One limitation I have not seen discussed is LVT's self-defeating nature, and it's an important one to figure out if land value taxes are to succeed in practice.
An upside and downside of LVT, depending on your perspective, is that the imposition of a LVT would seriously lower land values. The inverse is also true: removing an established LVT carries a significant upside for the affected landowners. Property that had been acquired for cheap under a LVT would be freed of its shackles and allowed to appreciate again. Some of this would be immediate, as thousands of dollars in taxes shift away from land and back onto labour, enterprise, and commerce, and some of it would be gradual as people resume buying land because land value always goes up (which causes land values to go up). This creates a powerful incentive to undo any progress that a LVT campaign might accomplish.
I doubt that anything short of a revolution would be able to overpower the wealthy landowning class who like their unearned rents and inflated asset values very much thank you, but you don't just need to beat them once, you need to be able to hold their political, economic, and intellectual influence at bay permanently or we end up right back where we started in a matter of years.
You need to fight for keeping any accomplishments you’ve got. US rolled back many child labor regulations, so we have 14 years old killed by sawmills again. It’s not like the US banned children from mines because it was economically more profitable.
I genuinely doubt 14 year olds are being killed on any mass scale by sawmills in the United States. That seems incredibly hyperbolic.
The closest thing I could find was a single 16 year old killed in Wisconsin last year. Very sad, but n=1, and the attribution to 'rolling back' child labour regulations seems spurious (did the previous regulations prevent 16 year olds from working?).
Edit: I'm noting the downvotes, but I stand by this. Just because something plays into your political preconceptions doesn't mean it's true. (We should all be doubly sceptical of spurious factoids that just so happen to perfectly align with our political views!)
- The 16 year old in Wisconsin you found
- 16 year old in Mississippi last July: https://www.nytimes.com/2024/01/16/business/mississippi-marj...
- Iowa allowing teens 14.5+ years old to drive to work. https://www.iowapublicradio.org/state-government-news/2024-0...
- 15 year old in Alabama: https://x.com/greenhousenyt/status/1755262697602523319- 16 year old loses both legs in Washington: https://www.lni.wa.gov/news-events/article/24-01
This was with a few minutes of searching. You have to filter out child labor deaths abroad and other breaking news, but the deaths are there and they're increasing.
Note that for each death that results in a successful lawsuit, you should assume there are other deaths happening where the family either (1) couldn't afford to bring a case, (2) agreed to private settlement, or even (3) it just didn't get big enough to make the broader news.
We’re up to three terribly sad anecdotes. Even if we multiply that by a hundred to account for the shadow deaths you mention, we’re still nowhere near a mass epidemic in a country of over 300 million.
The claim, though, was that rolling back labour law has led to the situation deteriorating, so we would need statistics from today, to compare with statistics from the 1970s, 1950s, etc. Are children dying at work at a higher rate today than they did in 1950? 1970?
We don't need death statistics to know that children working with poverty wages to make rich people richer is bad.
Your argument is that unless we have thousands dying, it's fine?
I don't understand why people are even arguing this. Children working is never going to make society better. It might make more money for a few, but that's about it.
I honestly can't believe I'm seeing people arguing against child labor laws. I thought this was the kind of thing that you'd read in books and think "those were crazy times" but never witness it, yet here we are.
Do you think work experience itself has any benefit to young people?
Do you think there's any benefit from the population of "young people with experience" being 16 instead of 20?
Do you think it outweighs those involved having a higher risk of maiming for lower compensation?
No. It's pretty much always a result of another system failing. We're not talking about a kid helping out in their mom and pop's shop. We're talking about kids working in meat plants because it's cheap labor.
If they have to work to help out with money, then our system has failed in providing an adequate environment for a kid to grow up.
If a child wants to learn a craft or pick up specific skills, that should not be done in a work environment that can put them in danger. Again, that's another failure of the system.
Most of us already have to basically work until death since they can't ever properly retire, so I see zero benefits in forcing humans that are still developing into that reality even sooner.
And where are you seeing these people, exactly?
My argument is that the claim “winding back labour law has caused a rise in workplace deaths involving children in sawmills” is unsupported by any statistical evidence, and very likely false. There are no statistics that support this claim.
False assertions are no way to debate about policy, provided we want good policy that is actually effective at keeping people safe. Such policy must be evidence based, and not vibes and feels based.
You’re battling a strawman of your own creation.
Okay, let's assume then all this thread is about being pedantic, and not because you're actually against child labor laws. My bad.
Still not sure how sending kids to work will increase their safety. You've mentioned evidence but I've never seen any evidence that supports it increases their safety. We've seen evidence it can decrease their safety since some are killed/injured, even if you dismissed it as not statistically relevant.
So in the end, this goes both ways: we don't have evidence that allowing kids to work improves their lives or society, making it a bad policy.
My guess these policies were based on greed, not "vibes". Clearly better, right?
Its interesting that the takeaway here is that teenagers are too fragile to do a job and must forego learning a new skill. Is the idea really that it's okay to die on the job as long as you are 18 or older?
Roofing companies shouldn't have anyone falling off the roof, there are OSHA regulations for a reason. 16 year olds being bad drivers has nothing to do with their employmwnt status. Using trenchers is dangerous no matter who you are, that isn't age related and if we are collectively concerned with how much damage they can do we should not use the machines.
Protecting and teaching kids is totally reasonable, but how far down the path of trapping them in a bubble do we really want to go?
As a global society we've generally agreed that if you are under the age of 18 you are not grown enough to make decisions that could put yourself or society at risk.
- You cannot sign up for the military, even though you might know how to aim and fire a weapon.
- You cannot vote in elections.
- You cannot purchase nicotine, alcohol, or other drugs. (In the USA this age is higher at 21)
So the takeaway is that yes, teenagers are too fragile and don't have the risk assessment capacity to work some of these dangerous jobs.
Yes, we have OSHA and other safety regulations. Still the jobs are dangerous. Adults are more likely to call this out or recognize when these regulations are being disregarded, but a 14 year old might not realize that what they are doing is more dangerous than it should be.
What "global society" is this? Most of the world by numbers doesn't seem to have signed on to this agreement. Well-off countries may have made child labor largely illegal, though some of it persists inside their borders, but this just moves most of it offshore. Not that the places where it lands didn't have child labor before, but the scale of their operations grow with exports and industrialization.
You can sign up for the military in the USA at 17 with parental permission; you can't be sent overseas until you're 19 in that case (IIRC).
These two are both linked. In the US, military enrollment age was 20-45 (The Enrollment Act). Around the two world wars it was lowered to 18, primarily because they didn't have enough troops and most kids graduated high school at 18.
The 26th amendment set the voting age to 18 because that's what the draft age was already set to.
Neither had anything directly to do with developmental differences by age. The first followed social norms for schooling age and the second just followed along.
There are many studies showing the risks of consuming these chemicals are much higher for people under the age of around 20. I don't know if those data were known before age limits were set, but there is a good reason to keep it today that has nothing to do with teenagers' ability to make decisions. Alternatively, I'd be just as happy seeing these also removed and us better teaching kids what the risks are so they can make their own decisions.
Lots of kids die at school too.
Yes and for this exact reason, many argue for better gun safety regulations. I grew up before mass shootings became a daily occurrence (this is not hyperbole), but I still had at least one classmate in Junior High and HS die every year from gun related deaths. Either being shot and killed intentionally by a friend's parent or from suicide using their parent's gun.
- Washington: "Washington’s youth employment laws identify prohibited duties for workers under 18 years old. Rotschy had a student learner exemption permitting minors to do some work that is otherwise prohibited, but use of the walk-behind trencher was not part of the exemption."
-Alabama: "The department’s Wage and Hour Division found Apex Roofing illegally employed the teen in violation of a Fair Labor Standards Act child labor hazardous occupation order that prohibits workers under the age of 18 from engaging in dangerous jobs designated by the act, including roofing or construction operations."
