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I've yet to see a single valid objection as to why LVT (Land Value Tax) should not be the primary tax, yet it's nowhere to be found in the political dialogue. S

I've yet to see a single valid objection as to why LVT (Land Value Tax) should not be the primary tax, yet it's nowhere to be found in the political dialogue. Such a shame that the majority of the tax burden instead falls on the working class while the landowners get a free ride.

oDot 6y ago
It actually makes much more sense to use a uniform sales tax: (1) If you spend more, you're taxed more. Obviously this is better for poorer people, who spend less, but also for rich yet reserved people, who keep most of their money in the bank (which lends it) and are earning an income (=productive). Both will not penalized. (2) It's much hard to raise, because people will just stop buying stuff, which is much easier than quitting a job to not pay income tax (3) Being uniform, it doesn't choose favorites. Everything is taxed the same
- blahbhthrow3748 6y ago
  Sales tax fails to capture the accumulation of capital, so (1) is kind of bogus. If you make 100 billion dollars and invest it you and several generations of your family coild live comfortably without ever working and your tax burden would only depend on your spending. A sales-only tax incentivized rent seeking, basically, because the rentiers pay the same taxes as the renters while accumulating capital.
  - LVTfan 6y ago
    and so often it gets invested in land, which includes not just the sites under our feet, but vital natural resources, the kind that are finite in supply.
    - oDot 6y ago
      If you take a look at the data, "investing in land" wasn't as luxurious as it is today, due to government actions inflating the market.
  - oDot 6y ago
    But what is investing other the attempt (aware or unaware) of creating wealth? When people make money, it means someone bought something from them. This means they had to create something other want. That can be a service, a good, or a house for rent. Remember that those who rent houses are people who can't afford to buy them, so they need someone with capital to manage the house. I am renting myself and I much prefer it at the moment to owning a house. You want billionaires to keep their money, because unless they put it under their mattress, they are growing the economy, which means lowering prices and raising quality.
- geofft 6y ago
  > rich yet reserved people, who keep most of their money in the bank (which lends it) and are earning an income (=productive) ... will not penalized. This goes against just about every standard defense of the ability to be rich: that rich people are job creators, that they power the economy by buying things, etc. Why should we discourage them from employing people and buying things? I don't want a loan (that needs to be repaid) from a bank from a rich person, I want the rich person to either employ me or buy goods and services from me. Actually, that's another point - does employment incur your "sales" tax? If not, it's more advantageous to hire a private chef or driver than to pay for a restaurant meal or a taxi trip, which makes the tax regressive - there's a discontinuity when you're able to hire someone instead of getting a service from a business.
  - andrepd 6y ago
    Replace "the rich" with "Lords" and your post is an adequate defense of feudal society. In other words, you're thinking "inside" the system, i.e. justifying the system with itself.
    - geofft 6y ago
      Well, the position I'm arguing against is that the lords should be left alone, that it's better for them to have their fiefdoms be isolated places than to actually employ anyone or purchase anything, and that we should use tax law to incentivize the lords to never interact with the peasants. (Or in other words - my actual position that the nobility should be abolished. I'm just surprised to see someone say not only that it should stay, but that the world would be better if they didn't provide any of the benefits people usually claim in defense of feudal society, so I'm trying to understand what their position is.)
  - oDot 6y ago
    An economy is driven by production, not consumption.
    - geofft 6y ago
      Sure. But the standard way of driving production is private consumption. Given that you have disincentivized the poor from consuming, what is the counterbalance that incentivizes the rich to produce? (There are a couple of standard answers, including government consumption / public works projects, that can address this.)
- DrAwdeOccarim 6y ago
  The issue I've always had with the uniform sales tax idea is that poorer you are, the larger percentage of your money you pay in taxes. As a total cost, it's ultimately regressive.
- zozbot234 6y ago
  Really, the thing is that the whole "single tax idea" is a bit misguided. A consumption tax (sales tax) is great, but there are some sensible reasons to tax capital income/investment to some extent, too. Mostly, because it correlates somewhat with basic ability-to-pay; also, because people might try to disguise income/expenses as investment-related in order to shield them from taxation, and having a more uniform tax base helps prevent this. But the broad principle that capital investment should bear a lower tax burden is quite correct. And one you've accepted that general principle, it makes a lot of sense to tax rent-generating assets like land and spectrum rights (since those are not really "capital" in the first place), which is pretty much the Georgist idea.
  - oDot 6y ago
    > Mostly, because it correlates somewhat with basic ability-to-pay; What do you care about ability-to-pay? > ...also, because people might try to disguise income/expenses as investment-related in order to shield them from taxation, and having a more uniform tax base helps prevent this. You can't shield from that tax. All entities pay, for every sale, no refunds.
    - zozbot234 6y ago
