patrick.net

Reality says

What is Georgist "land" vs. what is improvement is not clear-cut

For recent improvement, it's pretty simple. Take the market price of the property and subtract what it would cost to make those improvements. For things that happened in remote previous generations, Georgism advocates designating that as part of nature now.

Reality says

If the ideal tax rate on land is the land value multiplied by the prevailing interest rate, then arguably the owner is already paying that by holding onto the land

I think you're missing the point there. The goal is to tax land rent, and to deposit that land rent into the public treasury. This has a lot of major benefits, such as preventing land speculation, simplicity of tax collection, reduction of urban sprawl, more efficient land usage, encouraging labor by eliminating income tax, encouraging commerce by not taxing sales, making it possible for young families to buy houses, etc.

Reality says

Keeping trespassers off whatever land has its value (just look at the homeless settlement on "public land" in cities like Seattle).

Of course, and that's why it's central to Georgism that people do have title to land and the exclusive right to it - as long as they pay the tax on the land value.

Reality says

Owning farm land and renting it out to farmers in and of itself (in a competitive market place) is not necessarily "rent-seeking" in the Georgist sense: the owner has simply bought the capitalized value of all the historical improvements done to the farm land, such as cutting all the trees, removing all the stumps, building the irrigation network and the hundred of years preventing tree seedlings from growing into trees and preserving the fertility of the plot of land (e.g. risking Dust-bowl phenomenon).

You should read the book as it addresses all of this in great detail. The owner should keep the value of all the recent improvements, but pay the tax on the non-productive rent-seeking part of the value.

Reality says

tax-farming big concentrated landlords

No, all land would have to pay the land value tax.

Reality says

it would be dangerous to make bureaucrats' salaries and pensions entirely dependent on a few big landlords)

Again, not a few, but on all the land.

I agree that concentration/monopolization is also a problem, but the arguments for replacing income tax and sales tax with a land value tax is super-compelling if you take the time to actually go through the arguments in the book.

The Land Value tax has another key benefit: it has falsifiable predictions, and can be implemented incrementally and achieve incremental benefits (as we've seen in some real life implementations).

In the places where Georgism has been partially implemented so far (Hong Kong, Australia, Pennsylvania) we do indeed see the predicted benefits, and do not see an increase in rents.

https://en.wikipedia.org/wiki/Land_value_tax#Implementation

richwicks says

The United States is doing what it can to free Brittney Griner for bringing illegal drugs into Russia. We have people doing fucking MORE TIME THAN HER for doing EXACTLY the same thing within the United States.

Ironically, many of those were put in jail by our current VP.

I think this is a legit criticism:

Ashwin Parameswaran
Writes macro-resilience
Apr 16, 2021
Simply implementing a Land Value Tax in the manner that George suggested will almost certainly trigger a banking/financial and economic crisis as the rents that this tax seeks to eliminate have been a) capitalised into the price of land and b)the land in question has been levered up to a very high degree. The LVT will cause a significant fall in prices which will lead to defaults, bank failures and even personal bankruptcies (e.g. a middle-class family with a 90% LTV mortgage in a metropolitan city). For example, the same problem applies in removing farm subsidies where the value of subsidies has been capitalised and levered such that any removal will trigger bankruptcies and financial losses.

This is not a criticism of George as the same conditions may not have applied in his time. One possible solution is to introduce the tax in stages with a modest tax to begin with.

Randomstringofcharacters
Apr 16, 2021
No reason it has to be implemented at 100% instantly. You can implement it in gradually increasing amounts over a longer timescale, with advanced notice of the changes so people can financially adapt. That's how lots of laws are done.

So yes, the LVT would have to be implemented gradually.

Another objection, this one pretty hard to get around:

Except that it will be incredibly unpopular, your party will lose the next election, and then the tax gets rolled back...

You have to reduce income tax and sales tax the same amount.

Patrick says

unfairly exploited/taxed by non-productive land owners, people who create and contribute absolutely nothing, but are pure parasites in their role as landowners.

Or: older senior citizens who did work but can't anymore (because they're old) but were smart enough and responsible enough to save and sacrifice to buy some land to cover their expenses. They also provide a service for those who don't want to buy.

HunterTits says

richwicks says

https://yandex.com/images/search?from=tabbar&text=nude+beautiful+women

Alright! More titties!

I clicked. You can choose the orientation of the chicks. The options are horizontal, vertical, or square.

