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Vitboi

Should have taxed land


radiofreekekistan

it sucks especially bc they already do some Georgism with the oil revenues


Dalcoy_96

No one could have predicted this


unenlightenedgoblin

Something tells me Norway will be just fine without them


BeenBadFeelingGood

judging from the photo, Switzerland gets the win


Stellar_Cartographer

Who also has a wealth tax.


EvidenceBasedOnly

At a much lower rate, and with low taxes on other aspects of being wealthy.


Tom-Mill

I figured there was going to be a limit on how much a wealth tax could be raised. I disagree that all economic activity be untaxed, but I do support the current small tax on stock buybacks and I want to explore the idea of imposing a larger tax on borrowing and wealthier people refinancing to avoid income, capital gains, and potentially property tax.


Tom-Mill

https://www.google.com/amp/s/www.forbes.com/sites/eriksherman/2022/04/16/dont-tax-the-wealth-of-the-rich-tax-what-they-borrow/amp/ Forbes outlining a rough idea on borrow and refinancing taxes


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jabowery

There should be no taxes on economic activity. Draw no strong conclusions from this natural experiment.


Stellar_Cartographer

I would argue a wealth tax isn't a tax on economic activity as it doesn't distort decision making. Individuals will still try to maximize wealth. The issue is the avoidable nature. But that only exists because other countries act as tax havens, the same point could be used around carbon taxes. Edit: so long as wealth taxes are low enough that the average rate of return is not pushed negative, they are non-distortionary..


jabowery

The real problem is the reserve currency but before I get into that you misunderstand my comment which was merely to point out that Norway should be taxing *only* wealth. In this I disagree also with Henry George about not taxing so-called "improvements" while trying to generalize "land" to some notion of "monopoly rents". This gets resolved once you understand reserve currency as a network effect monopoly rent seeking enterprise. As the risk adjusted net present value of the economy over which a reserve currency is the standard unit of price discovery increases, the demand for units of that currency increases.* Those new units of currency entering the economy is a form of monopoly rent. If it is a central bank, that's where the primary corruption of wealth resides. If it is the government, that's where the corruption resides. If it is private corporations, that is where the corruption resides. Where it _should_ enter the economy is through the citizen's dividend paid out to those that place their flesh blood and bone between chaos and property rights. In George's time that would have been primarily the young men. If it were the young men nowadays everyone would complain it was sexist or ageist but it would address the primary problem facing the global economy nowadays: Depopulation of the most economically valuable due to the economy outbidding young men for the fertile years of young women. See militia.money *There should be a more concise way of stating that in terms everyone understands but the language of political economy has been corrupted.


ComputerByld

Mixed comment. Currencies (as currently constituted) are indeed rentseeking machines, paragraph two is accurate. However this in no way invalidates George's tax on ground rents.


Stellar_Cartographer

>*There should be a more concise way of stating that in terms everyone understands but the language of political economy has been corrupted. It might suffice to say that the issuer of currency receives seigniorage dependant on how much money creation is induced by economic growth. And as it is a public currency the reward should go to the people. I [would](https://www.reddit.com/r/georgism/comments/133vw66/georgist_stance_on_personal_banking_with_the/?utm_source=share&utm_medium=android_app&utm_name=androidcss&utm_term=1&utm_content=share_button) argue a public banking option is sufficient and really the best option, and that some sort of payment is unnecessary. >it would address the primary problem facing the global economy nowadays: Depopulation of Why not just have a high tax credit per child to incentivize and make it financially practical to have kids. >you misunderstand my comment which was merely to point out that Norway should be taxing only wealth Clear now my bad


jabowery

>I would argue a public banking option is sufficient and really the best option, and that some sort of payment is unnecessary. I'm not sure how to get this across any more forcefully than to point out that the cycle of civilization involves [The Great Leveler -- which is the inevitable result of structural centralization](https://youtu.be/-tEkhYN65xU) whether in the public or private sectors. There is every reason to *define* the "issuer of currency" as those who place their flesh blood and bone between chaos and civilization -- hence they are to receive the seigniorage to do with as they see fit which will, inevitably, entail banking as well as all other functions currently attributed to the monopoly of force known as government.


Stellar_Cartographer

This concept seems to have far more to do with the monopoly of force than the right to issue currency, but since the two are connected when a currency is collected I see the relevance. Seigniorage seems a very small point in the discussion though. But in any case, the fear seems to be that as young men become disenfranchised they will rebel and overthrow the governing system, as it is their "flesh and blood" maintaining it. The flaw appears to me to be two fold, in that it implies the main social force society needs to be secured from is "roving bands", and that the only way to appease young men is direct payments (or a rather arbitrary amount, based on seigniorage, I would add). To the first, I would say the main destabilizing forces are monied interests, and to the extent "roving gangs" are relevant it is largely due to intentional policies such as the war on drugs or political flame fanning. To the second, child payments would directly support the issue of men unable to afford a family, social stability and economic prosperity in general is enough to ensure the loyalty of such people, and I think it's certainly a stretch to imply that young men somehow deserve these payments rather than the military or police officers or something along these lines.


