Why a land-value tax is inevitable(medium.com)
medium.com
Why a land-value tax is inevitable
https://medium.com/@phila_31297/why-a-land-value-tax-is-inevitable-44e7e4571d33
321 comments
> UBI
I'm skeptical of UBI. The idea doesn't include any kind of automatic stabilization system to set the UBI at a sustainable level. Because UBI is not market-based, there's little information that flows into the process that sets of level of UBI and other redistribution systems. In a market system, a distributed consensus algorithm governs both wages and prices and adjusts both continuously to account for changes in scarcity and utility.
Who decides how much UBI is enough? What procedure will that person or body use? What is the algorithm that prevents UBI increasing without bound? After all, the public voting itself unsustainable transfers from the state is one of the classic failure modes of democracy.
No matter the initial level of UBI, there will be someone who's able to gain political advantage by claiming that the UBI is insufficient for a dignified existence and that human rights demand an increase. Proposing a decrease in UBI will be political suicide. What prevents UBI increasing to the point that it captures all excess value production from all of society and redistributes it evenly? Wouldn't that system be tantamount to the planned economies of the 20th century?
I'm skeptical of UBI. The idea doesn't include any kind of automatic stabilization system to set the UBI at a sustainable level. Because UBI is not market-based, there's little information that flows into the process that sets of level of UBI and other redistribution systems. In a market system, a distributed consensus algorithm governs both wages and prices and adjusts both continuously to account for changes in scarcity and utility.
Who decides how much UBI is enough? What procedure will that person or body use? What is the algorithm that prevents UBI increasing without bound? After all, the public voting itself unsustainable transfers from the state is one of the classic failure modes of democracy.
No matter the initial level of UBI, there will be someone who's able to gain political advantage by claiming that the UBI is insufficient for a dignified existence and that human rights demand an increase. Proposing a decrease in UBI will be political suicide. What prevents UBI increasing to the point that it captures all excess value production from all of society and redistributes it evenly? Wouldn't that system be tantamount to the planned economies of the 20th century?
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.”
― Alexander Fraser Tytler
Give me a break. Some of the world’s most stable democracies have both a high level of taxation and a significant social benefit system.
In America, in 2017, there was a group who decided that they could “vote themselves largesse from the public treasury” and it was not “voters”. The end result is referred to as the Tax Cuts and Jobs Act.
In America, in 2017, there was a group who decided that they could “vote themselves largesse from the public treasury” and it was not “voters”. The end result is referred to as the Tax Cuts and Jobs Act.
> The idea doesn't include any kind of automatic stabilization system to set the UBI at a sustainable level.
Except it does: land value.
This right here is the basis of geolibertarianism, which calls for a minimal government that exists solely to collect LVT and redistribute it directly as UBI. The UBI distributed should be equal to the opportunity cost externalized by private/exclusive land use. The cap would be a 100% LVT, where all land is leased from society as a whole (or more precisely, this minimal government representing said society).
So:
> Who decides how much UBI is enough?
The land market.
> What procedure will that person or body use?
The appraisal of the market value of land (sans the improvements upon it, like buildings).
> What is the algorithm that prevents UBI increasing without bound?
Supply and demand of land.
Except it does: land value.
This right here is the basis of geolibertarianism, which calls for a minimal government that exists solely to collect LVT and redistribute it directly as UBI. The UBI distributed should be equal to the opportunity cost externalized by private/exclusive land use. The cap would be a 100% LVT, where all land is leased from society as a whole (or more precisely, this minimal government representing said society).
So:
> Who decides how much UBI is enough?
The land market.
> What procedure will that person or body use?
The appraisal of the market value of land (sans the improvements upon it, like buildings).
> What is the algorithm that prevents UBI increasing without bound?
Supply and demand of land.
Change Carbon tax to "Pollution tax" -- even on the topic of global warming, methane and nitrous oxide are potentially more harmful, and a pollution tax is far more future proof for capturing externalities.
*pollution tax that can be reduced to zero if you are capturing (not necessarily at production) the pollutant you're emitting.
e.g. SpaceX shouldn't be taxed on CO2 release from their Raptor engines if they are getting all their methane via the Sabatier process.
e.g. SpaceX shouldn't be taxed on CO2 release from their Raptor engines if they are getting all their methane via the Sabatier process.
I'm sure they'd get capture credits.
Fair, I did an edit.
"Explanations exist; they have existed for all time; there is always a well-known solution to every human problem—neat, plausible, and wrong." -- H. L. Mencken I am not saying that the ideas you have listed are not without merit, however to say they will fix the 21 Century is a bit over reaching.
It's sounds wise and cynical, but is there actually evidence for this?
I'm not saying any of this is easy to do, but that's because politics and reform is hard. Not enough people can agree what to do != no one can know what to do.
With fields like "mechanism design" we've blurred the distinction between central planned and distributed economics too; never have we had a better menu of options.
I'm not saying any of this is easy to do, but that's because politics and reform is hard. Not enough people can agree what to do != no one can know what to do.
With fields like "mechanism design" we've blurred the distinction between central planned and distributed economics too; never have we had a better menu of options.
Economics is improving rapidly but it’s definitely not shown itself to be prescriptive yet. It’s a crap shoot how well an idea gets executed in the real world and I’d argue that’s not acceptable for something this drastic.
I totally agree, although I would expand the LVT to tax on all non-commodity property (e.g. intellectual property, like patents, copyrights, domain names, etc.). I think LVT is the biggest and most important of these types of taxes, but taxing all non-commodity property in the style recommended by Glen Weyl is even better.
I think you'd need to widen point 3 to be a Pigovian tax[1], and add a fourth point for a severance tax[2].
[1]: https://en.wikipedia.org/wiki/Pigovian_tax
[2]: https://en.wikipedia.org/wiki/Severance_tax
[1]: https://en.wikipedia.org/wiki/Pigovian_tax
[2]: https://en.wikipedia.org/wiki/Severance_tax
The fix that no one seems to talk about is to abolish usury/interest. Islam, Judaism, and Christianity outlawed lending money with interest many centuries ago, and for good reason. Once the core is fixed, we will see benefits across the board almost by definition. Ban parasitic and immoral practices (interest/usury, stock shorting, selling debt for debt, short and long option positions [aka gambling], etc.) and things will get fixed very quickly. Don't forget to return to a properly backed currency, not today's fake currency that allows the government to print money at will.
This is nonsense economics. Whether monetary policy or "natural", Capitalism as we know it relies on huge growth to have good outcomes.
If you want a steady-state economy, you're going to need far more reforms than this, and if you want capitalism without interest you're shit out of luck.
If you want a steady-state economy, you're going to need far more reforms than this, and if you want capitalism without interest you're shit out of luck.
It's not nonsense economics because it's proven to work. Islamic finance heavily encourages proper economic growth through correct risk sharing. Want to open a business? Get VC funding and grow the company, if it succeeds, all parties profit, if it fails, all parties share the risk. This is in line with capitalism, just without the immoral and parasitic practices that make it unstable, as we see today.
It's worth pointing out that the SEC banned short selling during the 2008 economic crisis, I wonder why. Not to mention that without interest bearing loans and selling debt for debt, there wouldn't have been a 2008 crisis to begin with.
The solution is less taxation, while removing the parasitic practices that underly the economy today.
It's worth pointing out that the SEC banned short selling during the 2008 economic crisis, I wonder why. Not to mention that without interest bearing loans and selling debt for debt, there wouldn't have been a 2008 crisis to begin with.
The solution is less taxation, while removing the parasitic practices that underly the economy today.
I'm not sure how UBI wouldn't just trigger massive inflation and knock a lot of wind out of the sails of people who receive the income.
Wouldn't a less punitive system of welfare properly distribute the wealth with none of the requirement to be universal?
Wouldn't a less punitive system of welfare properly distribute the wealth with none of the requirement to be universal?
> I'm not sure how UBI wouldn't just trigger massive inflation and knock a lot of wind out of the sails of people who receive the income.
It wouldn't by being calibrated (preferably by being indexed to a revenue source and not to inflation) to be at a level where that wouldn't occur, which is a factor of productivity and other factors.
> Wouldn't a less punitive system of welfare properly distribute the wealth with none of the requirement to be universal?
UBI is a less punitive welfare system; any retreat from universality is restoring the essence of the punitive factor which also is the driver of wasteful administrative overhead by duplicating functions already performed in the progressive income tax system.
It wouldn't by being calibrated (preferably by being indexed to a revenue source and not to inflation) to be at a level where that wouldn't occur, which is a factor of productivity and other factors.
> Wouldn't a less punitive system of welfare properly distribute the wealth with none of the requirement to be universal?
UBI is a less punitive welfare system; any retreat from universality is restoring the essence of the punitive factor which also is the driver of wasteful administrative overhead by duplicating functions already performed in the progressive income tax system.
Carbon taxes don't seem simple, to me. Measuring the carbon cost of many things seems really hard. What's the carbon tax rate of income from a downtown parking lot? How do you even reason about that?
(the others, sure, much simpler)
(the others, sure, much simpler)
Yes, Carbon tax is the least simple, but at least the others free up the carbon tax alone from being at all equitable. That helps.
Carbon tax is the simplest because you can do it at the well head or the port for imports.
You don't need to measure the carbon cost of everything. You tax carbon at the source, like power generation and oil drilling. The costs will naturally balance upwards.
The downtown parking lot, for example, probably doesn't have recurring carbon costs. The gasoline people use to drive there will be more expensive from the carbon tax on oil and gasoline production, and the cement or asphalt that takes electricity to produce will be covered by the source-charge on power plants.
The downtown parking lot, for example, probably doesn't have recurring carbon costs. The gasoline people use to drive there will be more expensive from the carbon tax on oil and gasoline production, and the cement or asphalt that takes electricity to produce will be covered by the source-charge on power plants.
That works for internal products, but not foreign ones. If you're importing from somewhere that also has a comparable carbon tax it's fine, but otherwise you have to apply the carbon tax to all imports.
Doing so also likely violates any free trade agreements you've signed.
It's a hard problem, but the gains are massive, so it's worth it.
It'll be a lot easier if a set of countries do this together.
Doing so also likely violates any free trade agreements you've signed.
It's a hard problem, but the gains are massive, so it's worth it.
It'll be a lot easier if a set of countries do this together.
To elaborate on that last point, one concrete model that was on the HN front page lately was the "climate club": https://www.aeaweb.org/articles?id=10.1257/aer.15000001
I think the solution here is likely to pass extra-onerous taxes on imports, and then tell the host countries "If you don't like it, apply the tax yourselves, and then we'll remove ours once we deem yours satisfactory".
I dunno, that sounds like a trade war to me. If it were this easy there’d be no need for international diplomacy.
We went from riding horses to computer and space ship so I don't know if those will have the same impact capitalism has especially if we have less money for innovation
Which of these would result in “less money for innovation”?
Carbon tax can be made revenue neutral and will net benefit innovative companies and/or customers buying their products.
LVT is literally taxing non-productive, limited, legally hereditary but actually “common heritage” capital. No damage there.
I’m quite opposed to UBI myself but I think there’s plenty of other ways to improve the social safety net with less opportunity of abuse, the net benefit being that people are less concerned with staying alive (low Maslow need) and free to be creative (high Maslow need).
Carbon tax can be made revenue neutral and will net benefit innovative companies and/or customers buying their products.
LVT is literally taxing non-productive, limited, legally hereditary but actually “common heritage” capital. No damage there.
I’m quite opposed to UBI myself but I think there’s plenty of other ways to improve the social safety net with less opportunity of abuse, the net benefit being that people are less concerned with staying alive (low Maslow need) and free to be creative (high Maslow need).
As the other responder says, LVT is good no matter what the basis of the economy is. But also, we absolutely have problems specific to today around automobile use and suburbia that ultimately go back to inefficient land use.
Trying to keep society progressing without improving land use and suburbia is like trying to improve CPUs while not improving upon 1980s processes/chip density.
Trying to keep society progressing without improving land use and suburbia is like trying to improve CPUs while not improving upon 1980s processes/chip density.
Someone's spending too much time on Twitter
Actually, I don't have a twitter account.
No we don't. I will never participate in a scheme where we rob someone at gunpoint to "help" another person. The end doesn't justify the means.
That does contain the huge and unprovable assumption that there is such a thing as natural property in the absence of the state.
See https://www.currentaffairs.org/2019/01/why-taxation-is-neith...
See https://www.currentaffairs.org/2019/01/why-taxation-is-neith...
Thank you for reminding the deluded world that property isn't a relationship between persons and things, but just between persons.
So annoying that the vast majority of Americans seem to fundamentally do not understand this. The curse of too much land.
So annoying that the vast majority of Americans seem to fundamentally do not understand this. The curse of too much land.
Add MMT to the list.
LVT is good for state governments that don't have their own currency.
LVT is good for state governments that don't have their own currency.
Modern Monetary theory is theory not policy.
The jobs guarantee that goes with it I really don't like. It's stupid in 2020 to not be trying to reduce the total labor per person.
Sure, some infrastructure projects are really important, not profitable, and might even require the training of new labor to get it done. They should definitely still happen. But I see no good reason to hitch that to jobs guarantee.
The jobs guarantee that goes with it I really don't like. It's stupid in 2020 to not be trying to reduce the total labor per person.
Sure, some infrastructure projects are really important, not profitable, and might even require the training of new labor to get it done. They should definitely still happen. But I see no good reason to hitch that to jobs guarantee.
Reducing labor as a goal seems rather odd. Why do you feel people should not have the freedom to work? What would you rather people do instead?
Let's look at this in aggregate:
Fact: Productivity growth stars exceeding whole economy growth sometime in the 1970s.
Rather than a shrinking workday or mass unemployment, we get mass underemployment. What this means is no one can survive without a job so inefficient or pointless work grows rapidly, fed by the margins of the labor market. This ultimately discourages further investment, technological progress, and will lead to falling median productivity and then mean productivity.
This is extremely dangerous for society. We'll end up paupers in the ruins of our past greatness. Maybe we already have, if one looks at our infrastructure.
Basically, you can think of the lack of a UBI as https://en.wikipedia.org/wiki/Dumping_(pricing_policy) on the labor market.
Fact: Productivity growth stars exceeding whole economy growth sometime in the 1970s.
Rather than a shrinking workday or mass unemployment, we get mass underemployment. What this means is no one can survive without a job so inefficient or pointless work grows rapidly, fed by the margins of the labor market. This ultimately discourages further investment, technological progress, and will lead to falling median productivity and then mean productivity.
This is extremely dangerous for society. We'll end up paupers in the ruins of our past greatness. Maybe we already have, if one looks at our infrastructure.
Basically, you can think of the lack of a UBI as https://en.wikipedia.org/wiki/Dumping_(pricing_policy) on the labor market.
A website like HN should be nakedly self-interestedly be for this, because a labor shortage is the best thing to "make technology great again".
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The most convincing argument for job guarantee over UBI I saw was plan jefes in argentina.
It started out as a job guarantee, where women were given jobs as caregivers and got shifted to UBI where the women were told they didn't have to do the jobs but they'd still get the money.
They still did the jobs when they didn't have to. They said it provided them with a social network and social interactions and most importantly, with purpose.
One of the things that bugs me the most about UBI is the idea that people would rather just laze at home and do their own thing given the chance and the money to make that possible. I don't believe that's true. I think humans have a deep seated need to be part of a community, to have purpose and to leave a mark.
The new deal was a spectacular illustration of that. The people who took part in public works projects were justifiably proud of what they'd done - building bridges, art works, schools, sewers, streets and more.
It started out as a job guarantee, where women were given jobs as caregivers and got shifted to UBI where the women were told they didn't have to do the jobs but they'd still get the money.
They still did the jobs when they didn't have to. They said it provided them with a social network and social interactions and most importantly, with purpose.
One of the things that bugs me the most about UBI is the idea that people would rather just laze at home and do their own thing given the chance and the money to make that possible. I don't believe that's true. I think humans have a deep seated need to be part of a community, to have purpose and to leave a mark.
The new deal was a spectacular illustration of that. The people who took part in public works projects were justifiably proud of what they'd done - building bridges, art works, schools, sewers, streets and more.
> The most convincing argument for job guarantee over UBI I saw was plan jefes in argentina.
The rest of your text seems to be an argument for UBI and against job guarantee. Is that first sentence what you meant?
The rest of your text seems to be an argument for UBI and against job guarantee. Is that first sentence what you meant?
Yes. I don't really see how I was arguing in favor of UBI.
You wrote this:
1. a group of people were assured jobs
2. the job assurance was changed to a basic income, no need to work anymore
3. people still showed up to work
errr... seems OK to me? It proves that even if there is an UBI most people will still work. The UBI is just a safety net that assures you do not die of exposure if you get to spend some time without working (for whatever reason). Your example proves that the UBI does not really distort the job market (except for the most shitty jobs, which is alright if they disappear). Also, your example proves that the existence of an UBI does not turn people lazy.
All in all, your example is a great argument for the UBI!
1. a group of people were assured jobs
2. the job assurance was changed to a basic income, no need to work anymore
3. people still showed up to work
errr... seems OK to me? It proves that even if there is an UBI most people will still work. The UBI is just a safety net that assures you do not die of exposure if you get to spend some time without working (for whatever reason). Your example proves that the UBI does not really distort the job market (except for the most shitty jobs, which is alright if they disappear). Also, your example proves that the existence of an UBI does not turn people lazy.
All in all, your example is a great argument for the UBI!
If they'd skipped straight to UBI they likely wouldn't have done these jobs.
