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Georgists have known for a long time about the tendency for land prices to rise in a way that captures a sizeable percentage of the gains of labour (income). Th

• teakettle42 4y ago
  I already think property taxes are immoral, in that they tax unrealized value in perpetuity. I’m paying $2k more in property taxes this year because a bunch of very wealthy out-of-state home owners have decided they want to live here, and have driven up prices to an extreme. I’m not going to be convinced that I should be ruinously taxed on the unrealized value of my land in order to force me to develop it according to the whims of whatever entity we entrust to socially engineer land-use.
  • melissalobos 4y ago
    > I should be ruinously taxed I don't know where you are getting that it would be a ruinous tax. It should also be offset by not having other types of taxes in a pure Georgian system.
    • throwaway0a5e 4y ago
      >I don't know where you are getting that it would be a ruinous tax. I'm sure the "force people with existing single family homes to develop them into something else or sell them to someone who will" rhetoric the proponents of such taxes sling around has something to do with it.
  • atdrummond 4y ago
    Why do you think land taxes would be ruinous? The only single family home owners who would see major tax increases are those in markets like the Bay Area - many of whom are already paying well below what they would nearly anywhere else in the country due to their legislatively capped house value. I also find the morality argument interesting, as land has some unique attributes as an economic good that one could use to make very convincing arguments for the immorality of land ownership itself.
  • xvedejas 4y ago
    But surely we can deduce that property taxes are _more_ immoral than a land value tax. With both, you do have to pay more when the wealthy decide your area is valuable. (Leave aside for the moment the argument that some Georgists will argue this is less likely in a world with LVT). But only with property tax are you taxed _more_ when you spend your own money to improve your own property. Property tax directly disincentivizes making the most of your own land, because it taxes the improvements to it. Land Value Tax is like taking property tax and removing the worst element of it. At least personally I think it moves the needle from "a very bad idea" to more in the realm of a necessary evil.
    • skybrian 4y ago
      Okay, but don't most people who like Land Value Tax want property taxes to go up, overall? As in, governments will collect more revenue? It's difficult to see how all the radical changes they promise would happen if property tax rates were lowered on average. That would tend to let people keep owning the property they have.
      • Jensson 4y ago
        No, it is enough that massively expanding your property wont increase your tax. That way you can build a lot more homes on your land and therefore become a lot richer without paying more taxes. There is no reason for the tax to be higher overall than before, its just what it incentivises. You might not take this opportunity but others will. Some people might pay more tax, if lets say your area develops into a dense city core over 40 years your land will now be worth many millions, at that point your tax would be comparable to the skyscrapers around you. Which is reasonable since you are hurting the progress of the city at that point, and if you sell your property you will have so much money that you can easily move slightly outside the boundaries of the city core. But in most cases you wont strike it rich with your land getting worth that much.
        • skybrian 4y ago
          This doesn't make sense. The higher the tax the more the (negative) incentive. Low tax means low incentive. Let's say someone has a house in a gentrifying area. The house isn't taxed but the land is, and property values are rising. Encouraging density means making it financially difficult for them to stay there, so they will sell to a developer. If the tax doesn't do that, LVT doesn't provide enough incentive to discourage speculation. LVT advocates need to own up to what they're trying to do. There will be winners and losers. Someone with little income (retired) and property in a desirable location is going to lose. And this is exactly the sort of thing that got Prop 13 passed in California. Homeowners really don't like it when their property tax goes up.
  • diebeforei485 4y ago
    Property taxes help pay for local services. As housing costs go up, so too do expenses faced by governments and contractors.
    • pixelatedindex 4y ago
      What expense is there for governments and contractors, that is directly tied to housing prices going up? Sure, more people would go to the same school but the government or contractors have very little to do with educational expenses. Maybe paving roads? Can’t think of much else. Happy to be wrong.
