5 ms·

Okay some things don't add up. You can't have a Georgist tax as a single revenue source for the government and calculate it off something other than what the go

by TimPC 4y ago

Okay some things don't add up. You can't have a Georgist tax as a single revenue source for the government and calculate it off something other than what the government needs for revenue. Either you calculate the Georgist tax rate on the unimproved land value, you add other taxes to government or you slash and burn through government spending to deal with the capped revenue. It's living in fantasy land to say Georgist land value taxes, calculated in precise accordance with this metric and not adjusted upward or downward by revenue needs will be a single source of revenue for all levels of government.

geocon 4y ago
Well, while Georgism is most famous for advocating for land value taxation the LVT itself is not the only Georgist tax. All forms of economic land, including such things as natural resources and intellectual property, also generate economic rents and are candidates for taxation. Furthermore, cutting taxes on labor and capital increases the value of land significantly, so much of the revenue "lost" by cutting income taxes, sales taxes, corporate taxes etc would flow directly back into land values and return via the LVT. In any case, there is lots of room for experimentation at the margins and any Georgist reform won't be complete or overnight. Any shift from taxing labor and capital will result in a better and more efficient economy, so don't get too caught up in the abstract end state.
- AnimalMuppet 4y ago
  > All forms of economic land, including such things as natural resources and intellectual property, also generate economic rents and are candidates for taxation. That fixes my biggest complaint about Georgism. Take Google, for instance. What is the basis of their income? It's not the land they own or occupy. It's that they own google.com. Where does IBM's money come from? Not from the land they own in upstate New York. It comes from their patent portfolio.
- dragonwriter 4y ago
  > All forms of economic land, including such things as natural resources and intellectual property, also generate economic rents Natural resources are consumed inputs and don't generate rents (extraction rights, which are a subset of property rights in land, do); intellectual property isn't land in the usual economic sense (it is not naturally occuring, so not land; it is durable and created, and therefore capital in the classic division.) It does generate rents, but that's typical of capital goods generally. (In modern use it's more typical to expand the use of “capital” to include land and thereby encompass durable, rent-generating subjects of property rights than to expand “land”.)
  - geocon 4y ago
    Well yes, natural resources are dealt with under severance taxes on extraction. By intellectual property rents I mean monopoly rents from government enforced IP law. And yes, neoclassical economics classes land under capital and that is a fundamental disagreement of Georgist economists with neoclassical economists.
    - dragonwriter 4y ago
      > And yes, neoclassical economics classes land under capital and that is a fundamental disagreement of Georgist economists with neoclassical economists. Perhaps, but your proposed construction (I’m not familiar enough with Georgism to know if it is the standard there) seems to be equivalent to that in equating classical categories of land and capital, but simply reversing the terminology, making durable (and thereby serving as rent-producing property) non-human factors of production, whether natural (and thus classically “land”) or created (and thus classically “capital”) all “economic land”.
brightly-salty 4y ago
Well other taxes are not precluded by Georgism. See for instance Piguovian taxes and IP taxes. But additionally, I don’t think it can be assumed that the government will continue to need its current amount of revenue. Under subsidiary, the size of the federal government would drastically be reduced as power moves downward to local governments.
- pyradius 4y ago
  Well, many Georgists believe that All Taxes Come out of Rents, so under that belief there is no reason to keep inferior taxes in existence as opposed to collecting the higher rental value that would occur with the removal of those current taxes. As for levies on externalities, these should be more accurately seen as correcting a market failure, the social cost that society must pay that the consumer/producer do not pay. Notably, Frank Ramsey and A.C. Pigou can be considered crypto-Georgists -http://blog.lvrg.org.au/2013/09/ramsey-and-pigou-crypto-georgists.html http://blog.lvrg.org.au/2013/09/ramsey-and-pigou-crypto-geor... "As we shall see, Ramsey not only formulated a rule that leads directly to a “single tax” on land, but also anticipated the so-called Laffer curve in cases where the “single tax” is not employed. Moreover, Ramsey's rule was to be applied after any externalities had been internalized by means of appropriate taxes and bounties."
  - TimPC 4y ago
    Ethically, under Georgism there is a strong moral basis for taxing economic rents and particularly so for taxing land and natural resources. The argument is that we all have equal entitlements to the land and the resources on it. That equal entitlement is forced by taxing adequately for the land value or natural resource value so that it doesn't unfairly benefit the person who holds it at the expense of everyone else. Georgists are a bit like libertarians when it comes to income taxes. It's very difficult for government to demonstrate a moral basis for interfering in work markets to generate taxation. Libertarians argue that if you are forced to pay 57% income tax you're 57% a slave. I'm not sure Georgists would go that far, but it seems unlikely you'd see implementation of taxes that are both economically less efficient and ethically more dubious than taxation of economic rents.
TimPC 4y ago
I think it's extremely important to undertake a cost benefit analysis of the end state to decide if we want to transform society in that direction. So I disagree strongly with any comment of the form "don't get too caught up in the end state". I agree there are some other things you can tax. I presume those are also taxed at precisely the economic rents they create? My point is that government needs some sort of tax with a knob that they have the ability to tweak upwards or downwards based on shifting revenue needs. It seems to me the only things in a Georgist system are taxed at precise values and fail to give government that knob. Do all Georgist societies have some sort of services cap because their tax revenues are capped?
- geocon 4y ago
  I say "don't get caught up in the end state" not because I don't think the end state is important but because the intermediate effects are hard to predict without more data. But, more to the point, if LVT is the most efficient kind of tax, why would we not want to over time, shift as much of the tax base to it as possible? In any case, Georgism produces a very different financialization of governance than the current tax system, because public goods pay for themselves via increases in land value- see the Henry George Theorem by Nobel laureate Joseph Stiglitz: https://en.wikipedia.org/wiki/Henry_George_theorem https://en.wikipedia.org/wiki/Henry_George_theorem. This means that rather than adjusting taxation to meet desired investment, desired investment is adjusted to produce optimum public returns- which has the beneficial side effect of incentivizing good and proper governance.
  - TimPC 4y ago
    I think it's fair to say efficiency and fairness are sometimes competing concerns. For instance, I disagree on shifting only property taxes to LVTs because I think they benefit condo developers at the expense of homeowners. Any tax shift has winners and losers and while there might be a slight overall benefit to the shift itself the individual outcomes can vary dramatically. I'd argue that we do have to have some degree of consideration for individual outcomes as well.
    - 4y ago