      > What do you care about ability-to-pay? Because it helps align incentives. You can have a 7% tax on sales, or a 5% tax on sales plus a 2% tax based on a noisy correlate. The latter will raise more revenue at a lower excess cost. > You can't shield from that tax. All entities pay, for every sale, no refunds. That would make it a tax on revenue, which is quite distortionary indeed and generally considered a last-resort. (Or you could have a VAT, where all entities pay but tax paid on non-final sales is refunded. VATs are quite good but not totally free of this kind of gaming.)
      - oDot 6y ago
        > Because it helps align incentives. You can have a 7% tax on sales, or a 5% tax on sales plus a 2% tax based on a noisy correlate. The latter will raise more revenue at a lower excess cost. I see. Well we seems to have different goals. As I see it, government is mostly good at destroying wealth, and so I aim to minimize their revenue. > That would make it a tax on revenue, which is quite distortionary indeed and generally considered a last-resort. (Or you could have a VAT, where all entities pay but tax paid on non-final sales is refunded. VATs are quite good but not totally free of this kind of gaming.) I am essentially suggesting a non-refundable, uniform VAT
alexmingoia 6y ago
Land value (like all value) is subjective. There is no inherent value to land. What one person is willing to pay is not the same for everyone. Appointing someone to imagine a price for the purposes of taxation doesn't change this fact.
- LVTfan 6y ago
  Every teardown provides a clear picture of the land value for that neighborhood: the transaction price plus the cost of clearing off the old building. The similar sized lot next door is worth just as much. And the value of whatever improvement is on it is the difference between what the building-plus-land is currently worth, and the value of the land -- pretty much the depreciated value of the existing improvements. Map these values, and you have a pretty good tool for good land assessments. And for lots a wider or narrower, or deeper or shallower, there have been very usable tables for over 100 years. NYC was doing this in the first decade of the 20th century. A tax on land values asks us to pay to exclude others from our site. In the middle of nowhere, that price can be $0. On valuable sites, it can be quite high. Today, a lot of city land is leased, and the tenant pays the landlord for the use of the land. The higgling of the market sets the price. There is a lot of revenue potential there, and collecting it for public purposes doesn't take from anyone something he created. And that can't be said for sales taxes, or wage taxes, or taxes on buildings.
- snidane 6y ago
  Property taxes are bad because they punish labor and effort. Land tax (important to distinguish) doesn't inhibit labor and effort. On the contrary cities implementing land taxes see increase in output because land gets better allocated to who need it. Simply because people sitting on vacant and absent land in the middle od cities drop it and sell it somebody else. Land is not subjective but perfectly objective. It is a necessary input to all production - whether it is agricultural (obvious) or manufacturing (your factory has to be placed somewhere) or services (you need access to concentrated area for qualified workers in big cities). You can't even survive without standing on land. 100% of people need land to survive so how can it be subjective? It might be subjective to birds.
- _0ffh 6y ago
CydeWeys 6y ago
What tax should tech companies pay then, given that the only land they really need is cheap rural land for data centers? This taxation system does make sense for land, but there's way more economic activity happening that isn't associated with land than there is that is.
- LVTfan 6y ago
  They generally locate where they can draw on a pool of talented people, and those people are drawn by social amenities, good schools, good infrastructure. All those things contribute to land value.
  - CydeWeys 6y ago
    You're not being concrete. How do you properly tax a tech company whose land allocation is negligible compared to the overall value of the company? Tech companies have less than 1% of their value tied up in land. If they're all-remote and cloud-based, then they have $0 in land. How would you even tax them if the only tax is based on land? Also, I live in an apartment. Should my tax be $0? Or if I owned and lived on land way out in a rural area where a small plot is only worth a few thousand bucks, do I only pay tax on that despite my income being mid six figures? The point is, as a knowledge worker, my economic productivity is entirely divorced from land. This is true of most white collar workers. Land value taxes may have made sense as the primary tax hundreds of years ago but they don't make sense for that purpose now.
    - xiphias2 6y ago
      The whole point of this tax type is encouraging efficiency. Tech companies are usually efficient, and taxing them less increases their efficiency even more. At the same time their harmful effects should be regulated (GDPR is an example of such regulation). Countries and states that let tech companies thrive are winning the race for capital.
      - CydeWeys 6y ago
PeterisP 6y ago
Some time ago wealth and production of wealth was heavily tied to land, agriculture and various natural resources were key to the wealth of a nation. This is not the case any more - only a tiny fraction of our economy is tied to the land, primary production (agriculture/forestry/fishing and mining including oil) is just a few percent of the total economy; real estate/rents/leasing is perhaps 15% but most of that is related to the value of buildings, not the value of land. For extremely wealthy people, almost nothing of their wealth or income is in the form of land, because land is not worth that much. The current billionaires aren't major landowners, we're not Victorian age with most of the upper class being rentiers living off the rents of their land estates; the upper class is living off the dividends of their capital which is not tied to land and would be tax-free in a land-tax-only regime. Extremely large taxes on land (or are we talking about an orders of magnitude reduction in the toal tax burden, and not just about the type of taxation? If we want to drastically cut the total volume of taxes, then that becomes the main topic, not the means of collecting taxes) while not the taxing the other 90% of the economy at all is not really a reasonable solution for modern times. It may have been reasonable in 1870s, but right now all it would just remove pretty much all taxes from all the very wealthy people and corporations, while putting all the tax burden on owners of farms and homes, and the 1.5% of USA economy that handles mining.