Patrick says

Well, maybe Prop13 is in the way of that in California, which might be one of the reasons Prop13 exists. Land owners want to protect their unjust and unearned land rents.

No real estate prices were rising in the 70s and the state was flush with property tax revenue that they were not returning to 'the people' and 'the people' were being thrown out of their homes b/c they couldn't afford the tax. - my understanding from oldsters anyway.

Patrick says

Note that under Georgism most of the infrastructure of the IRS would be eliminated.

Now you're speaka my language!

just_passing_through says

'the people' were being thrown out of their homes b/c they couldn't afford the tax

I read a book about Prop 13. It started as a reaction to the ruling Serrano vs Priest, which found that local property taxes paying for local schools were discriminatory because the poor school districts got less funding. So it was determined that all property tax revenue would have to go through the state and then be redistributed equally among all schools.

Parents paying a lot of property tax for their kids' schools didn't like that.

Howard Jarvis stepped in and latched on to the idea of old people being thrown out of their houses by property tax as a justification for freezing property taxes at the purchase price level plus a trivial increase per year. But evictions weren't all that common actually, and could have been solved by letting the elderly defer the property tax until they died or sold the house. And Howard had all these annoyed parents on his side too.

Howard's real motive was well hidden: to eliminate property tax increases on businesses. Most people somehow didn't notice that part, and still don't understand that that was the primary force which got Prop 13 passed. It remains a massive tax shift from California businesses to the California income tax and sales tax.

It was the very opposite of Georgism, and California has the craziest land prices and rents, and the highest state income tax and sales taxes because of it.

And California schools went from best in the nation to worst in the nation. There is a documentary about it: "From First To Worst".

https://news.stanford.edu/news/2004/january21/schools-121.html

Everyone suffered so that land owners could extract rents and price increases parasitically, doing absolutely nothing useful themselves, sucking up wealth from others.

Hmmm, Georgism is opposed to taxing improvements on land, but if you improve your own land, the value goes up, so then I think the LVT would go up as well.

If California did away with prop 13, it would have one of the highest property tax rates as well as one of the highest sales taxes and income taxes.

There is no amount of tax that will appease those fellows in Sacramento.

Patrick says

Howard's real motive was well hidden: to eliminate property tax increases on businesses. Most people somehow didn't notice that part, and still don't understand that that was the primary force which got Prop 13 passed. It remains a massive tax shift from California businesses to the California income tax and sales tax.

Morally bankrupt corrupt Prop 13 is a massive highway robbery every month since 1978. It MUST go and so does all the massive tax increases on everything else. All business and rich must start paying their fair share.

Misc says

If California did away with prop 13, it would have one of the highest property tax rates as well as one of the highest sales taxes and income taxes.

There is no amount of tax that will appease those fellows in Sacramento.

@Misc

A central point of Georgism is that income tax and sales tax are wrong, because they are unjust and they discourage work and commerce.

They are to be replaced by a tax on land values.

Blue says

Morally bankrupt corrupt Prop 13 is a massive highway robbery every month since 1978. It MUST go and so does all the massive tax increases on everything else.

Someone once told me that you could end Prop 13 overnight simply by publishing everyone's property taxes in an easily accessible place.

When they see that some people pay 20x what other people pay for the exact same size and kind of property in the same location, there would be a revolt against Prop 13.

https://unherd.com/2021/06/big-techs-threat-to-democracy/

Google, Facebook, Twitter and Amazon have established portals that people feel they have to pass through to conduct the business of life, and to participate in the common life of the nation. Such bottlenecks are a natural consequence of “the network effect.” It was early innovations that allowed these firms to take up their positions. But it is not innovation, it is these established positions, and the ongoing control of the data it allows them to gather, that accounts for the unprecedented rents they are able to collect, as in a classic infrastructure monopoly.

Maybe those network effects really are a kind of natural resource like land.

From a different group that wants a flat income tax, which is a horrible idea. Yet they have a good strategy which could be applied to Georgism:

1. We issue Key Vote Alerts to all Congressional offices so that Senators and Representatives know exactly how they should vote on proposed legislation.

2. We publish yearly Congressional Scorecards so that constituents know whether or not their legislators are voting in favor of tax cuts, reduced spending, and pro-growth policy.

3. We run hard-hitting independent issue ads on television and radio that expose to constituents the truth about where politicians stand on harmful bills that could raise taxes, increase regulations, and expand the role of the government. NO politician wants to be the feature of one of our ads.

A video recently posted by @richwicks called "All wars are banker's wars" claims that the 16th Amendment creating the federal income tax was never actually approved by the requisite number of states.

