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I'd like to better understand the concept of "unimproved land value" vs. "improvements". For example, let's say there's a neighborhood of people who are quite

I'd like to better understand the concept of "unimproved land value" vs. "improvements". For example, let's say there's a neighborhood of people who are quite poor but charitable toward one another. So they build nice gardens accessible for free, little galleries, drinking fountains and so on. As a result, other people want to move in, land value in the community increases, and eventually the original inhabitants can't pay the Georgist tax anymore and lose the land. And of course none of them can take the improvements they've made and transplant them somewhere else, it's just a total loss. Their own charity and neighborliness spelled their doom, even though they made the area attractive in the first place. What gives?

thaumasiotes 4y ago
I see a different problem with the separation. In the modern day, the improvements may contribute more than 100% of the value of the land. In most cases the sole benefit of having land in a desirable city is that it is near other desirable things. This is unlike the agricultural model motivating Georgism, where the primary benefit of owning land is that you can grow crops on it. But taking the proposal literally that we can tax land based on the improvements existing on other nearby land, but not based on the improvements made to the same land being taxed... there is a very obvious implication. Land will end up being owned in such massive chunks that the land value tax goes back down to zero, because we subtract away the entire value of the area when calculating the tax. Consider a small plot of land in Los Angeles. It's relatively close to Hollywood, and a lot of other nearby amenities. In its unimproved state, it's a swamp unfit for human habitation, but it is so advantageously located that we can attribute a lot of value to it anyway. But if the same person owns the entire region of California around Los Angeles, its unimproved state is still an uninhabitable swamp... and because he owns the entire area, there are no improvements nearby to raise the value of the land to the point where he'd have to pay taxes on it. The film industry is an improvement to the land, which we don't want to tax. The port of Long Beach is an improvement to the land, which we don't want to tax. (There is not any fundamentals-based reason to locate a port there - it was constructed as a union-busting exercise, not because of geography.) The fact that millions of people live there is an improvement that we don't want to tax. It makes no sense to base our tax assessments on how concentrated landownership is, but that is the Georgist proposal.
- boomboomsubban 4y ago
  Your issue is "what if someone owns huge chunks of land and doesn't try to make any money off it?" Then Hollywood gets built somewhere else where someone does want to make money. And eventually, those improvements may make the land the other person owns worth more money anyway and they'd be unable to pay the taxes.
  - thaumasiotes 4y ago
    > Your issue is "what if someone owns huge chunks of land and doesn't try to make any money off it?" That really has nothing to do with my issue. My issue is that, under the proposed system, two people who each own half of Los Angeles will pay a lot of property taxes, because the other half of Los Angeles adds taxable value to their half, even if their half is unimproved. But one person who owns the entirety of Los Angeles will pay no property taxes, because the unimproved land is worthless. This system guarantees that there will be a small number of people who own vast quantities of land, because that ownership structure minimizes the total tax burden. Sale of land would vanish to nearly nothing, because not only would the land have a very low cost of ownership - selling some of your land would raise the taxes you have to pay on the rest of it, the part that you keep! The total amount of tax owed is different depending on the structure of who owns the land. Why does that make sense?
    - deleted 4y ago
      [deleted]
    - Kbelicius 4y ago
      > My issue is that, under the proposed system, two people who each own half of Los Angeles will pay a lot of property taxes, because the other half of Los Angeles adds taxable value to their half, even if their half is unimproved. That is the goal, isn't it. To remove speculation from land ownership. Under this model the owner of the unimproved part of LA has no right to the increase in his land value since he did nothing to improve it. He either continues paying increasing taxes, sells it, or starts improving it. I see no bad side to it. > But one person who owns the entirety of Los Angeles will pay no property taxes, because the unimproved land is worthless. This system guarantees that there will be a small number of people who own vast quantities of land, because that ownership structure minimizes the total tax burden. What would be this persons incentive to own all this land under this model? Besides, somebody on the edges of this property starts some development and suddenly LA owners taxes raise. > Sale of land would vanish to nearly nothing, because not only would the land have a very low cost of ownership - selling some of your land would raise the taxes you have to pay on the rest of it, the part that you keep! This doesn't follow from anything. Land would have very low costs only if it is land that nobody wants, just like today. And selling your land will not lead to higher taxes on your remaining land unless the land that you sold gets improved in such a way that it increases the value of your land. Why do you think that landlords are entitled to value created by somebody else? >The total amount of tax owed is different depending on the structure of who owns the land. Why does that make sense? I agree, it doesn't make any sense. Luckily, your conclusion doesn't follow from anything that you wrote. The total amount of tax owed is different depending on the value of the land. Do you think that that also makes no sense?
frankus 4y ago
That's an interesting dilemma. I don't think Georgism fully solves the issue of returning community-created value to the community members who contributed to it. Of course the same is true under the current system for anyone who rents their residence. I think the ideal outcome would be to just build additional housing for the people who want to move there, i.e. split the tax per unit land across more units of housing, since that's what the market is indicating that it "wants". Of course most of the Anglophone world is doing a terrible job of adding housing in high-demand areas, and I'm not clear whether and how that would change under a Georgist regime.
