4 ms·

I think the biggest problems with Georgism are 1. in some sense it calls for the expropriation of land by the government 2. it's unfair to change the rules in t

by slibhb 5y ago

I think the biggest problems with Georgism are 1. in some sense it calls for the expropriation of land by the government 2. it's unfair to change the rules in the middle of the game and 3. it's logistically difficult to carry out. As far as unfairness goes, imagine a couple, 65, retired, paid off their mortgage, paid income taxes all their lives until retirement, now living off their savings. It's unfair to start taxing them based on the value of the land their home is built on, which they already paid for.

Schiendelman 5y ago
Many places already have protections for people on fixed or low incomes, that reset when a property is sold. Property tax can vary widely today; LVT can lower it for an owner as much as raise it.
tormeh 5y ago
It only takes one such case to make the tax look bad. But a LVT for corporate owners makes sense. Maybe one for young people too, only excepting retirees.
- fatbird 5y ago
  The way you handle retirees is tax deferral: they don't pay the taxes every year, they pay the whole amount when the property is transferred by sale or inheritance. In this case it would just be the land transfer.
- dane-pgp 5y ago
  > Maybe one for young people too If we're concerned about fairness in the housing market, a special tax which only applies to young people isn't the policy I'd recommend. As an alternative, you could give each person an allowance of land area/value (perhaps based on the median value, or an equal share of the nation's land territory) and say that anyone who uses more than that (with a mansion, or multiple homes) would pay the tax, and perhaps people who own less land than that should get a rebate. Obviously corporations wouldn't get such an allowance, as they are not people for the purposes of this calculation. Also, you could make the tax exponentially progressive, to put a downward pressure on the size of land holdings and encourage competition between landlords.
  - Zacru 5y ago
    Taxing different entities at different rates just opens the door for a middle-man with a lower tax rate to profit from simply renting the land to the entities with higher tax rates.
    - dane-pgp 5y ago
      If multiple middle-men all entered into contracts with one entity who wanted to set higher rental prices across the market, that would hopefully be caught by existing anti-trust / cartel laws, as well as tax evasion rules. You're right that there's a potential loophole here, but I don't think it is any more exploitable than other tax rules (i.e. it probably depends on how motivated the tax authorities are to actually enforce the rules).
floober 5y ago
> 2. it's unfair to change the rules in the middle of the game Is that not the very purpose of legislation? Laws are not written in stone
- SilasX 5y ago
  True, but this is a case where a difference in degree becomes a difference in kind. There’s a huge difference between “taxes are higher this year” and “taxes will be specifically levied in a way to make that asset of yours worthless”. Generally, the latter is considered a taking that merits compensation like in the case of eminent domain.
  - aunty_helen 5y ago
    “Worthless” is a false dichotomy, people will still need, use and pay for land. And progressively levying a LVT would make a lot more sense than flipping a switch and upside downing the economy.
    - SilasX 5y ago
      Yes, but it’s worthless to the owner on the market, as the entire point of Georgism is to drive said land value to zero. Yes, people would pay for it, but those payments would not go to the owner, as they would be diverted to the government via tax, functionally the same as if a tax made your retirement account worthless.
- refurb 5y ago
  Sure, but the US constitution also prevents "taking" without compensation. That "taking" can also include you keeping the property but the government imposing new rules that lower it's value.
  - fatbird 5y ago
    Do you have an example? I'm not aware of any instance of a general change that lowers property values causing the gov't to have to compensate landowners. The "taking" of which I'm aware is use of eminent domain to expropriate land, which requires fair compensation to the owner.
harimau777 5y ago
I think that's a good point. On the other hand, it's unfair that all of the valuable land has been claimed by people before I was even born.
GavinMcG 5y ago
Saying that something has a side effect (here: unfairness) is a really shallow criticism. The real question is whether the side effect can be productively/efficiently dealt with.
- slibhb 5y ago
  I didn't say I'm against Georgism, I just listed what seem to me the biggest obstacles in implementing it (some of which may be overcome). Sorry to hear you found my post shallow.
  - GavinMcG 5y ago
    I didn't say you were against it, either! It's also worth criticizing the things you're for.
shkkmo 5y ago
> imagine a couple, 65, retired, paid off their mortgage, paid income taxes all their lives until retirement, now living off their savings. It's unfair to start taxing them based on the value of the land their home is built on, which they already paid for. Taxes don't end at retirement. I fail to see how this substantially differs from any other change to the tax code. The retired couple if your example had the opportunity to buy real estate that most young people today will not have. Those same young people have been paying into a social security system that they will be lucky to see much if any payout from. So what is "fair" here? Is it really fair to let those young people pay higher rents so that the old people don't face the challenge of moving to a new domicile? Indeed, those high rents directly finance the mortgages of property owners and thus increase the speculative value of the property, enriching the very same elderly couple that you are worried about being unfair towards.
fatbird 5y ago
Aren't they still paying property taxes? You wouldn't be adding a tax to them, you'd be replacing a tax on them with a differently calculated tax. It might go up, or down (the auther says his would go down). And there is no "middle of the game" here, because there wasn't a start and won't be an end... it's all middle. You don't have a right to live by the same laws your whole life. By point 2, as everything is currently in process, we couldn't ever adjust taxes, or change laws.
hogFeast 5y ago
People who benefit from higher land prices are already taxing everyone else. Housing is the one of a few things that people have to buy. Choosing to essentially tax everyone in society to buy that product is...unthinkably stupid (a subtle effect is also that because the turnover of properties is so low, this has massive inter-generational effects...this isn't clear now because only people born 20-30 years ago are getting taxed, everyone else is just sitting on their capital gain...as these people die and that gets realised, the effect on wealth inequality will be incredible). Another comment here mentioned that you have to be very educated to think something so daft is stupid...it is actually quite simple and requires no education. Imagine that everyone ate only bread. What we have done is create a system in which bread manufacturers produce no extra output but benefit from bread price increases of 5-10%/year...for multiple decades. The economy is now largely based around bread, people whose parents were fortunate enough to own a licence to produce bread are now multi-millionaires, everyone else is a peon. Bread is so expensive that the rest of society is actually struggling to feed the bread manufacturers. The fallacy is believing that we aren't already paying a massive price. It isn't expropriation of land, it is reversing expropriation by returning land to the people who always owned it (i.e. no-one and everyone). It is completely fair (unless you are a bread manufacturer). For economies in the West, it will be massively enhancing to productivity because it only taxes value which generates no gain for society (tbh, I am not sure anyone can really know what the consequence would be...it would change the economics of commercial ownership of resi property completely because landlords couldn't pass on costs, the only risk is disincentivizing housing production...I don't think it does this, if anything it would incentivize production...where I am, housebuilders sit on land for years and wait for house prices to go up...I live near a development of fifty or so houses, the developer has taken four years to put up houses there because land is rising so fast here, an adjacent development of the same size went up in 12 months...as I said before, no-one can look at that and think this is productivity enhancing, it is just nonsense, this is a grievous tax on productivity).
larsiusprime 5y ago
> 2. it's unfair to change the rules in the middle of the game This is a fully general argument against change. As for the elderly couple, you can defer taxes until after they die and attach it as a lien on the property.
neilparikh 5y ago
> it's unfair to change the rules in the middle of the game This has already happened many times, and is happening now. Two examples: - abolition of slavery - taxing of carbon, and anti climate change measures in general Should we stop trying to reduce climate change because it changes the rules on oil companies and those dependent on cheap oil?

