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The problem with georgism is that “unimproved value” is a non-market price. It’s just made up by whoever is appointed assessor. Georgism conflates made up “val

The problem with georgism is that “unimproved value” is a non-market price. It’s just made up by whoever is appointed assessor. Georgism conflates made up “value” with market “value”. Ultimately some person has to assess the value of the unimproved land, meaning someone anointed to write down whatever number they want. Value is subjective. There is no such thing as “unimproved land value”, unless you’re talking about the last sale price of a particular unimproved lot. Property taxes in general have this problem, but it’s very acute with unimproved land. Unimproved land is one of the most non-fungible goods there is.

zozbot234 6y ago
Isn't that true of any assessment? With the ordinary property tax, you have to assess both the land value and the improvements. (There are of course ways of taxing property that don't involve that kind of outside assessment, but they're not commonly used.)
- epistasis 6y ago
  Yes, this, most definitely. And the land versus structure value is already calculated for most properties for insurance purposes. Even places (like California) that do not assess tax based on value still have massive fleets of property value assessors that are used during the course of normal market transactions, since those who lend mortgages use them to prevent fraud.
  - LVTfan 6y ago
    The valuation for insurance purposes is generally not the current, depreciated value of the building, but the cost to rebuild, at today's material and labor prices, and with modern materials and systems. A 50 year old building, with old systems, may be fully depreciated, but if one had to rebuild, one would need far more than the current building is worth. When one buys a home with a mortgage, the bank requires an appraisal. In some places, the forms don't even break out land value from building value, or they do it badly. An appraisal merely compares the subject house with others that have sold recently in the same area. Better location? $15,000 more (or, in California, $100,000 more) Inferior location? subtract $15k or $100k. 1 more bathroom? Add $5,000 (CA: might be $5k or $50k) new kitchen vs 20 y/o kitchen? Add $10k, $50k or $100k, or more, depending on what is typically spent in that neighborhood. For each "comparable" add up all the pluses and minuses, and add that to the transaction price for that property. Average those, and the subject house value is estimated. Land value is in there, but not explicit. California has assessors, too, who, after a property has sold, update the assessment on it to equal the transaction price. Some goes to land, some to the building. (check out listings at realtor.com, and fully expand the property history info. Notice when the previous transaction was, and look at the increases. They are in reality mostly land value. Buildings don't appreciate. Land rises and falls in value --- mostly rises.) But appraisers and assessors are very different.
- alexmingoia 6y ago
  None of that changes the fact that there is no inherent value to land (improved or unimproved). Different people value the same piece of land (or any good) differently. This is just reality, regardless of whether someone is appointed to imagine a price for the purposes of taxation.
  - epistasis 6y ago
    You may as well say that nothing has inherent value. The concept of "inherent value" is a bit broken, as the same thing that gives land value (somebody else wants it) is exactly what gives anything else value (somebody else will give you something for it). Valuations in currency are an abstraction for how we deal with this really tricky and intractable problem. But like all abstractions, it's leaky. A $100 bill has no "inherent" value yet it's value is very precisely known.
    - alexmingoia 6y ago
      Yes, nothing has inherent value. Different humans value things differently under different conditions. For example, I may be willing to trade a lot for oranges if no other food is available. But if lots of other food is available, I wouldn’t be willing to trade anything. Some people don’t like oranges and wouldn’t trade anything unless they were starving. This is why prices are always changing in a market. Prices only reveal two individual’s preferences at the time of a particular trade. So you see, there is no inherent value or price to oranges or water or land, or anything. This is a fundamental misunderstanding that Georgists have about the nature of prices and the world. The fact that someone can be appointed to declare an imagined inherent price to water or land or whatever doesn’t change it. Yes, the government does appoint people to do this and it is ridiculous. My house isn’t worth what the government says it is, it’s worth what I’m willing to trade for it.