- TimPC 4y ago
  If you switch to Georgism without fixing zoning it ends up worse not better. Zoning my land as suitable for a high-rise can destroy the entire value of my home because it becomes an unusable structure due to the higher rates of tax. At the same time zoning my land for high-rise causes the value to go up and that results in a massive tax increase that eliminates any price gain for my land. Since I so firmly don't want my land to be upzoned I become a NIMBY and compromise with my neighbors to also protect their land from upzoning. We all elect politicians that oppose all upzoning. Some Georgists argue that I'm supposed to want my neighbors upzoned because it raises my CD but they seem to have not done the math because if you're applying the CD over the entire US then upzoning a single neighbor raises my CD by fractions of a cent which I care so little about that it doesn't change the incentives for this political alliance.
kodyo 4y ago
There are some undefined variables. Did the people doing the improving own the land? Well, now they're no longer poor. Yay. Sell and get out of there before the Californians move in and turn it into a sewer. If they voluntarily improved somebody else's land under no contractual agreement with the owner, why do they think they're entitled to a share of the new value? If they voluntarily improved "public" land, good luck extracting gratitude from the state after the fact. The bureaucrats are more likely to issue fines and send in bulldozers.
- threatofrain 4y ago
  > If they voluntarily improved somebody else's land under no contractual agreement with the owner, why do they think they're entitled to a share of the new value? > If they voluntarily improved "public" land, good luck extracting gratitude from the state after the fact. The bureaucrats are more likely to issue fines and send in bulldozers. I wonder if this is a fringe example as I imagine few people are radically improving public land, esp. to such extent that it's causing a real estate rush. We might then go across not only the country but to other nations like Canada and ask what proportion of real estate booms are due to this scenario.
  - kodyo 4y ago
    I agree, I doubt it's much of a real thing, but the hypothetical got me thinking.
  - jandrewrogers 4y ago
    A small version of this occurs in the Mountain West. Some well-maintained rural roads are actually maintained illegally across Federal land by the locals. The Federal government is responsible for maintenance but often doesn't do any for decades and so the roads go into severe disrepair. If you ask permission to repair the road out of your own pocket, you will have to file absurd amounts of paperwork and the Federal government charges you money for the right! Some of the local illegal road repair crews are well-organized. They descend like a flash mob with heavy equipment when the odds of getting caught are near zero. The Feds are incurious about who is maintaining the roads illegally because it is kind of doing them a favor. I first learned about this when I naively started jumping through the hoops to get permission to repair a remote road. One of the local ranchers heard about it, pulled me aside, and explained how things worked while admonishing me for ruining my plausible deniability. The whole thing was wild.
kodah 4y ago
I've always called this "state-to-state" income inequality, because it used to be that people from relatively wealthy states would "retire" (probably not actually retire) in lower income states because they can purchase a home with less friction. Nowadays, the income inequality gap has grown drastically in each state, so I think this problem just falls under that umbrella. A good source: https://www.cbpp.org/blog/a-state-by-state-look-at-income-inequality https://www.cbpp.org/blog/a-state-by-state-look-at-income-in...
- hibikir 4y ago
  The problem with this is that states are very poor boundaries for almost any economic and demographic indicator: A US state is a mostly arbitrary collection of rural, urban and suburban people, which happened to be put together a few hundred years ago, and which have relatively few economic ties with people from different groups. A big difference among states is just how much of each group we get, plus a small multiplier between big, successful metro areas, and those that are not. How different is it to live in northern Illinois, vs south east Wisconsin? It's still really the Chicago metro area, and the state is mostly irrelevant. The same on both sides of the Kansas City metro. When you are measuring income inequality within states, all you are seeing is that the largest metro areas are in almost all cases getting richer, while rural areas poorer. It's not a matter of rich states and poor states at all. For almost anything that matters, those state lines are just confounding your statistics.
  - kodah 4y ago
    Yeah, I see your point. I do think there's something to do with a state having a concentration of wealthy people who then move. That, at least, seems problematic. I do think people, these days, are incentivized to do that because although we may look at them as wealthy they may have trouble affording where they're from. I don't even know what you do with that.
lazide 4y ago
By 'lose the land', really they'd be forced to sell or go bankrupt/accrue tax debt. Which is pretty terrible if the folks are little old ladies settling down to avoid the cruel harsh world, and now need to find somewhere else to live when they are least capable of doing so (being on a fixed income and all). The 'can't put old widows out of their homes' scenario is why California's Prop 13 came to be, btw. Even without Georgist taxation, property taxes got too high to pay. I imagine a lot of folks in Texas and other less dense areas are going through this right now due to the rapidly increasing property values and less controlled changes in taxation. It does cause change and turnover instead of stagnation in an area though.
- curun1r 4y ago
  > The 'can't put old widows out of their homes' scenario is why California's Prop 13 came to be There’s a better way to handle this, though, than the Prop 13 approach of limiting taxes. You just allow a certain amount of property taxes to optionally go unpaid and accrue as a lien against the property that must be settled when the property changes hands. Old widows never get forced out of their houses, but they don’t get to leave them to their kids without paying the tax.
