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Georgism Thread


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2022 Aug 5, 4:00pm   2,376 views  90 comments

by Patrick   ➕follow (48)   💰tip ($0.87 in tips)  

Having read an abridged version of Henry George's Progress and Poverty, I'm trying to clarify in my own mind exactly how it could work, and what legitimate objections might be. Georgeism seems to explain property prices in the Bay Area very well, and how the higher salaries from increased productivity around here get sucked up by non-productive landowners.

These links look pretty good. I just read the first one. They all pretty long, but seem worth the read:

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
https://www.theirishstory.com/2016/10/18/the-great-irish-famine-1845-1851-a-brief-overview/

The main impediment, politically, would be the reduction in land prices. But perhaps some tech billionaires would throw their weight behind Georgism purely out of self-interest. They would come out ahead if income tax is reduced as much as the land value tax is raised.



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43   Patrick   2022 Aug 6, 8:34pm  


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
44   HeadSet   2022 Aug 6, 8:42pm  

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.
45   Patrick   2022 Aug 6, 9:40pm  

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.
46   Patrick   2022 Aug 6, 10:00pm  

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.
49   just_passing_through   2022 Aug 7, 11:58am  

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.
50   Onvacation   2022 Aug 7, 12:03pm  

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.
51   just_passing_through   2022 Aug 7, 12:03pm  

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.
52   just_passing_through   2022 Aug 7, 12:03pm  

Patrick says

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


Now you're speaka my language!
53   Patrick   2022 Aug 7, 12:56pm  

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.
54   cisTits   2022 Aug 7, 8:05pm  

just_passing_through says

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.


Property taxes were being increased not by.rates but by inflating base prices the rates were calculated for determining one's tax bill.

That is why Prop 13 was popular. It set the base to be the price at when the home was purchased.

Other states: property tax bills go up when property values get reassessed by the local government. In other words, pretty much what Zillow says it should be.
56   Patrick   2022 Aug 8, 10:03pm  

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.
57   Misc   2022 Aug 8, 10:33pm  

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.
58   Blue   2022 Aug 9, 12:22am  

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.
59   Patrick   2022 Aug 9, 8:05am  

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.
60   Patrick   2022 Aug 9, 8:06am  

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.
61   Patrick   2022 Aug 12, 9:42am  

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.
62   cisTits   2022 Aug 12, 9:47am  

Patrick says

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.


But not in CA. Instead it would be as @Misc sez.
63   Patrick   2022 Aug 17, 11:01am  

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.
64   Patrick   2022 Aug 20, 11:45pm  

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.
65   richwicks   2022 Aug 21, 12:06am  

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.
66   cisTits   2022 Aug 27, 4:03pm  

For those of you who still don't understand why CA needs an LTV:

As Pinto points out, the cost of actual construction, comprising building materials, labor, and financing, is higher in California than other states. But the biggest difference by far is the gulf in land prices. He cites the case of Santa Clara County. “The average price of a newly built home there is $2.1 million, and the average size is 3,200 square feet. The construction cost is probably $1 million, so the land value is over half the total at $1.1 million.” How about existing homes? They average a meager 1,700 square feet, and go for a norm of $1.3 million. “The fully depreciated value of the house itself might be $200,000,” says Pinto. “As in the case of the new house, the land’s worth $1.1 million.” But for the old-time residence, the land value is multiple that of four walls of aluminum siding and Sheetrock.


https://fortune.com/2022/08/26/california-housing-market-supply-scarcity/
67   Patrick   2022 Aug 27, 4:10pm  

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).
68   cisTits   2022 Aug 27, 4:15pm  

Yup. And land under an ADU would not be taxed, which would spur more ADU development if we had an LTV.
69   Patrick   2022 Aug 27, 4:24pm  

What's an ADU?
70   cisTits   2022 Aug 27, 4:30pm  

Quarter acre lot is about 10,900 sqr feet.

You have a 2,000 square foot house on it, that leaves 8,900 square feet left to tax via LTV.

Therefore, in an LTV system putting in a 1,200 sqr foot ADU that can be rented would be a very profitable addition to that lot. So would subdividing part of it into a second lot (say 5,000 sqr feet) and putting two 2,100 sqr feet homes on it.

In order to make it politically palpable to sell to voters who own their own homes, a grandfather clause would probably have to be in effect where nobody pays more in LTV than they were paying under Prop 13 before the LTV.

But, it will still impact sales prices going forward so that ppl with smaller homes on quarter or more acre lots will probably get a better sale price by doing the subdivision thing as per above or at least installing an ADU as opposed to selling the lot just as is with existing house.

Either way, a lot of land will be unlocked for development and NIMBYism would become very expensive to maintain.
71   Patrick   2022 Aug 27, 4:33pm  

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.
72   Patrick   2022 Aug 27, 4:53pm  

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.
73   cisTits   2022 Aug 28, 5:54pm  

@Patrick

Check these guys out. I just bought their book from Amazon. Don't know when I will get to it, tho.

https://newphysiocrats.org/platform/
74   cisTits   2022 Aug 28, 5:56pm  

Patrick says

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.


The definition is in the article I was talking about. https://fortune.com/2022/08/26/california-housing-market-supply-scarcity/
76   Patrick   2022 Sep 10, 5:48pm  

Thanks @ZipperTits

Nice to see Henry George finally getting some coverage.

The elite hate him because he threatens their outright criminal land rents.
77   Patrick   2022 Sep 11, 4:58pm  

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.
78   HeadSet   2022 Sep 12, 9:59am  

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.
80   Misc   2023 Jan 23, 9:18pm  

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.
81   cisTits   2023 Jan 23, 10:01pm  

Misc says

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.


UNDEVELOPED land.

Developed land would not be taxed. Or just the land part.

Current property tax valuations already make distinctions between land and improvements on it.
82   Patrick   2023 Jan 23, 10:05pm  

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.

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