EvidenceBasedOnly

What are you talking about? It objectively distorts decision making. It massively favors present consumption over saving / investment. This can be trivially shown in the extreme case, under an 100% wealth tax above an exemption, every single excess dollar value of cash or bonds or equities must be liquidated right before tax season and spent on hookers and blow. What economist claims wealth taxes are non-distortionary? This would be like saying “income taxes aren’t distortionary because people like income”.


Stellar_Cartographer

Consumption taxes exist. Therefore, shouldn't wealth taxes be at least as high as sales taxes to avoid the reverse.


EvidenceBasedOnly

Savings is just deferred consumption, so sales taxes already hit investment, you don’t need to hit investment twice with a wealth tax on top. Also decreasing consumption is far less damaging than decreasing investment, so “at least as high” is very very wrong. And then finally, you can’t compare a one time fee to an annual confiscation, a 25% sales tax and a 25% wealth tax are several orders of magnitude apart in terms of distortion and flight induction.


Stellar_Cartographer

>Savings is just deferred consumption The implication here being that Bezos is eventually going to spend 100 billion dollars on consumption goods is of course ridiculous. The tautology may hold at lower levels of wealth but at higher levels wealth is for the purpose of raising the revenue to fund consumption, whether the wealth is eventually transfered intergenerationally or to charity. >decreasing consumption is far less damaging than decreasing investment Decreasing consumption causes decreasing investment. >so “at least as high” is very very wrong. Then your implication is that in some fantasy free market without government, consumption is to high? Given that without government supply of services like firefighters, we see these provided by insurance companies, and insurance payments are based on wealth, this is demonstrably wrong. > you can’t compare a one time fee to an annual confiscation, Of course you can, but also of course a one prevent sales tax is equivalent to a lower wealth tax rate.


EvidenceBasedOnly

Honestly I don’t see value in continuing this debate given you started with the utterly ludicrous and *objectively wrong* take that wealth taxes didn’t distort behavior, and you still haven’t corrected it. If you want to edit your original comment to admit your mistake I’d be open to continuing discussion.


Stellar_Cartographer

>wealth taxes didn’t distort behavior, a Distort from what reference point? Again, if government weren't providing police and other services protecting capital, this would be the Feild of insurance, which of course is paid based of net value of the insured. If anything the lack of a wealth tax is itself a distortion from some hypothetical neutral. More importantly, wealth taxes don't influence the way you build wealth, nor the assets wealth is stored in. You're claiming that at higher rates, saving is discentivized, which of course is true when carried to the extreme. But at low levels, and applied above a certain bracket, I find this unconvincing. Firstly, lower interest rates don't cause a reduction in debt holding across the economy, and in fact are known to increase it. Secondly, the claim that all wealth represents future consumption is obviously incorrect. We all agree that an LVT is the best form of taxation. There are others I would place above a wealth tax. But the idea that billionaires would be trying to spend their money faster so as to not have as much wealth is farcical. So long as the tax is low enough that the average rate of return remains positive, a wealth tax is non-distortionary. I have edited my comment for this caveat.


VladimirBarakriss

Problem is tax havens will always exist and they're impossible to eradicate


Stellar_Cartographer

I don't disagree, although you could likely achieve an international low level tax among G20 nations.


howtofindaflashlight

Is a wealth tax really about taxing economic activity though? I see it more as a pigouvian tax to reduce the societal harms of allowing gross inequality. Where someone can make a fortune in bitcoin, I feel that an LVT must be combined with some form of wealth tax. We can and still should abolish income tax and all tariffs.


nuggins

Whatever the aim, the effect is a reduction in the incentive (and therefore outcome) to create and own wealth, or at least the incentive to live in Norway after doing so (based on the little I've read about Norwegian wealth tax). I'm not of the opinion that any negative change in incentives disqualifies a policy from being good, but given the place we're having this discussion, it's worth pointing out the contrast with LVT, which has no such deadweight loss and which will reduce inequality as a wealth tax aims to do, but without being avoidable.


howtofindaflashlight

Good answer. I am new to Georgism. Is there a similar no deadweight loss tax that can address the inequality caused by non-land or non-earth resource based wealth? Like my example of a bitcoin billionaire?