  - bilbo0s 4y ago
    Your suggestion is not bad, but I like HN User "stickyricky"'s suggestion better. It's more all encompassing. Would certainly be nice to maybe stack this on top of his suggestions.
  - entangledqubit 4y ago
    ... or you accept that the widow argument was a bogus special interest ploy to begin with and have people who genuinely need a prop 13 style exemption apply for an exception - rather than have it apply to everyone. From what I understand, Seattle does it this way.
    - lazide 4y ago
      How is everyone going to get rich then?!?!
colinsane 4y ago
in the UBI version, the tax is purely redistributive. each of the 10 inhabitants pays some $ figure proportional to their monopoly use of the land, and then receive the sum divided by 10. if all inhabitants own roughly the same sqft, it has no real effect. in the case where Georgist tax is used to fund public works, things look identical before outsiders move in. the inhabitants are taxed into some fund, and now receive payment from that fund for their charitable improvements. it’s a closed economy. however, once a non-charitable neighbor moves in, they too are taxed but do not receive anything from this communal fund (since they aren’t working to make communal improvements). now, the 10 original inhabitants continue to make those original public improvements they enjoyed making, and as a bonus, they all receive a little extra for their work. depending on who you are, maybe you don’t like the idea of having “freeloaders” as neighbors, even if you’re materially better off for it. there are a few knobs you can tweak to shape the kind of neighbors you attract more explicitly (e.g. the $/hourly rate the community fund pays for labor, the rates associated with property taxes, etc). the key is that this tax is levied as part of a closed labor economy. you’re effectively monetizing the labor each neighbor was already investing into public spaces. the average neighbor sees no difference in their $ balance as before: no threat of not being able to afford to stay. UBI does better at protecting the elderly, community improvement fund better at protecting the hard-working/able-bodied.
onlyrealcuzzo 4y ago
The inhabitants don't lose. Play your scenario out. A bunch of poor people buy 100 acres of land for $1, and they turn it into a paradise. It becomes cool, so rich hipsters wanna buy up chunks to Instagram it. The first person sells a patch of land he bought for $0.01 for $1M. Suddenly, property tax on everyone's $0.01 parcels shoots up from $0 to $12,000 per year. These people have no jobs, so they can't afford $12,000 in taxes per year, so they're all forced to sell their properties to other hipsters on Instagram for $1M, too. Well guess what? Now they're millionaires. I mean, technically, not. They've got some taxes to pay. But you get the idea. No owners "lose" from property values shooting through the roof. ESPECIALLY not leveraged owners (mortgage holders).
- rufus_foreman 4y ago
  The value you put on living around your family and friends in this scenario is zero. That's not how normal people value those things.
  - onlyrealcuzzo 4y ago
    If their family lives nearby, they probably own homes and can all sell and move together, move in with each other, move to an area not far away that's substantially cheaper, use your huge winning to build an ADU in your dear family member's backyard and be even closer together, etc... You. Don't. Lose. By. Winning. $1M. You get options.
    - salawat 4y ago
      It's all relative. If everyone else moving in can spend a mill plus, you're priced out. If you and your neighbors happen to be the only ones improving things, and the mil plus group comes in and stagnates/displaces you through gentrificative forces, requiring you to to start from scratch elsewhere. Lets say you live long enough for the cycle to repeat multiple times. I assume proponents would say, "well, hooray, everyone but you is way better off, I guess it sucks that you weren't better at managing money", when all anyone ever wanted to do was live together and be left alone.
stickyricky 4y ago
> What gives? It's a law. You can just put in exemptions. - "Land tax increases shall not exceed X% if it is your primary residence." - "Land tax shall not increase if you are over the age of 65". - "You may deduct monies put into the improvement of a property from your land tax." - "You may not pay more than 5% of your income in land tax". I don't see the issue. We don't tax income at 20% with no deductions. We don't place a sales tax on all goods equally. We don't tax corporations the same way we do individuals.
- deleted 4y ago
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tuatoru 4y ago
Every system has downsides. The question is, is "having to make an immense moneetary gain at the cost of your connection to the trees you planted and the closeness of your neighbors" worse than the system we have now, and for whom? Again: No system is perfect. It seems to me that the Georgist approach would tend to lay the tax burden more evenly on people of all levels of wealth, even if it does force some people to sell and buy.
jlhawn 4y ago
> As a result, other people want to move in > Their own charity and neighborliness spelled their doom is allowing more homes not possible? If not, then where’s that “neighborliness” now?
Schroedingersat 4y ago
In concept the answer is simple (although avoiding loopholes is difficult). If it's your only residence then you get to cap the tax on one unit of housing worth of land at max(x% of income, y% of net wealth excluding that particular unit of land). In your scenario the poor locals must subdivide and sell or commercialise some of their land, but get to continue benefiting from the commons they have built even if they have 0 income and survive purely off of that commons.
ZeroGravitas 4y ago
Why would people want to move into an area without roads, police, doctors, power and the other basics of modern life? If they do, because they exist, then who pays for providing those things?
TimPC 4y ago
Improvements as defined in Georgism are the things you add to your own land that increase its value and don't include things added on other land. This is unfortunate when you take part in building community improvements but makes far more sense on average since the typical situation with most external improvements is that few people take part in them. I think in practice what happens is people end up balancing affordability and are strategic about the improvements they want made.
deleted 4y ago
[deleted]

