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On a personal level, I like the LVT as a single tax because then I wouldn't have to do any paperwork. They give me a bill, I pay a bill, there's no exceptions,
by MiddleEndian 4y ago
On a personal level, I like the LVT as a single tax because then I wouldn't have to do any paperwork. They give me a bill, I pay a bill, there's no exceptions, I can improve (or fuck up) my property, and overall the numbers won't change (unless a ton of people improve or fuck up their properties around me as well). Nice and easy.
But it also seems effective overall. After I quit my last job and before I got my current job, I did not work for several years (some due to choice, some due to circumstance). During this time, I obviously paid no income tax. But I still paid my mortgage (some of which obviously went to property tax, but mostly to the bank). Presumably with a land value tax, my payment to my mortgage company would be notably less less and the tax would notably be more, so during that time instead of paying a bank I would be paying taxes that go to infrastructure and welfare and whatnot.
I think this sort of thing is more accurate than an income-based source of taxes, because I obviously wasn't really in the same economic situation as an underemployed person who truly couldn't find a job for several years. It also allows you to assess your own level of taxation. For instance, I could have sold my place or rented it out, and moved elsewhere to a cheaper place (or I guess a more expensive place, were I so inclined to do so while not having a job).
Of course, the big disadvantage, as mentioned elsewhere in this thread, is that it is difficult to assess land value sometimes. It also seems like it may force people to move a bit more often, and moving is exhausting. And also presumably you'd have to convince people to pair this form of taxation with more lax zoning laws (with some stricter exception for farmland or something to keep the value per square foot low enough for it to still make sense).
Even weighing these factors, it seems like an improvement over the current system. But I guess the real issue is that in the current world of mortgages and such, even if 90% of the population decided it truly did make sense as a form of tax, the transition seems nearly impossible.
- TimPC 4y agoThe transition is hard. I'm convinced it has to be both gradual and compensated.
- zozbot234 4y agoSince all taxes are ultimately borne by land (specifically, by resources in fixed supply), it's not at all clear that compensation is required for a neutral tax shift.
- TimPC 4y agoSome people argue no compensation is required but I think in reality an LVT at 100% reduces the price of all land to $0. Given that land is substantial portion of retirement savings in our current economy, completely obliterating land prices without any compensation seems morally dubious. Perhaps if you do it slowly enough that you give everyone time to adjust and make the market adjustments gradual enough that people who need to sell land for retirement can still get something like 90% of the value initially it could work.
- zozbot234 4y agoNobody is arguing for a literal 100% LVT. You'd want to still leave a fraction of land rent (say 10% or so) untaxed, since this introduces a desirable market mechanism in property assessment - and George even acknowledges this. What's nutty is to let land speculators capture all of that value for no real reason.
- TimPC 4y agoI think the group that is capturing the most value is actually landlords, followed by speculators. I also agree that 90% LVT may be better in practice, although I do know people who still argue for 100% and various auction mechanisms to determine the LVT.
- MiddleEndian 4y agoAs much as I think LVT makes sense, having to go to some sort of annual auction for my own land does seem worse than just paying taxes. Along with that being a tedious process, that could put you at the mercy of malicious actors who may just dislike you and have enough cash to outbid you. Any implementation would have to not include this for people to be able to have stable lives.
- snidane 4y agoUnlikely that georgist system would get adopted gradually. It never worked in history. Denmark georgist party (Justice party of Denmark) never got a strong popular support. When they got some attention and implemented georgist policies, vested interests would take the new gains and roll the policies back, capturing the profits only for themselves. There are pockets in the US which are adopting georgist policies out of desperation. https://www.strongtowns.org/journal/2019/3/6/non-glamorous-gains-the-pennsylvania-land-tax-experiment https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g... The only model that was sustainable on a country level was Singapore and the eastern colonies like Hong Kong or Jiaozhou Bay. Unless there is dire disperation or a threat of a bigger enemy attempting to swallow you, the population gets complacent and always goes back to the humanity default of trying to outcompete their immediate neighbors, instead of working together to survive the threat of the poverty or the surrounding enemy. I admire your optimism. My hopes are that humanity gives georgism a chance this time. Instead of repeating the cycle by falling into yet another great war and then bringing prosperity back only as a post-war restoration.
- imtringued 4y agoBaden-Württemberg is adopting an LVT in Germany. It is just a matter of time until the co2 dividend is implemented.
- t0suj4 4y agoThe trouble with value assessment is good enough to dismiss LVT altogether. I don't want to be forced to liquidate my house to cover LVT bill only because the land value shot up thanks to being a part of future promise from a developer project that doesn't have to fall through.
- imtringued 4y agoWhat? Assessing the value of land is a much simpler problem than processing income taxes or sales taxes or VAT.
- t0suj4 4y agoAssessing value for the purpose of sale is much easier than for the purpose of tax. Land owners need to assess value when they want to sell. Taxmen need regular value assessment so they can tax it. Does renting out a room in your house to students influence the taxes you and your neighbors pay? How does it change your relationships if they never plan to sell?