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Land value tax

Masterhawk

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In the 19th century, there was an economic philosophy known as Georgism (or Geoism). To sum it up, they believe in socialism for land and capitalism for everything else. The logic is that while people can produce many stuff with their labor, they did not produce the land. Thus by paying a land value tax, they would be paying rent to mother nature. Georgists use this to argue that there should be a tax on land and that it should be the only tax. The movement died out after the early 20th century and very few jurisdictions ended up embracing this kind of tax.


A land value tax is a tax on land value. It differs from property taxes in that it only taxes the value of land, not anything built on it. I'm somewhat doubtful that this tax could collect enough revenue to replace everything else but it could have positive results. With the revenue collected, it could help reduce fiscal deficits, increase spending, or lower existing taxes. LVT would be progressive in nature because rich people tend to own more total land value with multiple houses and because poor people are more likely to rent. It would also discourage land speculation and instead encourage the efficient use of land. It's also less susceptible to tax evasion because of the full transparency of land value as opposed to personal or corporate income tax. The one issue I see is the potential negative effect on people who are land rich but cash poor such as on independent farmers and on people living in expensive cities (the cost being passed down as increased rent).

You may remember me posting about the consumption tax. A bunch of people pointed out that luxury goods tend to have elastic demand and that rich people would simply cheat the system by importing such goods. This is actually what happened in the early 90s when such as tax was implemented in the US; revenue turned out to be lower than expected. LVT doesn't have this problem because it cannot be moved and because it's not a commodity which is subject to supply and demand.
 

Jason Warfield

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Yes, land is a commodity.

Some land you can build on, others you cannot. Some land can be farmed, other land cannot. Just a couple of obvious examples. Use and stewardship will determine the value of land. Then there is the whole issue of ground rent...

Also, land can be created. Some extreme examples would be the creation of islands (for territorial purposes or for airports, etc.). Land can also be reclaimed: like the Netherlands and what one plan for Tangiers Island in the Chesapeake Bay calls for. Reclaimed land can also be land treated for any pollution; scraping off a few feet of the polluted soil and draining of pollutants, we did that here in Baltimore to expand Harbor East.

But in the end, land is a commodity. An artificial commodity, I grant you, but a commodity, nevertheless.
 

Mycroft

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In the 19th century, there was an economic philosophy known as Georgism (or Geoism). To sum it up, they believe in socialism for land and capitalism for everything else. The logic is that while people can produce many stuff with their labor, they did not produce the land. Thus by paying a land value tax, they would be paying rent to mother nature. Georgists use this to argue that there should be a tax on land and that it should be the only tax. The movement died out after the early 20th century and very few jurisdictions ended up embracing this kind of tax.


A land value tax is a tax on land value. It differs from property taxes in that it only taxes the value of land, not anything built on it. I'm somewhat doubtful that this tax could collect enough revenue to replace everything else but it could have positive results. With the revenue collected, it could help reduce fiscal deficits, increase spending, or lower existing taxes. LVT would be progressive in nature because rich people tend to own more total land value with multiple houses and because poor people are more likely to rent. It would also discourage land speculation and instead encourage the efficient use of land. It's also less susceptible to tax evasion because of the full transparency of land value as opposed to personal or corporate income tax. The one issue I see is the potential negative effect on people who are land rich but cash poor such as on independent farmers and on people living in expensive cities (the cost being passed down as increased rent).

You may remember me posting about the consumption tax. A bunch of people pointed out that luxury goods tend to have elastic demand and that rich people would simply cheat the system by importing such goods. This is actually what happened in the early 90s when such as tax was implemented in the US; revenue turned out to be lower than expected. LVT doesn't have this problem because it cannot be moved and because it's not a commodity which is subject to supply and demand.

"With the revenue collected, it could help reduce fiscal deficits, increase spending, or lower existing taxes."

This implies you are talking about this being a federal tax. It brings a few questions to mind:

1. When has a new tax ever lowered existing taxes?

2. When has ANY new tax or tax increase ever reduced fiscal deficits?

3. And why on earth would you EVER want to increase government spending?​

"A land value tax is a tax on land value."

Who do you propose should be tasked with determining land value? And what should be the criteria for determining the value of any particular piece of land? Do you propose a new federal agency...say, The Land Department...who's sole function is to examine each and every bit of land in the country to determine its value? I don't know...that may end up costing more than the revenue gained.