thaumasiotes 4y ago

I see a different problem with the separation. In the modern day, the improvements may contribute more than 100% of the value of the land. In most cases the sole benefit of having land in a desirable city is that it is near other desirable things. This is unlike the agricultural model motivating Georgism, where the primary benefit of owning land is that you can grow crops on it. But taking the proposal literally that we can tax land based on the improvements existing on other nearby land, but not based on the improvements made to the same land being taxed... there is a very obvious implication. Land will end up being owned in such massive chunks that the land value tax goes back down to zero, because we subtract away the entire value of the area when calculating the tax. Consider a small plot of land in Los Angeles. It's relatively close to Hollywood, and a lot of other nearby amenities. In its unimproved state, it's a swamp unfit for human habitation, but it is so advantageously located that we can attribute a lot of value to it anyway. But if the same person owns the entire region of California around Los Angeles, its unimproved state is still an uninhabitable swamp... and because he owns the entire area, there are no improvements nearby to raise the value of the land to the point where he'd have to pay taxes on it. The film industry is an improvement to the land, which we don't want to tax. The port of Long Beach is an improvement to the land, which we don't want to tax. (There is not any fundamentals-based reason to locate a port there - it was constructed as a union-busting exercise, not because of geography.) The fact that millions of people live there is an improvement that we don't want to tax. It makes no sense to base our tax assessments on how concentrated landownership is, but that is the Georgist proposal.

