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Understanding Georgism/economic rents was like a revelation to me. So many of the common complaints against capitalism are actually complaints against rent-seek

Understanding Georgism/economic rents was like a revelation to me. So many of the common complaints against capitalism are actually complaints against rent-seeking, whether it's landlords, Nestlé extracting water for free and making exorbitant profits from it, or internet companies using regulation to create artificial monopolies that reduce consumer choice and product quality. As someone who loves the idea of economic liberty, YIMBYism and Georgism are natural allies, but unfortunately many supposedly pro-liberty people are ardent defenders of rent-seeking under the guise of "capitalism". It's a cross-aisle concern, with politicians for and against on both sides. In reality, productive enterprise would blossom under a tax-neutral switch to land value tax, and cities would prosper when combining that with YIMBYism. Imagine having no income tax, and instead a land value tax. You wouldn't be punished for your labour, and you could afford to buy with your increased income as land values would be greatly suppressed! More capital would flow to businesses instead of land banking, mortgages, and rent extraction.

simple-thoughts 4y ago
Remember, taxes are passed through a political process. Even if a tax is perfect in some ideal form, tax proposals should be evaluated in the light that political processes will use them to benefit their team and punish the others. A great example is income tax, where what was supposed to be a fair and progressive system evolved into a swamp of exemptions and carve outs for special interests - meaning the tax rates have to be higher on everyone else to make the difference. Because of the huge amount of discretion in how to value land without development, a Georgist tax may be even more vulnerable to political processes than the income tax. Imagine a city where one side of the freeway is wealthy and the other side is poor - to benefit the wealthy side, the city adopts a policy that land on both sides has the same value. Or perhaps the poor side is ascendant politically, so their politician loots the wealthy side by overvaluing the land. As bad as income taxes are, at least it’s a measurable question of how much money entered your bank account rather that some arbitrary bureaucratic valuation process.

simple-thoughts 4y ago

Remember, taxes are passed through a political process. Even if a tax is perfect in some ideal form, tax proposals should be evaluated in the light that political processes will use them to benefit their team and punish the others. A great example is income tax, where what was supposed to be a fair and progressive system evolved into a swamp of exemptions and carve outs for special interests - meaning the tax rates have to be higher on everyone else to make the difference. Because of the huge amount of discretion in how to value land without development, a Georgist tax may be even more vulnerable to political processes than the income tax. Imagine a city where one side of the freeway is wealthy and the other side is poor - to benefit the wealthy side, the city adopts a policy that land on both sides has the same value. Or perhaps the poor side is ascendant politically, so their politician loots the wealthy side by overvaluing the land. As bad as income taxes are, at least it’s a measurable question of how much money entered your bank account rather that some arbitrary bureaucratic valuation process.