- MiroF 6y ago
  "Land" for George is just things you can rent-seek on and are fixed in supply, that includes stuff like intellectual property, etc. > real estate/rents/leasing is perhaps 15% but most of that is related to the value of buildings, not the value of land. Not at all clear that most of that is related to the value of the building and also you conveniently neglect to mention that that is the largest share of GDP out of any industry in the world. Further, land includes a lot more stuff that is not counted in the economic measures you are using. [0] [0]: https://www.emerald.com/insight/content/doi/10.1108/03068290910947930/full/html https://www.emerald.com/insight/content/doi/10.1108/03068290...
  - CydeWeys 6y ago
    How do you determine the value of intellectual property if not by looking at how much income is actually being derived from said IP? And at that point, don't you just have the same income-based corporate taxation that we already have, with extra steps?
zozbot234 6y ago
It is often considered a "narrow" tax base - just not enough for a "single" tax, all things considered. (That's largely because the burden of existing taxes is already being borne by land, at least to a significant extent. They just have additional disincentive effects, quite separate from that sort of final tax incidence.) But even then, it's clearly enough to fund local government expenses, so there's really no excuse for why we aren't using it.
neilwilson 6y ago
The primary purpose of taxation in a sovereign economy is to free goods and services up for deployment by the public sphere. What does the government want with all that land? Are you sure you have enough fungibility in your economy so that it will free up doctors, judges, refuse collectors or whatever and all the real goods that their salaries actually represent so that you can achieve the public purpose that is the reason you are taxing in the first place? In any Modern Money informed Targeted Taxation regime what you really want to tax is whoever is using the things government wants to use instead. And that, paradoxically, means the ideal tax is likely a Wage tax paid by businesses for the use of labour. That reduces the demand for labour in a controlled way, and those people are then hired (directly or indirectly) by government to do whatever the polity asked them to do when they were elected. Do that and you can probably scrap any income tax completely - meaning whatever an individual earns they get to keep. Bear in mind that if the labour resource is already free (aka unemployed) then there is no need to tax to free them up in the first place...
- tlholaday 6y ago
  > What does the government want with all that land? You are correct that the government does not want land. What the government wants is a share of the economic value that control of the land makes possible. Consider "vacant storefronts." The government does not want to operate stores. The government wants those storefronts put to good economic use, where what is good use is determined by bona fide auctions.
- jabl 6y ago
  Do you have any references for further reading on this topic? And how is a wage tax different from an income tax? It might not show up on an employee's payroll, but the end result is the same, no? And if you're not taxing capital/capital gains in any way, won't this cause inequality to shoot up even more than it already is?
logicprog 6y ago
Don't know if you'll consider these valid, but here are some critiques of the LVT and Georgism: - https://mises.org/wire/murray-rothbard-and-henry-george https://mises.org/wire/murray-rothbard-and-henry-george - https://mises.org/library/single-tax-economic-and-moral-implications https://mises.org/library/single-tax-economic-and-moral-impl... - https://www.econlib.org/archives/2012/02/a_search-theore.html https://www.econlib.org/archives/2012/02/a_search-theore.htm... The best criticism I've found, however, is here: https://www.orionsarm.com/fm_store/Critique%20of%20Georgism.htm https://www.orionsarm.com/fm_store/Critique%20of%20Georgism..... It's from a more mainstream economist POV (I think?) than the other links and is far more fair and detailed.
- snidane 6y ago
  Thanks for the articles providing feedback to georgist ideas - I've read some of these but some are new to me. The authors seem not to understand the topic unfortunately and have to use long prose as they are trying to wrap their head around it. The core problem and idea for solution is actually quite simple. Let me condense the topic into a tweet or two. --- Problem: You have a naturally occuring resource which is scarce and which nobody created. How do you allocate it to humans? Solution: Georgist simply say you can use an auction granting you possession for some amount of time instead of giving you time unlimited rights just because you were first to ask to use it. --- This is not a theory as it is applied in many systems such as DNS allocation or electromagnetic spectrum allocation. Georgists point out that similar allocation problem is for "land" (think location) and the same auction mechanism can be applied. Land was considered abundant in the past, especially as new continents were being discovered. Therefore nobody though about allocation, same as nobody considers