      • throwaway0a5e 4y ago
        >What expense is there for governments and contractors, that is directly tied to housing prices going up? In theory, nothing. In practice rich people complain about everything that isn't "nice" and want it made nice. As the community gets richer as a result of the minimum buy-in going up the municipality will be be fixing more potholes, changing more street light bulbs, painting everything on a more regular schedule, hiring more enforcement officials to harass people over increasingly smaller violations, hiring more cops because rich people call the cops over more minor things resulting in more calls, etc, etc. It costs a ton more money run a city/town the way people who can afford $500k houses and $2k rents want them run than the way people who can afford $200k houses and $800 rents want them run.
      • diebeforei485 4y ago
        To retain their employees and attract new talent, they need to pay wages that cover increasing rents.
  • pm90 4y ago
    You don’t own the land you live on in perpetuity. It seems like your neighborhood is undergoing gentrification; time to move to a more affordable neighborhood.
    • teakettle42 4y ago
      I’m not being displaced since I can readily afford the increase. The people being displaced are those on the margins who can’t afford it, many of whom our community is much worse off for losing. Hence “immoral”; the government is forcing gentrification through property tax.
  • BirdieNZ 4y ago
    > have driven up prices to an extreme. So your land, through no effort of your own, has hugely gone up in value; don't you think there's something wrong with you benefiting from other people's labour that increased the value of your land?
    • deleted 4y ago
      [deleted]
    • c22 4y ago
      You only benefit if you sell.
    • natpalmer1776 4y ago
      Except he doesn't benefit any more from the increased value unless he sells or rents the property. In fact, as his tax liability went up he is actually paying more to accommodate the inevitable increase in spending on municipal amenities that the wealthy newcomers are likely to petition for, given how much they pay in property taxes. If we imagine he did not desire these things in the first place, and was on fixed income like many thousands of individuals, he would be forced to sell his home as a result of the whims of the market. The escalating cost of property in his area should leave him with a tidy sum of money to ease the transition, but that is little consolation for potentially being forced out of the home you raised your children in, met your grandchildren in, spent hundreds or thousands of hours maintaining and improving, among many other sentimental attachments. To a homeowner who values their home and doesn't intend to sell, the increased value of land is an apology. It is a meagre recompensation for second order consequences of the market's capriciousness. But at least the value went up right?
      • Guvante 4y ago
        Lets take the example above as being too much money (as "too much" is hard to pin down). In exchange for losing a home due to the $2k payment you will receive $80k. Generally speaking 40 years worth of "I couldn't afford it" is a pretty decent apology. This is working of NJ which has the highest rate at 2.5%, most states are lower. Sure it sucks that you are paying $1k instead of $2k because your house is worth $200k instead of $100k but you know... You could sell your house for a profit of $100k.
  • handmodel 4y ago
    I used to have this view. But I think in practice not taxing wealth (property) and taxing contributions to producing things of value (income) is bad. And especially in 2022 with how easy it is to borrow money based on your property not taxing it is especially bad for society. Look at California. Everyone who bought here 40 years ago is super well off while those who moved more recently and are contributing a lot still can't get stability. I realize property taxes go to plenty of local government ventures - but presumably the US government (and state government) does quite a bit to protect your property from outside forces and local thieves. It makes sense that the more value in property you have the more you should pay to protect that.
    • double_nan 4y ago
      Another option might be to tax all transactions. Such tax might come with certain services which the government can provide in exchange.
    • neilwilson 4y ago
      "But I think in practice not taxing wealth (property) and taxing contributions to producing things of value (income) is bad. " That assumes taxes are there to raise money. They're not. Taxes are there to raise armies, not money. Government doesn't need any more land to do its work. Nor does it need money, since it is the currency issuer. What it needs is manpower. That manpower has to be released from the private sector who would otherwise employ them. Therefore the most effective taxation is one that leads to fewer job offers from the private sector of precisely the sort of people government needs to hire to do its work. Land and property is the least effective taxation that requires a large amount of fungibility in the economy to deliver the people government needs to hire, and is the least countercyclical to the business cycle.