But this is a hypothesis not actually supported by your example. A better example would be a case were the application of an UBI created negative effects in a society.
I'm not sure why you need to prove that it creates negative effects to say that there is a better option. Is UBI better than nothing? Probably quite a lot. Better than a JG? No, I don't think so.
This story very much demonstrates that giving people jobs helping the community rather than just money is a better option. They were both productive and happier. So much so that they didn't want to stop.
I'm sure the nature of the job probably had something to do with it. If these jobs were in call centers for debt collectors they probably would have quit en masse and been happy about it.
This story very much demonstrates that giving people jobs helping the community rather than just money is a better option. They were both productive and happier. So much so that they didn't want to stop.
I'm sure the nature of the job probably had something to do with it. If these jobs were in call centers for debt collectors they probably would have quit en masse and been happy about it.
There was a convincing op-ed in WSJ a few years ago about how in all the states that are facing public sector defaults, the ultimate payer of these debts will be homeowners. Since basically the only place left for most governments to go is property value (unless they have huge businesses they can tax).
And it is worse in the poorer states, because they don't have high home values to cushion the blow to the individual taxpayer.
And it is worse in the poorer states, because they don't have high home values to cushion the blow to the individual taxpayer.
There are big huge businesses we aren't adequately taxing: Big tech.
When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more.
And Jeff Bezos does not need more money.
When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more.
And Jeff Bezos does not need more money.
wrong! Bezos wouldn't have founded Amazon if he could only make $50 billion. /s
> When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more.
Agreed. We should be ruthlessly taxing capital gains, and in general should look upon money earned without laboring for it with scorn.
Agreed. We should be ruthlessly taxing capital gains, and in general should look upon money earned without laboring for it with scorn.
> money earned without laboring for it
Tell that to startup founders whose only income from all the work they put in on their startup is capital gains.
Tell that to startup founders whose only income from all the work they put in on their startup is capital gains.
> > money earned without laboring for it
> Tell that to startup founders whose only income from all the work they put in on their startup is capital gains.
I think there really ought to be more of a distinction made between taxing the upside of sweat equity vs. literal capital gains (as in, the return on invested capital).
Also, startup founders should only be deferring their salary (or a portion of it), not forgoing it entirely.
For that matter, it's insane that VC fund managers only pay capital gains tax rates on carried interest and management fees. The fees are really just ordinary income plain and simple (which they get regardless of how the fund does), and while carried interest is technically a return on invested capital, it's entirely OPM and seems like a dodge that lets the manager participate in the upside of the fund with no actual skin in the game, so what's the point of taxing it at a preferential rate?
> Tell that to startup founders whose only income from all the work they put in on their startup is capital gains.
I think there really ought to be more of a distinction made between taxing the upside of sweat equity vs. literal capital gains (as in, the return on invested capital).
Also, startup founders should only be deferring their salary (or a portion of it), not forgoing it entirely.
For that matter, it's insane that VC fund managers only pay capital gains tax rates on carried interest and management fees. The fees are really just ordinary income plain and simple (which they get regardless of how the fund does), and while carried interest is technically a return on invested capital, it's entirely OPM and seems like a dodge that lets the manager participate in the upside of the fund with no actual skin in the game, so what's the point of taxing it at a preferential rate?
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So taking an investment risk so that a startup can grow is to be looked on with scorn? You might be posting in the wrong community.
Really there just shouldn't be any privileged category for capital gains and it should be taxed like regular income, progressively.
The reason for giving capital gains a preferred long term rate is inflation. If you invest in business for 10 years and double your money, you've made a 7% annual return. But if inflation averaged 7% during that time you actually made zero economic gains.
A better way to restore progressively to capital gains is to index them for inflation, and then you can tax them at ordinary income rates.
A better way to restore progressively to capital gains is to index them for inflation, and then you can tax them at ordinary income rates.
Yeah, it was an aha moment for me when I understood the reason for the cap gains / normal tax difference.
It makes sense that it's an attempt to index for inflation, although strange that there is only one cutoff (securities held for 1 year taxed the same as the ones held for 10 years); you would imagine some sort of step-down function would make more sense / track inflation more accurately (or indexing directly which is much harder).
So maybe different tax rates for 1/5/10/20 years held?
It makes sense that it's an attempt to index for inflation, although strange that there is only one cutoff (securities held for 1 year taxed the same as the ones held for 10 years); you would imagine some sort of step-down function would make more sense / track inflation more accurately (or indexing directly which is much harder).
So maybe different tax rates for 1/5/10/20 years held?
You don't need different tax rates, just indexing.
Lets have a single fair set of rates with progressivity. A rich man in the 35% tax bracket should pay 35% on their capital gains, just as a poor retiree in the 15% tax bracket should only pay 15% on capital gains.
Lets have a single fair set of rates with progressivity. A rich man in the 35% tax bracket should pay 35% on their capital gains, just as a poor retiree in the 15% tax bracket should only pay 15% on capital gains.
Well that's a bit different than your earlier statement that we should "ruthlessly tax" capital gains.
Capital gains get a favorable treatment because we want to encourage investment that creates economic growth, but comes with risk of loss.
Capital gains get a favorable treatment because we want to encourage investment that creates economic growth, but comes with risk of loss.
I mean, we ruthlessly tax working for a living, I just don't see why we don't tax speculation gains the same.
Two wrongs don't make a right.
Others are not interested in your socialist/communist policies.
Which jurisdiction to tax large companies in, even without doing the double Irish trick, is complicated. The question was talking about state income, and taxing all of Amazon's profits in Washington doesn't really make sense. Amazon also doesn't make that much money; its profit margin is 5%; Apple's is more like 21%.
It's also not like the money is never taxed. If Jeff Bezos wants to turn his AMZN shares into dollars, he'll federal capital gains on the appreciation. He pays nothing in Washington state because it has no income or capital gains tax, and that's Washington's choice. Corporate taxes are also a form of double taxation for this reason; the profits are taxed when the company makes the money, and taxed when investors realize gains.
Amazon also indirectly pays taxes in ways you're not thinking about. There's sales tax on sales, taxes on all the supplies it buys, property tax on all the land it owns, payroll tax for employees, and its employees also pay income tax (except in Washington), property tax, etc.
Taxes are actually getting collected pretty much everywhere along that chain. The usual criticism is with tax inversions, and even those mostly defer taxes, and because dividends and capital gains are taxed, I'm not convinced it makes sense to tax corporation.
It's also not like the money is never taxed. If Jeff Bezos wants to turn his AMZN shares into dollars, he'll federal capital gains on the appreciation. He pays nothing in Washington state because it has no income or capital gains tax, and that's Washington's choice. Corporate taxes are also a form of double taxation for this reason; the profits are taxed when the company makes the money, and taxed when investors realize gains.
Amazon also indirectly pays taxes in ways you're not thinking about. There's sales tax on sales, taxes on all the supplies it buys, property tax on all the land it owns, payroll tax for employees, and its employees also pay income tax (except in Washington), property tax, etc.
Taxes are actually getting collected pretty much everywhere along that chain. The usual criticism is with tax inversions, and even those mostly defer taxes, and because dividends and capital gains are taxed, I'm not convinced it makes sense to tax corporation.
> Which jurisdiction to tax large companies in, even without doing the double Irish trick, is complicated
Certainly, but many of the tricks involve licensing IP between subsidiaries in different tax regimes.
So create an IP tax. Declare the value of your IP and pay an annual tax on it. If you ever go to court to claim infringement, this is the maximum value you can claim.
Certainly, but many of the tricks involve licensing IP between subsidiaries in different tax regimes.
So create an IP tax. Declare the value of your IP and pay an annual tax on it. If you ever go to court to claim infringement, this is the maximum value you can claim.
> When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more.
The problem is that increasing the corporate income tax rate just doesn't provide enough revenue. Corporate income taxes are only 7% of the US government's annual tax revenue, for example. Even if we doubled the corporate income tax rate, that's still only another 7% of the total tax revenue, which is way too small to make up for the annual US budget deficit.
> Jeff Bezos does not need more money.
While I don't disagree with this, taxing the wealth of the rich also just doesn't provide enough revenue. Suppose we set a hard cap on personal wealth of $1 billion--everything over that, the government takes in tax at a rate of 100%. The net worth of the 400 richest people in the world is around $3 trillion, so we'd be taking $2.6 trillion of it. And that would fund...the US government for about 6 months. Or all 50 US states for...a little more than a year. And then the wealth is gone, and what do you do next?
In other words, all the complaining about low corporate tax rates and wealth inequality is complaining about something that, even if it were "fixed" (and fixed without depressing wealth creation, which is highly implausible), would not do much of anything about the real problem: that we expect governments to do far too much and give them far too much power. And that translates into chronic overspending and deficits, which end up being paid by the middle class, because that's the only source of revenue large enough to pay it.
The problem is that increasing the corporate income tax rate just doesn't provide enough revenue. Corporate income taxes are only 7% of the US government's annual tax revenue, for example. Even if we doubled the corporate income tax rate, that's still only another 7% of the total tax revenue, which is way too small to make up for the annual US budget deficit.
> Jeff Bezos does not need more money.
While I don't disagree with this, taxing the wealth of the rich also just doesn't provide enough revenue. Suppose we set a hard cap on personal wealth of $1 billion--everything over that, the government takes in tax at a rate of 100%. The net worth of the 400 richest people in the world is around $3 trillion, so we'd be taking $2.6 trillion of it. And that would fund...the US government for about 6 months. Or all 50 US states for...a little more than a year. And then the wealth is gone, and what do you do next?
In other words, all the complaining about low corporate tax rates and wealth inequality is complaining about something that, even if it were "fixed" (and fixed without depressing wealth creation, which is highly implausible), would not do much of anything about the real problem: that we expect governments to do far too much and give them far too much power. And that translates into chronic overspending and deficits, which end up being paid by the middle class, because that's the only source of revenue large enough to pay it.
It is even more complicated than that. Suppose you take the $3T. How do you convert that wealth into money? You essentially can't, and if you try to do it so at once you'll end up with much less than $3T.
I wish, but household owners are so politically powerful I doubt it will happen.
Maybe those to whom the debt is owned won't get paid or won't get paid completely -- these debts aren't valid. Taking debt in someone elses name is immoral - especially when most of it public sector unions voting in those across the negotiating table.
The problem with this op-ed is that it's based on an entirely false premise, it completely ignores how much revenues governments need.
Clinton was able to run a federal government spending less than 20% of GDP, since George Walker Bush federal spending has exploded to the 25 to 30% range. The reality is that 20% is plenty, and can solve all the problems government has the ability to solve.
Need to start by NOT
1) serving as the worlds policeman
2) building double the aircraft carrier tonnage of the rest of the world combined.
3) spending a trillion dollars on newest latest fighters not ready for service when we aren't at war
4) staging US troops and ships in the Middle East or Europe when both are immensely wealthy and able to defend themselves.
5) pouring $40B into a launch system design based on obsolete technologies and an overweight deep space capsule that needs a year to replace a single bad power unit.
6) subsidizing professional sports leagues paying millions a year per employee. etc, etc.
A good start would be requiring senators and congresspeople to recuse themselves from any legislation that specifically allocates funds for any projects in their states/districts. Get away from the thousand page earmarked pork funding bills and focus their responsibilities on legitimate national interests.
Clinton was able to run a federal government spending less than 20% of GDP, since George Walker Bush federal spending has exploded to the 25 to 30% range. The reality is that 20% is plenty, and can solve all the problems government has the ability to solve.
Need to start by NOT
1) serving as the worlds policeman
2) building double the aircraft carrier tonnage of the rest of the world combined.
3) spending a trillion dollars on newest latest fighters not ready for service when we aren't at war
4) staging US troops and ships in the Middle East or Europe when both are immensely wealthy and able to defend themselves.
5) pouring $40B into a launch system design based on obsolete technologies and an overweight deep space capsule that needs a year to replace a single bad power unit.
6) subsidizing professional sports leagues paying millions a year per employee. etc, etc.
A good start would be requiring senators and congresspeople to recuse themselves from any legislation that specifically allocates funds for any projects in their states/districts. Get away from the thousand page earmarked pork funding bills and focus their responsibilities on legitimate national interests.
> Need to start by not 1) serving as the worlds policeman 2) building double the aircraft carrier tonnage of the rest of the world combined. 3) spending a trillion dollars on newest latest fighters not ready for service when we aren't at war, 4) staging US troops and ships in the Middle East or Europe when both are immensely wealthy and able to defend themselves. 5) pouring $40B into a launch system design based on obsolete technologies and an overweight deep space capsule that needs a year to replace a single bad power unit. 6) Not subsidizing professional sports leagues paying millions a year per employee. etc, etc.
Have you looked at the federal budget? The expenditures you mention are insignificant. Social security and medical assistance programs make up 48% [1] of the federal budget. Defense only makes up 16%, and of that, only 27% goes to the navy. Another 8% is various assistance programs. 8% is interest on debt. 0.5% is all of NASA.
You can't really reduce the government's expenditure levels by cutting a few high-profile programs that some consider wasteful. The majority of the budget goes to supporting the most vulnerable in society. Cutting these programs is politically impossible.
> thousand page earmarked pork funding bills and focus their responsibilities on legitimate national interests.
Earmarks are dead already. But they shouldn't be: earmarks let lawmakers swap favors in a way that promotes the smooth operation of government and compromise in lawmaking. Yes, there's some corruption, but that corruption was a small price to pay for decreasing the overall level of hostility in the legislature and promoting compromise.
[1] https://www.cbpp.org/research/federal-budget/policy-basics-w...
Have you looked at the federal budget? The expenditures you mention are insignificant. Social security and medical assistance programs make up 48% [1] of the federal budget. Defense only makes up 16%, and of that, only 27% goes to the navy. Another 8% is various assistance programs. 8% is interest on debt. 0.5% is all of NASA.
You can't really reduce the government's expenditure levels by cutting a few high-profile programs that some consider wasteful. The majority of the budget goes to supporting the most vulnerable in society. Cutting these programs is politically impossible.
> thousand page earmarked pork funding bills and focus their responsibilities on legitimate national interests.
Earmarks are dead already. But they shouldn't be: earmarks let lawmakers swap favors in a way that promotes the smooth operation of government and compromise in lawmaking. Yes, there's some corruption, but that corruption was a small price to pay for decreasing the overall level of hostility in the legislature and promoting compromise.
[1] https://www.cbpp.org/research/federal-budget/policy-basics-w...
LOL Earmarks clearly still exist, just under different names, and have always been used solely for corrupt purposes. Pork barrel spending is a huge price to pay for enabling national legislators to agree to legislation that's clearly bad for the country as a whole, in order to fund projects for their political supports.
And most social security payments go to people with living standards at or above the US median.
And most social security payments go to people with living standards at or above the US median.
Earmarks and pork funding is not even corruption. It is a representative's duty to advocate on behalf of their constituents. And constituents want spending programs in their communities.
Earmarks and pork are nothing other than corruption. The SLS is the clearest example.
US taxpayers have invested close to $20B in a launch system that was outdated the day it was designed and will literally cost 100 times more per pound than commercially available launch systems.
The first reason it's so costly is that the US congress required it to use solid rocket boosters, which increase launch risks, and substantially increase launch costs.
The second reason the SLS is so costly is that congress required it to use RS-25 engines, which were some of the most expensive rocket engines ever designed, originally costing $45M a pop. They were so expensive because they were used on the Shuttle and had to be refurbished between launches instead of expended (destroyed) every launch.
But not only will the RS-25s used on the SLS be expended every launch, Aeroject is getting $100M(!) each to build new ones. And it forced the SLS to use one of the worst possible first stage fuels, Hydrogen, which requires carrying a massively heavy cryogenic tank, construction of has held up launches for years,
By contrast, each SpaceX Merlin which has roughly half the thrust of an RS-25 costs around $500,000 to build, 200 TIMES LESS! And uses a far more compact and effective first stage fuel.
US taxpayers have invested close to $20B in a launch system that was outdated the day it was designed and will literally cost 100 times more per pound than commercially available launch systems.
The first reason it's so costly is that the US congress required it to use solid rocket boosters, which increase launch risks, and substantially increase launch costs.
The second reason the SLS is so costly is that congress required it to use RS-25 engines, which were some of the most expensive rocket engines ever designed, originally costing $45M a pop. They were so expensive because they were used on the Shuttle and had to be refurbished between launches instead of expended (destroyed) every launch.
But not only will the RS-25s used on the SLS be expended every launch, Aeroject is getting $100M(!) each to build new ones. And it forced the SLS to use one of the worst possible first stage fuels, Hydrogen, which requires carrying a massively heavy cryogenic tank, construction of has held up launches for years,
By contrast, each SpaceX Merlin which has roughly half the thrust of an RS-25 costs around $500,000 to build, 200 TIMES LESS! And uses a far more compact and effective first stage fuel.
There is a sense in which pork wastes money: distributed production is less efficient than centralized production. And you could call a congressman wasting the public's money to get something for this district a kind of corruption. But like I said, I think this inefficiency is a small price to pay for peace.
It doesn't lead to peace, it leads to terrible legislation hundreds of pages deep in special gifts to special interests at a huge cost to our economy.
Defence is 12% of federal spending -- or around ~2.5% of GDP, or a whopping 0.5% more than the NATO threshold.
It takes some tricky math to get where military spending is only 12% of federal spending.
First, a soldier wounded in Afghanistan and being treated in a VA hospital would have to have that cost excluded from the budget.
