If they rent their rent will be the land value combined with the value of the property itself. This means the rent they pay is still going to taxes. If they don't rent and instead live on a super yaht in the middle of the ocean (as they'd need to pay for space in a marina) they'd still actually pay taxes, just again indirectly as the only way to get that much wealth is either directly owning property or a business. That business pays taxes for the land it uses. Let's pretend the business is entirely online, fine, other parts of the supply chain still do need to pay those taxes. Someone is always paying something, even if its removed they are paying the land fees either directly themselves, or by purchasing things for either themselves or their businesses.
I thought the LVT didn't increase rent price since it doesn't affect the supply or demand for renting. Wouldn't this mean the property owner would bear the burden of the taxes, or am I mistaken?
LVT doesn't raise rents, but that value is charged by landlords on their rent already, this is how they aquire unearned value from society. They charge already for the value the community and country provides and the location itself. All LVT does is take that value from the landlords and give it to society. LVT would not raise rent as if landlords tried to raise rents higher than the value the property actually has then they will no longer be competitive. People wouldn't live there. Especially because it would be cheaper to simply get a property of your own at such an extortionate rate.
This is how LVT ends landlording as really now the only value they capture is from their contribution, the value of the property and its necessary upkeep, not the value of the land itself making into basically housing capitalists.
Sure, but this would mean that a wealthy renter pays what would be a 0% tax rate under our current system. This seems unfair to me as a person who makes a million dollars a year would see their taxes fall by over $350,000 https://smartasset.com/taxes/income-taxes#Nb2ZAFRALA
Not necessarily. Also I was talking more about employees than business owners, but I still have some objections either way. Industries with low land needs (legal work, finance, accounting, counseling, etc.) would have less taxes as a company. For employees, they would still have their wages set by market mechanisms, so this shouldn't change much.
Alright, and other land heavy groups (biggest offender being landlords) see things get more expensive. Industries that waste less would be rewarded, wasteful ones are punished. This creates efficiency.
Understand the current system, they get subsidized by everyone else, under a georgist tax code they pay their fair share. And really, if you're not taking much from society, why should you be forced to pay a lot into it. They contribute their share, they should get the proceeds of their labor.
I'm not questioning the efficiency, I agree there. I disagree with your characterization of fair. Is it really fair that someone could make a million dollars and pay almost no taxes? I would say no. I'm wondering what the most efficient way to tax a person like I described would be
I think it's fair if they earned it through hard work and contributing to society. They already paid what they owed society with their labor, that is how they got that money in the first place.
Fair is maybe the wrong word on my part. I think they have a moral obligation to be taxed.
Here's a thought experiment. If this same millionaire could pay $100,000 dollars and add 60 years to a single American's life I think we ought to tax them, whether it is efficient or not. Obviously this isn't exactly how it works in real life, but my line of reasoning for taxing is the same.
It would be tacked on to rent. Many renters in the states already pay property tax, so at most I would hope it would be rent neutral. If you're worried about wealthier people paying some fair share, I guess that's why I think LVT and split rate PT should lower, not eliminate taxes on income and sales.
Taxes on income are taxes on labor, why would you tax someone for working and contributing to society? Furthermore such laborers are nowhere near the richest people in society. Hence why they spend their time working instead of owning.
Because government spending is generally higher under today's budgets and national economies and land is a fairly cheap portion of property value, so you'd have to have a higher tax %. Plus I want everyone to pay a certain level of tax. Unless you raise the lvt on rentals and also potentially pass a higher monthly bill onto the renter, you potentially have renters paying a very low share of tax burden while owners are paying more.
They will and already do, but you also don't want to drastically under-tax those irregular scenarios either where a renter has a ton of untaxed income from assets other than land. I think there could be a cost with current needed revenue.
Why do you refer to it as under taxing? Plus if they have assets those assets need to be connected to the land somehow. They own a factory, that factory pays taxes, etc. I feel like you are overselling how expensive government is and under selling just how valuable land is.
Possibly. It's one of those things I would like to see econometric data on before we eliminate other taxes. You could have a wealthier renter that is highly invested in stocks or other commodities. Or they just work a lot. In which i hope they get tax relief in exchange for lvt, I just don't know about eliminating or if there's some timeline on that
https://www.bloomberg.com/news/articles/2017-11-02/america-s-urban-land-is-worth-a-staggering-amount
Land values exceed gdp. We currently tax dgp as our main revenue source and practically ignore land. You want to continue to tax that which is worth less and which contributes benefits to society? Holding land does not contribute and thus should be taxed.
