patrick.net

I'm trying to envision what the end result would be. Just much lower land values? It would have to be a tax on ALL land otherwise nontaxed land would skyrocket, no?

Yes, all land should be taxed, every last bit of it, including farms, corporate, primary residence, church land, government land.

And all those land tax records should be public, so that everyone can see the rate paid and by whom.

The end result would be that no one can profit by doing nothing while demanding that others pay them for the right to live.

Land prices would decline, and this would be a wonderful thing for everyone except landlords who don't create and maintain nice buildings. (If you build and maintain a nice building, you could still be a landlord and make a profit.) Banks would find that their collateral for mortgages is lower, but this is also a good thing. Bankers live by sucking interest payments out of young couples who want to buy a house to raise a family.

There would also be a boom in economic activity because working and running a business would no long be punished by taxes. Most taxes are currently paid solely so that land owners can avoid paying fair land value taxes. And there would be a secondary boom just because no one would have to file income taxes or sales tax reports. Tax lawyers would hate it because the tax system would be so simple.

The land value tax should be set by bidding when the land is sold. Let the market figure out the right tax.

Government would hate it because a market-based land value tax would limit how much they could extract to spend on wars and other stupidity.

Current land owners would also hate it because they were counting on exploiting the next generation.

Patrick says

I don't see any default warning on Federal Reserve Notes.

The section where they specify that it's legal tender. If it was real money, you wouldn't have to say it on the money.

Patrick says

Yes, all land should be taxed, every last bit of it, including farms, corporate, primary residence, church land, government land.

And all those land tax records should be public, so that everyone can see the rate paid and by whom.

The end result would be that no one can profit by doing nothing while demanding that others pay them for the right to live.

Land prices would decline, and this would be a wonderful thing for everyone except landlords who don't create and maintain nice buildings. (If you build and maintain a nice building, you could still be a landlord and make a profit.) Banks would find that their collateral for mortgages is lower, but this is also a good thing. Bankers live by sucking interest payments out of young couples who want to buy a house to raise a family.

There would also be a boom in economic activity because working and running a business would no long be punished by taxes. Most taxes are currently paid solely so that...

I must say, it sounds pretty good. No downsides come to mind. Are there any?

Patrick says

Yes, all land should be taxed, every last bit of it, including farms, corporate, primary residence, church land, government land.

This is like paying rent to the government on all acreage in the domain. Just like to a feudal lord.

Patrick says

The land value tax should be set by bidding when the land is sold. Let the market figure out the right tax.

This would lead to forced sales when the value of the land goes up. For example, I buy some raw land in Shenandoah that is off road. I build a community of solar powered homes with shared well and septic. The government does not like the low taxes on the land based on the original sale price, so laws allow a rich guy to buy that land out from under me.

RayAmerica says

Artificial wealth is when you possess what you have but are making payments to the real 'owner,' the lender that you borrowed your funds from.

or the government who taxes your possessions FOREVER! Or until you die.

This is another reason we should have hard silver metal currency by weight.

The government cannot plausibly find it and tax it, nor should they be able to.

Patrick says

This is another reason we should have hard silver metal currency by weight.

The government cannot plausibly find it and tax it, nor should they be able to.

Yep, and the right to bring in bulk silver for the Gov Mint to coin, minus a 2-3% Seigniorage fee for the official stamp and die cost, and a little extra for the government seal to go towards revenue. We did that in the 19th.

HeadSet says

This would lead to forced sales when the value of the land goes up.

This is already an issue with existing property tax, so it's not anything unique to Georgism.

One simple solution is to defer the land value tax until the owner dies. That is, let it accumulate as a debt to the government, but with no obligation for the owner to sell until the owner dies.

Debt is how the government manages the masses. It is also a tool of war, financial war.

HeadSet says

This is like paying rent to the government on all acreage in the domain.

This is already how things work everywhere that there is a property tax, which is pretty much... everywhere.

And a land value tax is also the best system for economic productivity because it eliminates income tax and sales tax.

Sure, taxes suck, but there have to be some kind of taxes, and the land value tax is the best way to do it.

