And you don't de-incentivize productive labor (as our current tax scheme does to an extent).

If all tax were things like use of land, use of aluminum in a can, burning of a unit of fossil fuel instead of "you worked an extra hour or invented something, now you owe a greater percent!" I believe society would become much more innovate and efficient.

It's not an argument for why we should rely solely on a land tax in lieu of e.g. taxes on corporate profits, income taxes, or sales tax.

A 50 year old building, with old systems, may be fully depreciated, but if one had to rebuild, one would need far more than the current building is worth.

When one buys a home with a mortgage, the bank requires an appraisal. In some places, the forms don't even break out land value from building value, or they do it badly. An appraisal merely compares the subject house with others that have sold recently in the same area. Better location? $15,000 more (or, in California, $100,000 more) Inferior location? subtract $15k or $100k. 1 more bathroom? Add $5,000 (CA: might be $5k or $50k) new kitchen vs 20 y/o kitchen? Add $10k, $50k or $100k, or more, depending on what is typically spent in that neighborhood. For each "comparable" add up all the pluses and minuses, and add that to the transaction price for that property. Average those, and the subject house value is estimated. Land value is in there, but not explicit.

California has assessors, too, who, after a property has sold, update the assessment on it to equal the transaction price. Some goes to land, some to the building. (check out listings at realtor.com, and fully expand the property history info. Notice when the previous transaction was, and look at the increases. They are in reality mostly land value. Buildings don't appreciate. Land rises and falls in value --- mostly rises.)

But appraisers and assessors are very different.

I sincerely believe all types of capital should be taxed instead of income, the tax burden doesn't have to change but it should be redistributed a bit.

This would also deal with companies like Amazon and Apple who pay very little tax on profits - they'd pay a tex on assets instead like land or cash and pay a larger share.

https://mises.org/library/single-tax-economic-and-moral-impl...

In any case, public land ownership is not in conflict with rent auctions.

Central Park worked because the existing density was already high and there was no way for Manhattan to grow outward (dredging excepted).

Occasionally one sees a diner in a skyscraper neighborhood. Under LVT, their incentive would be to find another place to conduct business, perhaps on the 1st floor of a taller building, and let the site be redeveloped to meet current needs.

I am reminded of a famous passage from Henry George's book "Progress and Poverty" (whose subtitle is "An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy") known as The Savannah. http://progressandpoverty.org/files/george.henry/pp042.html, starting at the 10th paragraph (the paragraphs are numbered in this particular file).

Incidentally, George dedicated P&P as follows:

"To those who, seeing the vice and misery that spring from the unequal distribution of wealth and privilege, feel the possibility of a higher social state and would strive for its attainment."

And, most of his stock holdings occupy land in very valuable places? True to some small degree, but not all that true overall. Take Coca-Cola, for instance. They own some very valuable land in Atlanta. But the value of Coca-Cola is much more than the value of the land, and is mostly unrelated to the value of the land. Should Coca-Cola be taxed based on the value of Coca-Cola, or on the value of Coca-Cola's land?

> So you collect the money for the infrastructure project by land "tax" before you begin with construction.

No, you use land taxes after completion to pay back the debt incurred to create the infrastructure. Adjustments of valuations based on the advantages of the infrastructure result in a greater burden of that repayment on those that receive the greatest benefit, but everyone contributes.

Or you'd have to say that the military is part of your "last resort". But then you need to raise enough money to pay for all your last resorts. If LTV is your method, the numbers may not work (as others have said here).

Or, instead of raising all that money, you could say that we don't need that big of a military. That's not an insane position. But using desire for an LVT as the basis for deciding on the size of your military seems to me to be putting the cart before the horse.

This is absolute nonsense. It's somewhat true for roads, provided you can efficiently price every single piece of road (which you can't). But it's horribly wrong for things like the police or fire fighting.

But proposing to replace income and sales taxes with land value taxes, making it the primary tax -- which would necessarily skyrocket the land value tax to produce the same tax revenue at the end of the day -- would be extremely distortionary.

If the parent was being downvoted for a certain view, why is this at all surprising?

First problem: This is a recurring process but the land is only "unimproved" at the time of the first auction. At which point no one was interested in the land, there being nothing and noone there, so the auction price is effectively zero. After that first auction you can't say how much of the market price in any later auction is due to the land itself and how much is due to improvements.