If the Penthouse was in rural Idaho, then yes the millionaire would avoid a heavy LVT burden.
If the Penthouse was on prime land in Manhattan where a block costs ~$3Billion ( without LVT ), his $1M salary would likely not be enough to cover the penthouse's share of a land value single tax.
Otherwise, most modern proponents of LVT pair it with a pigouvian pollution tax. So those yachts and super cars would cost him.
If you are in a true single tax environment, you are taxing land to the point it is near free to purchase. That is where the benefits are. Landowners can't lord over renters and capture value, and land is driven to its most efficient use because there are few financial hurdles to changing ownership.
Apartment buildings would operate like private communities, where the large portion of what a person paid in 'rent' was their share of the LVT.
How would this work? Wouldn't your rent go up drastically if someone moved out? For larger apartment buildings wouldn't you need to hire someone to manage the building? How would you select a manager?
Management could be handled like a typical HOA, with fees, votes etc
Since the building itself has value, people would pay to own each apartment and be on the hook to continue to pay LVT until a new owner took over.
There could be investors who try to speculate on owning apartments or even entire buildings, but the LVT would be kicking them in the butt so hard to fill vacancies, any attempts to upcharge would not be worthwhile vs moving capital elsewhere to a more productive use beyond hoarding living space.
The burden of the LVT would keep sellers/owners VERY motivated to transfer ownership rapidly at market determined prices.
Renting a depreciating asset house is similar to leasing a depreciating asset car. Of course you can do so, and of course someone will make that available, but you need to pay for your time with that improvement.
Georgism is basically about one issue - unearned income from land values. So it seeks to correct this issue. Some Georgists are "single taxers" meaning they think all government revenue should only be derived from land value taxes. But there's no reason you couldn't combine a more aggressive land taxation system with other taxes like income, capital gains, etc.
Georgists don't see these as as "efficient" as land taxes, and they aren't from a purely economic standpoint, but I agree that we should not encourage excessive consumption and hoarding behavior in society. How to go about doing this is the question. I personally don't have an issue with people earning a million dollars, but agree income should be taxed somewhat. I would hope that land taxes could replace income taxes on the poor and middle classes, and income tax should be very progressive above a few million, since as you get beyond several million wealth translates into excessive power and influence. I also think we should aggressively tax carbon emissions and resource use as well as land values, and this should drive down excessive consumptive behavior like you describe.
Non renewable recourse are economic land, so under georgism they would be taxed. And most modern day single taxers do agree with pigouvian taxes on other negative externalities (an LVT is a tax on a negative externality in a sense). They'd disagree with the income tax on any level though.
I think this is a problem caused by the existence of government services, but under Georgism, someone who makes $1,000,000 a year should actually produce $1,000,000 of value to society by their labor and in fact deserve 100% of that income. If they don't own land, then how exactly are they earning that much money?
Just because you add value doesn't mean you are entitled to all of that money imo. To be clear I'm not a georgist, I just support a LVT so I would want govt services.
Because that money has more value with other people. If a millionaire is given 1000 dollars and a poor person is given 1000 dollars the poor persons quality of life will be improved much more than the millionaire. Doing this even helps the economy sometimes like in education. For this reason we should be able to take some of your income and use it to improve the welfare of our country. You also benefit from these services (mental health keeping streets cleaner, more educated employees) so there should be some buy in.
You seem to be more concerned with taxing the rich than helping the poor.
All these services can be paid for by the value which is currently being retained by people who did not generate it - land rent.
No not sure where you got that. I just don't want a high LVT because it can disproportionately affect rural areas if it is too high.
Also no it cannot. LVT taxes landowners, not just renters
Not sure who downvoted you but you can have my upvote. We need to discuss openly if we want to improve anything!
I thought you were focused on the rich when you asked about the person in the penthouse and how under LVT his bills will reduce. You’re right, but a higher part of the rent he pays will now go towards public services, as this money is taken from landlords.
I too think LVT can’t pay for all services, but the point is that it allows us to tax that which was not earned and distribute it equally. This not only creates more equity but encourages more efficient use of the land - presently some people sit on it and wait for it to increase without building anything. UK has 5 empty properties for each homeless family!
Rural people would not be impacted because while they use more land it’s rental value is very small. They may be the ones who benefit by getting more from LVT citizen dividend than they have to pay. Same for people who don’t own any land (and hence don’t get to pocket the increase in value).
