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>You can borrow against unrealised gains. That's a key part of the 'buy, borrow, die' tax strategy. Borrowing and taxation are completely different concepts. U

>You can borrow against unrealised gains. That's a key part of the 'buy, borrow, die' tax strategy. Borrowing and taxation are completely different concepts. Unless I am the only idiot who hasn't asked for their tax back with interest. Possible. >People who sit on hugely appreciated land ain't 'poor'. They aren't poor in that they have at least one valuable asset. The kind of asset that helps people stay afloat when they have issues with income or domestic violence. Regressive taxes are regressive because they simply do not look at income. Someone can be retired, living on nearly no income, and have a single valuable asset. It is not the role of government to significantly disrupt peoples lives because they have 1 good thing going. IIRC home ownership is the single best indicator of mental health. My memory (going on 10 years I have been having this conversation with Georgists) is that George was largely enraged with Private US railways. From memory they would be automatically granted the land immediately adjacent the track they laid. Sometimes they would develop this land, sometimes they would sell it, but largely they banked it. Because that land was adjacent to, the railway, it was quite valuable, but often underused. The problem with Georgists, is that the context their ideas were formed under is no longer relevant. The people who will be punished by these ideas are not the railways, but people who are just holding on to their property, people who bought cheaply (ie made an intelligent forward thinking decision for their future) and find themselves surrounded by new services that raise their properties value. Thats what gets me, is that property value is not something you can consent to or plan for. Its arbitrary subjective market valuation, and asking people to lose their homes (homes are houses that humans have a relationship with) because of a subjective market valuation is bad. Its bad when variable mortgages do it, and its bad when georgists roll up and propose the same.