-Iowa : I would like to see data that shows the crash rate for teens going to/from work vs general teen driving.
In half of the examples, the company was having the worker do prohibited work. If the company is breaking the law, how does the fact that labor laws were changed affect that?
They’re using hyperbole to illustrate the point; don’t miss the point or deliberately try to derail the conversation.
I would judge that someone falsely claiming that 14 year olds are being killed in sawmills as a result of policy changes they dislike is the one deliberately trying to derail the conversation more than someone who correctly claims "no, that is false".
The burden of proof is certainly on the person claiming there's an increase in child labor death. However just because they didn't provide proof doesn't make the claim "false".
The increase in child labor-related deaths is happening and will continue as child labor laws are rolled back in states across the US.
You’re accepting the claim because you already believe it to be true, but both you and the original person making the claim have no evidence for this. This is a very dangerous style of political argument. “Well, there are no facts here, but this claim reinforces my already existing beliefs, so the vibes check out!”
We want policy around workplace safety to be evidence based, not vibes and feels based, because the former will save lives and the latter will not.
Fair. I am willing to wait for evidence that a 14 year old was killed in a sawmill as a result of these policy changes before cementing my conclusion that it was a false claim.
Hyperbole is by definition false, its use illustrates nothing beyond the speaker's willingness to stretch the truth.
In this case, to make political claims. Ought we organise our societies on the basis of political claims 'illustrated' by bombastic falsehoods?
We are already so high up this tree you can no longer see the ground. There, one more hyperbolic falsehood for you.
The use of hyperbole is actually misses the point and derails the conversation.
If a point is valid and clear hyperbole isn't needed. Concerns over children dying in job related accidents or being made to work extreme hours or in bad conditions is a fine point. Children falling into sawmills just muddies the waters and will draw in people who disagree that that is a concern at all.
...because in small scale, instead, would be acceptable?!
Because it’s generally a bad idea to legislate for over a third of a billion of humans on the basis of rare freak accidents.
I do not think teenagers represents 333 millions people in the U.S.A.
Yes, that sawmill incident was with 16-year-old, but there are more at other industries. E.g. WI regulations were relaxed to allow 14-years-old work 40 hour weeks as well part of the year. If there is not enough pushback fatalities are a matter of time.
How many 14 year olds getting a job even find a sawmill or a mine to apply to in the US?
Concerns over child labor when working at McDonalds or Walmart is one thing, but it's a real stretch to go straight to 14 year olds dying in sawmill accidents.
Indeed, these days it's more likely to be meatpacking or auto parts
Saw mill, industrial lathe, or spot welder; I'm not sure it matters too much which one of these is killing desperate and poor children being abused for profit
Do you have any stats on how many children are actually dying in these ways, and whether it is in fact disproportionately hurting the poor?
I have a hard time believing many children are dying in this way in the US today but I'm happy to be wrong and learn something new if there is real data there.
Looks like the current stats are focused more on the 69% increase from '19 to '22 in illegally employed children across the US. [1] (https://www.dol.gov/newsroom/releases/whd/whd20220729)
Actually, that report includes a few examples of children killed on the job. Like a 16 year old who died while working in construction, he fell about 160 feet to the ground after trying to jump from a roof to a nearby powered lift. In Nashville. [2] (same link as [1])
It also details the rise in children being employed to do hazardous labor.
Killed in sawmills is a bit of hyperbole, but it's not far off from the truth it seems.
That report basically includes a few anecdotes without data though, plus data that actually could go against the idea the regulations are the fix. If the stats are showing how many children are illegally employed it really has no basis on whether existing regulations or rollbacks made a difference, the employers and the kids weren't trying to follow the law.
You're absolutely right, it's not a report. It's a press release.
I did dig and found another news article about the anecdote included.
https://www.wkrn.com/news/local-news/nashville-family-advoca...
It looks like there is a discrepancy between State and Federal law, so the employers may indeed be acting in a twisted version of good faith. Despite the fact that Federal law supersedes state law. [2] https://www.shrm.org/topics-tools/news/all-things-work/child...
I'm not implying regulations are the fix, I just think it's a little fucked up.
Or dangerous agricultural work like picking and processing tobacco.
it was indirectly more profitable. no child labor -> children would have no distractions for grade school -> more chldren graduate -> graduates tend to contribute more to the national economy.
At least that was the theory. Clearly private lobbyists and various interests groups who want to erode the country don't care about such factors.
Exactly: Child labor laws are more profitable for society; child labor is more profitable for a small set of individuals. Lobbying by interest groups is often pushing away from the former and towards the latter.
ETA: In line with this sub-thread, I'd say: There are and always will be private interest groups lobbying against the former and towards the latter; and so there will always need to be public interest groups lobbying against the latter and towards the former. That applies to LVT as much as environmental and labor protections.
ETA?
"Edit to Add" I think.
As does a healthy middle class who get what they want (e.g. homeownership).
AFAIK modern capitalism doesn't incentivise behaviours that cause broad economic growth over a long period without any short-term profit. That's what governments are needed for.
Unearned rents? Do you consider the salary you work for an unearned social benefit?
I inherited three properties. I pay a property management company to do everything on them, all I get is a regular check in the mail. Please explain how I have earned this?
Life is uneven like that. Try to make the best of it.
I am completely healthy while some are born into wheelchairs. I did not earn any of it.
You didn't answer the question.
Just saying that’s life. Earning is a useless question.
"Earning" something is not a useless question. As someone who's had things stolen from me before, a large part of the anger comes from feeling like someone took something that you earned through hard work. It's a big reason we criminalise and punish things the way we do as a society.
I know the feeling, yet you did not earn shit. You were on the right side of lucky and we tell ourselves stories of justice.
Your health isn't a limited, shared resource
No, but this matters how? It’s just an example of life being unfair.
It's completely different: land is a limited resource, so one person inheriting it prevents another person from having it.
Useless then, because it's not analogous
how did you get the cash to pay said property manager? How did your ancestor get to own the property in the first place?
Nothing is unearned, except perhaps gov't welfare.
He said he'd give them a cut of the rent.
So his parents earned it, not him.
His parents worked hard and earned it so they could do with it what they like - such as benefiting their children. Nothing wrong with that.
The trouble with this is it's a playbook for huge inequality. If there is very little cost to holding onto land, then as soon as someone accrues some, it never leaves their family tree. For example, do you believe that the Duke of Westminster should be the beneficiary of his aristocratic ancestors? He is literally living off of land accrued hundreds of years ago.
Or they took it by force, or stole it.
Doing genealogy, one of the most interesting ancestors I have actually got mentioned in a discussion in parliament for his real estate shenanigans. His wife had inherited some small but vaguely defined land from her first husband. He then became mayor and land assessor, and drew up ridiculously generous borders (and low tax assessments) for that land. No one thought to stop him. At one point during a sale, some officials had commented that they couldn't find that he had title to this land, but they didn't follow up. By the time they complained about it in parliament, it was two generations and many land transfers ago so they didn't think it was worth it to try to unwind it.
Doesn't this mean that the problem is inheritance, not (only) land ownership? But I imagine taximg inheritance is very unpopular with everyone.
Nothing is earned, except perhaps the fruits of one's labor.
I think it is important not to take a moralistic lens to these topics but rather a more systemic approach.
Sure, but when people propose a land value tax it's because morally, they've come to the conclusion that the current system is unjust. Systemic changes need to originate somewhere, right?
Yes, but that does not need to be morals, values, ethics or ideology.
Instead I prefer Kant´s idea of the categorical imperative whereby the question only is if a society following specific rules would satisfy its members long term. It is more pragmatic as it shifts the question from should/shouldn't to does it work out.
