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i disagree that we should make landowners "whole" in some sense, as they went into their investment knowing that the value of their investment could go down. it

i disagree that we should make landowners "whole" in some sense, as they went into their investment knowing that the value of their investment could go down. it's not up to the rest of us to bail out wealthy landowners in that way, which creates a perverse incentive to seek government bailout for any and all risk-taking. enact the tax gradually, say over 5 years, and the property market will adjust accordingly.

CryptoPunk 5y ago
I think when we change the laws, we should compensate those who lose out from the change. By giving people the assurance that the laws will either remain the same, or they will be compensated if a change in the law incurs for them losses in their investment, people will be encouraged to invest more of their time and money in endeavors in our society. Regulatory/institutional stability is a related concept and widely considered by economists to be an important contributor to economic development. As for the moral argument, I find it hard to believe that individuals should know that the laws that society collectively agreed on and implemented, are unjust. To some extent we rely on society to inform us of right and wrong, and there is no clearer example of that expression than the laws and policies the government institutes through at the behest of elected representatives. So I think the fault of unjust laws, where they exist, should fall on society as a whole, as opposed to those who as a matter of circumstance, just happened to make investments of time or money that depended on those laws. Finally, not compensating landowners means far more political opposition to instituting such a tax, and therefore delays in doing so, and that in itself is costly. Consequently, insisting on landowners being punished for benefiting from the legal status of land ownership will be harmful to society. It would be a case of prioritizing vengeance over society's wellbeing.
- clairity 5y ago
  no, investors need no additional incentive to invest. they squarely chose to take the risk, and will do so regardless of boondoggles like this, because they have no better alternative (i.e., opportunity cost impels them). it's the same fallacious argument used to keep progressive taxes at bay (oh noes, the rich people will leave america for... ???). let them fail. it's not a social problem in the slightest. the social safety net should cushion those at the bottom, certainly not those at the top, or in most cases, not even those in the middle. certainly it means more political opposition in the form of money, but not in votes, which is the more pertinent metric.
  - CryptoPunk 5y ago
    >>no, investors need no additional incentive to invest. That is not true. Greater incentives translates to more investment, and more investment is socially beneficial. >>it's the same fallacious argument used to keep progressive taxes at bay (oh noes, the rich people will leave america for... ???). There is nothing fallacious about this argument. Disincentives to investment lead to less investment. Less investment means less gains in productivity and wages, which also means less taxable income that can support the mandatorily funded safety net leftists support. >>certainly it means more political opposition in the form of money, but not in votes, which is the more pertinent metric. Historically, measures that threaten major special interests are difficult to pass due to the opposition they face. Ignoring that is putting ideology ahead of pragmatic results.
    - clairity 5y ago
      no, investment may move, but it doesn't simply vanish. wealth managers would be fired for holding investible funds in cash (which is what withholding investment means--that's the opportunity cost mentioned earlier). historically, disenfranchised masses revolt, violently. bonus point: a more equitable distribution of wealth would lead to smarter investment overall and a more productive economy.
      - CryptoPunk 5y ago
        >>no, investment may move, but it doesn't simply vanish. wealth managers would be fired for holding investible funds in cash (which is what withholding investment means--that's the opportunity cost mentioned earlier). The percentage of income invested fluctuates, based on factors that include security of property rights and expected return on investment. Creating a reliable regulatory and tax regime would mean greater annual inflow of money into investments. >>historically, disenfranchised masses revolt, violently. All the better then to remove the obstacles to the enfranchisement of the masses, by offering compensation to the current beneficiaries of rent-extracting institutions in exchange for recruiting them in the drive to abolish these institutions. Violent revolutions that overturn power structures are actually quite rare and far more common is persistence of structural forces of rent-extraction for decades or centuries, and thus the threat of revolution is not an effective motivator for those in power to relinquish their privileges. The pragmatic reality is that we are more likely to get to a more just and efficient economy without these structures if we reach a settlement that removes the opposition of these structures' beneficiaries from the drive to eliminate them. >>bonus point: a more equitable distribution of wealth would lead to smarter investment overall and a more productive economy. Another bonus of eliminating rent-seeking institutions is that it reduces wealth inequality. Compensation to expedite the removal of a structural force that contributes to wealth inequality would likely be a net-gain for equity in the distribution of wealth, because the former is a one-time action while the latter has a recurring impact.
closeparen 5y ago
One reason the West is prosperous is we have the rule of law. This obviously doesn't free investors from all risks but it does reduce political risks, i.e. being arbitrarily dispossessed by the government is mostly not something you factor in. In poorer countries it does get factored in: people take less risk and demand a higher premium for doing so, since why bother if it's just going to get seized? This goes a decent part of the way to explaining why they are poorer countries. A Georgist would counter that land is special in this regard: unlike investment in productive enterprise, we don't actually need investment in land to create wealth. I think it's an open question whether markets would actually buy this designation, or see it as open season on all kinds of property. The latter would be very, very bad!
- clairity 5y ago
  this isn't about seizing property, but about not giving away tax money to wealthy landowners every time our laws change against their interest toward the broader public interest.
  - closeparen 5y ago
    Henry George’s LVT is a 100% tax on land rents. A 100% tax is also known as a seizure. Maybe there is some tax rate that would make this more in line with existing corporate or income taxes but setting it so low would also undermine its key benefits.
    - clairity 5y ago
      that's being intentionally obtuse. the tax is on rents, not the land itself (nor on productive use). again, rents are unproductive, while seizure is taking by force. make productive use of desirable and productive land or sell it if you don't want to pay the tax (note: no seizure here), and move to less desirable land if you just want to own land without that pressure. less than roughly 1% of the land area of the US would have such pressures, so you'd have plenty of tax-free land to choose from, and it'd be cheaper to buy too. productive land should be put to its "highest and best use".
  - 5y ago

