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naraburns  nihil supernum  1yr ago (text post)   32866 thread views

Culture War Roundup for the week of October 10, 2022

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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?" 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.

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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.

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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!!!!

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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.

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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.

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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.

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