      - epistasis 6y ago
        I don't think that Georgists have the misunderstanding that you claim. I'm not a Georgist, but I do like many of their ideas and listen to some modern day ones. What you are arguing against, the idea of taxing something based on its "value" where everybody already values things differently, this is not a new thing. It's not hard to implement. We already do it. It's here in the real world. We have property taxes. Each property is unique, non-fungible, everybody has different valuations for every property, and yet somehow we still work out a "market" value. Establishing land values is only a slight modification of establishing property values. It's easily solvable, and the places that have implemented it have not had difficulty establishing the valuations for tax purposes, by basing these valuations off of market transactions. But, you might argue, what if your personal valuations are different than what the "market" values them at? Well good for you, because then you are likely able to find a great deal more value out of a property than what the market values something at. And maybe if the market values something far less than what you value something, then you can hold on to it for cheap! And if the market values something far more than you value something, you can avoid the expense of buying it, or if you have it, you can profit from selling it. If markets are useful for something, it's finding out what a population thinks something is worth. When it comes to land, and who is excluded from using this precious and finite resource, and who is allowed to use it, market valuations are extremely useful. We can watch transactions to figure out who is using up the most of what other people want (i.e. holding land with high market value). If somebody is hoarding a precious resource, but unwilling to pay the taxes to hold onto it, perhaps they don't actually value that resource so much after all.
nabla9 6y ago
There is brilliant way to solve it so that value and market-value meet. Keep the land always in market. It's called Common Ownership Self-Assessed Tax (COST). Land owner would self-assess the value of assets they possess, pay a tax on that value. The owner would be required to sell the asset to anyone willing to purchase them at this self-assessed price. If you value the land high for any reason and want to keep it, you must self-assess the value higher than anyone is willing to pay for it and pay tax for it. If value it too low, someone might buy it.
- andruby 6y ago
  That would mean anyone who has enough money can buy the land that people live on just to harass them. It’s an interesting idea, and I like it in principal, but I also like living in my house on my land knowing that I need to give permission before someone can buy it.
  - nabla9 6y ago
    There would be likely exception for normal sized houses where people actually live or if there is way to asses the value other way. Pay normal n% tax and they can't buy it. Mansions and expensive property would be always on the market.
  - snidane 6y ago
    You solve this easily by assessing value and buying the land rights for a period of time - say 7 years. So basically you lock down the price in an auction once every 7 years giving you enough predictability and time to justify your investment. This is how these groups operate in present day already 1. businesses renting space in cities - they lock down rent for say 10 years 2. individual apartment renters - price is usually locked down for 1 year 3. domain name system - you lock down piece of land in "string space" for a year 4. electromagnetic spectrum auctions (LTE, 5g spectrum bands for telephone companies) every several years usually when new technology is deployed 5. technology patents locked down for 20 years 6. Government LAND to LANDOWNERS - locked down once, with expiration time at infinity and passable down through generations It helps to see what Georgists actually want to achieve with LVT - proper auction mechanism for something everybody needs and there is scarcity of it - land. For political reasons they attack it from the position of tax, not from the position of an auction. Which makes it a bit convoluted and confusing unfortunately.
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zozbot234 6y ago

