4 ms·

It gets the purposes of taxes wrong, and assumes the usual economic myths of a fixed amount of money and a loanable funds structure, with money being a veil ove

It gets the purposes of taxes wrong, and assumes the usual economic myths of a fixed amount of money and a loanable funds structure, with money being a veil over barter. Once you realise the latter are a myth, then the entire concept of taxing land makes no sense. Government, in a country with its own free floating currency, has no need of tax money to spend. In fact spending causes taxation from the induced transaction chain that will, without impediment from people saving some of their income rather than spending it, always precisely match whatever government spends. It's like a stone skipping across a pond. Taxing reduces the length of spending chains. You tax to release resources for the public use, and the tax imposer is then morally required to hire all those released to avoid unemployment. There is no other operational purpose for taxation. The natural conclusion of that view is that the best place to tax is to charge business for hiring labour. Then they won't hire as much, and government can then hire them to be teachers, doctors, judges, etc. The presence of financial saving means that money has an inductive relationship with physical production, not a direct one. Just like we need reactive power in an electrical circuit so that iPhone chargers work properly, we need reactive monetary circulation to make sure that physical production occurs at the maximum amount. The problem with land is not rent, it is the power of exclusion, which leads to hoarding. Just like any other market. So you tackle the hoard in the same way as any other attempt to corner markets - via anti-trust measures.