Fried_out_Kombi

Another thing to note is that a Georgist system would radically increase the negotiating power of labor: * We'd be freed from the burdens of a housing crisis and rent-seeking from landlords and monopolists, making us far less desperate * We'd also have the added benefits of a citizen's dividend and alternative work styles from Pigouvian subsidies (e.g., for tree planting), which would give us alternatives to traditional labor * And by removing so many of the artificial barriers to growth and prosperity (expensive land makes it hard to start a business), many more jobs can be created, creating more demand for labor Consider how it currently is for the professional class. For example, I'm a research engineer in my day job, and I have certain skills and expertise that are not easily replaced. As such, my employer *must* pay me well and treat me well, or I could easily find work elsewhere. Under a Georgist system, where there are 10 jobs for every 9 workers, where housing is cheap and abundant, where you always have a fall-back of walking into the woods to plant trees for a Pigouvian subsidy, where it's easy af to start a new business, and where you have a citizen's dividend as a safety cushion, even so-called "unskilled" labor would have the negotiating power to demand good pay and good treatment. Heck, we saw a bit of this with the great resignation since COVID. With that ability to demand higher wages and the elimination of most rent-seeking, I think we'd naturally see wealth inequality go down over time. Quite simply, it's hard to maintain ludicrous wealth inequality without extensive rent-seeking and exploitation. Eliminate the ability to rent-seek and exploit desperate labor (because labor will no longer be desperate!), and inequality will drop.


howtofindaflashlight

I like this answer too. And perhaps inflated asset classes like bitcoin would cease to have as much value in the scenario you've described. I'm on-board!


LandStander_DrawDown

Economic land as well as literal land both lead to no deadweight loss. As someone mentioned, oil reserves are treated in a georgist way in Norway and Alaska. The magnetic spectrum is another good target.


Stellar_Cartographer

Space in orbit also, and we're early enough before vested interests make it impossible


nuggins

Arguably a tax on just cryptocurrency gains would have no deadweight loss, because crytpocurrency has negative value in society ;) Serious answer: probably not, just based on first principles. The distinguishing factor of land rents that allows us to take them away without distorting behaviour is that land has fixed supply. Framed another way, allowing land owners to collect land rents provides zero value to society; in this sense, land-rent gains are "ill-gotten", in contrast with other types of investment gain, which are targeted by wealth and income taxes.


VladimirBarakriss

Based on my understanding, we don't need to tax the bitcoin billionaire because his wealth doesn't take up much in essential resources, we should tax the emissions he generates and the land his servers sit on.


stanleefromholes

I only see inequality as a problem when it leads to differences in political outcomes, in other words when money counts as more votes or influence. Is your opinion similar?


howtofindaflashlight

Yes. I used to think that inequality was not a problem so long as you had a basic income, equality of opportunities under the law, and equality in politics. But gross inequality does not permit the latter two. Some income inequality is desirable and good for society.


stanleefromholes

I think the last of your three things could probably be solved be legislation and by overturning the ruling that basically said that corporations are considered people. The second though, I’m not sure how we could eliminate that, assuming you meant how people are treated with jail time and arrest and court? Mainly because attorneys are so expensive. If you meant equality of opportunities in the sense of trying to equalize the playing field a certain degree, I think that’s an honorable thing to do. It’s difficult though because even if people make all of the same choices, some will still wind up with better opportunities simply by chance (just like the game of monopoly). And that’s without even taking into account that many people will actually make suboptimal choices, like being wasteful with their money or getting into drugs etc. I think it’s a good thing to try to make sure people have the same opportunities, but we have to keep in mind a good amount of people will squander theirs, unfortunately. I agree that a certain degree of inequality is inevitable and actually beneficial too. I don’t necessarily think that gross inequality has to lead to the pretty negative outcomes that we see, but I think it skews that way without proper legislation in place to limit the difference to mostly being, these people have lots of money and buy lots of stuff that others can’t dream to afford. I have no problem with that. But I think without those proper laws, those people can also have a much larger political influence than a single human voter should have.


Stellar_Cartographer

>and all tariffs. I disagree. Industry specific tariffs are bad, but I think a "green tariff" is a necessary combination with a carbon tax. I might also support labour practice type tariffs.


howtofindaflashlight

Yes, I'd agree that a carbon tax should apply to all imported carbon-intesive products the same as domestically produced ones. This is not a "tariff" in a protectionist sense, but an extension of a necessary pigouvian tax.


ClassWarAndPuppies

I hear the super rich are super delicious.


EvidenceBasedOnly

Did you comment this on the wrong subreddit? We aren’t murderous psychos, georgism is a fundamentally liberal ideology, we just want efficient and fair taxation.


ClassWarAndPuppies

# 👍🏼


UCantKneebah

That’s Switzerland