site banner
naraburns  nihil supernum  1yr ago (text post)   32873 thread views

Culture War Roundup for the week of October 10, 2022

This weekly roundup thread is intended for all culture war posts. 'Culture war' is vaguely defined, but it basically means controversial issues that fall along set tribal lines. Arguments over culture war issues generate a lot of heat and little light, and few deeply entrenched people ever change their minds. This thread is for voicing opinions and analyzing the state of the discussion while trying to optimize for light over heat.

Optimistically, we think that engaging with people you disagree with is worth your time, and so is being nice! Pessimistically, there are many dynamics that can lead discussions on Culture War topics to become unproductive. There's a human tendency to divide along tribal lines, praising your ingroup and vilifying your outgroup - and if you think you find it easy to criticize your ingroup, then it may be that your outgroup is not who you think it is. Extremists with opposing positions can feed off each other, highlighting each other's worst points to justify their own angry rhetoric, which becomes in turn a new example of bad behavior for the other side to highlight.

We would like to avoid these negative dynamics. Accordingly, we ask that you do not use this thread for waging the Culture War. Examples of waging the Culture War:

  • Shaming.

  • Attempting to 'build consensus' or enforce ideological conformity.

  • Making sweeping generalizations to vilify a group you dislike.

  • Recruiting for a cause.

  • Posting links that could be summarized as 'Boo outgroup!' Basically, if your content is 'Can you believe what Those People did this week?' then you should either refrain from posting, or do some very patient work to contextualize and/or steel-man the relevant viewpoint.

In general, you should argue to understand, not to win. This thread is not territory to be claimed by one group or another; indeed, the aim is to have many different viewpoints represented here. Thus, we also ask that you follow some guidelines:

  • Speak plainly. Avoid sarcasm and mockery. When disagreeing with someone, state your objections explicitly.

  • Be as precise and charitable as you can. Don't paraphrase unflatteringly.

  • Don't imply that someone said something they did not say, even if you think it follows from what they said.

  • Write like everyone is reading and you want them to be included in the discussion.

On an ad hoc basis, the mods will try to compile a list of the best posts/comments from the previous week, posted in Quality Contribution threads and archived at /r/TheThread. You may nominate a comment for this list by clicking on 'report' at the bottom of the post and typing 'Actually a quality contribution' as the report reason.

23
Top Bottom Old Controversial Comments
Jump in the discussion.

No email address required.

The recent Georgist uprising in the rat-sphere seems to be spreading outward, and gathering steam if anything. Lars Doucet, who wrote the original ACX post that blew up, is now releasing a book called Land is a Big Deal which summarizes his writings thus far.

There was also a major takedown of Detroit land assessment practices by a major land parcel data collector, ReGrid that dropped a few days ago. Major takeaways:

  • Property tax assessment is widely variable - some houses have *double* the tax burden of identical houses literally across the street.
  • Landowners tend to have far better valuations (i.e. pay less taxes) than homeowners, probably because they have more time/incentive to protest valuations.
  • Poor taxing and tax foreclosure in Detroit are likely a large part of why the city has fallen on such hard times in recent years.

In addition, some fairly mainstream political candidates such as Chloe Brown who's running for Mayor of Toronto, seem to be gaining steam. Land value tax is a large plank in her platform.

I got interested in land reform through the original series of ACX posts, and frankly I'm surprised how interesting the problem is and how overall neglected the topic seems to be. Even extremely intelligent and well read folks I talk to about it are surprised when they learn that land value is usually just pulled out of thin air - the industry standard is to just take 25% of the purchase price and not give a shit about location or any other factors, which seems bizarre upon a critical review.

I've seen some discussion about Georgism/LVT here, but curious if anyone else has been following this?

Also, what are the arguments against LVT, besides low-effort "taxes are always bad and raising them is evil?" Genuinely curious for well thought out reasons why an LVT would be a bad idea.

Edit: For those new to this idea, a Land Value Tax in it's most basic form simply says we should tax away the value of the land, and only let people who sell land profit off of the 'improvements' they make, such as buildings, restorations, etc. For instance if you bought a piece of land and tried to sell it 1 year later off pure speculation, doing nothing to the land, you would not receive any profit.

Also, what are the arguments against LVT, besides low-effort "taxes are always bad and raising them is evil?"

That would arguably be low effort only because its a simple statement of principle, rather than a development of the argument to support the principle. If it is low effort so is the simple statement "land value taxes are a good idea because they aren't making more land".

Everyone in this thread seems to be labouring under the impression that an LVT is always 100%. Not necessarily, no reason why we couldn't have a tax on unimproved land values of any level one was to choose.

I am a strong proponent of land value taxes, but there are a few things people often get wrong about them. The first is that it does not incentivize development on its own. It does so only indirectly if you assume other taxes such as property taxes will be reduced as a consequence of the introduction of the land value tax. The entire point of the land value tax is to raise taxes without distorting the market, which means it doesn't affect behaviour.

Some people point out that, if your taxes go up significantly, it may force you to sell. But that is just a wealth effect. Any tax that reduces wealth has the same effect, and it would have the opposite effect on whoever benefited from the tax.

The other thing they get wrong is that the supply of land is not actually fixed. Erosion causes land to disappear and it's very expensive to prevent. Land value taxes in coastal areas disincentives protecting land from erosion.

It also discourages exploration, which is not such a problem now. But if we can't credibly commit to not imposing a land value tax in the future on newly colonized planets, we will discourage private space exploration.

Finally, speculation is good and land value taxes discourage it. Speculation improves the allocation of land.

For instance if you bought a piece of land and tried to sell it 1 year later off pure speculation, doing nothing to the land, you would not receive any profit.

That sounds deflationary.

I also want to know what’s so wrong with speculation as a method of generating income, either in general or specific to land speculation.

That sounds deflationary.

How does land values failing to increase result in CPI (an index of how much it costs to buy food, oil, clothing, rent a flat, etc) decreasing?

If this were a real concern, why not just print more money?

Landowners tend to have far better valuations (i.e. pay less taxes) than homeowners, probably because they have more time/incentive to protest valuations.

I'd imagine this is because property tax increases are usually capped, and reassessments exceeding that cap typically only happen when the property is sold, or there are new improvements. This was meant to allow 'grandma' to afford to live in her home past retirement, without taxes forcing her out.

What typically happens is that landowners use an LLC for every property. Then when they sell a property, they are really just selling the LLC. So the property doesn't get reassessed when it is sold, because the owners of the company changed, not the owner (LLC) of the property. This gives landlords an advantage over homeowners, shifting the burden of property taxes onto new homeowners.

Another thing is that this leads to slumlords. Why renovate a property if it is going to lead to a massive increase in taxes? Meanwhile longtime homeowners who renovate (including grandma) will be absolutely ravaged by the reassessment.

And new rental builds are going to have to be high-end, because they won't be able to compete with older buildings that are paying a fraction of the taxes.

By simply removing the property tax cap and having everyone on an even playing field, you'd end up with better outcomes for most people.

Don't know how true all of this is for Detroit specifically.

Here are my objections:

  1. People don't care about sophisticated philosophical arguments concerning taxes; they merely care about how much they have to pay. If I have to pay 20k a year in taxes I really don't care whether they tax my income, purchases, or property. I still have to pay it. Sure you can (and Georgists do) make the argument that there are certain inefficiencies with regard to most methods of taxation, and I don't necessarily disagree, but this seems like nibbling around the edges. I don't think we're experiencing some kind of huge GDP loss simply because our tax system isn't optimized to create the right incentives for absolutely everyone. And no one is going to support any kind of tax reform that results in them paying more taxes for roughly the same amount of services. This is a fairly minor objection on the whole (I have no personal objection to land taxes as such), but when people tout the benefits of some sort of philosophical efficiency absent significant tangible benefits it seems like a rhetorical weakness. A system's elegance isn't a great argument for its implementation.

  2. It won't end land speculation. I often see Georgists act like "Speculators" are sitting on large developable tracts in urban areas just waiting for them to gain a little more value. While I'm sure you could find examples of this if you looked, most vacant land is vacant for a reason. Speculators buy land in areas where land is cheap now but where they expect it to gain in value in the future. Emphasis on the "cheap now" part. If the land has little value at present, the taxes on it aren't going to be all that high, and it may be worth it for an investor to hold it for a while. For example, suppose there's a 100 acre cow pasture outside a city that I can buy for $1,000/acre. I can buy it for that price because that's what it's worth, regardless of whether a speculator owns it or someone making the most productive use of it (in this case, as a cow pasture) owns it. And I'm not necessarily just letting it sit. If it's a cow pasture the owner will probably lease it for grazing to whoever owned the cows that were grazing it before. Either way, the land taxes while the land is cheap are just part of the investment formula. If the land increases in value to the point that holding it is uneconomical, the land gets sold. That's the same as it is now—why would I speculate in land I had no intention of selling? I don't understand this argument.

  3. This is perhaps my biggest objection: It's too easy to game the system. Any improvements to efficiency of land use will be totally subject to zoning regulations. Changing land-use patterns would still be subject to the same political considerations they are now. "So what", you may say, "eliminating zoning restrictions is part of it". And this may be the case. But lack of zoning restrictions only makes the gaming worse. Value of property is dependent on its potential use, and while land-use restrictions can limit potential uses, a more permanent limitation is based on size. If I own a 10,000 sq. ft. vacant lot in the central business district of a major city, and no surrounding property, the value of the land is limited because not much can be built on it that would suit the area. If instead I had a 1 acre lot then it may be worth more than an equivalent number of small lots simply because the development possibilities are more in line with the economic desires of the area. Eventually a lot is so small that it's practically worthless. If I had a large amount of vacant land I wanted to dodge taxes on, the goal would be to subdivide the land to the point that each individual tract was practically worthless. There would be survey costs in doing so, and costs again at the back end to recombine the parcels, but during the period the land is held the tax would be nominal.

So what's preventing people from doing this now with existing property taxes? One big one is minimum parcel sizes; in some areas the municipality simply won't let you subdivide below a certain point. But this brings back our old friend zoning. Such minimums are part of the zoning code, and while they don't sound as disruptive as outright use restrictions, they can still be use to great effect to influence patterns of development. For example, a lot of semi-rural areas near me that don't want residential subdivisions will set the minimum lot size at one acre or larger to prevent sprawl. This may sound like a good thing to those who want more density, but it's usually used as a means of limiting density. To maximize the space you'd need a fairly large building, and if there's no demand for such a building then you're getting houses on 1 acre lots. Set the minimum smaller and you optimize for density but make it easy for a developer to subdivide into oblivion. Commercial and industrial land is generally more expensive (and is thus taxed higher) than residential land. If you want to speculate on land for commercial purposes, just subdivide it into a bunch of lots designed for single-family homes and get a lower tax bill than if the parcel was intact; you've essentially zoned it for single-family use to the outside observer but since you own all the lots yourself you reserve the right to recombine them how you see fit. Or you could just separate out the land fronting the existing roads and landlock a big portion in the middle (nothing reduces a property's value like eliminating access).