      • handmodel 4y ago
        State and local government do need to raise money. Unless you want all local agencies to spend no more and no less than what the federal government decides to give them. They cannot issue currency.
  • mrDmrTmrJ 4y ago
    Do you think town services are immoral? If police, fire-dept., water, roads, and schools are not immoral - how do you propose to pay for them? Or do you wish to experience a "true property value" without those services? What's more immoral: Property taxes or zoning that prevents other people from building what they want on their own property? It's not the increased demand for homes that drives increases in prices, and hence property taxes, it's the prohibitions on new construction. Surely those are immoral too!
    • double_nan 4y ago
      I think you are mixing 2 different concepts: 1. type of taxes 2. public services While public services you listed are not immoral, the way how the taxes collected to pay for these services can be immoral.
      • happymellon 4y ago
        > how do you propose to pay for them? You need to answer this question.
        • teakettle42 4y ago
          The cost of these services hasn’t increased by $2k/year to serve my home just because home prices have increased.
          • wildrhythms 4y ago
            You yourself alluded to people moving in, so I don't see why the cost of those services (and many more) isn't justified. >because a bunch of very wealthy out-of-state home owners have decided they want to live here There it is.
    • teakettle42 4y ago
      > how do you propose to pay for them? Assess the actual cost, adjusted according to actual income — not the estimated value someone’s home.
  • afpx 4y ago
    I think most people are against taxes. Let's get rid of them already.
    • teakettle42 4y ago
      I’m not opposed to taxes, I’m opposed to assessing them in a way that arbitrarily and unnecessarily forces people out of their homes and out of our community.
      • TimPC 4y ago
        And I’m opposed to the argument that the current distribution of property is somehow more just or fair than one that results afterwards from a change in tax policy. Currently, suburbs are massively subsidized by big cities and without those subsidies taxes in suburbs would roughly double to pay for infrastructure (higher increases in poorer neighbourhoods where the tax base is smaller). You assume the resultant communities from all these subsidies are morally neutral and have strong rights to exist unchanged. Cities have a right to take back the tax dollars that are unfairly siphoned to suburbs and the resultant change in taxes would be just as disruptive to the community as anything being proposed. Georgism has a better moral basis than suburbanization. It’s possible to come up with a moral theory that justifies LVT and philosophers have done so. No philosopher has found a consistent moral theory to justify taking money from poor apartment dwellers and using it to pay for well-off suburbs. The current communities that exist are created through injustice and it’s unreasonable to demand they continue to exist unchanged when doing so requires perpetuating that injustice.
        • teakettle42 4y ago
          This is a really long-winded way to say “it’s moral to force people out of their homes, destroy people’s communities, and ruinously tax them, all for not living the way I want them to.” The fair allocation of a shared pool of taxes is a different question from LVT entirely.
          • TimPC 4y ago
  • double_nan 4y ago
    Another angle to look at property taxes might be private property rights. From some point of view real estate taxes are a way to deny these rights by forcing owners to pay rent for the right to use the property.
    • TimPC 4y ago
      You don’t own property in the US and never have. You have a title and deed that result in a lease of land from government and they can enforce taxes as part of that lease.
    • imtringued 4y ago
      The private property rights of land violate the private property rights of the people around that land as they work to improve their community and do not get compensated for their efforts. Instead, all that income is redistributed to corrupt established owners of land who want their family line to retain power at the expense of everyone else.