The department of energy dealing with nuclear weapon waste is excluded from that budget.
The office of a foreign US embassy serving as cover for a CIA case officer is excluded from that budget.
Interest on military deficit spending from last year is excluded from that budget.
In fact, add all these things up which don't fall within this theoretical 12% and it comes to hundreds of billions of dollars.
First, a soldier wounded in Afghanistan and being treated in a VA hospital would have to have that cost excluded from the budget.
The department of energy dealing with nuclear weapon waste is excluded from that budget.
The office of a foreign US embassy serving as cover for a CIA case officer is excluded from that budget.
Interest on military deficit spending from last year is excluded from that budget.
In fact, add all these things up which don't fall within this theoretical 12% and it comes to hundreds of billions of dollars.
Military spending is $934 billion in the 2021 budget. It's spread out among different agencies and budget categories, so you must add it all together. It includes:
Defense Department base budget: $636 billion.
DoD Overseas Contingency Operations: $69 billion.
Departments that support defense: $228 billion. They include the Department of Veterans Affairs ($93 billion), State Department ($48 billion), Homeland Security ($48 billion), FBI and Cybersecurity ($10 billion), and the National Nuclear Security Administration ($17 billion).
It's actually over 3% of GDP.
NATO is an organization of countries near the Russian border. The US could easily get by with 2% or less to defend it's own borders. If Russia invades Germany we can ship and airlift troops and meet them in France (given that Germany won't spend enough to defend itself).
NATO is an organization of countries near the Russian border. The US could easily get by with 2% or less to defend it's own borders. If Russia invades Germany we can ship and airlift troops and meet them in France (given that Germany won't spend enough to defend itself).
Pork barrel spending has not been a thing since 2011 when the House banned earmarks.
This info is woefully out of date, and at least some attribute the sharp increase in partisanship and gridlock to the ban on earmarks preventing horse trading.
This info is woefully out of date, and at least some attribute the sharp increase in partisanship and gridlock to the ban on earmarks preventing horse trading.
LOL. No longer not using the term "earmarks" in financing legislation is not the same as ending pork barrel spending.
If it is, please explain the SLS. It's entire design was dictated by Congress to use specific components from specific contractors.
If it is, please explain the SLS. It's entire design was dictated by Congress to use specific components from specific contractors.
Do you have a source for your assertions about the SLS? I can't seem to pull anything up.
The SLS reuses liquid hydrogen engines and solid rocket boosters from Shuttle by law, which has made it antiquated, massively expensive and paradoxically five years late.
“ In 2011, Rep. Tom McClintock and other groups called on the Government Accountability Office (GAO) to investigate possible violations of the Competition in Contracting Act (CICA), arguing that Congressional mandates forcing NASA to use Space Shuttle components for SLS are de facto non-competitive, single source requirements assuring contracts to existing Shuttle suppliers.”
“ In the summer of 2019, a former ULA employee claimed that Boeing, NASA's prime contractor for SLS, viewed orbital refueling technology as a threat to SLS and blocked further investment in it.”
“ In 2019, the Government Accountability Office found that NASA had awarded Boeing over US$200 million for service with ratings of good to excellent despite cost overruns and delays”
“ On 1 May 2020, NASA awarded a US$1.79 billion contract extension for the manufacture of 18 additional RS-25 engines. Ars Technica, in an article published on the same day, highlighted that over the entire RS-25 contract the price of each engine works out to US$146 million, and that the total price for the four expendable engines used in each SLS launch will be more than US$580 million. They critically commented that for the cost of just one engine, six more powerful RD-180 engines could be purchased, or nearly an entire Falcon Heavy launch with two thirds of the SLS lift capacity.”
https://en.m.wikipedia.org/wiki/Space_Launch_System
http://www.competitivespace.org/issues/the-senate-launch-sys...
“ In 2011, Rep. Tom McClintock and other groups called on the Government Accountability Office (GAO) to investigate possible violations of the Competition in Contracting Act (CICA), arguing that Congressional mandates forcing NASA to use Space Shuttle components for SLS are de facto non-competitive, single source requirements assuring contracts to existing Shuttle suppliers.”
“ In the summer of 2019, a former ULA employee claimed that Boeing, NASA's prime contractor for SLS, viewed orbital refueling technology as a threat to SLS and blocked further investment in it.”
“ In 2019, the Government Accountability Office found that NASA had awarded Boeing over US$200 million for service with ratings of good to excellent despite cost overruns and delays”
“ On 1 May 2020, NASA awarded a US$1.79 billion contract extension for the manufacture of 18 additional RS-25 engines. Ars Technica, in an article published on the same day, highlighted that over the entire RS-25 contract the price of each engine works out to US$146 million, and that the total price for the four expendable engines used in each SLS launch will be more than US$580 million. They critically commented that for the cost of just one engine, six more powerful RD-180 engines could be purchased, or nearly an entire Falcon Heavy launch with two thirds of the SLS lift capacity.”
https://en.m.wikipedia.org/wiki/Space_Launch_System
http://www.competitivespace.org/issues/the-senate-launch-sys...
It seems US Government spending is less than 20% and has been since the 1970s? [1]. Curious if I am mis-understanding you here. 2013-2018 is also roughly in line with the spending % of the Clinton presidency according to that source as well.
[1] https://www.theglobaleconomy.com/usa/government_size/
[1] https://www.theglobaleconomy.com/usa/government_size/
I think this has been implemented already in Finland. The tax administration evaluates the property's value (both land and infrastructure) and taxes it accordingly, eg 0.5%. For unused land the municipality can set an extra tax to coerce the land owner to develop the land, for example 1 to 3 percent. But I wouldn't say it is a miracle maker, just a part of an effective taxation system.
What I personally would do, if I could, is to target the unscrupulous rich by banning companies located in tax havens from operating in the country, unless they can prove that they have proportionally high enough of employees working full-time in the said tax haven compared to their assets. That, I would say, is very achievable goal that would affect mostly just tax-dodgers and give a strong signal that those practices should come to an end.
I think it is just unfair that normal people have pay taxes up to 50% on their earnings (depending on the country of course) while millionaires and billionaires can just bypass the whole system by incorporating a holding company in Cayman Islands. Or mega corporations that can even negotiate special tax privileges.
What I personally would do, if I could, is to target the unscrupulous rich by banning companies located in tax havens from operating in the country, unless they can prove that they have proportionally high enough of employees working full-time in the said tax haven compared to their assets. That, I would say, is very achievable goal that would affect mostly just tax-dodgers and give a strong signal that those practices should come to an end.
I think it is just unfair that normal people have pay taxes up to 50% on their earnings (depending on the country of course) while millionaires and billionaires can just bypass the whole system by incorporating a holding company in Cayman Islands. Or mega corporations that can even negotiate special tax privileges.
> The tax administration evaluates the property's value (both land and infrastructure)
That's not what the article is proposing; it specifies a tax only on the land, not on whatever is built on the land. The point is to incentivize transferring ownership of the land to whoever can get the highest value use out of it; that only works if the tax itself is only on the land, so it makes sense to build higher value infrastructure on it since that raises the income from the land without raising the tax.
That's not what the article is proposing; it specifies a tax only on the land, not on whatever is built on the land. The point is to incentivize transferring ownership of the land to whoever can get the highest value use out of it; that only works if the tax itself is only on the land, so it makes sense to build higher value infrastructure on it since that raises the income from the land without raising the tax.
Sure, but would that be the case either way? I am quite suspicious how it would work better than the property + undeveloped land tax. And I would say LVT would disproportionally affect the poorer folk who live in the country side with a lot of land without anything to build on it. But I guess these points have already been discussed in this thread.
Poorer folk in the countryside will be surrounded by land that is worth less and will be taxed less accordingly. Land value tax means a square meter in manhattan gets taxed the same as an acre in middle of nowhere wyoming.
Rich folk hoarding higher value but physically smaller land/buildings in the city centres surrounded by amenities and transport infrastructure will be buried in taxes. Either they make that land work for its taxes or they yield it to somebody who will.
It'll cause better development of land too since land speculation will be removed from the land development formula. Either you make buildings people like and want to rent and you make a profit or you don't. As a landlord you'll be both insulated from declines in an area's popularity and unable to profit from an area being suddenly fashionable.
Rich folk hoarding higher value but physically smaller land/buildings in the city centres surrounded by amenities and transport infrastructure will be buried in taxes. Either they make that land work for its taxes or they yield it to somebody who will.
It'll cause better development of land too since land speculation will be removed from the land development formula. Either you make buildings people like and want to rent and you make a profit or you don't. As a landlord you'll be both insulated from declines in an area's popularity and unable to profit from an area being suddenly fashionable.
Ok, I see. But still, this boosted urbanization doesn't seem that great for building diverse cities. Just making as tall and densely-packed buildings as possible. Yeah, ok if you build villas in the city center I can see it being useful but it seems very similar to the current taxation.
The difference is going to be less what gets built and who gets to profit. Instead of land speculators like Donald Trump making profits off the backs of our hard work the unearned land wealth will be distributed more evenly.
In both scenarios few people will build villas in downtown Manhattan because it is too profitable to build skyscrapers instead. The difference is that with LVT building a villa will be a massive tax burden whereas under our current system there is no tax burden.
In both scenarios few people will build villas in downtown Manhattan because it is too profitable to build skyscrapers instead. The difference is that with LVT building a villa will be a massive tax burden whereas under our current system there is no tax burden.
Land-value tax doesn't have huge inefficiencies like some other taxes. But the hard part is assessing "value". How should land value be decided? The book "Radical Markets" has some good insights on how to find the value of every plot of land by using markets.
> But the hard part is assessing "value"
Insurers have no problems assessing land value and have been doing it for centuries.
Insurers have no problems assessing land value and have been doing it for centuries.
Not so much. Insurers don't insure land. The insure property built on land, crops grown on land, and they insure against various kinds of liability. None of my dirt is insured.
Insurers assess improvement value. Land is not insured, because it really can't be destroyed. If you house burns down, the land is still there. The only thing you lost is the house.
Exactly! So when you get a mortgage, you're paying for land plus house in the mortgage. Insurers have to know the value of the land alone so they can know the difference and insure just the house.
Actually, no, they don't. Insurers make no valuation on the land, only on the improvements. There is no appraisal done when buying a homeowners or business insurance policy
> Insurers make no valuation on the land, only on the improvements
Well
Well
$PROPERTY_VALUE = $LAND_VALUE + $IMPROVEMENTS_VALUE
$LAND_VALUE = $PROPERTY_VALUE - $IMPROVEMENTS_VALUE
This still gives you something to work from, since the mortgage (or appraised value) - improvements = land value.
I'm curious what mechanisms it proposes.
One of the funner ones I've heard of is that the owner and payer of the property tax performs the valuation of the land: it makes implementation pretty much free and uncontroversial! The only caveat is that whatever value the owner lists as the value is an amount they must accept for the land in a sale (plus some meaningful fee to drive off trolls).
So, sure, you can list the value of the land of your Pac Heights mansion as $1 and pay a commensurate tax on that. If you do, though, someone can purchase it for $1 and start charging you a hefty use fee.
One of the funner ones I've heard of is that the owner and payer of the property tax performs the valuation of the land: it makes implementation pretty much free and uncontroversial! The only caveat is that whatever value the owner lists as the value is an amount they must accept for the land in a sale (plus some meaningful fee to drive off trolls).
So, sure, you can list the value of the land of your Pac Heights mansion as $1 and pay a commensurate tax on that. If you do, though, someone can purchase it for $1 and start charging you a hefty use fee.
I would not sell my home at the assessed value. As I would have to move my family, get a new mortgage, and change jobs and schools potentially. I live in a fairly expensive area and a home that meets my requirements (no hoa, not a townhouse) is hard to find. I may have to fork out twice as much to get something that meets those requirements. I don't see that as a great reason why I should pay taxes more than my neighbors.
You're selling the land underneath your house, not your house. And you wouldn't have to move: you'd pay some use fee to the new owner (though there'd probably be some kind of option to revaluate after a bid to prevent a whole lot of churn).
My choice in buying the home was made for twofold reasons firstly to no longer be subject to the whims of a landlord, secondly to lock in my costs of housing against inflation. This would rob me of both those advantages. I don't see how you would get any homeowners to vote for a proposal like that.
> firstly to no longer be subject to the whims of a landlord
Unless you have an allodial title (hint: you almost certainly do not), you are always subject to the whims of at least one landlord, specifically the state.
Unless you have an allodial title (hint: you almost certainly do not), you are always subject to the whims of at least one landlord, specifically the state.
What a ridiculous response to a genuine concern.
Right, it's "ridiculous" to point out that the very premise of that "genuine" concern is based on a fundamental misunderstanding of how land ownership works in pretty much every common law jurisdiction (the US included) because... reasons.
This sounds like an insane rich get richer scheme. I can either set a high value on my land and pay to much in taxes, or pretty much guarantee that someone would by my land. Why wouldn't they? They can buy the land, immediately place a higher value (they make the money on the resale) then charge a user few to cover the tax plus their income.
As a current homeowner about the only thing I can do is place a high value on the land myself. Enough that is someone buys it out makes it easier for me to move. But then I'm paying higher taxes. Of course I have the problem with the new house.
Essentially this removes land ownership from the average person. Some might say that isn't a bad thing, but it is when only the rich can afford land.
This is a land value tax, not a tax on the improvements. If you have a lot worth $50,000 and a house worth $250,000, and place a value of $50,000 on it for tax purposes, do you propose people can buy your house for $50,000?
No, they buy the land underneath your house for $50,000. They can then charge you a use fee for the land. If you don't want to be charged a use fee, you publish a higher price for your land.
I can't see any downside to that :-) This "solution" kinda proves the core idea is unworkable
How does the use fee get set? I think you're simplifying things too much. Creating a land market where people can be forced to sell their land that they don't want to sell doesn't seem like it'd work.
I am probably missing something, but why can't they buy the land and charge you $1,000,000,000,000,000 an hour for the use, so you have to leave the house?
Most societies already levy property taxes on real estate, including on unimproved land. I don't know how they assess the value of that land, but they must have a working method for it.
Typically it's assessed value inferred from market sales data from similar properties.
British customs used to have a simple mechanism to bind declared value to market value.
A captain could declare the value of the cargo whatever he sees fit, and pay the tax on that amount.
The customs reserved the right to buy the entire cargo at the declared price, at their discretion.
It's a bit harder to implement with large parcels of land, but should work well with home-sized lots.
A captain could declare the value of the cargo whatever he sees fit, and pay the tax on that amount.
The customs reserved the right to buy the entire cargo at the declared price, at their discretion.
It's a bit harder to implement with large parcels of land, but should work well with home-sized lots.
This works for cargo because much of the point of cargo is to sell it. The point of a house is to reduce the buyer's risk against e.g. rent going up. Except now there's the risk of my house being bought out from under me unless I'm willing to pay above-market tax. Money is fungible, housing really isn't.
The properties on adjacent lots affect the land value of your lot.
It's only in trying to resist the above that the difficulties arise.
It's only in trying to resist the above that the difficulties arise.
For a LVT, the value is whatever it was purchased for.
Typically land is bundled with the improvements to said land though.
For LVT, structures are not considered. It would have to be improvement to the land itself.
Plainly not inevitable. Crises can continue to get worse instead, and surely that's much more likely.
However, I'd love to be pleasantly surprised, and occasionally am, e.g., apparently Baden-Wurttemburg (the German state that includes Stuttgart) has recently passed a LVT scheduled to be implemented in 2025 https://libdemsalter.org.uk/en/article/2020/1382897/germany-...
However, I'd love to be pleasantly surprised, and occasionally am, e.g., apparently Baden-Wurttemburg (the German state that includes Stuttgart) has recently passed a LVT scheduled to be implemented in 2025 https://libdemsalter.org.uk/en/article/2020/1382897/germany-...
There are so many ways to tax the wealthy that would "work". But as long as the rich have way more influence on how society is organized than than the poor or middle class, it's just very difficult to do anything about it.
Absolutely, but their best defense is complexity and regularity capture, so the masses don't even know they're getting fucked.
If one can, by some miracle, pass simple policies like LVT and UBI, the resulting fronts and battlegrounds are a hell of a lot clearer.
If one can, by some miracle, pass simple policies like LVT and UBI, the resulting fronts and battlegrounds are a hell of a lot clearer.
The big moral problem I have with a recurrent tax on assets like land or improvements on land (buildings) is that it erodes the fundamental right to private ownership. What does it mean to own anything if policies can retroactively apply taxes to it or continually extract taxes and ultimately take that asset away from you? That’s simply not compatible with a free society and it amounts to theft in my opinion.
Seeing as land is limited, it's logical for governments to charge a rent on the most productive plots in order to maintain itself. I don't see how that erodes the fundamental right to private ownership. You can certainly find land with very low or no property or land taxes on it. You won't be anywhere near infrastructure, culture, food, or higher education, but your taxes will be very, very low. You are paying to participate in all the value-adding parts of society. It would only follow that improvements to the public common increases the value of your privately owned asset, and you should continue to pay your share of the upkeep based on the productive value of the land.
Exactly. It's the feudal system implemented with different accounting methods. Landowners are turned into sharecroppers working for the government.
The only thing inevitable will be that eventually Land-Value taxes will not be enough (if implemented) and then what? There is no end or limit to the amount of money a Government can squander.
Squandering taxes seems like a separate problem. In the case taxes are squandered, and in the case they are not, it makes sense to use the most efficient taxes first.