allocation of air. If air got severely polluted (say by radioactivity) and only small fraction remained usable for humanity, you can be assured that the same allocation problem would exist for air. After discovering all continents on Earth land ceased to be abundant and now requires a proper allocation mechanism. Otherwise landlord monopolies will continue piling up profits because of their luck in winning the infinitely durable possession rights allocated years, decades and centuries ago in badly structured auction. Either we start inhabiting new planets or we solve problem of allocation of important scarce resources. What's funny - you solve this allocation problem and many societal problems disappear as if by magic. Somehow this suggests that land allocation is a major root cause of society. That's why Georgists dwell on it so much. You should start solving problems from the most serious ones with high impact.
AnimalMuppet 6y ago
And I have yet to see a single valid reason as to why LTV should be the primary tax. I've seen a lot of words, but they all seem to start by assuming that LTV would be fair and the current system is not. That forms a very poor basis for convincing people who don't already agree. Here's my argument against LTV: Warren Buffet owns one modest house in Omaha. Should he be taxed based on the land value of that modest house, and nothing more? That hardly seems fair.
- LVTfan 6y ago
  Most of his stock holdings occupy land in very valuable places, and aren't paying much in property tax. The principle is to pay for what you take, not for what you make. His modest home, likely on a modest lot, in a not-huge city, is worth little. For a while, he had a couple of places in Malibu, and he told the WSJ what he thought of Proposition 13, keeping the taxes ridiculously low. Arnold Schwarznegger told him to go do pushups. Buffett saw the injustice.
  - AnimalMuppet 6y ago
    Sure, his home is worth little, but he's worth billions. Should he be taxed based on his billions, or only based on his home? I see the injustice in your proposal. And, most of his stock holdings occupy land in very valuable places? True to some small degree, but not all that true overall. Take Coca-Cola, for instance. They own some very valuable land in Atlanta. But the value of Coca-Cola is much more than the value of the land, and is mostly unrelated to the value of the land. Should Coca-Cola be taxed based on the value of Coca-Cola, or on the value of Coca-Cola's land?
    - LVTfan 6y ago
      To the degree that Coca-Cola is harming people, they owe something. Coke likely occupies a very valuable site in Atlanta, and perhaps has O&O bottlers on locally valuable sites, near centers of population, served well by transportation infrastructure that brings ingredients in and finished products to the customers. When communities start collecting the full value of those sites (and stop burdening the buildings and equipment with taxes) who will be harmed? Should Coca-Cola be taxed on its good will? or for adding to people's satisfaction? The biggest promoters of Henry George's single tax were business people who saw a way to a more just society in which all could prosper. But there were others -- railroad, steel, other monopolies -- whose continued position depended on keeping their monopolies, and they were less than enthusiastic about the concept. Who owns the land in the central business district of most cities? Often it is the corporations that use it, but frequently it is trusts of people long dead, whose heirs just keep enjoying the ever-rising land rent. They didn't create the value. The corporations should pay for the value of the land they use; so should the trusts who collect the land rent of our most valuable sites. And the value of Warren Buffett's holdings might be affected, but the freer market it will create will provide opportunities for all sorts of entrepreneurs to work their business plans. And recall the data on how concentrated stock ownership is.
crazygringo 6y ago
I mean... the objection is that it's incredibly arbitrary, greatly affecting one part of the economy and leaving others untouched. Why not a radio spectrum tax as the primary tax instead? Or an oxygen tax proportional to your lung size? Or a clean water tax, or a tax on the weight of your grocery consumption, or a tax on the weight of the garbage you produce, or the carbon you consume? All of those are valuable resources. That's why it's not found in the political dialog, because it's super-arbitrary and would therefore have grossly distorting effects. Why should a low-margin supermarket which people need, occupying tons of space, pay huge taxes, while a tiny very profitable ultra-luxury boutique hotel pays only 5% of the taxes? Taxation needs to be applied with some combination of minimizing distortion and achieving some level of progressivism. A land value tax is absolutely terrible at both of those.
- balfirevic 6y ago
  Land value tax is considered among the economists as being one of the least distortionary taxes.
  - crazygringo 6y ago
    I don't believe so. It's considered to remove distortions in land use, as compared to property taxes that include the value of structures. In other words, you get less vacant lots and more productive use of land. Which there are good arguments for. But proposing to replace income and sales taxes with land value taxes, making it the primary tax -- which would necessarily skyrocket the land value tax to produce the same tax revenue at the end of the day -- would be extremely distortionary.
    - deleted 6y ago
      [deleted]
    - VHRanger 6y ago
      > I don't believe so. Thanks for giving your off the cuff opinion against a consensus of people studying the question > which would necessarily skyrocket the land value tax to produce the same tax revenue at the end of the day -- would be extremely distortionary. It's distortionary against the existing distortions, by reducing them. Anything reducing tax distortions is "distortionary" by your argument's logic

