high value. It's just the government
| will capture the high value of that land instead of
| landlords and that high value land capture will be used to
| remove other taxes like income tax and property tax. Land
| prices in SF would fall slightly as the LVT removes most
| speculation. So likely rents go from $6000/month to
| something like $5400/month. But the government might
| capture $4500 of that to reduce other taxes.
|
| If we still had 1870's small government the idea would be
| to put most of the LVT into a Citizen's Dividend which
| functions like a UBI and helps people pay for their cost of
| living (including some of the land taxes).
| colinmhayes wrote:
| Rental prices would not change, it's just that more of the
| money would go to government instead of the landlord,
| especially for low density housing.
| TheCoelacanth wrote:
| They probably would decrease somewhat, because there's no
| longer an incentive for landowners to prevent people from
| building housing to keep the supply low.
| ryukafalz wrote:
| This is something I've been wondering about with LVT.
| Wouldn't they still have an incentive to stop people from
| building more dense housing near them? Even more of an
| incentive than now, in fact? Because the more people that
| can live and work in the immediate area near them, the
| more valuable the land is, and the more they'll pay in
| tax.
| scythe wrote:
| The biggest problem with LVT is surprisingly simple:
| accurately assessing the value of land is very hard, and
| ensuring that the assessment process is fair is therefore
| extremely hard.
|
| LVT experiments in history tend to run into problems when
| people feel that their land has been valued incorrectly,
| leading to a vocal minority that despises the law. That
| results in something like this:
|
| https://nassimtaleb.org/2016/08/intolerant-wins-
| dictatorship...
| bee_rider wrote:
| Huh. Property tax is already a thing of course, but I guess
| if the LVT was going to replace all taxation the stakes
| would be much higher.
|
| In an urban setting, it seems to me that the land value
| should be... reasonably uniform, unlike property, which
| should make assessing much easier, right? But that's just
| getting the number. Whether people are happy with the
| number is a whole 'nother problem.
| markdown wrote:
| Doesn't work that way. A subway gets built near your
| property. The benefit of greater access accrues to you
| more than it does someone 10km away. So your LVT has to
| go up.
|
| Now you can't afford the taxes, and you're forced to sell
| and move to somewhere with lower LVT. It's bought by
| someone who will put it to better use. Maybe an apartment
| block instead of your single family home.
|
| Over time, every piece of land is put to its most
| productive use. But before it gets there, there will be
| some pain for the individuals who choose (or are forced)
| to move because they can't afford to the improvements
| made to the infrastructure in their locality.
| xboxnolifes wrote:
| > Now you can't afford the taxes, and you're forced to
| sell and move to somewhere with lower LVT. It's bought by
| someone who will put it to better use. Maybe an apartment
| block instead of your single family home.
|
| > Over time, every piece of land is put to its most
| productive use. But before it gets there, there will be
| some pain for the individuals who choose (or are forced)
| to move because they can't afford to the improvements
| made to the infrastructure in their locality.
|
| Which is why I think it makes sense that the LVT
| shouldn't be re-evaluated on a rolling basis. It would
| only be re-evaluated (or at least put into effect) when
| it changes owners (sale, gift, inheritance, etc).
| Otherwise you get bad incentives for people to vote
| against improvements that price them out of living where
| they currently are.
|
| Corporate land ownership would likely need different
| rules, as the owner could theoretically be the same
| forever.
|
| Over time, land is still put to it's most productive use,
| there is just a delay introduced that considers the human
| condition.
| its_ethan wrote:
| I would have assumed exactly the opposite in terms of
| urban land being uniform in value.
|
| 10 acres that are 30 minutes from Des Moines, IA are
| going to be very similar in value (price people are
| willing to pay) compared to 10 acres that are 10 miles
| down the road. Rural land is generally quite uniform and
| more likely to be functionally the same. In an urban
| area, say Los Angeles, 10 acres in Malibu (an area with
| very high demand for property) is going to have a totally
| different value (again, price people are willing to pay)
| as compared to 10 acres 10 miles away in skid row.
|
| The problem, that other people have highlighted, is how
| do you (the government/IRS/agency in charge) determine
| the value of each of those land areas? Letting some city
| planners in LA decide that those two areas should have
| the same LVT, or allowing them to determine what tax each
| should have, is gifting a lot of power to people who may
| or may not be qualified, and may or may not experience
| any sort of consequence for poor decision making/ biased
| value assessment/ etc.