Benefits have been clear everywhere it has been implemented, Hong Kong for example, with the only losers being those who are trying to sponge off the productive work of others.

https://www.emerald.com/insight/content/doi/10.1108/14635780410525153/full/html?skipTracking=true

Hong Kong and Singapore are characterized by rapid economic development and a high population density of 6,250 and 6,055 per km2 land respectively. Land revenue is their major source of income to finance their public infrastructure and social services. Their design and collection of taxes on land, their value‐capture instruments and their allocation of revenue for public works are examined. The article finds that there are some similarities between the two cities in capturing land value, such as the collection of annual rates and stamp duty on property. The differences include the adoption of property tax surcharge and the development charge. In fact, each mechanism has its pros and cons. The method and the extent of each mechanism depend on the goals of the government in respect of the social and economic conditions.

cisTits says

Patrick says

citTits what is a "Swiss brake"? A search just gets me bicycle parts.

Patrick https://www.heritage.org/budget-and-spending/commentary/switzerland-has-budget-surplus-heres-how-and-what-the-us-could-learn

As The Heritage Foundation’s Romina Boccia notes, the Swiss government is restrained by what is called a “debt brake”—a constitutional balanced-budget amendment that requires the government’s budget to balance over the course of a normal business cycle.

The Swiss rule has successfully cut debt-to-GDP from 49% to well below 30%. It enjoys wide support, thanks in large part to its transparent, simple, and limited design.

The spending limit is also flexible, allowing for deficits during economic downturns and requiring a small budget surplus during booms.

Sounds good to me!

Patrick says

HeadSet says

This would lead to forced sales when the value of the land goes up.

This is already an issue with existing property tax, so it's not anything unique to Georgism.

One simple solution is to defer the land value tax until the owner dies. That is, let it accumulate as a debt to the government, but with no obligation for the owner to sell until the owner dies.

Wouldn't that negate the whole reason of a land tax? If you can't force payment, the owner could operate as if there's no tax.

The deferment is supposed to be an exceptional thing to prevent someone from being kicked out.

You do force payment of all the back tax when the property sells after the owner dies.

We should study how Hong Kong and Singapore do these things.

Patrick says

Singapore do these things.

Singapore had Lee Kwan Yew, we had leaders whose policy is continuous and pre-emptive quasi military and financial wars. There is a war going on now on the American people, its a financial and cultural war.

Patrick says

You do force payment of all the back tax when the property sells after the owner dies.

This seems to be no different than debt. You know there would be fees, fines and interest attached.

gabbar says

There is a war going on now on the American people, its a financial and cultural war.

No doubt about it.

GNL says

Patrick says

You do force payment of all the back tax when the property sells after the owner dies.

This seems to be no different than debt. You know there would be fees, fines and interest attached.

Yes, if you don't pay your tax you have a debt, the same as now.

Interest would be a motivator to pay now rather than later.

Let me know if you have a different idea for a way to raise tax money that does not penalize work or commerce.

Sales taxes penalize commerce
Tariffs penalize IMPORTING but encourage domestic production
Income taxes penalize effort

Tobin taxes are a sales tax on financial transactions. They encourage long term investment over short term arbitrage
Capital gains penalizes money, not people, at work. They can also be structured to support long term HODL over short term arbitrage.
Land taxes penalizes physical assets
Property taxes penalize best use of land and are almost as bad as income and sales taxes.

So to me, the best is a mix of a Land (not property) tax, a 1% Tobin tax, and a 10% Tariff.

People would bitch about paying a token $10 1% tax when the trade itself costs $25 in fees from the brokerage on a $1000 stock trade. C'mon! You'd be better off finding another brokerage. The real opponents of a Tobin Tax would be quant traders hiding behind "Concerned Retail investors", give me a fucking break. If you want $1000 in stock and it's the $10 in Tobin Tax and not the $25 to UBS or whomever that's bothering you, get a life.

Another great idea: Constitutional Amendment that forces the government to fund and spend on Non-Discretionary items first, and prohibit the borrowing of money for NON-discretionary items

Patrick says

Let me know if you have a different idea for a way to raise tax money that does not penalize work or commerce.