boomboomsubban 4y ago
Your issue is "what if someone owns huge chunks of land and doesn't try to make any money off it?" Then Hollywood gets built somewhere else where someone does want to make money. And eventually, those improvements may make the land the other person owns worth more money anyway and they'd be unable to pay the taxes.
- thaumasiotes 4y ago
  > Your issue is "what if someone owns huge chunks of land and doesn't try to make any money off it?" That really has nothing to do with my issue. My issue is that, under the proposed system, two people who each own half of Los Angeles will pay a lot of property taxes, because the other half of Los Angeles adds taxable value to their half, even if their half is unimproved. But one person who owns the entirety of Los Angeles will pay no property taxes, because the unimproved land is worthless. This system guarantees that there will be a small number of people who own vast quantities of land, because that ownership structure minimizes the total tax burden. Sale of land would vanish to nearly nothing, because not only would the land have a very low cost of ownership - selling some of your land would raise the taxes you have to pay on the rest of it, the part that you keep! The total amount of tax owed is different depending on the structure of who owns the land. Why does that make sense?
  - deleted 4y ago
    [deleted]
  - Kbelicius 4y ago
    > My issue is that, under the proposed system, two people who each own half of Los Angeles will pay a lot of property taxes, because the other half of Los Angeles adds taxable value to their half, even if their half is unimproved. That is the goal, isn't it. To remove speculation from land ownership. Under this model the owner of the unimproved part of LA has no right to the increase in his land value since he did nothing to improve it. He either continues paying increasing taxes, sells it, or starts improving it. I see no bad side to it. > But one person who owns the entirety of Los Angeles will pay no property taxes, because the unimproved land is worthless. This system guarantees that there will be a small number of people who own vast quantities of land, because that ownership structure minimizes the total tax burden. What would be this persons incentive to own all this land under this model? Besides, somebody on the edges of this property starts some development and suddenly LA owners taxes raise. > Sale of land would vanish to nearly nothing, because not only would the land have a very low cost of ownership - selling some of your land would raise the taxes you have to pay on the rest of it, the part that you keep! This doesn't follow from anything. Land would have very low costs only if it is land that nobody wants, just like today. And selling your land will not lead to higher taxes on your remaining land unless the land that you sold gets improved in such a way that it increases the value of your land. Why do you think that landlords are entitled to value created by somebody else? >The total amount of tax owed is different depending on the structure of who owns the land. Why does that make sense? I agree, it doesn't make any sense. Luckily, your conclusion doesn't follow from anything that you wrote. The total amount of tax owed is different depending on the value of the land. Do you think that that also makes no sense?

frankus 4y ago

That's an interesting dilemma. I don't think Georgism fully solves the issue of returning community-created value to the community members who contributed to it. Of course the same is true under the current system for anyone who rents their residence. I think the ideal outcome would be to just build additional housing for the people who want to move there, i.e. split the tax per unit land across more units of housing, since that's what the market is indicating that it "wants". Of course most of the Anglophone world is doing a terrible job of adding housing in high-demand areas, and I'm not clear whether and how that would change under a Georgist regime.

TimPC 4y ago
If you switch to Georgism without fixing zoning it ends up worse not better. Zoning my land as suitable for a high-rise can destroy the entire value of my home because it becomes an unusable structure due to the higher rates of tax. At the same time zoning my land for high-rise causes the value to go up and that results in a massive tax increase that eliminates any price gain for my land. Since I so firmly don't want my land to be upzoned I become a NIMBY and compromise with my neighbors to also protect their land from upzoning. We all elect politicians that oppose all upzoning. Some Georgists argue that I'm supposed to want my neighbors upzoned because it raises my CD but they seem to have not done the math because if you're applying the CD over the entire US then upzoning a single neighbor raises my CD by fractions of a cent which I care so little about that it doesn't change the incentives for this political alliance.

kodyo 4y ago

There are some undefined variables. Did the people doing the improving own the land? Well, now they're no longer poor. Yay. Sell and get out of there before the Californians move in and turn it into a sewer. If they voluntarily improved somebody else's land under no contractual agreement with the owner, why do they think they're entitled to a share of the new value? If they voluntarily improved "public" land, good luck extracting gratitude from the state after the fact. The bureaucrats are more likely to issue fines and send in bulldozers.