oDot 6y ago

It actually makes much more sense to use a uniform sales tax: (1) If you spend more, you're taxed more. Obviously this is better for poorer people, who spend less, but also for rich yet reserved people, who keep most of their money in the bank (which lends it) and are earning an income (=productive). Both will not penalized. (2) It's much hard to raise, because people will just stop buying stuff, which is much easier than quitting a job to not pay income tax (3) Being uniform, it doesn't choose favorites. Everything is taxed the same

blahbhthrow3748 6y ago
Sales tax fails to capture the accumulation of capital, so (1) is kind of bogus. If you make 100 billion dollars and invest it you and several generations of your family coild live comfortably without ever working and your tax burden would only depend on your spending. A sales-only tax incentivized rent seeking, basically, because the rentiers pay the same taxes as the renters while accumulating capital.
- LVTfan 6y ago
  and so often it gets invested in land, which includes not just the sites under our feet, but vital natural resources, the kind that are finite in supply.
  - oDot 6y ago
    If you take a look at the data, "investing in land" wasn't as luxurious as it is today, due to government actions inflating the market.
- oDot 6y ago
  But what is investing other the attempt (aware or unaware) of creating wealth? When people make money, it means someone bought something from them. This means they had to create something other want. That can be a service, a good, or a house for rent. Remember that those who rent houses are people who can't afford to buy them, so they need someone with capital to manage the house. I am renting myself and I much prefer it at the moment to owning a house. You want billionaires to keep their money, because unless they put it under their mattress, they are growing the economy, which means lowering prices and raising quality.
geofft 6y ago
> rich yet reserved people, who keep most of their money in the bank (which lends it) and are earning an income (=productive) ... will not penalized. This goes against just about every standard defense of the ability to be rich: that rich people are job creators, that they power the economy by buying things, etc. Why should we discourage them from employing people and buying things? I don't want a loan (that needs to be repaid) from a bank from a rich person, I want the rich person to either employ me or buy goods and services from me. Actually, that's another point - does employment incur your "sales" tax? If not, it's more advantageous to hire a private chef or driver than to pay for a restaurant meal or a taxi trip, which makes the tax regressive - there's a discontinuity when you're able to hire someone instead of getting a service from a business.
- andrepd 6y ago
  Replace "the rich" with "Lords" and your post is an adequate defense of feudal society. In other words, you're thinking "inside" the system, i.e. justifying the system with itself.
  - geofft 6y ago
    Well, the position I'm arguing against is that the lords should be left alone, that it's better for them to have their fiefdoms be isolated places than to actually employ anyone or purchase anything, and that we should use tax law to incentivize the lords to never interact with the peasants. (Or in other words - my actual position that the nobility should be abolished. I'm just surprised to see someone say not only that it should stay, but that the world would be better if they didn't provide any of the benefits people usually claim in defense of feudal society, so I'm trying to understand what their position is.)
- oDot 6y ago
  An economy is driven by production, not consumption.
  - geofft 6y ago
    Sure. But the standard way of driving production is private consumption. Given that you have disincentivized the poor from consuming, what is the counterbalance that incentivizes the rich to produce? (There are a couple of standard answers, including government consumption / public works projects, that can address this.)
DrAwdeOccarim 6y ago
The issue I've always had with the uniform sales tax idea is that poorer you are, the larger percentage of your money you pay in taxes. As a total cost, it's ultimately regressive.
zozbot234 6y ago
Really, the thing is that the whole "single tax idea" is a bit misguided. A consumption tax (sales tax) is great, but there are some sensible reasons to tax capital income/investment to some extent, too. Mostly, because it correlates somewhat with basic ability-to-pay; also, because people might try to disguise income/expenses as investment-related in order to shield them from taxation, and having a more uniform tax base helps prevent this. But the broad principle that capital investment should bear a lower tax burden is quite correct. And one you've accepted that general principle, it makes a lot of sense to tax rent-generating assets like land and spectrum rights (since those are not really "capital" in the first place), which is pretty much the Georgist idea.
- oDot 6y ago
  > Mostly, because it correlates somewhat with basic ability-to-pay; What do you care about ability-to-pay? > ...also, because people might try to disguise income/expenses as investment-related in order to shield them from taxation, and having a more uniform tax base helps prevent this. You can't shield from that tax. All entities pay, for every sale, no refunds.
  - zozbot234 6y ago
    > What do you care about ability-to-pay? Because it helps align incentives. You can have a 7% tax on sales, or a 5% tax on sales plus a 2% tax based on a noisy correlate. The latter will raise more revenue at a lower excess cost. > You can't shield from that tax. All entities pay, for every sale, no refunds. That would make it a tax on revenue, which is quite distortionary indeed and generally considered a last-resort. (Or you could have a VAT, where all entities pay but tax paid on non-final sales is refunded. VATs are quite good but not totally free of this kind of gaming.)
    - oDot 6y ago
      > Because it helps align incentives. You can have a 7% tax on sales, or a 5% tax on sales plus a 2% tax based on a noisy correlate. The latter will raise more revenue at a lower excess cost. I see. Well we seems to have different goals. As I see it, government is mostly good at destroying wealth, and so I aim to minimize their revenue. > That would make it a tax on revenue, which is quite distortionary indeed and generally considered a last-resort. (Or you could have a VAT, where all entities pay but tax paid on non-final sales is refunded. VATs are quite good but not totally free of this kind of gaming.) I am essentially suggesting a non-refundable, uniform VAT