by TimPC 4y ago

geocon 4y ago

Well, while Georgism is most famous for advocating for land value taxation the LVT itself is not the only Georgist tax. All forms of economic land, including such things as natural resources and intellectual property, also generate economic rents and are candidates for taxation. Furthermore, cutting taxes on labor and capital increases the value of land significantly, so much of the revenue "lost" by cutting income taxes, sales taxes, corporate taxes etc would flow directly back into land values and return via the LVT. In any case, there is lots of room for experimentation at the margins and any Georgist reform won't be complete or overnight. Any shift from taxing labor and capital will result in a better and more efficient economy, so don't get too caught up in the abstract end state.

AnimalMuppet 4y ago
> All forms of economic land, including such things as natural resources and intellectual property, also generate economic rents and are candidates for taxation. That fixes my biggest complaint about Georgism. Take Google, for instance. What is the basis of their income? It's not the land they own or occupy. It's that they own google.com. Where does IBM's money come from? Not from the land they own in upstate New York. It comes from their patent portfolio.
dragonwriter 4y ago
> All forms of economic land, including such things as natural resources and intellectual property, also generate economic rents Natural resources are consumed inputs and don't generate rents (extraction rights, which are a subset of property rights in land, do); intellectual property isn't land in the usual economic sense (it is not naturally occuring, so not land; it is durable and created, and therefore capital in the classic division.) It does generate rents, but that's typical of capital goods generally. (In modern use it's more typical to expand the use of “capital” to include land and thereby encompass durable, rent-generating subjects of property rights than to expand “land”.)
- geocon 4y ago
  Well yes, natural resources are dealt with under severance taxes on extraction. By intellectual property rents I mean monopoly rents from government enforced IP law. And yes, neoclassical economics classes land under capital and that is a fundamental disagreement of Georgist economists with neoclassical economists.
  - dragonwriter 4y ago
    > And yes, neoclassical economics classes land under capital and that is a fundamental disagreement of Georgist economists with neoclassical economists. Perhaps, but your proposed construction (I’m not familiar enough with Georgism to know if it is the standard there) seems to be equivalent to that in equating classical categories of land and capital, but simply reversing the terminology, making durable (and thereby serving as rent-producing property) non-human factors of production, whether natural (and thus classically “land”) or created (and thus classically “capital”) all “economic land”.