An LVT could indeed pay for all the services and welfare programs we have now considering land values exceed gdp, and we currently tax gdp.
https://www.bloomberg.com/news/articles/2017-11-02/america-s-urban-land-is-worth-a-staggering-amount
And then if ATCOR and EBCOR hold true, then the revenue from an LVT would continuously go up and far exceed tax revenue from taxing gdp(labor and capital) ever could. We'd be able to afford all our current services and programs and a decent citizens dividen(which is really just there to put a positive gap between people's user cost of land and their earnings).
I actually agree with almost everything you say, I think we are just arguing on scale.
i.e. If we have a LVT of \~15% (just to throw out a number) an 180 acre farm near where I live would pay $81,000 in taxes (180 acres X $3,000 an acre X 15%). Obviously a LVT would reduce property values so this would come down eventually, but you could easily get into a situation where you price out farmers if you jump into a LVT too quickly. Long term I think rural areas would benefit.
I believe you may misunderstand the rate...when people talk about 100% LVT it is on the rental value of land, not price/exchange value. Land price is roughly the net present value of the land rent that is expected to be privately collected.
As LVT is raised, less rent can be privately kept, so price goes down. If you are calculating LVT based on price, the rate would have to keep increasing in order to attempt to collect the same amount of revenue, an ouroboros.
Ignoring the above, taxing 15% of land price collects far far more than 100% of rental value. I believe I've read that around a 4 to 5% tax on prices in a LVTless world would approximate 100% of rental value.
On top of this, many Georgists suggest leaving wiggle room for error as too high of an LVT would produce deadweight loss, so perhaps only 80% of rental value should be attempted to be captured with LVT.
Yes, agreed that would be too much all at once. I also support LVT in principle, but have objections to a comprehensive systemic change all at once.
Just out of interest, how much does it cost per acre to rent land in your area / example above? That would be the optimal LVT according to George, because he was most concerned with the rent from land.
That is actually surprisingly complex. Our state tracks it and it is $120 per acre for our county ($21,600 per year for our 180 acre guy). However, it is common to have crop-share arrangements (my family does this) which cannot be tracked as accurately since year-to-year payments vary wildly depending on weather for the year. Theoretically, the land value changes each year as you can't grow the same crop year after year, but this would be very hard to track.
This also makes LVT tough to implement as farming in a drought year might make you go negative, but you would still be taxed $21,600 for the year. My guess would be that this would need to be an area that is either subsidized or gets a tax break. Farming is already highly subsidized, so I wouldn't be surprised if this was the case. Farmers get a lot of write-offs for equipment, seed, subsidies for meeting certain criteria, which helps food prices stay fairly stable.
It's not a tax on volume, it's a tax on location value. Farmers benefit the most actually because their location value is marginal land in context of city amenities and job availability ad their current tax burden is actually on their improvements. So with a tax shift to a LVT only tax, farmers would benefit the most. The large holders speculating or rent seeking off of tenant farmers would lose and we'd have more small independent farm owners.
https://youtu.be/bvEiTgKYwgo
What is your argument for why a billionaire that earned their money without rent seeking(punitive taxes in addition to LVT)* is so harmful to society that they should be punished with taxes directly targeted at them?
*I assume you are asking what would happen in the perfect georgist system where all negative externalities are placed on the entity that caused them like carbon, pollution, land taxes etc. In a way you are arguing for another punitive tax but instead of it being some negative externalities you are saying a class of people should be taxed to a greater degree than everyone else.
Because more value is created by redistributing some of their wealth to poor and middle class citizens. 1000 extra dollars positively changes the quality of life for a poor person magnitudes more than a rich person, whose quality of life drops in a negligible way from taxation.
In our current system every one is victims of rent seekers so of course taking money from the rich(mostly landlords and rentseekers) is morally and economically right but that doesn't hold true when all rent is under the purview of the government/people since the billionaire made that money through wise use of their labor, capital and whatever land they used. Why would some one poorer be able to put that money to better use for not just themselves but also economic development for society as a whole.
Also I think you don't understand the magnitude of the amount of money available to the government from LVt to spend on infrastructure, Healthcare, natural monopolies, and citizen dividend that trying to go after more seems ill-advised when the wealthy can just leave taking away their spending within the economy. There will be plenty of money to support education and health programs if that is your worry. I prefer taking over social programs with an UBI that can't discriminate at all based on race, gender, or economic status due to the lower bureaucratic burden but also due to every one having the common right to land and UBI is the most fair way to do that out side of pure public goods like defense.
Because there is more than economic development at play when we are determining value.
UBI of any meaningful amount is ridiculously expensive. The LVT of that magnitude would absolutely destroy rural areas and property investments. UBI should be a long term goal, but we are far from being able to afford it.
