New, simplified geoist-style tax code..

When you speak of “other forms of wealth” are you really speaking of government-issued monopolistic privileges? Such privileges would include patents, copyrights, bank charters, limited liability corporations, taxi medallions, sugar quotas, etc, etc.

Because if so, these “other” privileges have little to do with government spending -- although they do make their owners rich through monopolistic pricing and risk shifting (with the governments blessings of course).

Personally I think these other privileges should be abolished, but if they are not, then taxing away the full value of these privileges would be a second best alternative. I think Roy would also agree with that.

A flat land value tax (levied at near the full rental value of the land parcel) will by itself take nearly all the profit out of owning land. You do understand that by taking the profit out of landownership that the market price of land would fall to near zero, right?

What this means is that land is super cheap (near $0) to purchase, but the tax makes the land more expensive to hold. When you couple this effect of low land prices with Roy’s proposed individual land tax exemption, you have a situation where every citizen can hold some land completely free of any charge:

Super low land prices + individual land tax exemption = some free land use for every citizen.

So if a flat land value tax takes the profit out of owning land (above the exemption amount) and the land tax exemption makes it free to hold some land as a citizens right, then what need is there for a “progressive land tax”?

 

Neat example of how the Georgist approach isn't consistent with basic economics. Monopolistic competition merely refers to a heterogeneous product, with product choice ensuring price making power. Without an understanding of the firm or the labour market, Georgism has no means to design practical tax policy

 

I sympathize with your view, but then the tax revenue becomes a reason for government to keep doing them.

That sounds reasonable, but the end result is perverse incentives.

Other forms of wealth that get their value from government privilege can and ideally should be abolished. Land can't.

Of course. But I would prefer to abolish government-created injustice rather than tax it. Consider if government were issuing literal licenses to steal. Should they be taxed, or abolished?

You're not clear on the concept. The value is indeed created by labor -- mainly that of government employees and contractors -- but it does not GO to labor. It goes to landowners.

It doesn't matter what the welfare subsidy giveaway to landowners is used for, any more than it matters what the proceeds of crime are used for. It was unjustly obtained.

Because it's a loophole that only benefits those who were supposed to be paying more under progressive taxation, and it leads to inefficiencies and waste through rent seeking and legal maneuvering. It's better not to make the tax progressive, but just to have a flat, universal individual exemption that will be used by pretty much everyone, like the universal individual LVT exemption.

No, it just leads to legal trickery to get the lower tax rate while actually owning more land. It is much more effective as well as fairer simply to recover its full rental value.

Exactly as much as he should.

It would be far more.

Just recovering the full land rent after a uniform, universal individual LVT exemption would do that far more fairly and effectively.

 

Neat example of how the socialist approach is always to lie about known facts of economics in order to attack justice. The socialist always attacks justice with a single-minded, maniacal ferocity he never exhibits towards capitalism. The socialist knows that justice is his true enemy and capitalism his best friend: capitalism is the source of the injustice that provides his excuse for seeking to steal from the productive and to exercise totalitarian power over people's economic activities. The socialist always seeks political power above all else, and knows that he cannot permit justice, as that would remove the rationale for him to seize power. You will notice, therefore, that Reiver always attacks justice in societal institutions for possession and use of land with a fanaticism and dishonesty he never exercises when engaging in his softball attacks on capitalism. Reiver knows, and always proves, that his only true enemy is justice.

Reiver merely decides to prove again that all his nonsense is irrelevant, dishonest, anti-economic garbage spewed in an incontinent campaign of anti-justice hate propaganda: land is not a product.

Without lying, the socialist has no means of opposing justice. Without lying, the socialist has no means to pretend that recovery of publicly created land value for public purposes and benefit is not always automatically practical tax policy.

 

and especially meta777 and Roy L, however, the basis of the argument is that LAND is the source of all evil and that it should be taxed. Thus, LAND is the basis of income and wealth inequality in the USA. I don't see that as a reality. I see wealth still defined by USA dollars with inheritance and cronyism FAR more pervasive and problematic than LAND. When the USA dollar collapses, the land taxation is a very fair and logical argument to control those that take control of land in the future. As of right now, I see land owners fighting tighter margins that oil refineries, steel or computer chip makers. If you want to reform the system, target the problem and not a convenient scapegoat for the problem. Food availability and price as of this second in the USA are non-issues.

 

No one has said "land is the source of all evil," or any evil. It should be taxed because THAT IS THE ONLY POSSIBLE WAY TO MAKE GOVERNMENT PAY FOR ITSELF. It is also the only possible way to align government's financial interest with the public interest, because the value government creates by its spending on programs and infrastructure ALL GOES TO LANDOWNERS, BY ECONOMIC LAW.

