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