Should we go by the valuations that are already determined by the states? States use differing criteria to determine their property taxes. You could end up with people paying a higher or lower federal land value tax than others who have similar land simply because their state uses different criteria for determining land value.​

"It would also discourage land speculation and instead encourage the efficient use of land."

Why do you want to discourage land speculation? Do you have a problem with people buying land based on the chance that it may increase in value some day?

This tax will stifle the ability of some people to even think about buying land.

For example, here in Colorado, I can buy a piece of land that has zero commercial or industrial value right now, but I can afford the price and the property tax. But if you add another tax obligation you've effectively raised the cost of owning that land...possibly outside of my ability to pay. Sure...someone else could buy that land, but THEY won't be able to use the land anymore than I could. But you and your federal government just prevented ME from buying the land in favor of someone with more money than I have by raising the cost of owning the land.​

I don't think the federal government should be making it harder for people to buy land. In effect, the government would be favoring the wealthy over the less wealthy.​


Yeah...I don't think this land value tax of yours is a very good idea.
 
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Tlrmln

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At the end of the day, if we want to have a functioning government, it needs to have income. Since government generally is not in the business of operating for profit, the best way to get this income is through taxes. Something has to be taxed, and it's generally (albeit not universally) accepted that each person should pay in accordance with their ability to do so. Land/property value are as good a basis as any other to achieve this.
 

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I'm not quite sure what the goal is in simply taxing the land vs the property value. Is it because there is a limited supply of land and that the tax would discourage the hoarding of land?

If so, I can get on board with that.
 

NerdcoreSteve

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"With the revenue collected, it could help reduce fiscal deficits, increase spending, or lower existing taxes."

This implies you are talking about this being a federal tax. It brings a few questions to mind:​
1. When has a new tax ever lowered existing taxes?​
2. When has ANY new tax or tax increase ever reduced fiscal deficits?​
3. And why on earth would you EVER want to increase government spending?​


"A land value tax is a tax on land value."

Who do you propose should be tasked with determining land value? And what should be the criteria for determining the value of any particular piece of land? Do you propose a new federal agency...say, The Land Department...who's sole function is to examine each and every bit of land in the country to determine its value? I don't know...that may end up costing more than the revenue gained.​
Should we go by the valuations that are already determined by the states? States use differing criteria to determine their property taxes. You could end up with people paying a higher or lower federal land value tax than others who have similar land simply because their state uses different criteria for determining land value.​

"It would also discourage land speculation and instead encourage the efficient use of land."

Why do you want to discourage land speculation? Do you have a problem with people buying land based on the chance that it may increase in value some day?​
This tax will stifle the ability of some people to even think about buying land.​
For example, here in Colorado, I can buy a piece of land that has zero commercial or industrial value right now, but I can afford the price and the property tax. But if you add another tax obligation you've effectively raised the cost of owning that land...possibly outside of my ability to pay. Sure...someone else could buy that land, but THEY won't be able to use the land anymore than I could. But you and your federal government just prevented ME from buying the land in favor of someone with more money than I have by raising the cost of owning the land.​


I don't think the federal government should be making it harder for people to buy land. In effect, the government would be favoring the wealthy over the less wealthy.​


Yeah...I don't think this land value tax of yours is a very good idea.

"why on earth would you EVER want to increase government spending?"

I'll bite on this planet-sized can of worms. 🙂

1. Bank loans are government spending. Banks create money when they make a loan and that money ultimately comes from the federal reserve. The amount of loans increase and decrease over time. This seems reasonable if we're going to agree that there should be money, banks, and loans.

2. Because the government might have a new need, for example the need to repair and build more infrastructure.

3. Because people are unemployed. The government created unemployment by requiring folks to pay taxes in dollars. It's only sensible for them to spend enough money to make sure those folks have access to dollars.
 

joko104

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No, never. I understand white man's desire to take land the people whose land it is. There are piles of words attempting to prove the government take people's land from them by force, oppression, abusive regulations and taxation. But, in fact, it is one group of people - the majority - taking land away from whose land it is.

This is denial of a most basic and instinct human nature. To have a place that is their's - that they are secure in, can not be taken from them - including as shelter and a safe haven in their old age.