pydry 5y ago
>Once you realise the latter are a myth, then the entire concept of taxing land makes no sense. Government, in a country with its own free floating currency, has no need of tax money to spend. Tax keeps a lid on inflation and can be used to discourage socially undesirable activity. It absolutely makes sense to keep inflation down and prevent productive land from being hoarded or used inefficiently with a tax at the same time.
- neilwilson 5y ago
  Inflation is handled by superior spend side auto-stabilisers, like a Job Guarantee, and socially undesirable activities are done with levies and duties, not tax. The latter being a political position, not an economic one. If you have sufficient saving in society , then you hardly need to tax at all - as Japan demonstrates.
  - pydry 5y ago
    It feels like you read about MMT but didnt really... get it? You're mixing up all the concepts. A job guarantee doesnt help keep a lid on inflation at all - quite the opposite (it keeps a lid on deflationary pressures). Levies and duties are...uh, taxes.
    - neilwilson 5y ago
      In which case why am I writing chapters in MMT books alongside Warren Mosler and Bill Mitchell and you aren't? The Job Guarantee is designed as an automatic stabiliser that dampens inflation both expectational and financially as well as providing stimulation. It works like this: https://new-wayland.com/blog/how-the-jg-controls-inflation/ https://new-wayland.com/blog/how-the-jg-controls-inflation/ Levies and Duties are political deductions. They are not required. Taxes are required for the public purpose. No matter whether you are hard core libertarian or Stalin's best mate you will likely need to taxes that stay in place even if everybody does precisely what is required, because there are public positions that need to be filled. However if everybody stops smoking then cigarette duty naturally drops to zero. Taxes are best thought of as the secondary countercyclical stabilisers or the static payments required to Drive the Denomination. Warren, for examples, favours scrapping all taxes and relying upon a single property tax. Most importantly taxes are never altered by policy settings in response to the business cycle. They are set so the cyclical autostabilisers do their job - primarily on the spend side. Levies and Duties are set for the political purposes of whichever view is in power at the time. They come and go with the political cycle.
  - istinetz 5y ago
    >If you have sufficient saving in society , then you hardly need to tax at all - as Japan demonstrates. ... do you think Japan has particularly low taxes or something? Because they don't, according to this: https://www.jetro.go.jp/en/invest/setting_up/section3/page7.html https://www.jetro.go.jp/en/invest/setting_up/section3/page7....
    - neilwilson 5y ago
      Which is why they have been in a slump for this long. As Warren Mosler would say, they are overtaxed for the size of government they have.
Qub3d 5y ago
You should really give the original book review that preceded this a read.[0] > assumes the usual economic myths of a fixed amount of money Not at all. Henry George's original ideas included defining money as essentially an IOU pointing to an underlying wealth; and wealth can indeed be increased. > The problem with land is not rent, it is the power of exclusion, which leads to hoarding This sentence makes me suspect you've confused the antecedent of LVT with its result. Fixing hoarding is The Point of LVT. You're misunderstanding the term "rent", which unfortunately refers to both the common "I charge you X money on a recurring basis in exchange for occupation" and the more precise economic rent[1]. LVT would disincentivize economic rent, which would kill speculation and encourage more productive use of land overall, which would decrease exclusion and force hoarders to sell off their holdings. [0]:https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty https://astralcodexten.substack.com/p/your-book-review-progr... [1]:https://en.wikipedia.org/wiki/Economic_rent https://en.wikipedia.org/wiki/Economic_rent
- neilwilson 5y ago
  That is the fixed amount of money idea. Money isn't an IOU pointing to an underlying physical wealth. It is wealth in its own terms that is created by government out of nothing based solely upon its future ability to tax. Even some bank money is secured on future income streams, although that is mostly discounting physical collateral. There isn't a one-to-one mapping between money and stuff. Never has been. "You're misunderstanding the term "rent"" I'm not. You're hoping I am. The economic rent comes from the capacity to hoard. Once you remove that the economic rent is eliminated. In other words ownership isn't the root cause of the problem - it's the capacity to prevent use that is the problem. So you eliminate that by forcing things to be rented out and used, or they will be confiscated. Which incidentally is a function of tax. Either you pay it, or you lose assets. So either you rent it or lose assets does the same thing.
  - Qub3d 5y ago
    > It is wealth in its own terms that is created by government out of nothing based solely upon its future ability to tax. The units may vary, but the value remains the same. You get more dollars, but they are worth less, as the purchasing power parity is diluted. See: 6.8% inflation this year. > So you eliminate that by forcing things to be rented out and used, or they will be confiscated. I'm confused. I genuinely think you're reinventing LVT from first-principles here. The "confiscation" in Georgism/Geoism just comes at the hand of the free market. Yes, if you resolutely clung to land refusing to vacate it and also not pay the tax, someone will eventually show up and evict you, but the pressure to just take the money and go will drive an economically rational person to leave before then. > I'm not [misunderstanding rent]. You're hoping I am. I'm trying to engage you in good faith[0]. Your first comment's line of thought confused me so I thought I'd lay out my response as I understood it, and I'm glad you came back to clarify. That said, if you won't return the favor then I'm not going to bother continuing the conversation. [0]:https://news.ycombinator.com/newsguidelines.html#comments https://news.ycombinator.com/newsguidelines.html#comments

pydry 5y ago

>Once you realise the latter are a myth, then the entire concept of taxing land makes no sense. Government, in a country with its own free floating currency, has no need of tax money to spend. Tax keeps a lid on inflation and can be used to discourage socially undesirable activity. It absolutely makes sense to keep inflation down and prevent productive land from being hoarded or used inefficiently with a tax at the same time.