LVT satisfies the categorical imperative. If I didn't know whether I'd be born as a landless serf (very high chance) or born to inherit wealth (low chance), then I should prefer to be born into a society with an LVT, since the LVT distributes the land rent to everyone.
you want a dictatorship? that's how you get a dictatorship.
I am not going to speak for others, but one can argue for LVT as a more functional system
https://www.astralcodexten.com/p/does-georgism-work-is-land-...
Didn't the previous owners want you to to inherit their properties? As long as they did, you must have done something to have earned this inheritance, with or without you being aware (e.g. being born to or adopted by them).
If they didn't want you to inherit them, presumably they would have done something about that.
Just admit that the world isn't fair and that some people are lucky and you don't live in a meritocracy, please.
You haven't earned it, your ancestors did. But your inheritance of this property is only a small fraction of your unearned benefits. Ask a dung beetle how fair life is.
then live to your own standards and give it away. This all just virtue signaling until you actually so something with your (not very strongly held) values.
Luck is part of part -- in economics we call it risk. And without risk there is no economic development.
Somebody in your past took a risk and passed profits from that risk down to you. Trying to take the ability to pass that down is both immoral and bad economics.
Someone earns a salary by working. By when land appreciates in value, it's not usually because of the work _you_ put in, but the work others did.
Like, if I found a tech startup that grows big in a small town, homes in that town will increase in value because people want to work at my company. The landowners did nothing for that value.
The value of land is the result of the productivity of society and the bounty of nature. Would you consider the massive growth in property values over the last 30 years an earned benefit? What have landowners done to deserve this bounty besides owning an irreproducible asset? An empty lot held out of productive use will appreciate just as much as the same land put to productive use as the city around it grows and technology advances.
On the contrary, I consider the wages of labour and the return on capital to be the actual earned benefits. Yet these are the things we tax. So the wealthy claim no income, hold their assets, and never realize capital gains, and multinationals play accounting games and pretend that all of their profits happen in the lowest international tax jurisdiction. Sales taxes and personal income taxes end up being the majority of government revenue.
Land value taxes are much harder to avoid, they reward investment by not taxing it, and they promote efficient use of the land, which is the one thing that you need to do anything and the only thing that we can't get any more of.
Oh not again with the trickle-down story. It doesn't work, it never worked.
The only way that money trickles is in the pockets of the landowners, from there it will be used to lobby politicians or stored in some fiscal haven.
On the other hand, as long as that money is taxed it can be used by the state for the people. Build infrastructure, improve education, healthcare, etc.
That's how you get money to "trickle down". That is, of course, if the state isn't to o busy making arms manufacturers rich.
If you won't trust in the state parentally taking from some and giving to others, nor trust in people making transactions between each other on what they find valuable, what do you want? Is there a third option?
I don't see any other option. We should remember that we are the state, in theory. It's the whole point of a state. If that isn't the case anymore, we should fix it.
The main problem is that nowadays states operate on the basis of the same false trickle-down fable.
They don't build stuff, they pay corporations to do it for them and expect that money to somehow flow down to the people. We can clearly see that doesn't happen as inequality keeps growing.
We aren't the state, though. The state is the governing body and its surrounding entities, funded through taxes, that controls the justice system and the military.
I don't think it's a good idea to conflate "the state" and "the country" or "society". The state is the most powerful entity in the country, but it's not the only one.
And I've probably said this elsewhere, but inequality is not important. We keep hearing about it every day, so it sounds important, but it's not. Unless it's being done deliberately to keep people down, e.g. in a feudal or 20th century socialism country, but even then the fundamental problem is authoritarianism, not inequality. Inequality is a symptom, and not always of something bad.
I don't care that Tesla owners in the early 2010s had Roadsters and I didn't. Roadsters paved the way for Model Ss, which paved the way for Model 3s, which - if the Cybertruck hadn't got in the way - paved the way for Model 2s.
I don't care that at some point in history only rich people had (terrible) glasses. Basically everyone (outside of impoverished countries whose government officials absorb the cash from overseas to help) now has access to high quality lenses - far better than those the rich people of the past could access.
Temporary inequality leads to - over time - an uplift of the fundamental things for everyone. That's the only thing that matters - the baseline now vs what it used to be. Not the difference between baseline and the rich. The rich will spend on a thousand trivial things that won't matter, but also on things that will eventually be accessible to everyone.
Whatever your views, this is simply wrong.
A state that controls its own currency doesn’t need taxes.
They only exist to control inflation. We could achieve the same thing with high interest rate, printing all the money we need and having zero tax on anything.
Taking out loans creates money, including when private banks do it. That’s what national debt does too.
The currency only has value because of taxes.
This is the first time I've encountered anybody else who has figured this out and says it openly.
For those who wonder how: If it wasn't for taxes being collected in the currency of the government, people and businesses would conduct their affairs in other currencies that do not decrease in value from inflation. That's also the reason why there will never be any simple taxation system, such as land value tax or whatnot. In order to keep everybody using the government currency, the taxes demanded in that currency has to be applied to every and any economic activity imaginable, otherwise people will flock to other currencies after having paid their dues, and the government currency value collapses.
This is also the reason why the public sector workforce is of an enormous size, even in supposedly capitalist countries. Public sector workers cannot choose another currency for their paycheck.
This is the reason why most third world countries cannot create a stable government currency: Their tax collection is not effective or comprehensive enough. Unless all the population is put under government issued money by rigorous taxation, they will choose other currency.
Also why cryptocurrency will never replace fiat currency. Not that it was ever really meant to, but you know.
A cryptocurrency where all the voting nodes are run by the state could fulfill the same objective. The problem is that cryptocurrencies as we know them are based upon a publicly verifiable ledger. Inevitably, the state would want an "off the books" way to move money around, which would lead to a shadow currency, and the resulting disequilibrium would destabilize either the state or the "official" currency.
Wut? This is one of the basic principles of Modern Monetary Theory, and reams upon reams have been written on it.
https://en.wikipedia.org/wiki/Modern_monetary_theory
What do you mean - if US government cuts taxes, value of USD goes down?
Definitely. There would be more dollars in circulation for a start. Ultimately the government is the final "sink" for dollars in the system. That and loan repayments (but unlike taxes, loan repayments could be made in any currency).
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
That's literally in the constitution and not just that of the USA.
Rich people do care, they want the best healthcare the world can provide, the best education for their children, and want it now, not in 50 years when the "rising tide lifts all boats". Do you consider yourself inferior to them? Then why wouldn't you care?
"A rising tide lifts all boats", "Trickle down" these are all aphorisms invented by rich people in order to justify their hoarding while there are people who can't afford a roof over their heads. To keep the outcasts calm, waiting for their turn to enjoy a small fraction of what others enjoy entirely now.
I don't see how this is relevant to whether the state is synonymous with the population of a country.
I don't consider "inferior" to be "I don't have a Porsche and they do". Or even "I can't force taxpayers to pay for a $10m operation and followup treatment and someone else can afford it out of the value they've created", which I think is what you're thinking I should say.
Is that what you're saying? Happy to discuss, but you seem to be talking in emotive language rather than speaking plainly, and I'm just trying to get at the a plain description of what you mean.
You keep fixating on luxury cars for some reason, I'm talking about fundamental rights recognized in the universal declaration of human rights. I couldn't care less about owning a Porsche or a Tesla.
I care about the health and education of my family and I don't want to live in a society where people die because of lack of treatments. You say "a $10m operation", I'm sorry to say that shows again you're out of touch. People die every day because they can't afford insulin, which costs about $3 per vial to produce.
In a functional democracy, the state is working in the best interest of the people. And your assertion that GP is arguing that the state is "synonymous with the population" is a straw man, as they didn't say that.