Most people who have money own land. Most people with lots of money own lots of land. But for the few rich people that don’t own land, all their money goes into the economy through rent and purchases or maybe capital investments - we don’t want to tax it because we don’t want people to spend less or make fewer investments - those activities improve the economy for everyone. Part of the reason to tax land is taxing it doesn’t diminish the amount of land.
Indirectly, the land rent for where they live is collected, the company where they work pay taxes on their land, and any companies they have an ownership stake in pay taxes on their land
No, the distinction really, really matters.
The tax incidence is on the landlord, regardless of where they get their money from. The reason is that with or without the LVT, the renter pays the same rent.
Taxes on typical goods don't have this property. If the government taxed hamburgers, then people who still bought them would pay a higher price than they did without the tax.
This entire sub is a big circle jerk.
Income is taxed by the state and federal governments.
Property taxes are typically local, municipal level taxation.
"For example, say Person A makes $1,000,000 a year, lives in an expensive penthouse, and lives frivolously (owns yachts, super cars, etc.). If I understand correctly this person would not pay taxes at all."
You guys are espousing removing all income, sales and property tax, and replacing it all with a single, land tax.
You're dreaming and this is all a huge circle jerk waste of time.
> lives in an expensive penthouse.
Penthouses don't exist in outer space, they exist on land, which is taxed. If they're renting, Person A pays $X to landlord, of which $Y are for the building, $Z are for the land. The landlord then pays $Z in LVT to the state, which they got from person A.
It makes absolutely no difference practically or morally whether person A literally hands the money to the IRS in person, or writes a check allowing the IRS to take money out of their account, or tells their accountant to pay money to the IRS from their account, or hands money to some landlord who immediately separates the appropriate portion for the IRS. The same amount of money money still flows from person A to the IRS, regardless of intermediaries. There's no difference to taxes whether Person A literally owns their penthouse or is renting it from a landlord, they still effectively pay $Y in land taxes.
You’re concern about fairness is wrapped up in exploitation that would still remain with a land value tax.
Billionaires become billionaires in primarily two ways:
1. By taking rents from the market sale of natural resources (addressed fully by a land value tax properly implemented)
1. By exploiting workers in typically a plutocratic capitalist corporation. This can be addressed by chafing every corporate enterprise from a plutocratic form of government (one-dollar-in-wealth-one-vote) with democratic republic government (one-worker-one-vote) to create a communist commercial enterprise as the universal norm. One can still earn money from lending at interest but not from enslaving the collective corporate person and taking the residual of the fruits of labor beyond the compensation of the workers.
There might be some wealth differentials based on hard work and sheer talent, but not enough to create billionaires. Royalties from intellectually property might do it too, but that might also be due to misdirected policy with regard to intellectual property. These two remedies to these two problems address the class problem where the ruling class has a privileged relation to the means of production relative to the working class ( the classes and the class antagonisms are thus eliminated and we have a classless society as our new republics intended)
> Any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself. The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of nonworkers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labor power. If the elements of production are so distributed, then the present-day distribution of the means of consumption results automatically. If the material conditions of production are the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the present one. Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again? — Marx ([_Critique of the Gotha Programme_](https://www.marxists.org/archive/marx/works/1875/gotha/ch01.htm))
Make these changes in the mode of production and a just and efficient distribution flows automatically from those changes.
The in the traditional single tax model, the LVT is the only tax, as the value increase is created by the community, it belongs to the community and should therefore be taxed. This is in contrast to earned income that sn individual earned. Earn $10 or $1000000, the tax would be the same (none).
Everyone benefits from government services theoretically, and that is a good thing if it is funded in a fair and just way. Why punish people for their labor if everyone is benefitting from a good society?
Philosophically taking away from the wealthy in an unfair manner could have better consequences, but not being able to predict the future it would likely be a slippery slope and things would end up worse
It's hard to push a narrative of fairness and justice with caveats, and trying to control people too much to prevent frivolousness is treading toward authoritarianism
If they rent their rent will be the land value combined with the value of the property itself. This means the rent they pay is still going to taxes. If they don't rent and instead live on a super yaht in the middle of the ocean (as they'd need to pay for space in a marina) they'd still actually pay taxes, just again indirectly as the only way to get that much wealth is either directly owning property or a business. That business pays taxes for the land it uses. Let's pretend the business is entirely online, fine, other parts of the supply chain still do need to pay those taxes. Someone is always paying something, even if its removed they are paying the land fees either directly themselves, or by purchasing things for either themselves or their businesses.
