So the quadratic voting issue seems kinda curious to me. It seems like the best mechanism is through the use of tokens. But, I also assume that the tokens would have to be categorized to some degree right? i.e. you wouldn't use the same tokens for electing people that you use on issues themselves. But if you start breaking the voting topics down, don't the categories become somewhat arbitrary? i.e. do you have "Elections" "Constitutional" "Budgetary" categories each with their own voting tokens? If you have budgetary concerns, is it better to vote "for" your preference than "against" a different preference? Is every budgetary matter up for public approval?
I'm more interested in getting our revenue sources right (i.e. the public collection of land rent). Is the tyranny of the majority a major concern after that? It seems like the most viable projects should move forward by simply majority and the remainder can be returned as a citizen's dividend. Tyranny only exists when a decision creates a barrier to alternatives right? Perhaps someone can give an example where a spirited minority may want to use public funding for something that the majority does not want (or is less interested in) and that this spirited minority could not take their dividends to provide for themselves.
Well the private property rights you buy when you buy land include the state's ability to tax it. As for why it's an issue of distributive justice, that's simple. Ethically speaking, everyone has a right to use land, limited only by the equal rights of others. The rental value of land is the differential value of what one land plot can offer compared to what is available for free, aka "differential rent". That differential is a free gift of nature. As a matter of simple justice, paying those excluded from using land is the ethical position.
Meanwhile, taxing people's labor is a way of collectivizing people's labor, which violates the right to self-ownership.
As for the 'payment of services', this is simply a narrow view of the services land provides.
"The consumption tax that best fits Smith’s criteria is on that of spatial services. A tax on spatial services also best applies the Ramsey rule of taxing inelastic items. Space does not get used up, but space generates a flow of site services over time that do get used up, and is measured as the implicit market rent. For example, suppose the rental of a house includes a back yard. The yard offers a continuous flow of service as a place to enjoy the outdoors. The user consumes that flow over time. Though the space remains, every hour of yard service is an hour of spatial service that is gone as soon as that time passes. As a flow, the spatial service is simultaneously generated and consumed. It has been well known by economists since the classical economics of Ricardo that the taxation of land rent does not affect the economic rent. Since the supply of land, within some jurisdiction, is fixed, a tax on land rent does not alter the amount of land. Since a tenant does not care who gets the rent, the tax on land rent does not change the demand, i.e. the quantity of land demanded at various amounts of rent." https://sor.senate.ca.gov/sites/sor.senate.ca.gov/files/Fina...
Whether you personally use a service or not is irrelevant. If the land provides a service and you choose not to use that service, you are still depriving others from enjoying that service.
Amusingly, levying a land value tax alongside the Wright Irrigation Districts in California is what broke up the large landholders who were monopolizing access to water. This was widely viewed as an enormous success in policy, even as the large landholders screeched that it wasn't fair that they should have to pay for the water whether they were using it or not. https://www.henrygeorge.org/caldes.htm
A private lump sum payment is simply a private tax. How we treat land ownership is ultimately an ethical question, without the state your title to land means nothing.
"THE TREATMENT of rent as public revenue is part and parcel of an organic theory of the State.
In the contractual theory, government is a kind of business which extends services to landowners. They only need pay for benefits received, which are construed in the narrowest possible terms.
In the organic theory, landowners hold title to land as a privilege. In return, they owe the State - acting on behalf of the community - certain obligations. The entire value of land is regarded as a benefit received from government. This is in keeping with the definition of land as "Public Value" offered by Alfred Marshall, the distinguished Victorian economist.
Land and its value is the joint product of at least three things:
• nature, which created it;
• government, which acquired it from other sovereigns and protects it from other powers and extends public works for the public's benefit;
and
• synergism, which is the increment to value that spills over from social and economic activity in the neighborhood of each parcel of land. Value stemming from all these elements is regarded as unearned by the individual landowner. It is the product of outside forces and therefore a fit object of taxation."
You're welcome to believe otherwise of course, but trying to dispute the ethical position of land value taxation is like trying to argue against the laws of physics.
Property tax falls on both the land and improvements. Inasmuch as they pay a 'property tax on land', they paid a reduced price to purchase said land. If there had been no tax on land, they would have simply paid that much more in lump sum for their fee simple ownership.
The premise behind a land value tax is to take an increasing amount of the land rent in taxation, which at the extreme end would reduce the selling price of land to $0.
The objective is both to make the land markets work better and one of distributive justice. It isn't to punish homeowners. It is to redirect the privatization of land rent and return it to the rightful recipients (those who are excluded from using a location with the public acting on their behalf).
In other words, if the Georgist solution had been in place, the price of land would have been close to $0. I can assure you this is nowhere near the case. In fact, here in Salt Lake City, the land share of real estate value is around 70%.