alexmingoia 6y ago

Land value (like all value) is subjective. There is no inherent value to land. What one person is willing to pay is not the same for everyone. Appointing someone to imagine a price for the purposes of taxation doesn't change this fact.

LVTfan 6y ago
Every teardown provides a clear picture of the land value for that neighborhood: the transaction price plus the cost of clearing off the old building. The similar sized lot next door is worth just as much. And the value of whatever improvement is on it is the difference between what the building-plus-land is currently worth, and the value of the land -- pretty much the depreciated value of the existing improvements. Map these values, and you have a pretty good tool for good land assessments. And for lots a wider or narrower, or deeper or shallower, there have been very usable tables for over 100 years. NYC was doing this in the first decade of the 20th century. A tax on land values asks us to pay to exclude others from our site. In the middle of nowhere, that price can be $0. On valuable sites, it can be quite high. Today, a lot of city land is leased, and the tenant pays the landlord for the use of the land. The higgling of the market sets the price. There is a lot of revenue potential there, and collecting it for public purposes doesn't take from anyone something he created. And that can't be said for sales taxes, or wage taxes, or taxes on buildings.
snidane 6y ago
Property taxes are bad because they punish labor and effort. Land tax (important to distinguish) doesn't inhibit labor and effort. On the contrary cities implementing land taxes see increase in output because land gets better allocated to who need it. Simply because people sitting on vacant and absent land in the middle od cities drop it and sell it somebody else. Land is not subjective but perfectly objective. It is a necessary input to all production - whether it is agricultural (obvious) or manufacturing (your factory has to be placed somewhere) or services (you need access to concentrated area for qualified workers in big cities). You can't even survive without standing on land. 100% of people need land to survive so how can it be subjective? It might be subjective to birds.
_0ffh 6y ago

CydeWeys 6y ago

What tax should tech companies pay then, given that the only land they really need is cheap rural land for data centers? This taxation system does make sense for land, but there's way more economic activity happening that isn't associated with land than there is that is.

LVTfan 6y ago
They generally locate where they can draw on a pool of talented people, and those people are drawn by social amenities, good schools, good infrastructure. All those things contribute to land value.
- CydeWeys 6y ago
  You're not being concrete. How do you properly tax a tech company whose land allocation is negligible compared to the overall value of the company? Tech companies have less than 1% of their value tied up in land. If they're all-remote and cloud-based, then they have $0 in land. How would you even tax them if the only tax is based on land? Also, I live in an apartment. Should my tax be $0? Or if I owned and lived on land way out in a rural area where a small plot is only worth a few thousand bucks, do I only pay tax on that despite my income being mid six figures? The point is, as a knowledge worker, my economic productivity is entirely divorced from land. This is true of most white collar workers. Land value taxes may have made sense as the primary tax hundreds of years ago but they don't make sense for that purpose now.
  - xiphias2 6y ago
    The whole point of this tax type is encouraging efficiency. Tech companies are usually efficient, and taxing them less increases their efficiency even more. At the same time their harmful effects should be regulated (GDPR is an example of such regulation). Countries and states that let tech companies thrive are winning the race for capital.
    - CydeWeys 6y ago

PeterisP 6y ago

Some time ago wealth and production of wealth was heavily tied to land, agriculture and various natural resources were key to the wealth of a nation. This is not the case any more - only a tiny fraction of our economy is tied to the land, primary production (agriculture/forestry/fishing and mining including oil) is just a few percent of the total economy; real estate/rents/leasing is perhaps 15% but most of that is related to the value of buildings, not the value of land. For extremely wealthy people, almost nothing of their wealth or income is in the form of land, because land is not worth that much. The current billionaires aren't major landowners, we're not Victorian age with most of the upper class being rentiers living off the rents of their land estates; the upper class is living off the dividends of their capital which is not tied to land and would be tax-free in a land-tax-only regime. Extremely large taxes on land (or are we talking about an orders of magnitude reduction in the toal tax burden, and not just about the type of taxation? If we want to drastically cut the total volume of taxes, then that becomes the main topic, not the means of collecting taxes) while not the taxing the other 90% of the economy at all is not really a reasonable solution for modern times. It may have been reasonable in 1870s, but right now all it would just remove pretty much all taxes from all the very wealthy people and corporations, while putting all the tax burden on owners of farms and homes, and the 1.5% of USA economy that handles mining.

