5 ms·

https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism TL;DR: things that people produce such as labor, products, and services are not t

by api 5y ago

https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism TL;DR: things that people produce such as labor, products, and services are not taxed at all. No payroll taxes, no sales tax, no income tax, and no capital gains tax on investments in productive activity or human-made capital. Things that people did not produce such as land or the right to extract natural resources are taxed. For land the land value is taxed, but this does not include the value of things built on the land. You're basically billed for the right to "own" things that existed before any of us were born. Since not much else is taxed, these taxes could be rather steep. This strongly incentivizes efficient use of land and natural resources and discourages non-productive squatting on them. You would not see, for example, a bunch of self-storage places and gigantic sprawling car washes in Silicon Valley. The land value taxes in such an area would be far too high to justify anything but highly efficient productive uses of the land such as housing, manufacturing, offices, etc. Vertical construction would be highly incentivized in high value areas.

deepnotderp 5y ago
Yeah I’m personally a fan of Georgism but realistically something like a LVT is too radical to implement. I think that a carefully thought out property tax code (eg higher taxes for lower density buildings) can get you 80% of the way to the effects of a LVT while being pragmatic enough to implement today.
- larsiusprime 5y ago
  You could actually do a lot to adapt existing property tax regimes into something like a very close approximation of an LVT. Step 1 would just be improving the quality of assessments to take advantage of the state of the art of the latest mass appraisal methods (which requires no change in law, just requires you to influence the training and/or appointment/election of local assessors) from the last 15 years. Step 2 would be lowering the tax rate on improvements and shifting the burden off of buildings and onto land; this is barred in certain states but is perfectly legal in others.
  - sokoloff 5y ago
    Lowering the tax rate on improvements would probably have the side effect of having more remodeling work be inspected. Much of the avoidance of building permits (and associated inspections) is about avoiding increased assessments and associated taxes. This in turn would likely lead to less totally slipshod remodeling work, at least by people who weren’t aiming for that outcome.
    - larsiusprime 5y ago
      Wait why would LOWERING the tax rate on improvements INCREASE the amount of building inspections? Are you assuming that this would lead to an increased reliance on the cost approach for assessments?
      - sokoloff 5y ago
        With a high tax on improvements (as is the case today), there is incentive to make improvements in a way that the municipality won’t know about (as is the case today). The easiest way for the municipality to learn about improvements is via the building department permitting and inspections process, so a lot of work is done without pulling permits. Lowering or removing this disincentive would increase the amount of work that gets inspected. As an owner-occupant, I want the inspections and am willing to pay one-time for an impartial second set of eyes. As an owner-occupant, I do not want to pay a recurring subscription fee (in the form of higher property tax) as a result of the inspection. Given how many properties have obviously recent remodels and no permits pulled in the last 30 years, it’s fair to say that at least some of the market has decided that permits aren’t worth the tax increases.
  - clairity 5y ago
    that’s right, appraisal/assessment methods can be changed more easily than tax law, and could be a potential avenue for more equitable/productive taxation. the barrier is, of course, working with the ~5000 property taxing jurisdictions in the US, each its own special form of opaque bureaucracy, averse to any and all risk-taking (not saying this to discourage, but to show the magnitude of the challenge).
- kragen 5y ago
  > realistically something like a LVT is too radical to implement That's what they said about the French Revolution, American democracy, the abolition of Russian serfdom, the abolition of US slavery, the Paris Commune, the Bolshevik Revolution, Prohibition, the Holocaust, the establishment of the State of Israel, the Great Leap Forward, the Iranian Revolution, etc. I mean, that's also what they said about lots of other changes that actually didn't get implemented. And, as the examples above illustrate, it's easy for radical changes to have unintended effects...
- legulere 5y ago
  The current federal property tax was deemed unconstitutional in Germany. The new law has an opening clause for states to regulate the property on their own. The state of Baden-Württemberg has introduced a land value tax.
- rcpt 5y ago
  That's what Pennsylvania did and it worked very well
odiroot 5y ago
> TL;DR: things that people produce such as labor, products, and services are not taxed at all. No payroll taxes [..] This is actually very logical. Never understood why salaries are taxed so high. Always seemed to me like the governments are punishing workers for actively working.
- imtringued 5y ago
  The government also spends the money on things like hospitals which raises the value of the land so you end up paying twice. Pay taxes and then pay increased rent to get access to the things your tax money was spent on. It's highly inefficient.
bawolff 5y ago
> The land value taxes in such an area would be far too high to justify anything but highly efficient productive uses of the land such as housing, manufacturing, offices, etc. Wouldn't that just mean those lots would stand empty? Its not like the car washes are there because there is a higher revenue option but people just dont want to do it.
- BirdieNZ 5y ago
  If the lots are of value then someone will buy them and develop them to return a profit. Under a land value tax you expect land to be used more efficiently, not less.
  - bawolff 5y ago
    But umm, why? In this specific example, what's preventing the land from being used for something more valuable than a car wash currently? I get that a land value tax would disincentivize hoarding land, but urban-sprawl-car wash hardly seems like a case of land hoarding. I think the parent was suggesting that these car washes would no longer exist because taxes would be too high under a land value tax regime - but that raises the question of what the more valuable usage is? Does there exist one, why isn't it currently being used that way, and is the reason something that lvt would rectify? If car washes are the most valuable usage, then they will either continue to exist or if the tax burden is too high in the new regime, they will stop existing and nothing will replace them. I'm sure there are plenty of examples where lvt would encourage more efficient land usage, i'm just confused why this would be one of them.
    - BirdieNZ 5y ago
      Car washes are low maintenance, so it's an easy way to make a little cashflow whipe primarily owning the land for landbanking purposes. With the land freed up for something more productive, other businesses will be set up which are higher effort but higher returns. Basically car washes are the slightly-harder version of land banking, but there is still enough value in the land that if the land was put up for sale, some other business would purchase it and utilise the land better. If the car wash owner wanted to maximize returns they could set up a more profitable business today, sure. It's just more effort than they can be bothered with.

