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For a long time, Georgism and other land-centric ideologies were dismissed as out-of-date holdovers from a far more agricultural area. But in recent years, it's

• snidane 6y ago
  Economy hasn't changed much for what matters. Real estate/land is still the dominant market. Economics changed however. Land is no longer a factor of production like it used to in classical economics. Real estate market, despite its size and 99% people involved with 50% of their salary in it, is just an afterthough for a modern economist.
  • foota 6y ago
    I don't think I'd say it's an afterthought for economists, I would argue that it's not talked about because it's pretty simple, but politics is out of touch with economics.
    • Ericson2314 6y ago
      Orthodox neoclassic economics does tend to overly focus on supply constraints, and if you like suburbs for misguided reasons well....we're no where close to actually running out of land!
  • cma 6y ago
    Maybe it isn't completely dominant yet, but attention has had a strong run: https://www.wired.com/1997/12/es-attention/ https://www.wired.com/1997/12/es-attention/
• minikites 6y ago
  Land is like attention: finite and there are no substitutes. Both are critical components of the economy.
  • swiley 6y ago
    And like attention it can go a very long way if you leverage it (by building multi-tenant buildings and other infrastructure) or you can let it rot and have it go nowhere.
• u678u 6y ago
  Here in NJ we're getting screwed by property taxes. 2-3% per year! Try doing that when you're out of work or on social security. Its one of the main reasons people leave.
  • Ericson2314 6y ago
    Are you in a single family home? If so, I have 0 sympathy. Downsize.
    • erentz 6y ago
      NJ has the highest property tax (I think). Note it’s property tax not land value tax so while it has some effect on real estate prices it doesn’t quite create the same incentive for more efficient land use.
      • nine_k 6y ago
        I'd say it may have an inverse effect. Build a nice house on your lot, pay a ton every year. Stay in a shack on that same lot, save a ton every year.
        • Ericson2314 6y ago
          The value of the land still counts towards the total property value, so it's not an inverse effect, but it does decay the more is built until there's no marginal incentive one way or the other.
    • u678u 6y ago
      No I'm in an 2br apartment with my wife and teenage daughter. Taxes are $1600/mo. Still cheaper than the suburbs with good schools.
      • woofyman 6y ago
        You’re apartment is valued at $700,000?
• Semiapies 6y ago
  Georgism is not so much a solution looking for a problem as a problem looking for an excuse to be inflicted.
  • leafmeal 6y ago
    It sounds like you disagree with Georgism. Personally, it makes a lot of sense to me, so I was wondering if you wouldn't mind elaborating on your complaint.
  • strken 6y ago
    Can you elaborate more? Do you mean that people are seduce by a land value tax because it's non-distortionary and fail to consider other downsides? Or do you disagree on other principles?
• dan-robertson 6y ago
  I find I really struggle to believe that a land value tax is progressive. It seems to me that if you are ten times as rich as me then you will use less than ten times the land value I do, making the tax regressive rather than progressive (the case if you would use more than ten times the land value.) While big farms may pay a lot of the tax, that gets pushed to food prices which will have a proportionally larger affect on the poor, even if wealthier people eat more land-intensive foods. A wealthier person in a city could pay for an expensive skyscraper apartment or a taller or higher quality home on a narrow footprint and not pay significantly more tax than someone in a shorter house or lower apartment. It seems the only way for the rich to pay a lot more land tax is for them to go back to having large country estates (that mostly aren’t farmed) which doesn’t seem to be the way the rich are going—most people get and stay rich through businesses which, in western countries, tend to provide services and operate out of a small amount of land rather than farms or mines which exploit their monopoly on land.
  • harbergertaxguy 6y ago
    Harberger tax gets around this problem.
  • brutusborn 6y ago
    Where I am from the majority of rich people are heavily invested in high value land. There have been many studies asssessing the question you describe. I will try to find them when I get some time, I think you will be surprised.
  • bawolff 6y ago
    Does land value mean a flat fee based on number of square foot, or does it include fair market value of the property. Because that penthouse downtown apt definitely cost more than a house in the middle of nowhere, even if its technically smaller.
    • corneliusphi2 6y ago
      It's taxing fair market value of the land. So, if you erased a skyscraper in downtown, how much would that barren plot of land be worth? Tax all of the value there. It's one of the only known taxes that doesn't negatively distort the economy
• lend000 6y ago
  TIL a LVT is currently implemented throughout Denmark, Estonia, Lithuania, Russia, Singapore, and Taiwan. Wouldn't it be more appropriate to analyze these countries rather than Houston when proposing such a dramatic policy shift? EDIT: while Denmark and Singapore are considered very expensive places to live, the rent in Denmark is actually cheaper (while Singapore could be forgiven to some degree due to the country's high density).