We have a huge amount of land. Nearly all is very uninhabitable virgin natural land that may never be developed by deed restriction. Still, it is our land. Ours. The deal to have that exemption on the land is that is equally forever will be tax free. There are obligations we have in terms of managing and safeguarding the land. Still, it's ours. No words can be written justifying the majority population - ie the government - taking it from us.
 

jimbo

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In the 19th century, there was an economic philosophy known as Georgism (or Geoism). To sum it up, they believe in socialism for land and capitalism for everything else. The logic is that while people can produce many stuff with their labor, they did not produce the land. Thus by paying a land value tax, they would be paying rent to mother nature. Georgists use this to argue that there should be a tax on land and that it should be the only tax. The movement died out after the early 20th century and very few jurisdictions ended up embracing this kind of tax.


A land value tax is a tax on land value. It differs from property taxes in that it only taxes the value of land, not anything built on it. I'm somewhat doubtful that this tax could collect enough revenue to replace everything else but it could have positive results. With the revenue collected, it could help reduce fiscal deficits, increase spending, or lower existing taxes. LVT would be progressive in nature because rich people tend to own more total land value with multiple houses and because poor people are more likely to rent. It would also discourage land speculation and instead encourage the efficient use of land. It's also less susceptible to tax evasion because of the full transparency of land value as opposed to personal or corporate income tax. The one issue I see is the potential negative effect on people who are land rich but cash poor such as on independent farmers and on people living in expensive cities (the cost being passed down as increased rent).

You may remember me posting about the consumption tax. A bunch of people pointed out that luxury goods tend to have elastic demand and that rich people would simply cheat the system by importing such goods. This is actually what happened in the early 90s when such as tax was implemented in the US; revenue turned out to be lower than expected. LVT doesn't have this problem because it cannot be moved and because it's not a commodity which is subject to supply and demand.

Land is already taxed. Are you advocating a separate tax on already taxed land?

Instead of creating another tax, why not look for ways to decrease government spending? I know, that's a radical concept. But might be worth a try.
 

Peter

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Land is already taxed. Are you advocating a separate tax on already taxed land?

Instead of creating another tax, why not look for ways to decrease government spending? I know, that's a radical concept. But might be worth a try.

Ok then, how about we cut spending on the military and police?
We can then use the money to fund better schools, infrastructure and eliminate most tuition fees for older students.

As for a land tax maybe you could implement a system where you find out the average size of a house in the US and only tax people who have houses larger than that or second or more houses in a sliding scale?
This would only tax people with larger houses who can afford a tax while not touching most low and middle class families.
 

newpublius

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The problem is that in the information age we have alot of wealth in intangible things and so the tax discriminates against those who need relatively more land than others.
 

jimbo

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Ok then, how about we cut spending on the military and police?
We can then use the money to fund better schools, infrastructure and eliminate most tuition fees for older students.

As for a land tax maybe you could implement a system where you find out the average size of a house in the US and only tax people who have houses larger than that or second or more houses in a sliding scale?
This would only tax people with larger houses who can afford a tax while not touching most low and middle class families.

We already have a system. It's called assessment.

Can't say I would have much objection to cutting the military. We don't need to be the world's police.


Police are a different matter. I don't feel good about calling a protester when I'm being robbed.

How about we tax the 50% that pays no taxes?
 

Bullseye

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In the 19th century, there was an economic philosophy known as Georgism (or Geoism). To sum it up, they believe in socialism for land and capitalism for everything else. The logic is that while people can produce many stuff with their labor, they did not produce the land. Thus by paying a land value tax, they would be paying rent to mother nature. Georgists use this to argue that there should be a tax on land and that it should be the only tax. The movement died out after the early 20th century and very few jurisdictions ended up embracing this kind of tax.


A land value tax is a tax on land value. It differs from property taxes in that it only taxes the value of land, not anything built on it. I'm somewhat doubtful that this tax could collect enough revenue to replace everything else but it could have positive results. With the revenue collected, it could help reduce fiscal deficits, increase spending, or lower existing taxes. LVT would be progressive in nature because rich people tend to own more total land value with multiple houses and because poor people are more likely to rent. It would also discourage land speculation and instead encourage the efficient use of land. It's also less susceptible to tax evasion because of the full transparency of land value as opposed to personal or corporate income tax. The one issue I see is the potential negative effect on people who are land rich but cash poor such as on independent farmers and on people living in expensive cities (the cost being passed down as increased rent).

You may remember me posting about the consumption tax. A bunch of people pointed out that luxury goods tend to have elastic demand and that rich people would simply cheat the system by importing such goods. This is actually what happened in the early 90s when such as tax was implemented in the US; revenue turned out to be lower than expected. LVT doesn't have this problem because it cannot be moved and because it's not a commodity which is subject to supply and demand.
We don't need no steenkin' taxes.
 