Let's look at the phrase "value they've created" that you used. That's a bit of an idealistic way of thinking. After all those with money and power in society have historically used that money and power to get more money and power. Does a king sitting on a throne produce more "value" than the farmers that feed his cities? Does the hedge fund manager choosing stocks to buy and companies to liquidate produce more value than doctors who save people's lives?
It's not about taking versus not taking. The rules of the game that we've put in place favor the haves. The end state of that is a return to fiefs and serfs, if we don't see a revolution first.
We need to create new rules to the game that give the advantage to the small. That lets us keep a "free market" without the homogenization and consolidation. For example, consider progressive taxes based on business size/revenue/etc. If there was a 90% top level corporate tax rate based on company size/revenue, we'd reverse the trend towards mergers and consolidations literally overnight. If most government regulations were relaxed for small businesses (say <= 20 employees) it would provide a massive boost to entrepreneurship. Instead we have rules that favor the big guys.
It would boost entrepreneurship, but would mean any business that requires 1000 people to function at all may never be built. I don't think it's worth only listing the pros of a change.
Can you provide an example of something that couldn't be built by a cooperative formed by a number of smaller companies, each trying to solve a part of the problem in an economically viable way?
- Products that significantly benefit from vertical integration like Tesla and iPhone
- Apple throwing around their 800lb gorilla weight to have better user privacy and bankroll TSMC’s latest process node
- Apple being able to afford gigantic SoC dies in iPhone, compared to android where manufacturers nickel and dime on the SoC and users get flaming pieces of shit clocked to high heaven
I don't think there is anything that can't be built. It's me a matter of the increased expense and inefficiency making things too expensive to be practical.
That's not how it works. The state is tasked with keeping the public good - such as basic infrastructure. "Parentally (...) giving to others" imply that the government taxes your money to do welfare only (and you implied it in a derogatory manner for that matter, which shows your inclinations).
Welfare is important, but not the only function of a government.
Those should absolutely be regulated and taxed. "people making transactions between each other on what they find valuable" are looking only for their private benefit, society be damned.
We absolutely should not be restricting any mutually voluntary interaction, regardless of the motivations of those party to that interaction.
Note that "mutually voluntary" means no other party having their rights violated by that interaction, which would preclude actions like polluting
I don't think this is a rights issue, because it's too difficult to understand. Even simple transactions require contracts, and imagine all the (changing) regulations on what is or isn't deemed acceptable, and how that could be misused. Does noise pollution count? How much CO2 can I breath out before I'm violating your rights? Rights have to be simple; the stuff that will change needs to be laws.
No - this is in the context of the constrasting "trickle down" theory (also derogatory). I took that to mean that instead of trickling down, we should be taking from people who produce the most value and giving it to others. Not we should replace trickle down theory with infrastructure spending - those are not related.
Those people are society. Babysitters earning some pocket money; local tradespeople doing jobs; actual community things like churches and running clubs and schools and game cafes; local produce creators. Stuff to spend on locally. That's what makes up society, and those transactions are how it happens.
Society is not a bureaucrat allocating some funds to spend on a committee to decide how round bananas are allowed to be, or whether all children should learn new math or old math, the teacher's opinion be damned. The state is not society.
Especially since there is no new value generated that could trickle down. Such "rent seeking" is only redistribution towards lend owners.
I think you must have misread the comment. The comment is very clearly anti-landowner and saying if an LVT were repealed, labour and enterprise would be taxed instead, which is bad.
Nothing to do with trickle down.
Indeed, tax is the single most effective measure so far we've found to trickle money out of the rich, and sometimes to the benefit of the poor.
I read that part not as "trickle-down", but as "the tax would have to be collected from other sources".
The end state for trickle down economics is serfs and fiefdoms. We're seeing it now.
The easiest answer to this is a very slow phase in. LVT doesn't need to be 100%. You can start it at 1% and have it set to increase slowly over time. This means that, for currenty owners, it will come into effect so slowly that it doesn't matter. You can even phase it in so slowly that on the timelines that they might want to sell it, it doesn't matter too much. And, at every point along that phase in, you get incremental improvements.
This doesn't resolve the ongoing incentive to remove the LVT, creating immediate value for the current land-owners.
What you describe applies to pretty much any tax on any asset.
E.g. "if you tax bitcoin as capital gains that will only create an incentive to remove it because then the value of bitcoin will go up."
A proper analogy would be a yearly tax on bitcoin sitting idly in your wallet, not a capital gains tax. Land is already subject to capital gains tax.
Yes, however I'd argue that land, maybe more than other property, is one of the main property rights that government exists to enforce. If the land value tax becomes a land property rights enforcement subscription payment, maybe it makes more sense to have it be an annual payment so that the government (courts, cops, etc) makes sure others respect that you own the land.
Property taxes and property ownership are fundamentally at odds with each other.
Fundamental rights should never be taxed and the government should never be able to take them away from us. If either of those are true then it's a privilege not a right.
As soon as a government can tax me just for owning a piece of land, rather than for the original purchase of the land or the produces I make and sell from the land, I no longer have a right to property ownership. At that point I am effectively renting the land from the government.
That landlord can take the land back if I don't pay my taxes. They can even kick me off the land if they decide they need it, graciously throwing some money at me based on whatever they think my claim to ownership is worth while they send me packing.
This makes absolutely no sense.
Property is not a fundamental right and never has been. Firstly, a huge number of people do not own land (which an LTV would apply to) so in declaring it a fundamental right, you'd need to start thinking about how to get land to those people. Good luck doing that without violating the "fundamental right" of the existing property owners.
Secondly, many cultures (past and present) simply don't recognise property rights in the way outlined in the legal codes of western governments. Traveller communities & nomadic tribes, for example, have far fuzzier concepts of property ownership than you or I understand.
To be clear I'm talking about the US here. I actually very much align with the views of some other cultures where land can not be owned at all. I'd much prefer that model, it just isn't what we have today.
For something to be a right means that we are each entitled to it simply by being human [1]. Free speech, for example, is a right that isn't supposed to be infringed upon regardless of what you say.
Privledges come with strings attached. you have the opportunity to drive a car but not the right to do so. You have to be licensed, you have to pay taxes, you have to register your vehicle, etc. If you don't follow the rules you may lose that privledge.
Many of the US founding fathers wrote extensively about the importance of property rights [2]. They also viewed slaves as property and took land from loyalists after the revolutionary war was over, so by no means am I saying they were perfect. The history of the right to property ownership literally goes back to the creation of our country though.
The right to own property doesn't mean that everyone must own some though, I'm not sure where you're getting that. The government doesn't have to ensure that everyone does own land, only that everyone can own land.
[1] https://helpfulprofessor.com/rights-vs-privileges/ [2] https://www.hillsdale.edu/educational-outreach/free-market-f...
So let's look at the United States. By your definition, this "property right" is still not fundamental, as Property Tax seems to be a thing. [1]
According to the US Constitution, property is outlined as a right but not inalienable. Clearly it's possible for governments to take property with due process (i.e. a process written down) and they don't mention taxing them at all. Article 17 of the Universal Declaration of Human Rights also doesn't mention taxation, so I still don't see how any of this supports your argument that property taxes violate property rights.
[1] https://en.wikipedia.org/wiki/Property_tax_in_the_United_Sta...
That was actually the core of the original point I was trying to get at, I may have just done a poor job explaining it.
Property ownership should be a fundamental right in my opinion, and at least based on their writing that's an opinion shared by our country's founders.
The existence of property taxes and the state's power to claim eminent domain both show that it isn't treated as a right.
Well clearly that is how it is being handled today, but that doesn't mean it should be that way. Though rare, you will occasionally find stories of individuals who's land was taken by the government ad the person is effectively thrown out on their ass. I don't think that should ever be possible, I don't care what the government would like to use the land for.