Second problem: In order to auction something off you have to own it first, but this is unowned land. No one has the right to sell it—or to prevent anyone else from using it. Land only becomes property after it has been improved. This is also the point where it first acquires economic value.

Third problem: You can't just go auctioning off already-improved land separate from the improvements. The improvements and the land are a single, unified good and in the vast majority of cases cannot be separated without incurring expense akin to rebuilding the improvements from scratch.

Fourth problem: LVT is valued mainly for being a tax on "unearned" external benefits property owners receive from the community, but the "unimproved" value of the property is a poor proxy for net external benefit received by property owners. On the one hand, the value of the improvements also depends on the community; if you build a family home or a restaurant or a warehouse the value of that building is going to depend on the demand for specific kinds of goods in that area and not just the cost to build a similar building. On the other hand, the so-called "unimproved" value of the land is readily influenced by the actions of the property owner, for good or ill. LVT punishes property owners who contribute to the surrounding community by taxing them on any increase in the value of their property which follows from their own contribution to the public good, and rewards property owners who contribute to lowering property values in their own neighborhood.

You want billionaires to keep their money, because unless they put it under their mattress, they are growing the economy, which means lowering prices and raising quality.

This notion of copyright has basically destroyed the idea of folklore in the last few hundred years, relegating it from one of the main areas of human expression to a corner of the internet.

I think even 20 + 20 copyright is problematic. People should be free to use characters and stories while they are still relevant, and create their own variations that may even become more popular than the 'original creation' (in quotes because so much of creativity rests on the shoulder of others).

If you like 100 years of ownership, set the rate at 1% per year, calculated on the copyright/patent holder's self-assessed price. Every century, the polity collects 100% of the value. What the polity does with the money collected is up to the polity.

Valuations in currency are an abstraction for how we deal with this really tricky and intractable problem. But like all abstractions, it's leaky. A $100 bill has no "inherent" value yet it's value is very precisely known.

And when the Single Tax was conceived, it was already abundantly clear that urban land values were far above rural land values, and rising much faster.

Few tech companies will want to locate where there isn't already broadband, good schools, cultural amenities, a range of interesting restaurants, and ready pool of the talents they need, not to mention infrastructure such was water, sewer, medical care, etc. And to the extent that they create jobs in such places, they will probably be quite welcome.

What do you care about ability-to-pay?

> ...also, because people might try to disguise income/expenses as investment-related in order to shield them from taxation, and having a more uniform tax base helps prevent this.

You can't shield from that tax. All entities pay, for every sale, no refunds.

So basically you lock down the price in an auction once every 7 years giving you enough predictability and time to justify your investment.

This is how these groups operate in present day already

1. businesses renting space in cities - they lock down rent for say 10 years

2. individual apartment renters - price is usually locked down for 1 year

3. domain name system - you lock down piece of land in "string space" for a year

4. electromagnetic spectrum auctions (LTE, 5g spectrum bands for telephone companies) every several years usually when new technology is deployed

5. technology patents locked down for 20 years

6. Government LAND to LANDOWNERS - locked down once, with expiration time at infinity and passable down through generations

It helps to see what Georgists actually want to achieve with LVT - proper auction mechanism for something everybody needs and there is scarcity of it - land.

For political reasons they attack it from the position of tax, not from the position of an auction. Which makes it a bit convoluted and confusing unfortunately.

In the US there is $16T currency, $38T stocks plus a roughly equal amount in corporate internal valuation, ~$30T small business, $33T houses, $17T commercial real estate, plus commodities, any other mark to market securities, vehicles, collectibles, intangibles like copyrights, patents, operating licenses, and really anything else that a court can adjudicate possession of.

I would expect somewhere around $250-500T with defensive valuation, so tax rates <1%. If your house is worth $1M, it’ll cost you $800/mo. By comparison, a US top 5%-er pays the same in property tax, plus income tax of about $7000/mo.

And it seems amazingly efficient. List and pay. If you like it, pay more. If you want to sell, just pay less and somebody will inquire. Market liquidity and order book depth transparency would be amazing. Capitalizations would be accurate for liquidation rather than estimated by float pricing.

The big monkey wrench I see is privacy. I believe this can be solved with zero-knowledge proofs. Maybe this is my next project.

Mansions and expensive property would be always on the market.

This idea is the problem. Taken to its logical conclusion, we get feudalism, where those who don't own land will forever pay rent the landed gentry, only because they were fortunate enough inherit land.