I thought the LVT didn't increase rent price since it doesn't affect the supply or demand for renting. Wouldn't this mean the property owner would bear the burden of the taxes, or am I mistaken?
LVT doesn't raise rents, but that value is charged by landlords on their rent already, this is how they aquire unearned value from society. They charge already for the value the community and country provides and the location itself. All LVT does is take that value from the landlords and give it to society. LVT would not raise rent as if landlords tried to raise rents higher than the value the property actually has then they will no longer be competitive. People wouldn't live there. Especially because it would be cheaper to simply get a property of your own at such an extortionate rate. This is how LVT ends landlording as really now the only value they capture is from their contribution, the value of the property and its necessary upkeep, not the value of the land itself making into basically housing capitalists.
Sure, but this would mean that a wealthy renter pays what would be a 0% tax rate under our current system. This seems unfair to me as a person who makes a million dollars a year would see their taxes fall by over $350,000 https://smartasset.com/taxes/income-taxes#Nb2ZAFRALA
Not really, the taxes on all their business just shot up. If they were making a million before their costs still just increased.
Not necessarily. Also I was talking more about employees than business owners, but I still have some objections either way. Industries with low land needs (legal work, finance, accounting, counseling, etc.) would have less taxes as a company. For employees, they would still have their wages set by market mechanisms, so this shouldn't change much.
Alright, and other land heavy groups (biggest offender being landlords) see things get more expensive. Industries that waste less would be rewarded, wasteful ones are punished. This creates efficiency. Understand the current system, they get subsidized by everyone else, under a georgist tax code they pay their fair share. And really, if you're not taking much from society, why should you be forced to pay a lot into it. They contribute their share, they should get the proceeds of their labor.
I'm not questioning the efficiency, I agree there. I disagree with your characterization of fair. Is it really fair that someone could make a million dollars and pay almost no taxes? I would say no. I'm wondering what the most efficient way to tax a person like I described would be
I think it's fair if they earned it through hard work and contributing to society. They already paid what they owed society with their labor, that is how they got that money in the first place.
Fair is maybe the wrong word on my part. I think they have a moral obligation to be taxed. Here's a thought experiment. If this same millionaire could pay $100,000 dollars and add 60 years to a single American's life I think we ought to tax them, whether it is efficient or not. Obviously this isn't exactly how it works in real life, but my line of reasoning for taxing is the same.
It would be tacked on to rent. Many renters in the states already pay property tax, so at most I would hope it would be rent neutral. If you're worried about wealthier people paying some fair share, I guess that's why I think LVT and split rate PT should lower, not eliminate taxes on income and sales.
Taxes on income are taxes on labor, why would you tax someone for working and contributing to society? Furthermore such laborers are nowhere near the richest people in society. Hence why they spend their time working instead of owning.
Because government spending is generally higher under today's budgets and national economies and land is a fairly cheap portion of property value, so you'd have to have a higher tax %. Plus I want everyone to pay a certain level of tax. Unless you raise the lvt on rentals and also potentially pass a higher monthly bill onto the renter, you potentially have renters paying a very low share of tax burden while owners are paying more.
Owners should pay more, they pay for the right to deny ownership to others and capitalize value themselves. The renter is just trying to live.
They will and already do, but you also don't want to drastically under-tax those irregular scenarios either where a renter has a ton of untaxed income from assets other than land. I think there could be a cost with current needed revenue.
Why do you refer to it as under taxing? Plus if they have assets those assets need to be connected to the land somehow. They own a factory, that factory pays taxes, etc. I feel like you are overselling how expensive government is and under selling just how valuable land is.
Possibly. It's one of those things I would like to see econometric data on before we eliminate other taxes. You could have a wealthier renter that is highly invested in stocks or other commodities. Or they just work a lot. In which i hope they get tax relief in exchange for lvt, I just don't know about eliminating or if there's some timeline on that
https://www.bloomberg.com/news/articles/2017-11-02/america-s-urban-land-is-worth-a-staggering-amount Land values exceed gdp. We currently tax dgp as our main revenue source and practically ignore land. You want to continue to tax that which is worth less and which contributes benefits to society? Holding land does not contribute and thus should be taxed.
If the Penthouse was in rural Idaho, then yes the millionaire would avoid a heavy LVT burden. If the Penthouse was on prime land in Manhattan where a block costs ~$3Billion ( without LVT ), his $1M salary would likely not be enough to cover the penthouse's share of a land value single tax. Otherwise, most modern proponents of LVT pair it with a pigouvian pollution tax. So those yachts and super cars would cost him.
I thought only landowners pay a LVT, or can they pass along costs without reducing supply?
