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Apparently the UK's entire net worth was £10.7 trillions in 2020 according to the ONS, their chief statistic agency. What's remarkable is that a whopping 60% of that is "non-produced, non-financial assets".
That's a fancy way of saying land. Why isn't this fact more well known? Should we expect it to be different for other countries? And why aren't more people talking about Georgism?
I made a top-level comment here a couple of weeks ago that tried to outline some of the major updates on the Georgism discussion in the ratsphere.
(Editing for less strawmanning.) I think that a lot of the problem is that Georgism strikes at the heart of fundamental value differences for folks. Many people seem to equate Georgism with Communism, or redistribution of wealth, which I don't find convincing.
For instance:
@bnfrmt:
@Brannigan:
@laxam
@Westerly
@naraburns
@The_Nybbler
@MeinNameistBernd
These are not cherry picked responses - all of these had at least 10 upvotes, and in many cases 25+.
Some of the responses were less charitable, which has led to me getting heated on this topic, such as people literally calling me a vampire (and getting 15+ upvotes) for arguing for a type of land reform.
Responses like "LVT is equivalent to the state seizing all land, and renting it back at market rates; it's expropriation on a massive scale." are not knee-jerk emotional responses, and they are light, not heat. That when this light is shed on Georgism, it becomes obviously (to most) a bad thing is a problem with Georgism, not the comments.
How is changing the way land is taxed equivalent to the government seizing all land? None of the anti-Georgists have been able to explain this to me.
An LVT does not have to be 100%, and besides even if it is people still own the improvements aka buildings on the land. What's really being taxed is the 'locational' aspect.
To me this argument is the equivalent of saying "income tax is the state seizing all work" which I just don't find reasonable.
Income tax is the state claiming ownership over work.
Think of it this way ... for any given tax, what would it take for a private non-government actor to implement that "tax". If I was a private actor and I wanted to charge someone rent for getting to use a parcel of land ... then I would need to own that land.
If I was a private actor and I wanted to take a cut out of all the money that someone gained, then I would have to own that person like a slave.
The power to regulate is also a form of ownership.
An alternative interpretation, is that the state doesn't own the things it taxes, it is instead just stealing. The libertarian refrain "taxation is theft" is along these lines. But that is what it boils down to, either the state has ownership, and thus the right to determine how the thing they own is used, or they don't have ownership and they are just constantly stealing.
Thank you for explaining the libertarian view - I understand where those folks are coming from. I suppose I find it disingenuous because it seems that people who aren't full libertarians and are on-board with other taxes seem to have knee-jerk responses when it's a tax on land rather than something else.
Maybe I'm incorrect, and everyone saying the government is stealing our land really is a full out libertarian that doesn't support any taxes. I will ask next time, but it doesn't seem likely.
There are also people who realize that what the government is doing through taxation is basically theft, and their response is something like "Ok yeah taxation is theft, but the theft is for a good cause. Plus its not like a lot of other theft, and the word theft has some negative baggage, so you are just using the association to say that taxation is bad". That is sort of Scott Alexander's response if I remember him correctly.
It can be both a massive theft and the correct thing to do. But if it is a massive theft and you are treating it as just a minor adjustment in policy then that might lead to you misunderstanding the anger coming your way.
If I was going to justify a land value tax I would start with requiring the income tax to be abolished. And that the land tax would explicitly exist as a way of funding defense of that territory. There is a massive amount of tyranny and injustice around the income tax, and the idea that the value of people's work is literally being stolen from them on a nation wide scale. Returning people's freedom over the money they earn through work seems like a worthwhile tradeoff for taking away the ability to meaningfully own land. But thats not how this discussion started out.
I can get behind that framing, and I know many other Georgists argue for that. My issue with that promise though is I think an LVT should be phased in gradually. If you do that it becomes much harder to immediately wipe out income tax.
You could set them to ratchet down over time as an LVT increased which I think makes sense, but is far less appealing to the masses than “I’ll wipe out income tax and replace it with something else!”
All that said, interesting framing on the taxation is theft. I think we have common ground in that the main draw of the LVT is that it’s more fair and less game-able in theory.
Based on the implementation of previous tax schemes it would be highly unlikely for the income tax to be ever fully phased out. Its not like the US really got rid of any other taxes once it had income taxes. For a while they got rid of alcohol taxes by banning all alcohol, but thats about it.
Having income taxes and LVTs seems terrible.
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Would you call yourself a minarchist?
