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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 d

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

oh_sigh 9y ago
Isn't a land value tax punitive to poor people who buy cheap land which then becomes valuable for some reason? Let's say I have low cash flow and bought a reasonably priced house in silicon valley in 1975. Should I basically be forced out of my house in 2010 because a bunch of ultra wealthy companies opened offices a few miles away?
- throwawaybbqed 9y ago
  The companies are ultra-wealthy because they are producing high value for society.
  - TheOtherHobbes 9y ago
    Or enclosing the value generated by others. Because that works too.
  - polotics 9y ago
    High-value non poaching agreements?
- ZeroGravitas 9y ago
  So your example of poor people that it affects punitively is a rich person who owns millions in assets? I guess that answers your question that it doesn't affect poor people. It's almost directly analogous to saying that the estate tax affects poor people who win the lottery. Both have received massive benefits unrelated to their efforts and are no longer poor, so talking about them as if they were seems like sophistry.
  - ThrowawayR2 9y ago
    On one side, you would have elderly people who would be forced out of homes they've lived their entire lives in and raised their families in. On the other side, there would your pragmatic but rather cold-hearted analysis. Which side do you think public opinion is going to come down on? A home is more than a structure that one happens to reside in and its value has other dimensions than what the market might be willing to pay in dollars for it.
    - ZeroGravitas 9y ago
      Most land value tax proposals have exemptions for a person's personal home. But even if they didn't, we have financial instruments that can release the value stored in an asset like a home. If the owner looks at the situation and decides to sell and move somewhere cheap and have lots of money to spend then great, if they decide to unlock the value in their land via a mortgage because living exactly there is worth more to them then what they pay in taxes then that's also great. In both situation they are richer, and they have the opportunity to decide how to spend these riches they have accidentally acquired. Either way, they're not poor people. Poor people would be affected by the lack of affordable housing in areas close to work though.
- aaronchall 9y ago
  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.
  - ImSkeptical 9y ago
    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?
justonepost 9y ago
Well, at least it would be a great boon to remote work!

oh_sigh 9y ago

Isn't a land value tax punitive to poor people who buy cheap land which then becomes valuable for some reason? Let's say I have low cash flow and bought a reasonably priced house in silicon valley in 1975. Should I basically be forced out of my house in 2010 because a bunch of ultra wealthy companies opened offices a few miles away?

throwawaybbqed 9y ago
The companies are ultra-wealthy because they are producing high value for society.
- TheOtherHobbes 9y ago
  Or enclosing the value generated by others. Because that works too.
- polotics 9y ago
  High-value non poaching agreements?
ZeroGravitas 9y ago
So your example of poor people that it affects punitively is a rich person who owns millions in assets? I guess that answers your question that it doesn't affect poor people. It's almost directly analogous to saying that the estate tax affects poor people who win the lottery. Both have received massive benefits unrelated to their efforts and are no longer poor, so talking about them as if they were seems like sophistry.
- ThrowawayR2 9y ago
  On one side, you would have elderly people who would be forced out of homes they've lived their entire lives in and raised their families in. On the other side, there would your pragmatic but rather cold-hearted analysis. Which side do you think public opinion is going to come down on? A home is more than a structure that one happens to reside in and its value has other dimensions than what the market might be willing to pay in dollars for it.
  - ZeroGravitas 9y ago
    Most land value tax proposals have exemptions for a person's personal home. But even if they didn't, we have financial instruments that can release the value stored in an asset like a home. If the owner looks at the situation and decides to sell and move somewhere cheap and have lots of money to spend then great, if they decide to unlock the value in their land via a mortgage because living exactly there is worth more to them then what they pay in taxes then that's also great. In both situation they are richer, and they have the opportunity to decide how to spend these riches they have accidentally acquired. Either way, they're not poor people. Poor people would be affected by the lack of affordable housing in areas close to work though.
aaronchall 9y ago
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.
- ImSkeptical 9y ago
  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?

justonepost 9y ago

Well, at least it would be a great boon to remote work!