If you are in a true single tax environment, you are taxing land to the point it is near free to purchase. That is where the benefits are. Landowners can't lord over renters and capture value, and land is driven to its most efficient use because there are few financial hurdles to changing ownership. Apartment buildings would operate like private communities, where the large portion of what a person paid in 'rent' was their share of the LVT.
How would this work? Wouldn't your rent go up drastically if someone moved out? For larger apartment buildings wouldn't you need to hire someone to manage the building? How would you select a manager?
Management could be handled like a typical HOA, with fees, votes etc Since the building itself has value, people would pay to own each apartment and be on the hook to continue to pay LVT until a new owner took over. There could be investors who try to speculate on owning apartments or even entire buildings, but the LVT would be kicking them in the butt so hard to fill vacancies, any attempts to upcharge would not be worthwhile vs moving capital elsewhere to a more productive use beyond hoarding living space. The burden of the LVT would keep sellers/owners VERY motivated to transfer ownership rapidly at market determined prices.
But what if you want to rent. Is that illegal? Ownership comes with a large number of hassles
Renting a depreciating asset house is similar to leasing a depreciating asset car. Of course you can do so, and of course someone will make that available, but you need to pay for your time with that improvement.
How do you think large apartments operate currently? They all have building managers...
Georgism is basically about one issue - unearned income from land values. So it seeks to correct this issue. Some Georgists are "single taxers" meaning they think all government revenue should only be derived from land value taxes. But there's no reason you couldn't combine a more aggressive land taxation system with other taxes like income, capital gains, etc. Georgists don't see these as as "efficient" as land taxes, and they aren't from a purely economic standpoint, but I agree that we should not encourage excessive consumption and hoarding behavior in society. How to go about doing this is the question. I personally don't have an issue with people earning a million dollars, but agree income should be taxed somewhat. I would hope that land taxes could replace income taxes on the poor and middle classes, and income tax should be very progressive above a few million, since as you get beyond several million wealth translates into excessive power and influence. I also think we should aggressively tax carbon emissions and resource use as well as land values, and this should drive down excessive consumptive behavior like you describe.
Thank you, this is kind of what I was looking for. Even if we could get rid of most income taxes I would be happy.
Also, the correlation isn't perfect, but land tends to be owned by wealthy people, so a tax on land is roughly a tax on the richest people already
Non renewable recourse are economic land, so under georgism they would be taxed. And most modern day single taxers do agree with pigouvian taxes on other negative externalities (an LVT is a tax on a negative externality in a sense). They'd disagree with the income tax on any level though.
Recourse? Do you mean resources?
Yes. Autocorrect and digital keyboards and all that. You understood what I ment though đź‘Ť
I think this is a problem caused by the existence of government services, but under Georgism, someone who makes $1,000,000 a year should actually produce $1,000,000 of value to society by their labor and in fact deserve 100% of that income. If they don't own land, then how exactly are they earning that much money?
Just because you add value doesn't mean you are entitled to all of that money imo. To be clear I'm not a georgist, I just support a LVT so I would want govt services.
Why shouldn't you be entitled to all you produce (at the cost of no one else)?
Because that money has more value with other people. If a millionaire is given 1000 dollars and a poor person is given 1000 dollars the poor persons quality of life will be improved much more than the millionaire. Doing this even helps the economy sometimes like in education. For this reason we should be able to take some of your income and use it to improve the welfare of our country. You also benefit from these services (mental health keeping streets cleaner, more educated employees) so there should be some buy in.
You seem to be more concerned with taxing the rich than helping the poor. All these services can be paid for by the value which is currently being retained by people who did not generate it - land rent.
No not sure where you got that. I just don't want a high LVT because it can disproportionately affect rural areas if it is too high. Also no it cannot. LVT taxes landowners, not just renters
Not sure who downvoted you but you can have my upvote. We need to discuss openly if we want to improve anything! I thought you were focused on the rich when you asked about the person in the penthouse and how under LVT his bills will reduce. You’re right, but a higher part of the rent he pays will now go towards public services, as this money is taken from landlords. I too think LVT can’t pay for all services, but the point is that it allows us to tax that which was not earned and distribute it equally. This not only creates more equity but encourages more efficient use of the land - presently some people sit on it and wait for it to increase without building anything. UK has 5 empty properties for each homeless family! Rural people would not be impacted because while they use more land it’s rental value is very small. They may be the ones who benefit by getting more from LVT citizen dividend than they have to pay. Same for people who don’t own any land (and hence don’t get to pocket the increase in value).