|
| The exact way that sort of value/tax-setting would play
| out would be _very_ interesting, but the unintended
| consequences could end up being pretty bad.
|
| I've always thought it was interesting that property tax
| assessments don't just use the previous purchase price,
| and instead rely on a relatively arbitrary valuation.
| That could be one way to more accurately determine an LVT
| - make it a set percent of the previous purchase price of
| the land, that would allow the taxes to be priced in to
| land transactions.
|
| I still just don't love the idea at its core.
| colinmhayes wrote:
| Now you've brought the horror that is prop 13 to a tax
| that is supposed to replace all other taxes. Things
| change in value, we have to account for that.
| bee_rider wrote:
| With a land value tax we could at least come up with
| pretty straightforward equations, right? Some starting
| value from being in town, then add something for
| oceanfront property, then add something some extra bump
| based on distance from some set of amenities provided by
| the community (parks, subways, etc). It is at least
| possible to come up with something, unlike, what, the
| assessor's gut feeling about how nice your house is? This
| seems like it is putting much more arbitrary power in the
| hands of some random person.
| its_ethan wrote:
| > Some starting value from being in town, then add
| something for oceanfront property, then add something
| some extra bump based on distance from some set of
| amenities provided by the community (parks, subways,
| etc).
|
| How do you know you weren't also supposed to take the
| floor plan or exterior paint color into consideration?
| How do you account for the value lost from having
| obnoxious neighbors? What happens when, in the future, a
| nice bookstore/coffee shop is opened up down the street,
| or alternatively a liquor store? Ultimately, how do you
| know if whatever equation you've constructed is
| exhaustive or "correct"?
|
| It might sound like "well then you just adjust the
| equation" but this wouldn't be without consequence. One
| outcome of getting that equation incorrect is that a home
| is valued at a point where the imposed tax prices out
| anyone from purchasing the home - it would sit
| empty/foreclosed for as long as it takes a local
| government bureaucracy to come in and attempt to re-
| assess its value. So you could effectively be removing
| houses from a competitive home buying market, which is
| going to increase the price of other homes until they too
| have priced people out of the area. Multiply that by
| entire zip codes, and while you're working on adjusting
| that equation, you could end up having a real shit show
| on your hands with a bunch of people being displaced or
| in worse financial positions.
|
| > It is at least possible to come up with something,
| unlike, what, the assessor's gut feeling about how nice
| your house is? This seems like it is putting much more
| arbitrary power in the hands of some random person.
|
| I agree with the point that a home assessment is strange
| and arbitrary, but you're really just saying we should
| replace the assessor who goes and visits a property with
| a group of assessor's that just come up with an equally
| arbitrary equation that gets blanket applied to entire
| cities? Why is that preferable to something like just
| using the previous home sale price or, honestly, just
| staying with the current system that we know is generally
| very functional?
| lordnacho wrote:
| Someone came up with this delicious game:
|
| Landowners decide for themselves what value their land
| has, and pay tax accordingly. But whatever they say the
| value is, someone else is allowed to buy it for.
| its_ethan wrote:
| It's certainly a fun game, but does that mean if I decide
| my property is worth $100,000, accurate or not, I am
| forced to sell it just because someone comes along and
| decides they want to buy it? Also, is this a game that
| happens every year to allow for appreciation?
|
| For a realistic implementation, why not just use the fact
| that the landowner already decided what the value their
| land has when they purchased it and/or paid people to
| develop it. Why not just use those values?
| notahacker wrote:
| The biggest problem with it as presented in _Progress and
| Poverty_ (i.e. as a Single Tax to fund the government
| budget, not some small supplementary levy to fund something
| like local services) is that the size of the tax bears
| relatively little relation to the ability of someone to pay
| it (at least, to pay it without selling their house).
| Turfing pensioners out of their house because the land it
| sits on gained in value faster than their pension whilst
| others earn millions virtually tax free obviously isn 't a
| natural vote winner.
| colinmhayes wrote:
| Maybe Im heartless, but I don't see why people should be
| allowed to stay in a home they can't afford just because
| they've been there a while. Especially when the reason
| they can't afford it is because the community thinks it
| should support high density housing but they have a low
| density home.
| TimPC wrote:
| Most modern day versions proposed allow you to defer the
| tax until the sale of your home or pay it as part of the
| settling of your estate.