threatofrain 4y ago
> If they voluntarily improved somebody else's land under no contractual agreement with the owner, why do they think they're entitled to a share of the new value? > If they voluntarily improved "public" land, good luck extracting gratitude from the state after the fact. The bureaucrats are more likely to issue fines and send in bulldozers. I wonder if this is a fringe example as I imagine few people are radically improving public land, esp. to such extent that it's causing a real estate rush. We might then go across not only the country but to other nations like Canada and ask what proportion of real estate booms are due to this scenario.
- kodyo 4y ago
  I agree, I doubt it's much of a real thing, but the hypothetical got me thinking.
- jandrewrogers 4y ago
  A small version of this occurs in the Mountain West. Some well-maintained rural roads are actually maintained illegally across Federal land by the locals. The Federal government is responsible for maintenance but often doesn't do any for decades and so the roads go into severe disrepair. If you ask permission to repair the road out of your own pocket, you will have to file absurd amounts of paperwork and the Federal government charges you money for the right! Some of the local illegal road repair crews are well-organized. They descend like a flash mob with heavy equipment when the odds of getting caught are near zero. The Feds are incurious about who is maintaining the roads illegally because it is kind of doing them a favor. I first learned about this when I naively started jumping through the hoops to get permission to repair a remote road. One of the local ranchers heard about it, pulled me aside, and explained how things worked while admonishing me for ruining my plausible deniability. The whole thing was wild.

kodah 4y ago

I've always called this "state-to-state" income inequality, because it used to be that people from relatively wealthy states would "retire" (probably not actually retire) in lower income states because they can purchase a home with less friction. Nowadays, the income inequality gap has grown drastically in each state, so I think this problem just falls under that umbrella. A good source: https://www.cbpp.org/blog/a-state-by-state-look-at-income-inequality https://www.cbpp.org/blog/a-state-by-state-look-at-income-in...

hibikir 4y ago
The problem with this is that states are very poor boundaries for almost any economic and demographic indicator: A US state is a mostly arbitrary collection of rural, urban and suburban people, which happened to be put together a few hundred years ago, and which have relatively few economic ties with people from different groups. A big difference among states is just how much of each group we get, plus a small multiplier between big, successful metro areas, and those that are not. How different is it to live in northern Illinois, vs south east Wisconsin? It's still really the Chicago metro area, and the state is mostly irrelevant. The same on both sides of the Kansas City metro. When you are measuring income inequality within states, all you are seeing is that the largest metro areas are in almost all cases getting richer, while rural areas poorer. It's not a matter of rich states and poor states at all. For almost anything that matters, those state lines are just confounding your statistics.
- kodah 4y ago
  Yeah, I see your point. I do think there's something to do with a state having a concentration of wealthy people who then move. That, at least, seems problematic. I do think people, these days, are incentivized to do that because although we may look at them as wealthy they may have trouble affording where they're from. I don't even know what you do with that.

lazide 4y ago

By 'lose the land', really they'd be forced to sell or go bankrupt/accrue tax debt. Which is pretty terrible if the folks are little old ladies settling down to avoid the cruel harsh world, and now need to find somewhere else to live when they are least capable of doing so (being on a fixed income and all). The 'can't put old widows out of their homes' scenario is why California's Prop 13 came to be, btw. Even without Georgist taxation, property taxes got too high to pay. I imagine a lot of folks in Texas and other less dense areas are going through this right now due to the rapidly increasing property values and less controlled changes in taxation. It does cause change and turnover instead of stagnation in an area though.

curun1r 4y ago
> The 'can't put old widows out of their homes' scenario is why California's Prop 13 came to be There’s a better way to handle this, though, than the Prop 13 approach of limiting taxes. You just allow a certain amount of property taxes to optionally go unpaid and accrue as a lien against the property that must be settled when the property changes hands. Old widows never get forced out of their houses, but they don’t get to leave them to their kids without paying the tax.
- bilbo0s 4y ago
  Your suggestion is not bad, but I like HN User "stickyricky"'s suggestion better. It's more all encompassing. Would certainly be nice to maybe stack this on top of his suggestions.
- entangledqubit 4y ago
  ... or you accept that the widow argument was a bogus special interest ploy to begin with and have people who genuinely need a prop 13 style exemption apply for an exception - rather than have it apply to everyone. From what I understand, Seattle does it this way.
  - lazide 4y ago
    How is everyone going to get rich then?!?!