brightly-salty 4y ago

Well other taxes are not precluded by Georgism. See for instance Piguovian taxes and IP taxes. But additionally, I don’t think it can be assumed that the government will continue to need its current amount of revenue. Under subsidiary, the size of the federal government would drastically be reduced as power moves downward to local governments.

pyradius 4y ago
Well, many Georgists believe that All Taxes Come out of Rents, so under that belief there is no reason to keep inferior taxes in existence as opposed to collecting the higher rental value that would occur with the removal of those current taxes. As for levies on externalities, these should be more accurately seen as correcting a market failure, the social cost that society must pay that the consumer/producer do not pay. Notably, Frank Ramsey and A.C. Pigou can be considered crypto-Georgists -http://blog.lvrg.org.au/2013/09/ramsey-and-pigou-crypto-georgists.html http://blog.lvrg.org.au/2013/09/ramsey-and-pigou-crypto-geor... "As we shall see, Ramsey not only formulated a rule that leads directly to a “single tax” on land, but also anticipated the so-called Laffer curve in cases where the “single tax” is not employed. Moreover, Ramsey's rule was to be applied after any externalities had been internalized by means of appropriate taxes and bounties."
- TimPC 4y ago
  Ethically, under Georgism there is a strong moral basis for taxing economic rents and particularly so for taxing land and natural resources. The argument is that we all have equal entitlements to the land and the resources on it. That equal entitlement is forced by taxing adequately for the land value or natural resource value so that it doesn't unfairly benefit the person who holds it at the expense of everyone else. Georgists are a bit like libertarians when it comes to income taxes. It's very difficult for government to demonstrate a moral basis for interfering in work markets to generate taxation. Libertarians argue that if you are forced to pay 57% income tax you're 57% a slave. I'm not sure Georgists would go that far, but it seems unlikely you'd see implementation of taxes that are both economically less efficient and ethically more dubious than taxation of economic rents.

TimPC 4y ago

I think it's extremely important to undertake a cost benefit analysis of the end state to decide if we want to transform society in that direction. So I disagree strongly with any comment of the form "don't get too caught up in the end state". I agree there are some other things you can tax. I presume those are also taxed at precisely the economic rents they create? My point is that government needs some sort of tax with a knob that they have the ability to tweak upwards or downwards based on shifting revenue needs. It seems to me the only things in a Georgist system are taxed at precise values and fail to give government that knob. Do all Georgist societies have some sort of services cap because their tax revenues are capped?

geocon 4y ago
I say "don't get caught up in the end state" not because I don't think the end state is important but because the intermediate effects are hard to predict without more data. But, more to the point, if LVT is the most efficient kind of tax, why would we not want to over time, shift as much of the tax base to it as possible? In any case, Georgism produces a very different financialization of governance than the current tax system, because public goods pay for themselves via increases in land value- see the Henry George Theorem by Nobel laureate Joseph Stiglitz: https://en.wikipedia.org/wiki/Henry_George_theorem https://en.wikipedia.org/wiki/Henry_George_theorem. This means that rather than adjusting taxation to meet desired investment, desired investment is adjusted to produce optimum public returns- which has the beneficial side effect of incentivizing good and proper governance.
- TimPC 4y ago
  I think it's fair to say efficiency and fairness are sometimes competing concerns. For instance, I disagree on shifting only property taxes to LVTs because I think they benefit condo developers at the expense of homeowners. Any tax shift has winners and losers and while there might be a slight overall benefit to the shift itself the individual outcomes can vary dramatically. I'd argue that we do have to have some degree of consideration for individual outcomes as well.
  - 4y ago