5 ms·
Wage slavery is a real thing in America today. I'm in almost the 95th percentile of income in the US today (although I wasn't always so lucky), and, if I were
Wage slavery is a real thing in America today. I'm in almost the 95th percentile of income in the US today (although I wasn't always so lucky), and, if I were to somehow lose my job tomorrow, my first priority would be to find a new one ASAP, because I wouldn't be able to pay rent after less than 6 months of unemployment. Most people are not so fortunate. Even the most well-off Americans only have about $164K saved in their retirement accounts [0]. Real wages have been flat for decades [1]. Half of Americans don't have $500 in emergency savings [2].
My employer has nearly 100 employees; I have one employer. The job "market" is designed to create information asymmetry between me and my employer that ensures I'm not getting the best deal I can when negotiating for a job. I'm expected to give a reasonable amount of notice before leaving my job, but no such expectation generally exists on the other side of the table. I can be fired for almost any reason, or no reason. When I was hired, I had to sign an agreement signing away any right I had to ever sue my employer in court for any reason.
Now, even granted that some of these things are not necessarily going to be relevant to my particular situation (e.g. I don't really foresee any need to sue my employer, and I don't think they're going to fire me for no reason at all), what side of the table does the huge majority of the power lie on?
[0]: https://www.cnbc.com/2017/04/07/how-much-the-average-family-has-saved-for-retirement-at-every-age.html https://www.cnbc.com/2017/04/07/how-much-the-average-family-...
[1]: http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/ http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor...
[2]: https://www.creditdonkey.com/average-american-savings-statistics.html#emergency https://www.creditdonkey.com/average-american-savings-statis...
The solution is pretty straightforward. Replace all taxes on labor and earned income with a land value tax. This will increase disposable income of workers by directly decreasing taxes on wages, by lowering the cost of housing by disincentivizng speculative land investment, and by increasing the supply and margin of production of rent-free land, the later of which increases the bargaining power of workers per Ricardo's Law of Rent. The lack of private savings can also be addressed by creating a Citizen's Savings account for all citizen residents over the age of 21, into which a dividend is regularly deposited raised from natural resource rents.
The supply of land, and the degree to which land has been monopolized, is still the primary determining factor of wages even in a high-tech economy.
The price of rent for access to land in proximity to capital and dense concentrations of skilled workers of complementary skillsets determines how much savings one has to have before they can start a competing business or work for themselves, and the ease at which people can create a new business and go into competition with their previous employer determines the fairness at which equity is distributed in the average firm.
https://en.wikipedia.org/wiki/Law_of_rent https://en.wikipedia.org/wiki/Law_of_rent
I think we need to better manage expectations of living space. Renters have no right to live forever in the same apartment, and if they can't pay rent, they have to move. Homeowners pay rent in the form of property taxes to the government, and likewise: if you can't pay your rent, you gotta move.
So you won a lottery ticket?
You pay your taxes or go to jail.
So you got lucky with your home purchase?
You pay your taxes or lose your home.
Property is pretty fungible - if your taxes go up, you got lucky, now you probably are sitting on hundreds of thousands more dollars. Stop being stubborn. You've had your turn in that property. Sell. Move to a cheaper place, own it free and clear, and free up housing stock for people who are willing to pay for it.
- Sincerely, the rest of us.
PS - a commenter writes:
> That ignores the possibility that you bought your house as an investment, because you recognized the potential of a neighborhood, or that you were responsible (in part) for building the value of the neighborhood.
Oh, you expected the neighborhood to improve and didn't expect your property taxes to go up? That seems really disingenuous.
> Luck
We all have luck, and for the most part, we make it ourselves. The reality of life is that you shouldn't expect to live in the same place forever. If you've had your turn in one place, but the economy is saying your turn is over, don't fight it. It's not worth it. Make your own luck. Move where the taxes and crime-rates are lower and where the schools and streets are better.
This seems antithetical to the concept of ownership. If it's my house, why do I have to give it up just because someone with more money wants it? Why should my taxes go up, just because people value my property at an increased rate? Property taxes are supposed to fund the services provided by the local government, not evict poor people for the benefit of the rich.
