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I really cant hit a moving target. I cant explain the economic flaws in your arguments faster than you can generate flawed arguments. >LVT should be set to app

I really cant hit a moving target. I cant explain the economic flaws in your arguments faster than you can generate flawed arguments. >LVT should be set to approximately tax all land rents. What does this even mean? >so that the land-poorest 20% of the population have no net LVT payments to make. Right but you just added a huge cost that you have to tax from somewhere. So the LVT rate goes up again. (Very common experience discussing LVT - New taxes, regulations and handouts that will randomly make criticism go away) >Why are you so obsessed with income that's measured in money? Why are you against it lmao? >There's also plenty of in-kind income. Eg when you have an apple tree, you get apples. If you have a house, you get housing. How is this relevant to anything being discussed? And under an LVT, having a house or apple tree gets you a tax bill, measured in money. Of course economic calculation is relevant. >What's with you and punishment? I don't have a better description for what you want to happen to people with income lower than their LVT bill. Feel free to suggest something. "Economic Defenstration" maybe.

eru 1y ago
> Right but you just added a huge cost that you have to tax from somewhere. So the LVT rate goes up again. No, it doesn't. >> LVT should be set to approximately tax all land rents. > What does this even mean? A sketch: suppose a piece of land gives a land-rent of $100 a year. At 5% prevailing interest rates, that piece of land would trade for about $100/5% = $2,000. That's because arbitrage will roughly make it trade at the same price as a bond that pays $100 a year. (For simplicity of illustration assume no taxes, no risk, etc.) Now if you add a 15%-a-year LVT, you get the following no-arbitrage condition: (land price) * (tax rate + interest rate) = land rent Solving for the new land price gives you (land price) = $100 / (15% + 5%) = $500. That market price gives you a $75 LVT bill. That's 75% of our land rent. You can directly calculate the proportion of land rent that goes to LVT as a function of the tax rate and interest rate as (tax rate) / (tax rate + interest rate). As you can see, assuming non-negative interest rates, this can get arbitrary close to but will never reach 100% of land lent. There are some practical limits to how high you can set the LVT per year. But you can get pretty close to 100% of the land rent. And the limits are of a practical nature, they don't have anything to do with what you are doing with the revenue (ie UBI or whatever). I know, it's a bit confusing: we are charging a specific rate on the price of the land, but what we are actually interested in is the proportion of land rent we are capturing. Land prices adjust to the taxes we are charging. So jacking up the LVT rates won't really give you an increase in the tax take. (That's one way to implement LVT. You could also instead auction off leases to use plots of land for eg 20 years at a time to the highest bidder. There it's also clear that you take approximately 100% of the land rent as a tax, and it's also clear that there's not much the government can do to jack up the rates: they are already getting the whole proceeds of the auction.) > And under an LVT, having a house or apple tree gets you a tax bill, measured in money. Of course economic calculation is relevant. Yes, the tax bill is measured in money. But that doesn't mean the only thing that's admissible to be taxed should be income measured in money. > I don't have a better description for what you want to happen to people with income lower than their LVT bill. You have to sit on a lot of valuable land to have a high LVT bill. Those are rich people. In any case, you are right that changing the tax system will always create winners and losers, even if you create many more winners than losers. So you could do what the British did when they freed the slaves in the Empire without causing a civil war: you could pay out the old landowners. (The British paid off the previous slave owners.) By itself, acquiring all the land will be fiscally neutral, so the government hasn't gained anything. (In reality, there will be some inefficiencies and friction, so you'll actually lose money.) However, once you start lowering other taxes, land rents will go up and thus the LVT take with it. You have to make sure to pay for what the land traded _before_ the market started pricing-in the anticipation of lowering other taxes later. Instead of paying off the old owners, you could also gradually introduce the LVT to soften the blow of the impact a bit.
- protocolture 1y ago
  >No, it doesn't. Lmao, so you either collect less money, or you collect enough money to pay for your new dividend + other government services. you cant have it both ways. You must account for the cost of the random new UBI you addressed to cover your other arguments. >You have to sit on a lot of valuable land to have a high LVT bill. Those are rich people. This is one of my favourite parts of LVT, the magically tiny tax. If you take <national budget> and apply it proportionally across land as it is valued, the most <national budget> is extracted from inner city residential and commercial land. This is literally the stated intention. You have stopped caring about a persons income, and started caring only about the value of the land beneath their house. By design and intention. That value will rise and fall based on subjective third party determinations. By design and intention. Its highly likely that people will end up with a significantly increased tax bill, especially if they had low/no income previously. Again this is stated intention, its just the flip side of encouraging more efficient use, is discouraging people from living within their means on a block of land they own that's near things property evaluators value. Rich people with high incomes and expensive property wont give a shit. People who fall outside of your hypothetical, plenty of whom exist lots of them former income tax payers, will be significantly worse off. >By itself, acquiring all the land will be fiscally neutral Land value as it stands is fucked in large part because the government holds so much of it. The solution is to release more land, not lock more of it up in state ownership. >I know, it's a bit confusing: we are charging a specific rate on the price of the land, but what we are actually interested in is the proportion of land rent we are capturing. You need to solve for the entire budget, not a number you made up. The market cap of the US housing market is 50 trillion. That includes developments on the land, and it excludes all the commercial and agricultural land. Lets assume it averages out to 60 trillion. US government spent 6.8 trillion last year. You aren't going to be able to tax rents 10%, you will need to tax value 10% to reach that number. If someone lives in a caravan sitting on a 200k valued piece of land that they own outright (hoping to develop one day), making minimum wage, and they get a tax bill for 20k, or even 10 or 5k their life just ended. If you want them to borrow with no income to offset their tax, they wont get that loan. I dont understand how you dont understand the actual cost of an LVT or how it is likely to affect people.
  - 1y ago

