3 ms·

Sure, much of the value locked in shares is land or land-like assets but a much higher proportion of the value of the average middle class person's property is

Sure, much of the value locked in shares is land or land-like assets but a much higher proportion of the value of the average middle class person's property is land. So as taxes go it's incredibly favourable to most one percenters, and ordinary homeowners are amongst those whose taxes must make up the difference. (And Single Taxers have to raise 1/3 of GDP from someone so its not like the possibility of the middle classes actually paying less tax providing they kiss goodbye to their homes and move into a high rise or rural Nevada is a solution and not a different category of problem) Efficiency arguments that the average middle class homeowner would still be better off materially even with a much higher personal tax bill because the Zuckerbergs and Dorseys of this world would retain more untaxed profits and dividends to use their superior resource allocation skills to invest in land-free Bigger Adtech might appeal to the armchair neoclassical economist but for obvious reasons the public are more sceptical.

zozbot234 5y ago
Even if you focus on real estate alone, land is a "much higher" portion of that value only in urban cores where owning one's residence would be relatively uncommon (and that for very sensible, rational reasons). The areas that are most commonly associated with middle-class real estate ownership have significantly lower land values. While it's hard to say whether a genuine "single tax" is actually feasible given modern trends in government spending, the overall incidence of LVT is really quite favorable to the middle class and especially to the lower class.
- deleted 5y ago
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- notahacker 5y ago
  Land values vary from place to place, but I can't think significant pockets of middle class housing in developed countries where the value of the underlying land is as insignificant to the homeowners' net worth as natural resources are to Facebook's market cap. If we plug in something approaching real data, the UK government statistics agency assesses that the UK has £6tr in land value (more than the value of the assets that sit on it!) of which two thirds is owned by householders. And there's an annual government budget of 1tr so those land value taxes are going to be a really high proportion of the total value of the land (and property that sits on it). Good luck convincing the average homeowner who takes 30 years to pay for their home from their salary and typically retires not long afterwards that the tax incidence of a Single Tax will be favourable to them
  - zozbot234 5y ago
    > Good luck convincing the average homeowner who takes 30 years to pay for their home from their salary and typically retires not long afterwards But that's exactly the point - these people are glorified renters, they don't really structurally benefit when land values go up. The fact that a Georgist tax has to be introduced gradually in order not to be punitive towards those who happen to be holding land at any given time is well known. But we already have property taxes for a start, many countries have large one-time fees on real estate transactions etc. These are taxes that could quite easily be replaced by a shift to LVT.

zozbot234 5y ago

Even if you focus on real estate alone, land is a "much higher" portion of that value only in urban cores where owning one's residence would be relatively uncommon (and that for very sensible, rational reasons). The areas that are most commonly associated with middle-class real estate ownership have significantly lower land values. While it's hard to say whether a genuine "single tax" is actually feasible given modern trends in government spending, the overall incidence of LVT is really quite favorable to the middle class and especially to the lower class.

deleted 5y ago
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notahacker 5y ago
Land values vary from place to place, but I can't think significant pockets of middle class housing in developed countries where the value of the underlying land is as insignificant to the homeowners' net worth as natural resources are to Facebook's market cap. If we plug in something approaching real data, the UK government statistics agency assesses that the UK has £6tr in land value (more than the value of the assets that sit on it!) of which two thirds is owned by householders. And there's an annual government budget of 1tr so those land value taxes are going to be a really high proportion of the total value of the land (and property that sits on it). Good luck convincing the average homeowner who takes 30 years to pay for their home from their salary and typically retires not long afterwards that the tax incidence of a Single Tax will be favourable to them
- zozbot234 5y ago
  > Good luck convincing the average homeowner who takes 30 years to pay for their home from their salary and typically retires not long afterwards But that's exactly the point - these people are glorified renters, they don't really structurally benefit when land values go up. The fact that a Georgist tax has to be introduced gradually in order not to be punitive towards those who happen to be holding land at any given time is well known. But we already have property taxes for a start, many countries have large one-time fees on real estate transactions etc. These are taxes that could quite easily be replaced by a shift to LVT.