by slibhb 5y ago

Schiendelman 5y ago

Many places already have protections for people on fixed or low incomes, that reset when a property is sold. Property tax can vary widely today; LVT can lower it for an owner as much as raise it.

tormeh 5y ago

It only takes one such case to make the tax look bad. But a LVT for corporate owners makes sense. Maybe one for young people too, only excepting retirees.

fatbird 5y ago
The way you handle retirees is tax deferral: they don't pay the taxes every year, they pay the whole amount when the property is transferred by sale or inheritance. In this case it would just be the land transfer.
dane-pgp 5y ago
> Maybe one for young people too If we're concerned about fairness in the housing market, a special tax which only applies to young people isn't the policy I'd recommend. As an alternative, you could give each person an allowance of land area/value (perhaps based on the median value, or an equal share of the nation's land territory) and say that anyone who uses more than that (with a mansion, or multiple homes) would pay the tax, and perhaps people who own less land than that should get a rebate. Obviously corporations wouldn't get such an allowance, as they are not people for the purposes of this calculation. Also, you could make the tax exponentially progressive, to put a downward pressure on the size of land holdings and encourage competition between landlords.
- Zacru 5y ago
  Taxing different entities at different rates just opens the door for a middle-man with a lower tax rate to profit from simply renting the land to the entities with higher tax rates.
  - dane-pgp 5y ago
    If multiple middle-men all entered into contracts with one entity who wanted to set higher rental prices across the market, that would hopefully be caught by existing anti-trust / cartel laws, as well as tax evasion rules. You're right that there's a potential loophole here, but I don't think it is any more exploitable than other tax rules (i.e. it probably depends on how motivated the tax authorities are to actually enforce the rules).

floober 5y ago

> 2. it's unfair to change the rules in the middle of the game Is that not the very purpose of legislation? Laws are not written in stone