Also https://en.wikipedia.org/wiki/Henry_George_theorem shows "that under certain conditions [presumably including limited squandering, though I didn't check], beneficial investments in public goods will increase aggregate land rents by at least as much as the investments cost"
Also https://en.wikipedia.org/wiki/Henry_George_theorem shows "that under certain conditions [presumably including limited squandering, though I didn't check], beneficial investments in public goods will increase aggregate land rents by at least as much as the investments cost"
That might be true to the extent government spending is actually in public goods, such as infrastructure, transit, parks, schools, what have you. In reality most government fiscal problems are from things like underfunded pensions and debt service.
There's no end or limit to the amount of money any person or institution can squander.
It's a flow of income (land rent) that can accrue either to everybody and be shared or to individuals. One way or another some party has to be the beneficiary. The question is who deserves this unearned income?
It's a flow of income (land rent) that can accrue either to everybody and be shared or to individuals. One way or another some party has to be the beneficiary. The question is who deserves this unearned income?
This is a really good example of the slippery slope logical fallacy. https://en.wikipedia.org/wiki/Slippery_slope
It's a slippery slope argument. Logicians demand perfect rigour, and label reasoning that fails to attain that a "fallacy". Humans are satisfied with heuristical arguments, which the slippery slope is an example of. Pointing out that it fails to achieve perfect rigour is meaningless; no argument reaches that bar, and demands to pursue it will only result in obfuscation. Instead, try to explain why the heuristic doesn't apply in this case - if you can. The general response to a slippery slope argument is to explain why one step, once achieved, won't lead to any further steps. You will have great difficulty demonstrating that in this case, since government expenditures regularly rise to the level of their budgets (and indeed beyond).
Why would a government not raise expenditures to the level of its budget? Perhaps to pay off debt, but that's only useful in limited circumstances.
On the other hand, certain parts of the political spectrum are very emphatic about wanting to reduce both budget and expenditures, and sometimes manage to do so.
On the other hand, certain parts of the political spectrum are very emphatic about wanting to reduce both budget and expenditures, and sometimes manage to do so.
While I don't agree with your premise that private sector is magically more efficient, let's just accept it.
The government can also hand out cash raised from the LVT as a UBI.
Problem solved.
The government can also hand out cash raised from the LVT as a UBI.
Problem solved.
If the definition of squander is defined such that any government spending on anything OP don’t benefit from counts as squandering, then it’s not so easily solved. A bit tongue in cheek but not an uncommon opinion.
If you think that solves the problem, I don't think you understood the problem...
I think an LVT only works if property tax is removed. And getting every state to have less taxes will be rough.
http://savingcommunities.org/issues/taxes/landvalue/
http://savingcommunities.org/issues/taxes/landvalue/
LVT essentially is a property tax, except it's designed to be fairer, harder to evade and more economically efficient (doesnt tax productive activity) than other forms of property tax.
It would make little sense to have two kinds of property tax.
It would make little sense to have two kinds of property tax.
That is a needless dichotomy. For a variety of reasons we want a smooth transition.
Today:
c(land value) + c(building value) = tax
eventually:
big(land value) + small(building value) = tax
Just interpolate between those the obvious way.
Today:
c(land value) + c(building value) = tax
eventually:
big(land value) + small(building value) = tax
Just interpolate between those the obvious way.
An LVT at a high enough rate could generate the same revenue as current property taxes.
LVT can levy the same amount of net revenue. It's just a different way of determining valuation. Large buildings in the desert come to pay less. Empty lots in the middle of downtown come to pay more.
LVT isn't a way of determining valuation, it's a restriction of what things you need to determine the value of.
Maybe add a (2018) to the title
I think the problem with land-value taxes is that objective valuation of raw land value is actually difficult and even arbitrary. If you say a parcel of land is valuable because there's a building on it, you wind-up with just a real estate tax. If you value all land the same, people will just abandon ownership of large parcels, probably with paradoxical results.
Almost automatically, the assessment of just land has to be harder than the assessment of land plus the property that's there. And assessing land for taxes tends to be politically hard. For example, the overall process of real estate taxation in California was politicized into a disastrous mess years ago with proposition 13. Just undo prop 13 would be a simpler matter and even that likely isn't going to happen.
Further consider, the objective land value of a parcel in Mountain View is probably less than the assessed value a lot of homeowners pay their taxes based on. I'd be in favor of measures that force more intensives use of that land but taking on home-owners with vast political influence is going to be a challenge.
Almost automatically, the assessment of just land has to be harder than the assessment of land plus the property that's there. And assessing land for taxes tends to be politically hard. For example, the overall process of real estate taxation in California was politicized into a disastrous mess years ago with proposition 13. Just undo prop 13 would be a simpler matter and even that likely isn't going to happen.
Further consider, the objective land value of a parcel in Mountain View is probably less than the assessed value a lot of homeowners pay their taxes based on. I'd be in favor of measures that force more intensives use of that land but taking on home-owners with vast political influence is going to be a challenge.
You don’t need a great deal of precision with a land value tax. If the closest properties where sold at X$/ acre that’s a solid suggestion of the actual value of that land.
The goal is essentially to separate the value of land based on local infrastructure like subway systems from the amount of effort put into improving the property. An empty lot that’s worth 10,000$ per acre may physically look the same as an empty lot worth 10,000,000$ per acre, but it’s clear society not the property owner generated that value is.
That said, there are a lot of edge cases like beach front property vs having another house in front.
The goal is essentially to separate the value of land based on local infrastructure like subway systems from the amount of effort put into improving the property. An empty lot that’s worth 10,000$ per acre may physically look the same as an empty lot worth 10,000,000$ per acre, but it’s clear society not the property owner generated that value is.
That said, there are a lot of edge cases like beach front property vs having another house in front.
You don’t need a great deal of precision with a land value tax.
You need a ball park figure for land value to work and even that is going to depend on the philosophy used for valuation. If Walmart buys the cheapest land it can find and builds a distribution center on that land, how much is that land worth? What they paid for it? What someone else would pay for it now? How bought all the parcels around it that now would be useful for housing?
Either paradigm is real estate valuation (at which point it become real estate tax) or the paradigm is something else with that something else up for grabs.
You need a ball park figure for land value to work and even that is going to depend on the philosophy used for valuation. If Walmart buys the cheapest land it can find and builds a distribution center on that land, how much is that land worth? What they paid for it? What someone else would pay for it now? How bought all the parcels around it that now would be useful for housing?
Either paradigm is real estate valuation (at which point it become real estate tax) or the paradigm is something else with that something else up for grabs.
> people will just abandon ownership of large parcels
Good. That's the whole point. That abandonment of ownership gives other people the opportunity to make use of it for their own benefit.
That is: the very act of land ownership externalizes opportunity costs on the rest of society, and this is what underpins wealth inequality. LVT forces landowners to internalize those costs.
Good. That's the whole point. That abandonment of ownership gives other people the opportunity to make use of it for their own benefit.
That is: the very act of land ownership externalizes opportunity costs on the rest of society, and this is what underpins wealth inequality. LVT forces landowners to internalize those costs.
> At the top of an economic cycle, governments are collecting their peak tax revenues — yet even so, many are still running large fiscal deficits and have large existing public debts.
They’re also spending more than they ever have before in history.
> The LVT is not the same as a property tax, as it does not punish those who put the land to use; it taxes only the land, not the structure built on top of it.
I’m not convinced this is that different than what’s happening now. For a $1m house in the Bay Area, only a quarter or a third of that value is the structure.
> However, most of all, it is one of the rare taxes that does not diminish economic activity, and in fact stimulates it.
How do they arrive at this conclusion? A bakery that’s been around for 100 years finds itself in a hip part of town (which maybe it helped foster), and then has to move out because the only type of business that can support the LVT in the area is luxury apartments. The higher the LVT, the more risk of a monoculture in land usage, not the other way around.
They’re also spending more than they ever have before in history.
> The LVT is not the same as a property tax, as it does not punish those who put the land to use; it taxes only the land, not the structure built on top of it.
I’m not convinced this is that different than what’s happening now. For a $1m house in the Bay Area, only a quarter or a third of that value is the structure.
> However, most of all, it is one of the rare taxes that does not diminish economic activity, and in fact stimulates it.
How do they arrive at this conclusion? A bakery that’s been around for 100 years finds itself in a hip part of town (which maybe it helped foster), and then has to move out because the only type of business that can support the LVT in the area is luxury apartments. The higher the LVT, the more risk of a monoculture in land usage, not the other way around.
Governments do, indeed, spend significantly more than they used to.
The problem in the Bay Area is simply that taxable value assessed only at sale.
The problem in the Bay Area is simply that taxable value assessed only at sale.
> The problem in the Bay Area is simply that tax is not reassessed regularly.
No, tax-basis value is assessed annually. However, increases in assessed value are limited to a maximum of 2% per year outside of certain events qualifying for full-value assessment of the property or particular improvements. (And this is statewide, not Bay Area specific).
No, tax-basis value is assessed annually. However, increases in assessed value are limited to a maximum of 2% per year outside of certain events qualifying for full-value assessment of the property or particular improvements. (And this is statewide, not Bay Area specific).
That's not true. Every year it can be raised 2%.
Ah, okay -- that I did not know. The effect of the policy over the past decades has still been to allow the value to dramatically increase relative to the taxation.
> The effect of the policy over the past decades has still been to allow the value to dramatically increase relative to the taxation.
No. The problem is they're not building enough housing. Not that taxes aren't high enough.
No. The problem is they're not building enough housing. Not that taxes aren't high enough.
No, that's not right. Poor tax policy leads to poor land use.
> For a $1m house in the Bay Area, only a quarter or a third of that value is the structure.
So the first problem is zoning, but imagine if zoning is fixed. Now the taller the building is, the smaller the portion of the taxable value derives from the land itself.
The fact of the matter is single family suburbia is a scourge, and we need redevelopment not more development. We can subsidize affordable housing, or we can structure the taxes such that the only economical thing to do is massively denser buildings immediately. The latter is better because it is simpler and less subject to regulatory capture.
So the first problem is zoning, but imagine if zoning is fixed. Now the taller the building is, the smaller the portion of the taxable value derives from the land itself.
The fact of the matter is single family suburbia is a scourge, and we need redevelopment not more development. We can subsidize affordable housing, or we can structure the taxes such that the only economical thing to do is massively denser buildings immediately. The latter is better because it is simpler and less subject to regulatory capture.
> So the first problem is zoning, but imagine if zoning is fixed. Now the taller the building is, the smaller the portion of the taxable value derives from the land itself.
Which is sort of the problem, right? You have an area which is, say, two story buildings, in an area where you really need an average of three story buildings to satisfy local demand.
Implement LVT and everyone gets the bright idea to build twelve story buildings, because why wouldn't they? Three story buildings would have four times the tax per unit.
But then you get the opposite problem. Real estate prices crash, because there are suddenly twelve story buildings going up everywhere and the prices need to fall to the level that building more of them isn't viable even against the tax advantage. Which is well before you're saturated with tall buildings.
But now you have a thousand plots of land and 10% of them have new tall buildings while 90% have existing single family homes. Now the owners of the single family homes are paying a disproportionate amount of the taxes. They abandon their properties, which have already declined in value, because the tax is more than the newly lowered cost of buying space in one of the tall buildings.
The government is now receiving no tax from 90% of the lots because they've been abandoned, so the land tax amount has to increase by ten fold per plot. But that makes it profitable to build 25 story buildings instead of twelve story ones, to amortize the tax over more units, and the cycle repeats.
It seems obvious that this only works if the amount of the land tax isn't large enough to cause these behavioral changes.
Which is sort of the problem, right? You have an area which is, say, two story buildings, in an area where you really need an average of three story buildings to satisfy local demand.
Implement LVT and everyone gets the bright idea to build twelve story buildings, because why wouldn't they? Three story buildings would have four times the tax per unit.
But then you get the opposite problem. Real estate prices crash, because there are suddenly twelve story buildings going up everywhere and the prices need to fall to the level that building more of them isn't viable even against the tax advantage. Which is well before you're saturated with tall buildings.
But now you have a thousand plots of land and 10% of them have new tall buildings while 90% have existing single family homes. Now the owners of the single family homes are paying a disproportionate amount of the taxes. They abandon their properties, which have already declined in value, because the tax is more than the newly lowered cost of buying space in one of the tall buildings.
The government is now receiving no tax from 90% of the lots because they've been abandoned, so the land tax amount has to increase by ten fold per plot. But that makes it profitable to build 25 story buildings instead of twelve story ones, to amortize the tax over more units, and the cycle repeats.
It seems obvious that this only works if the amount of the land tax isn't large enough to cause these behavioral changes.
> It seems obvious that this only works if the amount of the land tax isn't large enough to cause these behavioral changes.
It's about the speed of the transition to LVT, not the stateless amount of LVT.
> But then you get the opposite problem. Real estate prices crash, because there are suddenly twelve story buildings going up everywhere and the prices need to fall to the level that building more of them isn't viable even against the tax advantage. Which is well before you're saturated with tall buildings.
Only if the LVT goes up to quick. Because the value of the land depends on the improvement to adjacent land, we can think of human building as a puddle of liquid that LVT makes more cohesive.
If we crank of the cohesion too quick, we get tiny beads of liquid everywhere, you scattered 12 storey buildings, and no walkability. It's just a modernist landscape.
If we grank of the cohension slowly, we get bigger beads, i.e. new manhattens as the surrounding suburbia is drained. This is exactly what we want.
The increased density itself creates more derived value, and so a big crash is unlikely.
It's about the speed of the transition to LVT, not the stateless amount of LVT.
> But then you get the opposite problem. Real estate prices crash, because there are suddenly twelve story buildings going up everywhere and the prices need to fall to the level that building more of them isn't viable even against the tax advantage. Which is well before you're saturated with tall buildings.
Only if the LVT goes up to quick. Because the value of the land depends on the improvement to adjacent land, we can think of human building as a puddle of liquid that LVT makes more cohesive.
If we crank of the cohesion too quick, we get tiny beads of liquid everywhere, you scattered 12 storey buildings, and no walkability. It's just a modernist landscape.
If we grank of the cohension slowly, we get bigger beads, i.e. new manhattens as the surrounding suburbia is drained. This is exactly what we want.
The increased density itself creates more derived value, and so a big crash is unlikely.
What are you basing your predictions here on? Do you have an example where this has happened?
Do you have an example of where LVT was tried at scale anywhere at all ever?
I'm just describing the incentives. Identify the flaw in the logic.
I'm just describing the incentives. Identify the flaw in the logic.
> Do you have an example of where LVT was tried at scale anywhere at all ever?
Pennsylvania[1].
> The number of vacant structures in Harrisburg declined from over 4200 in 1982 to under 500 by 2001. The downtown—previously a ghost town—is alive, even at night. The number of businesses on the tax roll has grown from 1,908 to 8,864.
> After LVT was adopted by voters in 1996, 70% of residential parcels saw a tax decrease; importantly, in the most at-risk neighborhoods (older pre-war housing and factory blocks) upwards of 90% of homes had their tax liability reduced. Local business taxes were frozen by law at 1996 levels. Construction returned to the city: the number of taxable building permits surged past neighboring Bethlehem, market investment returned, and capital improvement reappeared in city budgets. Tax burdens on productive work and business declined. The losers in this trade were absentee owners of vacant lots, who had to shoulder much more of the burden.
[1] https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...
Pennsylvania[1].
> The number of vacant structures in Harrisburg declined from over 4200 in 1982 to under 500 by 2001. The downtown—previously a ghost town—is alive, even at night. The number of businesses on the tax roll has grown from 1,908 to 8,864.
> After LVT was adopted by voters in 1996, 70% of residential parcels saw a tax decrease; importantly, in the most at-risk neighborhoods (older pre-war housing and factory blocks) upwards of 90% of homes had their tax liability reduced. Local business taxes were frozen by law at 1996 levels. Construction returned to the city: the number of taxable building permits surged past neighboring Bethlehem, market investment returned, and capital improvement reappeared in city budgets. Tax burdens on productive work and business declined. The losers in this trade were absentee owners of vacant lots, who had to shoulder much more of the burden.
[1] https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...
So this is basically considering the opposite scenario -- not one in which there is pent up demand but one in which there are many existing abandoned buildings. Moreover, it's a scenario in which the introduction of LVT was not revenue neutral -- you're including in the measurement the economic benefits of a tax cut. It means you're essentially here:
> It seems obvious that this only works if the amount of the land tax isn't large enough to cause these behavioral changes.
> It seems obvious that this only works if the amount of the land tax isn't large enough to cause these behavioral changes.
>They abandon their properties, which have already declined in value, because the tax is more than the newly lowered cost of buying space in one of the tall buildings.
If we hit the saturation point for tall apartment buildings, the land is less valuable (since you can't extract as much value from it), decreasing the land value taxes (and thus, incentive to leave homes). Lower land value taxes incentivize constructing more modest apartment buildings, as those will now be profitable. This process continues until housing supply meets demand.
Also many people prefer living in single-family houses. The bay area is full of people who won't sell their single-family house even though the value has gone up 20x. They wouldn't abandon their properties unless they had to. And if they have to it means they can sell them for a lot to a developer who will profitably build an apartment.
If we hit the saturation point for tall apartment buildings, the land is less valuable (since you can't extract as much value from it), decreasing the land value taxes (and thus, incentive to leave homes). Lower land value taxes incentivize constructing more modest apartment buildings, as those will now be profitable. This process continues until housing supply meets demand.