Isn't that true of any assessment? With the ordinary property tax, you have to assess both the land value and the improvements. (There are of course ways of taxing property that don't involve that kind of outside assessment, but they're not commonly used.)

epistasis 6y ago
Yes, this, most definitely. And the land versus structure value is already calculated for most properties for insurance purposes. Even places (like California) that do not assess tax based on value still have massive fleets of property value assessors that are used during the course of normal market transactions, since those who lend mortgages use them to prevent fraud.
- LVTfan 6y ago
  The valuation for insurance purposes is generally not the current, depreciated value of the building, but the cost to rebuild, at today's material and labor prices, and with modern materials and systems. A 50 year old building, with old systems, may be fully depreciated, but if one had to rebuild, one would need far more than the current building is worth. When one buys a home with a mortgage, the bank requires an appraisal. In some places, the forms don't even break out land value from building value, or they do it badly. An appraisal merely compares the subject house with others that have sold recently in the same area. Better location? $15,000 more (or, in California, $100,000 more) Inferior location? subtract $15k or $100k. 1 more bathroom? Add $5,000 (CA: might be $5k or $50k) new kitchen vs 20 y/o kitchen? Add $10k, $50k or $100k, or more, depending on what is typically spent in that neighborhood. For each "comparable" add up all the pluses and minuses, and add that to the transaction price for that property. Average those, and the subject house value is estimated. Land value is in there, but not explicit. California has assessors, too, who, after a property has sold, update the assessment on it to equal the transaction price. Some goes to land, some to the building. (check out listings at realtor.com, and fully expand the property history info. Notice when the previous transaction was, and look at the increases. They are in reality mostly land value. Buildings don't appreciate. Land rises and falls in value --- mostly rises.) But appraisers and assessors are very different.
alexmingoia 6y ago
None of that changes the fact that there is no inherent value to land (improved or unimproved). Different people value the same piece of land (or any good) differently. This is just reality, regardless of whether someone is appointed to imagine a price for the purposes of taxation.
- epistasis 6y ago
  You may as well say that nothing has inherent value. The concept of "inherent value" is a bit broken, as the same thing that gives land value (somebody else wants it) is exactly what gives anything else value (somebody else will give you something for it). Valuations in currency are an abstraction for how we deal with this really tricky and intractable problem. But like all abstractions, it's leaky. A $100 bill has no "inherent" value yet it's value is very precisely known.
  - alexmingoia 6y ago
    Yes, nothing has inherent value. Different humans value things differently under different conditions. For example, I may be willing to trade a lot for oranges if no other food is available. But if lots of other food is available, I wouldn’t be willing to trade anything. Some people don’t like oranges and wouldn’t trade anything unless they were starving. This is why prices are always changing in a market. Prices only reveal two individual’s preferences at the time of a particular trade. So you see, there is no inherent value or price to oranges or water or land, or anything. This is a fundamental misunderstanding that Georgists have about the nature of prices and the world. The fact that someone can be appointed to declare an imagined inherent price to water or land or whatever doesn’t change it. Yes, the government does appoint people to do this and it is ridiculous. My house isn’t worth what the government says it is, it’s worth what I’m willing to trade for it.
    - epistasis 6y ago
      I don't think that Georgists have the misunderstanding that you claim. I'm not a Georgist, but I do like many of their ideas and listen to some modern day ones. What you are arguing against, the idea of taxing something based on its "value" where everybody already values things differently, this is not a new thing. It's not hard to implement. We already do it. It's here in the real world. We have property taxes. Each property is unique, non-fungible, everybody has different valuations for every property, and yet somehow we still work out a "market" value. Establishing land values is only a slight modification of establishing property values. It's easily solvable, and the places that have implemented it have not had difficulty establishing the valuations for tax purposes, by basing these valuations off of market transactions. But, you might argue, what if your personal valuations are different than what the "market" values them at? Well good for you, because then you are likely able to find a great deal more value out of a property than what the market values something at. And maybe if the market values something far less than what you value something, then you can hold on to it for cheap! And if the market values something far more than you value something, you can avoid the expense of buying it, or if you have it, you can profit from selling it. If markets are useful for something, it's finding out what a population thinks something is worth. When it comes to land, and who is excluded from using this precious and finite resource, and who is allowed to use it, market valuations are extremely useful. We can watch transactions to figure out who is using up the most of what other people want (i.e. holding land with high market value). If somebody is hoarding a precious resource, but unwilling to pay the taxes to hold onto it, perhaps they don't actually value that resource so much after all.

nabla9 6y ago

There is brilliant way to solve it so that value and market-value meet. Keep the land always in market. It's called Common Ownership Self-Assessed Tax (COST). Land owner would self-assess the value of assets they possess, pay a tax on that value. The owner would be required to sell the asset to anyone willing to purchase them at this self-assessed price. If you value the land high for any reason and want to keep it, you must self-assess the value higher than anyone is willing to pay for it and pay tax for it. If value it too low, someone might buy it.

andruby 6y ago
That would mean anyone who has enough money can buy the land that people live on just to harass them. It’s an interesting idea, and I like it in principal, but I also like living in my house on my land knowing that I need to give permission before someone can buy it.
- nabla9 6y ago
  There would be likely exception for normal sized houses where people actually live or if there is way to asses the value other way. Pay normal n% tax and they can't buy it. Mansions and expensive property would be always on the market.
- snidane 6y ago
  You solve this easily by assessing value and buying the land rights for a period of time - say 7 years. So basically you lock down the price in an auction once every 7 years giving you enough predictability and time to justify your investment. This is how these groups operate in present day already 1. businesses renting space in cities - they lock down rent for say 10 years 2. individual apartment renters - price is usually locked down for 1 year 3. domain name system - you lock down piece of land in "string space" for a year 4. electromagnetic spectrum auctions (LTE, 5g spectrum bands for telephone companies) every several years usually when new technology is deployed 5. technology patents locked down for 20 years 6. Government LAND to LANDOWNERS - locked down once, with expiration time at infinity and passable down through generations It helps to see what Georgists actually want to achieve with LVT - proper auction mechanism for something everybody needs and there is scarcity of it - land. For political reasons they attack it from the position of tax, not from the position of an auction. Which makes it a bit convoluted and confusing unfortunately.

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