You suggest that buying a house that people want is like winning a lottery ticket. That ignores the possibility that you bought your house as an investment, because you recognized the potential of a neighborhood, or that you were responsible (in part) for building the value of the neighborhood. Setting those possibilities aside, being rich is a matter of luck too. Your parents were well off, you happened to study the right thing at college, get involved with a startup at the right time, or were even born with the genetics and upbringing to generate a high iq. That's all luck too. Why should the rich person's luck be rewarded by forcing the poor to give up their home and move somewhere worse?
Two points:
1) Someone's getting taxed, somewhere. The question is what we want to incentivize.
Working hard for a living? Saving money and investing it to grow the economy? Purchasing food to feed and garments to clothe your family? Trading with people outside the country who make things more efficiently than you can?
Or sitting on underutilized land?
No matter what, someone's ox gets gored. The key is that it should be oriented around good public policy, and that people should have the time to incorporate policy changes into their decision making process.
2) You seem unrealistically worried about government coming in and removing people from houses they own at gunpoint. The actual worst case scenario is someone gets a reverse mortgage from the bank to pay property tax with equity from the home, and they end up bequeathing a smaller proportion of wealth to their heirs when they pass.
> The actual worst case scenario is someone gets a reverse mortgage from the bank to pay property tax with equity from the home, and they end up bequeathing a smaller proportion of wealth to their heirs when they pass.
In other words, a permanent and widespread subsidy that enriches the banking industry at the expense of the public. Don't we have enough of those already?
9y ago
>The question is what we want to incentivize.
I disagree with this. This idea is based on the implicit assumption that the purpose of taxation is to change behavior.
As I alluded to earlier, I think the purpose of property tax is to help fund the local government. We need waste disposal, food inspectors, schools, police, fire department, etc. These things are, in part, funded by property taxes.
If people value my house at a greater rate, that doesn't change the amount of education local kids need, I don't get better police protection, and the amount of government services don't necessarily increase. Why am I paying more in property taxes then?
>You seem unrealistically worried about government coming in and removing people from houses they own at gunpoint
My main concern is the idea that we would use property taxes as a tool for taking people's property.
>Property taxes are supposed to fund the services provided by the local government, not evict poor people for the benefit of the rich.
Not so from my observations.
But your taxing authority would like you to think so. They actually have always been rich too, and that's who they favor even if none of their people are individually paid that much.
Property taxes are directly based on "socage" and "quitrents" which provided a clear legal framework to formalize the right to evict poor people for the benefit of the rich.
https://www.britannica.com/topic/socage https://www.britannica.com/topic/socage
OTOH inheritance or estate tax is based on the medieval concept of "relief" where the tenant's next-of-kin is supposedly giving relief to the landowner who would otherwise not know where his next Shilling was coming from once the previous tenant passed away. Or the landowner is giving relief to the surviving inheritors so they will not be evicted as long as they pay what amounts to a windfall bonus for the taxing authority who can then celebrate the death of a taxpayer in appropriate style. Whatever.
https://www.britannica.com/topic/relief-medieval-tax https://www.britannica.com/topic/relief-medieval-tax
US states originated as British colonies under this system and it has changed as little as possible with the continuous enforcement of your local constable.
There was also the effect which requires a tenant (owner or lessor) to produce enough from the land itself or remit in some other way, otherwise the parcel will be confiscated and someone else will be given a try.
The idea was to keep "all men are created equal" from coming true financially for the disadvantaged at a time when the King held ultimate title to all land. His local representatives would be today's county judge and tax assessor-collector, with the enforcer being the county sheriff and whatever his punishment at the time happened to be. No surprise that it seems so medieval to almost be unbelievable today, but that is the unbroken history.
Property taxes would not actually be necessary in a truly free country based on commerce, free enterprise and fairness.
Rather than perpetuating the differential between landowner and peasant as much as possible, untaxed land would tend toward flatter stewardship of the most desirable parcels allowing the maximum utilization of a limited resource when needed without the landowner requiring such a high income from the property itself to support all of today's effective "middlemen" just to retain title to it.
Interesting case study:
http://scholarship.law.marquette.edu/cgi/viewcontent.cgi?article=1653&context=mulr http://scholarship.law.marquette.edu/cgi/viewcontent.cgi?art...
>Why should the rich person's luck be rewarded by forcing the poor to give up their home and move somewhere worse?
Sometimes that's the only reward being seeked by those whose riches originated in similar ways, or through no productive effort of their own.
"Today's weirdness is tomorrow's reason why"__Hunter S. Thompson