"Property taxes currently generate 70 percent of all local tax revenue, some or all of which would have to be replaced with other taxes under property tax
repeal."
And if you DO choose to tax commerce, the effects are lousy.
Even Milton Friedman repeatedly called LVT the "least bad" tax. Too bad he didn't life a finger to support it. Not sure who he was working for, or what pressures he must have been under.
but the upper middle class is relatively small, depending on how you define upper middle class. Nationally, one might say the 15% who are below the 95th percentile (but locally is what matters for the purpose of buying property, and maybe "upper middle" is 60% to 95% of the local ranking).
If one wants children, is planning on children, one wants good public schools for them, and those are generally found in areas with significant population and higher land values. If you can plan around home schooling and one parent staying home to conduct it, rural living may be a great choice. But trips to libraries might be long, and fast internet connections unavailable or unaffordable. Those amenities are available where population is denser.
George was only "radical" because he sought out the root of the existence of involuntary poverty in the midst of riches, and then described a simple way of eradicating it.
Economists employed by universities founded by monopolists understood that their route to security - tenure - did not have room for even mentioning George's ideas to their students. (Witness what the Wharton School at Penn did to Scott Nearing, whose ideas up to that point (1915) were largely Georgist.)
As Thoreau said, "There are a thousand hacking at the branches of evil
to one who is striking at the root." The evil he was referring to is poverty.
George was pointing out the root, and provided the tool for removing it. It's too bad that it hasn't yet been implemented.
It isn't the size of their geographical footprint. Rather, it is the location. Actually, locations, for the individual practitioner: their business and their home. They want to be in a good school district that educates all its students well and sends them to good colleges? They pay for the privilege.
They want to be close to high-paying jobs? They want to be close to highly-paid homeowners? They want to be close to their own workplace? Location, location, location!
But instead of paying the previous owner, who didn't create the land value, they pay the community, year in and year out, for those services.
As housing fads change, some styles will go out of favor. Great rooms replace lots of small rooms.
Technology changes, too, will make some houses obsolete; older roof technology, plumbing, HVAC, inefficient systems, too little insulation and no space for more.
Houses that are obsolete for their location will sell as teardowns. In that situation, the land value is measured by the selling price plus the cost of removing the old house from the site. Assessors can work with those figures very well. Connect the dots from one to the next to the next, and the land value map shapes up.
Those owners may still be living in the homes in which they raised a number of children, near schools they no longer need, near jobs they long ago retired from, with more house than they can afford to heat, cool, clean, maintain, and steps that no longer suit them.
The increase in land value over 30 or 40 years has gifted them with lots of home equity (far more than their principle payments on their mortgage). That's enough funds to downsize from 3 or 4 bedrooms on a 10,000 or 20,000 sf lot to a very fine single-level apartment or condo in a building close to the center of things, a home they can take care of, feel safe in, and perhaps even have services to cater to their current needs, just as the nearness to schools and jobs catered to their needs 30 or 40 years ago.
Meanwhile, young families, particularly those with only one earner, must drive further and further to qualify for a mortgage. They drive not just on their home-hunting trip, but twice a day to commute to jobs close to those family-size homes and well established schools.
And if they do manage to afford a home in those older more central locations, they are paying (in California) multiples of what their neighbors are paying in property tax. Those neighbors raised their kids in a time when people of all ages were contributing to the costs of the schools. Today, the young families pay lots, while the comfortable older ones play little.
And from an environmental POV, having those workers commuting 30 or 40 miles each way each days isn't such a great deal for the environment, or for their quality of life, or for the time they can spend with their children.
See the first page of lvtfan.typepad.com for the story! It goes back to November, 1887, and a speech from a then-judge, later congressman, from California.
As I understand it, what prompted Prop 13, aside from the desire to serve the owners of the best land, was that while land values were rising astronomically, municipalities and elected representatives were eager to serve their constituents, who naturally wanted all the amenities that their governments cared to offer.
And the municipalities -- their local elected representatives -- complied. They didn't reduce the millage rate each year to stay revenue neutral. No, they used those funds to supply those desired public goods.
And as land values rose, taxes rose. And eventually, people whose homes were appreciating by half (or 100% or more) of their annual incomes, increasing their home equity at an awesome rate, started objecting to the taxes that were paying for all those public goods.
Remember that in those days, California's colleges and universities were regarded as among the very best. And they changed a lot of lives, particularly of those in the school districts so well funded by those taxes that were ever-rising because the local officials didn't lower the tax rate to remain revenue neutral.
I don't see any sign that California, under Prop 13, has any resemblance to Georgism.
Take a look at a listing at realtor.com for a home in any California city or suburb, and focus on the "Property History" section, on (1) asking and selling prices; and, under that (2) assessment and tax history. (Choose the "see more" option in each section.) Then look at the assessments vs the current asking price. The land and "additions" figures rise by no more than 2% per year, while the asking and selling prices are far above the assessment on which taxes are based.
