Henry George, A Land Tax, and the 2016 Election

[Thailandnotes]

http://techcrunch.com/2016/01/29/not...appened-before

Around the time that George published “Progress and Poverty,” the U.S. had the smallish sort of government that modern-day libertarians would favor. It took in less than 2 percent of GDP in taxes through customs revenues and excise taxes, and most true governance happened at the local and state levels. There was no Federal Reserve Bank, the economy ran on the gold standard and military was small with only commitments to guarding the frontier. It was also deeply corrupt and patrimonial with private interests coursing through it using bribes and patronage.

But by the turn of the century, the Gilded Age and the Progressive Era that it kicked off, that government had been transformed from a small, clientelistic one that awarded positions on the basis of patronage into a much larger professionalized and merit-based bureaucracy, according to Francis Fukuyama’s Political Order and Political Decay.

Technological and economic changes had fundamentally altered the structure of society, creating demand for a new form of political governance.

This is part of the argument that underpins the work of economist Carlota Perez, whose work is sometimes cited by venture capitalists like Marc Andreessen, Chris Dixon or Union Square Ventures’ Fred Wilson.

[gwynedd1]

Re: Henry George, A Land Tax, and the 2016 Election

When Henry George passed away he was buried 12 feet under ground. They also made sure he would promote his theory in the afterlife and buried all his writings with him.

[LorenS]

Re: Henry George, A Land Tax, and the 2016 Election

It is a little ironic to blast rising rents and then propose the solution is a land tax. I've watched plenty of older people get just creamed by property taxes. Property taxes go up way faster than "inflation" adjusted Social Security.


It's a horrible conflict of interest to let the same entity that collects tax revenue also assign the value of the property they collect revenue on.

I sent my county assessor no less than 6 properties within 1/4 mile of my house that were on larger lots with more finished square footage and larger garages that sold for less than they were claiming my house was worth. They did not budge a penny on their bogus valuation. That's just plain wrong.

[thriftyandboringinohio]

Re: Henry George, A Land Tax, and the 2016 Election

It is a little ironic to blast rising rents and then propose the solution is a land tax. I've watched plenty of older people get just creamed by property taxes. Property taxes go up way faster than "inflation" adjusted Social Security.


It's a horrible conflict of interest to let the same entity that collects tax revenue also assign the value of the property they collect revenue on.

I sent my county assessor no less than 6 properties within 1/4 mile of my house that were on larger lots with more finished square footage and larger garages that sold for less than they were claiming my house was worth. They did not budge a penny on their bogus valuation. That's just plain wrong.

You make good points, LorenS. My wife grew up on the south fork of Long Island, and most of her family and friends have been priced out of their hometowns as property values transformed from simple potato farming hamlets into the holiday playground of the billionaire bunch.

Still, there is one key difference between rents and taxes on land.
Rents buy yachts and homes in the Hamptons, while taxes buy elementary schools and roads.

To me, the most crooked aspect of soaring property taxes is that the county collects taxes today on some windfall I will not put into my pockets for many years, if ever.

[Thailandnotes]

Re: Henry George, A Land Tax, and the 2016 Election

land tax and property tax are different
https://en.wikipedia.org/wiki/Land_value_tax#Efficiency

[gwynedd1]

Re: Henry George, A Land Tax, and the 2016 Election

It is a little ironic to blast rising rents and then propose the solution is a land tax. I've watched plenty of older people get just creamed by property taxes. Property taxes go up way faster than "inflation" adjusted Social Security.


It's a horrible conflict of interest to let the same entity that collects tax revenue also assign the value of the property they collect revenue on.

I sent my county assessor no less than 6 properties within 1/4 mile of my house that were on larger lots with more finished square footage and larger garages that sold for less than they were claiming my house was worth. They did not budge a penny on their bogus valuation. That's just plain wrong.

You do raise a good point that the assessment should not come from the same entity that taxes it. Its one of the issues.

Though as it happens I recently spoke with a Ukrainian man and his Russian wife. I was made aware before of their non existent property taxes in Ukraine and had it confirmed, People can simply sit on their land unproductively. I first learned of this when I was in a Ukrainian woman's landscaping truck...As we were driving she said here you have to work to pay the property tax......Its the same story with the Sinclairs in Hawaii. They work because the state taxes them.

Its also a pretty big conflict of interest to tax other people for benefits received . The reason why land has any value is because the state says its yours for exclusive use. It all sound like a good point , that the state is intrusive when it taxes your land, until any other tax is considered like skin taxes and behaviour taxes. There is absolutely no third party involved in selling goods or services. There is a third party involved when you say something you did not make is yours.

The other perspective which poisons the debate is the homesteading mentality. Homesteads are typically rural, low values regions in terms of raw real estate. Yes its all from the homesteader's work. None of this applies because there should be no tax. However it is hardly rugged American individualism when GM opens a plant in Detroit which made the land valuable around it , and allowing the retiree to either camp out or resell it causing labor costs to go up and urban sprawl ensues. If you live in a place designed to work, move.







As to the corruption there is alway that. That is why the Federal government should not be involved . As long as its the state and country level there is no monopoly.