Also many people prefer living in single-family houses. The bay area is full of people who won't sell their single-family house even though the value has gone up 20x. They wouldn't abandon their properties unless they had to. And if they have to it means they can sell them for a lot to a developer who will profitably build an apartment.
> If we hit the saturation point for tall apartment buildings, the land is less valuable (since you can't extract as much value from it), decreasing the land value taxes (and thus, incentive to leave homes).
The problem here is that you're assuming we can just reduce government revenues that way. That would imply a corresponding reduction in government spending, or else the government would have to increase the rate to account for the reduced land value.
Which is why people would be forced out of single family homes. The amount of government services required by the occupants of a twelve story building would have to be financed by a tax that collects the same money from the owner of a single family home. The latter would be forced out by that amount of tax.
The problem here is that you're assuming we can just reduce government revenues that way. That would imply a corresponding reduction in government spending, or else the government would have to increase the rate to account for the reduced land value.
Which is why people would be forced out of single family homes. The amount of government services required by the occupants of a twelve story building would have to be financed by a tax that collects the same money from the owner of a single family home. The latter would be forced out by that amount of tax.
It's one thing to sell because you have an unrealized 20x gain. It's another thing to be forced to sell because you can't afford the taxes.
You're describing a scenario starting with extreme zoning restrictions and then immediately lifting those restrictions. I don't think your predictions relate to a LVT at all — similar drastic development with varying height would happen in any desirable area with sudden change in zoning restriction.
Imagine instead that zoning restrictions were relaxed gradually.
Imagine instead that zoning restrictions were relaxed gradually.
Not really. If you only eliminated the zoning restrictions then the incentive to build much taller than average buildings would be reduced, and the taxes that had to be collected from owners of smaller buildings wouldn't change or could in fact be reduced as the new taller buildings pick up more of the tax burden.
I'm not arguing for or against anything and I didn't write an elaborate prediction, I'm just asking what you are basing your predictions on.
The fundamental problem is that the value of land is inexorably tied up in the things people do with the land to actually earn money. Vacant land has little value in that sense until it's improved. You can't separate the land value from the investment in the improvements made that actually generate income. It's not quite that simple because a vacant lot in a trendy area has more potential value than a lot in a run-down area. But only because of the improvements on other nearby properties. That's what makes the land valuable -- not anything intrinsic about the land itself.
A charming bakery in a now expensive part of town is in fact an economic inefficiency. You can argue against it on non-economic grounds, but living in a luxury apartment is a good that people consume, just like madeleines.
Charming bakery with five stories of apartments above it > charming bakery by itself
Bakery in a retail slot in the ground floor of a 5-story apartment building is by definition not charming. It's cookie-cutter (pardon the pun). It's the sort of place that opens, struggles for nine months, and goes bankrupt.
We see so much about wanting "walkable" neighborhoods where we have shops and markets all steps away from our door. Well, if the land is so valuable that it will only support dense apartment towers, small businesses like that will not be able to afford to be close by.
We see so much about wanting "walkable" neighborhoods where we have shops and markets all steps away from our door. Well, if the land is so valuable that it will only support dense apartment towers, small businesses like that will not be able to afford to be close by.
The idea behind the LVT is that the tax is based on the best and highest use of the land. But zoning is a component.
If the market is begging for a 100-floor tower on a piece of land, but the zoning says you can only build a single house, the LVT would be based on a house sitting there.
So, if you had a historic or otherwise significant structure, you’re going to have to downzone the land to prevent the loss of the structure. Naturally, that’s going to be abused. Connected people are going to get their property zoned for smaller structures, while unconnected people will get their property zoned for huge structures.
If the market is begging for a 100-floor tower on a piece of land, but the zoning says you can only build a single house, the LVT would be based on a house sitting there.
So, if you had a historic or otherwise significant structure, you’re going to have to downzone the land to prevent the loss of the structure. Naturally, that’s going to be abused. Connected people are going to get their property zoned for smaller structures, while unconnected people will get their property zoned for huge structures.
As a counterpoint, Manhattan has plenty of charming street-level shops in an area where multi-story apartment buildings are the only reasonable thing to build.
77 Rue Galande, 75005 Paris, France
Tell me that's not charming as hell.
Tell me that's not charming as hell.
It's not too different to what's happening now in low density neighborhoods because single-family houses are not an efficient use of million-dollar lots. In the current system, an empty lot is taxed less than a house, which is taxed less than say a small apartment building. IMO this is completely backwards: the tax code should reward productive usage of limited resources.
The idea of land-value tax strongly reminds me of the often cited, and much maligned, so-called fiduciary duty to shareholders which CEOs and/or board members reportedly have. This duty creates, it is said, an incentive towards naked short-term greed, which is often described as a bad thing. Now, even though this duty is also usually derided as fictional, the argument, if this duty did exist, is reasonable. But does not a LVT create the same incentives in landowners – in essence forcing landowners to always use the land in a way which extracts the maximum amount of money from it? Why then is a LVT a good thing while the duty thing would be bad?
> ... in essence forcing landowners to always use the land in a way which extracts the maximum amount of money from it ...
That incentive already exists, landholders typically use their land in a high-value way. If you cast your eye on Europe there are a large contingent of undeserving people who have generations of wealth that they secure through owning land, which does not degrade over time. The big win of a land tax is about breaking ultra-low-risk inter-generational wealth transfer. If wealth is transferred between generations there at least has to be some level of competent management demonstrated by each new layer of the family tree.
That incentive already exists, landholders typically use their land in a high-value way. If you cast your eye on Europe there are a large contingent of undeserving people who have generations of wealth that they secure through owning land, which does not degrade over time. The big win of a land tax is about breaking ultra-low-risk inter-generational wealth transfer. If wealth is transferred between generations there at least has to be some level of competent management demonstrated by each new layer of the family tree.
The general incentive to make money always exists, yes, but if LVT is implemented, there would, I assume, be an almost insurmountable force compelling landowners to do so. I compared LVT with the idea of “fiduciary duty” with intentional precision; CEOs are also, in general, incentivized to make money, but the idea behind decrying the alleged fiduciary duty is that a CEO is supposedly more or less forced to do whatever makes the most money, regardless if they feel it would be bad in the long run, inhumane, or even unethical.
The same principle seem to apply to LVT: A landowner would, it seems, be forced, by the taxes extracted from them, to generate a matching (or larger) income by the land, regardless if they might feel that the community would be better served by using the land for something which would, incidentally, make less money for them personally.
If the object of LVT is to prevent inter-generational wealth transfer, I would assume that there would be vastly more effective ways to accomplish this more directly. Or there could at least be some carve-out which limits the effect of a LVT to those instances.
The same principle seem to apply to LVT: A landowner would, it seems, be forced, by the taxes extracted from them, to generate a matching (or larger) income by the land, regardless if they might feel that the community would be better served by using the land for something which would, incidentally, make less money for them personally.
If the object of LVT is to prevent inter-generational wealth transfer, I would assume that there would be vastly more effective ways to accomplish this more directly. Or there could at least be some carve-out which limits the effect of a LVT to those instances.
Fiduciary duty isn't that big of a deal compared to the general incentive to make money. When CEOs are hired they are screened to be the sort of people who want to make money. If I had a controlling share of a company and the CEO didn't want to make profitable decisions there isn't any special legal construct needed - he'd be gone and somebody new would be hired. Most shareholders are the same.
> ... regardless if they might feel that the community would be better served by using the land for something which would, incidentally, make less money for them personally ...
The community obviously disagrees with our landholder in this scenario, or the community can stump up the cash to pay the land taxes or hold the land publically.
It is just 1 more expense. It isn't like running a soup kitchen was ever free, someone is paying for the soup. Giving a donation of space is the same as giving a donation of time and materials.
There are incentives, but there isn't anything especially new here. It isn't going to be radically different from a mortgage in the short term, and in the long term the change is competent people will own land instead of old families.
> ... regardless if they might feel that the community would be better served by using the land for something which would, incidentally, make less money for them personally ...
The community obviously disagrees with our landholder in this scenario, or the community can stump up the cash to pay the land taxes or hold the land publically.
It is just 1 more expense. It isn't like running a soup kitchen was ever free, someone is paying for the soup. Giving a donation of space is the same as giving a donation of time and materials.
There are incentives, but there isn't anything especially new here. It isn't going to be radically different from a mortgage in the short term, and in the long term the change is competent people will own land instead of old families.
In your first paragraph, you’re talking about actual fiduciary duty, but I was making an analogy not with what fiduciary duty actually is, but instead with the idea of it which people usually argue against. People usually say that fiduciary duty creates and even enforces thoughtless short-term greed, and argue that is bad for society and also the company in the long run. Regardless of what fiduciary actually is in reality, how is then LVT any different from creating the same short-term enforced greed?
The rest of your text can be summarized as “whoever has money deserves to have it, and should be trusted to make decisions which override any community which, in aggregate, have less money”. I believe this to be a somewhat controversial stance.
The rest of your text can be summarized as “whoever has money deserves to have it, and should be trusted to make decisions which override any community which, in aggregate, have less money”. I believe this to be a somewhat controversial stance.
The idea of a LVT is that valuable land should an efficient use - the obvious example of inefficiency are the upper middle class neighborhoods on the SF Peninsula - Silicon Valley. The aggressive zoning and relatively low tax situation mean that it's impossible for people who get job in Silicon Valley to live there, causing crazy spill over to the rest of the SF Bay Area. Theoretically, forcing up taxes would force more efficient uses of land - allow the building of apartment high rises and so generally increase the affordability of housing.
But that's theoretically. Whether you could actually impose this regime is a different matter. What the "real" value of land isn't a clear thing thing imo. A town might that since it's zoning prevents building much, it's land isn't worth much.
But that's theoretically. Whether you could actually impose this regime is a different matter. What the "real" value of land isn't a clear thing thing imo. A town might that since it's zoning prevents building much, it's land isn't worth much.
But a city needs different buildings with different uses, no? However, IIUC, a LVT would tax a plot of land by what use it could theoretically be put to in order to make the most money. And this is evaluated individually for each plot of land, with no regard for what would actually happen in reality if every single plot of land would actually be put to use in the most money-making way. Would a LVT not force a monoculture of, say, only lofts, where previously each landowner might have opted to allow things like nightclubs or the occasional park or other forms of variation and whimsy? If you tax every land owner as if they have the maximum possible income, do you not essentially force every landowner to implement that way in order to acquire it?
This is an interesting thought. It's like how we want developers to build affordable housing, but through the market they are forced to only create "luxury" developments in order to make up for the large fixed cost of the land.
Food for thought: profit per square foot could stay the same by decreasing unit size and increasing the number of units if zoning allowed it.
Large apartment complexes are typically worth a lot more per land area than luxury developments.
It's interesting and I need to do some more thinking and research. On the one hand I don't think that one should be forced off one's land because others could be using it in a more valuable way. However the whole idea of property rights is founded in improvement or creation of value. Abandonment is a thing, and if you do nothing to improve or derive value from land you can lose your property rights in it.
This makes a lot of unsubstantiated claims. Like the bond market is saturated that seems the opposite of true. This also claims theres been a high inflation but that doesn't seem to be true either based on any metric.
I think the one thing is clear and I agree with is taxes increases capital outflow. But my biggest issue is with the central premise that is taken at face value. That the government needs more money. I don't think it does. The US government especially has far to much money and waste most of it.
So I'd say instead of trying to find sneaky ways of taking more of the citizen money maybe incentive it to be use to create more opportunities. Instead of taking from some to give to other incentive opportunities so those who have will willingly give opportunities to those who don't
I think the one thing is clear and I agree with is taxes increases capital outflow. But my biggest issue is with the central premise that is taken at face value. That the government needs more money. I don't think it does. The US government especially has far to much money and waste most of it.
So I'd say instead of trying to find sneaky ways of taking more of the citizen money maybe incentive it to be use to create more opportunities. Instead of taking from some to give to other incentive opportunities so those who have will willingly give opportunities to those who don't
I think you mean unsubstantiated. True or not, the claims you are making are also unsubstantiated.
Which is why I presented the solution as a opinion.
By the same logic, the link is also an opinion. Also if you use asset prices as a metric, there has been plenty of inflation.
No he stated things as fact and moved on. I stated I think the US govt has to much money. And I think the US govt is wasteful so taxes now aren't going to help. I think we should incentivize the people with the money to solve these issues.
Thats way different than postulating facts and trying to conclude a narrative based on those facts. Cause I may be wrong about the government having to much money and I fully admit to it.
Thats way different than postulating facts and trying to conclude a narrative based on those facts. Cause I may be wrong about the government having to much money and I fully admit to it.
> Instead of taking from some to give to other incentive opportunities so those who have will willingly give opportunities to those who don't
What does this even mean? This is not a sentence :)
What does this even mean? This is not a sentence :)
It's great to ask what someone means but please don't do it in a nasty way, such as by cross-examining them. That costs more than it benefits.
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsguidelines.html
My bad, I have edited my comment to make it friendlier.
I’m struggling to envision how this would impact homeowners differently than the current property tax paradigm. If I have a house and the value of the property goes up, my property taxes increase. If I were to sell a house at market rate, theoretically it would be reflective of what rate it was being taxed at.
How would this same situation play out with a land-value tax?
How would this same situation play out with a land-value tax?
Perversely, if it was based on what the value of the property would be without any building on it, in lots of popular areas it would be more than the cost of the property tax because people will pay a premium for land where they can build what they want if the area is popular.
So I guess it can't be that way, as it would piss a lot of people off.
So I guess it can't be that way, as it would piss a lot of people off.
LVT, in its most pure form, isn’t based on any improvements (or lack thereof) to the land — the tax would be based purely based on the land itself, as if the home were NOT there.
Most likely, it would be heavily based on zoning, neighborhood, and proximity to jobs and transit. Take Los Angeles, for example. I would imagine you could actually see taxes in predominantly SFH enclaves like Calabasas or Malibu 1hr+ from job centers go _down_ while taxes on similar single family homes in West Hollywood or Beverly Hills, being much more incorporated into the urban framework of LA, would go up.
Wealthy people can still have their expansive estates elsewhere, but the incentive is to move them off of land that would have a better use serving more people: just as it doesn’t make too much sense for the Empire State Building to be built in Aspen, CO, it doesn’t make much sense for a single-family, detached vacation home with a white picket fence and yard to be built in the financial district of Manhattan.
Most likely, it would be heavily based on zoning, neighborhood, and proximity to jobs and transit. Take Los Angeles, for example. I would imagine you could actually see taxes in predominantly SFH enclaves like Calabasas or Malibu 1hr+ from job centers go _down_ while taxes on similar single family homes in West Hollywood or Beverly Hills, being much more incorporated into the urban framework of LA, would go up.
Wealthy people can still have their expansive estates elsewhere, but the incentive is to move them off of land that would have a better use serving more people: just as it doesn’t make too much sense for the Empire State Building to be built in Aspen, CO, it doesn’t make much sense for a single-family, detached vacation home with a white picket fence and yard to be built in the financial district of Manhattan.
So, you're saying it is the way I described but thought must be wrong?
About the same.
AIUI, they see a few benefits:
- it will ensure someone holding onto empty land for future use will have to pay at the same "rate" as you do. They don't get a discount simply because they choose not to use the land. If you aim to collect the same total amount of revenue, this would lower your tax.
- Use of land would be better optimized if there was no disincentive to build an expensive (eg bigger/denser) building. IMO this is flawed in that local land use rules are the bigger issue compared to tax policy.
AIUI, they see a few benefits:
- it will ensure someone holding onto empty land for future use will have to pay at the same "rate" as you do. They don't get a discount simply because they choose not to use the land. If you aim to collect the same total amount of revenue, this would lower your tax.
- Use of land would be better optimized if there was no disincentive to build an expensive (eg bigger/denser) building. IMO this is flawed in that local land use rules are the bigger issue compared to tax policy.
Thanks for this response. Disclaimer: I live in a city that is growing constantly and has many growing pains that are being worked through.
To me, it almost sounds like this type of tax puts more power in the hands of big developers, which is a challenge many municipalities deal with right now - striking the right balance with that. If they want to force someone to sell the remaining property in a block they’re trying to develop, wouldn’t they just need to make enough improvements that the city drives that person out with taxes?
I can’t help but think it could incentivize municipal governments seeking revenue to approve big projects without input from people living there, and incentivize people living somewhere to being actively anti-development.
To me, it almost sounds like this type of tax puts more power in the hands of big developers, which is a challenge many municipalities deal with right now - striking the right balance with that. If they want to force someone to sell the remaining property in a block they’re trying to develop, wouldn’t they just need to make enough improvements that the city drives that person out with taxes?
I can’t help but think it could incentivize municipal governments seeking revenue to approve big projects without input from people living there, and incentivize people living somewhere to being actively anti-development.
If the value goes up when all else stays the same, it is actually the land value that goes up.
If you completely renovate the house, a property tax would go up but the lvt stays the same.
If you completely renovate the house, a property tax would go up but the lvt stays the same.
Homeowners whose physical home makes up a lot of the value of their property would probably see a decrease, and those whose home makes up a small amount of the value of their property would probably see an increase. The broad idea is to incentivize actually using land instead of sitting on empty lots waiting to flip them.
So what about specifically a vacant/unoccupied tax as opposed to an LVT? Some places in Canada are doing this to disincentivize ownership of vacant condos/properties.
In theory,
Tax should be based on land value, not your improvements. So a really nice house isn't taxed more than a run down house. Fixing up the house, or knocking down a post war box and putting up a nice modern house, should not change your taxes.