Property tax fixes this somewhat, but California decided to weaken that with Prop 13, and now is approaching feudalism. For example, in the apartment I lived in California, the rent paid would cover the landlord's property tax obligations in a month, and the remaining rent is the landlord's (minus whatever costs they have for maintenance).

Idea that you can buy a monopoly is generally a bad idea.

Consider what the government would do if a huge oil deposit was found under your house.

If a high (but arguably appropriate and fair) land value tax was implemented and captured like 8-10 % points of that, it would fund like 70% of the government.

(Edit: Fixed typo.)

That said your opinion is clearly not gathered by expert reading, because I've done that reading and it comes to a different conclusion.

If you're interested in optimal taxation, I'd skip reading Wikipedia page and just go read the 2008 Mankiw literature review on "optimal taxation in theory and practice" instead. It doesn't touch land value taxation (which is a niche topic) but is very accessible and a good read.

Second, when metropolitan LVT is studied, the theoretical social benefits are large bordering on the absurd. Here's a study by the NY fed:

https://www.newyorkfed.org/medialibrary/media/research/econo...

It massively reduces income and wealth inequality (lots of inequality is tied up in urban real estate ownership).

If we assume that the rich are, as other advertisers, rational and self-interested, the we should expect their messaging (i.e., the “standard defenses”) to be that which is most effective.

Something akin to if it works, it ships.

Consider that from the perspective of the accountants, every job created is a huge and ongoing liability and cost, and that from the perspective of the shareholders, every job created is stolen profit, money that is not returned in the form of equity appreciation + dividends.

Then you will begin to see the reality of the situation.

The "excess cost" I was referring to is precisely a matter of destroying wealth. It's all well and good to limit government involvement in the economy but clearly, whatever revenue it does collect should be collected efficiently.

It is a form of sharecropping.

And then we must pay the dumb taxes on top of it. Sales taxes, wage taxes.

Taxing land value fully would bring the purchase price of a home down to the depreciated value of the structure plus something for the lovely mature landscaping. Instead of a downpayment on the land and building, one would, in effect, be purchasing the building from its current owner, and taking over the stream of location-based payment to the community. No down payment on that. Mortgages would be smaller, and shorter, and the sum of the mortgage payment and one's land value tax would be a lot less than the current sum of one's housing-related costs plus the dumb taxes. If one wanted to move from one city to another, selling one's home would be easier because more people could afford it, and in one's new city, one could afford a similar home, because wages in the new city would support the higher tax on the higher land value there.

Today, moving from Peoria to NYC or Silicon Valley is a whole other ballgame.

Phase this in, removing the dumb taxes, one after another, and collecting an increasing share of the annual value of the land, and our children will have better opportunities to thrive.

Those who do leave will likely be replaced by others seeking those things.

Here in the finite world, most of the money moving around is in services, while most of the land is disconnected from that economy. How are you getting 1-2 trillion in tax revenue from land without making, say, farming economically unviable? Will it just be riddled through with exceptions and carveouts?

What? How?

This flat-out isn't true. Tech companies alone are a significant part of economic activity globally (e.g. they make up the majority of the top 10 largest companies in the world by market cap). Once you include all white collar work, which generally tends to be similarly divorced from land value, you're talking about the majority of the world economic activity at this point.

> Second, intellectual property holdings would be considered "land" in the Georgian sense.

Oh really? How the hell do you value that if not based on the actual income derived from said intellectual property? I.e. this is just the taxation regime that already exists.

If your military is too expensive and not covered by LVT, just go ahead and add a specific tax to fund your military. If you can justify that it'll protect everybody then people will be fine with it.

Idea of LVT as a single or zero tax is a political move to get you thinking about better government funding schemes. You should think of "paying for specific services" instead of "pooling money and allocating them according to wishes of select few" as is the case of current tax systems.

And tax revenues reach the government without middlemen collecting their share, so the cost will be lower to those who pay.

That said, you roll out the new policy gradually by reducing labor related taxes while increasing land and monopoly related ones.

After several iterations you should expect convergence to a new stable position.

It's better to prefer iterative deployment over big bang changes. Not only in software.

How does it assume that?

Profit is a terrible measure of economic activity because it is unrelated to the amount of goods changing hands. Indeed, in industries where lots and lots of goods change hands, profit is likely to be lower.

e: Also, real estate is extremely profitable, it's just not as consolidated as the major tech companies are.