No? Read and learn:

Forbes has kindly provided brief interviews with 21 "self-made" (ahem)
billionaires from the 2007 Forbes 400 list of the richest people in
the USA:

http://www.forbes.com/2007/09/18/secrets-self-made-ent-manage-cx_ll_richlist07_0920secretsqa.html

Almost all the wealth of
almost all really wealthy people is not earned by actual productive
contributions, but is obtained by making oneself the beneficiary of
unjust privileges. These privileges are mainly private ownership of
land and other natural resources such as minerals and broadcast
spectrum, IP monopoly privileges, the privilege of creating bank
deposits ex nihilo, and of course, the "business" of manipulating and
dealing in these privileges.

I've included the source of these billionaires' fortunes after their
names, and added some explanation. Notice how many specify "real
estate":

1 Tim Blixseth: timberland, real estate
-- i.e., pure landowner privilege
Notice Blixseth's slightly too revealing response to Q 15:
Say you have $100,000 to invest: What do you do with it?
A: "Raw, undeveloped land out in front of the path of development."

2 Eli Broad: "investments" -- i.e., dealing in privileges

3 John Catsimatidis: oil, real estate, supermarkets
-- i.e., ownership of natural resources

4 Ken Fisher: money management -- dealing in privileges

5 B. Tom Golisano: Paychex -- Well! Actual productive work!

6 Harold Hamm: Continental Resources -- ownership of natural resources

7 Michael Heisley: manufacturing -- Productive work again!

8 Kenneth Hendricks: building supplies
-- Another one! Three producers out of eight so far!

9 Joseph Jamail, Jr.: lawsuits
-- hmmmm... transferring money from defendants to plaintiffs is not
productive

10 Ted Lerner: real estate -- ahhh, back to privilege...

11 Ronald Perelman: leveraged buyouts
-- "How to Destroy Productive Capacity for Fun and Profit"

12 Jorge Perez: condos -- i.e., landowning
Slightly too revealing answer to Q 10: When was the last evening that
hadn't been scheduled in advance? What did you do?
A: "Just today, one of the wealthiest families in Mexico came to Miami
and wanted to see me to see if we could develop their extensive land
holdings. Had a very productive and enjoyable three-hour lunch."

13 Richard Rainwater: real estate, energy, insurance
-- mainly natural resource ownership

14 Phil Ruffin: casinos, real estate
-- gambling monopoly privilege and landowner privilege

15 O. Bruton Smith: Speedway Motorsports -- oops! Actual production!

16 James Sorenson: medical devices, real estate
-- patent privileges and landowner privilege

17 A Alfred Taubman: real estate -- landowner privilege

18 Kenny Trout: Excel Communications -- MLM scam, not productive

19 Donald Trump: real estate
-- landowner privilege (especially property tax abatements)

20 Sanford Weill: Citigroup -- bank seignorage privilege

21 Mort Zuckerman: real estate, media
-- landownership and copyright privileges


Well, there you have it, folks. Just four of the 21 "self-made"
billionaires (out of the 400 on Forbes's list!) actually made the bulk
of their money through actual productive contributions. The rest were
all rent collectors or scammers of one stripe or another. The
productivity ratio is certainly worse in the full list of 400, many of
whom inherited or obtained their wealth by even less savory means.

Start digging. Follow the money. You will find that even inheritance and cronyism are dominated by land and dealings in land.

Nonsense. Land has no cost of production. Zero. All the landowners are fighting is their own greed for unearned wealth: the debt they have undertaken in their insatiable greed to seize ownership of as much of others' rights to liberty as they can.

Land IS the problem. Landowner privilege is not the only problem, but it is by far the biggest and most important problem, for the reason stated above: LANDOWNERS GET TO POCKET OTHER PEOPLE'S TAXES. Once you understand that, and what it implies, all other issues pale to insignificance. No matter what reform you seek to undertake, if you leave landowner privilege in place, everything you do will only benefit landowners.

Were you under an erroneous impression that the price and availability of food were somehow related to the problem of landowner privilege? Anyone who yammers about food and farming in relation to land value taxation is merely proving that he has no clue about the relevant economics. None.

 

This is all fluff. The problem is that you can't deny the point (not with any validity at least). The fellow made an inappropriate reference to monopolistic competition (which, by definition, only requires product heterogeneity). It is of course very silly to try and derive practical tax policy without an understanding of the economic agent.

 

Right, because we are not advocating a 5% tax on land value, we are advocating a 100% tax on land value.

That’s because a 100% tax on land value is what would naturally happen if market participants were allowed to appraise their own land value and corresponding rate of taxation, while government would simply give land titles to those who valued the land the most.