japanuspus 1y ago
> Borrowing and taxation are completely different concepts. Unless I am the only idiot who hasn't asked for their tax back with interest. Possible. I get the impression that maybe you are not aware of what is implied by the 'buy, borrow, die' tax strategy that parent is referring to: in effect it completely eliminates taxes on capital gains (in the US). [0] and [1] below are first two Google hits. [0]: https://www.reddit.com/r/BuyBorrowDieExplained/comments/1f26rsf/buy_borrow_die_explained/ https://www.reddit.com/r/BuyBorrowDieExplained/comments/1f26... [1]: https://www.wsj.com/finance/investing/buy-borrow-die-how-rich-americans-live-off-their-paper-wealth-11625909583 https://www.wsj.com/finance/investing/buy-borrow-die-how-ric...
- protocolture 1y ago
  I dont know how to respond to this. There being a loophole in a single country doesn't seem to invalidate anything I have said. Capital Gains and Death Taxes are their own issues.
  - eru 1y ago
    Ignore capital gains taxes. I mentioned the tax strategy just to point out that borrowing against unrealised gains is common. (You can also do it in jurisdictions that don't have capital gains taxes. But there you do it for reasons other than optimising your taxes. Eg you might want to mortgage your house (without selling it) to buy a car.)
    - protocolture 1y ago
      Ok but why mention borrowing at all. We are talking about taxation. They are almost completely opposite concepts. Borrowing literally defers payment to the future. Taxation on your now land value occurs now. Why does the ability to borrow against unrealised gains (with the lender speculating on the return on those gains) matter compared to paying a tax on unrealised gains (which is due now, not deferred and barely speculative)
      - eru 1y ago
        > Why does the ability to borrow against unrealised gains (with the lender speculating on the return on those gains) matter compared to paying a tax on unrealised gains (which is due now, not deferred and barely speculative) You can borrow to pay the taxes. Or you can 'realise' your gains via a sale to pay the taxes. That avoids the leverage that you point out.
        protocolture 1y ago
        >You can borrow to pay the taxes. Or you can 'realise' your gains via a sale to pay the taxes. That avoids the leverage that you point out. Thats insane, you know that right? You may have invented a worse financial instrument than the subprime mortgage crisis. Taxation is an ongoing cost. you pay it every year. Under LVT, the LVT price is entirely subjective. If I am a bank, and joe blo has a 200k tax bill, and 20k income, I am already disinclined to lend him money to cover that tax bill because of his income. I think this is where you fall over, and the rest of this is just making fun of your nonsense. The great thing about joe is he is going to get another tax bill next year, even if he parts with 95% of his land portfolio, I have no idea what the value of the remainder is going to be, subjectively, next year. Its an open ended liability. If I was a good banker who wanted to be nice to Joe I would ask him to leave. However a normal bank might lend him the money just to receive his land as collateral to take it on when he inevitably defaults. But I thought LVT was about the reduction of land banking, not shifting ownership of land to the banks?
eru 1y ago
Why do you want to punish anyone? What's that strange obsession. Land Value Tax is simply an efficient tax system that minimalises dead weight losses. Yes, Henry George was a big fan of them, but he was just one proponent. LVT does not live and fall with Henry George. > Borrowing and taxation are completely different concepts. Unless I am the only idiot who hasn't asked for their tax back with interest. Possible. I am saying that your specific objections to taxing unrealised gains do not apply. > They aren't poor in that they have at least one valuable asset. The kind of asset that helps people stay afloat when they have issues with income or domestic violence. Regressive taxes are regressive because they simply do not look at income. Someone can be retired, living on nearly no income, and have a single valuable asset. It is not the role of government to significantly disrupt peoples lives because they have 1 good thing going. IIRC home ownership is the single best indicator of mental health. You are proving too much. Holding down a steady job is also a great indicator of mental health. So the government shouldn't tax your job either? Ie income tax bad? You have to tax something to run the government. Btw, you could run a land value tax but give everyone a universal basic income equivalent to the LVT paid by the median person. That means only people who sit on more than the median amount of land (by value) would pay a net tax. Everyone else would see a net income from the system. That would immediately knock out all of your arguments about those poor widows and orphans. (In taxation and income, medians tend to be lower than averages, so the above system would leave money left over to use for general government revenue. If you want more of that, instead of paying the median amount, you could pay UBI at eg the 20%-ile level. That would still protect those people who only 'have 1 good thing going' from net outflowing payments.)
- protocolture 1y ago
  >I am saying that your specific objections to taxing unrealised gains do not apply. I dont see how referencing borrowing is relevant to taxation. >Ie income tax bad? Yes its horrible. But if you tax 10% on income, you are left with 90% of your income on an ongoing basis, and that can accrue. People can become wealthier. People without income dont pay the tax so arent negatively affected. If you tax someone with 5 bucks in their bank account and no job, 10% of their 200K property, they arent going to accrue 90% of their property on an ongoing basis. Their wealth will shrink. Which is bad on average. >Btw, you could run a land value tax but give everyone a universal basic income equivalent to the LVT paid by the median person. I often see these joined but IIRC I did some math on this, and UBI would make your LVT extremely punishing. I wouldnt group them together as proposals.

japanuspus 1y ago

> Borrowing and taxation are completely different concepts. Unless I am the only idiot who hasn't asked for their tax back with interest. Possible. I get the impression that maybe you are not aware of what is implied by the 'buy, borrow, die' tax strategy that parent is referring to: in effect it completely eliminates taxes on capital gains (in the US). [0] and [1] below are first two Google hits. [0]: https://www.reddit.com/r/BuyBorrowDieExplained/comments/1f26rsf/buy_borrow_die_explained/ https://www.reddit.com/r/BuyBorrowDieExplained/comments/1f26... [1]: https://www.wsj.com/finance/investing/buy-borrow-die-how-rich-americans-live-off-their-paper-wealth-11625909583 https://www.wsj.com/finance/investing/buy-borrow-die-how-ric...