Tax needs to vary with the maximum use of the land. A daily farm that is now surrounded by luxury apartments should pay taxes at the same rate per acre as those luxury apartments. This is where people start to flip out and get offended that they might be on the side of things that's disadvantaged by it.
Most property tax systems in the US have features that allow some land to be taxed at much lower rates than other land based just on historical ownership. Most notorious is California's Prop 13. The beneficial incentive system of the LVT is that it encouraging redeveloping now-valuable land. That means grandma can't afford to live there anymore. But, that only happens if grandma owns land that has appreciated, so she's probably okay overall.
I'm not really clear on whether LVT always goes with opposition to zoning or discretionary review, but I have seen some of that as well.
Tax should be based on land value, not your improvements. So a really nice house isn't taxed more than a run down house. Fixing up the house, or knocking down a post war box and putting up a nice modern house, should not change your taxes.
Tax needs to vary with the maximum use of the land. A daily farm that is now surrounded by luxury apartments should pay taxes at the same rate per acre as those luxury apartments. This is where people start to flip out and get offended that they might be on the side of things that's disadvantaged by it.
Most property tax systems in the US have features that allow some land to be taxed at much lower rates than other land based just on historical ownership. Most notorious is California's Prop 13. The beneficial incentive system of the LVT is that it encouraging redeveloping now-valuable land. That means grandma can't afford to live there anymore. But, that only happens if grandma owns land that has appreciated, so she's probably okay overall.
I'm not really clear on whether LVT always goes with opposition to zoning or discretionary review, but I have seen some of that as well.
Theoretically with an LVT, if the value of the property goes up because you restore and extend it or convert it into a dozen flats the tax stays the same (but still increases if the value increases because youre lucky enough get a good school and a light rail station in the area as the result of others' actions). In practice, it's somewhat difficult to separate the two which is why property taxes are more common (also because the multistorey apartment block built on similarly valued land to the house next door has a lot more people with the ability to pay and the expectation of having local services paid for)
The other difference is that proponents of LVT often argue it should replace other taxes like income tax. But regardless of theoretical efficiency criteria, it's a lot easier to persuade people that a large fixed portion of their earnings are the government's share than give them an enormous bill for the valuable land their house sits on and tell them if they're not earning enough to afford it they can always move (as long as they can find a buyer...). Which is why LVT has been 'inevitable' since before the Industrial Revolution without it being very widely experimented with
The other difference is that proponents of LVT often argue it should replace other taxes like income tax. But regardless of theoretical efficiency criteria, it's a lot easier to persuade people that a large fixed portion of their earnings are the government's share than give them an enormous bill for the valuable land their house sits on and tell them if they're not earning enough to afford it they can always move (as long as they can find a buyer...). Which is why LVT has been 'inevitable' since before the Industrial Revolution without it being very widely experimented with
Thank you for your response.
I feel like homeowners may become more resistant to city services and improvements in their area if it will impact their bottom line disproportionately. I guess it would come down to the value formulation.
I feel like homeowners may become more resistant to city services and improvements in their area if it will impact their bottom line disproportionately. I guess it would come down to the value formulation.
> If I have a house
After the transition period, far fewer people can afford freestanding single-family buildings.
After the transition period, far fewer people can afford freestanding single-family buildings.
Places with high property taxes disincentivize beautiful building. The nicer you build, the more you pay yearly. LVT does not have this bad incentive problem.
Anecdotally, I’ve been surprised by how Washington DC’s aggressive, punitive taxing of vacant properties has done little (in my observation) to free up these plots. $MM properties that just sit there.
LVT is a great idea.
I'd also like to see more general resource use taxes (i.e taxes on raw materials like water, oil, aluminum etc.). They could be adjusted based on economic conditions (instead of playing shell games with interest rates) and adjusted for external effects. Make it formulaic. Open source, everyone can see how it works and who adjusted and how and it's not a closed door XX party with input from lobbyists.
Among other good effects I see this encouraging efficient use and recycling.
I'd also like to see more general resource use taxes (i.e taxes on raw materials like water, oil, aluminum etc.). They could be adjusted based on economic conditions (instead of playing shell games with interest rates) and adjusted for external effects. Make it formulaic. Open source, everyone can see how it works and who adjusted and how and it's not a closed door XX party with input from lobbyists.
Among other good effects I see this encouraging efficient use and recycling.
I'm not sure that LTV is a great idea. But if it is, why stop at land?
Take Google, for instance. Google owns some buildings on some land. But, in proportion to how valuable Google is, they don't own much land. What they own is a mountain of code, and multiple mountains of data. The single most valuable thing they own is the google.com domain. And out of all of that, we're going to tax... the land? Huh?
If all money came from land, then LTV would make sense. When it was devised, that was more or less true. But it's not the 1800s any more, and that is a long way from true today.
Take Google, for instance. Google owns some buildings on some land. But, in proportion to how valuable Google is, they don't own much land. What they own is a mountain of code, and multiple mountains of data. The single most valuable thing they own is the google.com domain. And out of all of that, we're going to tax... the land? Huh?
If all money came from land, then LTV would make sense. When it was devised, that was more or less true. But it's not the 1800s any more, and that is a long way from true today.
> The LVT is not the same as a property tax, as it does not punish those who put the land to use; it taxes only the land, not the structure built on top of it.
This sounds regressive. So someone with a bungalow on their property pays the same tax as someone with a 40 story apartment building?
This sounds regressive. So someone with a bungalow on their property pays the same tax as someone with a 40 story apartment building?
If they're next to each other, yes.
If the bungalow is out in the suburbs and the apartment building is downtown next to the transit station, the apartment will pay MUCH more tax as that land is much more valuable.
If the bungalow is out in the suburbs and the apartment building is downtown next to the transit station, the apartment will pay MUCH more tax as that land is much more valuable.
It isn’t regressive, because poor people don’t typically own valuable property.
If someone is hoarding land on which a 40 story apartment building would be profitable, yes, they should be taxed for it
It's only sounds that we because there is so much yeoman farmer -> suburban everyman stuff in our heads.
The land is our collective inheritence, so someone with 1 story bungalow on highly desireable land is actually extremely selfish and decedent in their misuse of the commons.
To get less moral and more mathematical, developers can lessen their tax only to the extent that the flood the market with floors pace, devaluing the good they are selling (floor space, not land space). This forces and equilibrium where the vast majority of people do better than today.
The land is our collective inheritence, so someone with 1 story bungalow on highly desireable land is actually extremely selfish and decedent in their misuse of the commons.
To get less moral and more mathematical, developers can lessen their tax only to the extent that the flood the market with floors pace, devaluing the good they are selling (floor space, not land space). This forces and equilibrium where the vast majority of people do better than today.
Are people who have more than one child (or 2.1, if you’d like for monogamous couples) selfish too?
If you’re hinting at taxing having more kids, I know it’s an unpopular idea but honestly it sounds decent to me.
It just doesn’t mesh well with the declining birth rates in developed nations. Some countries are paying people to have kids, and it’s not working very well.
It just doesn’t mesh well with the declining birth rates in developed nations. Some countries are paying people to have kids, and it’s not working very well.
Well. It is a statistical certainity that we will hit a peak and the population numbers will fall off the cliff.
My hope is that if we can manage population numbers before we run out of resources, we can stave off the severe resource crunch that will come when we don’t have a sufficiently large gene pool when the decline begins.
The problem also is that our efficient supply chain has ensured that one or two rich deposits of xyz resource takes care of the whole world. Many rare metals and precious metals mined for electronics and phones come to mine. Phosphorous comes to mind. We use it as fertilizer but it’s not renewable. The river sand we use for construction. Top soil that is depleted and water sources that are poisoned due to Ag runoffs and Ag soils that are tilled away.
And I am not even talking about global raising temperatures or carbon. Take insects for example. The bees we need for pollination. The frogs..especially insects and reptiles and amphibians need habitat to survive. Their disappearance shows that there is a tear in the web. It indicates that we have destroyed their environment or poisoned it or made it impossible for them to reproduce it sufficient numbers to keep their future generations up. They are on the other side of mammals like us or elephants etc..because we live so long, it would take a while and a lag before we see a decline. They have such short life spans and can have a couple of hundred generations within a matter of days, they are like early warning systems.
Given this, we know that habitat is disappearing and ecosystems are in peril. Poverty is disappearing and we are expending huge amounts of energy to keep our soon to be 10 billion people by 2050.
Even if population becomes stable before plummeting as the old people become more more numerous and are non reproductive and die off..even if we have sufficient young people to keep our species alive and even if we find it ways to live smaller and differently...the non renewable resources once gone are gone. Top soil once gone is gone. Soil phosphorus once depleted isnt coming back. Mining has to end some day. Oil will become scarce someday. Homes build on Ag land and forests cannot be razed down to become habitat and forests and environment and habitat again.
This might not happen in your lifetime or mine, but our species extend beyond one or two generations. We owe it to generations down the line to preserve the planet. We can’t synthesize our own food. We rely on our environment and natural resources as an apex predator sitting on top of the food chain.
The most urgent thing to do is multi part: 1. Find a way to preserve genetic material effectively and create a gene data base. We do that with seeds in Ag. There is a seed vault in Svalbard(don’t know if it still exists) 2. Invest in anti ageing therapies. And by this I don’t mean youthfulness of looks but ageing is the slow decline of cognitive faculties and organ failure and cell aging. 3. Have a half-earth philosophy as promulgated by E.O.Wilson to keep intact our environment and habitat that relies on that environment.
I am not attempting to suggest that we have to become Luddites or start controlling population numbers. If we just back off and stop incentivizing high birth rate, within 120-150 years, we might get this under control. No need for coercion or mandatory depopulation methods. Stop encouraging people who can’t afford children to keep having children. That will do.
China supplies most of the developed world with what we need at cheap prices. These are mass produced products. In return, through belt and road initiative, China has the entire Southern Hemisphere trading food and Ag products to support its 1.4 billion. It’s easy to make 10 billion iPhone chips. It’s not as easy to feed 1.4 billion people pork with available resources.
So with declining populations, the world still needs to deploy and deplete its resources to trade due to our higher consumption habits. But exponential population increases are a funny thing. Exponentially 1.4 increases faster than 350 million. Some resources don’t increase at all and in fact non renewable. What do we do now?
My hope is that if we can manage population numbers before we run out of resources, we can stave off the severe resource crunch that will come when we don’t have a sufficiently large gene pool when the decline begins.
The problem also is that our efficient supply chain has ensured that one or two rich deposits of xyz resource takes care of the whole world. Many rare metals and precious metals mined for electronics and phones come to mine. Phosphorous comes to mind. We use it as fertilizer but it’s not renewable. The river sand we use for construction. Top soil that is depleted and water sources that are poisoned due to Ag runoffs and Ag soils that are tilled away.
And I am not even talking about global raising temperatures or carbon. Take insects for example. The bees we need for pollination. The frogs..especially insects and reptiles and amphibians need habitat to survive. Their disappearance shows that there is a tear in the web. It indicates that we have destroyed their environment or poisoned it or made it impossible for them to reproduce it sufficient numbers to keep their future generations up. They are on the other side of mammals like us or elephants etc..because we live so long, it would take a while and a lag before we see a decline. They have such short life spans and can have a couple of hundred generations within a matter of days, they are like early warning systems.
Given this, we know that habitat is disappearing and ecosystems are in peril. Poverty is disappearing and we are expending huge amounts of energy to keep our soon to be 10 billion people by 2050.
Even if population becomes stable before plummeting as the old people become more more numerous and are non reproductive and die off..even if we have sufficient young people to keep our species alive and even if we find it ways to live smaller and differently...the non renewable resources once gone are gone. Top soil once gone is gone. Soil phosphorus once depleted isnt coming back. Mining has to end some day. Oil will become scarce someday. Homes build on Ag land and forests cannot be razed down to become habitat and forests and environment and habitat again.
This might not happen in your lifetime or mine, but our species extend beyond one or two generations. We owe it to generations down the line to preserve the planet. We can’t synthesize our own food. We rely on our environment and natural resources as an apex predator sitting on top of the food chain.
The most urgent thing to do is multi part: 1. Find a way to preserve genetic material effectively and create a gene data base. We do that with seeds in Ag. There is a seed vault in Svalbard(don’t know if it still exists) 2. Invest in anti ageing therapies. And by this I don’t mean youthfulness of looks but ageing is the slow decline of cognitive faculties and organ failure and cell aging. 3. Have a half-earth philosophy as promulgated by E.O.Wilson to keep intact our environment and habitat that relies on that environment.
I am not attempting to suggest that we have to become Luddites or start controlling population numbers. If we just back off and stop incentivizing high birth rate, within 120-150 years, we might get this under control. No need for coercion or mandatory depopulation methods. Stop encouraging people who can’t afford children to keep having children. That will do.
China supplies most of the developed world with what we need at cheap prices. These are mass produced products. In return, through belt and road initiative, China has the entire Southern Hemisphere trading food and Ag products to support its 1.4 billion. It’s easy to make 10 billion iPhone chips. It’s not as easy to feed 1.4 billion people pork with available resources.
So with declining populations, the world still needs to deploy and deplete its resources to trade due to our higher consumption habits. But exponential population increases are a funny thing. Exponentially 1.4 increases faster than 350 million. Some resources don’t increase at all and in fact non renewable. What do we do now?
No, or not nearly as much.
The needs of a child are mediated by productivity, which has been wildly different throughout history. E.g. maybe we'll have practical fusion in 100 years and can support 100 billion people no problem.
But the surface area of the earth is fixed. If you want 100 acres to do nothing good with, do it with a giant seastead.
The needs of a child are mediated by productivity, which has been wildly different throughout history. E.g. maybe we'll have practical fusion in 100 years and can support 100 billion people no problem.
But the surface area of the earth is fixed. If you want 100 acres to do nothing good with, do it with a giant seastead.
> If you want 100 acres to do nothing good with, do it with a giant seastead.
And even then, the surface area of the Earth is still fixed. So is the volume (unless you're willing to destroy Earth as we know it in the process).
So a seastead just kicks the can down the road. If you want 100 acres to do nothing good with, do it in space.
And even then, the surface area of the Earth is still fixed. So is the volume (unless you're willing to destroy Earth as we know it in the process).
So a seastead just kicks the can down the road. If you want 100 acres to do nothing good with, do it in space.
1. I agree that people need to be housed.
2. But I don’t agree that property rights ought to be snatched from owners.
3. I also don’t think we could keep on increasing the world population when we have clearly crossed carrying capacity.
They are all different issues and points. Not necessarily related.
You don’t need separate a person’s property from him just because a few million people are homeless.
You don’t need to keep on breeding homo sapiens to out breed all other species and destroying habits and environment to support the extra billions of human beings. Because the apex predator can wipe out every eco system to support itself. And at a faster rate if it outbreeds the rest of the species.
Half the planet needs to be uninhabitated and rewilded for species and habitat preservation, conservation and restoration.
As apex predators, if we don’t protect habitat and other species below us, it is like sawing off the main trunk of a tree below us while perching on the top most branch. We will become extinct as a species.
One day, I am going to be able to buy thousands and thousands of acres and let nature take it back. There is a better chance that we will survive as a species if we reduce our population rather than keep on increasing it exponentially. Because we are guaranteed to outbreed every other species upon whom we rely on for our survival.
The planet survives because of a delicate balance between the ocean’s temperature and carbon levels in our atmosphere. We really don’t understand it fully yet. It’s premature to assume that we can keep on breeding to perpetuate our species. It’s the most unscientific, irrational and illogical way to solve a problem. It certainly is a sure way to erase ourselves from the universe as we know it.
2. But I don’t agree that property rights ought to be snatched from owners.
3. I also don’t think we could keep on increasing the world population when we have clearly crossed carrying capacity.
They are all different issues and points. Not necessarily related.
You don’t need separate a person’s property from him just because a few million people are homeless.
You don’t need to keep on breeding homo sapiens to out breed all other species and destroying habits and environment to support the extra billions of human beings. Because the apex predator can wipe out every eco system to support itself. And at a faster rate if it outbreeds the rest of the species.
Half the planet needs to be uninhabitated and rewilded for species and habitat preservation, conservation and restoration.
As apex predators, if we don’t protect habitat and other species below us, it is like sawing off the main trunk of a tree below us while perching on the top most branch. We will become extinct as a species.
One day, I am going to be able to buy thousands and thousands of acres and let nature take it back. There is a better chance that we will survive as a species if we reduce our population rather than keep on increasing it exponentially. Because we are guaranteed to outbreed every other species upon whom we rely on for our survival.
The planet survives because of a delicate balance between the ocean’s temperature and carbon levels in our atmosphere. We really don’t understand it fully yet. It’s premature to assume that we can keep on breeding to perpetuate our species. It’s the most unscientific, irrational and illogical way to solve a problem. It certainly is a sure way to erase ourselves from the universe as we know it.
> But I don’t agree that property rights ought to be snatched from owners.
Nobody's calling for any snatching of property rights. What's being called for is for landowners to internalize the opportunity costs they've externalized on the rest of society (and, indeed, the planet).
> I also don’t think we could keep on increasing the world population when we have clearly crossed carrying capacity.
As much as I agree, unfortunately humans happen to enjoy making more humans (and indeed, arguably have a biological drive to do so), so barring either the ability to move humans off Earth or some Malthusian catastrophe, global population will continue to increase whether we like it or not.
> Half the planet needs to be uninhabitated and rewilded for species and habitat preservation, conservation and restoration.
Which is a lot easier when people are penalized for contributing to suburban and rural sprawl.