| zozbot234 wrote:
| > Turfing pensioners out of their house because the land
| it sits on gained in value faster than their pension
|
| This is a well-known canard. If someone can't pay their
| tax on a primary residence, you put a lien on the
| property that becomes enforceable when the ownership
| changes hands, whether by sale or inheritance. No one
| gets "thrown out" of their homes.
| mrob wrote:
| People who disagree with their assessed value should be
| given the option to declare whatever value they like. If
| they take this option, the state should have the option of
| buying their property at the declared value, plus some
| extra to cover transaction costs.
| colinmhayes wrote:
| The problem is that most land has stuff on top of it. The
| government can't buy the land without the building that
| comes with it.
| CuriousSkeptic wrote:
| At the surface it seems there should be a market solution
| for this.
|
| One approach might be to do something clever with
| mortages and property rights. Basically keep trying to
| keep the current mechanics of borrowing and just shifting
| around the parties involved so that the all the interest
| gets collected as LVT.
|
| Might even let the central bank handle both collection
| and dividends of it all.
|
| Another option might be to create economic incentives for
| some party to get the assessment right. Like insurance
| companies and banks loose either customers or revenue
| when getting it wrong.
|
| Perhaps can play with some margin for speculation such
| that lender and borrower get to share some profit.
|
| Or just make lenders outbid each other on who can extract
| most rent for the property.
|
| I guess one concern here is to make sure the commons have
| a representation, so that not all land get appropriated
| to private use
| bee_rider wrote:
| This is a 'clever' solution to property taxes. But a land
| value tax _specifically_ just taxes based on the value of
| the land. This is supposed to incentivize people to use
| their land as productively as possible -- with a property
| tax, any improvements you make increases your tax bill,
| with a land value tax, it doesn 't.
|
| A moral argument for it is, if you own an empty lot which
| is gaining in value as the community grows around it, you
| are essentially leeching extra value from the community
| through no work of your own. This sort of behavior is
| punished heavily with an LVT, as your taxes go up but you
| don't get any extra revenue from your empty lot.
| TimPC wrote:
| My city already does a two-factor assessment that includes
| land value and structure value for assessing my property
| tax. I don't think just doing the land value component is
| substantially harder although I do agree it's slightly
| harder.
| notacoward wrote:
| Focusing on that one issue presents an incomplete picture,
| to say the least. LVT has been tried many places, and has
| been no less successful than other tax systems. Here's a
| pretty thorough analysis and discussion of empirical
| results.
|
| https://www.lincolninst.edu/sites/default/files/pubfiles/as
| s...
|
| _Of course_ there are secondary and /or orthogonal
| problems that need to be solved. _Of course_ there are some
| people who complain, either because they are truly being
| overtaxed or (more often) because they think they
| personally would do better under some other system. Just
| like literally every other tax system including the ones
| most of us live under right now. LVT is no panacea, but
| there are legitimate reasons to believe it 's a
| fundamentally better starting point than the mishmash of
| income, sales, and property taxes we have now.
| markdown wrote:
| Could you tell us where these experiments were held, and
| how far they went? For example, were other taxes eliminated
| at the same time?
| notacoward wrote:
| See my sibling comment to yours. The most notable
| examples are in New Zealand, Australia, and several towns
| in Pennsylvania. Some of those ran into problems with
| execution, others were abandoned for purely
| ideological/selfish reasons, but overall it's not a bad
| record.
| teach wrote:
| These were previously published on AstralCodexTen and discussed
| here: https://news.ycombinator.com/item?id=29493005
|
| GameOfRent is a new site by the author to collect these and
| similar writings by him and others.
| simonebrunozzi wrote:
| I suggest to view Scott Alexander's (Astral Codex Ten) review of
| the same book [0].
|
| https://astralcodexten.substack.com/p/your-book-review-progr...
| rufus_foreman wrote:
| For those who think a Georgist tax makes sense, why not apply the
| same type of logic to income?
|
| If someone is employed as say, a teacher making $75,000 a year,
| but would be most productive as a software developer making
| $200,000 a year, should we tax them on $200,000 a year?
| TimPC wrote:
| Georgists get around this issue by abolishing income taxes
| entirely.
|
| Regardless, I think there are fundamental differences between
| the two cases. Most notably land doesn't have freedom of choice
| the way people do.
|
| We also currently tax land based on its market value which
| corresponds to the most productive use of the land so LVT
| doesn't change this.
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