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Took a fast read at the article. Its a pity he is so angry at Georgism in his writing, and dismissive, but nevertheless he presents a case worth hearing. The i

Took a fast read at the article. Its a pity he is so angry at Georgism in his writing, and dismissive, but nevertheless he presents a case worth hearing. The indifference vote thing is a fantastic idea, so now I know I'm a Geo-Libertarian. A fatal flaw in this essay is that it mentions LVT as a single tax. It is a bit unfair because originally, when Henry george proposed it, total public spending was very low (under 10%), not the 35% of GDP that it is today. LVT can account for 5-10% of GDP, and thus in our modern times it is only applicable as a local tax. The second issue is that it talks about the disadvantages of taxing this way, or the consequences, of which there always are some, but he does not weigh it with property taxes (which exist today), or sales taxes. There are no perfect taxes, its just the "least bad tax". Granted that a state like california already has an issue with property taxes themselves as they are not collected how they should be. Nevertheless, its the best piece I found yet against LVT.

SilasX 8y ago
Good points, all. It is important to keep in mind the difference between the Georgist position that: 1) "LVT is a positive good and governments should try to collect the entire site value of every property." vs the more moderate one that: 2) "LVT is the least bad tax and much preferable to taxing positive economic activity like labor, investment, and exchanges." I think Birch makes a good point that LVT, like all other taxes, will cause horrible distortions once it's high enough. I agree that it's hard to dispute 2), but that's a long way from the 1) promoted in Progress and Poverty. His other good point, I think, was that you don't actually want to tax the site value, but the site value's net contribution from the other sites (i.e. subtract off the positive externalities the site throws onto others), which in practice is hard to calculate, since you only observe O(n) values (land and structure prices) but need to observe a data point for every pair of properties, O(n^2), to calculate the net improvement.

SilasX 8y ago

Good points, all. It is important to keep in mind the difference between the Georgist position that: 1) "LVT is a positive good and governments should try to collect the entire site value of every property." vs the more moderate one that: 2) "LVT is the least bad tax and much preferable to taxing positive economic activity like labor, investment, and exchanges." I think Birch makes a good point that LVT, like all other taxes, will cause horrible distortions once it's high enough. I agree that it's hard to dispute 2), but that's a long way from the 1) promoted in Progress and Poverty. His other good point, I think, was that you don't actually want to tax the site value, but the site value's net contribution from the other sites (i.e. subtract off the positive externalities the site throws onto others), which in practice is hard to calculate, since you only observe O(n) values (land and structure prices) but need to observe a data point for every pair of properties, O(n^2), to calculate the net improvement.