I actually saw this happen just a few years ago. The cities of Orange Beach and Gulf Shores, aong with the Alabama stage government, were all fighting over where a new bridge to the barrier island should go and who would get to tax it. A plan was drawn up putting the bridge on part of the canal where homes already existed on both sides.
The owners were forced out and given under market rate for the houses. This was in 2017 or so if I remember right, property value there has gone crazy in recent years meaning they also lost all that potential growth in value. Anyway, the legal fight over the bridge ultimately swung a different way and the homes were taken only to sit vacant and abandoned as the bridge is now going elsewhere.
This should never happen in my opinion, plain and simple. If I lawfully own a piece of land and followed all the rules the government shouldn't be able to kick me out and effectively use my land as a piece on a political game board.
You say that the government should never be able to take away land from us that we own. But what if they take away the services that guarantee other people don't take away that land from us?
In that way, they're not taking the land, they're just ceasing to provide police officers, judges, courts, etc., to ensure no one else takes the land.
I think I agree with you in theory, that if we own it, we own it, and yet I think "owning" something is a social construct protected by institutions doing services.
It almost seems like the debate in software where companies have often shifted to subscription SaaS models and customers want to be able to own the software outright. And customers say they don't want updates, but often they still want security updates and for as long as the product exists, which is an ongoing service software companies provide, not so dissimilar to services governments might provide to protect land.
In other words, if I buy a plot of land, does that entitle me to 10 years of someone defending my land borders? 100? 1,000? And if not and i have to defend those borders myself, do we really have government property rights or lots of individuals with guns saying who owns which property?
I dont think it HAS to be paid with property taxes, but i also dont think the concept of infinite ownership makes sense either.
Are governments really protecting our land borders in that situation though, or protecting their monopoly such that they are the only ones who can take it from us? Governments can absolutely protect our borders, my only issue is that it should be universal and governments should also be ensuring that even they can't strip us of land that we own based on the existing laws and social contracts that are fundamental to our society.
I totally agree that land ownership is propped up on by social contracts, and that we have institutions meant to enforce those contract. I'd be okay with getting rid of land ownership entirely if it also meant getting rid of all those centralized powers that are supposed to defend it but sometimes do the opposite.
SIdenote: this is the case right now in Netherlands (and 2 or 3 other European countries) and has been for decades. They tax capital value instead of capital gains value.
So, if you bought $100K of bitcoin, then 10 years later the value of bitcoin drops by 50% you not only lost $50K you also paid taxes just for possession of the bitcoin? That seems awful. It'd also incentivize a lot of people to get "hacked" and lose their bitcoin.
This pattern has been observed in practice, such as in France: https://en.wikipedia.org/wiki/Wealth_tax#Capital_flight
Sometimes there's only a single tax allowed. Like in the US the federal government can only tax income unless they change the constitution.
LVT as the single tax would be much harder to repeal.
This is close to, but not entirely, true. The US federal government also has the power to levy direct capitation taxes (taxes that are effectively constant per-person without regard to any other factors).
In practice, those taxes are impractically regressive, but the federal government does have that power under the Constitution.
This is a pretty weak argument, in my opinion: "we shouldn't do this because powerful people who don't benefit will try to undo it."
It's not an argument not to do it. I'm just pointing out that it isn't enough to make the world a better place, you need to have a plan ready for how to keep it that way or we just get captured again.
Guillotining a few of the more obnoxious ones every couple generations should do the trick.
In olden days when chopping of heads was more acceptable, smart people understood that "debt relief" was a way to somehow decrease a chance of loosing they'r heads :)
Now, when technology (military) enables to control the masses more strictly this approach has fallen in popularity.
https://en.wikipedia.org/wiki/History_of_debt_relief
Sure there are ways it could technically be implemented, but that doesn't say whether it should be implemented. Why is an LVT inheritly good for us? And is it so good that we should trick the public into not realizing a new tax was forced on them and the government was stealing more of their money?
There are more than enough words spilled on the first topic by better writers than myself. If you click around the archives of the substack the linked article is from, you will find plenty. As for the second point: usually LVT is proposed as a more efficient alternative to current taxes, not as an entirely new tax on top of all the currently existing taxes.
In fact, there are people in this thread (inaccurately) accusing the author of being a "single taxer", since there are some Georgists who believe that an LVT could potentially be the only tax.
This comment is a bit surprising to me. Your point seems to be that strong policies which impose significant good will face significant resistance and so there's no point doing them.
I don't think that makes any sense. Workers rights, regulations around dumping waste, capital gains taxes... There are a lot of things that we already have which some people with power have a strong incentive to remove. We had to fight to implement and to keep these, but goddamnit is it worth it!
I don't see why we shouldn't be optimistic here because historically speaking things have gotten much much better! To me, a gradual and consistent ramping up lvt would be probably the most progressive policy a country could pass at this point :D
The problem (and for the record I favor LVT myself) is that many of the other things you mention -- the 8 hour workday, environmental regs, etc. -- have clear positive effects that an average person doesn't have to take action to benefit from. If you tried to take them away, people would notice and object.
For a typical homeowner, the effect of LVT would be pretty neutral, by design. Proposals I've seen advocate changing the _distribution_ of single-family home taxes between land and improvements, but not the _total_.
Yes, LVT would discourage speculators from buying land as an investment without improving it, which is a societal good. But it's not direct and short term like many of your other examples.
I think GP's point stands that rolling back LVT would be highly desired by big landowners (who could then return to do-nothing land appreciation and rents for their profits rather than be required to actually _do something_ with the land to earn over its taxed value), while the average Jane couldn't care less, because it wouldn't really impact her tax bill.
That sort of situation is not stable long term. To make it more stable, you'd need to set it up so that LVT lowered the average voter's tax bill. I'm not sure how feasible that is.
Depending on who you ask, LVT would ideally replace all taxes, including income, so the property tax bill would be the only tax you paid. In this scenario, getting rid of LVT would be a significant undertaking, and very noticeable.
This is no longer actually possible. LVT at 100% generates less revenue than all other methods of taxation combined across all levels of government. This was the original idea but government is now too large for it.
Why do you think it's no longer possible? What does the size of the government have to do with tax rates of land?
If you add up the value of all the land, how does it compare to the budget of the government.
If the budget is, say, 100% of the value of the land, you're stuffed? I mean, obviously you can set a tax rate as multiples of value but land almost immediately becomes worthless and all multiples of 0 are 0.
Where would all the people go to live, out to the ocean?
I only give away the land, not the property on it. I assume in the real world we'd get some financial engineering to holding companies and peppercorn rents and so on - but as with every other tax there is a simply an inflection point where receipts drop to zero (if you tax income at 100%, people will simply stop working).
Joseph Stiglitz proved what he called the Henry George Theorem which shows basically that useful government expenses will always show up as increased land value that matches or exceeds the cost.
Unfortunately, it is true that a fair amount of government expenses are not useful. (i.e. do not constitute a public good in the economic sense)
If we eliminated all other methods of taxation, what do you think would happen to rents? Would they increase, decrease, or stay the same? How do you think this affects the amount collected through a Land Value Tax?
I think the average person actually cares an incredible amount about property taxes, especially when it comes to local politics. Local news stations talk all the time about "property tax relief", and there's a general sentiment from just about everyone involved in local politics that property taxes are a useless drain. Which in some cases they are - property taxes really only "work" when they roughly approximate LVT, but it leaves suburbanites feeling overtaxed (because they are, compared to the value of their land) and they have massive political power.
I think that if LVT was simply touted as a "Property Tax Relief Plan", you could make it have massive, massive support. It wouldn't be perfect, but you could give eveyr single person a massive tax credit based on what LVT revenues would bring in, and make up for that tax credit with the LVT.
For example - if you lived in a city of 100,000, and total LVTs bring in $200,000,000, you could give every single person a $2000 "Tax Relief Credit" deductible from all city taxes. You change nothing about how much money is raised, only the distribution, and in a way where 95% of people visibly see their tax bill go down. Good luck getting rid of that!