Nobody's calling for any snatching of property rights. What's being called for is for landowners to internalize the opportunity costs they've externalized on the rest of society (and, indeed, the planet).
> I also don’t think we could keep on increasing the world population when we have clearly crossed carrying capacity.
As much as I agree, unfortunately humans happen to enjoy making more humans (and indeed, arguably have a biological drive to do so), so barring either the ability to move humans off Earth or some Malthusian catastrophe, global population will continue to increase whether we like it or not.
> Half the planet needs to be uninhabitated and rewilded for species and habitat preservation, conservation and restoration.
Which is a lot easier when people are penalized for contributing to suburban and rural sprawl.
When you start instructing landowners what to do with their property, that’s infringing upon property rights especially if failure to do so results in penalizing them.
Your argument states that empty land would be better served if it’s used for other human beings. The same argument if applied to a time scale rather than upon land resources, it is rational to conclude that our planet is better off if people had 1/2 surviving child per person until we hit carrying capacity.
If land owners should be taxed for owning land they don’t use, we should also have a child tax for future exponential growth of a certain set of genes who will monopolize the world’s population by over breeding.
Humans can continue to enjoy baby making(it’s not unlike some human beings enjoy owning vast tracts of land they dont put to use) but left to their own devices and without encouragement, if they are allowed to bear the full cost of raising the fruits of their loins, I think the numbers will go down dramatically.
If goods cost as much as it takes to make them..especially food which is grown at tremendous costs(not just monetary), we will realize that the abundance is a myth and scarcity is our reality.
Re: Your final point..people who own property don’t contribute to suburbs and rural sprawl. It is those who can’t make proper decisions personally and financially who make choices FOR themselves. Things like where to live, what job to do and what to study are easy choices. Inheriting illness, disabilities are choices we didn’t make, but was made by nature for us. We take care of vulnerable people who had no control over their deficiencies because we share as a species DNA with them.
That obligation and duty towards our collective humanity is entirely different than feeling responsible for personal decision making.
Sometimes people make terrible decisions for themselves because they are unable to make best decisions for themselves. In those cases, we have to make decisions for them if we feel responsible for them. These kind of things never end well as history as shown and is best avoided if possible. An example would be the mentally ill. Many refuse to take medications and their circumstances cause them to suffer. Those are tough decisions. But even then there is no need to penalize private property owners.
None of these issues are connected to each other. I doubt if anyone cares about urban sprawl. An easy target is private property owners and that comes from what I can only term as jealousy in simplistic terms.
In today’s world, we have managed to conquer crippling poverty even though there is much work to do. GINI co-eff fueled inequality makes villains out of the property owners. That is a dangerous path to take..once again, as history has shown us.
Your argument states that empty land would be better served if it’s used for other human beings. The same argument if applied to a time scale rather than upon land resources, it is rational to conclude that our planet is better off if people had 1/2 surviving child per person until we hit carrying capacity.
If land owners should be taxed for owning land they don’t use, we should also have a child tax for future exponential growth of a certain set of genes who will monopolize the world’s population by over breeding.
Humans can continue to enjoy baby making(it’s not unlike some human beings enjoy owning vast tracts of land they dont put to use) but left to their own devices and without encouragement, if they are allowed to bear the full cost of raising the fruits of their loins, I think the numbers will go down dramatically.
If goods cost as much as it takes to make them..especially food which is grown at tremendous costs(not just monetary), we will realize that the abundance is a myth and scarcity is our reality.
Re: Your final point..people who own property don’t contribute to suburbs and rural sprawl. It is those who can’t make proper decisions personally and financially who make choices FOR themselves. Things like where to live, what job to do and what to study are easy choices. Inheriting illness, disabilities are choices we didn’t make, but was made by nature for us. We take care of vulnerable people who had no control over their deficiencies because we share as a species DNA with them.
That obligation and duty towards our collective humanity is entirely different than feeling responsible for personal decision making.
Sometimes people make terrible decisions for themselves because they are unable to make best decisions for themselves. In those cases, we have to make decisions for them if we feel responsible for them. These kind of things never end well as history as shown and is best avoided if possible. An example would be the mentally ill. Many refuse to take medications and their circumstances cause them to suffer. Those are tough decisions. But even then there is no need to penalize private property owners.
None of these issues are connected to each other. I doubt if anyone cares about urban sprawl. An easy target is private property owners and that comes from what I can only term as jealousy in simplistic terms.
In today’s world, we have managed to conquer crippling poverty even though there is much work to do. GINI co-eff fueled inequality makes villains out of the property owners. That is a dangerous path to take..once again, as history has shown us.
> When you start instructing landowners what to do with their property
Nowhere is anyone instructing anyone else. Requiring landowners to internalize the opportunity costs they externalize onto everyone else is not unreasonable.
> If land owners should be taxed for owning land they don’t use
They should be taxed for land period, whether they're using it or not, since all land ownership inherently entails the externalization of opportunity costs on everyone else. And if they're using it for something productive, they'll have a much easier time paying that tax.
> we should also have a child tax
That's already built into a land value tax. Land's value - like the value of anything else - is a function of supply and demand. The supply of land is fixed, and demand is a function of population (more people in the world = more people needing places to live and work and play = more demand for land). So, as more humans enter the world, the value of land goes up, and therefore so does the tax on that land's value.
> people who own property don’t contribute to suburbs and rural sprawl.
They literally do, be it by owning the land encompassing that sprawl or by owning the land within urban centers and refusing to develop it into denser residential spaces. This is the mathematical reality. If you want a reduction in humanity's carbon footprint, a land value tax is one of the most effective levers to drive that reduction.
Nowhere is anyone instructing anyone else. Requiring landowners to internalize the opportunity costs they externalize onto everyone else is not unreasonable.
> If land owners should be taxed for owning land they don’t use
They should be taxed for land period, whether they're using it or not, since all land ownership inherently entails the externalization of opportunity costs on everyone else. And if they're using it for something productive, they'll have a much easier time paying that tax.
> we should also have a child tax
That's already built into a land value tax. Land's value - like the value of anything else - is a function of supply and demand. The supply of land is fixed, and demand is a function of population (more people in the world = more people needing places to live and work and play = more demand for land). So, as more humans enter the world, the value of land goes up, and therefore so does the tax on that land's value.
> people who own property don’t contribute to suburbs and rural sprawl.
They literally do, be it by owning the land encompassing that sprawl or by owning the land within urban centers and refusing to develop it into denser residential spaces. This is the mathematical reality. If you want a reduction in humanity's carbon footprint, a land value tax is one of the most effective levers to drive that reduction.
That’s not my point. And you didn’t answer my question. You spoke of commons as collective inheritance.
A serial breeder..say..someone who has a couple of children with different women more selfish than someone who has 1-2 children.
The commons will be saturated by the needs of genes of prolific breeders who use women’s bodies as vessels. Is that selfish? Since we are talking about selfishness and commons as a collective inheritance, define commons.
A serial breeder..say..someone who has a couple of children with different women more selfish than someone who has 1-2 children.
The commons will be saturated by the needs of genes of prolific breeders who use women’s bodies as vessels. Is that selfish? Since we are talking about selfishness and commons as a collective inheritance, define commons.
This parent does not get that benefit though, each child does usually when you say somebody is selfish, they're actually doing stuff that gains benefits for themselves.
Parents pass down their genes. They benefit.
The genes benefit. The individual doesn't really. Dawkins wrote a book about it: 'The Selfish Gene'.
The book came out in 1976 and there has been a lot of discussion and debate around it since then. Wikipedia can update you and is easy to look for links in the reference : https://en.m.wikipedia.org/wiki/The_Selfish_Gene
[..] The view of The Selfish Gene is that selection based upon groups and populations is rare compared to selection on individuals. Although supported by Dawkins and by many others, this claim continues to be disputed.[33][34] While naïve versions of group selectionism have been disproved, more sophisticated formulations make accurate predictions in some cases while positing selection at higher levels.[35] Both sides agree that very favourable genes are likely to prosper and replicate if they arise and both sides agree that living in groups can be an advantage to the group members. The conflict arises in part over defining concepts:
"Cultural evolutionary theory, however, has suffered from an overemphasis on the experiences and behaviors of individuals at the expense of acknowledging complex group organization...Many important behaviors related to the success and function of human societies are only properly defined at the level of groups".[34] In The Social Conquest of Earth (2012), the entomologist E. O. Wilson contends that although the selfish-gene approach was accepted "until 2010 [when] Martin Nowak, Corina Tarnita, and I demonstrated that inclusive fitness theory, often called kin selection theory, is both mathematically and biologically incorrect."[36] Chapter 18 of The Social Conquest of Earth describes the deficiencies of kin selection and outlines group selection, which Wilson argues is a more realistic model of social evolution. He criticises earlier approaches to social evolution, saying: "...unwarranted faith in the central role of kinship in social evolution has led to the reversal of the usual order in which biological research is conducted. The proven best way in evolutionary biology, as in most of science, is to define a problem arising during empirical research, then select or devise the theory that is needed to solve it. Almost all research in inclusive-fitness theory has been the opposite: hypothesize the key roles of kinship and kin selection, then look for evidence to test that hypothesis." According to Wilson: "People must have a tribe...Experiments conducted over many years by social psychologists have revealed how swiftly and decisively people divide into groups, and then discriminate in favor of the one to which they belong." (pp. 57, 59) According to Wilson: "Different parts of the brain have evolved by group selection to create groupishness." (p. 61)[..]
[..] The view of The Selfish Gene is that selection based upon groups and populations is rare compared to selection on individuals. Although supported by Dawkins and by many others, this claim continues to be disputed.[33][34] While naïve versions of group selectionism have been disproved, more sophisticated formulations make accurate predictions in some cases while positing selection at higher levels.[35] Both sides agree that very favourable genes are likely to prosper and replicate if they arise and both sides agree that living in groups can be an advantage to the group members. The conflict arises in part over defining concepts:
"Cultural evolutionary theory, however, has suffered from an overemphasis on the experiences and behaviors of individuals at the expense of acknowledging complex group organization...Many important behaviors related to the success and function of human societies are only properly defined at the level of groups".[34] In The Social Conquest of Earth (2012), the entomologist E. O. Wilson contends that although the selfish-gene approach was accepted "until 2010 [when] Martin Nowak, Corina Tarnita, and I demonstrated that inclusive fitness theory, often called kin selection theory, is both mathematically and biologically incorrect."[36] Chapter 18 of The Social Conquest of Earth describes the deficiencies of kin selection and outlines group selection, which Wilson argues is a more realistic model of social evolution. He criticises earlier approaches to social evolution, saying: "...unwarranted faith in the central role of kinship in social evolution has led to the reversal of the usual order in which biological research is conducted. The proven best way in evolutionary biology, as in most of science, is to define a problem arising during empirical research, then select or devise the theory that is needed to solve it. Almost all research in inclusive-fitness theory has been the opposite: hypothesize the key roles of kinship and kin selection, then look for evidence to test that hypothesis." According to Wilson: "People must have a tribe...Experiments conducted over many years by social psychologists have revealed how swiftly and decisively people divide into groups, and then discriminate in favor of the one to which they belong." (pp. 57, 59) According to Wilson: "Different parts of the brain have evolved by group selection to create groupishness." (p. 61)[..]
> the needs of genes of prolific breeders who use women’s bodies as vessels
I believe you mean the needs of actual human beings born of such people, to whom the God-given rights of life, liberty, the pursuit of happiness, and yes, the collective inheritance of the commons, are owed.
I believe you mean the needs of actual human beings born of such people, to whom the God-given rights of life, liberty, the pursuit of happiness, and yes, the collective inheritance of the commons, are owed.
Can you please point out to me the original source where said ‘God-given rights’ are proffered?
I really don't care about individual-morality questions that do not show up in the aggregate. These are perhaps good philosophical problems to ponder, but the legacy of liberalism is such that we think that they imply questions to how society should be run. Nope, they don't.
These serial breeders do not show up in the aggregate in any country I've every been too. If you are worried about population rates in dirt poor countries, the per-capita consumption is so much lower you shouldn't bother.
> The commons will be saturated by the needs of genes of prolific breeders who use women’s bodies as vessels.
Do you have evidence to think this numerically insignificant behavior is so genetically hereditary we should worry about it?
These serial breeders do not show up in the aggregate in any country I've every been too. If you are worried about population rates in dirt poor countries, the per-capita consumption is so much lower you shouldn't bother.
> The commons will be saturated by the needs of genes of prolific breeders who use women’s bodies as vessels.
Do you have evidence to think this numerically insignificant behavior is so genetically hereditary we should worry about it?
Yes. https://www.census.gov/content/dam/Census/library/working-pa... : census for 2019 and men’s fertility
The idea is to tax the opportunity cost of the land. If Jeff Bezos decides he wants to build a bungalow in the middle of Manhattan that is his prerogative, but he shouldn’t get to pay less taxes than someone who put the land to more economical use as a 40 story apartment building.
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land value tax. Yes, If you decide to buy a plot in downtown San Fransisco you are taxed the same as the neighboring plot with the Salesforce tower.
This is exactly the point he is making: One should put the land to good use. Move the bungalows where land is cheap and tax is low.
This is exactly the point he is making: One should put the land to good use. Move the bungalows where land is cheap and tax is low.
And generate more carbon and traffic by forcing suburban lifestyles?
Moving bungalows away from the city center allows that land to be used for denser housing, lowering commute times. The exact opposite of NIMBY-enforced suburbanism
Why would I live in my bumfuck FOMO bungalo when there is enough housing in the dense city proper to house everyone I know? (or dense small town proper with good rail to other towns and cities.)
Clearly I will just rent vacation bungalos when I actually have a need to be near nature.
Clearly I will just rent vacation bungalos when I actually have a need to be near nature.
I would imagine each apartment dweller would have 1/40th (ish) of the tax burden.
> This sounds regressive.
We can't make that determination without knowing how much profit a rented bungalow can receive versus the apartment building. A bungalow in midtown Manhattan might very well house one of the world's richest families.
Fundamentally, LVT is a wealth tax. If you hold a large amount of wealth (land) but have no income then the tax would seem regressive from an income-based perspective. But from a wealth-based perspective, its a perfectly reasonable thing to expect those that own to pay taxes not just those who labor.
We can't make that determination without knowing how much profit a rented bungalow can receive versus the apartment building. A bungalow in midtown Manhattan might very well house one of the world's richest families.
Fundamentally, LVT is a wealth tax. If you hold a large amount of wealth (land) but have no income then the tax would seem regressive from an income-based perspective. But from a wealth-based perspective, its a perfectly reasonable thing to expect those that own to pay taxes not just those who labor.
The argument against it is that a vacant property imposes very little cost upon society. It doesn't require fire protection, it doesnt add children to the education system, it doesn't use any municipal resources. If it's an eyesore or presents a hazard in some way, sure, but simply being vacant or "underutilized" doesn't do that. Why should it pay to simply exist?
> The argument against it is that a vacant property imposes very little cost upon society.
A vacant property (really, any ownership of property, period) results in an opportunity cost externalized onto all other members of society. That opportunity cost is equal to the land's value. In the middle of nowhere, therefore, that opportunity cost might be low to the point of nonexistence, but in the middle of a city downtown, that opportunity cost can be and often is on the scale of tens/hundreds of thousands of dollars (or more!) per year. That is wealth that is long overdue to be repaid back to the rest of society.
A vacant property (really, any ownership of property, period) results in an opportunity cost externalized onto all other members of society. That opportunity cost is equal to the land's value. In the middle of nowhere, therefore, that opportunity cost might be low to the point of nonexistence, but in the middle of a city downtown, that opportunity cost can be and often is on the scale of tens/hundreds of thousands of dollars (or more!) per year. That is wealth that is long overdue to be repaid back to the rest of society.
The vacant lot in the middle of Manhattan has a massive opportunity cost to society. If you goal is to own a vacant lot and you don't care where it is, trade that vacant lot in Manhattan for another one in rural Alabama.
The apartment tower also has massive costs. It requires high-capacity water, sewer, electric, and trash service. It requires specialized fire protection services including extra training and equipment to fight fires in high rise buildings. It has a massive carbon footprint.
Why should a property owner who does not impose any of those costs (or imposes a tiny fraction of them) pay equally for them?
Why should a property owner who does not impose any of those costs (or imposes a tiny fraction of them) pay equally for them?
The apartment tower is likely in a high density area already built for those types of services. It's a perfectly sensible idea to penalize those who would waste those services on a vacant lot.
> It requires high-capacity water, sewer, electric, and trash service. It requires specialized fire protection services including extra training and equipment to fight fires in high rise buildings.
The apartment almost certainly already pays for all of these things.
> It has a massive carbon footprint.
Which can be offset or even reduced/eliminated outright.
The apartment almost certainly already pays for all of these things.
> It has a massive carbon footprint.
Which can be offset or even reduced/eliminated outright.
It's the greenest type of residence per capita.
It imposes the cost of pushing people farther away from each other. Every block that's empty is one block farther people have to walk/cycle/drive to get where they're going.
So you'd be in favor of plowing under Central Park and covering it with apartments towers so that everyone could be closer together?
Central Park isn't empty land; it's in active use. Also, I think an argument could be made that Central Park generates enough (intangible) value to cover its LVT. When the government pays tax to itself it nets out to zero anyway AFAIK.
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Another way to put it: the person who owns a vacant lot in Manhattan (worth many millions) pays the same tax as the person who owns an equivalent lot in Manhattan with an apartment building built on it. They would also pay the same tax as the person who owns that same lot with a bungalow sitting on it.