I could go on forever like this but I need to head out the door.

On Georgist you can also speculate on land in urban cores. Sometimes an area is still growing and it’s not ready for giant tower to be built.

I live in brickell Miami a booming place. Some lots have sold for crazy money. A decade ago they may have been appropriate to build 10-30 stories, with the book now their putin up 70-100 stories. Sometimes it makes sense to sit on the land until your ready to build huge.

Tearing down 5 year old buildings has expenses so land spec makes sense till it’s time for huge developments.

On (2), most of the speculators aren't sitting on vacant land. They are sitting on underused land.

That's the same as it is now—why would I speculate in land I had no intention of selling?

For example, one may wish to capture a large and increasing stream of owner equivalent rent. (This is a major use case.) For example, one might speculatively buy a home in NYC in the 1970's and then continue to live in it until their death.

Generally speaking, most of truly distortionary problems in the US today consist of middle class people exploiting the system to gain long term stable revenue streams. (See also government pensions.)

Any improvements to efficiency of land use will be totally subject to zoning regulations.

Part of the value of an LVT is to tax land as if it's not in a NIMBY area in order to charge NIMBYs a high price for being NIMBYs. As in, consider local SF single family homeowners who prevent apartments from being built. Lets make them pay taxes as if their land were usable for apartments.

The LVT sounds like a terribly unfair idea unless it's paired with fewer regulations/restrictions for landlords, such as regarding evictions or zoning. A reason why land stays undeveloped is because it's too costly to extract rent from it.

Done right, Georgism is a massive tax cut which is why it won’t be adopted at scale, even though it is among the least economically distortive of the taxes. The hard part of Georgism does not lie in taxing the land value of property: that is already happening with property taxes which count both land value and improvements. The hard part of Georgism lies in getting governments to not tax the improvements when the incentives are aligned against it.

Georgism will also change the culture from that homeowners to renters, possibly long-term neutral, but it will fly in the face of the headwinds from both parties of promoting homeownership.

If that's the case then income tax is like the state siezing humans and taking rent from their labour.

When income taxes were introduced did they compensate the owners of human capital for reduced future income streams?

Yes 100% woukd be a wealth transfer. I think the current system has gone the other way, young people have to work many more years to transfer wealth to the old.

So.. we should aim to even it out a bit. Let's haggle on the percent and timelines

As someone who owns zero land that sounds excellent

Land is fundamentally different to all other types of wealth, though, because it's finite. Every landowner has a complete monopoly over that parcel of land, and in that respect, land is completely unique, and as such deserves unique treatment. And it's not like bankrupting people with brown hair. We're not taxing people with land except for on land holdings, we'd only be taxing the value accrued from an increase in land values, which the entire community is responsible for but currently only the landowner benefits.

I don't get how land is more finite than any other mineral. Why isn't there a 100% iron tax since there's only so much left to dig out of the ground?

Two reasons, firstly Iron doesn't generate revenue passively. Iron has an 'unimproved value', clearly, but whereas a landlord can realise an increase in land values by increasing rent, for instance, an owner of a lump of iron won't realise the gains until they use it for something productive or sell it to someone who will.

Secondly, iron is fungible (mostly). If you don't sell me your lump of iron, I can go and buy someone else's. But all land is unique.

  • Georgism at heart is about identifying what is often the most precious possession a person can have, that most of the middle class has spent 30 years of their lives working to pay off, to render to their posterity, and stealing it from them despite the fact that they haven't really done anything wrong.

  • Nominal immiseration of the middle class may render American institutions much more liable to capture by the upper class

  • There is no clear theoretical way to "gradually" introduce it and dampen the blow, as any long term plan if factored into market price will bring long term land value down to nothing.

  • It disincentivizes searching for natural resources like buying property to drill for potential natural gas

  • It is still unclear how viable land value assessment without an operating market for land would be - we necessarily lose access to price information that we might well need to do the LVT as soon as we do the LVT

  • Most pressing gains in this area (i.e. the expensive rents for young professionals in world class cities that drives this discourse) are just as much a matter of zoning reform, and we need to do that first because poor zoning + LVT means almost nothing gets built at all

  • Georgists themselves have had a long partisan tradition that has produced plenty of internal critique if you're so interested.

Just off the top of my head but none of it is that strong. LVT is an extremely radical proposal constituting the functional government expropriation of all private land, a fact which was soberly understood by its 19th century proponents. Its 21st century proponents talk about it with the same gravity they discuss capital gains taxes.

There is no clear theoretical way to "gradually" introduce it and dampen the blow, as any long term plan if factored into market price will bring long term land value down to nothing.

This claim is simply innumerate.

Value of property = \sum pow(1- interest rate, N) x (income in year N - LVT in year N). Here N = # of years.

So here's how you can dampen it:

  1. Raise interest rates above 0. (They are currently 4% or so.)

  2. Set the horizon for the LVT some time in the future, say 10 years.

The end.

Presto, the contribution of N=0..10 has not been reduced at all, and the cost of the LVT in year 10 has been dampened by 33% (1-4% interest rate ^ 10), year 11 by 36% (=(1-4%)^11), etc.

This calculation assumes the discount rate for real estate == interest rate. But that's a gross underestimate - when interest rates were essentially 0%, 4-5% cap rates were typical and that implies real estate's discount rate is typically interest rate + maybe 3-4%. At a discount rate of interest rate + 4% = 8% (today), that suggests dampening of year 10's income by 57% rather than 33%.

There is no clear theoretical way to "gradually" introduce it and dampen the blow, as any long term plan if factored into market price will bring long term land value down to nothing.

Because of discounting, phasing in an LVT gradually will reduce the present value of a plot of land by less than imposing it immediately will.

Think about a plot of land generating $25k per year with 5% discounting. The net present value of an infinite stream of $25k annual payments is $500k. If you impose a 100% tax on rental value right now, all those future payments are zeroed out, and the land's value drops to zero.

If you phase the tax in over a period of ten years, that will definitely reduce the land's net present value, but since it still generates some rental income for the owner, the NPV is positive.

I'll work out the math later when I'm at a computer.

Edit: I forgot about this. At 3% discounting, a 50-year phase-in will cut the current value of the land in half. At 5%, a 50-year phase-in will reduce the value by 35%, and a 30-year phase-in will cut it in half. At 8%, a 30-year phase-in will cut the value by 35%.

Land value taxes are good because they're extremely efficient and minimize deadweight loss in the tax system (intuition: Taxing something means you have less of it because you're causing a marginal decrease in the supply of that thing, whether it's labor, capital, or consumption goods. New land is not generally produced, so taxing land value minimizes the loss from that decrease in supply).

100% land value taxes are no more just than 100% taxation on anything else and are a form of paternalism at the end of the day.

Are you taxing land, or are you taxing land value? If it's the latter, you can definitely lower the production of land value. I could make my house look super-ugly, put bars over the windows and cover the lawns in trash to reduce it's valuation. If you think you can decouple this as an improvement distinct from the value of the land itself... good luck.

People will deliberately uglify their homes to avoid taxes. The UK has experience with this, back when we had a window tax. Intended to be a simple way to assess property taxes - larger houses have more windows, windows can be counted from the outside, can't cheat the number of windows you have. People responded by bricking up their windows and living in darkness instead of paying the tax.

Land value doesn't stem from what's built on it but rather what surrounds it. You might uglify your own house to reduce your taxes, but the majority of that loss in land value (and hence reduction in tax) will go to people around you. There's a big collective action problem that would need to be solved for that to take place.

The land value tax doesn't consider what your improvements look like. If you own a run down shack on an acre of land, and there's a skyscraper on an acre next to you, you're taxed the same. And this is meant to encourage you to rip down your shack and build a skyscraper, too, because the burden of paying tens of thousands a month in taxes is meant to penalize you for inefficiently using your land.

It's like how in Vancouver, BC, they brought in a vacancy tax and started taxing single story restaurants for not using the 'air' over their restaurant.

Yes, assessment has always been an issue with taxation, going back into the dark mists of history. The idea is indeed to tax the value of land which, no matter how difficult the assessment, is still more efficient than other kinds of taxes as long as you're not trying to hit exactly 100% like the Georgists.

100% land value taxes are no more than 100% taxation on anything else and are a form of paternalism at the end of the day.

Could you clarify this?

"We know better than you how you should use your land", is roughly analogous to, "We know better than you what you should put in your body".

They're not analogous at all because what you put in your body, by and large, mostly affects you only. The finite nature of land is such that poor land use punishes everyone. And LVT doesn't stop anyone from using their land in the manner they chose, you just don't get to leech off the rest of the community, who are the reason your land is worth anything in the first place.

If the community takes on any responsibility at all for healthcare (as pretty much every government on the planet does), this isn't true. What you put into your body effects the costs the community may need to pay in the future for the support of your health.

"We know better than you how you should use your land"

Georgism doesn't require the government know how anyone should use any land.

That's pretty much what the 'highest value use' terminology is about.

In my understanding, under a Georgist framework the land market determines what the value is - the government is not doing any sort of communist style seizing and redistributing.

Tax based nudging isn't really market based decision making.

It's not a question of seizing and redistributing. The government has to determine what it believes the "highest and best use" of the land would be in order to determine the value of the land itself. Once the government has made that determination and levied a punitive tax on that land, use of the land for anything other than the purported "highest and best use" is nothing but downside risk, so no-one will do it.

The government has to determine what it believes the "highest and best use" of the land would be in order to determine the value of the land itself.

No way, I would not support that in any fashion. The value of the land would still be decided by the market, the government would have no say in terms of what the land is used for. Why do you think the government has to come in and determine a specific use for the land before it can be valued on the market?

More comments

Public choice problems are a good place to start, since (a) Henry George understandably did not consider them and (b) they are a problem even if Georgism is correct.

LVTs are highly contestable - has the land value really increased? - and have strong constituencies against their consistent application - the people at risk of losing their homes. The latter are concentrated interest groups, while the benefits of a LVT are dispersed across society. It's not clear to me that a LVT can be effective as a revenue raiser in the long run, while some of the natural ways to make it politically viable also introduce deadweight losses, e.g. waiving LVTs for people who have lived in a certain area for more than x years. That's a deadweight loss, because it creates an incentive to stay put after x < years, because otherwise you start paying LVT again.

So, even if we accept the Georgist arguments for the superiority of an ideal LVT, it's dubious that an ideal LVT is sustainable, and the deadweight losses from a non-ideal LVT may not be worth it. This may be why 100% LVTs have, AFAIK, never been used, and LVTs tend not to last (or at least not raise much revenue). Wealth taxes have similar problems.

Just to clarify: aren't all these arguments against existing property taxes?

Depends on whether the property tax is a second best solution. There are deadweight losses to property taxes, but also advantages relative to other taxes, e.g. it's easier to hide income than hide a house. Property taxes do persist, but there are often political problems with revaluations.

Property taxes also suck

This strikes me as rationalists rationalizing their own class self-interest. The same way EA just so happens to only support democrat politicians, rationalism coincidentally just so happens to work out extremely well for the types of people that are rationalists. Easy to be YIMBY when you are 25 and living in a rented apartment in San Francisco.