Of course, transitions can be challenging. The prior owners of the land got away with legalized theft and you can trace this back in time from each former landowner capturing the land rent from the next buyer. This is what Georgists aim to stop.
Getting to a 'very high LVT' is not something proposed to happen overnight. Mortgage debt also has to be considered since this is simply 'capitalized future rents'. Additionally, the process would include a tax shift, that is the reduction of other taxes as the tax on land is raised. Only after a revenue-neutral tax shift was concluded would further increases in land value taxation occur.
Given the fact that renters (who generally have less income than homeowners) can manage to pay the annual land rent every year, homeowners will manage just fine.
"Furthermore, as we discuss in more detail in our paper, the number of net winners from this reform would far exceed the number of net losers, who, if necessary, could be exempted or compensated at little budgetary cost." https://voxeu.org/article/post-corona-balanced-budget-fiscal...
"The anarchists' vagueness in attempting to define occupancy
and use was best exemplified in the correspondence between Tucker and Stephen Byington (who subsequently became a "disciple" of Tucker's).
Byington wanted to know what would happen to occupiers of land or buildings when they would be away from their premises for a period of time.
Tucker, reducing his answer to an absurdity, replied that the very last user and occupier would not only lose his land but his personal property as well."
Alas there is no relationship between an income tax and personal consumption of spatial services. There is absolutely no coherent reason to do as you suggest, and every reason for the land to pay the cost of delivering those services, along with the rest of the rental value of land.
The problem isn’t vastly understated, and the retirees have largely been subsidized by the current system, they aren’t losing anything. That said, I’m just as favorable to a writedown of the asset and liability. The banks can now invest in productive enterprise.
I see no evidence that it would be difficult in the slightest to disentangle such things but I’m willing to be convinced otherwise by those who have done an actual analysis of the issue.
Of course, as Foldvary notes, “First of all, compensation for the loss of land value is not morally required. The typical landowner has been receiving an implicit subsidy from the government, as public goods generate higher rent and land value. One could argue that justice requires the title holder to pay back the past subsidies.”
What you see as a problem is not an ethical or economic problem merely a potentially political problem.
These are not show-stoppers, nor are they something that Georgists have failed to consider.
"Another basis on which it is argued that greatly increased taxes on land are infeasible is that if land values were to fall precipitously, the financial system would collapse. It is true that many properties have mortgages that would exceed the value of the property if land taxes were increased significantly. This makes it necessary to think carefully about who should absorb the decline in aggregate asset value that would accompany a significant shift toward taxing land. Nevertheless, it is possible to plan for a restructured financial system that would have shed its dependence on land as collateral." http://www.wealthandwant.com/docs/Tideman_CTL.html#I._Taxing...
"Furthermore, as we discuss in more detail in our paper, the number of net winners from this reform would far exceed the number of net losers, who, if necessary, could be exempted or compensated at little budgetary cost. The winners would even include almost all of the very rich, who not only hold the vast majority of US land but who as a rule are also very well diversified, with land only accounting for a small share of their portfolios. They would benefit greatly from the countervailing cuts in labour and capital income taxes." https://voxeu.org/article/post-corona-balanced-budget-fiscal...
"It came as a quite natural development that also the question of incorporating these ideas into Danish Law was raised. From the very beginning, Jakob E. Lange was convinced that the problem of indebtedness, especially the mortgage debts, must be solved when the full Land Rent, or Ground Duty (in Danish "Grundskyld") were to be collected for a public revenue.
When in 1889 Henry George was on a speaking tour in England, Jakob E. Lange made use of the opportunity and went to England to meet him and to discuss the problem with him. The memoirs of Jakob E. Lange relate that Henry George completely accepted his standpoint; an eventual full Ground Rent which were to exceed the present property taxes ought to be proportioned between the title owner and the mortgage holder. This agreement between Henry George and Jacob E. Lange is also found expressed in the later correspondance between the two." https://cooperative-individualism.org/bille-frank_danish-ame...
Well, many Georgists believe that All Taxes Come out of Rents, so under that belief there is no reason to keep inferior taxes in existence as opposed to collecting the higher rental value that would occur with the removal of those current taxes.
As for levies on externalities, these should be more accurately seen as correcting a market failure, the social cost that society must pay that the consumer/producer do not pay.
"As we shall see, Ramsey not only formulated a rule that leads directly to a “single tax” on land, but also anticipated the so-called Laffer curve in cases where the “single tax” is not employed. Moreover, Ramsey's rule was to be applied after any externalities had been internalized by means of appropriate taxes and bounties."
That is not the sole purpose for the public collection of land rent. Land rent is based on demand for land. Land rent is what you would pay for a particular plot vs. some other plot that is available.
