6 ms·

Anyone here for Georgism? https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism The tax upon land values is, therefore, the most just a

Anyone here for Georgism? https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return. — Henry George, Progress and Poverty, Book VIII, Chapter 3 Very relevant to this particular article: https://en.wikipedia.org/wiki/Georgism#/media/File:Everybody_works_but_the_vacant_lot_(cropped).jpg https://en.wikipedia.org/wiki/Georgism#/media/File:Everybody... >"EVERYBODY WORKS BUT THE VACANT LOT" I paid $3600, for this lot and will hold till I get $6000. The profit is unearned increment made possible by the presence of this community and enterprise of its people. I take the profit without earning it. For the remedy read "HENRY GEORGE"

bpt3 1y ago
Georgism is a nice idea in theory, but will never work in practice (a characteristic it shares with communism, not coincidentally). If someone comes along and overimproves their land near me (or overpays for a lot), does that mean the entire area should be compelled to pay taxes as if all landowners made the same incorrect decision?
- larsiusprime 1y ago
  Wouldn't this scenario also apply under conventional property tax regimes? Is or isn't this already happening in high property tax states? What is the specific bad effect you are invoking, and is it having the effects you predict in places where the effective tax rate on land is already fairly high?
  - WillPostForFood 1y ago
    It typically won't apply under conventional property tax regimes. Two common protection are: 1: your rate is based on a sampling of similar houses, not the newest most expensive neighboring house. 2: your rate of increase is capped, so you are insulated (not immune) from rapid change
    - larsiusprime 1y ago
      I mean couldn't you do the same thing in a property tax where the buildings are exempted (ie, a Land value tax)?
      - bpt3 1y ago
        Sure, it's possible in theory. The purpose of a LVT is to capture as much property value for the government as possible. Anyone advocating for it is unlikely to recommend exemptions that would interfere with that purpose.
  - bpt3 1y ago
    As I understand it (having it explained to me by Georgists and doing a fair amount of research myself), the value of the land is determined by "best and highest use". That is such a nebulous term that can be manipulated in so many ways (e.g. the example I provided above or zoning changes) that it doesn't seem feasible to use as the basis for any government policy. And to answer your questions, no this wouldn't apply under conventional property tax regimes because overimprovements have no impact on the value of neighboring lots or existing improvements, no this is not already happening in high tax states because the value of the land is (supposed to be) set by market rates and the land value and improvement values are decoupled in the assessment. In practice, assessors do a poor job of this (see the article in question), which is why I have no interest in giving them even more control.
    - Based-A 1y ago
      > the value of the land is determined by "best and highest use" Absolutely valid to say that "best and highest use" is vague and untrustworthy at best, but it's said this way to avoid getting trapped in the weeds of what exactly it means. Broadly speaking, "best and highest use" is entirely contextual to the land in question. The "best" use for 40 acres of nutrient-rich soil an hour away from the nearest city is going to be agriculture. While a plot of land smack dab in the middle of mainstreet in a rural town would probably be a commercial building or a mixed use building offering an apartment(s) above a shop or restaurant of some kind. Downtown in a metropolis would be some multi-storied residential or business/commercial building, while the middle of nowhere filled with trees is forestry and maybe mining. Everything is contextual. Who determines the "best" use case is usually delegated to a free market of land value appraisers. It seems counter-intuitive to leave so much leeway at this part, but consider that land value taxation is attempting to best capture the true value of the land. Meaning that land owners want the lowest possible valuation of their land to pay less taxes, but since land can't be hidden, it's (in theory) hard to fake the value of your land. I can't argue my house in an urban community is relatively worthless when A) every neighboring piece of land will have more or less the same value, and B) everyone can see where the land my house is located and what's around it. This plays into your first comment, if your neighbor adds a bunch of improvements to his land, if you and your other neighbors gain benefit from those improvements (they opened a store, or a school, or installed a modern sewer system or clean drinking water system, or created a private land reserve, and you and your property have access to these), then yes your land would