neilwilson 5y ago
Inflation is handled by superior spend side auto-stabilisers, like a Job Guarantee, and socially undesirable activities are done with levies and duties, not tax. The latter being a political position, not an economic one. If you have sufficient saving in society , then you hardly need to tax at all - as Japan demonstrates.
- pydry 5y ago
  It feels like you read about MMT but didnt really... get it? You're mixing up all the concepts. A job guarantee doesnt help keep a lid on inflation at all - quite the opposite (it keeps a lid on deflationary pressures). Levies and duties are...uh, taxes.
  - neilwilson 5y ago
    In which case why am I writing chapters in MMT books alongside Warren Mosler and Bill Mitchell and you aren't? The Job Guarantee is designed as an automatic stabiliser that dampens inflation both expectational and financially as well as providing stimulation. It works like this: https://new-wayland.com/blog/how-the-jg-controls-inflation/ https://new-wayland.com/blog/how-the-jg-controls-inflation/ Levies and Duties are political deductions. They are not required. Taxes are required for the public purpose. No matter whether you are hard core libertarian or Stalin's best mate you will likely need to taxes that stay in place even if everybody does precisely what is required, because there are public positions that need to be filled. However if everybody stops smoking then cigarette duty naturally drops to zero. Taxes are best thought of as the secondary countercyclical stabilisers or the static payments required to Drive the Denomination. Warren, for examples, favours scrapping all taxes and relying upon a single property tax. Most importantly taxes are never altered by policy settings in response to the business cycle. They are set so the cyclical autostabilisers do their job - primarily on the spend side. Levies and Duties are set for the political purposes of whichever view is in power at the time. They come and go with the political cycle.
- istinetz 5y ago
  >If you have sufficient saving in society , then you hardly need to tax at all - as Japan demonstrates. ... do you think Japan has particularly low taxes or something? Because they don't, according to this: https://www.jetro.go.jp/en/invest/setting_up/section3/page7.html https://www.jetro.go.jp/en/invest/setting_up/section3/page7....
  - neilwilson 5y ago
    Which is why they have been in a slump for this long. As Warren Mosler would say, they are overtaxed for the size of government they have.

Qub3d 5y ago

You should really give the original book review that preceded this a read.[0] > assumes the usual economic myths of a fixed amount of money Not at all. Henry George's original ideas included defining money as essentially an IOU pointing to an underlying wealth; and wealth can indeed be increased. > The problem with land is not rent, it is the power of exclusion, which leads to hoarding This sentence makes me suspect you've confused the antecedent of LVT with its result. Fixing hoarding is The Point of LVT. You're misunderstanding the term "rent", which unfortunately refers to both the common "I charge you X money on a recurring basis in exchange for occupation" and the more precise economic rent[1]. LVT would disincentivize economic rent, which would kill speculation and encourage more productive use of land overall, which would decrease exclusion and force hoarders to sell off their holdings. [0]:https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty https://astralcodexten.substack.com/p/your-book-review-progr... [1]:https://en.wikipedia.org/wiki/Economic_rent https://en.wikipedia.org/wiki/Economic_rent

neilwilson 5y ago
That is the fixed amount of money idea. Money isn't an IOU pointing to an underlying physical wealth. It is wealth in its own terms that is created by government out of nothing based solely upon its future ability to tax. Even some bank money is secured on future income streams, although that is mostly discounting physical collateral. There isn't a one-to-one mapping between money and stuff. Never has been. "You're misunderstanding the term "rent"" I'm not. You're hoping I am. The economic rent comes from the capacity to hoard. Once you remove that the economic rent is eliminated. In other words ownership isn't the root cause of the problem - it's the capacity to prevent use that is the problem. So you eliminate that by forcing things to be rented out and used, or they will be confiscated. Which incidentally is a function of tax. Either you pay it, or you lose assets. So either you rent it or lose assets does the same thing.
- Qub3d 5y ago
  > It is wealth in its own terms that is created by government out of nothing based solely upon its future ability to tax. The units may vary, but the value remains the same. You get more dollars, but they are worth less, as the purchasing power parity is diluted. See: 6.8% inflation this year. > So you eliminate that by forcing things to be rented out and used, or they will be confiscated. I'm confused. I genuinely think you're reinventing LVT from first-principles here. The "confiscation" in Georgism/Geoism just comes at the hand of the free market. Yes, if you resolutely clung to land refusing to vacate it and also not pay the tax, someone will eventually show up and evict you, but the pressure to just take the money and go will drive an economically rational person to leave before then. > I'm not [misunderstanding rent]. You're hoping I am. I'm trying to engage you in good faith[0]. Your first comment's line of thought confused me so I thought I'd lay out my response as I understood it, and I'm glad you came back to clarify. That said, if you won't return the favor then I'm not going to bother continuing the conversation. [0]:https://news.ycombinator.com/newsguidelines.html#comments https://news.ycombinator.com/newsguidelines.html#comments