colinsane 4y ago

in the UBI version, the tax is purely redistributive. each of the 10 inhabitants pays some $ figure proportional to their monopoly use of the land, and then receive the sum divided by 10. if all inhabitants own roughly the same sqft, it has no real effect. in the case where Georgist tax is used to fund public works, things look identical before outsiders move in. the inhabitants are taxed into some fund, and now receive payment from that fund for their charitable improvements. it’s a closed economy. however, once a non-charitable neighbor moves in, they too are taxed but do not receive anything from this communal fund (since they aren’t working to make communal improvements). now, the 10 original inhabitants continue to make those original public improvements they enjoyed making, and as a bonus, they all receive a little extra for their work. depending on who you are, maybe you don’t like the idea of having “freeloaders” as neighbors, even if you’re materially better off for it. there are a few knobs you can tweak to shape the kind of neighbors you attract more explicitly (e.g. the $/hourly rate the community fund pays for labor, the rates associated with property taxes, etc). the key is that this tax is levied as part of a closed labor economy. you’re effectively monetizing the labor each neighbor was already investing into public spaces. the average neighbor sees no difference in their $ balance as before: no threat of not being able to afford to stay. UBI does better at protecting the elderly, community improvement fund better at protecting the hard-working/able-bodied.

onlyrealcuzzo 4y ago

The inhabitants don't lose. Play your scenario out. A bunch of poor people buy 100 acres of land for $1, and they turn it into a paradise. It becomes cool, so rich hipsters wanna buy up chunks to Instagram it. The first person sells a patch of land he bought for $0.01 for $1M. Suddenly, property tax on everyone's $0.01 parcels shoots up from $0 to $12,000 per year. These people have no jobs, so they can't afford $12,000 in taxes per year, so they're all forced to sell their properties to other hipsters on Instagram for $1M, too. Well guess what? Now they're millionaires. I mean, technically, not. They've got some taxes to pay. But you get the idea. No owners "lose" from property values shooting through the roof. ESPECIALLY not leveraged owners (mortgage holders).

rufus_foreman 4y ago
The value you put on living around your family and friends in this scenario is zero. That's not how normal people value those things.
- onlyrealcuzzo 4y ago
  If their family lives nearby, they probably own homes and can all sell and move together, move in with each other, move to an area not far away that's substantially cheaper, use your huge winning to build an ADU in your dear family member's backyard and be even closer together, etc... You. Don't. Lose. By. Winning. $1M. You get options.
  - salawat 4y ago
    It's all relative. If everyone else moving in can spend a mill plus, you're priced out. If you and your neighbors happen to be the only ones improving things, and the mil plus group comes in and stagnates/displaces you through gentrificative forces, requiring you to to start from scratch elsewhere. Lets say you live long enough for the cycle to repeat multiple times. I assume proponents would say, "well, hooray, everyone but you is way better off, I guess it sucks that you weren't better at managing money", when all anyone ever wanted to do was live together and be left alone.

stickyricky 4y ago

> What gives? It's a law. You can just put in exemptions. - "Land tax increases shall not exceed X% if it is your primary residence." - "Land tax shall not increase if you are over the age of 65". - "You may deduct monies put into the improvement of a property from your land tax." - "You may not pay more than 5% of your income in land tax". I don't see the issue. We don't tax income at 20% with no deductions. We don't place a sales tax on all goods equally. We don't tax corporations the same way we do individuals.

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tuatoru 4y ago

Every system has downsides. The question is, is "having to make an immense moneetary gain at the cost of your connection to the trees you planted and the closeness of your neighbors" worse than the system we have now, and for whom? Again: No system is perfect. It seems to me that the Georgist approach would tend to lay the tax burden more evenly on people of all levels of wealth, even if it does force some people to sell and buy.

jlhawn 4y ago

> As a result, other people want to move in > Their own charity and neighborliness spelled their doom is allowing more homes not possible? If not, then where’s that “neighborliness” now?

Schroedingersat 4y ago

In concept the answer is simple (although avoiding loopholes is difficult). If it's your only residence then you get to cap the tax on one unit of housing worth of land at max(x% of income, y% of net wealth excluding that particular unit of land). In your scenario the poor locals must subdivide and sell or commercialise some of their land, but get to continue benefiting from the commons they have built even if they have 0 income and survive purely off of that commons.

ZeroGravitas 4y ago

Why would people want to move into an area without roads, police, doctors, power and the other basics of modern life? If they do, because they exist, then who pays for providing those things?

TimPC 4y ago

Improvements as defined in Georgism are the things you add to your own land that increase its value and don't include things added on other land. This is unfortunate when you take part in building community improvements but makes far more sense on average since the typical situation with most external improvements is that few people take part in them. I think in practice what happens is people end up balancing affordability and are strategic about the improvements they want made.

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