MiroF 6y ago
"Land" for George is just things you can rent-seek on and are fixed in supply, that includes stuff like intellectual property, etc. > real estate/rents/leasing is perhaps 15% but most of that is related to the value of buildings, not the value of land. Not at all clear that most of that is related to the value of the building and also you conveniently neglect to mention that that is the largest share of GDP out of any industry in the world. Further, land includes a lot more stuff that is not counted in the economic measures you are using. [0] [0]: https://www.emerald.com/insight/content/doi/10.1108/03068290910947930/full/html https://www.emerald.com/insight/content/doi/10.1108/03068290...
- CydeWeys 6y ago
  How do you determine the value of intellectual property if not by looking at how much income is actually being derived from said IP? And at that point, don't you just have the same income-based corporate taxation that we already have, with extra steps?

zozbot234 6y ago

It is often considered a "narrow" tax base - just not enough for a "single" tax, all things considered. (That's largely because the burden of existing taxes is already being borne by land, at least to a significant extent. They just have additional disincentive effects, quite separate from that sort of final tax incidence.) But even then, it's clearly enough to fund local government expenses, so there's really no excuse for why we aren't using it.

neilwilson 6y ago

The primary purpose of taxation in a sovereign economy is to free goods and services up for deployment by the public sphere. What does the government want with all that land? Are you sure you have enough fungibility in your economy so that it will free up doctors, judges, refuse collectors or whatever and all the real goods that their salaries actually represent so that you can achieve the public purpose that is the reason you are taxing in the first place? In any Modern Money informed Targeted Taxation regime what you really want to tax is whoever is using the things government wants to use instead. And that, paradoxically, means the ideal tax is likely a Wage tax paid by businesses for the use of labour. That reduces the demand for labour in a controlled way, and those people are then hired (directly or indirectly) by government to do whatever the polity asked them to do when they were elected. Do that and you can probably scrap any income tax completely - meaning whatever an individual earns they get to keep. Bear in mind that if the labour resource is already free (aka unemployed) then there is no need to tax to free them up in the first place...

tlholaday 6y ago
> What does the government want with all that land? You are correct that the government does not want land. What the government wants is a share of the economic value that control of the land makes possible. Consider "vacant storefronts." The government does not want to operate stores. The government wants those storefronts put to good economic use, where what is good use is determined by bona fide auctions.
jabl 6y ago
Do you have any references for further reading on this topic? And how is a wage tax different from an income tax? It might not show up on an employee's payroll, but the end result is the same, no? And if you're not taxing capital/capital gains in any way, won't this cause inequality to shoot up even more than it already is?

logicprog 6y ago

Don't know if you'll consider these valid, but here are some critiques of the LVT and Georgism: - https://mises.org/wire/murray-rothbard-and-henry-george https://mises.org/wire/murray-rothbard-and-henry-george - https://mises.org/library/single-tax-economic-and-moral-implications https://mises.org/library/single-tax-economic-and-moral-impl... - https://www.econlib.org/archives/2012/02/a_search-theore.html https://www.econlib.org/archives/2012/02/a_search-theore.htm... The best criticism I've found, however, is here: https://www.orionsarm.com/fm_store/Critique%20of%20Georgism.htm https://www.orionsarm.com/fm_store/Critique%20of%20Georgism..... It's from a more mainstream economist POV (I think?) than the other links and is far more fair and detailed.

snidane 6y ago
Thanks for the articles providing feedback to georgist ideas - I've read some of these but some are new to me. The authors seem not to understand the topic unfortunately and have to use long prose as they are trying to wrap their head around it. The core problem and idea for solution is actually quite simple. Let me condense the topic into a tweet or two. --- Problem: You have a naturally occuring resource which is scarce and which nobody created. How do you allocate it to humans? Solution: Georgist simply say you can use an auction granting you possession for some amount of time instead of giving you time unlimited rights just because you were first to ask to use it. --- This is not a theory as it is applied in many systems such as DNS allocation or electromagnetic spectrum allocation. Georgists point out that similar allocation problem is for "land" (think location) and the same auction mechanism can be applied. Land was considered abundant in the past, especially as new continents were being discovered. Therefore nobody though about allocation, same as nobody considers allocation of air. If air got severely polluted (say by radioactivity) and only small fraction remained usable for humanity, you can be assured that the same allocation problem would exist for air. After discovering all continents on Earth land ceased to be abundant and now requires a proper allocation mechanism. Otherwise landlord monopolies will continue piling up profits because of their luck in winning the infinitely durable possession rights allocated years, decades and centuries ago in badly structured auction. Either we start inhabiting new planets or we solve problem of allocation of important scarce resources. What's funny - you solve this allocation problem and many societal problems disappear as if by magic. Somehow this suggests that land allocation is a major root cause of society. That's why Georgists dwell on it so much. You should start solving problems from the most serious ones with high impact.

