6 ms·

The transition is hard. I'm convinced it has to be both gradual and compensated.

by TimPC 4y ago

zozbot234 4y ago
Since 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 ago
  Some 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 ago
    Nobody 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 ago
      I 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 ago
        As 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.
        imtringued 4y ago
        A yearly auction is overkill. Do it every 5-10 years with a fee the longer you delay the next auction. (Like banks charge more interest the longer a fixed rate loan is)
        MiddleEndian 4y ago
        Eh still sounds pretty terrible really. The assessment people should be able to figure it out however they normally figure out taxes.
      - zozbot234 4y ago
        You could use "auctions" to capture that residual value if those were long-term land leases. But you'd still want to assess and tax land rent afterwards, because in practice high-stakes leases have proven vulnerable to government corruption.
      - imtringued 4y ago
        Silvio Gesell proposed an auction mechanism but I honestly don't care about the details. You can lease land. Tax it or auction it off. There are so many good enough solutions that one does not have to be picky.
  - prichino 4y ago
    That's the gist of it. If land is so worthless even rich people don't want anything to do with it, why would it make someone poor better off to have it?
    - TimPC 4y ago
      Because you can put structures on the land and capture the entire value of the structure? There is a difference between something being intrinsically worthless and the taxes driving the market price to $0.
  - imtringued 4y ago
    No, if land was worth $0 people would bid it up until the value of the land is how much they are willing to pay per year in taxes.
- AnimalMuppet 4y ago
  > Since all taxes are ultimately borne by land ... Objection, your honor. Assumes facts not in evidence. How is income tax ultimately borne by land? Sales tax? Inheritance tax? Gasoline tax? Corporate income tax on corporations like SpaceX, Goldman Sachs, and Intel? "Ultimately borne by land" may have made sense a century or three ago, when (almost) all income ultimately came from the land. That's not the world we live in any longer.
  - prichino 4y ago
    The username checks out; where do you think wealth comes from if not land? Paper money in the end is just a representation of claims for assets generated from land. Food, minerals, energy, actual things all come from land. You cannot eat a metaverse.
    - AnimalMuppet 4y ago
      > The username checks out; where do you think wealth comes from if not land? I gave several examples of wealth that doesn't come from land. I asked for an explanation of how, in those examples, wealth came from land. You reply with an insult to my chosen username. That's... not a very good argument. > Paper money in the end is just a representation of claims for assets generated from land. Here you're using the assumption that all wealth comes from land (the exact assumption I was questioning) in your argument. That's circular, and therefore flawed. You can't assume X and use that in your proof of X. > Food, minerals, energy, actual things all come from land. The silicon that goes into Intel chips comes from land. The chips themselves? Not so much. The single biggest factor in Google's prosperity is the google.com domain name. How big a real estate footprint does that have? I hear that Taylor Swift has a pretty big income. How much of her income is based off of land? It's derived from a musical imagination. > You cannot eat a metaverse. This I will grant you. All food (currently) is derived from land. There's a lot more to wealth than food, though.
      - prichino 4y ago
        I apologize for the uncalled snark. My point is that at the end of the day everything valuable at some point came from the land. The Intel factory is just wealth that was extracted and accumulated earlier, it is an actual, valuable asset.
snidane 4y ago
Unlikely 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 ago
  Baden-Württemberg is adopting an LVT in Germany. It is just a matter of time until the co2 dividend is implemented.

The transition is hard. I'm convinced it has to be both gradual and compensated.

by TimPC 4y ago

The transition is hard. I'm convinced it has to be both gradual and compensated.

Since 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 ago
Some 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 ago
  Nobody 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 ago
    I 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 ago
      As 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.
      - imtringued 4y ago
        A yearly auction is overkill. Do it every 5-10 years with a fee the longer you delay the next auction. (Like banks charge more interest the longer a fixed rate loan is)
        MiddleEndian 4y ago
        Eh still sounds pretty terrible really. The assessment people should be able to figure it out however they normally figure out taxes.
    - zozbot234 4y ago
      You could use "auctions" to capture that residual value if those were long-term land leases. But you'd still want to assess and tax land rent afterwards, because in practice high-stakes leases have proven vulnerable to government corruption.
    - imtringued 4y ago
      Silvio Gesell proposed an auction mechanism but I honestly don't care about the details. You can lease land. Tax it or auction it off. There are so many good enough solutions that one does not have to be picky.
- prichino 4y ago
  That's the gist of it. If land is so worthless even rich people don't want anything to do with it, why would it make someone poor better off to have it?
  - TimPC 4y ago
    Because you can put structures on the land and capture the entire value of the structure? There is a difference between something being intrinsically worthless and the taxes driving the market price to $0.
- imtringued 4y ago
  No, if land was worth $0 people would bid it up until the value of the land is how much they are willing to pay per year in taxes.
AnimalMuppet 4y ago
> Since all taxes are ultimately borne by land ... Objection, your honor. Assumes facts not in evidence. How is income tax ultimately borne by land? Sales tax? Inheritance tax? Gasoline tax? Corporate income tax on corporations like SpaceX, Goldman Sachs, and Intel? "Ultimately borne by land" may have made sense a century or three ago, when (almost) all income ultimately came from the land. That's not the world we live in any longer.
- prichino 4y ago
  The username checks out; where do you think wealth comes from if not land? Paper money in the end is just a representation of claims for assets generated from land. Food, minerals, energy, actual things all come from land. You cannot eat a metaverse.
  - AnimalMuppet 4y ago
    > The username checks out; where do you think wealth comes from if not land? I gave several examples of wealth that doesn't come from land. I asked for an explanation of how, in those examples, wealth came from land. You reply with an insult to my chosen username. That's... not a very good argument. > Paper money in the end is just a representation of claims for assets generated from land. Here you're using the assumption that all wealth comes from land (the exact assumption I was questioning) in your argument. That's circular, and therefore flawed. You can't assume X and use that in your proof of X. > Food, minerals, energy, actual things all come from land. The silicon that goes into Intel chips comes from land. The chips themselves? Not so much. The single biggest factor in Google's prosperity is the google.com domain name. How big a real estate footprint does that have? I hear that Taylor Swift has a pretty big income. How much of her income is based off of land? It's derived from a musical imagination. > You cannot eat a metaverse. This I will grant you. All food (currently) is derived from land. There's a lot more to wealth than food, though.
    - prichino 4y ago
      I apologize for the uncalled snark. My point is that at the end of the day everything valuable at some point came from the land. The Intel factory is just wealth that was extracted and accumulated earlier, it is an actual, valuable asset.

snidane 4y ago

Unlikely 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 ago
Baden-Württemberg is adopting an LVT in Germany. It is just a matter of time until the co2 dividend is implemented.