CryptoPunk 5y ago

I think when we change the laws, we should compensate those who lose out from the change. By giving people the assurance that the laws will either remain the same, or they will be compensated if a change in the law incurs for them losses in their investment, people will be encouraged to invest more of their time and money in endeavors in our society. Regulatory/institutional stability is a related concept and widely considered by economists to be an important contributor to economic development. As for the moral argument, I find it hard to believe that individuals should know that the laws that society collectively agreed on and implemented, are unjust. To some extent we rely on society to inform us of right and wrong, and there is no clearer example of that expression than the laws and policies the government institutes through at the behest of elected representatives. So I think the fault of unjust laws, where they exist, should fall on society as a whole, as opposed to those who as a matter of circumstance, just happened to make investments of time or money that depended on those laws. Finally, not compensating landowners means far more political opposition to instituting such a tax, and therefore delays in doing so, and that in itself is costly. Consequently, insisting on landowners being punished for benefiting from the legal status of land ownership will be harmful to society. It would be a case of prioritizing vengeance over society's wellbeing.

clairity 5y ago
no, investors need no additional incentive to invest. they squarely chose to take the risk, and will do so regardless of boondoggles like this, because they have no better alternative (i.e., opportunity cost impels them). it's the same fallacious argument used to keep progressive taxes at bay (oh noes, the rich people will leave america for... ???). let them fail. it's not a social problem in the slightest. the social safety net should cushion those at the bottom, certainly not those at the top, or in most cases, not even those in the middle. certainly it means more political opposition in the form of money, but not in votes, which is the more pertinent metric.
- CryptoPunk 5y ago
  >>no, investors need no additional incentive to invest. That is not true. Greater incentives translates to more investment, and more investment is socially beneficial. >>it's the same fallacious argument used to keep progressive taxes at bay (oh noes, the rich people will leave america for... ???). There is nothing fallacious about this argument. Disincentives to investment lead to less investment. Less investment means less gains in productivity and wages, which also means less taxable income that can support the mandatorily funded safety net leftists support. >>certainly it means more political opposition in the form of money, but not in votes, which is the more pertinent metric. Historically, measures that threaten major special interests are difficult to pass due to the opposition they face. Ignoring that is putting ideology ahead of pragmatic results.
  - clairity 5y ago
    no, investment may move, but it doesn't simply vanish. wealth managers would be fired for holding investible funds in cash (which is what withholding investment means--that's the opportunity cost mentioned earlier). historically, disenfranchised masses revolt, violently. bonus point: a more equitable distribution of wealth would lead to smarter investment overall and a more productive economy.
    - CryptoPunk 5y ago
      >>no, investment may move, but it doesn't simply vanish. wealth managers would be fired for holding investible funds in cash (which is what withholding investment means--that's the opportunity cost mentioned earlier). The percentage of income invested fluctuates, based on factors that include security of property rights and expected return on investment. Creating a reliable regulatory and tax regime would mean greater annual inflow of money into investments. >>historically, disenfranchised masses revolt, violently. All the better then to remove the obstacles to the enfranchisement of the masses, by offering compensation to the current beneficiaries of rent-extracting institutions in exchange for recruiting them in the drive to abolish these institutions. Violent revolutions that overturn power structures are actually quite rare and far more common is persistence of structural forces of rent-extraction for decades or centuries, and thus the threat of revolution is not an effective motivator for those in power to relinquish their privileges. The pragmatic reality is that we are more likely to get to a more just and efficient economy without these structures if we reach a settlement that removes the opposition of these structures' beneficiaries from the drive to eliminate them. >>bonus point: a more equitable distribution of wealth would lead to smarter investment overall and a more productive economy. Another bonus of eliminating rent-seeking institutions is that it reduces wealth inequality. Compensation to expedite the removal of a structural force that contributes to wealth inequality would likely be a net-gain for equity in the distribution of wealth, because the former is a one-time action while the latter has a recurring impact.

closeparen 5y ago

One reason the West is prosperous is we have the rule of law. This obviously doesn't free investors from all risks but it does reduce political risks, i.e. being arbitrarily dispossessed by the government is mostly not something you factor in. In poorer countries it does get factored in: people take less risk and demand a higher premium for doing so, since why bother if it's just going to get seized? This goes a decent part of the way to explaining why they are poorer countries. A Georgist would counter that land is special in this regard: unlike investment in productive enterprise, we don't actually need investment in land to create wealth. I think it's an open question whether markets would actually buy this designation, or see it as open season on all kinds of property. The latter would be very, very bad!

clairity 5y ago
this isn't about seizing property, but about not giving away tax money to wealthy landowners every time our laws change against their interest toward the broader public interest.
- closeparen 5y ago
  Henry George’s LVT is a 100% tax on land rents. A 100% tax is also known as a seizure. Maybe there is some tax rate that would make this more in line with existing corporate or income taxes but setting it so low would also undermine its key benefits.
  - clairity 5y ago
    that's being intentionally obtuse. the tax is on rents, not the land itself (nor on productive use). again, rents are unproductive, while seizure is taking by force. make productive use of desirable and productive land or sell it if you don't want to pay the tax (note: no seizure here), and move to less desirable land if you just want to own land without that pressure. less than roughly 1% of the land area of the US would have such pressures, so you'd have plenty of tax-free land to choose from, and it'd be cheaper to buy too. productive land should be put to its "highest and best use".
- 5y ago