see an increase in value as a result. However, these types of improvements are rarely the case, and are mostly handled by some form of government. The same with a neighbor "overpaying", since in theory they wouldn't "overpay", they'd just be paying the value that the land is assessed at. Alternatively, if your neighborhood is run down compared to something brand new and shiny, and all of your neighbors decide to clean things up and do renovations and increase the overall perceived value of the neighborhood, then yes you'd see your property value increase as a result of others actions. But this is no different than when communities go through "urban renewal" and other programs that artificially increase the communities' value as a result of private and public funding.
- deleted 1y ago
  [deleted]
- sagarm 1y ago
  Improvements are not considered in a land value tax; it's kind of the point. Land is also more fungible and easier to model the value of than improvements. Why would you prefer an income tax -- by definition, taking earned income -- to a land value tax, which is constructed specifically to target unearned windfalls and the time value of access to public infrastructure and community benefits?
  - bpt3 1y ago
    > Improvements are not considered in a land value tax; it's kind of the point. The potential improvements to a parcel are a key factor in the land value, so they are relevant. > Land is also more fungible and easier to model the value of than improvements. Land is more fungible, but not easier to value IMO. Input costs for improvements are easily calculated, the value of being in a nice neighborhood, having good schools nearby, being close (or not) to public transit, etc. are much harder to calculate. > Why would you prefer an income tax -- by definition, taking earned income -- to a land value tax, which is constructed specifically to target unearned windfalls and the time value of access to public infrastructure and community benefits? Taxes need to be paid somehow, and I think having some diversity in revenue sources is a good strategy. Also, given how bad of a job governments do in assessing property under the current scheme (see the article here as an example), I don't think giving them more power to arbitrarily decide the "true" value of the property based on the fairly arbitrary metrics you described is a good idea. Lastly, one person's "unearned windfall" is another person's wise investment.
Aurornis 1y ago
Land Value Tax (one of the main theories pushed by Georgism proponents) is a favorite of online discussion forums, but becomes progressively less popular as the conversation turns from broad strokes to details. Every time it comes up it seems many people are also unaware that taxing land value is already common practice. It’s common to have one tax for the assessed value of the land and another tax for the assessed value of the improvements. Policies might include exemptions for the first so many dollars of a person’s primary residence structure. With a pure Land Value Tax you cover your eyes and pretend the value of the structures and improvements doesn’t count. If one wealthy neighbor builds a $2,000,000 house next to a retired grandma living out her final years in her small, old forever home, the LVT people don’t care. If their lots are the same then they must pay the same taxes because the land value is what matters. This makes it a very regressive tax structure as the people or businesses with the least valuable structures now subdivide their neighbors with the most valuable structures. This can all be avoided by simply using our existing system of having a tax on land and a tax on structures each at their assessed value.
- owenversteeg 1y ago
  >This makes it a very regressive tax structure That's objectively false. Georgism is one of the few reliably progressive tax structures, ask any economist. The "little old grandma in her forever home surrounded by incredibly valuable real estate" trope is a) fairly uncommon + a very small percentage of total real estate and b) very common in conservative billboards advocating for highly regressive cuts to property tax. At the end of the day, if your little old grandma owns $5M in prime real estate, she is very wealthy and can certainly afford the property taxes, and pretending otherwise is how we get policy disasters like San Francisco. But of course, the overwhelming majority of unimproved property is not owned by little old grandmas, it is owned by real estate corporations. The half acre of Grandma's house pales in comparison to the literal _billions_ (!) of parking spaces in the US, or empty lots, or empty buildings. Drive around NYC and tell me the ratio of acreage owned by little old ladies to that of underutilized land owned by real estate corporations.
  - Aurornis 1y ago
philipallstar 1y ago
> The tax upon land values is, therefore, the most just and equal of all taxes It is definitely not an equal tax. A poll tax is an equal tax.

