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naraburns  nihil supernum  1yr ago (text post)   32851 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.

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.

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.

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