Drawdown

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We already have a system. It's called assessment.

Can't say I would have much objection to cutting the military. We don't need to be the world's police.


Police are a different matter. I don't feel good about calling a protester when I'm being robbed.

How about we tax the 50% that pays no taxes?

I'd be happy if we just stopped sending people more money back than they ever paid in in the form of the Earned Income Tax Credit. It is a disaster republican workfare program that has resulted in untold billions in fraud.
 

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I'm not quite sure what the goal is in simply taxing the land vs the property value. Is it because there is a limited supply of land and that the tax would discourage the hoarding of land?

If so, I can get on board with that.

Pretty much, yes. Property tax includes not just the value of the land but the 'improvements' on that land (e.g. your house). LVT is just the value of the land minus your improvements.

Many great thinkers of various political persuasions advocated LVT, including conservatives like WIliam F Buckley and Winston Churchill, to liberals like Ralph Nader and Joseph Stigletz, to libertarians like Albert Jay Nock and Milton Friedman, to radicals like Helen Keller and Leo Tolstoy. Hell, Tolstoy was such an LVT fanboy he kept a framed picture of Henry George on his desk.
 

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We don't need no steenkin' taxes.

Well then I guess you are perfectly fine with no police force or military, right Bullseye?

What we need are advocates for SMARTER taxation, not kneejerk reactionaries, "Durr, stop takin' my moneys gubmint!!!"
 

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Yeah...I don't think this land value tax of yours is a very good idea.

Conservatives like Churchill and Buckley loved the idea of the land value tax. Milton Friedman thought it was the 'least evil tax.' It is a brilliant idea and anyone who can get the Single Tax Movement rolling again should win a Nobel Peace Prize.
 

Geoist

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Land is already taxed. Are you advocating a separate tax on already taxed land?

Instead of creating another tax, why not look for ways to decrease government spending? I know, that's a radical concept. But might be worth a try.

LVT advocates want to replace the property tax (and frankly, most other taxes) with a land value tax. No, LVT advocates do not want to tax the land twice.
 

Geoist

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The problem is that in the information age we have alot of wealth in intangible things and so the tax discriminates against those who need relatively more land than others.

If you are referring to farmers, keep in mind not every acre of land is of equal market value. Farmers live in rural areas where the land is far far cheaper. Also, LVT would mean no property tax on barns, silos, homes, storage sheds, stables, etc.
 

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NerdcoreSteve

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Well then I guess you are perfectly fine with no police force or military, right Bullseye?

What we need are advocates for SMARTER taxation, not kneejerk reactionaries, "Durr, stop takin' my moneys gubmint!!!"
"Well then I guess you are perfectly fine with no police force or military, right Bullseye?"

Me (an anarchist): well..... 🙂
 

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LVT advocates want to replace the property tax (and frankly, most other taxes) with a land value tax. No, LVT advocates do not want to tax the land twice.

You can't seriously think that the improvement tax will go away and be replaced with a higher land tax. A typical million dollar home is about 25% land and 75% improvements. And the left believes the rich already don't pay their fair share.

That will last about 2 days.
 

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If you are referring to farmers, keep in mind not every acre of land is of equal market value. Farmers live in rural areas where the land is far far cheaper. Also, LVT would mean no property tax on barns, silos, homes, storage sheds, stables, etc.

In my mind I was thinking more in terms of revenue:land value and speculating that google and other tech companies likely have high revenue:land value ratios; not necessarily acreage.
 

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In my mind I was thinking more in terms of revenue:land value and speculating that google and other tech companies likely have high revenue:land value ratios; not necessarily acreage.

Tech companies don't hold much acreage, but 1. they hold some of the most valuable solid land in the world. 2. they hold valuable patents that geoists argue should be heavily taxed or limited 3. the digital space they hold fit the economic definition of land and would be subject to taxation under LVT.

Most geoists/georgists I read advocate for a revenue-neutral transition to an LVT tax system.
 
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Ringo Stalin

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The fact that we don't pay tax for air yet is a big flaw of private market economy. If the air were in private hands, it would be much cleaner, fresher and more fragrant, and competition would lead to prices that would be quite moderate and affordable for the majority of the population.
P.S. I think I deserve next Nobel price in the field of economy.
 
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