In a nutshell, nearly all land value advocates just want the government to stop appraising land values and setting tax rates. We want to let the market do the appraisals and set the tax rates, and that the government simply issue land titles to the highest bidders.

Currently, large landowners don’t want the market to set the rates of taxation on land, because if they have the government do it, they can get the rates of taxation set artificially low, that means greater profits for landowners.

If the government simply accepted what the market offered in taxation for land titles, competition for land would drive the tax rate to 100% of the lands value, which would eliminate all landowner profits, and drive the exchange value (price) of land to zero.

If government simply allowed its citizens to set the rate of taxation on land themselves, and then issued titles to the highest bidder, government would receive sufficient revenue to abolish all the taxes which burden production and trade.

Does that make sense?

 

For one thing, they will just redistribute nominal ownership to avoid the tax. Consider corporations, who own the vast majority of all land in the USA. It is easy for a corporation to start subsidiary corporations to own parts of its landholdings in order to reduce its total land tax liability.

It is vital to understand that a land value tax is totally unlike any other tax. Other taxes are unjust and economically harmful from the first dollar of revenue, and gradually become even more unjust and harmful as the tax rate rises. A land value tax is increasingly just and economically beneficial up to the full rental value of the land, after which it very rapidly becomes unjust and harmful (and less effective in raising revenue). There is therefore no reason to restrict it to a rate lower than the full rental value of the land, and no reason to increase it above that point.

It is necessary for justice and economic efficiency.

This consideration is satisfied by the uniform, universal individual land value tax exemption, which restores the equal individual right to liberty.

Even better is to just tax the full rental value of land, with an equal exemption for all resident citizens.

 

Government can't do anything without revenue, and you might be surprised at how revenue considerations govern government actions. Most police officers, for example, are aware that drug prohibition is nothing but an expensive failure. But police departments seize and often keep or sell assets used in the drug trade, and that is a source of revenue for them. So they support the evil and insane War on Drugs.

Government can't go into debt without revenue, because lenders won't believe they can expect to be repaid.

Public choice theory illuminates how private interests and the personal interests of those in government condition government policy.

If a tax can be devised to isolate the beneficiaries and recover what they are being given, then that would be worth looking into. In some cases it is probably possible.

Actually, other government-issued and -enforced privileges would be far easier to abolish than landowning, because possession and use of land has to be administered SOMEHOW, and that is one of government's most fundamental roles.

No, we do not have property rights because governments create them. We create governments to secure the natural property rights we already have: our property rights in the products of our labor, which antedate government. The problem is that government has created legal property in privileges that were never natural property, like land titles, IP monopolies, and money issuance.

What government spends enforcing them is not the issue. How much they enable their holders to take from others is the issue.

Sure. It is government's rightful function to secure and reconcile the equal rights of all.

 

I have been a strong advocate of land value taxation (and simultaneously reducing income tax) for quite some time.
It is good to see this concept finally being discussed.

But I think there should be exemptions for people that own less than a certain value of land- and only if these people are not in debt.
When a land owner is in debt, it is as if the true owner of that land is really the owner of this debt. Because it is really the lender that has bought the land, and the interest paid on the loan is like rent on the land. If the borrower stops payment, his land belongs to the lender.

So I think people should be taxed on the equity they hold in land. The banks should be taxed on the mortgages they hold.


What I would hate to see is an old person losing their little house just because they cannot afford to keep paying land taxes.
So I think people should not have to pay taxes on the first 250,000 USD (for example) of the value of their house. This would also encourage a more equitable distribution of land ownership, and help small farming families.

 

Sounds like you may be Danish, and if so, your country's history includes a brilliantly successful interlude of land value taxation in the 1950s.

Equality of human rights requires that everyone get the same exemption, landholder and tenant alike, to restore the equal rights of all to liberty.

As land rent recovery removes the exchange value of land, there would be no loans against land, and no debts secured by land.

They have a number of happy alternatives available, and it is dishonest to talk about them "losing" their little house. People lose their houses when they can't afford to make the mortgage payments. California brought in Proposition 13, relentlessly reducing property taxes, putatively to prevent a relative handful of people a year from "losing" their homes to rising property taxes (but in actual fact selling them at a large, unearned, and untaxed profit). What has been the result? In the last five years, MILLIONS of Californians have ACTUALLY LOST their homes, their life savings, and everything else to mortgage defaults. Do you really imagine it is some sort of accident that the actual effect of Proposition 13 has been catastrophically the opposite of its putatively intended effect?

It would be far better to secure an equal LVT exemption to all resident citizens. This would make home ownership affordable to all who wanted to own, without subsidizing them at the expense of those who preferred to rent.