"The land value component is re-accessed frequently and changes based on comparables (presumably but its mostly black box)." No, they rise by 2% per year, until a sale takes place, at which point their sum is adjusted to the selling price.
But the house next door, of similar age and condition, but not sold in 20 or 40 years, is receiving a huge subsidy, paying a tiny fraction of what the newly sold neighboring buyers are paying.
Where is the equity in that?
The answer, for other states, is not assessment caps or capping taxes at a certain percentage of assessed value, but reducing the millage rate to remain revenue neutral, unless the local property owners approve a millage rate that is higher than revenue neutral because they actively desire more services, better schools, etc.
As the community grows in population, it behooves people to establish businesses to serve their various needs. This creates prosperity for all those business owners and employees who provide services to maintain and improve their homes, provide them with groceries and entertainment and restaurants and pharmacies. The provision of good transit increases the land value close to its stations; the provision of a highway to higher paying jobs increases the land value close to its exits.
The provision of good emergency services and hospitals and libraries and other amenities raises the land values within their service areas. (They don't raise the value of the buildings.)
Likely true of most taxes, but not true of a tax on land value. Taxing land value heavily causes underused land to either be put to good use or sold, at a reasonable price, to someone who will build on it.
Taxing land value -- that is, collecting the lion's share of the annual rental value of the land for public purposes -- removes the speculative element, and makes it worth only what it is worth FOR USE.
That almost always creates jobs, first for construction, and then to utilize the space. It may create housing, and goodness knows, much of California is in desperate need of housing. And housing creates jobs -- houses and highrises don't maintain themselves.
Virtuous circle --- the opposite of the vicious one that Proposition has created (and which was easy to predict before it was enacted).
If you want jobs and housing, tax land value.
Otherwise, keep California doing what it does now.
If instead of taxing wages, we collect the rental value of the land on which their residences and businesses are located, it is highly unlikely that the land will leave town.
HG was born in Philadelphia (1839); arrived in San Francisco by 1860 or so, and lived in California until early 1880. He wrote "Our Land and Land Policy" and "Progress and Poverty" during that period, as well as owning and editing the SF Daily Evening Post for 4 years between those books. He then moved to NYC, where he lived until his death in 1897.
Dr. Mason Gaffney, the remarkable economics professor at UC Riverside whose work was inspired by the insights of Henry George, has died, at 96. A tribute at https://schalkenbach.org/file-12/wp-content/uploads/2020/07/... provides a sense of the scope of his writings over the course of 75 years. It has links and commentary on many of his writings.
It starts with Henry George's central philosophical principle:
"The equal right of all men to the use of land is as clear as their equal right to breathe the air—it is a right proclaimed by the fact of their existence. For we cannot suppose that some men have a right to be in this world and others no right.
If we are all here by the equal permission of the Creator, we are all here with an equal title to the enjoyment of his bounty— with an equal right to the use of all that nature so impartially offers. This is a right which is natural and inalienable; it is a right which vests in every human being as he enters the world, and which during his continuance in the world can be limited only by the equal rights of others."
source: http://progressandpoverty.org/files/george.henry/pp071.html#...
The corresponding economic principle is that we ought to recognize our equal rights to the earth by collecting all the rental value of land and other natural opportunities as shared public revenue.
Gaffney's work, like Henry George's thought, shows that economics is not a dismal science.
His writing is erudite, witty and hopeful, and provides a perspective most economics majors never get exposed to.
Rural land values will remain low until there is significant economic activity and particular demand for land IN THAT PLACE. To the extent that land, say, 10 or 20 miles away is just as suited for the user's purposes, the next piece of land that comes on the market is quite adequate, and the rural business can locate wherever, not pay a premium.
I am reminded of a famous passage from Henry George's book "Progress and Poverty" (whose subtitle is "An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy") known as The Savannah. http://progressandpoverty.org/files/george.henry/pp042.html, starting at the 10th paragraph (the paragraphs are numbered in this particular file).
Incidentally, George dedicated P&P as follows:
"To those who, seeing the vice and misery that spring from the unequal distribution of wealth and privilege, feel the possibility of a higher social state and would strive for its attainment."
Many people who were first influenced by Henry George's ideas became impatient with the "organicness" of them, and moved to promoting socialism because they thought it would achieve their objectives more quickly. But George was convinced that it had to grow organically.
George Bernard Shaw was perhaps the most famous of them.
Henry George had public debates with several socialists (Serge Shevitch was one - 1887; Henry Hyndman another). They're great reading.
"Property taxes currently generate 70 percent of all local tax revenue, some or all of which would have to be replaced with other taxes under property tax repeal."
And if you DO choose to tax commerce, the effects are lousy.
Even Milton Friedman repeatedly called LVT the "least bad" tax. Too bad he didn't life a finger to support it. Not sure who he was working for, or what pressures he must have been under.