  • tdaltonc 4y ago
    I think it would be immoral for land property rights to operate in the way you want them to. Property rights for copyright, tractors, land, etc all work differently so there's no obvious "most ethical" way to manage property rights. This legal property rights are usually different for good reasons. The Real Estate rights bundle, for example, is a kind of monopoly. I think it's ethical that that bundle of rights should come with an obligation to pay a kind of rent to society for that monopoly for the same reason that the right to own a slice of radio frequency spectrum comes with a rent to society. A good method for determining the relative size of that rent (in both cases) is based on its market value (ie in proportion to the value that other members of society place on that monopoly). https://www.investopedia.com/terms/b/bundle-of-rights.asp https://www.investopedia.com/terms/b/bundle-of-rights.asp
  • pydry 4y ago
    So you also think jacking up rent is immoral? If lots of people want something I occupy but I didnt create or make valuable why should I not have to pay society for that privilege?
  • haihaibye 4y ago
    My wages were driven up by wealthy employers hiring other programmers for jobs I didn't want or ask for - it's immoral to tax my increased income.
    • teakettle42 4y ago
      Increased income is realized value. You actually have the income. Imagine that instead, your income was taxed based on the government estimated income you could have if you switched to a new job that paid more, and you were taxed based on that hypothetical increase in your wages. I see no profit from my home’s increased estimated value unless/until I sell and move out of the area.
      • TimPC 4y ago
        You see all sorts of value from the increased value of your home including the ability to get larger loans using the land/property as an asset to back that loan. Not having the cash in hand isn’t a good basis for not charging a tax, especially when that tax is a tiny fraction of the actual value of the property.
        • teakettle42 4y ago
          > Not having the cash in hand isn’t a good basis for not charging a tax That’s a great basis for not charging a tax. > … especially when that tax is a tiny fraction of the actual value of the property. How does that justify a tax?
  • TimPC 4y ago
    In order for property taxes to be moral we have to ask what land is and what land does. Land is an economic good that is unlike any other. It captures the value of other people’s work just by existing. As the amount of income in a neighborhood goes up the land value goes up even if no one improves everything. So there are substantial questions on why you are entitled to 100% of these gains you didn’t create. Short of libertarianism you’re not going to have a moral basis for a property right strong enough to justify it. And libertarianism is a terrible morass of bad philosophical ideas that don’t work.
    • teakettle42 4y ago
      > It captures the value of other people’s work just by existing That’s an invention to justify your desire to force people out of their homes to make way for your preferred use of their land. You don’t want to only tax the profits when they actually do eventually sell; you want to tax unrealized “value” that they derive no benefit from and will never see if they remain in their homes and as part of their community.
      • TimPC 4y ago
        No, it's a valid economic model that has been consistently explained through economic theory. You are entitled to you're own opinion but not your own facts and you're literally calling substantial pieces of modern economics "an invention" in the sense of fiction. I want to tax the economic rent of land. Your land being worth more has benefits to you even if you haven't yet cashed them in. The market taxes on your property going up functions similarly to rents going up from land increases and is just as justified. You treat it as a strange mystic unnatural phenomenon unlike anything that has ever existed. It's pretty bog standard. If there is a moral basis for rent increases in response to land value increases there is a moral basis for increasing the amount of tax charged for land value increases. In both cases, the expense comes from unrealized value of land, the landlord doesn't have to sell in order to raise a rent. Property rights aren't magic that tears down the very fabric of reality.
        • teakettle42 4y ago
  • lovich 4y ago
    With the use of the term “out-of-state” I am assuming you are American, and that means you don’t own land. No one in the country owns land. You own a title to rent exclusive use of the land from the government and property taxes are the rent on that. Being allowed to sit on unrealized value from the land, deny its use to all others in society, _and_ not pay taxes on it seems like the immoral situation to me
    • teakettle42 4y ago
      > Being allowed to sit on unrealized value from the land By “sit on unrealized value”, you mean continuing to live in my home, in the community that I’ve worked with others to build, exactly as I have for many years prior? It’s incredibly presumptuous to think you have the right to force me from my home and dismantle my community because you don’t like how we’re choosing to “sit on unrealized value”. > deny its use to all others in society I’m also denying the use of my lawnmower to all others in society, but I don’t have to pay a yearly tax on it. There’s plenty of land, plenty of housing, and plenty of lawnmowers. You’re not entitled to mine just because you really want to take it from me.
