6 ms·

Seems land taxation + basic income would be a great combo to spread wealth around.

by brador 10y ago

SmellTheGlove 10y ago
I happen to think that if you want to maximize human potential across the board, you need to take away the threats to existence at the individual level - meaning a place to live, food, healthcare, education. If your basic needs are met, theoretically, you're free to explore and innovate (or sit on your ass, but I think the propensity for that is overblown). That's not just to help poor people either, that could boost your middle class output as well - use me for an example, I'm educated, relatively advanced in my career for my age, but I'd probably be doing something different if I didn't have to worry about student loans to repay and a roof over my family's head. Maybe that something different would be more impactful, maybe it wouldn't, but it'd be different. I digress. I really hope to see UBI attempted somewhere to see if it works. We do already tax land in most (all?) of the developed world. I honestly have no idea of the tax structure on land in 15th century Florence, but I'm inclined to check that out after work today. Of course, goals vary across humans. Advancing the whole at the relative expense of another makes the people who are already ahead a bit nervous. That's not wrong, either, it's just human nature. Advance the baseline far enough and it begins to matter less.
- huherto 10y ago
  AFAIK, we have tax on property. We tax the land plus the value added to the land by building on it. IMH, we shouldn't tax the construction since that is disincentive for economic activity. But the land? Some land just becomes valuable because it is near other valuable properties.
  - aaron-santos 10y ago
    Georgism gets a lot of support on HN, but how exactly would the unimproved value of land be determined? Similar to the appraisal system we have in place for houses, or something different?
    - huherto 10y ago
      It is definitely an interesting problem. Perhaps a function based on the travel distance from where the rest of the people are living or working ? Sort of like page rank.
      - ghaff 10y ago
        So land in Detroit and San Francisco, which have similar populations, should be valued about the same. (Yes, there are probably more people in the Bay area overall, but to a first approximation.) And coastal property on the southern Maine coast should have a low value. Ultimately, it's market value. You can subtract the value of the building but it's actually hard to separate the two.
        huherto 10y ago
        Well San Francisco is on the coast. By sea, it has shorter travel times to all the cities in the West Coast, Vancouver and a continent called Asia.
        vintermann 10y ago
        Instead of distance to people, how about distance to people times dollars?
    - logfromblammo 10y ago
      I think you would have to take the current market value of the land, then subtract an estimate of what it would cost to re-do the improvements at today's prices. The insured value of structures may be an easy way to get at that estimate. For instance, a lot with a house on it that costs $250k, when the structure would cost $180k to reconstruct from scratch, implies that an adjacent empty lot of the same size would be $70k. But that's not entirely unimproved. There still may be water, power, telecoms, and sewer utility hookups, which certainly qualify as improvements. So you estimate the cost to re-wire/re-pipe the entire neighborhood from the utility, and divide that across all the lots, weighted by area. And being close to a road is an improvement... Professional appraisers would most likely just make a plausible-sounding number up, and collude with one another to ensure consistency over an entire county. It's the easy way.
- TheOtherHobbes 10y ago