If you try to find out which thoughts are tainted by speculating about the wishes of the thinkers, you are merely making a fool of yourself. You must first find out on purely logical grounds which of them do, in fact, break down as arguments. Afterwards, if you like, go on and discover the psychological causes of the error.

Is there even a principled defense of nimbyism, or is that sort of accusation all you have? If pressed, nimbys will frequently confess to hypocrisy and naked self-interest. But yimbys don’t need to, because the case for yimby is easy, as you say : If everyone nimbys, nothing ever gets built. Rents and corn should be cheap, their prices should be at open to competition, not controlled by a cartel.

naked self-interest.

Why isn't that good enough? Do you think the YIMBYs expect to be harmed by their policies?

How can it be good enough? Obviously it is in my interest to receive money from the government. Should that be policy?

The public thing is about the common good. If you are harmed by a policy, you have to prove that you are harmed more than others benefit. Nimbys don't seem to 'act only according to that maxim whereby they can, at the same time, will that it should become a universal law'(because nothing would be built), and that's not a good sign. Whether yimbis also have selfish reasons on top of good justifications is irrelevant.

How can it be good enough? Obviously it is in my interest to receive money from the government. Should that be policy?

Because it's good enough for the YIMBYs? Why is it good for them to demand policies that serve their naked self-interest, but bad for other people to do so? The fact that those "other people" have already invested significant effort and capital into their backyards, as it were, seems like a powerful argument for defaulting to their preferences. In any case, this argument seems like a sleight of hand in which we carefully obscure that both factions have a self-interest at play.

The public thing is about the common good. If you are harmed by a policy, you have to prove that you are harmed more than others benefit. Nimbys don't seem to 'act only according to that maxim whereby they can, at the same time, will that it should become a universal law'(because nothing would be built), and that's not a good sign.

I'm sorry, but you don't get to invoke utilitarianism and Kant in the same breath. Kant is anti-utility; his deployment is inherently suspect.

Whether yimbis also have selfish reasons on top of good justifications is irrelevant.

What is the difference between a good justification and a selfish reason except framing and intellectual charity?

If NIMBYs NIMBY at scale then it’s a problem.

What do we do then?

(My solution: NIMBY labor and re-education camps)

I'm sorry, but you don't get to invoke utilitarianism and Kant in the same breath.

They are in sync here. Your position violates not only kant, but utilitarianism, the golden rule, most moral systems known to man.

Why is it good for them to demand policies that serve their naked self-interest, but bad for other people to do so?

Because they have other reasons than naked self-interest (which again, is just a cheap accusation that can be lobbied against anyone). The self-interest of citizens have to be balanced against each other, and we do this by using the good justifications. When one admits to having no other reason than self-interest, one’s cause is deligitimized.

There’s a dispute between two farmers over ownership of a donkey. The village gathers in the square to hear their cases. The first one says witnesses saw him buy it , he can describe it from memory, that he frequently helps other villagers with it, and so on. The second one replies that he doesn’t care about good justifications, it should be given to him because it is in his self-interest, he doesn’t understand why everyone is so naive, it’s also in the other guy’s self-interest to get the donkey.

Because they have other reasons than naked self-interest (which again, is just a cheap accusation that can be lobbied against anyone).

Ok, so what are those reasons? You're just blanket assuming one side in a generic conflict is in the right.

The self-interest of citizens have to be balanced against each other

Yes, because everyone has the right to advocate for their own self-interest. Failing to recognize that is, as Kant might put it, treating people as mere means rather than ends in themselves.

There’s a dispute between two farmers over ownership of a donkey. The village gathers in the square to hear their cases. The first one says witnesses saw him buy it , he can describe it from memory, that he frequently helps other villagers with it, and so on. The second one replies that he doesn’t care about good justifications, it should be given to him because it is in his self-interest, he doesn’t understand why everyone is so naive, it’s also in the other guy’s self-interest to get the donkey.

In this silly scenario you've concocted to try to prove your point, the first guy is the NIMBY, the established interest with existing skin in the game, who doesn't want to lose sunk costs for existing benefits to some second person whose main justification is "but it would be good for me".

And frankly, even if you devise some second scenario where the utility argument could come down in favor of the second person, it's still valid to not want to eat the costs of externalities for things that benefit other people.

Let’s not confuse the two arguments. Argument A is whether there are ‘good justifications’ for nymbyism, and how they stack up against yimbyism ’s good justifications. I originally asked for nymby’s good justifications, and gave some for yimbyism.

You then refused, said B: good justifications don’t matter, it’s all about self-interest, you don’t need any more reason than that. The donkey story was purely aimed at B.

Do you want to go back to A now, with you giving ‘good justifications’ for nimbys for improving the land etc?

And frankly, even if you devise some second scenario where the utility argument could come down in favor of the second person, it's still valid to not want to eat the costs of externalities for things that benefit other people.

Let’s say it’s a very large benefit to the second person and the rest of society, completely dwarfing the first person’s benefits. Is the first person still justified in refusing to eat the cost? Or, the first person seriously harms other people for a very small personal benefit, still okay? It seems to me you’re arguing for extreme selfishness, like people should never go against their self-interest, no matter the circumstances. Note: this is still argument B.

You're just blanket assuming one side in a generic conflict is in the right.

Well, rampant NIMBYism results in enormous transfers of wealth based merely on who got into an area first (primarily a function of age), massively infringes on private property rights, tremendously stifles any sort of economic development or indeed change of any kind, results in huge negative-sum costs paying lawyers, grants lots of power to the kind of sociopathic busybodies who want to control everything around them, makes moving into economically dynamic cities infeasible for the kind of young workers that they need, cripples economic mobility, and generally enshrines into law the kind of development and transportation (sprawl and cars, respectively) with by far the largest externalities and costs (people dying in car crashes and car/bike or car/pedestrian collisions, pollution, noise, congestion, etc.)

In this silly scenario you've concocted to try to prove your point, the first guy is the NIMBY, the established interest with existing skin in the game, who doesn't want to lose sunk costs for existing benefits to some second person whose main justification is "but it would be good for me".

Have you heard of a thing called "property rights"? The NIMBYs are the second guy, they just already took the donkey and the YIMBYs would like it back.

it's still valid to not want to eat the costs of externalities for things that benefit other people.

NIMBYs are already capturing massive positive externalities due to the increase in the value of their land because other people made their city desirable to live in. To then act like a victim because your house will be slightly shaded by a small apartment block is reminiscent of the story that defines the word chutzpah.

But since you're opposed to externalities, you must also be on board with efforts to ban cars from the city? After all, why should pedestrians and cyclists eat the cost of the noise, danger, and pollution caused entirely for the benefit of drivers?

More comments

FWIW, I was glad when an apartment building started going up near the place I owned in my previous city.

That isn't an argument in favour of NIMBYism, it just shows that there are lots of unprincipled people. But being unprincipled doesn't actually make you wrong.

The same way EA just so happens to only support democrat politicians

I know it's not the point of this post, but this is not true. EA does back a number of Republican candidates and works actively to get more, they just keep it quieter out of a mix of unpopularity/strategy.

Like who?

Not a great answer, and not what OP was referring to most likely, but from here

While his biggest spending has been on Democratic primaries, he has also contributed directly to Democratic and Republican campaigns alike.

“There have been a lot of times when I have been a bigger supporter of Democratic candidates than Republican candidates. That’s not — that’s not an immovable fact about the world,” [...] “I am legitimately worried about doing things that will make people view me as partisan when it’s not how I feel

The evidence that Bankman-Fried truly wants to be a bipartisan donor is thin — at least in his publicly disclosed spending. Although Bankman-Fried donated directly to a half-dozen Republicans and gave $105,000 to a super PAC that backed Katie Britt, the Republican Senate nominee who won a contested primary in Alabama, it still pales in comparison to the many tens of millions he’s disclosed giving to Democratic candidates and groups

Guarding Against Pandemic has endorsed 22 Democrats and 15 Republicans, a mix of incumbents and first-time candidates.

Messaged you about this - long story short I talked to someone in person who gave me some info but doesn't look like the candidate list is public.

Well that isn't very transparent of EA

Hah EA is not very transparent.

New Jersey does not have a state property tax, and the state government gets most of its money through income and sales taxes. It appears Google Search reveals the Urban Institute saying this; they are being sloppy. New Jersey localities do have property taxes, they are rather high and varied (mine is 4.4% of assessed value, 3.6% of estimated market value), and they tend to increase at about 2% per year (because there's a legislative cap; they used to increase more than that)

This is a conventional property tax, land + improvements, and so isn't Georgist at all.

3.6% of market value is incredible, though, that might be the highest annual property tax in the developed world.

It's not even the highest in my county; that would be Orange City, at 5.2%. Highest in New Jersey is Winfield Township (Motto: "The Most Progressive Community in the State") at 21.4%; Winfield is more of a co-op than an actual township, though. Next-highest is the small Woodlynne Boro at 7.4%

By state I should have said state-and-local, I guess?

Even that's misleading because it's local only.

It certainly is not.

The US already has states that implement a firm of Georgism, albeit based upon total property value

As I stated in the original post - if these states actually separate the land value from the 'improvements' (which I don't think they do?) then this is an entirely arbitrary number. The 'land value' here is just some percentage of total value.

New Jersey localities do normally separate the land value from the improvements, and it is not an arbitrary number like a percentage of the total value -- it is the assessor's judgement of the part of the value which can be attributed to the land. This is to make equalization easier, since e.g. it is obvious that similar houses on different-sized properties should have different land values but similar improvement values. However, as far as I know, with the exception of a few jurisdictions with "vacant lot" taxes, the rates on land and improvements are the same in all jurisdictions.

Also, what are the arguments against LVT, besides low-effort "taxes are always bad and raising them is evil?" Genuinely curious for well thought out reasons why an LVT would be a bad idea.

Edit: For those new to this idea, a Land Value Tax in it's most basic form simply says we should tax away the value of the land, and only let people who sell land profit off of the 'improvements' they make, such as buildings, restorations, etc. For instance if you bought a piece of land and tried to sell it 1 year later off pure speculation, doing nothing to the land, you would not receive any profit.

My concern with LVT is that I regard most kinds of property tax (as well as income tax) as fundamentally immoral, for basically Nozickean reasons, and I do not regard that as "low-effort" in the slightest. I am fine with sales tax, insofar as government facilitates exchange through the medium of regulated money; when you use the government-facilitated exchange, you should also pay for the maintenance of that exchange. I am okay with property tax to the extent that the use and enjoyment of your property depends on government police powers protecting borders and private property rights, but even here I favor strong homestead protections; for property you live on, especially, I regard tax foreclosures as strictly immoral. In the U.S. today, almost all tax dollars fund purely redistributionist aims, and I do not think there are very many plausible justifications for the amount of redistribution we do (though there are probably some cases where it's justified, particularly where negative externalities are imposed on the public by private actions).