I like this angle... Focus first on the fact that I'm having to pay taxes to put a roof over my head while the developer down the road is driving up land prices by squatting on an empty lot while paying pennies!
As a resident of the northeast, I've only owned 2 homes in the suburbs of a city. For those, the value of the land comprised 63% and 57% of the overall value of the property. I imagine that ratio changes as one moves away from the city.
That is because they are not marginal, and they are not land value taxes.
You basically get rewarded for leaving a large piece of land undeveloped in the middle of an urban area. You do no work, and reap all the gains of appreciation while society around you does the work of making the place desirable to live, hence making the land desirable to buy.
You also get armed protection via military, police, and courts, and all of their salaries are disproportionately paid by everyone else doing work.
Earned income instead of property tax is the biggest and most perverse subsidy from working people (especially young) to non working asset owners (and older people) and hence collect rent.
On top of that, we give lower tax rates to capital gains, and on top of that, we let land owners indefinitely defer taxes via 1031 exchanges. Exactly the opposite of what a just society would want to incentivize. We take from laborers and give to owners (and their descendants). And then dream about becoming owners ourselves.
Highly feasible!
https://www.commonwealth.ca/ < These guys propose a citizen's dividend/sovereign wealth fund
Alternatively, it would be easy to lower taxes in parallel with the increased revenue. The nice thing about taxes is that they are paid in dollars - meaning you can spend them all sorts of different ways ;)
Or if you want, "georgist" theory proposes lowering (improvement) property taxes/income taxes/capital gains taxes/sales taxes which introduce deadweight losses. A tax is fundamentally a disincentive so why are we disincentivizing working/building but not speculation? Plenty of room for improvement ;)
Excellent point! Reminds me of a certain climate-related topic ;) Again though - I think there is reason to be optimistic. Public awareness is gradually increasing[1], housing/zoning policy discussion is a hot topic these days, and young kids are volunteering/attending rallies at a higher rate than any previous generation[2]
[1] https://trends.google.com/trends/explore?date=all&q=land%20v... [2] https://www.statista.com/statistics/1448606/us-political-act...
Not everyone shares the same value judgements of what is good and bad.
Are you trying to say that any kind of discussion around ethics or values is pointless because it's possible for people to disagree?
I think it's much better to discuss actual policies rather than to question the point of even being able to have discussions around what people think would make for a better world.
I think they are pointing out that if the first principles are completely different, everything that follows after will be different also. What is good/bad determines what policies should be pursued, and those actual real-world police’s may be as different as night and day.
I don't think you should read the above comment as a lack of optimism, but instead as warning that conviction is required to enact the optimistic vision.
Yes, strong policies which impose significant good will always face significant resistance because finite resources cause many to see the world as a zero-sum game. This is the progressive vs reactionary battle.
You've read it correctly.
This is probably more feasible than you think. A hybrid or split rate combining both land and property taxes is not only possible but apparently exists in practice in some cities, for example Pittsburgh.
https://www.chicagofed.org/-/media/publications/chicago-fed-...
You could make the same theoretical argument against most taxes though. If it were possible to unwind corporate taxes through raw political connections it'd have happened by now for example. Or capital gains tax in its entirety.
That is actually a great theoretical argument against taxes generally by the way - there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support.
But this has more or less been done for the most powerful, e.g. corporate income tax exists but Apple doesn't pay it, capital gains tax exists but is deferred until you sell the shares and then rich people don't do that. So then Rockefellers don't pay the tax, but you do as an ordinary peon who has a good run messing around on Robinhood, or when you start making withdrawals from your IRA. Meanwhile we can't get rid of the tax which now only applies to the middle class because people claim that you're trying to give a tax cut to the billionaires who aren't actually paying it.
It's really an argument for tax simplification.
As far as I can tell the way tax policy works is that rich people hire lawyers and PR firms to cast the forms of taxation they would actually have to pay as regressive (e.g. consumption taxes, because you can't register the Rolls Royce without paying the tax and you can't sell into the jurisdiction without collecting VAT) and the forms they can avoid through shell games and accounting tricks as The One True Way To Tax The Rich (e.g. "profit" taxes, because profit is fuzzy around the edges and has high inter-region liquidity), which the rich then weasel out of and leave only the middle class paying the tax.
I looked for some reliable numbers on Apple's tax payment and didn't find any, so I won't comment on that, but I do want to say some things about...
This gets pretty quickly into the philosophical what-are-we-doing-here-exactly of taxes, but:
1) Shares don't do very much on their own, so there isn't really a problem with that. I mean, dude owns a billion in shares - if they earn income dude will pay tax, if they don't the only true to get to the value is to sell them.
I imagine there are some gaping loopholes involving charities and debt, but that isn't anything to do with the deferment of the tax.
2) Because of inflation - and asset inflation is markedly higher than CPI - CGT is effectively a wealth tax because fairly quickly most of the value of an asset is the inflationary component. I've got gold bars where I allegedly am making a 100-and-something% return and that just flies in the face of the inert reality of the metal itself. The tax is markedly unfair, anyone trying to be a responsible saver ends up paying much more of their income in tax than someone who just spends it on the day and it effectively becomes a wealth tax that stops anyone in the middle class moving up over time. Moving wealth between assets is catastrophic to your financial health once CGT is a factor.
There are a bunch of quirky distortions in the tax system. CGT might even be one of the contributing factors to why people don't tend to have savings (although the biggest factor is probably psychology). Rationally speaking saving is quite an inefficient use of money if you end up paying CGT.
But this is kind of my point. Capital gains tax is a dumb tax, it mostly screws middle class people and creates several perverse incentives, and we'd be better off to use a simple consumption tax instead. The argument against this is supposedly that "rich people" are the ones who pay capital gains tax, but in practice "rich people" are the ones in the best position to avoid paying it using fancy accountants and cross-border shenanigans. The middle class people actually paying it wouldn't be any worse off with a consumption tax that lacks all of those perverse incentives, and might even end up paying less because then the super rich would pay the same rate as they do instead of a lower one.
Consumption tax screws the working and middle classes the absolute most because they consume the most as a % of their income.
There's a reason it was pushed mostly by billionaires.
LVT is the most egalitarian tax. It's completely unavoidable for land owners, renters pay nothing at all, it skews highest on the biggest landowers and it doesnt disincentivize productive investment or productive work.
LVT ignores that there are other resources that may be hoarded. In particular, companies can hire all the employees with the skills necessary to build a competitor and have them do busy work to avoid having to innovate or compete on the merits of their products.
This is essentially the same thing as buying up land and leaving it fallow, but with human resources instead of land. In some ways this is worse, as society has already invested in training those workers.
Are you aware of the "buy, borrow, die" strategy? In short, you can borrow against the value of appreciated assets to get income during your lifetime, then pass the assets (and the debt) on in inheritance, and your heirs don't have to pay any capital gains tax because of cost-basis step up when they sell the assets to pay the debt. You effectively avoid any taxation on the appreciation.
You don't need shares for this - you can be mortgaged up to the hilt and pass on the house to your heirs when you die, and they sell the house to pay off the mortgage.
But all the money you borrowed needs to have been spent, or it's subject to inheritance tax (or paying back the debt it came from), and all that spending needs to be on things that are taxed with VAT, with employees providing services you buy who are paying income tax, and the businesses you're buying from paying corporation tax, etc etc. Tax is never avoided; it's just paid through other means.
Excellent comment
people who say this need to remember what makes the most money vs. what are the actual most necessary goods for basic civilization. Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on.
There's definitely tons of corruption, but we do need someone with a wider scope to budget for the "boring" stuff.
But people are funding it. They're not the ones borrowing from Macquarie, but they are the ones paying them back. Is there a more direct way to do this, is the question.