  > If your basic needs are met, theoretically, you're free to explore and innovate (or sit on your ass, but I think the propensity for that is overblown). It's a necessary, but not a sufficient condition. You also need world class free education, and a networking system that tries to bring the most inventive people together. I'm not sure if the propensity for empty hedonism is overblown or not. It's hard to imagine what would happen in a system with open economic freedom and self-determination, because it's never been attempted before. I've seen estimates that maybe only 10% of the population is even remotely innovative. A lot of people seem to want to have someone telling them what to do with their time. But is that because of the emotional scarring left by an economically abusive upbringing, or is it innate? No one knows.
huherto 10y ago
I am sort of reaching that conclusion myself too. We are better and better on manufacturing. I don't know how much efficiency is left to extract. And human labor is becoming less and less valuable as we are better on automating. Real Estate(housing and commercial), education and health are still very expensive. A tax on land would reduce real estate costs and help pay for basic income. But politically will be really, really hard to do.
onetimeusename 10y ago
It makes more sense to try to grow the GDP and tax income instead. Taxing land in order to specifically target people with inherited land holdings has all sorts of unintended (or maybe intended) consequences because these people often do not have sufficient liquid holdings to pay the taxes. They end up having to sell off land in parcels which is an arduous and incredibly inefficient way for a government to raise revenues to 'spread wealth' and land in these cases often isn't easily parceled. Should a family sell their estate, the farmland that produces revenue that sustains the estate, or the useless swamp to cover the taxes? This isn't the sort of situation governments should be encouraging. If you have no mercy for that family, consider people whose parents buy a small plot of land that unexpectedly becomes very valuable and then the children are forced to sell the house on the death of their parents. Or the same family who finds their tax rate going up but their income staying the same because their land is suddenly in a trendy area. Taxing income to me seems like the most fair way to raise revenue because it targets liquid means.
- coryrc 10y ago
  I fail to see why, if they aren't using the land productively, they shouldn't sell to someone who will. I don't understand why I should feel bad for the family whose small plot of land becomes very valuable so they make lots of money. How terrible!
- chongli 10y ago
  The only thing worse than a wealthy person sitting on a vast horde of cash is a land-rich person sitting on vast tracts of highly desirable land. If somebody owned several acres in the heart of Manhattan and chose to leave them in the form of undeveloped, fallow fields, why should we not charge them high taxes in order to force them to either develop the land or sell it off to somebody who will? Land is one of the rare cases where the needs of the many trump the rights of the few.
  - onetimeusename 10y ago
    So what if we apply that rule to poor and middle income people? Are you suddenly interested in taxing those people to get them out so that someone with more cash can do something better with their land? What about people with just enough land to have an unsustainable tax rate but not enough land for it to be immediately useful for development? People with older homes in cities fall into this category frequently. How much revenue is this worth for the government after land is sold and properties destroyed to make way for new versus if they had just raised tax on income? This assumes there is even a willing buyer.
jandrese 10y ago
"Land taxation" is called property tax and it already exists everywhere. For most people it is the largest tax bill they pay, it pays for schools and roads and local government.
- DasIch 10y ago
  Property tax is common, land value taxes muss less so. Although arguably they're much better in many ways (assuming regulation isn't otherwise broken in regards to zoning for example).