It's not regressive at all. You pay tax based on the value of the land. If you're not utilizing the full value of the land (by leaving it vacant or otherwise under built compared to the demand) then you're going to pay more in taxes than you get out of it. The whole purpose of LVT is to nudge you toward either improving the land so you can utilize its value or sell it to someone who will.
It's not regressive at all. You pay tax based on the value of the land. If you're not utilizing the full value of the land (by leaving it vacant or otherwise under built compared to the demand) then you're going to pay more in taxes than you get out of it. The whole purpose of LVT is to nudge you toward either improving the land so you can utilize its value or sell it to someone who will.
I detest property taxes. What ends up happening is that people who are on the brink of poverty keep losing their (inherited) land because the government deems it an income generating asset, even though it is not (it's either their home or some dilapidated piece of land without much actual income generation prospects).
Often they also get screwed on the selling because they are under pressure and because they are not experienced in selling property, and end up losing money in the process.
So it's like crabs on the brim of the bucket being kicked back to the bottom.
The solution is clear: an, ummm, income-based land value tax
Only that doesn’t happen in real life. People on the brink of poverty don’t inherit property. And if they do, they can always sell it and put that money to better use.
I am talking from experience. You are wrong on both counts.
What makes you think that poor people don't inherit property? There are lots of people with very low incomes but who own a house. And no they don't just sell it. Why sell the only house you have? Or maybe it is not their house but it is a piece of property that they have always owned and which they use as a garden or a yard or storage.
They don't sell it because they'd rather have a piece of land to enjoy then some money in the bank. It might be their only luxury in an otherwise frugal life.
What makes you think that poor people don't inherit property? There are lots of people with very low incomes but who own a house. And no they don't just sell it. Why sell the only house you have? Or maybe it is not their house but it is a piece of property that they have always owned and which they use as a garden or a yard or storage.
They don't sell it because they'd rather have a piece of land to enjoy then some money in the bank. It might be their only luxury in an otherwise frugal life.
This only happens because our terrible land use is inflating the real estate market + terrible policy like prop 13.
In an LVT world, the value of land (overall-inflation-adjusted) should basically track the population, and virtually no one will own land they could no longer afford to buy.
In an LVT world, the value of land (overall-inflation-adjusted) should basically track the population, and virtually no one will own land they could no longer afford to buy.
That’s why LVT will never happen and is a dumb idea.
If a freeway exit gets built a block away from my house, my taxes will reflect the value of a Walmart or whatever instead of my house.
If a freeway exit gets built a block away from my house, my taxes will reflect the value of a Walmart or whatever instead of my house.
In which case you should sell your property and make bank on what Walmart would be willing to pay for it. (If you wouldn't make bank then your taxes wouldn't be prohibitively high)
Why would Walmart make a deal when they could just wait for or lobby the county to valuate your land at some excessive value and force a sale in distress?
LVT is just bad policy that sounds ok in concept. In my city, inner city residential property is near worthless once it falls below section 8 standards. The taxes are low too as result. With a LVT scheme, someone would cook up some “true” value subjectively, which has obvious potential for abuse.
LVT is just bad policy that sounds ok in concept. In my city, inner city residential property is near worthless once it falls below section 8 standards. The taxes are low too as result. With a LVT scheme, someone would cook up some “true” value subjectively, which has obvious potential for abuse.
Can't Walmart already do this? Property assessors already estimate the value of your property and the value of the land plays a part.
Generally no. Values are usually based on sales history.
Value is whatever someone will pay. If Wal-Mart offers $1MM for your land, that is what it is worth, even if the next-best offer is $500K.
Only if you sell.
LVT serves a few different interests and is sold as a cure all. Kinda like the “gold bug” of tax policy.
LVT serves a few different interests and is sold as a cure all. Kinda like the “gold bug” of tax policy.
Or the very questionable use of eminent domain that some municipalities engage in.
It's really the same as eminent domain. Wal-Mart wants your property for a store? They just need to offer to pay enough that the LVT is unaffordable to you. You'll have no choice but to sell, even if you don't want the money and would rather keep the property.
Source?
What is a better use than property? I though property was the best investment one could make. The government taking property because of a lack of income to pay taxes is heinous.
What is a better use than property? I though property was the best investment one could make. The government taking property because of a lack of income to pay taxes is heinous.
Do you have a viable alternative to property taxes for raising municipal revenues? Additionally, certain acts like California Prop 13 of 1978 attempt to solve the problem you’re addressing but, in my opinion, ended up causing much more harm than good.
https://en.m.wikipedia.org/wiki/1978_California_Proposition_...
https://en.m.wikipedia.org/wiki/1978_California_Proposition_...
Yes but it is like a complete rewrite of the tax code if you are American.
In my country we just don't have municipal taxes. Municipalities have reduced responsibility. All the important services are funded directly from central governments.
So you don't get problems like underfunded schools and such. Municipalities get pocket money also from the central government and are only in charge of less important infrastructure and service.
There is no property tax, but we have capital gains taxes based on transfers of assets.
There is no property tax, but we have capital gains taxes based on transfers of assets.
> Do you have a viable alternative to property taxes for raising municipal revenues?
Income and/or sales tax.
Income and/or sales tax.
This isn't an argument against funding government on sales and income tax alone, but income from those is more volatile in recessions that property tax, so it takes a fiscally responsible government for that to work.
Sorry, they should sell. Truely cash-poor land-rich people are an insignificant class that's been held up as the boogieman for 100+ years.
You're not a "temporarily embarrassed billionaire", and if owning land one can no longer afford seems commonplace, it is entirely because the current real estate speculation scheme we prop up (CA especially).
Any realistic LVT would be phases in slowly, and give the prop 13 petit gentry plenty of time to sell and live a fine remainder of their life in a very fashionable condo.
You're not a "temporarily embarrassed billionaire", and if owning land one can no longer afford seems commonplace, it is entirely because the current real estate speculation scheme we prop up (CA especially).
Any realistic LVT would be phases in slowly, and give the prop 13 petit gentry plenty of time to sell and live a fine remainder of their life in a very fashionable condo.
I just don’t see this happening. Maybe I live in a different place.
Who are these people inheriting land who are too poor to use it, too dumb to sell it and losing it to the county?
I live in a high tax state and have served on nonprofit boards that have exposure to housing issues. This didn’t happen.
The common problems of this ilk were usually frauds where caregivers, relatives, powers of attorney or others squander or steal proceeds of reverse mortgages or borrow money against property without telling the family. The other issue that would come up is Medicaid recapture when money is given away.
Usually if there is a tax sale there is some bigger story why the property is worthless. You can borrow against the equity of anything.
Who are these people inheriting land who are too poor to use it, too dumb to sell it and losing it to the county?
I live in a high tax state and have served on nonprofit boards that have exposure to housing issues. This didn’t happen.
The common problems of this ilk were usually frauds where caregivers, relatives, powers of attorney or others squander or steal proceeds of reverse mortgages or borrow money against property without telling the family. The other issue that would come up is Medicaid recapture when money is given away.
Usually if there is a tax sale there is some bigger story why the property is worthless. You can borrow against the equity of anything.
It happens outside of your bubble. It's not about being dumb. It's about having a certain way of life that values frugality and simple living. But you need land to live on.
Go tell the Amish to sell their land and move into a condo because it makes more financial sense.
Indeed, the biggest problem with LVT is who exactly gets to value the land and how. It's an extraordinarily difficult issue which would require a very precise implementation.
Once you start assessing peoples property in such a wholesale fashion, you almost end up in a classic "managed economy" situation. "From each according to his ability, to each according to his needs" failed due to the combined difficulty of assessment + corruption of the assessors. LVT is the same principle applied to land.
I think that LVT will end up as one of those ideas that is great in theory but doesn't work in practice.
Once you start assessing peoples property in such a wholesale fashion, you almost end up in a classic "managed economy" situation. "From each according to his ability, to each according to his needs" failed due to the combined difficulty of assessment + corruption of the assessors. LVT is the same principle applied to land.
I think that LVT will end up as one of those ideas that is great in theory but doesn't work in practice.
There have been some interesting market driven pricing schemes mentioned in this thread where your property tax is set based on an auction model, though that seems to have the opposite problem where the person with the largest bank can steamroll everyone else. High capital efficiency though.
Except that it appears to have already been implemented in many places and it seems to work just fine. See the Wikipedia article on it.
Seems to be either standard property taxes listed (with a bit of variation) or minor deployments as experiments?
That's the gist of why I was comparing it to communist economics - it works great in small communities, but when either the scale is large, and/or the stakes are high, it will be subject to inefficiency and corruption.
LVT experiments on the small scale have people highly invested in making it work. On the large scale, this will just be a matter of everyday bureaucracy and any competence will revert to the mean.
On the large scale, it will be subject to the exact same corruption seen elsewhere. Certain industries will carve out exceptions to the tax, certain people with influence will get their historical properties excluded, etc.
By and large I've heard of LVT being a replacement for Sales/VAT style taxes. Whilst those are often regressive, at least they are relatively simple, 20% VAT is 20% VAT.
That's the gist of why I was comparing it to communist economics - it works great in small communities, but when either the scale is large, and/or the stakes are high, it will be subject to inefficiency and corruption.
LVT experiments on the small scale have people highly invested in making it work. On the large scale, this will just be a matter of everyday bureaucracy and any competence will revert to the mean.
On the large scale, it will be subject to the exact same corruption seen elsewhere. Certain industries will carve out exceptions to the tax, certain people with influence will get their historical properties excluded, etc.
By and large I've heard of LVT being a replacement for Sales/VAT style taxes. Whilst those are often regressive, at least they are relatively simple, 20% VAT is 20% VAT.
Under LVT, if this house is on useless land in the middle of nowhere they wouldn't owe hardly anything. If they inherited empty land downtown they'd have to sell, but no one is well served by someone destitute hanging on to such land and doing nothing with it.
2018
(2018)
shaggyfrog(4)
LVT has to be mixed with an occupancy tax however. If I own a large field capable of supporting 10 homes right in the middle of the suburbs, I shouldn't be paying the equivalent taxes that 10 households should be paying. You have to separate out the taxes used to pay for services like trash from the taxes meant for ownership of the land. (although you could argue that large parts of the government are needed to service, protect, and legislate ownership of land)
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That's the whole point. If you want to sit on an acre of land in a dense area, you should be taxed at the highest and best value of that land.
You make a valid point about services that can be measured, but the point of a Georgist land value tax is that land is the thing that is least distortionary to tax.
I'm not fully bought in and think a transition would be very difficult, but this is one of the reasons I don't like California's Prop 13 (even if I think all the proposed reforms would leave us in a worse state).
You make a valid point about services that can be measured, but the point of a Georgist land value tax is that land is the thing that is least distortionary to tax.
I'm not fully bought in and think a transition would be very difficult, but this is one of the reasons I don't like California's Prop 13 (even if I think all the proposed reforms would leave us in a worse state).
> If you want to sit on an acre of land in a dense area, you should be taxed at the highest and best value of that land.
Isn't that what property tax already codifies?
Also aren't market forces already essentially doing this? If I sit on an acre of land in a dense area I will have developers knocking at my door and everyone has a price.
Isn't that what property tax already codifies?
Also aren't market forces already essentially doing this? If I sit on an acre of land in a dense area I will have developers knocking at my door and everyone has a price.
This is true (though since land is a finite resource, market forces can also encourage landowners not to sell the land to someone wanting to put it to efficient use now if the shortage of suitable development land in the area is likely to grow worse)
The theory behind LVT is that the increase in a land's value from it becoming the centre of a bustling city should accrue to funds the government spends on the city's population (which helps make land more valuable) and not the person that's sitting on the land
The theory behind LVT is that the increase in a land's value from it becoming the centre of a bustling city should accrue to funds the government spends on the city's population (which helps make land more valuable) and not the person that's sitting on the land
You most certainly should be paying the equivalent of 10 households. You deny 9 others the ability to use the land.
If you have real use for the land, paying the lvt won’t be an issue. If you can’t use it efficiently, an lvt will incentivise you to sell what you don’t use.
If you have real use for the land, paying the lvt won’t be an issue. If you can’t use it efficiently, an lvt will incentivise you to sell what you don’t use.
I disagree, if a town with 1000 households are interspersed with 100 farms, those 100 farms should not be paying an equal amount of money to the town finances as the 1000 households. It just doesn't make sense. They should certainly be paying for the right to have exclusive access to that land, but those 100 farmers do not put as much of a financial strain on the town budget as those 1000 households
> those 100 farms should not be paying an equal amount of money to the town finances as the 1000 households.
If those 100 farms take up the same land area as 1000 households, then yes they absolutely should. Hell, they'll even have an easier time doing so, since they're (ostensibly) using that land productively (and if not, they absolutely should be) and thus be more able to internalize that opportunity cost they've imposed on others.
And if they can't produce enough to internalize that opportunity cost, then all the more reason for someone else to be given the opportunity to do so.
If those 100 farms take up the same land area as 1000 households, then yes they absolutely should. Hell, they'll even have an easier time doing so, since they're (ostensibly) using that land productively (and if not, they absolutely should be) and thus be more able to internalize that opportunity cost they've imposed on others.
And if they can't produce enough to internalize that opportunity cost, then all the more reason for someone else to be given the opportunity to do so.
Would that happen? 100 smallish farms can be a pretty big area, it would be atypical for 1000 additional residences to be mixed in (they would tend to concentrate).
Also, when I lived in a rural township there weren't any household services, the township did things like look after a couple of roads and zoning and had a little park. We had a well and septic and contracted with a private trash hauler.
Also, when I lived in a rural township there weren't any household services, the township did things like look after a couple of roads and zoning and had a little park. We had a well and septic and contracted with a private trash hauler.
They do - if there could be 5000 more households on the land occupied by the farmers, and paying that much more tax revenue to the town, that could be viewed as a financial strain.
It's unlikely that there is pent-up demand for 5000 more households in a rural farm area. Farm land just sits there. It doesn't "cost" the local town/county anything.
> It's unlikely that there is pent-up demand for 5000 more households in a rural farm area.
Okay, then all the more reason for those farms to sell off some unused acres to alleviate what little pent-up demand there is. And if there are no unused acres, then it's best to work on getting more productivity per acre to make some unused acres.
The agricultural sector is in dire need of a kick in the rear to encourage better land efficiency; LVT is one heck of a kick.
> Farm land just sits there.
Then it ain't a farm, in which case all the more reason to sell off that land and make it available to someone else.
> It doesn't "cost" the local town/county anything.
It imposes an opportunity cost on everyone who would more effectively use that land, including other farmers with better methods (and also, more broadly, anyone else wanting places to live and/or work and/or play).
Okay, then all the more reason for those farms to sell off some unused acres to alleviate what little pent-up demand there is. And if there are no unused acres, then it's best to work on getting more productivity per acre to make some unused acres.
The agricultural sector is in dire need of a kick in the rear to encourage better land efficiency; LVT is one heck of a kick.
> Farm land just sits there.
Then it ain't a farm, in which case all the more reason to sell off that land and make it available to someone else.
> It doesn't "cost" the local town/county anything.
It imposes an opportunity cost on everyone who would more effectively use that land, including other farmers with better methods (and also, more broadly, anyone else wanting places to live and/or work and/or play).
> If I own a large field capable of supporting 10 homes right in the middle of the suburbs, I shouldn't be paying the equivalent taxes that 10 households should be paying.
Yes you should, that's literally the entire point of an LVT. If you can generate enough productive economic activity on the land to equal/surpass that of ten households, then the tax is no problem, otherwise you should sell it so the houses can use it better.
Yes you should, that's literally the entire point of an LVT. If you can generate enough productive economic activity on the land to equal/surpass that of ten households, then the tax is no problem, otherwise you should sell it so the houses can use it better.
Not to endorse a particular point of view, but I believe land value taxes are based on assessed land value. If you're saying that your hypothetical land shouldn't pay the tax the neighboring 10 homes are paying, I think the economist would say something like that clearly isn't the most productive use of the land and you should build on it, I guess. Again, not an endorsement, just my view of the argument.
Also I think "occupancy taxes" as referred to by policy people means a tax on unoccupied land/homes (e.g. pied a terre laws). But I could be mistaken.
Also I think "occupancy taxes" as referred to by policy people means a tax on unoccupied land/homes (e.g. pied a terre laws). But I could be mistaken.
> I shouldn't be paying the equivalent taxes that 10 households should be paying
Why not? You may not be making use of the services because of your inefficient use of land, but you do benefit from those services being available in the form of higher land value.
Why not? You may not be making use of the services because of your inefficient use of land, but you do benefit from those services being available in the form of higher land value.
The idea is that once the denser buildings, the value of land from the city centers will also decrease far more rapidly.
There is a temporary transition period when shit is weird because we don't have the density/land value gradient to make farming not suffer. The best thing to do is re-plan where the density ought to be to come up with
> pre_plan(x, y) * current_value(x, y)
But I'm not sure how to do this in a way that isn't a political clusterfuck.
There is a temporary transition period when shit is weird because we don't have the density/land value gradient to make farming not suffer. The best thing to do is re-plan where the density ought to be to come up with
> pre_plan(x, y) * current_value(x, y)
But I'm not sure how to do this in a way that isn't a political clusterfuck.
2. LVT
3. Environmental externality taxes
That's all we need to fix the 21st century. Simple as hell so basically immune to regulatory capture, and will usher in a rate of progress we haven't seen in 100 years, if ever.