  • gustavo-fring 6y ago
    You'd want to do both. You want to see the variation and effects across countries but Houston has a very different culture than all of those places.
  • refurb 6y ago
    LVT in Singapore? Most of Singapore is 99-year lease. At the end you give the land back to the government. Property taxes are quite low.
    • BelenusMordred 6y ago
      > At the end you give the land back to the government I hear this complaint a lot about Singapore, especially from Australians, who seem to forget that most of SG's 99-year leases are until the 2070's. Meanwhile nearly every single property in the Australian Capital Territory has its 99 year lease finalised in the next decade. Most Australians generally don't want to have an honest conversation about those people returning their homes to the government and seem to pretend the leasehold system doesn't even exist. I get the feeling that leasehold and the returning of property to their rightful owners won't stand up well in a democratic society where the majority decides.
      • refurb 6y ago
        I find the 99 year lease thing in Singapore fascinating so have done a bunch of background reading on it. You are correct that most of the leases are good until the late 2000's (since most construction happened in the 1970-90's, but there are some properties built in the 1960's that are on the "downhill slope" of the lease - basically the remaining time is less than the average adult life expectancy (say buy at 30 and live another 60 years). As you said, it's going to be interesting when these start to "expire" in large quantities. What the conversation has been in Singapore so far: - the gov't will "buy out" the remaining lease for some developments and put up new housing. Existing owners will get a payment and a new subsidized house. However, the gov't has said this will be rare (the problem was when this started is people assumed all owners would get this deal so housing prices jumped, even on properties with little lease life left). - if you do an NPV analysis of the value of a 99-year lease, it's pretty much worth the same as a freehold lease for the first couple of decades, then it starts to be priced as a true lease - e.g. what would the NPV of renting it be for X years? that's the purchase price. So if a home rents for $3k per month and has 2 years of lease left, the purchase price would be $72k (minus any time value of money) - the Singapore gov't has also said that it will be proactively initiating the lease-end process 5-10 years prior to avoid masses of people dealing with expired leases at the same time.
• AnthonyMouse 6y ago
  What's interesting about Georgism is that he seems to nail the problem, and the proposed solution might work, but it's also an approximate equivalent to doing something else. Heavily incentivizing new construction. Because that's what LVT would do. If you pay the same, high, tax no matter what then you might as well build skyscrapers until rents fall below the construction cost. At which point the "land value" would trend asymptotically to zero because rents would equal construction costs and the value of the land is only what you can collect from it as rent. It kind of implies that LVT wouldn't generate a lot of revenue if it was implemented faithfully, because land values would crash and with it the "tax base." But in that environment you don't need that much tax revenue. How much social assistance is necessary if an apartment is $100/month and overall cost of living is correspondingly lower because all local businesses are paying similar rents and it's that much easier to start a small business? Which implies that you could get to the same, good, place by heavily incentivizing construction/densification on its own, and in general doing everything possible to reduce market rate rents. Though "stop taxing the building component of real property" is perhaps still a necessary component of that, at which point the argument is maybe only over whether LVT should be the tax we use instead of property tax vs. the tax we use to the exclusion of all others.
  • sagarm 6y ago
    You're right that if you capture 100% of land rent, the price of land effectively drops to zero. At that point you'd need some other way to estimate the land rent.
    • AnthonyMouse 6y ago
      > You're right that if you capture 100% of land rent, the price of land effectively drops to zero. I'm not sure that's not what happens regardless, except for the two things preventing it right now. The first is the existing property tax. If increasing the size of the building on your property increases your property tax, you have to recover that in addition to the construction cost from rents or it isn't worth it. The second is, of course, zoning. Even if it would be cost effective to build a 20 story building on your lot, you can't do it if it's prohibited by law. If you can't build upwards then you have to build outwards, which requires land, which transfers the scarcity of land into a scarcity of housing and prevents rents from falling to the construction cost. And you need to fix that for LVT to do what you want it to do. Otherwise the artificial housing scarcity persists and the money just goes to the government instead of the landlord, and gives the government a direct rather than indirect incentive to maintain (or increase) housing scarcity through restrictive zoning.