Gotcha. I'm just playing devil's advocate because I'm curious what the downsides might be.

AmericanKulak says

Land taxes penalizes physical assets

Not the Georgist land value tax, which would require the same tax on an improved lot (with building, sewage, etc) as an unimproved lot next door.

Tobin tax sounds OK to me. Maybe it makes the market slightly less efficient at pricing stocks though.

10% tariff on imports also seems reasonable, helping domestic producers compete, but not locking out really cheap production from countries with natural advantages.

GNL says

gabbar says

There is a war going on now on the American people, its a financial and cultural war.

No doubt about it.

Its about management of masses through news, continued debt, luxury problems, poor food, managed education, managed healthcare, censorship, conditioning, puffery, corporatism...they want money and power by instituting invisible ball and chain.

The answer to the titular question is: "government" is a tool for banksters to collect tax money from the public . . . that's why interest payment is usually tax deductible (i.e. the banksters have already collected that money directly).

Georgist land tax has the evaluation problem: e.g. the usual "two neighboring lot should be taxed the same regardless developed or not" has two major problems in practice: 1. a beach front lot would have much higher or lower value than the lot next to it towards inland, depending on whether you prefer water-front view or prefer less salt corrosion (or even land erosion!). 2. similar problem with road-front vs. next lot one-lot removed from road. Should a lot that is next to a lot that has utility line worth more than a lot that has no neighboring lot with utility line? Does that mean utility line has negative value? Property tax as it's currently practiced is sort-of acquiesced to largely because the amount is much smaller than either the owner's income or the owner's ability to generate profit from the property; raising tax anywhere close to the full utilization value of the land would mean the the land has no value, then the whole edifice of private ownership collapses. Besides, land value is highly dependent on use/purpose, as exemplified by the drastically lower property tax if land is used for agriculture in most jurisdictions (per acre, farm land generates far less money than using the same acre for storage facility or home building; using home building lot price for taxation and collect full utilization value would immediately put all farm land at negative value).

1% Tobin tax would collapse market liquidity. This is not 1990, hardly anyone pays $10 for a $1000 trade. Even in 1990, people would pool money together so a $10 commission fee would pay for a $10,000 trade. People with sub-$10k accounts now trade at $0 commission. An entire day's market movement is typically only 0.5% to 1.5%; most intraday trends last only half an hour to an hour. People trading those trends are not high frequency traders, but normal intraday traders that supply much of the market liquidity.

There is a strong argument for import tariffs, as tariff-free international trade essentially forces domestic businesses and individuals subsidize the military that enables international trade. International traders should at least pay for their own protection/sustainability. One idea I haven't seen raised elsewhere is a tariff rate proportional to the source country's percentage of the world's total population (or plus area on top of it); e.g. China has 17% of the world's population, so gets hit with a 17% tariff; Russia has 12% of the world's total land area, so gets hit by a 12% tariff on account of land area; or combination of the two, so 24% for China and 15% for Russia respectively. That way, large countries are encouraged to break up into smaller ones, which is conducive to individual liberty and fair competition among numerous countries, and prevent the rise of the next big country threatening world peace.

Patrick says

RWSGFY says

Not sure if serious. Living standards in NoKo are shit.

Yes, living standards in North Korea are shit.

I don't see any causal relation between not having a national debt and low living standards.

The difference is whether the Federal Government acts as a profit oriented entity. Throughout history if the government seeks to profit from its citizens, horrible things happen to the common citizens.

Reality says

Besides, land value is highly dependent on use/purpose, as exemplified by the drastically lower property tax if land is used for agriculture in most jurisdictions (per acre, farm land generates far less money than using the same acre for storage facility or home building; using home building lot price for taxation and collect full utilization value would immediately put all farm land at negative value).

This is the biggest flaw with Georgist taxes living in farm country in IL. Apple, the tech company I believe owns 360 acres on their campus. I know multiple farmers with literally that exact amount of land. They would just stop growing crops and become mechanics or some other skill derived from farming overnight and food prices would skyrocket. If you then adjust for AG land versus commercial we're back at the current method.