[dcarrigg]

Re: Henry George, A Land Tax, and the 2016 Election

land tax and property tax are different
https://en.wikipedia.org/wiki/Land_value_tax#Efficiency

That is true. But being a coastal New Englandah and seeing how arbitrary land appraisal value is one cannot help but see some strange level of injustice in it. There are times when the mil rate stays the same, but the underlying value goes up by 1,000% in just a couple of years between appraisals. It's the surefire tactic for moving the Swamp Yankees out and making room for the pinstriped Yale to Wall Street crowd to have another summer home. I figure, at the rate they're going, by 2100, the masses will save up years and pay thousands of dollars in todays money to their noble overlords just for the privilege of getting a glimpse at the drink.

It's sort of a weird, more modern, classist blockbusting instead of the racist one. I've seen the moves in action, too. You have someone come into an area and overpay like a maniac for one property. It rubs off on the others in the next appraisal and forces them to sell when they can't afford the taxes. Of course, they sell for far less than the appraisal value, and they're motivated, because they have to get out quickly. Then you snap up the rest of the homes in a fire sale and tear them down and erect some condos or a couple swanky McMansions in their place. Then the appraisals really pop. And you move the rest of the neighborhood out with them.

Seems to me the land value tax was a far more sensible solution in olde times when computers in Manhattan didn't blink trillions into and out of existence on nanosecond whims of 1s and 0s. Land still is the most valuable commodity in capitalism. No doubt about that. So there is a lot of sense to be made from the LVT. But with how trivial it is for those with concentrated capital to manipulate real estate markets and own tens of thousands or millions of homes and acres of land...I mean, just quantities of this stuff that would be totally unfathomable to George...Malone owning a Connecticut-sized chunk of land, Turner owning a Delaware and 2 Rhode Islands worth, etc. etc...I'm just not sure there's any back on land value tax alone without a way to tax capital creation/gains/transfers directly somehow as well.

[gwynedd1]

Re: Henry George, A Land Tax, and the 2016 Election

An LVT is certainly not the cure all. Nor should it only be applied to land. It should apply to the general principle of a user fee, just like a stamp tax. If a document needs to be enforced by the state, should the people that benefit pay for it? It would be one of many things including dealing with our corrupt credit system, federal power etc. etc. However one can not simply let a private consortium own vast tracts of land and consider it a democracy because there is still a sidewalk. It is also the only way small states can retain any real sovereignty. Otherwise the entire economic surplus is sucked out the country by foreign ownership. Georgism is not a good economic system, but it is a tool of understanding the problem of income without effort and effort without income.

[LorenS]

Re: Henry George, A Land Tax, and the 2016 Election

You make good points, LorenS. My wife grew up on the south fork of Long Island, and most of her family and friends have been priced out of their hometowns as property values transformed from simple potato farming hamlets into the holiday playground of the billionaire bunch.

Still, there is one key difference between rents and taxes on land.
Rents buy yachts and homes in the Hamptons, while taxes buy elementary schools and roads.

To me, the most crooked aspect of soaring property taxes is that the county collects taxes today on some windfall I will not put into my pockets for many years, if ever.

You just reminded me of another completely outlandish practice with regards to land tax. We have subdivisions being built on farmland, they get an "urban blight" designation and the developer gets to divert the property taxes into his own pocket while the school districts get hosed and those of us in the "old" housing get to pick up the tab for educating the children of the new subdivisions.

So my mom at age 70+ living on SS and having long since had no kids in the house is also paying to educate kids in houses 4x the size of hers.

I am actually OK with property tax as long as the taxes go to the things that make the property valuable, schools, roads, local government. However, you can't have really high property tax and expect rents to be cheap. My dad is renting out his farm land, the property tax is equal to 1/2 of the gross rent. If rent goes up much more he will either have to raise the rent or sell the land. Raising the rent doesn't work so well because the profits from the land are not going up with taxes. This land is out in the middle of nowhere, no one is going to build condos on it, it's only value is to grow crops, and yet someone somewhere is declaring it worth huge amounts of money....

[gwynedd1]

Re: Henry George, A Land Tax, and the 2016 Election

You just reminded me of another completely outlandish practice with regards to land tax. We have subdivisions being built on farmland, they get an "urban blight" designation and the developer gets to divert the property taxes into his own pocket while the school districts get hosed and those of us in the "old" housing get to pick up the tab for educating the children of the new subdivisions.

So my mom at age 70+ living on SS and having long since had no kids in the house is also paying to educate kids in houses 4x the size of hers.

I am actually OK with property tax as long as the taxes go to the things that make the property valuable, schools, roads, local government. However, you can't have really high property tax and expect rents to be cheap. My dad is renting out his farm land, the property tax is equal to 1/2 of the gross rent. If rent goes up much more he will either have to raise the rent or sell the land. Raising the rent doesn't work so well because the profits from the land are not going up with taxes. This land is out in the middle of nowhere, no one is going to build condos on it, it's only value is to grow crops, and yet someone somewhere is declaring it worth huge amounts of money....

That really isn't an LVT. An LVT really isn't even about land or property taxes; its about economic rent. This can be applied to domain names , band width, rights of way etc. I would also suggest personal exemptions. The idea is not to put all rent into government hands. Its to spread it out. A single owner of all the land, as in Pottersville, is just another de facto government control of all the land. It certainly does not help to suck up all the rent to a government if the economic rent is spread evenly already. So if land rents were values of no more than 100k and the exemption is say 250k, then no LVT could exist and there would be no need since the goal is to spread the rent. This is why I am not strictly speaking a Georgist. However understanding the basis of his argument is extremely critical.