Seems easy to prove one way or another.

Patrick says

A video recently posted by @richwicks called "All wars are banker's wars" claims that the 16th Amendment creating the federal income tax was never actually approved by the requisite number of states.

Seems easy to prove one way or another.

It has been proven:

https://duckduckgo.com/?t=ffab&q=16th+amendment+never+ratified&ia=web

https://michaelruark.blog/2020/09/12/states-did-not-legally-ratify-the-16th-amendment/

There's a ton of people that talk about it, that's not going to change it. What? Did you think we just abandoned the rule of law recently?

What states ratified it? Who signed it? 3/4 of the states had to approve it, in their legislatures, find the signatures. I thought everybody knew by now.

It doesn't matter. Law doesn't matter. There's no constitutional right to have an FBI or CIA either. Alcohol prohibition had to have an amendment, where's the one for pot, heroin, and LSD? What gives the federal government the right to record internet communication? Why can't I own a nuclear bomb? They just skip over all this shit. It's been this way our entire lives.

Yes, the price of a "house" in California is almost entirely the price of the land.

This leads to the endless repetition of the same non-sensical story titled some variation on "Look what this crappy 2BR sold for!"

The story always ignores the price of the land. The house itself often has negative value because someone bought that 2BR for the quarter acre of land it sits on and is just going to scrape it and build something else.

The essence of Georgism is to distinguish between non-productive land ownership (which should be taxed heavily) and the productive activity of building or maintaining a house on the land (which should not be taxed at all).

What's an ADU?

Patrick says

What's an ADU?

I think you should spell it out, because perhaps the majority of people won't know what it is, even on this site.

ZipperTits says

a lot of land will be unlocked for development and NIMBYism would become very expensive to maintain

Yes, this is a primary goal of Georgism. Incentivize efficient use of land, as well as incentivizing labor and commerce by eliminating income tax and sales tax.

And then there would be enormous savings in not having to file or audit income tax returns. And similar savings for eliminating the sales tax bureaucracy.

Thanks @ZipperTits

Nice to see Henry George finally getting some coverage.

The elite hate him because he threatens their outright criminal land rents.

ZipperTits says

https://www.vanityfair.com/news/2017/09/the-obscure-economist-henry-george-ayn-rand

When you work for an hour, you increase society’s wealth (and your own) by an hour’s worth of wages. When you save a dollar rather than spending it, you increase society’s (and your own) wealth by a dollar. But when you buy a piece of land for $10,000 and sell it for $20,000, you haven’t increased the total wealth of society by a nickel. Yet the price of land keeps going up, up, up, as the population increases and society grows richer. Where does that money come from? It comes from the pockets of the other two factors of production, labor and capital. ...

Henry George believed that the landlord’s share of wealth that all of us have helped to accumulate is inherently illegitimate and should be confiscated. He wouldn’t send in the National Guard to seize people’s property. He would instead confiscate the value of unimproved land—that is, land that had not been improved by, say, building on it—by taxing its annual value at a rate of 100 percent.

“But,” you’re thinking, “that would make the property itself worthless.” (“That’s not what I’m thinking,” says Arianna, mysteriously.) Well, you’re right. Making the property worthless is the whole idea. Society gets the value of the property. Taxes on the other factors of production—labor and capital—can be reduced, or even eliminated. This is why people who are dedicated to promoting George’s ideas are known as “single-taxers.”

The landlord will have little choice but to put the property to its “highest and best use.” ...

But George got the main things right. Free markets are best (provided they are really free). A lot of markets that masquerade as free really aren’t. And we often tax the wrong things—ignoring wealth that accomplishes nothing while taxing labor and capital that are actually productive.

Patrick says

When you save a dollar rather than spending it, you increase society’s (and your own) wealth by a dollar.

Not so. Wealth is produced by labor. Saving that dollar is just storing the value of previous labor.

https://astralcodexten.substack.com/p/does-georgism-work-is-land-really

Great thread there.

Quick question, who would want to own land under this tax regime?????

The quick answer is nobody.

Sounds like something the WEF would promote...you will own nothing and be happy.

Thanks @cisTits

Yes, the tax is just on the land, not the improvements or buildings.

@Misc If you read more about Georgism, you'll see that it's much much better than having an income tax and sales tax.

Again... who would own the land???

It would make zero sense for individuals to own the land as they would be paying taxes for nothing.