If any government is to do anything, it generally needs to pay for it. If it's going to have the money to pay out, it needs to have some method of collecting money. What would you define as the valid parameters around "government collecting money"?
Anarcho-capitalist. Though I get along well with minarchists and try to avoid arguing with them.
I think even for people who are not minarchists/anarcho-capitalists that it is useful to recognize what government is doing. Governments collect money either by owning everything and charging rent, or they are stealing stuff from people. The government can own everything or steal things, because they have a monopoly on the use of force.
It is worth noting that under anarcho-capitalism, you can't own except to the extent that you can defend it. Much like feudalism really - in fact feudalism evolves from the anarcho-capitalism that existed briefly after the fall of Rome as the competing protection agencies (Knights, a word which derived from the old Saxon word for bandits) established local monopolies (Lords), set up the hierarchical system of arbitration between neighbouring protection agencies that David Friedman advocates (Kings), and cut a deal with the local influencers to propagandise for maintaining the system (the Church).
Under feudalism, the effective tax rate on non-warriors who wish to occupy land was also close to 100%.
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Would you say that some level of tax collection is a necessary evil, rather than both unnecessary and evil?
I assume that various tax schemes would fall on a gradient of more-to-less offensive, depending on the details; what type of taxation (if any) would generally be on the less offensive end of the spectrum?
If you want to have a government, yeah taxation in some form is probably necessary.
And yeah the badness of taxation is on a gradient, and not all forms of taxation are evil. The problem is that the less offensive forms of taxation are often not as good at raising massive amounts of revenue.
I think certain use taxes are often ok-ish. Like docking taxes that pay for dredging of waterways. Other use taxes seem pretty messed up, especially when the government has an enforced monopoly on the service. The more necessary the service and the more those taxes are used to pay for random other things the more messed up it is.
Sin taxes are annoying and paternalistic, but I wouldn't call them evil.
Import tariffs that are applied universally on all goods (and not used for protectionist schemes) seem ok as well.
Head taxes feel a little less evil than income taxes, simply because they don't require a massive administrative state to look into everyone's incomes.
If poll taxes were the only tax I would consider them fully reasonable.
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The value of land is the
futurepresent value of the cash flows it generates. Those cash flows are what Georgism seizes.As one site puts it "Land Market Value is the land rental value, minus land taxes, divided by a capitalization rate." If land taxes are equal to land rental value, the land market value is zero, and the entire value of the land has been seized.
Yes, an LVT does not have to be 100%. But the Georgist land tax is, and the relatively small reductions from 100% modern Georgists accept to try to get around practical problems don't really change much. If you're talking about a much smaller LVT, you're not talking about Georgism.
In my experience most Georgists I’ve talked to prefer a 60-80% land tax, to make up for practical problems in the implementation. Maybe those aren’t the ones that write books etc.
I guess the fundamental difference for me is that I find the land market to be inherently flawed due to the fact that nobody creates land and it cannot be created, only improved.
The Netherlands would like a word with you.
Land on the seabed is still land - they are simply improving it. Making land on the seabed usable and able to be built on is an improvement, this argument has been tossed at Georgism for over a century.
Under the Georgist framework all of the ocean is still 'land,' if that makes sense.
Why do you suppose that is? The colloquial meaning of "land"--let's say, "the patches of dirt that are not submerged beneath rivers, lakes, or seas"--makes claims like "nobody creates land and it cannot be created, only improved" clearly false. So when Georgists say "land," they apparently have a technical definition in mind that goes beyond what people think when they hear Georgists say "land."
That sets the whole discussion up for failure straight out of the gate, because you're either being deliberately or inadvertently obtuse about the central subject of discussion. In the United States today, the physical coordinates over which people claim ownership are often the least of what their "real property" (as we call owned land) entails. On the prevailing "bundle of rights" view, in addition to the physical coordinates you own, your "property" also includes things like a right of quiet enjoyment, a right of access, a right against trespass, and so forth. Those are real rights, and often they are not the kind of right that you can really put a fair dollar value on.
There is a school of legal thought, "Law and Economics," which holds roughly that the purpose of law is to facilitate efficient economic exchange. Its founder, Richard Posner, has broadly disclaimed its universal applicability. Much of the law is concerned with economic exchange, yes--but not all of it. Individuals have important interests that should not be violated, not even if the majority says so, not even if the majority would benefit. Just as "land" on your view can also mean "the sea," "real property" means much more than spatial coordinates over which you happen to have dominion. Whatever its effects on markets, Georgism fails to appropriately account for its effects on people.
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