      • lovich 4y ago
        > You’re not entitled to mine just because you really want to take it from me. No one is entitled to anything that is your property. However, you still don’t own the land. Just a right to exclusiveish(barring other rights others hold to the land like easements) use of it as long as you pay your property taxes. Wanting to keep a monopoly on the use of the land without paying the taxes is you feeling entitled to taking land from society.
        • teakettle42 4y ago
          Why should “society” have a stronger right to land than the people inhabiting it?
          • lovich 4y ago
  • michaelbrave 4y ago
    This may sound extreme, and I don't quite believe it, but I'm thinking on it. But the long and short of it is that I'm not even sure we should allow for the ownership of land. Going back far enough all land was stolen (central park, anything dealing with first peoples) or conned from someone, some war determined it, it was sold and sold again. The only two arguments of justification are 1. they were conquered so it's done (basically might makes right) or 2. it was so long ago that we shouldn't worry about it, and that wasn't me specifically. Besides if Climate Change ends up half as bad as I think it will, some areas will need to designated as "no farm zones" or "no more people zones", some towns will need to be closed and maybe turned back into wilderness. The problems are already there, like California having a 20 year drought and importing most of it's water, at what point do you say "this is the new normal and we need to plan as such" because we continue to grow water heavy crops like pistachios in California when over 20 years tells us we shouldn't. But protection of ownership of a thing that probably shouldn't be owned will halt any effective amounts of change to be able to happen. I'm not even entirely sure what I'm trying to say as I've not thought it out, but just recognize that we have these assumptions about things that maybe aren't or shouldn't be true.
• s1artibartfast 4y ago
  One issue with georgism is that it significantly penalizes Urbanization and productivity that goes with it. People are incentivized to spread out and live on less costly land and take a hit to their income or less lucrative jobs. You would have Urban workers paying most of their income and taxes, and remote white collar workers paying essentially zero taxes.
  • xvedejas 4y ago
    This is maybe true for the landowner, but it's much less true for the renter. Since land is more available (due to fewer underproductive uses), you can expect more competition to put renters in land efficient configurations (high rises) in the densest cities. Sounds like urbanization to me? And more affordable than the status quo.
    • s1artibartfast 4y ago
      Still sounds like a lot of blue collar workers who need to be close to jobs crammed into tiny high-rises, paying for the tax either directly or through rent, and white collar works living in remote mansions with no tax. alternatively, if blue collar workers cant keep up with the tax, then they are commuting 2 hours each way to drive in from the countryside
      • xvedejas 4y ago
        There's a lot of analysis out there showing that LVT is the one kind of tax that is not transferred into rent. On the contrary, it's expected that rents would drop under LVT, since land would become less scarce where people are willing to pay rents.
        • s1artibartfast 4y ago
          It sounds like a perpetual motion machine. 100% of Revenue comes from land but somehow this isn't passed on to those occupying the land. It also ignores entire segments of the economy that don't have significant land requirement: Finance, services, digital Commerce. Google on Googlers pay no taxes but plumbers and homeowners in urban areas pick up the slack. Sounds highly regressive
• pessimizer 4y ago
  Maybe, but my problem with the land tax is that the rich just wouldn't own any land. Especially in the age of gig work "independent contractors" I can imagine people who work somewhere being forced to commit a part of their salary to supplying their own workplace. Rents and mortgages are essentially the same thing.
• kurupt213 4y ago
  Property taxes are a downward pressure on home prices
  • imtringued 4y ago
    Agreed. The question of whether the build or its location should be taxed is at the hear of the property Vs land value tax. For some reason people think that they are dedicated eviction tools while completely ignoring that they are meant to align economic incentives with human desires. There is no need to have extremely high taxes, just don't keep them laughably low.