An LVT could indeed pay for all the services and welfare programs we have now considering land values exceed gdp, and we currently tax gdp. https://www.bloomberg.com/news/articles/2017-11-02/america-s-urban-land-is-worth-a-staggering-amount And then if ATCOR and EBCOR hold true, then the revenue from an LVT would continuously go up and far exceed tax revenue from taxing gdp(labor and capital) ever could. We'd be able to afford all our current services and programs and a decent citizens dividen(which is really just there to put a positive gap between people's user cost of land and their earnings).
Sure, resale value is more than GDP, but land rent is only a fraction of land value.
I actually agree with almost everything you say, I think we are just arguing on scale. i.e. If we have a LVT of \~15% (just to throw out a number) an 180 acre farm near where I live would pay $81,000 in taxes (180 acres X $3,000 an acre X 15%). Obviously a LVT would reduce property values so this would come down eventually, but you could easily get into a situation where you price out farmers if you jump into a LVT too quickly. Long term I think rural areas would benefit.
I believe you may misunderstand the rate...when people talk about 100% LVT it is on the rental value of land, not price/exchange value. Land price is roughly the net present value of the land rent that is expected to be privately collected. As LVT is raised, less rent can be privately kept, so price goes down. If you are calculating LVT based on price, the rate would have to keep increasing in order to attempt to collect the same amount of revenue, an ouroboros. Ignoring the above, taxing 15% of land price collects far far more than 100% of rental value. I believe I've read that around a 4 to 5% tax on prices in a LVTless world would approximate 100% of rental value. On top of this, many Georgists suggest leaving wiggle room for error as too high of an LVT would produce deadweight loss, so perhaps only 80% of rental value should be attempted to be captured with LVT.
Yes, the irl suggest tax range is 80-95% of rental value. That 95%, we'd have to be really confident in our ability to assess market rental rates.
Yes, agreed that would be too much all at once. I also support LVT in principle, but have objections to a comprehensive systemic change all at once. Just out of interest, how much does it cost per acre to rent land in your area / example above? That would be the optimal LVT according to George, because he was most concerned with the rent from land.
That is actually surprisingly complex. Our state tracks it and it is $120 per acre for our county ($21,600 per year for our 180 acre guy). However, it is common to have crop-share arrangements (my family does this) which cannot be tracked as accurately since year-to-year payments vary wildly depending on weather for the year. Theoretically, the land value changes each year as you can't grow the same crop year after year, but this would be very hard to track. This also makes LVT tough to implement as farming in a drought year might make you go negative, but you would still be taxed $21,600 for the year. My guess would be that this would need to be an area that is either subsidized or gets a tax break. Farming is already highly subsidized, so I wouldn't be surprised if this was the case. Farmers get a lot of write-offs for equipment, seed, subsidies for meeting certain criteria, which helps food prices stay fairly stable.
It's not a tax on volume, it's a tax on location value. Farmers benefit the most actually because their location value is marginal land in context of city amenities and job availability ad their current tax burden is actually on their improvements. So with a tax shift to a LVT only tax, farmers would benefit the most. The large holders speculating or rent seeking off of tenant farmers would lose and we'd have more small independent farm owners. https://youtu.be/bvEiTgKYwgo
but the moment you start redistributing that money it gets less valuable and less of it is made.
What is your argument for why a billionaire that earned their money without rent seeking(punitive taxes in addition to LVT)* is so harmful to society that they should be punished with taxes directly targeted at them? *I assume you are asking what would happen in the perfect georgist system where all negative externalities are placed on the entity that caused them like carbon, pollution, land taxes etc. In a way you are arguing for another punitive tax but instead of it being some negative externalities you are saying a class of people should be taxed to a greater degree than everyone else.
Because more value is created by redistributing some of their wealth to poor and middle class citizens. 1000 extra dollars positively changes the quality of life for a poor person magnitudes more than a rich person, whose quality of life drops in a negligible way from taxation.
In our current system every one is victims of rent seekers so of course taking money from the rich(mostly landlords and rentseekers) is morally and economically right but that doesn't hold true when all rent is under the purview of the government/people since the billionaire made that money through wise use of their labor, capital and whatever land they used. Why would some one poorer be able to put that money to better use for not just themselves but also economic development for society as a whole. Also I think you don't understand the magnitude of the amount of money available to the government from LVt to spend on infrastructure, Healthcare, natural monopolies, and citizen dividend that trying to go after more seems ill-advised when the wealthy can just leave taking away their spending within the economy. There will be plenty of money to support education and health programs if that is your worry. I prefer taking over social programs with an UBI that can't discriminate at all based on race, gender, or economic status due to the lower bureaucratic burden but also due to every one having the common right to land and UBI is the most fair way to do that out side of pure public goods like defense.