Seems land taxation + basic income would be a great combo to spread wealth around.

by brador 10y ago

Seems land taxation + basic income would be a great combo to spread wealth around.

I happen to think that if you want to maximize human potential across the board, you need to take away the threats to existence at the individual level - meaning a place to live, food, healthcare, education. If your basic needs are met, theoretically, you're free to explore and innovate (or sit on your ass, but I think the propensity for that is overblown). That's not just to help poor people either, that could boost your middle class output as well - use me for an example, I'm educated, relatively advanced in my career for my age, but I'd probably be doing something different if I didn't have to worry about student loans to repay and a roof over my family's head. Maybe that something different would be more impactful, maybe it wouldn't, but it'd be different. I digress. I really hope to see UBI attempted somewhere to see if it works. We do already tax land in most (all?) of the developed world. I honestly have no idea of the tax structure on land in 15th century Florence, but I'm inclined to check that out after work today. Of course, goals vary across humans. Advancing the whole at the relative expense of another makes the people who are already ahead a bit nervous. That's not wrong, either, it's just human nature. Advance the baseline far enough and it begins to matter less.

huherto 10y ago
AFAIK, we have tax on property. We tax the land plus the value added to the land by building on it. IMH, we shouldn't tax the construction since that is disincentive for economic activity. But the land? Some land just becomes valuable because it is near other valuable properties.
- aaron-santos 10y ago
  Georgism gets a lot of support on HN, but how exactly would the unimproved value of land be determined? Similar to the appraisal system we have in place for houses, or something different?
  - huherto 10y ago
    It is definitely an interesting problem. Perhaps a function based on the travel distance from where the rest of the people are living or working ? Sort of like page rank.
    - ghaff 10y ago
      So land in Detroit and San Francisco, which have similar populations, should be valued about the same. (Yes, there are probably more people in the Bay area overall, but to a first approximation.) And coastal property on the southern Maine coast should have a low value. Ultimately, it's market value. You can subtract the value of the building but it's actually hard to separate the two.
      - huherto 10y ago
        Well San Francisco is on the coast. By sea, it has shorter travel times to all the cities in the West Coast, Vancouver and a continent called Asia.
      - vintermann 10y ago
        Instead of distance to people, how about distance to people times dollars?
  - logfromblammo 10y ago
    I think you would have to take the current market value of the land, then subtract an estimate of what it would cost to re-do the improvements at today's prices. The insured value of structures may be an easy way to get at that estimate. For instance, a lot with a house on it that costs $250k, when the structure would cost $180k to reconstruct from scratch, implies that an adjacent empty lot of the same size would be $70k. But that's not entirely unimproved. There still may be water, power, telecoms, and sewer utility hookups, which certainly qualify as improvements. So you estimate the cost to re-wire/re-pipe the entire neighborhood from the utility, and divide that across all the lots, weighted by area. And being close to a road is an improvement... Professional appraisers would most likely just make a plausible-sounding number up, and collude with one another to ensure consistency over an entire county. It's the easy way.
TheOtherHobbes 10y ago
> If your basic needs are met, theoretically, you're free to explore and innovate (or sit on your ass, but I think the propensity for that is overblown). It's a necessary, but not a sufficient condition. You also need world class free education, and a networking system that tries to bring the most inventive people together. I'm not sure if the propensity for empty hedonism is overblown or not. It's hard to imagine what would happen in a system with open economic freedom and self-determination, because it's never been attempted before. I've seen estimates that maybe only 10% of the population is even remotely innovative. A lot of people seem to want to have someone telling them what to do with their time. But is that because of the emotional scarring left by an economically abusive upbringing, or is it innate? No one knows.

huherto 10y ago

I am sort of reaching that conclusion myself too. We are better and better on manufacturing. I don't know how much efficiency is left to extract. And human labor is becoming less and less valuable as we are better on automating. Real Estate(housing and commercial), education and health are still very expensive. A tax on land would reduce real estate costs and help pay for basic income. But politically will be really, really hard to do.

onetimeusename 10y ago

It makes more sense to try to grow the GDP and tax income instead. Taxing land in order to specifically target people with inherited land holdings has all sorts of unintended (or maybe intended) consequences because these people often do not have sufficient liquid holdings to pay the taxes. They end up having to sell off land in parcels which is an arduous and incredibly inefficient way for a government to raise revenues to 'spread wealth' and land in these cases often isn't easily parceled. Should a family sell their estate, the farmland that produces revenue that sustains the estate, or the useless swamp to cover the taxes? This isn't the sort of situation governments should be encouraging. If you have no mercy for that family, consider people whose parents buy a small plot of land that unexpectedly becomes very valuable and then the children are forced to sell the house on the death of their parents. Or the same family who finds their tax rate going up but their income staying the same because their land is suddenly in a trendy area. Taxing income to me seems like the most fair way to raise revenue because it targets liquid means.

coryrc 10y ago
I fail to see why, if they aren't using the land productively, they shouldn't sell to someone who will. I don't understand why I should feel bad for the family whose small plot of land becomes very valuable so they make lots of money. How terrible!
chongli 10y ago
The only thing worse than a wealthy person sitting on a vast horde of cash is a land-rich person sitting on vast tracts of highly desirable land. If somebody owned several acres in the heart of Manhattan and chose to leave them in the form of undeveloped, fallow fields, why should we not charge them high taxes in order to force them to either develop the land or sell it off to somebody who will? Land is one of the rare cases where the needs of the many trump the rights of the few.
- onetimeusename 10y ago
  So what if we apply that rule to poor and middle income people? Are you suddenly interested in taxing those people to get them out so that someone with more cash can do something better with their land? What about people with just enough land to have an unsustainable tax rate but not enough land for it to be immediately useful for development? People with older homes in cities fall into this category frequently. How much revenue is this worth for the government after land is sold and properties destroyed to make way for new versus if they had just raised tax on income? This assumes there is even a willing buyer.

jandrese 10y ago

"Land taxation" is called property tax and it already exists everywhere. For most people it is the largest tax bill they pay, it pays for schools and roads and local government.

DasIch 10y ago
Property tax is common, land value taxes muss less so. Although arguably they're much better in many ways (assuming regulation isn't otherwise broken in regards to zoning for example).