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naraburns  nihil supernum  2yr ago (text post)   33475 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.

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.

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.

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