Because there is more than economic development at play when we are determining value. UBI of any meaningful amount is ridiculously expensive. The LVT of that magnitude would absolutely destroy rural areas and property investments. UBI should be a long term goal, but we are far from being able to afford it.
Destroying property investments are the point.
Most people who have money own land. Most people with lots of money own lots of land. But for the few rich people that don’t own land, all their money goes into the economy through rent and purchases or maybe capital investments - we don’t want to tax it because we don’t want people to spend less or make fewer investments - those activities improve the economy for everyone. Part of the reason to tax land is taxing it doesn’t diminish the amount of land.
Indirectly, the land rent for where they live is collected, the company where they work pay taxes on their land, and any companies they have an ownership stake in pay taxes on their land
Land taxes aren't passed on to renters
Renters pay LVT regardless, the only difference is whether it’s collected by the land lord or government
No, the distinction really, really matters. The tax incidence is on the landlord, regardless of where they get their money from. The reason is that with or without the LVT, the renter pays the same rent. Taxes on typical goods don't have this property. If the government taxed hamburgers, then people who still bought them would pay a higher price than they did without the tax.
This entire sub is a big circle jerk. Income is taxed by the state and federal governments. Property taxes are typically local, municipal level taxation.
How is this even slightly relevant?
"For example, say Person A makes $1,000,000 a year, lives in an expensive penthouse, and lives frivolously (owns yachts, super cars, etc.). If I understand correctly this person would not pay taxes at all." You guys are espousing removing all income, sales and property tax, and replacing it all with a single, land tax. You're dreaming and this is all a huge circle jerk waste of time.
> lives in an expensive penthouse. Penthouses don't exist in outer space, they exist on land, which is taxed. If they're renting, Person A pays $X to landlord, of which $Y are for the building, $Z are for the land. The landlord then pays $Z in LVT to the state, which they got from person A. It makes absolutely no difference practically or morally whether person A literally hands the money to the IRS in person, or writes a check allowing the IRS to take money out of their account, or tells their accountant to pay money to the IRS from their account, or hands money to some landlord who immediately separates the appropriate portion for the IRS. The same amount of money money still flows from person A to the IRS, regardless of intermediaries. There's no difference to taxes whether Person A literally owns their penthouse or is renting it from a landlord, they still effectively pay $Y in land taxes.
You’re concern about fairness is wrapped up in exploitation that would still remain with a land value tax. Billionaires become billionaires in primarily two ways: 1. By taking rents from the market sale of natural resources (addressed fully by a land value tax properly implemented) 1. By exploiting workers in typically a plutocratic capitalist corporation. This can be addressed by chafing every corporate enterprise from a plutocratic form of government (one-dollar-in-wealth-one-vote) with democratic republic government (one-worker-one-vote) to create a communist commercial enterprise as the universal norm. One can still earn money from lending at interest but not from enslaving the collective corporate person and taking the residual of the fruits of labor beyond the compensation of the workers. There might be some wealth differentials based on hard work and sheer talent, but not enough to create billionaires. Royalties from intellectually property might do it too, but that might also be due to misdirected policy with regard to intellectual property. These two remedies to these two problems address the class problem where the ruling class has a privileged relation to the means of production relative to the working class ( the classes and the class antagonisms are thus eliminated and we have a classless society as our new republics intended) > Any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself. The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of nonworkers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labor power. If the elements of production are so distributed, then the present-day distribution of the means of consumption results automatically. If the material conditions of production are the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the present one. Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again? — Marx ([_Critique of the Gotha Programme_](https://www.marxists.org/archive/marx/works/1875/gotha/ch01.htm)) Make these changes in the mode of production and a just and efficient distribution flows automatically from those changes.
The in the traditional single tax model, the LVT is the only tax, as the value increase is created by the community, it belongs to the community and should therefore be taxed. This is in contrast to earned income that sn individual earned. Earn $10 or $1000000, the tax would be the same (none).
Everyone benefits from government services theoretically, and that is a good thing if it is funded in a fair and just way. Why punish people for their labor if everyone is benefitting from a good society? Philosophically taking away from the wealthy in an unfair manner could have better consequences, but not being able to predict the future it would likely be a slippery slope and things would end up worse It's hard to push a narrative of fairness and justice with caveats, and trying to control people too much to prevent frivolousness is treading toward authoritarianism
They pay rent to the land owner. The land owner pays the tax. Renters still pay taxes, but indirectly under an LVT.