eru 1y ago

> Right but you just added a huge cost that you have to tax from somewhere. So the LVT rate goes up again. No, it doesn't. >> LVT should be set to approximately tax all land rents. > What does this even mean? A sketch: suppose a piece of land gives a land-rent of $100 a year. At 5% prevailing interest rates, that piece of land would trade for about $100/5% = $2,000. That's because arbitrage will roughly make it trade at the same price as a bond that pays $100 a year. (For simplicity of illustration assume no taxes, no risk, etc.) Now if you add a 15%-a-year LVT, you get the following no-arbitrage condition: (land price) * (tax rate + interest rate) = land rent Solving for the new land price gives you (land price) = $100 / (15% + 5%) = $500. That market price gives you a $75 LVT bill. That's 75% of our land rent. You can directly calculate the proportion of land rent that goes to LVT as a function of the tax rate and interest rate as (tax rate) / (tax rate + interest rate). As you can see, assuming non-negative interest rates, this can get arbitrary close to but will never reach 100% of land lent. There are some practical limits to how high you can set the LVT per year. But you can get pretty close to 100% of the land rent. And the limits are of a practical nature, they don't have anything to do with what you are doing with the revenue (ie UBI or whatever). I know, it's a bit confusing: we are charging a specific rate on the price of the land, but what we are actually interested in is the proportion of land rent we are capturing. Land prices adjust to the taxes we are charging. So jacking up the LVT rates won't really give you an increase in the tax take. (That's one way to implement LVT. You could also instead auction off leases to use plots of land for eg 20 years at a time to the highest bidder. There it's also clear that you take approximately 100% of the land rent as a tax, and it's also clear that there's not much the government can do to jack up the rates: they are already getting the whole proceeds of the auction.) > And under an LVT, having a house or apple tree gets you a tax bill, measured in money. Of course economic calculation is relevant. Yes, the tax bill is measured in money. But that doesn't mean the only thing that's admissible to be taxed should be income measured in money. > I don't have a better description for what you want to happen to people with income lower than their LVT bill. You have to sit on a lot of valuable land to have a high LVT bill. Those are rich people. In any case, you are right that changing the tax system will always create winners and losers, even if you create many more winners than losers. So you could do what the British did when they freed the slaves in the Empire without causing a civil war: you could pay out the old landowners. (The British paid off the previous slave owners.) By itself, acquiring all the land will be fiscally neutral, so the government hasn't gained anything. (In reality, there will be some inefficiencies and friction, so you'll actually lose money.) However, once you start lowering other taxes, land rents will go up and thus the LVT take with it. You have to make sure to pay for what the land traded _before_ the market started pricing-in the anticipation of lowering other taxes later. Instead of paying off the old owners, you could also gradually introduce the LVT to soften the blow of the impact a bit.

protocolture 1y ago
>No, it doesn't. Lmao, so you either collect less money, or you collect enough money to pay for your new dividend + other government services. you cant have it both ways. You must account for the cost of the random new UBI you addressed to cover your other arguments. >You have to sit on a lot of valuable land to have a high LVT bill. Those are rich people. This is one of my favourite parts of LVT, the magically tiny tax. If you take <national budget> and apply it proportionally across land as it is valued, the most <national budget> is extracted from inner city residential and commercial land. This is literally the stated intention. You have stopped caring about a persons income, and started caring only about the value of the land beneath their house. By design and intention. That value will rise and fall based on subjective third party determinations. By design and intention. Its highly likely that people will end up with a significantly increased tax bill, especially if they had low/no income previously. Again this is stated intention, its just the flip side of encouraging more efficient use, is discouraging people from living within their means on a block of land they own that's near things property evaluators value. Rich people with high incomes and expensive property wont give a shit. People who fall outside of your hypothetical, plenty of whom exist lots of them former income tax payers, will be significantly worse off. >By itself, acquiring all the land will be fiscally neutral Land value as it stands is fucked in large part because the government holds so much of it. The solution is to release more land, not lock more of it up in state ownership. >I know, it's a bit confusing: we are charging a specific rate on the price of the land, but what we are actually interested in is the proportion of land rent we are capturing. You need to solve for the entire budget, not a number you made up. The market cap of the US housing market is 50 trillion. That includes developments on the land, and it excludes all the commercial and agricultural land. Lets assume it averages out to 60 trillion. US government spent 6.8 trillion last year. You aren't going to be able to tax rents 10%, you will need to tax value 10% to reach that number. If someone lives in a caravan sitting on a 200k valued piece of land that they own outright (hoping to develop one day), making minimum wage, and they get a tax bill for 20k, or even 10 or 5k their life just ended. If you want them to borrow with no income to offset their tax, they wont get that loan. I dont understand how you dont understand the actual cost of an LVT or how it is likely to affect people.
- 1y ago