AnimalMuppet 6y ago

And I have yet to see a single valid reason as to why LTV should be the primary tax. I've seen a lot of words, but they all seem to start by assuming that LTV would be fair and the current system is not. That forms a very poor basis for convincing people who don't already agree. Here's my argument against LTV: Warren Buffet owns one modest house in Omaha. Should he be taxed based on the land value of that modest house, and nothing more? That hardly seems fair.

LVTfan 6y ago
Most of his stock holdings occupy land in very valuable places, and aren't paying much in property tax. The principle is to pay for what you take, not for what you make. His modest home, likely on a modest lot, in a not-huge city, is worth little. For a while, he had a couple of places in Malibu, and he told the WSJ what he thought of Proposition 13, keeping the taxes ridiculously low. Arnold Schwarznegger told him to go do pushups. Buffett saw the injustice.
- AnimalMuppet 6y ago
  Sure, his home is worth little, but he's worth billions. Should he be taxed based on his billions, or only based on his home? I see the injustice in your proposal. And, most of his stock holdings occupy land in very valuable places? True to some small degree, but not all that true overall. Take Coca-Cola, for instance. They own some very valuable land in Atlanta. But the value of Coca-Cola is much more than the value of the land, and is mostly unrelated to the value of the land. Should Coca-Cola be taxed based on the value of Coca-Cola, or on the value of Coca-Cola's land?
  - LVTfan 6y ago
    To the degree that Coca-Cola is harming people, they owe something. Coke likely occupies a very valuable site in Atlanta, and perhaps has O&O bottlers on locally valuable sites, near centers of population, served well by transportation infrastructure that brings ingredients in and finished products to the customers. When communities start collecting the full value of those sites (and stop burdening the buildings and equipment with taxes) who will be harmed? Should Coca-Cola be taxed on its good will? or for adding to people's satisfaction? The biggest promoters of Henry George's single tax were business people who saw a way to a more just society in which all could prosper. But there were others -- railroad, steel, other monopolies -- whose continued position depended on keeping their monopolies, and they were less than enthusiastic about the concept. Who owns the land in the central business district of most cities? Often it is the corporations that use it, but frequently it is trusts of people long dead, whose heirs just keep enjoying the ever-rising land rent. They didn't create the value. The corporations should pay for the value of the land they use; so should the trusts who collect the land rent of our most valuable sites. And the value of Warren Buffett's holdings might be affected, but the freer market it will create will provide opportunities for all sorts of entrepreneurs to work their business plans. And recall the data on how concentrated stock ownership is.

crazygringo 6y ago

I mean... the objection is that it's incredibly arbitrary, greatly affecting one part of the economy and leaving others untouched. Why not a radio spectrum tax as the primary tax instead? Or an oxygen tax proportional to your lung size? Or a clean water tax, or a tax on the weight of your grocery consumption, or a tax on the weight of the garbage you produce, or the carbon you consume? All of those are valuable resources. That's why it's not found in the political dialog, because it's super-arbitrary and would therefore have grossly distorting effects. Why should a low-margin supermarket which people need, occupying tons of space, pay huge taxes, while a tiny very profitable ultra-luxury boutique hotel pays only 5% of the taxes? Taxation needs to be applied with some combination of minimizing distortion and achieving some level of progressivism. A land value tax is absolutely terrible at both of those.

balfirevic 6y ago
Land value tax is considered among the economists as being one of the least distortionary taxes.
- crazygringo 6y ago
  I don't believe so. It's considered to remove distortions in land use, as compared to property taxes that include the value of structures. In other words, you get less vacant lots and more productive use of land. Which there are good arguments for. But proposing to replace income and sales taxes with land value taxes, making it the primary tax -- which would necessarily skyrocket the land value tax to produce the same tax revenue at the end of the day -- would be extremely distortionary.
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  - VHRanger 6y ago
    > I don't believe so. Thanks for giving your off the cuff opinion against a consensus of people studying the question > which would necessarily skyrocket the land value tax to produce the same tax revenue at the end of the day -- would be extremely distortionary. It's distortionary against the existing distortions, by reducing them. Anything reducing tax distortions is "distortionary" by your argument's logic