7 ms·

> "In particular, the taxes on property ownership are supposed to capture the entire value of renting the property." No. once again, invariably, multiple peopl

> "In particular, the taxes on property ownership are supposed to capture the entire value of renting the property." No. once again, invariably, multiple people make this mistake in every thread about the land value tax. 'economic rents' are not the colloquial 'rent' we pay for housing we don't own. economic rents are UNproductive, meaning simply income produced by ownership itself, rather than in the productive delivery of service (in this case, housing). LVT only seeks to tax away that unproductive part (economic rents). the productive part would include the costs of mortgage(s), insurance, utilities, upkeep, and a small profit (aka risk premium).

TimPC 4y ago
Agreed. This is an oversimplification. We'd attempt to tax away the value of the rent of the unimproved land which is less than the value of the improved land. Of course, taxes will actually be set in accordance with what the government needs for revenue since this is supposed to be a single tax. Elsewhere in the thread I've tried to estimate Georgist land taxes based on current revenue needs and found them to be quite high.
- clairity 4y ago
  LVT has nothing to do with improved vs. unimproved land. both improved and unimproved land have productive and unproductive aspects. LVT is solely targeted at economic rents. this is the key to understanding LVT. otherwise, the idea that it's the most economically efficient tax will not make sense, and the tax itself will not seem to make sense. on the other hand, what the government will do tax-wise is political, not economic. constitutionally, the tax cat is out of the budget bag, so we have little hope of restraint there. politicians will always try to expand government because it benefits them, no matter what rhetoric they spout. (i.e., taxes are high because politics, not LVT.)
  - geocon 4y ago
    One of the nice things about LVT is that it aligns those incentives though, since what increases tax revenue the most is investment in public infrastructure and services. It's the Henry George Theorem at work: https://en.wikipedia.org/wiki/Henry_George_theorem https://en.wikipedia.org/wiki/Henry_George_theorem
    - clairity 4y ago
      that's assuming politicians are compelled at least a little bit by the public good. unfortunately, our politico-economic systems have become more and more captured by moneyed interests, insulating politicians from those wider incentives. but to be fair, that's not unique to georgism. we need to solve for that problem generally.
      - brightly-salty 4y ago
        I think it would be at least partially solved by reorganizing government to be based upon subsidiarity :) but yes, this isn’t necessarily a question which political economy can or should solve
      - imtringued 4y ago
        When politicians want more money they often raise taxes because passing good policies is difficult and the relationship between their policy and tax revenue is not obvious. With a land value tax politicians have a very easy way of increasing tax revenue, do something productive. The countless times a government has cut important services and investments to get a short term cash influx have always lead to misery. Greece ended its public healthcare for the sake of austerity and now they are further in debt. Operating a hospital should be something that is a revenue stream for the government (through land value taxes), not a burden to be distributed across people through taxes.
hushpuppy 4y ago
> 'economic rents' are not the colloquial 'rent' we pay for housing we don't own. economic rents are UNproductive, meaning simply income produced by ownership itself, rather than in the productive delivery of service (in this case, housing). LVT only seeks to tax away that unproductive part (economic rents). the productive part would include the costs of mortgage(s), insurance, utilities, upkeep, and a small profit (aka risk premium). Except the LVT premise is bullshit. Lets say I have a house I rent out for 1800 dollars a month. About 500 dollars of that will go to taxes (income, property, etc). Out of the rest I take 600 dollars and am in the process of fixing up two more houses that I bought from a tax sale that were made unlivable through crackhead squatters. So that leaves me about 700 dollars more. Out of that I need to save probably about 300 dollars a month to cover costs associated with owning homes. Such as the need to replace roofs or water heaters or hire arborist to take down dying trees before they destroy my neighbor's property, etc. Then that leaves me with 400 dollars that I reinvest in other companies. So it goes to doing thing like buying bonds, etc. The only thing that is "unproductive" here is the money being paid to the federal governemnt to go murder brown people half way around the world. The entire intellectual basis of this "Georgian" stuff is completely bogus. The theories about monopolies are wrong. The theories about how to solve the tragedy of the commons is wrong as well. The economic efficiency theories are wrong, etc etc etc.
- geocon 4y ago
  Really? Care to tell that to the various Nobel laureate economists who have endorsed land value taxation? Do you really think you understand economics better than Paul Samuelson, Milton Friedman, Joseph Stiglitz, William Vickrey?
  - klyrs 4y ago
    Regardless of my vehement disagreement with GP, you're attempting an [appeal to authority](https://en.m.wikipedia.org/wiki/Argument_from_authority https://en.m.wikipedia.org/wiki/Argument_from_authority) which is utterly unconvincing.
    - User23 4y ago
8note 4y ago
By comparison to alternative housing, hotels, the housing rent is unproductive other than repairs and getting contracts. Once you have a lease, it's unproductive as it comes, purely getting money for owning something