SilasX 5y ago
True, but this is a case where a difference in degree becomes a difference in kind. There’s a huge difference between “taxes are higher this year” and “taxes will be specifically levied in a way to make that asset of yours worthless”. Generally, the latter is considered a taking that merits compensation like in the case of eminent domain.
- aunty_helen 5y ago
  “Worthless” is a false dichotomy, people will still need, use and pay for land. And progressively levying a LVT would make a lot more sense than flipping a switch and upside downing the economy.
  - SilasX 5y ago
    Yes, but it’s worthless to the owner on the market, as the entire point of Georgism is to drive said land value to zero. Yes, people would pay for it, but those payments would not go to the owner, as they would be diverted to the government via tax, functionally the same as if a tax made your retirement account worthless.
refurb 5y ago
Sure, but the US constitution also prevents "taking" without compensation. That "taking" can also include you keeping the property but the government imposing new rules that lower it's value.
- fatbird 5y ago
  Do you have an example? I'm not aware of any instance of a general change that lowers property values causing the gov't to have to compensate landowners. The "taking" of which I'm aware is use of eminent domain to expropriate land, which requires fair compensation to the owner.

harimau777 5y ago

I think that's a good point. On the other hand, it's unfair that all of the valuable land has been claimed by people before I was even born.

GavinMcG 5y ago

Saying that something has a side effect (here: unfairness) is a really shallow criticism. The real question is whether the side effect can be productively/efficiently dealt with.

slibhb 5y ago
I didn't say I'm against Georgism, I just listed what seem to me the biggest obstacles in implementing it (some of which may be overcome). Sorry to hear you found my post shallow.
- GavinMcG 5y ago
  I didn't say you were against it, either! It's also worth criticizing the things you're for.

shkkmo 5y ago

> imagine a couple, 65, retired, paid off their mortgage, paid income taxes all their lives until retirement, now living off their savings. It's unfair to start taxing them based on the value of the land their home is built on, which they already paid for. Taxes don't end at retirement. I fail to see how this substantially differs from any other change to the tax code. The retired couple if your example had the opportunity to buy real estate that most young people today will not have. Those same young people have been paying into a social security system that they will be lucky to see much if any payout from. So what is "fair" here? Is it really fair to let those young people pay higher rents so that the old people don't face the challenge of moving to a new domicile? Indeed, those high rents directly finance the mortgages of property owners and thus increase the speculative value of the property, enriching the very same elderly couple that you are worried about being unfair towards.

fatbird 5y ago

Aren't they still paying property taxes? You wouldn't be adding a tax to them, you'd be replacing a tax on them with a differently calculated tax. It might go up, or down (the auther says his would go down). And there is no "middle of the game" here, because there wasn't a start and won't be an end... it's all middle. You don't have a right to live by the same laws your whole life. By point 2, as everything is currently in process, we couldn't ever adjust taxes, or change laws.

hogFeast 5y ago

People who benefit from higher land prices are already taxing everyone else. Housing is the one of a few things that people have to buy. Choosing to essentially tax everyone in society to buy that product is...unthinkably stupid (a subtle effect is also that because the turnover of properties is so low, this has massive inter-generational effects...this isn't clear now because only people born 20-30 years ago are getting taxed, everyone else is just sitting on their capital gain...as these people die and that gets realised, the effect on wealth inequality will be incredible). Another comment here mentioned that you have to be very educated to think something so daft is stupid...it is actually quite simple and requires no education. Imagine that everyone ate only bread. What we have done is create a system in which bread manufacturers produce no extra output but benefit from bread price increases of 5-10%/year...for multiple decades. The economy is now largely based around bread, people whose parents were fortunate enough to own a licence to produce bread are now multi-millionaires, everyone else is a peon. Bread is so expensive that the rest of society is actually struggling to feed the bread manufacturers. The fallacy is believing that we aren't already paying a massive price. It isn't expropriation of land, it is reversing expropriation by returning land to the people who always owned it (i.e. no-one and everyone). It is completely fair (unless you are a bread manufacturer). For economies in the West, it will be massively enhancing to productivity because it only taxes value which generates no gain for society (tbh, I am not sure anyone can really know what the consequence would be...it would change the economics of commercial ownership of resi property completely because landlords couldn't pass on costs, the only risk is disincentivizing housing production...I don't think it does this, if anything it would incentivize production...where I am, housebuilders sit on land for years and wait for house prices to go up...I live near a development of fifty or so houses, the developer has taken four years to put up houses there because land is rising so fast here, an adjacent development of the same size went up in 12 months...as I said before, no-one can look at that and think this is productivity enhancing, it is just nonsense, this is a grievous tax on productivity).

larsiusprime 5y ago

> 2. it's unfair to change the rules in the middle of the game This is a fully general argument against change. As for the elderly couple, you can defer taxes until after they die and attach it as a lien on the property.

neilparikh 5y ago

> it's unfair to change the rules in the middle of the game This has already happened many times, and is happening now. Two examples: - abolition of slavery - taxing of carbon, and anti climate change measures in general Should we stop trying to reduce climate change because it changes the rules on oil companies and those dependent on cheap oil?