So... individuals would not own the land. but instead rent and/or lease it from an altruistic, benevolent entity such as the State, an LGBTQP- NGO, and/or a WEF front organization.

I am certain that these types of organizations would be given special tax treatment that an ordinary citizen could not obtain.

People would end up owning nothing. I doubt that overflowing bliss would occur, however.

cisTits says

Ppl don't own land today either. Not allodially as you seem to describing it.

I do not believe there is any allodial land in the United States. People who say you can do this, I think are lying. I tried to find an example of it once.

People would not take title to land where the taxes could shoot up greatly.

Example" Let's say some schmuck under this proposed Georgianism tax scheme bought a piece of property for $ 1 million when the interest rate was 5%. Let's say interest rates went down to roughly 2%. That would increase the value of the property by about $1 million so resulting in the tax of about $1 million. The schmuck would loose everything he ever owned due to this crap tax system.

This system would lead to ownership by the benevolent State, under the best of circumstances. People would own nothing.

Misc says

People would not take title to land where the taxes could shoot up greatly.

Example" Let's say some schmuck under this proposed Georgianism tax scheme bought a piece of property for $ 1 million when the interest rate was 5%. Let's say interest rates went down to roughly 2%. That would increase the value of the property by about $1 million so resulting in the tax of about $1 million. The schmuck would loose everything he ever owned due to this crap tax system.

This system would lead to ownership by the benevolent State, under the best of circumstances. People would own nothing.

Why don't you check out how they do things in Pittsburgh, PA? They have a land value tax (tax on the land only, not improvements). IIRC, property value swings have been far lower in this city - a land value tax stabilizes real estate prices.

Hey, Howzabout we put in this Georgism tax thingy in now?

You know when property prices are gonna sink because interest rates went up. That way instead of property owners having to pay a tax, the government would send the owners money because their properties went down in value. What was the rate???? --- Oh, it was 100% of the gain so to be fair it should be 100% of the loss...

... and here I was thinking that the Georgism proponents were against "free" money.

How do you separate the value of improvements from the value of the land?

Let’s say I buy a lot for $100K and build a house on it for $100K. Then I sell the whole thing to another person for $180K.

What’s the value of the land? Is it $80K because the house cost $100K to build? Is it still $100K because I had 30 cats and my house smells like pee and that was the reason for the depreciation?

@pudil The value of the land is the value of an equivalent empty lot next door.

So yes, I'd say that it's still $100K.

There is a lot of discussion about this in these links:

https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty
https://astralcodexten.substack.com/p/does-georgism-work-is-land-really
https://astralcodexten.substack.com/p/does-georgism-work-part-2-can-landlords
https://astralcodexten.substack.com/p/does-georgism-work-part-3-can-unimproved

stereotomy says

Why don't you check out how they do things in Pittsburgh, PA? They have a land value tax (tax on the land only, not improvements). IIRC, property value swings have been far lower in this city - a land value tax stabilizes real estate prices.

Yes, stabilization of real estate prices seems to be another benefit of the land value tax.

Misc says

Let's say some schmuck under this proposed Georgianism tax scheme bought a piece of property for $ 1 million when the interest rate was 5%. Let's say interest rates went down to roughly 2%. That would increase the value of the property by about $1 million so resulting in the tax of about $1 million. The schmuck would loose everything he ever owned due to this crap tax system.

Not true.

In the worst case, he could sell at the new value and pay the tax, and also recover what he originally paid for the land.

But the tax could also be deferred, to be taken out of the proceeds from the land value when the owner dies.

The point is that no one created land, therefore no one should be able to extract wealth from people who actually work simply by virtue of land ownership. All hereditary aristocracy is based on a class of people who don't have to work because they own the land and everyone else is therefore forced to work for them. Land ownership produces nothing at all.

Please read the good explanations at:

https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty
https://astralcodexten.substack.com/p/does-georgism-work-is-land-really
https://astralcodexten.substack.com/p/does-georgism-work-part-2-can-landlords
https://astralcodexten.substack.com/p/does-georgism-work-part-3-can-unimproved

If it is as you say that the tax is deferred until the land is sold, then it is the same as the system we currently have.

There is a small exclusion for primary residences whereby a gain of $250k/$500k per couple is excluded from the capital gains tax. Depending on the holding period it reflects the rate of inflation.

From what I understand the cost basis is stepped up upon death for the heirs and the value is added to the other assets owned for estate tax purposes.

Overall, except for a few small exclusions from our tax code it would be the same as it currently is.