TimPC 4y ago

Agreed. This is an oversimplification. We'd attempt to tax away the value of the rent of the unimproved land which is less than the value of the improved land. Of course, taxes will actually be set in accordance with what the government needs for revenue since this is supposed to be a single tax. Elsewhere in the thread I've tried to estimate Georgist land taxes based on current revenue needs and found them to be quite high.

clairity 4y ago
LVT has nothing to do with improved vs. unimproved land. both improved and unimproved land have productive and unproductive aspects. LVT is solely targeted at economic rents. this is the key to understanding LVT. otherwise, the idea that it's the most economically efficient tax will not make sense, and the tax itself will not seem to make sense. on the other hand, what the government will do tax-wise is political, not economic. constitutionally, the tax cat is out of the budget bag, so we have little hope of restraint there. politicians will always try to expand government because it benefits them, no matter what rhetoric they spout. (i.e., taxes are high because politics, not LVT.)
- geocon 4y ago
  One of the nice things about LVT is that it aligns those incentives though, since what increases tax revenue the most is investment in public infrastructure and services. It's the Henry George Theorem at work: https://en.wikipedia.org/wiki/Henry_George_theorem https://en.wikipedia.org/wiki/Henry_George_theorem
  - clairity 4y ago
    that's assuming politicians are compelled at least a little bit by the public good. unfortunately, our politico-economic systems have become more and more captured by moneyed interests, insulating politicians from those wider incentives. but to be fair, that's not unique to georgism. we need to solve for that problem generally.
    - brightly-salty 4y ago
      I think it would be at least partially solved by reorganizing government to be based upon subsidiarity :) but yes, this isn’t necessarily a question which political economy can or should solve
    - imtringued 4y ago
      When politicians want more money they often raise taxes because passing good policies is difficult and the relationship between their policy and tax revenue is not obvious. With a land value tax politicians have a very easy way of increasing tax revenue, do something productive. The countless times a government has cut important services and investments to get a short term cash influx have always lead to misery. Greece ended its public healthcare for the sake of austerity and now they are further in debt. Operating a hospital should be something that is a revenue stream for the government (through land value taxes), not a burden to be distributed across people through taxes.

hushpuppy 4y ago

> 'economic rents' are not the colloquial 'rent' we pay for housing we don't own. economic rents are UNproductive, meaning simply income produced by ownership itself, rather than in the productive delivery of service (in this case, housing). LVT only seeks to tax away that unproductive part (economic rents). the productive part would include the costs of mortgage(s), insurance, utilities, upkeep, and a small profit (aka risk premium). Except the LVT premise is bullshit. Lets say I have a house I rent out for 1800 dollars a month. About 500 dollars of that will go to taxes (income, property, etc). Out of the rest I take 600 dollars and am in the process of fixing up two more houses that I bought from a tax sale that were made unlivable through crackhead squatters. So that leaves me about 700 dollars more. Out of that I need to save probably about 300 dollars a month to cover costs associated with owning homes. Such as the need to replace roofs or water heaters or hire arborist to take down dying trees before they destroy my neighbor's property, etc. Then that leaves me with 400 dollars that I reinvest in other companies. So it goes to doing thing like buying bonds, etc. The only thing that is "unproductive" here is the money being paid to the federal governemnt to go murder brown people half way around the world. The entire intellectual basis of this "Georgian" stuff is completely bogus. The theories about monopolies are wrong. The theories about how to solve the tragedy of the commons is wrong as well. The economic efficiency theories are wrong, etc etc etc.

geocon 4y ago
Really? Care to tell that to the various Nobel laureate economists who have endorsed land value taxation? Do you really think you understand economics better than Paul Samuelson, Milton Friedman, Joseph Stiglitz, William Vickrey?
- klyrs 4y ago
  Regardless of my vehement disagreement with GP, you're attempting an [appeal to authority](https://en.m.wikipedia.org/wiki/Argument_from_authority https://en.m.wikipedia.org/wiki/Argument_from_authority) which is utterly unconvincing.
  - User23 4y ago

8note 4y ago

By comparison to alternative housing, hotels, the housing rent is unproductive other than repairs and getting contracts. Once you have a lease, it's unproductive as it comes, purely getting money for owning something