People fund it with their electric bill every month. If the business isn't viable and can only stay open through massive government subsidies that's a much more fundamental problem.
Why does the government get to decide what is best for people to spend their money on? If consumers really would prefer to spend money in TV and sport merchandise, well it's their damn money to spend and none of the government's concern.
The argument/discussion about taxes has to start by discussing what functions and services we want to be handled by the state.
There are taxes that are there to nudge people and encourage certain things, but all in all the point is to finance the state.
In most developed countries the state, in one form or another, has taken on many functions and services and that implies that taxation has to be significant. So before discussing cutting tax we need to think about what the state should offload (if anything) first.
I would love to have that discussion, as I agree instinctively, having worked with local and national government bodes in the UK - it does seem as though the current way is very expensive. But what could we chop off without making it much worse?
Meh, the only cogent argument against taxation is "I like the Mad Max franchise so much I'd vacation there". Everything else is just trying to find someone else's pocket to pick to pay for the services one enjoys. Anyway, we're currently pretty damn close to having unwound corporate taxes. Check this out: https://taxfoundation.org/data/all/federal/historical-corpor...
That's an argument for taxation, not against it.
I think its a bit different. In other scenarios like income, capital gains or even sales tax, its tied to the taxee gaining something. Its the price of doing business and an evaluation can be made by the taxee. Incentives are pitted against each other and chalked up to the price of doing business.
An LVT feels like pure downside to the taxee. There are no beneficial _direct_ effects. Its psychologically very different, especially for residential land.
The way I see land value tax and taxes in general is different.
Tax is someone taking money by force. Supposedly this tax is then used to protect the land / assets from being seized. Over time every country seemingly has increased taxes as stability increased (not the other way around), so in reality — it’s extortion. Give us money or we take your stuff, your “protector” takes more because you don’t have other options.
Back to the land value tax, why bother? It’s the same fundamental issue; why are we paying these taxes?
And before we get into “but the services”. I moved somewhere that has approximately zero taxes and zero services. It’s great - safer, cheaper, better run. A lot of community stuff is ran by parents or churches, people tend to just “figure it out”.
The idea of a land value tax is insane because it robs you of assets faster the more valuable it is. We had this in the past, feudal Europe, it sucked. What it will end up being is just like Europe some random person will dictate what you owe and if you don’t pay it, then someone else is granted it at a discount. Probably the bureaucrats cousin.
The libertarian notion that taxes are extortion is frankly childish in how overly simplistic it is.
You get all sorts of benefits in return for your taxes. You can't realistically opt out of them. You can't live without using roads or being defended by the military. You can't tell society at large that when you get hit by lightning that you want they to leave you to die and not call an ambulance
Since you can't opt out, a nontaxpayer ends up being a freeloader and social parasite. The only just option is to have to contribute to the imperfect system
The whole idea of extortion is premises that people can exist somehow outside of society which is disconnected from reality.. No man is an island
I agree libertarianism is a tad silly, but really are those "benefits" you list not paid for by inflation rather than taxes.
How does inflation pay for services and infrastructure?
Modern Monetary Theory, with the way it works it feels dishonest to claim taxes are paying for those things.
And you say the libertarians are childish and simplistic
You just replied childish and simplistic comeback.
The alternative to the current model is not to have no services at all, as that makes no sense, agreed.
The argument is weak because you constructed a straw man. The libertarian notion is not to live without any of the services provided by a state, but to have different providers which are in competition. The issue is that the state / gov has a monopoly but is exempt from antitrust laws.
The implementation is tricky though because in reality, when functions of the state are privatized there is often a huge amount of lobbying and corruption involved and these functions are given to a small group of big companies which effectively form a cartel once again. Then they extract all the economic value left in the infrastructure, the privatization is declared failed and undone, effectively another channel of syphoning tax money into the hands of big companies.
it never worked in practice though.
because it does a mediocre job at many things, making it quite easy to compete against it when and if it's worth it, but provides those things no private entity would, because it's anti-economical.
like, for example, the proverbial roads to nowhere.
Or people can agree to collaborate (like a church or workers union) without extortion of citizens. There’s plenty of examples where extortion isn’t necessary.
I’m also not suggesting taxes shouldn’t be levied at all, I’m saying land and income taxes are particularly gross, as they misalign incentives. Like I said, the more civilized a civilization is, presumably the less protection people need, so we should pay less taxes. Similarly, the more civilized a civilization the more services can be provided by the private sector. The reverse trend is true for taxes, they charge more for less.
https://en.wikipedia.org/wiki/The_Land_(song)
It is inherently immoral to own land. Land belongs to the people of the society that controls it. No one in that society ever had the right to give it away. I agree that land owners should be reimbursed if we enter an LVT, but the idea that private ownership of land, an asset that can not be created and is inherently limited, should be allowed is frankly nonsensical. Land belongs to society, and thats why LVT is the best tax. Funding the government with the profit of the land makes the most sense.
On the Indian reservations in the US, the land isn't wholly owned by the individuals. It is kept in a tribal trust where a lot of people own slivers of the land (called land shares), and it cannot be used for things like securing loans and economic development if often redistributed through various means. There has been a lot of write ups on this over the years.
It is also the poorest and most corrupt parts of the country. Shit happens on the reservations that would even make Congress blush. If you want to see what happens when land is devalued and not ownable, look at the reservations.
I’m not buying the causation you seem to be selling with this correlation.
you can always try to build your own country in your own land and see how it goes.
The article adresses this. The value of land you tax is not the sale value, but the productive value of the land.
So the sale value drops, but the assesed value doesn't, and the raised taxes also remain fixed.
That pushes towards the most profitable use of the land. Not sure why that would generally be desirable.
Because the most profitable use of private land is, almost by definition, the most desirable.
Sarcasm?
Why would it be? Price is simply the best information we have about the interaction millions of various desires, distilled into one number.
Things having a price isn't same as profit maximizing on everything. People don't purely profit maximize.
Are you maximizing profit in your primary residence? You might derive pleasure from having a large garden instead of building an industrial plant of same sort there, for example, or not rent out rooms, or have more shirts than you need instead of investing those monies into a business.
When you said generally desirable, I assumed you meant to the general public and society at large. Absent some other very convincing information, the price of a plot of land is going to be the best analogue for how much society values that land.
Obviously the private land owner (in general) would prefer that the cost of owning land was as near zero as possible so that they could use it how they saw fit, regardless of the opportunity cost to society. And that's how it spirals into the mess we have today.
Why would it be most desirable for society if the only thing done with land was to maximize profit? Society also values museums, parks, etc. - but those are not a profit maximization things.
You keep bringing up price, but price and use of the land are not the same. A price (if transacted on) also only really speaks towards the parties involved, not society as a whole.
The mess we have today is not because we don't maximize profits from landownership enough.
Not quite. There is information that's not part of the price system.
National defense isn't going to be priced in by markets. And food security is national security, even if it's "more efficient" to ship food in from your geopolitical rivals.
Some states of Germany are currently introducing it. I don’t see any land owners revolting about long term implications. Many bitch about the transition because reevaluating land is some paper work.
Everybody seems to believe that it will not make much of a difference. I assume it depends on the municipalities to raise it in the future.
When is the last time (a subset of) Germans revolted about anything though?
A few months ago there were big demos against AfD and also farmers against some subsidy cuts.
1989 was a major one that a lot of people have heard of
What new tax is that? Or do you mean the changes to the Grundsteuer (which is more like an update to the value that is being taxed, I think, and it was a forced change).
Baden-Württemberg does it right. The other states not (yet).
This seems to be the German Georgists: https://www.grundsteuerreform.net/
A lot of the costs for the state, city etc. are billed separately in a lot of places.
Also, given the demographic projections, land will not be a limiting factor in the long-term anyway.