bpt3 1y ago

Georgism is a nice idea in theory, but will never work in practice (a characteristic it shares with communism, not coincidentally). If someone comes along and overimproves their land near me (or overpays for a lot), does that mean the entire area should be compelled to pay taxes as if all landowners made the same incorrect decision?

larsiusprime 1y ago
Wouldn't this scenario also apply under conventional property tax regimes? Is or isn't this already happening in high property tax states? What is the specific bad effect you are invoking, and is it having the effects you predict in places where the effective tax rate on land is already fairly high?
- WillPostForFood 1y ago
  It typically won't apply under conventional property tax regimes. Two common protection are: 1: your rate is based on a sampling of similar houses, not the newest most expensive neighboring house. 2: your rate of increase is capped, so you are insulated (not immune) from rapid change
  - larsiusprime 1y ago
    I mean couldn't you do the same thing in a property tax where the buildings are exempted (ie, a Land value tax)?
    - bpt3 1y ago
      Sure, it's possible in theory. The purpose of a LVT is to capture as much property value for the government as possible. Anyone advocating for it is unlikely to recommend exemptions that would interfere with that purpose.
- bpt3 1y ago
  As I understand it (having it explained to me by Georgists and doing a fair amount of research myself), the value of the land is determined by "best and highest use". That is such a nebulous term that can be manipulated in so many ways (e.g. the example I provided above or zoning changes) that it doesn't seem feasible to use as the basis for any government policy. And to answer your questions, no this wouldn't apply under conventional property tax regimes because overimprovements have no impact on the value of neighboring lots or existing improvements, no this is not already happening in high tax states because the value of the land is (supposed to be) set by market rates and the land value and improvement values are decoupled in the assessment. In practice, assessors do a poor job of this (see the article in question), which is why I have no interest in giving them even more control.
  - Based-A 1y ago
    > the value of the land is determined by "best and highest use" Absolutely valid to say that "best and highest use" is vague and untrustworthy at best, but it's said this way to avoid getting trapped in the weeds of what exactly it means. Broadly speaking, "best and highest use" is entirely contextual to the land in question. The "best" use for 40 acres of nutrient-rich soil an hour away from the nearest city is going to be agriculture. While a plot of land smack dab in the middle of mainstreet in a rural town would probably be a commercial building or a mixed use building offering an apartment(s) above a shop or restaurant of some kind. Downtown in a metropolis would be some multi-storied residential or business/commercial building, while the middle of nowhere filled with trees is forestry and maybe mining. Everything is contextual. Who determines the "best" use case is usually delegated to a free market of land value appraisers. It seems counter-intuitive to leave so much leeway at this part, but consider that land value taxation is attempting to best capture the true value of the land. Meaning that land owners want the lowest possible valuation of their land to pay less taxes, but since land can't be hidden, it's (in theory) hard to fake the value of your land. I can't argue my house in an urban community is relatively worthless when A) every neighboring piece of land will have more or less the same value, and B) everyone can see where the land my house is located and what's around it. This plays into your first comment, if your neighbor adds a bunch of improvements to his land, if you and your other neighbors gain benefit from those improvements (they opened a store, or a school, or installed a modern sewer system or clean drinking water system, or created a private land reserve, and you and your property have access to these), then yes your land would see an increase in value as a result. However, these types of improvements are rarely the case, and are mostly handled by some form of government. The same with a neighbor "overpaying", since in theory they wouldn't "overpay", they'd just be paying the value that the land is assessed at. Alternatively, if your neighborhood is run down compared to something brand new and shiny, and all of your neighbors decide to clean things up and do renovations and increase the overall perceived value of the neighborhood, then yes you'd see your property value increase as a result of others actions. But this is no different than when communities go through "urban renewal" and other programs that artificially increase the communities' value as a result of private and public funding.
deleted 1y ago
[deleted]
sagarm 1y ago
Improvements are not considered in a land value tax; it's kind of the point. Land is also more fungible and easier to model the value of than improvements. Why would you prefer an income tax -- by definition, taking earned income -- to a land value tax, which is constructed specifically to target unearned windfalls and the time value of access to public infrastructure and community benefits?
- bpt3 1y ago
  > Improvements are not considered in a land value tax; it's kind of the point. The potential improvements to a parcel are a key factor in the land value, so they are relevant. > Land is also more fungible and easier to model the value of than improvements. Land is more fungible, but not easier to value IMO. Input costs for improvements are easily calculated, the value of being in a nice neighborhood, having good schools nearby, being close (or not) to public transit, etc. are much harder to calculate. > Why would you prefer an income tax -- by definition, taking earned income -- to a land value tax, which is constructed specifically to target unearned windfalls and the time value of access to public infrastructure and community benefits? Taxes need to be paid somehow, and I think having some diversity in revenue sources is a good strategy. Also, given how bad of a job governments do in assessing property under the current scheme (see the article here as an example), I don't think giving them more power to arbitrarily decide the "true" value of the property based on the fairly arbitrary metrics you described is a good idea. Lastly, one person's "unearned windfall" is another person's wise investment.

Aurornis 1y ago

Land Value Tax (one of the main theories pushed by Georgism proponents) is a favorite of online discussion forums, but becomes progressively less popular as the conversation turns from broad strokes to details. Every time it comes up it seems many people are also unaware that taxing land value is already common practice. It’s common to have one tax for the assessed value of the land and another tax for the assessed value of the improvements. Policies might include exemptions for the first so many dollars of a person’s primary residence structure. With a pure Land Value Tax you cover your eyes and pretend the value of the structures and improvements doesn’t count. If one wealthy neighbor builds a $2,000,000 house next to a retired grandma living out her final years in her small, old forever home, the LVT people don’t care. If their lots are the same then they must pay the same taxes because the land value is what matters. This makes it a very regressive tax structure as the people or businesses with the least valuable structures now subdivide their neighbors with the most valuable structures. This can all be avoided by simply using our existing system of having a tax on land and a tax on structures each at their assessed value.

owenversteeg 1y ago
>This makes it a very regressive tax structure That's objectively false. Georgism is one of the few reliably progressive tax structures, ask any economist. The "little old grandma in her forever home surrounded by incredibly valuable real estate" trope is a) fairly uncommon + a very small percentage of total real estate and b) very common in conservative billboards advocating for highly regressive cuts to property tax. At the end of the day, if your little old grandma owns $5M in prime real estate, she is very wealthy and can certainly afford the property taxes, and pretending otherwise is how we get policy disasters like San Francisco. But of course, the overwhelming majority of unimproved property is not owned by little old grandmas, it is owned by real estate corporations. The half acre of Grandma's house pales in comparison to the literal _billions_ (!) of parking spaces in the US, or empty lots, or empty buildings. Drive around NYC and tell me the ratio of acreage owned by little old ladies to that of underutilized land owned by real estate corporations.
- Aurornis 1y ago

philipallstar 1y ago

> The tax upon land values is, therefore, the most just and equal of all taxes It is definitely not an equal tax. A poll tax is an equal tax.