protocolture 1y ago
I dont know how to respond to this. There being a loophole in a single country doesn't seem to invalidate anything I have said. Capital Gains and Death Taxes are their own issues.
- eru 1y ago
  Ignore capital gains taxes. I mentioned the tax strategy just to point out that borrowing against unrealised gains is common. (You can also do it in jurisdictions that don't have capital gains taxes. But there you do it for reasons other than optimising your taxes. Eg you might want to mortgage your house (without selling it) to buy a car.)
  - protocolture 1y ago
    Ok but why mention borrowing at all. We are talking about taxation. They are almost completely opposite concepts. Borrowing literally defers payment to the future. Taxation on your now land value occurs now. Why does the ability to borrow against unrealised gains (with the lender speculating on the return on those gains) matter compared to paying a tax on unrealised gains (which is due now, not deferred and barely speculative)
    - eru 1y ago
      > Why does the ability to borrow against unrealised gains (with the lender speculating on the return on those gains) matter compared to paying a tax on unrealised gains (which is due now, not deferred and barely speculative) You can borrow to pay the taxes. Or you can 'realise' your gains via a sale to pay the taxes. That avoids the leverage that you point out.
      - protocolture 1y ago
        >You can borrow to pay the taxes. Or you can 'realise' your gains via a sale to pay the taxes. That avoids the leverage that you point out. Thats insane, you know that right? You may have invented a worse financial instrument than the subprime mortgage crisis. Taxation is an ongoing cost. you pay it every year. Under LVT, the LVT price is entirely subjective. If I am a bank, and joe blo has a 200k tax bill, and 20k income, I am already disinclined to lend him money to cover that tax bill because of his income. I think this is where you fall over, and the rest of this is just making fun of your nonsense. The great thing about joe is he is going to get another tax bill next year, even if he parts with 95% of his land portfolio, I have no idea what the value of the remainder is going to be, subjectively, next year. Its an open ended liability. If I was a good banker who wanted to be nice to Joe I would ask him to leave. However a normal bank might lend him the money just to receive his land as collateral to take it on when he inevitably defaults. But I thought LVT was about the reduction of land banking, not shifting ownership of land to the banks?

eru 1y ago

Why do you want to punish anyone? What's that strange obsession. Land Value Tax is simply an efficient tax system that minimalises dead weight losses. Yes, Henry George was a big fan of them, but he was just one proponent. LVT does not live and fall with Henry George. > Borrowing and taxation are completely different concepts. Unless I am the only idiot who hasn't asked for their tax back with interest. Possible. I am saying that your specific objections to taxing unrealised gains do not apply. > They aren't poor in that they have at least one valuable asset. The kind of asset that helps people stay afloat when they have issues with income or domestic violence. Regressive taxes are regressive because they simply do not look at income. Someone can be retired, living on nearly no income, and have a single valuable asset. It is not the role of government to significantly disrupt peoples lives because they have 1 good thing going. IIRC home ownership is the single best indicator of mental health. You are proving too much. Holding down a steady job is also a great indicator of mental health. So the government shouldn't tax your job either? Ie income tax bad? You have to tax something to run the government. Btw, you could run a land value tax but give everyone a universal basic income equivalent to the LVT paid by the median person. That means only people who sit on more than the median amount of land (by value) would pay a net tax. Everyone else would see a net income from the system. That would immediately knock out all of your arguments about those poor widows and orphans. (In taxation and income, medians tend to be lower than averages, so the above system would leave money left over to use for general government revenue. If you want more of that, instead of paying the median amount, you could pay UBI at eg the 20%-ile level. That would still protect those people who only 'have 1 good thing going' from net outflowing payments.)

protocolture 1y ago
>I am saying that your specific objections to taxing unrealised gains do not apply. I dont see how referencing borrowing is relevant to taxation. >Ie income tax bad? Yes its horrible. But if you tax 10% on income, you are left with 90% of your income on an ongoing basis, and that can accrue. People can become wealthier. People without income dont pay the tax so arent negatively affected. If you tax someone with 5 bucks in their bank account and no job, 10% of their 200K property, they arent going to accrue 90% of their property on an ongoing basis. Their wealth will shrink. Which is bad on average. >Btw, you could run a land value tax but give everyone a universal basic income equivalent to the LVT paid by the median person. I often see these joined but IIRC I did some math on this, and UBI would make your LVT extremely punishing. I wouldnt group them together as proposals.