by api 5y ago

deepnotderp 5y ago

Yeah I’m personally a fan of Georgism but realistically something like a LVT is too radical to implement. I think that a carefully thought out property tax code (eg higher taxes for lower density buildings) can get you 80% of the way to the effects of a LVT while being pragmatic enough to implement today.

larsiusprime 5y ago
You could actually do a lot to adapt existing property tax regimes into something like a very close approximation of an LVT. Step 1 would just be improving the quality of assessments to take advantage of the state of the art of the latest mass appraisal methods (which requires no change in law, just requires you to influence the training and/or appointment/election of local assessors) from the last 15 years. Step 2 would be lowering the tax rate on improvements and shifting the burden off of buildings and onto land; this is barred in certain states but is perfectly legal in others.
- sokoloff 5y ago
  Lowering the tax rate on improvements would probably have the side effect of having more remodeling work be inspected. Much of the avoidance of building permits (and associated inspections) is about avoiding increased assessments and associated taxes. This in turn would likely lead to less totally slipshod remodeling work, at least by people who weren’t aiming for that outcome.
  - larsiusprime 5y ago
    Wait why would LOWERING the tax rate on improvements INCREASE the amount of building inspections? Are you assuming that this would lead to an increased reliance on the cost approach for assessments?
    - sokoloff 5y ago
      With a high tax on improvements (as is the case today), there is incentive to make improvements in a way that the municipality won’t know about (as is the case today). The easiest way for the municipality to learn about improvements is via the building department permitting and inspections process, so a lot of work is done without pulling permits. Lowering or removing this disincentive would increase the amount of work that gets inspected. As an owner-occupant, I want the inspections and am willing to pay one-time for an impartial second set of eyes. As an owner-occupant, I do not want to pay a recurring subscription fee (in the form of higher property tax) as a result of the inspection. Given how many properties have obviously recent remodels and no permits pulled in the last 30 years, it’s fair to say that at least some of the market has decided that permits aren’t worth the tax increases.
- clairity 5y ago
  that’s right, appraisal/assessment methods can be changed more easily than tax law, and could be a potential avenue for more equitable/productive taxation. the barrier is, of course, working with the ~5000 property taxing jurisdictions in the US, each its own special form of opaque bureaucracy, averse to any and all risk-taking (not saying this to discourage, but to show the magnitude of the challenge).
kragen 5y ago
> realistically something like a LVT is too radical to implement That's what they said about the French Revolution, American democracy, the abolition of Russian serfdom, the abolition of US slavery, the Paris Commune, the Bolshevik Revolution, Prohibition, the Holocaust, the establishment of the State of Israel, the Great Leap Forward, the Iranian Revolution, etc. I mean, that's also what they said about lots of other changes that actually didn't get implemented. And, as the examples above illustrate, it's easy for radical changes to have unintended effects...
legulere 5y ago
The current federal property tax was deemed unconstitutional in Germany. The new law has an opening clause for states to regulate the property on their own. The state of Baden-Württemberg has introduced a land value tax.
rcpt 5y ago
That's what Pennsylvania did and it worked very well

odiroot 5y ago

> TL;DR: things that people produce such as labor, products, and services are not taxed at all. No payroll taxes [..] This is actually very logical. Never understood why salaries are taxed so high. Always seemed to me like the governments are punishing workers for actively working.

imtringued 5y ago
The government also spends the money on things like hospitals which raises the value of the land so you end up paying twice. Pay taxes and then pay increased rent to get access to the things your tax money was spent on. It's highly inefficient.

bawolff 5y ago

> The land value taxes in such an area would be far too high to justify anything but highly efficient productive uses of the land such as housing, manufacturing, offices, etc. Wouldn't that just mean those lots would stand empty? Its not like the car washes are there because there is a higher revenue option but people just dont want to do it.

BirdieNZ 5y ago
If the lots are of value then someone will buy them and develop them to return a profit. Under a land value tax you expect land to be used more efficiently, not less.
- bawolff 5y ago
  But umm, why? In this specific example, what's preventing the land from being used for something more valuable than a car wash currently? I get that a land value tax would disincentivize hoarding land, but urban-sprawl-car wash hardly seems like a case of land hoarding. I think the parent was suggesting that these car washes would no longer exist because taxes would be too high under a land value tax regime - but that raises the question of what the more valuable usage is? Does there exist one, why isn't it currently being used that way, and is the reason something that lvt would rectify? If car washes are the most valuable usage, then they will either continue to exist or if the tax burden is too high in the new regime, they will stop existing and nothing will replace them. I'm sure there are plenty of examples where lvt would encourage more efficient land usage, i'm just confused why this would be one of them.
  - BirdieNZ 5y ago
    Car washes are low maintenance, so it's an easy way to make a little cashflow whipe primarily owning the land for landbanking purposes. With the land freed up for something more productive, other businesses will be set up which are higher effort but higher returns. Basically car washes are the slightly-harder version of land banking, but there is still enough value in the land that if the land was put up for sale, some other business would purchase it and utilise the land better. If the car wash owner wanted to maximize returns they could set up a more profitable business today, sure. It's just more effort than they can be bothered with.