I get the impression that some of the basic ideas of Georgism/LVT may be compatible with my view, but presumably someone who paid the value of land, and never improves it, can only sell for the (present) value of the land. Any "profit" they make is down to fluctuations in the market that are beyond their control. One of the most basic rules of business associations law is that whoever bears the risk, reaps the reward. The way you've described LVT here ("tax away the value of the land"), privatizes risk of holding unimproved land, while publicizing rewards. That seems to me just as objectionable as publicizing risk while privatizing rewards.

But I have not made a careful analysis of Georgism (beyond reading what Scott says about it) so I'd be interested in any corrections you might be able to offer my view.

Why are sales taxes better than income taxes under your philosophy? They both make use of the medium of regulated money.

The problem is most legible for the self-employed. For them, income tax is just an additional way of taxing profits after they've already been taxed as transactions. So like--you open up a shop, you charge $100 in labor to fix someone's iPhone. Depending on where you live, you also have to collect 6% or 10% or 12% in sales taxes on that money, to pay to the government. But hey, you've got $100! Well, no, now you also have to pay over 15% in self-employment taxes, and another 5% or 15% or 35% or whatever in income taxes to the government because... why? You already paid tax on the transaction, if it's not enough to support the system of exchange, then raise taxes on the exchange!

It's a little less clear for those who collect salaries or wages, but consider that in the U.S. your paycheck does get taxed directly, as an exchange, before income tax withholding kicks in--Social Security and Medicare amount to a 15.3% tax if you're self-employed, though most people have about half that amount paid by their employer rather than having it come out of their paycheck. That looks much more like a tax on the exchange of services for money than a tax on income per se (though it would be better, I think, if it were a flat fee rather than a percentage).

You might say "well, it's six of one, half dozen of the other" but even if that's numerically true, the math can function as a shell game for government actors. How often have you heard something like, "I don't mind paying taxes because I like to drive on roads!" A large chunk of most state transportation budgets, however, is fuel taxes--which makes sense. If you don't use the roads, you don't pay for (that part of) them. When there's a clear connection between the tax being levied, who it's being levied on, and how it's being spent, that benefits citizens by keeping systems accountable. That kind of transparency can, I think, help prevent cost disease. If your paycheck is getting charged, essentially, sales tax for the transaction between you and your employer, with the explicit purpose of keeping the nation's monetary system functioning, people will think of it very differently than if they're essentially pouring money into a general slush fund for Congress to spend on god-knows-what.

And really, in a system of fiat currency, it's kind of silly to have taxes at all. This is a more complicated argument, but basically the point of taxes used to be that the government needed your money to pay soldiers and pave roads. Under a fiat currency system, the (federal) government doesn't need your money; your money is worthless to a government that can make as much money as it wants. Really taxes aren't even a question of revenue, taxes are just one of many interlocking opaque and unaccountable systems the government and its cronies can use to regulate the economy, or in other words, to control people. For their own good, maybe! But that's the kind of thing I would prefer the government be forced to do explicitly, if it's going to be allowed to do it at all.

So basically, sales taxes are better because they are a step toward government transparency and accountability. It's okay to tax your paycheck as an exchange. But calling it an "income tax" so you can effectively double- or triple-tax certain exchanges (by multiplying the number of "exchanges" ostensibly taking place) is exactly the sort of thing I regard as morally impermissible government behavior.

Social Security and Medicare amount to a 15.3% tax if you're self-employed, though most people have about half that amount paid by their employer

Which may not really matter much in terms of the effective impact of the tax. If it costs more to employ you that puts downward pressure on you wage or salary. If a change was made now to put it all on the employee, its not like all employee compensation would automatically or even quickly change but in the longer run the amount going to employees might not change much.

A large chunk of most state transportation budgets, however, is fuel taxes

Fuel taxes are also used to cover non-road transportation, so it may be the case that that large chunk is actually in a sense over 100 percent. (Yes the actual road expenses only cost 100 percent of what they costs but the fuel tax could be more than 100 percent of that cost.)

Really taxes aren't even a question of revenue, taxes are just one of many interlocking opaque and unaccountable systems the government and its cronies can use to regulate the economy, or in other words, to control people. For their own good, maybe! But that's the kind of thing I would prefer the government be forced to do explicitly, if it's going to be allowed to do it at all.

Not sure where to begin with this really. Governments can't spend in any great capacity without taxation, whether or not you want to call it a 'question of revenue' or not. The government can't borrow without the presence of taxation guaranteeing to debt holders that the government will eventually fulfil its obligations. Nor can it simply 'print money', the consequences of financing expenditure with only creating new money would be absurdly inflationary.

When there's a clear connection between the tax being levied, who it's being levied on, and how it's being spent, that benefits citizens by keeping systems accountable

This is how people perceive taxes like fuel duty but they are totally wrong. All taxes pay for all expenditure. We know this is true because firstly rates of fuel duty move up and down completely out of sync with costs of road maintenance and construction, and secondly because what you pay for fuel duty doesn't correspond with the wear and tear you cause on roads. If two cars of the same weight have different levels of efficiency, then the more efficient car pays less despite not doing any more damage to roads. On a policymaking level, fuel duty is set with no reference to the cost of roads, it's just one source of revenue for the government (with added environmental concerns).

Not sure where to begin with this really. Governments can't spend in any great capacity without taxation, whether or not you want to call it a 'question of revenue' or not. The government can't borrow without the presence of taxation guaranteeing to debt holders that the government will eventually fulfill its obligations. Nor can it simply 'print money', the consequences of financing expenditure with only creating new money would be absurdly inflationary.

I would recommend you begin by thinking more carefully before making sweeping declarations about what governments "can't" do. The second part of this paragraph demonstrates why you're clearly wrong about the first. Governments can, and do, "simply 'print money'" all the time. And yes--when they do that, it's inflationary! We know it's inflationary because we've watched it happen time and again throughout history. It's weird to say "governments can't do X, because it causes Y" when the suppressed premise is "and we know it causes Y because governments somewhat routinely do X." What you really mean is that governments shouldn't do X, for further reasons to be explained.

A claim I encountered some time ago, that I've been contemplating for a while, is that taxes are now the primary backstop of the dollar's value. You can find other ways to exchange goods and services, you can barter or use other currencies or whatever, but the only way to pay government taxes is with government-approved currency. So at some level you want your transactions to be taxed, because that is both how the currency you have maintains its value, and how you can secure receipts declaring that the government's monopoly on force should not be used to confiscate your property.

The more I think about this, the more I feel like the switch to fiat currency is something we as a civilization have yet to sufficiently digest. Part of me continues to suspect that fiat currency was just a horrible mistake. I'm aware of the reasons why it was done, and the arguments for how it greased the skids for American prosperity. But that's the kind of trick you can only pull once; when you do it, a bunch of stuff comes apart and the sociological distortions created by those trends are hard to predict beyond "probably not great."

But part of me wonders if we just failed to sufficiently commit. A major practical development that ended the Confederated U.S. and gave rise to the Constitutional U.S. was a bunch of unpaid soldiers. Would the question of soldier pay have arisen under a system of fiat currency? I think no--the U.S. cannot run out of dollars. Those dollars might be worthless, but that's a different problem! When the U.S. government "borrows" money, it's actually a bit of a farce; in a fiat system, the U.S. cannot possibly default on any of its dollar-denominated debt unless it chooses to do so (by refusing to print the necessary dollars). "National debt" is just a way of printing tomorrow's fiat dollars, today! And inflation is a tax on people who have money (both now, and later). The question is, if the government collected no taxes, and instead printed money to finance expenditures, would the resulting inflation be a greater tax than extant taxes, or a lesser tax?

That's an empirical question that will presumably depend in great measure on psychological factors (namely, how people perceive inflation versus taxation). It is not an empirical question I think will ever be answered. But this is why I think about the "taxes give your dollars value" argument a lot. If it's right, then one inescapable "cost" of maintaining a functioning system of economic exchange just is confiscating some amount of people's money from time to time--because if you don't, then people will get rid of money as fast as they can, exchanging it for durable goods and other stores of value. And not poor people's money, because they won't think about or understand any of this, but rich people's money, because they are the ones who are most afraid of having their goods confiscated by state-sponsored bandits and extortionists ("revenue services"). To successfully pay the protection racket, they must agree to participate in the sovereign's monetary scheme. But this functionally disincentivizes certain kinds of success, and it makes the task of transforming income into wealth more difficult, essentially protecting the existing rich from competition that might otherwise rise from the lower classes.

This is why the apparent death of small-government conservatism (which was never very healthy to begin with) is so frustrating to me. The appropriate way out of this mess, as I see it, is to keep the government small enough to drown in a bathtub. Imagine a government that collects sales tax alone, and primarily finances expenditures through inflationary money-printing. In such a government, the way to keep inflation low is simple and obvious: keep expenditures down. Every decision to use the government monopoly on force would be accompanied by a tax on everyone with money, in the form of inflation. That's about as direct as accountability gets. And yes--I can imagine that this could be hell on the economy in a variety of ways. But my argument is a moral one. I want to increase liberty, and decrease the use (or threat) of government coercion against citizens doing nothing but living their lives. If stealing was the only road to general prosperity, it would be better for people to make peace with being paupers.

I do not regard that as "low-effort" in the slightest

I regret hand-waving this point away, I'll work to be more charitable in the future.

The way you've described LVT here ("tax away the value of the land"), privatizes risk of holding unimproved land, while publicizing rewards.

Under a truly Georgist system, my understanding is that there would be little risk to holding unimproved land, you just wouldn't be able to make a profit based on land speculation. It would also theoretically reduce the incentive/means of someone trying to buy you out of a valuable piece of land, because you wouldn't get that profit yourself. Although then I would worry unofficial means of bullying people off valuable pieces of land might come in vogue I suppose.

Under a truly Georgist system, my understanding is that there would be little risk to holding unimproved land

If you hold unimproved land and someone builds a skyscraper next to it, the taxes on your unimproved land go up. That's risk.

Note that you can't get anything back by selling the land, since the land sells for $0.

LVTs don't have to be 100% of land values.

The way I’ve usually seen it idealized is that when you buy a piece of land, you set the price of the land and pay taxes on that. But then you have to sell it at the same price. (inflation adjusted)

Also, what are the arguments against LVT, besides low-effort "taxes are always bad and raising them is evil?"

Still low-effort is "it's communism, but only with land". But given how bad communism has turned out, I think it's sufficient. The Georgist LVT is equivalent to the government owning all the land and leasing it out to the highest bidder.

Socialist economic systems are bad because they don't incentivize producing what people want. But no one actually produces land (land reclamation is negligible). Hence, Georgist "land communism" can't result in the same kind of failure as everything-else communism.

But no one actually produces land

But this isn't actually true - the 'unimproved value' of land depends on its' surroundings, placement in a city, neighbors, etc - and that certainly is produced and changes. In the ACX comments someone brought up a property developer - they make massive investments in a particular neighborhood to improve the value of a group of properties, but the improvement to any individual property comes in large part from the neighbors, or infrastructure there, rather than just work 'on the land' itself. So they're increasing the 'unimproved value'!