The question is to whom should this payment go, and "fee simple" is an entirely inappropriate mechanism for payment.
Everyone has an equal right to the use of land, limited only by the equal rights of others to use land. What the state does not need for the provision of public goods & services should still be collected and returned to the people on a per capita basis, as a simple matter of social & economic justice.
It is not very difficult to separate improvements from the land. Critically, due to the deadweight loss of present taxes, even an inaccurate LVT would be superior to the present tax system. The margin of error for LVT is essentially "is it worse than the present system?" I'd recommend reading -
As a simple practical matter, the "Highest and Best Use" is ultimately subservient to "demand for land". Simply because you -could- build the Empire State Building in the desert does not make it so that every plot of land in this desert is assessed at this level. In fact, if you were to build the Empire State Building in the middle of nowhere, the rental value of the plot and the surrounding plots would remain at or near $0. It is inaccurate to suggest that the improvement gives the land its value. People give the land its value, and the location value is not equal to the improvements. Why would I pay someone else rent (which is ultimately what we're discussing here) when I could make those same improvements elsewhere? Louis F Post gets into this point below
"Q6. If a land-owner builds, does not that increase the value of his land and consequently the amount of the tax he would have to pay? If so, would not he be taxed for his improvement?
A. No. Upon the value of the building he would never pay any tax. It is true that his improvement might attract others to the locality in such numbers as to make land there scarcer and consequently dearer. His own lot would in that case rise in value with the other land and be taxed more, just as the rest would be. But that would not take any of his labor in taxes; he would still have his building free of taxation. Thus: If on a lot worth $1000 a building worth $1000 were erected, making the whole worth $2000, the tax would fall only upon the $1000 which represents the value of the lot. If land then became so scarce that the lot rose in value to $1500 the tax would be raised. But the owner's improvement would be still exempt. When his property was worth $2000 he was taxed on $1000, the value of the lot, leaving $1000, the value of the building, free; and now, though he is taxed on $1500, the value of the lot, $1000, the value of the building, is still free."
Land and its value is the joint product of at least three things:
• nature, which created it;
• government, which acquired it from other sovereigns and protects it from other powers and extends public works for the public's benefit;
and
• synergism, which is the increment to value that spills over from social and economic activity in the neighborhood of each parcel of land.
Value stemming from all these elements is regarded as unearned by the individual landowner. It is the product of outside forces and therefore a fit object of taxation
Yes, Land Value Taxers would exempt improvements. Notably, "The Greening of the California Desert" was financed with Land Value Taxes and "A significant amendment to the Wright Act also embodies the ideas of Henry George. The revised act exempted "all trees, vines, alfalfa, growing crops and all the structures of whatever class or description," from taxation. The full cost of the irrigation systems to be built would fall on the land, not the improvements. Small farmers could take control of their destiny and bring water to their farms." https://www.henrygeorge.org/caldes.htm
Of course, we should first replace the existing bad taxes for multiple reasons. Nonetheless, as a matter of economic and social justice, -any- amount of land rent that exists should be publicly collected and distributed on a per-capita basis.
This does not increase the user-cost of land as land has no cost of production. Of course as a transitional issue there will be net winners and net losers (for which we could create policies to address the transitional effects). The ultimate effect of the full public collection of land rent would be to bring the selling price of land down to $0, while the rental value would remain the same (not counting the dynamic effects).
In reality, land value taxation isn't really a tax when properly understood. You either pay a previous owner in selling price or you pay the public the annual rental value. Most people don't properly consider that the selling price is simply the capitalized ability to capture future rents. In an ethical society, this privilege would not exist.
I'd recommend reading "Taxation: The Lost History" for a deeper dive into why rent as public revenue is the most logical, ethical, and efficient tax base. It is book length, but worth it if you want to understand some of the deeper/intricate concepts. Some useful sections include:
I would add that while zoning reform is something that all Georgists should get behind, land rent as public revenue is really a separate issue. It is worth doing even with the present zoning in place. Consider a scenario where society is at a technological level where the only type of development possible is a single-family home. Rent as public revenue is still the most efficient and ethical tax base for society. Land assessment is based upon the highest and best legally-permitted use. If it is -only- possible to build single-family homes, this does not diminish the case for land rent as the tax base.
I'm more interested in getting our revenue sources right (i.e. the public collection of land rent). Is the tyranny of the majority a major concern after that? It seems like the most viable projects should move forward by simply majority and the remainder can be returned as a citizen's dividend. Tyranny only exists when a decision creates a barrier to alternatives right? Perhaps someone can give an example where a spirited minority may want to use public funding for something that the majority does not want (or is less interested in) and that this spirited minority could not take their dividends to provide for themselves.