Unearned rents is questionable. People have always understood the value of land and have worked hard to be able to purchase it and vote + participate in local government to help protect the value of that land. Especially in the US, that mostly worked quite well. We still have huge amounts of extremely cheap land that could be made desirable with enough hard work. You can still buy a crazy amount of land in parts of the country for like $50k.
Done right, an LVT can actually increase land value. Suppose you are a developer that owns a plot of land in a desirable area but there are some abandoned building nearby that a stingy owner refuses to sell. With a regular property tax, if you make significant improvements like add park space, nice trees, landscaping, etc. to your building you pay much more property tax while the stingy owner pays nothing but benefits from increased property value. LVT at least partially penalizes the freeloaders. They must pay more LVT if the area around them improves. It prices an unpriced externality which is generally a good thing.
There might be one thing the rich dislike more than taxes: freeloaders
Land is made desirable mostly from what productive use it has. ie: being near jobs. There's not really any hard work any one individual can do to make some random plot of land in Kansas more valuable than its current market price.
This is a nice euphemism for blocking new construction and restricting housing supply.
Not only being near jobs but being developable at all. There are lots in the hollywood hills that go for $40k. Why that low for such prime land you might ask? I’d assume you’d find out the reason fast as soon as the current owner unloads their lemon onto you for a mere $40k.
Done right land is worthless under land value tax. Ideally the vast majority of then unimproved lands rents will flow to the government through the tax. An asset with no profits is worthless.
Is there some rationale for setting the LVT rate so that the land is worthless?
That seems unnecessary and counter-productive. If I were designing the system, I would want both the government and the landowner to share in the appreciation of the land. If a nice park is to be built next to some land in a city, interests are more aligned if both the city and the landowner share in the benefit.
Land value is a measure of supply and demand. But most of the demand isn't for land in particular, it's for indoor space. If you have LVT and don't have density restrictions -- or just don't have density restrictions regardless of LVT -- then people are going to build until the cost of indoor space falls to the construction cost. Then land values will be low because it's being used efficiently, and there is a de facto ceiling on the price -- if you want to add 100 stories of new space and land is dirt cheap then you might build a hundred single-story buildings, but if land gets even slightly more expensive than that you can just build twenty 5-story buildings instead, which is what people would do rather than paying for five times more land unless it's prohibited.
LVT increases this incentive even more, because not only would you have to pay for more land, you would have to pay the LVT on more land, so now it makes sense to build ten or twenty story buildings. Meanwhile if you're not going to build a ten or twenty story building (or in a place like NYC, a hundred story building), holding onto an underutilized lot will cost more than it's worth, so the land values become negligible. This ignoring the overall premise of LVT which is that the tax should be equal to the land value, so even if land values were high, the tax would just offset them and zero them out -- until the high tax incentivized even more construction.
But there is a different reason the argument doesn't apply to this -- or to any other tax. Governments have budgets. If they currently get money from a tax, and you propose to get rid of the tax, and your proposal is to cut spending, the people currently receiving the money (often politically connected corrupt industries or government unions) will fight you. If you propose to get rid of the tax without cutting spending by instituting or raising some other tax, the people you propose to tax instead will fight you. The status quo is sticky.
I wonder if this could be solved with a local maxima. Let the established landowners keep a (much smaller) benefit to align incentives.
Spitballing...
I wonder if it could be balanced to give an LVT discount for holding on to land for 5+ years or some such thing. In this system, we still have reduced land prices because of LVT but there's still a benefit that old money has over the default and can clutch tightly to. Suddenly, long term owners have an incentive to keep such a system else they be set at the same level as new owners.
That would be a disincentive to land ever being sold and I don't think we want that. It's gameable too: you just have one entity own the land, and then rather than buying and selling the land, you just buy and sell the entity.
Good thing that developers aren't elected lol.
Not sure if there's a word for a dictatorship, but you're totally able to just leave if it's not your thing.
Most of the real world ones tend to put up walls and guards facing inwards. Or hold your family hostage.
Which hopefully doesn't give Blizzard any ideas.
Phil Spencer is already trying to move development to Alcatraz island. -- likely true.
Continuing to be an equal society, or not seeing that reverse, requires strong institutions (as in culture).
You are right. And right now we see so much institutional deconstruction due to lobbying, fear of being anti dogmatic, and straight up propaganda that this should concern everybody.
This is also why regulation and transparency is needed for massive social networks.
As Tony Benn said: "There is no final victory, as there is no final defeat. There is just the same battle. To be fought, over and over again."
This is what happened in NZ.
there's a middle ground: LVT could be progressive, like income taxes. In that way owning a small/not valuable piece of land would generate little or no taxes, while wealthy landowners, with large very valuable assets, would be required to contribute back much more.
You can say the same thing about workers' rights and environmental protection laws too. Progress shouldn't be taken for granted.
I think you're right that it would require a revolution, but we've had those before and come out OK, so it's not so far-fetched or scary as it sounds. It's definitely not going to be voted into law by any local or state legislature without great civil unrest to motivate it.
However, as the landowning class concentrates and we run out of valuable "frontier", it becomes an inevitability.
As a history lesson, we used to have feudalism in New York from before the revolutionary war up into the 1800s. It was a grandfathered-in political-economic system initiated by the Dutch to encourage high-class immigration and patronize friends of the governor, which the English expanded and the nascent U.S. extended to curry favor with the wealthy families who'd supported the revolution.
That system, too, was really valuable for the people who had that privilege. But eventually they were outnumbered and overthrown, in a movement that was pretty revolutionary [1]. By the time it happened, we had innovated new ways to develop wealth that didn't require rent-seeking landlordship and monopolies (this was the era of the industrial revolution), so it'd become significantly less politically-tasteful, even in comparatively bourgeois and aristocratic circles, to depend on these ancient monopolies for access to wealth. But, ultimately, it was a popular (and, at times, violent) revolution that tipped the scales towards reform.
I think it'll probably happen at the municipal or state level before it happens at the federal level. Most likely in NY (again!) or CA, if I were a betting person.
[1]: https://en.wikipedia.org/wiki/Anti-Rent_War
Rents are "unearned" in the same way all appreciation is unearned. You spend your money on something, anybody else could also have spent that money on it, but the person who does spend the money on it enjoys the appreciation, if any, because they pay the opportunity cost.
Tell that to the people who left urban St. Louis and Detroit and Cleveland in droves over the last 75 years. Their land didn't just go down in value; it went to less than zero. You'd literally have to pay somebody to take it and it's a huge burden on those municipalities.
The problem with Georgism is that, yes, land is different than other things in that you can't make more of it, but it's also the same as most things in most ways that matter.
Under a full LVT system the price of the land itself should be 0.
Also it is not just the "landed gentry" who will feel like they lost their investments but also the 64% or so of Americans who own their own homes. [1]
Ithaca NY has the unusual situation that much of the land is owned by universities, colleges and other non-profits that don't pay property taxes so residential property taxes are high. In recent years tenant organizations have come to perceive that any increase in property taxes is going to be added to their rent so in addition to trying to get more money out of Cornell they are becoming increasingly spending skeptic.
[1] https://www.financialsamurai.com/u-s-homeownership-rate/
I would really like you to elaborate on this point. Sure, I guess if land comes with an extra $X of tax attached to it, the net value of land is lower. But it encourages things like building taller buildings, because a 2 story apartment building can't break even with the land tax but a 20 story building can. Land in the middle of SF's financial district or Manhattan isn't cheap: a strong argument can be made that building taller denser buildings increases land value.
Tying ownership to a market determined LVT has been my goto. That is, when “buying” land you don’t bid on the one time transaction, instead you directly bid on the rent.
In practice it could perhaps be implemented such that it would still look like the current market where a private bank loan determines the rent, only you shift the loan to a central bank like institution for collecting on it as rent.