They're also bad because they don't incentivize care about long-term consequences (note that Capitalism doesn't always do this either, but the Soviet Union had a particularly bad track record on such things, e.g. the horrifying ecological disasters the Soviets left dotted all over the Eurasian landmass).

One might equally say (and indeed Robert Nozick and others have said) that taxing income is slavery insofar as it forces people to do (fractional) unpaid labour, with the threat of force as ultimate guarantor. In both cases, I think it is a form of what Scott has called the worst argument in the world. If it did turn out that income tax was legitimately conceptually very close to slavery or LVT to Communism, it would be entirely reasonable to say, “huh, I guess at least one form of slavery/Communism is relatively unproblematic”.

Income taxes aren't slavery because they don't force you to work. A 100% land value tax really would be like confiscation of property-in-land.

Of course they force me to work. Without income taxes, I’d be already retired, instead, I have to work for couple more years.

Yeah, the income equivalent would be a... education-scaling poll tax, which would 100% be considered unacceptable by the exact same people pushing this. George Mankiw once trollishly proposed taxing height in a similar way, since it correlates so closely with earning potential.

The fact that human capital can't be easily taxed is pretty close to a grand unified theory of 21st century American politics, really.

The Georgist LVT is not fractional; it really is equivalent to the government owning all the land.

People keep bringing this up, but doesn't the government already own all the land? You have to pay property tax on it...

The distinction here is that the government is capturing the appreciation of land, or value not directly added by the landowner.

The Georgist LVT is equivalent to the government owning all the land and leasing it out to the highest bidder.

You say that like it's a bad thing, but shouldn't we want land to be controlled by the people who can create the most value on it? How is that different to landlords owning all the land and leasing it out to the highest bidder?

but shouldn't we want land to be controlled by the people who can create the most value on it

No more than we should want cars to be controlled by the people who can create the most value using them.

Well let's imagine cars were finite. There were only X many cars in the United States. But, in the places where people need them, there aren't enough to go around. In that scenario, it seems totally reasonable to place a tax on car usage, in order to ensure our limited supply of cars are being used optimally, by tradesmen, rural dwellers, and commuters with no alternative etc. rather than be people who could be taking the train, going on joyrides etc. In a world where cars are finite like land, it seems totally reasonable to encourage productive use of them.

Everything's finite. So now you've re-invented central planning.

Everything is not finite in the way land is finite. There isn't a number X of cars that can be produced, and will only ever be able to be produced.

I think the word you're looking for is "fixed".

Why not? I think it would be better for cars to be controlled by say, families, or people with long commutes, as opposed to students or people living in cities, who would get less use out of them. This isn't a hard principle - I'm sure there are plenty of individuals in either situation who might get more or less value out of owning a car, depending on their circumstances.

By definition it's best for things to go to the people that will best use them. But there are issues with the distribution process as well as vast second-order effects. A few problems off the top of my head:

  1. Who is distributing these cars and what is their criteria? What kind of overhead does the distribution process have? Surely there will be many mistakes made if we know anything about the government.

  2. What are the effects on incentives? Many people only work because they want to buy nice cars. How will economic productivity and mental health be impacted?

  3. What are the effects on existing markets? Vast markets (dozens of billions of dollars) exist just to get people from place to place--Uber, doordash, taxis, etc. Not to mention car companies who are now basically selling cars to the government rather than to people.

  4. Is there potential for corruption? Why spend a billion dollars on marketing when you can spend $100 million bribing the right official for 10x the effect?

Anyways there's a VAST difference between wanting a particular state of affairs, and wanting a government policy that you believe will lead to that state.

I didn't say anything about government policy.

Oh, come on man. The context is obvious, and earlier you were talking about the government specifically leasing land out, so it's not exactly a logical leap. Nobody's going to take the fight to your motte that "people who will use resources best will use resources best."

The opportunity costs of not selling to the highest bidder is already fully internalized by the current owner—by turning down the payout. I don’t see why the state would need to stick its nose in this very real economic calculation that is happening when people choose not to sell.

Abolishing zoning laws would be a less harmful way to accelerate the property shuffling that LVT argues for.

Zoning laws are notoriously hard to roll back - one of the reasons Georgism is becoming so popular is because it would put far more pressure on poor zoning, and make zoning more important.

shouldn't we want land to be controlled by the people who can create the most value on it?

I cannot possibly create the most value on the land I own, so, no. I want land to be controlled by bona fide purchasers for value with clean chain of title.

with clean chain of title

This is the argument at the heart of Georgism though - there is no such thing when it comes to land. It's not a product like a car that was originally created in a factory and passed through various hands such that you can trace the chain back to its production.

Land being the ultimate scarce resource, why would we not want to incentivize people to create the most value on it?

originally created in a factory

Factory recquires resources. Usually extracted from the land. Which you claim cannot have a clean chain title. Thus the same argument as Georgists deploy against land, applies to anything that needs materials found in it.

The Georgist argument is that those resources required labor to be extracted from the land, which turns them into wealth. The land itself is not wealth because nobody put in resources to make it usable, it just exists.

I haven't heard this take either, definitely interesting.

I agree that's essentially what would happen, but I don't follow how it's communist. Yes it would mean the government captured more value from land, but do you think the land market is 'fair' right now?

To use another example, the government effectively owns the internet, which lead to a golden age of tech. It's a classic example of a commons which I know some hardcore libertarians are against, but to me it makes sense that land speculation is classic rent seeking. You're essentially getting something for nothing, sucking value out of the economy without putting anything back in.

To use another example, the government effectively owns the internet, which lead to a golden age of tech.

Interesting, because I have the opposite view: The governments didn't understand the World Wide Web and left it alone, so the wild west cyberspace was left to libertarian self organization and anarcho-capitalism, which led to a golden age in tech.

Compare it to the Minitel system by the French state, which was reasonably successful but technologically stagnant:

https://en.wikipedia.org/wiki/Minitel

Solid counter point. Didn’t the US gov build the infrastructure for the Internet though?

It built (or at least paid contractors to build) some of the early infrastructure, but mostly the infrastructure of the internet, the routers and other networking equipment, the fiber and wire connections, the wireless connections satellites, wifi devices, cell towers, microwave relays, etc., the servers, and the end user computers phones and other devices were built by private industry, and more for non-government use than by the government (and with much of even the government use being the government acting as a customer in the market).

I agree that's essentially what would happen, but I don't follow how it's communist.

Because it's government ownership of the means of production (though only the "land" part)

To use another example, the government effectively owns the internet

Not for a long time now.

So it seems like you're arguing on the basis that if the government owns something or collects value, that's inherently bad. You don't seem to be arguing against the idea of an LVT, more generally against taxation / government control. Do I follow you correctly?

I'm arguing that the government owning all the land is bad, and that the Georgist LVT is equivalent to the government owning the land.

Are you familiar with the legal distinction between "Allodial Title" and "Fee Simple" ownership?

Yes, but it's not particularly relevant. In the Georgist case, the putative landowner does not have "Fee Simple" ownership; he essentially has a leasehold interest.

Right, but without an Allodial title, the 'ownership' of the land isn't truly vested in the current holder, as the title will be traced back to some governmental entity or other bestowing it on some person if you go far enough back.

And the land will revert back to that entity should it ever be fully abandoned.

This assumption of governmental ownership still underlies the current system.

The government already owns all of the land, this is just changing the incentives for landowners. The government just gets a larger cut of the appreciation of the land.

Also, what are the arguments against LVT, besides low-effort "taxes are always bad and raising them is evil?" Genuinely curious for well thought out reasons why an LVT would be a bad idea.

My understanding is that this is effectively an opportunity cost tax. I.e., if you are sitting on a valuable plat which could generate 10 M$ in rents with 1 M$ of improvements, the market value of the plat should be about 9M$, and you would be taxed on that value, even if you were only generating 100K$ of rents (including imputed rents).

This is economically very efficient, as it encourages land to be used for its most economically efficient purpose. However, this butts directly up against peoples' real-world desires to "settle" - to establish a home in a place and be able to stay there indefinitely. If, for reasons beyond their control, the price of their property increases, they can be financially forced from their homes, which is about as soulcrushing as being foreclosed upon, while also seeming much more unfair. It destroys a person's ability to make stable long-term plans regarding a very fundamental fact of life. It also destroys residential community, by creating a disincentive to make a community that people want to live in, which has the natural effect of increasing property value. These are already problems with existing property taxes, that would be greatly amplified by taxing away all of the land value (leaving only rents).

After all, most people recoil about applying the same logic in other contexts: should a person's income tax be based on the amount of money they theoretically could be earning, if they worked as much as possible in the most valuable field they are qualified for, in the location with the highest salary? Hard-core utilitarians have seriously proposed this, but the concept of being treated as an economic ends with no function other than to produce social benefit, rather than a sapient being with noneconomic needs and desires makes most people reject this with prejudice.

should a person's income tax be based on the amount of money they theoretically could be earning, if they worked as much as possible in the most valuable field they are qualified for, in the location with the highest salary?

I, being one of the few hard-core utilitarians, actually support this in principle. In practice, I'm suspicious of the implementation details being carried out well enough to justify it (e.g. the risk of this destroying the Schelling point of free markets).

That being said, if I were to do it (as God Emperor), I just want to mention that I'd adjust the tax rates rather than the taxes themselves. For instance, suppose Alice is skilled enough to make $100k and Bob is skilled enough to make $40k. I might tax Bob 0% and Alice at 60%, thereby leaving Alice and Bob both at $40k if they maximize their economic potential. The reason essentially boils down to me believing a flat tax doesn't distort labor decisions.

Behind a veil of ignorance (before knowing their skills), they would both agree to my proposal compare to the alternative (43% flat tax on both).

For, I think, a somewhat powerful non-utilitarian intuition: Alice's skills are a lottery she won; Bob's lack of skills are a lottery he lost. Neither deserves their lot in life. It is fundamentally unfair that Alice can get the same life Bob has by working 2 days per week while Bob works all 5.

I agree with you but I think the bigger issue is that Georgeism seeks to solve a problem that doesn't exist. There are very few otherwise valuable tracts of land that are sitting vacant simply because the owner refuses to develop them. Most vacant land is outside of cities and is worth very little unless it's developed. Most vacant land in cities is in areas where governing bodies have to give incentives based on taxes that already exist to get people to develop it. The idea that there's prime real estate out there just sitting and not properly contributing to the tax rolls is a fiction.

This is economically very efficient, as it encourages land to be used for its most economically efficient purpose. However, this butts directly up against peoples' real-world desires to "settle" - to establish a home in a place and be able to stay there indefinitely. If, for reasons beyond their control, the price of their property increases, they can be financially forced from their homes, which is about as soulcrushing as being foreclosed upon, while also seeming much more unfair.

The solution I've seen mentioned is that you can permit the homeowner to 'name their price' i.e. the value of what they think their home/land is truly worth, with the caveat being that if someone offers to purchase at said price they are legally compelled to accept it.

If they name an astronomically high price, then they are going to be taxed accordingly.