And I hate to sound like liberal here, but it wouldn't be fair. I like my farmer friends, but they are supported by the government AND many are very wealthy. BUT we need food. Government need to get out of subsidizing things. Let the market work itself out.

Fact is we need to stop spending. Term limits for Congress critters. Rules that force Federal officials on every level to halt all trading unless it's selling at a loss. Basically stock investments are frozen while in office. They could still make money on stocks, but they can't buy more Lockheed or Boeing if they're on the defense committee with classified contract negotiations.

Guys like Fauci and similar as well, not just the 3 branches. The leaders of the 3 letter agencies. That includes immediate family as well.

Do that and see how quickly spending drops. How much smaller the budget proposals get because they can't throw in pork barrel shit that they know will raise the stock price of some asinine publicly traded company no one looks at and they make $100k+ trading it once the public finds out ABC Company is going to get $10M from the government.

Patrick says

Why not eliminate all income tax and sales tax and just have a land value tax instead?

Or do away with all taxes except import duties, and raise those high enough to fund spending? Didn't this already work for more than 100 years?

Why do we have a national debt at all?

Same reason why every (or almost every?) government does....
They decide their spending first. Once that's done, then they look at ways to fund it. They don't do what any responsible person does which is to FIRST look at what money is coming in, and THEN decide how to spend it.

RayAmerica says

through Constitutional Amendment, the Fed not only controls the money supply, but it charges the Government fees and interest on the debt that the government creates

There's no constutional amendment involving the Fed.

So that once or twice a year the media has another scare story about a govt. shut down with the typical bi-partisan agreement at the 11th hour. A lot of back slapping and glad handing and proof that the govt. is really working hard for the people.
Besides that, who is it owed to? It is never going to get payed back. Big buyers of treasuries don't seem to care. So does it even matter? If you say it does matter, when does it start mattering? 30 tril, 40tril, 100 tril....1 qudrillion?

komputodo says

It is never going to get payed back. Big buyers of treasuries don't seem to care. So does it even matter? If you say it does matter, when does it start mattering? 30 tril, 40tril, 100 tril....1 qudrillion?

The $64,000 question. Seems like it will never matter. My belief is you'll see the results as a smaller middle class and a larger and larger poor class.

GNL says

The $64,000 question. Seems like it will never matter. My belief is you'll see the results as a smaller middle class and a larger and larger poor class.

Which will continue to get more extreme. As long as you can keep the debt slaves full of junk food and entertained, nothing is ever going to change

Does anyone want the Federal Government to be profit driven???

I would rather have a government going further into debt each year than expanding its coffers every year... and you think taxes are high now.

Misc says

I would rather have a government going further into debt each year than expanding its coffers every year.

False choice. The government can limit spending to collections.

HeadSet says

Misc says

I would rather have a government going further into debt each year than expanding its coffers every year.

False choice. The government can limit spending to collections.

why would a politician want to limit spending when spending benefits him and being thrifty castigates him?

https://babylonbee.com/cleanArticle/senators-say-theyre-not-super-worried-about-running-up-national-debt-as-most-of-them-will-die-of-natural-causes-in-the-next-year-or-so

its all about cash flow ... not enough income to match expenses and the federal government does not have assets or savings to cover its expenses ...

however it does have "assets" as far as land and resources...it could try to increase income by leasing forest land such as for deadwood collection used for engineered wood

when i saw the congressional democrat's publishing their 2024 budget which was a 5.2% increase from the 2023 budget, then that was enough to show that we are seriously fucked.... the same democrats tout annual inflation (i.e, PCE) around 2.5% ...

the democrats want to increase spending at twice the rate of guvmint-reported inflation

why not just grow spending at 1 or 2% below the annual inflation rate ?

AD says

its all about cash flow ... not enough income to match expenses and the federal government does not have assets or savings to cover its expenses ...

Print it.

Why tax at all? Most of the budget is borrowed.

Patrick says

One simple solution is to defer the land value tax until the owner dies. That is, let it accumulate as a debt to the government, but with no obligation for the owner to sell until the owner dies.

Or the ability for some (seniors for example, perhaps inheritors) to spread out or delay the Georgist Taxes with the balance due on sale if they rise dramatically in a short period.