So the incentive would be that they name a price that is sufficiently high to make up for the the distress of leaving a cherished home, of finding and moving to a new one, and whatever other burdens would be placed on them if they were to move, but not so high that they couldn't afford the tax burden.

I've not thought of nor seen a solid rebuttal to this proposal. If a homeowner has a price they are genuinely willing to accept for a property they have an extreme emotional attachment to, then 'forcing' them to sell at that price is barely a harm. If they claim that the property is actually worth far more than any buyer would reasonably be willing to pay, then they are prevented from complaining if their inflated valuation is the one they pay tax on.

Because if we take the complete inverse of your scenario, we end up with nail houses where a person refuses all reasonable offers to sell, and ends up having all the positive features of their neighborhood stripped away and end up distressed anyway, but with no money to show for it.

What happens when the prices overlap? As in, I wouldn't want to sell at a price that's high enough to tax me out of my own home. This should be more common than not, since most people value their homes more than what they can sell them for - which is why they're not selling right now.

Come to think of it, everything you have should be worth more to you than what you could sell it for (counting transaction costs). That's why you bought and kept the thing for in the first place!

The proposal you're talking about is called a common ownership self-assessed tax, or COST.

I'm sympathetic to Georgism, and COST seems like a good idea for purely economic assets (e.g. farmland), but actually implementing it for housing would probably impose large social costs which would outweigh the economic benefits. People tend to get emotionally attached to their homes in a way that can't really be quantified.

As another comment said, eminent domain exists for the rare situation where a small number of people are preventing development. Everyone else should feel safe knowing their home won't be expropriated.

For more information on this style of taxation (called a "Harberger tax"), see the paper Property Is Only Another Name for Monopoly.

The existing system of private property interferes with allocative efficiency by giving owners the power to hold out for excessive prices. We propose a remedy in the form of a tax on property, based on the value self-assessed by its owner at intervals, along with a requirement that the owner sell the property to any third party willing to pay a price equal to the self-assessed value. The tax rate would reflect a tradeoff between gains from allocative efficiency and losses to investment efficiency, likely in the range of 5–10% annually for most assets. We discuss the detailed design of this system from an economic and legal perspective.

The authors expand on the history of the idea in chapter 1 of the book Radical Markets.

These kinds of choices are just degrading, painful and exploitative. What’s the harm if I offer a poor man one million dollars to have sex with his wife? If he values his wife’s purity he can just refuse, no harm right? Obviously not, if he’s in a situation where he needs the money, even just having this option can be deeply distressing.

You know, I'm going to call you on this one:

Under what possible, realistic set of circumstances would someone actually be willing to pay $1,000,000 to have sex with a particular woman, rather than just buying time with 500 top-tier escorts?

And what person would experience emotional distress in excess of what 1 million dollars could ameliorate?

Okay, so imagine a much smaller offer, say $10,000. You could prevent having to accept that offer by naming a higher price, but you have to pay a tax to do so, a tax calculated to be punitive enough that you would be indifferent toward paying the tax or not increasing your price.

Under what possible, realistic set of circumstances would someone actually be willing to pay $1,000,000 to have sex with a particular woman, rather than just buying time with 500 top-tier escorts?

Revenge or sadism, by a fairly rich person.

The fact that people kill other people over infidelity should be taken as evidence that infidelity is sometimes taken to a million-dollar-equivalent level.

Revenge or sadism, by a fairly rich person.

Have to imagine this will result in maybe a couple dozen instances, tops. Which is to say 99.999999% of couples will never face this particular conundrum.

I guess I don't see this as something I'd consider an appreciable threat. Feel free to convince me otherwise.

I happen to think that the vast, vast majority of wealthy people aren't really so villainish in their tastes, but I'd be open to seeing an example of one who was and used their wealth to exercise their sadism in this way.

The fact that people kill other people over infidelity should be taken as evidence that infidelity is sometimes taken to a million-dollar-equivalent level.

Or as evidence that people make rash decisions without thinking through the consequences.

Assuming we could get rid of all counterparty risk, and the parties involved were given ample time to consider their options, what are the odds of a couple who agrees to accept $1,000,000 for a single instance of infidelity ending up involved in a murder somehow?

The million dollars is an example. You probably wouldn't be offering it to someone who can afford to pay the tax on a million dollars, so you wouldn't have to make the offer that large.

Wow, there was some French movie with that exact plot I saw when I was four. Wonder what the title was.

Indecent Proposal in America

Oh thanks, don't know why I thought it was French. Probably the degeneracy.

the value of what they think their home/land is truly worth, with the caveat being that if someone offers to purchase at said price they are legally compelled to accept it

This is even worse. Under either the present system or full gay space communism georgism, at least I do not wake up one morning and get told I have to move out within the next month.

You are robbing the entire owner surplus here. I am sure the grocery store would like to figure out exactly how much I am willing to pay for a loaf of milk or a jar of bread, or the car salesman to figure out exactly what a car is worth to me.

There is being more economically efficient, and then there is negotiating with the swarm of AI drones outside my house exactly how much my child's life is worth to me compared to their value of him in paperclips.

I have a bunch of things in my house that I would like to sell for their market price but the transaction costs are too high to bother. That is essentially negative surplus for me. But I also own things that I value much more than their market value in cash, which is positive surplus, so it balances out. So the idea of a future where I lose the positive surplus but lose the negative surplus is extremely distressing.

loaf of milk or a jar of bread

You must go to a different grocery store than me

at least I do not wake up one morning and get told I have to move out within the next month.

If you set your asking price correctly, then this should be priced in.

You are robbing the entire owner surplus here.

Again, if they set their price accurately and account for all the value they can reasonably extract from the land, they should be capturing close to all of the 'surplus' available to them, OR there's simply nobody out there that would match their asking price.

then there is negotiating with the swarm of AI drones outside my house exactly how much my child's life is worth to me compared to their value of him in paperclips.

I guess I have a hard time accepting that someone would be so attached to a piece of land that they cannot express a price point at which they would gleefully part with it.

As opposed to parting with a human who is, from an emotional standpoint, of nigh-infinite value and not replaceable.

If you set your price high enough, you could use the sale proceeds to pay to have the entire property reconstructed in exacting detail at a different location, such that you would barely notice the difference.

But I also own things that I value much more than their market value in cash, which is positive surplus, so it balances out.

Can you name one such thing that can't be replaced by a good-enough reproduction if it were ever lost or broken? Do you have some unique pieces of art or some item that has sentimental value only to you?

Otherwise, why do you value such items more than a near-identical one you could just buy on the market?

Can you name one such thing that can't be replaced by a good-enough reproduction if it were ever lost or broken?

Yes, location! This is what the entire point of land ownership is to begin with!

If I live in a neighborhood with a nice school, people I know, family nearby, close to my job, etc. then there's literally no way to reproduce it even with infinite money - unless everyone and everything moves to an exact replica in some other location, which requires moving the entire world, which is both impossible and makes buying my original home pointless.

If you set your asking price correctly, then this should be priced in.

If you know even a smidgen about the financial acumen and long-term planning capabilities of the median American, you should realize that just about no-one will set their asking price """correctly""".

You could offload a significant portion of the price-setting burden to professionals by inverting the system. Have purchase offers go through the government land registry, and base the land tax on the highest offer rejected in the past year or something.

Offers unanswered in some time are rejected by default, and you have a somewhat fair system to assess land value for tax purposes where the owner isn't forced into regular active price setting or having to sell for a previously committed price.

In such a system purchase offers would presumably need collateral or preapproved mortgages to ensure against frivolous purchase offers.

This makes the argument for getting value-producing assets out of their hands stronger.

Why are we letting financial illiterates sit on land that could be producing much greater value? This is no way to run an economy!

But more seriously, fine. Require that they consult with a professional before declaring a price. An agent of sorts. Ah, there we go. Lets set up a profession of "Real Estate Agents", who are familiar with local market conditions, that people can hire so they can set a good asking price for their house and not get taken advantage of by buyers. Maybe require licensing.

Crazy idea, I know.

Why are we letting financial illiterates sit on land that could be producing much greater value?

Because its their land, and properly their decision to sit on it or not. Not yours, not even "ours".

Right, and the issue of people being too financially illiterate to know the 'right' price for their property has been solved for decades upon decades, so this is simply not a good objection to the overall point.

Why are we letting financial illiterates sit on land that could be producing much greater value? This is no way to run an economy!

People are not cogs in an economy. An "economy" is literally the art and science of managing households. To destroy the concept of a household in the service of household management would be a horrifying historical irony, and so fundamentally inhuman I'm having trouble staying civil over it.

How is it unfair to have someone name the value they believe their house is worth for taxation purposes, but fair to have the government declare a value and tax on that value by fiat?

That's been my point the entire time. The most fair way to do a land value tax is to have the person who owns the land declare the value, whilst holding them to said valuation if a sale offer is made.

Financial illiteracy is not a viable objection to this because it is a solved problem.

More comments

all of the 'surplus' available to them,

Surplus is an established economic concept, not something for scare quotes.

Otherwise, why do you value such items more than a near-identical one you could just buy on the market?

I do not fucking want to wake up and find my kitchen table replaced with $400 in cash even though that is what it is "worth" in some market sense. I would probably pay more much than $400 to have a table but anyone trying to find my price point is my blood enemy. That is valuable information. Mail me an offer if you want it. Tell me how much it is worth to you.

People have things to do with their day besides deal with transaction bots.

I do not fucking want to wake up and find my kitchen table replaced with $400 in cash even though that is what it is "worth" in some market sense.

At what price would this start to be acceptable to you? That's the price you set.

At some value X you'd be pleased to wake up and find your table replaced with $X in cash.

People have things to do with their day besides deal with transaction bots.

Then set the price high enough that the transaction bots leave you alone. If you place a premium on privacy and autonomy, all this hypothetical requires is that you price that premium in.

Okay, so I set the price at $1B, and everyone else does that too. Why not? Oh yes, because this will bump the property tax beyond what I can afford. On the other hand, if I bring it down to what I can afford, bots will no longer leave me alone. Point is, you’re trying to pull a fast one here.

Why not? Oh yes, because this will bump the property tax beyond what I can afford

So your real disagreement is really with the tax rate it sounds like.

Advocate for the tax to be brought down to, say 0.0001% of the property's value and it ceases to be a problem.

We just have to fiddle with the dials a bit to solve your objection.

If your problem is with taxes as a concept then just say that! Its a fine position!

On the other hand, if I bring it down to what I can afford, bots will no longer leave me alone. Point is, you’re trying to pull a fast one here.

I'm trying to explain how this system can be made fair, rather than depending on the government to set accurate values by fiat, which is how almost everywhere does it currently.

More comments

I've not thought of nor seen a solid rebuttal to this proposal.

The simplest rebuttal is that it is immoral to tax people for having natural human feelings of attachment to their home. You could make the same case for forcing people to set a sale price for their children. Very efficient for clearing the adoption market. Or for their spare organs, even. By forcing people to pay for the right to not be forced from their home, you are turning a voluntary market into an involuntary one, which degrades the market and degrades basic human rights and dignity.

That said, I'm not totally against the use of eminent domain powers where you have obstinate sellers blocking genuine civic improvements. But I think the "public benefit" of such seizures needs to be adequately established.

The simplest rebuttal is that it is immoral to tax people for having natural human feelings of attachment to their home.

If we grant that people's feelings have moral weight then we're opening up quite the can of worms here.

If people aren't willing to place a specific price tag on their 'feelings of attachment' then how can we know that their attachment outweighs that of the buyer's desire to have the house?

What if the buyer is actually attempting to re-purchase their childhood home, and has INTENSE positive feelings associated with it?

How ELSE can you figure out how to weigh the disparate interests here?

If we grant that people's feelings have moral weight then we're opening up quite the can of worms here.

I don't see how. We account for them in myriad other laws.

If people aren't willing to place a specific price tag on their 'feelings of attachment' then how can we know that their attachment outweighs that of the buyer's desire to have the house?

Because otherwise they would sell at that higher price voluntarily, presumably.

How ELSE can you figure out how to weigh the disparate interests here?

Voluntary transactions, the same way we clear most markets. This is only a problem because you're starting with the assumption that the owner shouldn't be able to benefit from the transaction.

Voluntary transactions, the same way we clear most markets.

Yes, that's the trick. You ask a person "at what price would you voluntarily part with this piece of property?"

and if they offer such a price, they should by definition be willing to accept an offer at that price without a fuss.

They're free to name an arbitrarily high amount, but then they'll be held to that number by being taxed on it.

If you are objecting to the morality of taxing assets at all you can find this problematic Otherwise, there's really no fairer way to establish a valuation for purposes of imposing a tax.

They're free to name an arbitrarily high amount, but then they'll be held to that number by being taxed on it.

Well then it's not strictly voluntary, is it? If you can't afford to pay the taxes on your subjective valuation, you're forced out of your home just as surely as if the government re-assessed your property at a higher rate than you can afford.

This is why we don't normally tax wealth.

Well then it's not strictly voluntary, is it?

In the same way any tax isn't strictly voluntary, yes.

But this argument generalizes to literally any sort of tax you could impose. I'm happy to have that discussion.

But I thought we were engaging with the LVT idea itself.

If you can't afford to pay the taxes on your subjective valuation, you're forced out of your home just as surely as if the government re-assessed your property at a higher rate than you can afford.

Which is why you better set your valuation at the correct level!

Is it better to depend on the government to declare a valuation which you have almost no control over?

This is why we don't normally tax wealth.

Also because wealth can be easily hidden or obfuscated. As opposed to land, which is physically located exactly where you expect it to be at all times, and can't be hidden.

But surely taxing land doesn't prevent someone from shifting their wealth into other, non-taxed assets!!!!

More comments

Yes, that's the trick. You ask a person "at what price would you voluntarily part with this piece of property?"

No. You come to me with an offer and earnest money, and I decide if it is worth my time to bother listening to you based largely on the number.

It is aggravating to price everything in my life, knowing that I am fucked if I get it wrong because they are out to get me.

If someone values my home at $3 million because of the feng shui, they can offer me $2 million and keep $1 million of surplus for themselves. $2 million is more than I value my current home. Now someone is going to try "we already know you are a whore we are just negotiating on the price" to figure out exactly where below $2 million my value is and that is when I tell them to eat shit. If I have to defend my property constantly then I might as well go full ancap and blast anyone who steps on it.

No. You come to me with an offer and earnest money, and I decide if it is worth my time to bother listening to you based largely on the number.

I mean this happens, constantly, all the time. If you live in a desirable area you will get a veritable stream of calls, texts, e-mails trying to make you an offer on your land.

It's dreadfully annoying to filter.

From my perspective, I'd much rather just publicly set the asking price for which its worth my time to even engage with a possible buyer, and only interact with those who can prove the ability to pay the asking price, and everyone else can pound sand.

If someone values my home at $3 million because of the feng shui, they can offer me $2 million and keep $1 million of surplus for themselves.

And if you think there's someone out there who values your house at $3 mil, maybe set the price at $3 mil, or $2.5 to split the difference.

Nothing in this hypothetical situation demands you set the price exactly where you value it. You're free to set a 'strategic' asking price too.

More comments

If, for reasons beyond their control, the price of their property increases, they can be financially forced from their homes, which is about as soulcrushing as being foreclosed upon, while also seeming much more unfair.

Notably, many states have callouts in existing property taxes to (ideally) avoid this situation. Some probably work well, but others (notably California's Prop 19) are borderline comical.

After all, most people recoil about applying the same logic in other contexts: should a person's income tax be based on the amount of money they theoretically could be earning, if they worked as much as possible in the most valuable field they are qualified for, in the location with the highest salary?

As a relevant example, the State already does calculations like this when computing child support payments and means testing benefits. I don't think it's particularly popular method, but it does exist in limited practice.

This is a good argument, thank you for giving me this perspective!

If, for reasons beyond their control, the price of their property increases, they can be financially forced from their homes, which is about as soulcrushing as being foreclosed upon, while also seeming much more unfair.

I'm definitely more of a YIMBY, I understand that losing a house can be a serious blow, but I am more concerned with the fact that our cities are becoming increasingly less dense, losing valuable network effects, and wasting huge swathes of land.

It also destroys residential community, by creating a disincentive to make a community that people want to live in, which has the natural effect of increasing property value.

To me this is the most salient problem you bring up, although I tend to come to the opposite conclusion. Yes a poorly implemented immediate LVT would absolutely destroy community, the idea is to slowly introduce it at say 30% of land value, and raise it over time to soften the blow.

From what I can tell though, one of the big issues of community being destroyed in the U.S. especially is the lack of density. It's much harder to have a strong social group when you have to drive 15-30 minutes to see any of your friends, being able to walk to another building one block over is much easier. That being said, we do tend to have an issue building ugly, dystopic dense housing which actively disincentivizes community. That's a separate problem we need to fix.

After all, most people recoil about applying the same logic in other contexts: should a person's income tax be based on the amount of money they theoretically could be earning, if they worked as much as possible in the most valuable field they are qualified for, in the location with the highest salary?

I could never get behind this, and you're changing my mind on the 100% LVT. How would you feel about an LVT that taxed away 80% of the land value?

Why is it then that the social ties among residents of SFH neighborhoods are almost universally stronger than among apartment dwellers? I don’t think that a typical renter even knows the names of people living in the neighboring apartments, or, for that matter, anyone else in the building.

If you are not living in a huge metro, most of the people you can conceivably meet on a regular basis will be within 10-20 minutes drive, because driving in non-dense places outside of big metros is very fast. This is not the case in big metros, to be sure, but in big metros, you cannot cram everyone into walking distance from everyone else anyway (see: NYC). The choice is not between driving 20 minutes to see your friends in suburbia vs waking one block over to your friends, it is between driving 20 minutes vs taking 20 minute subway trip. If your friends are free to move so close to you, why cannot we assume that they also cannot buy a house in the walking distance in the same SFH neighborhood? If you are instead assume that you make friends with people who already live close by, why not assume the same when you’re living in SFH?

Frankly, I am reading often about how suburbia is alienating compared to dense city living, and I am frankly bewildered. My experience have been completely opposite of that. I think people are comparing suburbia today vs communal living in cities 70 years ago, where yeah, you could make the case that the social ties in cities 70 years ago were stronger than are in today’s suburbs — but this is the whole Bowling Alone thing, not dense city vs suburbs issue.

I'm definitely more of a YIMBY, I understand that losing a house can be a serious blow, but I am more concerned with the fact that our cities are becoming increasingly less dense, losing valuable network effects, and wasting huge swathes of land.

Build new cities! Sounds glib, I know, but there is really no shortage of unzoned, unoccupied land in the United States, in nearly every temperate zone. Sure, the best port locations and the most ideal of weather locations are taken, but this isn't Europe. There's no reason that building the cities you want must entail destroying the ones that exist, unless you are unwilling to settle for anything less than the maximum possible ideal locations, in which case no amount of land reform is ever going to solve the problem that millions of people want to live in those places without also living in proximity to millions of other people.

From what I can tell though, one of the big issues of community being destroyed in the U.S. especially is the lack of density. It's much harder to have a strong social group when you have to drive 15-30 minutes to see any of your friends, being able to walk to another building one block over is much easier.

I disagree, I think too much density is also harmful to community. There is balance between not having enough people to form a community and having so many people proximate that your community is too large to meaningfully participate in. I suspect that in reality, the ideal community is within an order of magnitude of Dunbar's number, and the physical size of one's "community" is simply scaled by the density. In a small town, the entire town is your community. In a suburb, it is your residential neighborhood. In a larger city, your block, and in a megalopolis, your building, or maybe even your elevator stop.

I could never get behind this, and you're changing my mind on the 100% LVT. How would you feel about an LVT that taxed away 80% of the land value?

Better, but still not very positive.

Build new cities! Sounds glib, I know, but there is really no shortage of unzoned, unoccupied land in the United States, in nearly every temperate zone.

I'm also on the build new cities train. I think the problem is building a new city is extremely hard. Not the actual infrastructure, but the getting people to move there. To be clear if we do institute a LVT, I think we should test it extensively on smaller/new cities and areas instead of just roll it out immediately.

I disagree, I think too much density is also harmful to community. There is balance between not having enough people to form a community and having so many people proximate that your community is too large to meaningfully participate in. I suspect that in reality, the ideal community is within an order of magnitude of Dunbar's number, and the physical size of one's "community" is simply scaled by the density. In a small town, the entire town is your community. In a suburb, it is your residential neighborhood. In a larger city, your block, and in a megalopolis, your building, or maybe even your elevator stop.

Interesting point here. I definitely find it compelling, and it's a huge problem. I'd like to think a Georgist system where people can name their price for a piece of land would enable stronger communities but a lot of people in this thread seem to disagree.

If, for reasons beyond their control, the price of their property increases, they can be financially forced from their homes,

Is the windfall from selling a house + expensive land gone under Georgism? If my land goes from being worth 200K to being worth $5M, I still get to pocket that $4.8M, right? I think so because the check from the buy er has to so somewhere, but maybe LVT breaks this in a way I cannot understand.

You still do, the big difference is you pay taxes on the 5 mil value until you sell.

It's also likely that land values would be somewhat lower especially in places where some of the current value comes from the disconnect between potential and actual value and being taxed on the current use.

If the land value is kept down by prospects of high taxes then the owner will pay tax on the low value, which will be managable.

You will be forced out of your home long before that, and all the gains will accrue to the condo developer whose political allies pushed you out (like Dag just explained below).

It's been happing where I live for years, and if "rationalists" want to join in it will mark the point where they became just another parasite class that rationalizes entirely in its self-interest.

Frankly advocating "georgism" is the "break out the guillotines" limit for me, because the victims are my people and the preparators are /r/neoliberal vampires. I know too many retired Microsoft types with two-digit employee numbers who do "land use advocacy" in rural areas to have any illusions about their goals for land ownership, and I'm not going to die a landless serf while they relax in their 2-acre billion-dollar mansions surrounded by a hundred acres of untaxed "nature reserves" that used to be our farms.

/r/neoliberal vampires

If I have to become a neoliberal in order to become a vampire, I may accept.

In all seriousness, yes losing your home to developers sounds terrible but it does promote valuable use of land. At the end of the day it depends on how you fundamentally view land and how it should be used.

From my point of view, having land simply reward whoever squatted there first with no view to their effort on the land is both unfair and a huge waste of potential value. If anything I would say the landowners who get a massive benefit from simply being lucky enough to live in a desirable area are the vampires, as they are sucking away monetary value from the surrounding area by doing essentially nothing.

House Vampire is the best house, and no, you don't have to be a neoliberal to join.

Pretty amazing how we went from "there's nothing coercive about land use reform" the other day to "the state will seize your land and give it to developers, die in a pod you filthy undeserving squatter"

Merited impossibility happens so fast these days (or is that the wrong name for it?).

I never claimed there was nothing coercive about it, all taxes are inherently coercive. Also, nobody is seizing anyone's land under a Georgist model.

The government is seizing everyone's land under a Georgist model. The present value of the ground rent (the part the government is taxing away) is the entire value of the land.

I think we're getting confused on terminology. In my view the government already owns all the land in a nation and they essentially rent it even to landowners. This is pretty confusing to talk about though.

Idk, I'll have to go back to the drawing board on some of the Georgist stuff. Getting a lot of good objections from this post.

I kind of like the LVT on economic grounds but every time I listen to the people who want it I feel a great need to go learn how to use a gun.

No, you wouldn't get to keep that 4.8M unless you improved the land yourself, for instance built out a house/new wing or something similar. And then you'd only keep the portion which you improved.

The whole idea is that the 'land value' which drives most real estate speculation is taxed away.

Okay, so where does the money go?

At the start of 1990 I pay $100K+$100K for land+house by writing a check for $200K to the current owner of land+house.

Land value goes up kind of slowly for the first 15 years (say it goes from $100K to $400K, around 10% a year). I pay LVT of $5000 at the start and $20,000 at the end.

Then it really takes off, going up 50% per year. By 2010 the land is just over $3,000,000, and I decide "fuck this" at the $150K tax bill and sell.

So I sell for $3000K+$250K at the start of 2010 and get a check for $3,250,000 from the guy I sold the land to.

I still get that check. Even retroactively applied against all the back taxes, I come out ahead.

... Unless I decide to keep on living on the the $3 million land for 20 years. But I am choosing to leave nearly $3 million on the table for doing that. Being able to keep on living in one place is nice but not $3 million nice.

Under LVT theoretically all property is basically worthless because its value is taxed away. It would be impossible for its value to grow that large, because the associated taxes would grow at the same rate, making its net value 0.

Even under the "government owns it and just leases it to you" model, land still is not worthless, the same way a landlord's building is not worthless to the people who live there.

It is basically worthless to them, if you assume the landlord is charging the maximum possible rent they are willing to pay.

IIRC, implementations of Georgism also include Land Transfer taxes to mitigate people earning that windfall.

So I sell for $3000K+$250K at the start of 2010 and get a check for $3,250,000 from the guy I sold the land to.

No, in with an LVT you would get that check, and everything but the $200K purchase price (adjusted for inflation) and the value of your improvements, would be taxed away. This number would be adjusted based on how much you've already paid in yearly taxes, depending on the system.

Does that make more sense?

That sounds like double-dipping and is very frightening.

EDIT How do you establish land value without private sales? This is always a big problem in pure global communism where you lose access to price signals.

Honestly I may not understand the LVT that well, don't take my argument as the LVT position. I'll have to read more about the nitty-gritty.

There would be private sales, they would simply be heavily taxed based on land value. The numbers would be public (or at least accessible to assessors.)

The Georgist LVT is 100%. Whatever the value is of that land, you're paying it to the government. So you should buy the $100K house + $100K land in 1990 from the previous owner for $100K. Over the course of the first year you pay whatever the value of holding a piece of $100K land is for a year in taxes. Same for each of the years after that, with the new value of the land. When you sell, you get the $250K for the appreciation of the house, but nothing for the land. Of course, most likely no one else wants a $250K house on land they can't afford to pay the taxes on, so in fact a developer takes it from you for a song or you abandon it to the government, and someone else who is going to fill the land with 400 square foot apartments develops it instead.

If the LVT was done honestly, in this scenario you should be paying $0 taxes on the land because its market value is $0. If the land isn't worth $0, a land value tax makes it worth $0 according to the market--nobody would want to buy land that's priced higher than $0, because they have to pay the sale price plus 100% of the value in taxes, which is a net loss.

(And actually, all land would have negative value. The land is valueless because all the value gets taken away in taxes, plus you have transaction costs.)

The usual way the Georgists put it is taxing 100% of the land rent. The market value of the land is indeed zero under this system, but the land rent is not zero.

I have a hard time, even after Googling it, figuring out what land rent could mean here that's not also zero. The land rent is supposed to be the amount of rent the property would generate. Since all the land rent is taxed away, the land owner should be indifferent to how much land rent anyone would actually pay, which would drive the land rent down to zero as well.

More comments

Of course, most likely no one else wants a $250K house on land they can't afford to pay the taxes on,

The hypothetical was that the land value was going way up. If no one wants to buy it then the value is not there.

They want the land, not the house.

I would think that in a lot of cases, the house would have negative value, since it would have to be demolished and cleared away in order to improve the land.

More comments

I'm probably misunderstanding georgism, but would it even help without YIMBY/zoning deregulation? If land value prices in zoning restrictions, then a plot of land that can only be used for single family housing won't be worth more than a single family can afford. If land value is independent of zoning restrictions, then it just makes a ton of people poor without letting them build improvements that house more people.

If land value is independent of zoning restrictions, then it just makes a ton of people poor without letting them build improvements that house more people.

Zoning restrictions don't exist in a vacuum. This would probably happen, which would ideally lead to a far greater willingness to repeal/change ridiculous zoning regulations. Arguably the reason zoning has gotten so ridiculous is because it's an extremely powerful and effective tool for land owners to speculate and prevent competition in the land market.

At least in my metropolis, zoning is a way for the City to extract fees from developers, for politically-involved individuals to influence what gets built in their neighborhoods, and for city planners to try and create the perfect city of their dreams (and universally fail), as well as keeping a goodly number of specialist attorneys, permit fixers, etc. in business.

Most developers I've interacted with would prefer the zoning requirements to vanish rather than stay as they are (i.e. expensive, time-consuming, uncertain, and subject to political interference)

Arguably the reason zoning has gotten so ridiculous is because it's an extremely powerful and effective tool for land owners to speculate and prevent competition in the land market.

I'm absolutely certain there are bad actors abusing zoning regulations / bribing municipal officials, or whatever, but it seems a stretch to say that zoning is a tool for speculation and shutting out the competition. Can you lay out your case here?

The idea is that single-family housing zones prevent denser housing from competing with SFH. I suppose. I'm realizing I need to study up quite a bit more on this whole topic.

Well, the problem is that many, if not all, types of non-SFH have negative externalities for the people in the SFH.

For example, if my neighbor sells their house to a developer who then builds a 5 story apartment building, this will have significant effects for me.

My street will go from quiet to busy.

I will go from knowing all my neighbors to definitely not knowing all my neighbors.

Noise will go up.

Etc.

All these are externalities we, the current residents of this neighborhood, seek to avoid.

Therefore, we work with the town to zone our area for SFH.

There's no aspect of "competing" here except insofar as we are in a death struggle with developers.

Yeah, this is one area where I think the intellectual arguments are butting up against physical reality. I live in a SFH neighborhood and it's quite nice, great sense of community.

That being said, the Georgist logic inherently makes a lot of sense to me, and seems like it would strongly incentivize better use of land which I think is crucial. I'm torn.

The goal of human civilization and society is not to make the most efficient use of resources. If you can accept that then there’s no reason to insist on a tax policy that would inherently sacrifice things that are genuine good things.

The goal of human civilization and society is not to make the most efficient use of resources.

Agreed, but look around. Efficiently using resource is what brought us the modern era. Myself and other utilitarians are hoping to keep all the material and intellectual wealth of modernity while retaining the good things about being human.

That requires learning how to use resources efficiently to preserve the things we care about.

More comments

The idea is that single-family housing zones prevent denser housing from competing with SFH

I suppose, if I squint, but you're going to to have to lay out the mechanics more before I'm fully convinced.

Back on The Motte, grendelkin (I think?) regularly posted about zoning fights in the Bay Area and it was usually "community leaders", not SFH owners protesting developers trying to remove historically-significant laundromats, or whatever, to build denser housing.

Also, what are the arguments against LVT

As you say in your comment, a lot of land value assessments are completely random and depend on how much time you can spend fighting the tax collector assessor. How well the government runs property taxes is a good proxy for how well they will run land taxes.

This seems like a problem that could easily be solved with proper tools, especially machine learning models. I agree this is a strong objection to an LVT.

How would you feel about an LVT if the assessing problem were fixed?

This seems like a problem that could easily be solved with proper tools, especially machine learning models.

The "AI models are racist and undervaluing my crack den in the middle of the ghetto" articles will (literally) write themselves.

You're missing the point. Yes, it could be solved with the proper tools, but this is government, and I don't trust the government to select the right tools or to solve the problem at all. You're offering more technocracy for what is not a technocratic complaint.

True, appraisal is pretty horrible. I wonder if there would be a way to fully commercialize it, but probably not without getting rid of property tax entirely.

What is this place?

This website is a place for people who want to move past shady thinking and test their ideas in a court of people who don't all share the same biases. Our goal is to optimize for light, not heat; this is a group effort, and all commentators are asked to do their part.

The weekly Culture War threads host the most controversial topics and are the most visible aspect of The Motte. However, many other topics are appropriate here. We encourage people to post anything related to science, politics, or philosophy; if in doubt, post!

Check out The Vault for an archive of old quality posts. You are encouraged to crosspost these elsewhere.


Why are you called The Motte?

A motte is a stone keep on a raised earthwork common in early medieval fortifications. More pertinently, it's an element in a rhetorical move called a "Motte-and-Bailey", originally identified by philosopher Nicholas Shackel. It describes the tendency in discourse for people to move from a controversial but high value claim to a defensible but less exciting one upon any resistance to the former. He likens this to the medieval fortification, where a desirable land (the bailey) is abandoned when in danger for the more easily defended motte. In Shackel's words, "The Motte represents the defensible but undesired propositions to which one retreats when hard pressed."

On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.


New post guidelines

If you're posting something that isn't related to the culture war, we encourage you to post a thread for it. A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a submission statement. A submission statement is required for non-text sources (videos, podcasts, images).

Culture war posts go in the culture war thread; all links must either include a submission statement or significant commentary. Bare links without those will be removed.

If in doubt, please post it!


Rules


Recommended Posts And Communities

Recommended Realtime Chats