If someone makes a painting in 5 minutes and another guy pays 10M USD for it very little happened. 10M changed hands and the other guy has a painting on his wall. Yet somehow income tax proponents thinks it's fair to now take 50% from that transaction just because money changed hands. It's just not a good way to organize your tax system.

[0] https://ourworldindata.org/extreme-poverty

Those late to the game who decide to rent are paying rents based on current land values, but their landlords, who may have owned the property for 10, 20, 30, 40 years, are paying to the community based on their purchase price. It becomes a form of sharecropping. Landlording can be very profitable, especially in California, if you own or inherit property from someone who bought it decades ago. Cui bono?

"George preferred taxing unimproved land value"

Also, I live in an apartment. Should my tax be $0? Or if I owned and lived on land way out in a rural area where a small plot is only worth a few thousand bucks, do I only pay tax on that despite my income being mid six figures? The point is, as a knowledge worker, my economic productivity is entirely divorced from land. This is true of most white collar workers. Land value taxes may have made sense as the primary tax hundreds of years ago but they don't make sense for that purpose now.

There were also significant tariffs on imported goods. Sugar and tea, which the poor liked as well as the rich. One of HG's books was "Protection or Free Trade" which Milton Friedman called his favorite book on the topic. (Then again, Friedman repeatedly called land value taxation the "least bad" tax, but never found the motivation to promote its application.) I had occasion to dip into POFT last week, and found it pleasurable and interesting reading. Its at Schalkenbach's website, among other places.

Yes, a shift could be quite gradual, though I suspect that once it was begun, and people began to see the beauty of untaxing buildings, wages, sales, it would likely be sped up.

"The producer is unable to pass the tax onto the consumer and the tax incidence falls on the producer. In this example, the tax is collected from the producer and the producer bears the tax burden. This is known as back shifting."

From section "Inelastic supply, elastic demand" https://en.m.wikipedia.org/wiki/Tax_incidence

If the landlords decided to increase rents expecting tenants would foot the bill, they would find out tenants to leave the location because it would be unlivable for them at that cost.

More likely scenario is by introducing LVT the landlord would be forced to do the opposite - ie decrease rent - as other landlords would dump their uninhabited properties back to the market.

Seriously?? If your inquiry concluded this then it certainly was being run on behalf of landlords.

They would no more be able to make up their losses through rent increases than I could make up the loss of being charged extra for a loaf of bread at the supermarket by unilaterally raising my wages. One does not drive the other.

When the supply of housing remains constant and the demand of housing remains constant then prices remain constant. LVT changes none of these variables directly.

Since no land can be created or destroyed, the supply-demand curve is fixed. This means that the land tax cannot be passed onto the renter, because the market conditions haven't changed. The rent is not calculated based on the landlord's costs plus some extra, but instead is whatever the market equilibrium price is.

Another way to think about it: if landlords have the market power to raise rents, why wouldn't they just do it now, rather than wait until an LVT is passed?

The problem it targets is not the wealth of landlords. The problem it targets is land owners who are not landlords making money, often as a by-product of consuming a luxury good (a home in a city center), without actually providing the social functions which in principle justify their compensation (anticipating demand, managing housing at scale, high-quality construction on a budget, etc).

Land wasn't created by any individual or any corporation. (Minor, and not eternal, exception: Made Land, such as by filling in a swamp or dumping fill alongside a river. After a century or so, it stops being special, and is simply land, whose value comes from its location and the services that are provided to it.

When the companies that issue stock are paying LVT on the land they occupy, and on the finite natural resources they claim for themselves and process to sell to consumers, the value of their stock will be reduced somewhat by that "pre-distribution."

The stock is taxed indirectly. Georgism holds that all wealth fundamentally comes from the land. This isn't completely true in the digital age but it is still true enough.

> Their heirs receive the dividends from that stock

If you tax income it never goes away. You just take a portion of whatever is there. If you tax wealth then the wealth is eventually drawn completely into the society. That's the fundamental difference. LVT is a tax on wealth.

If we're too busy patting ourselves on the back about the latter, we become blind to the existential threat posed by the former in the face of a global technological revolution which is making tools of mass destruction available better, faster, and cheaper at exponential rates.

Markets need massive amounts of legal structure and regulation to make them efficient. Including taxation as part of that is an excellent idea.

And if we get to Piketty-inspired corrections for r>g, part of that will include eliminating economic rents the way a LVT does.

I agree with you, providing defense and protecting real capitalism, stopping oligarchies/long term monopolies from forming is important, to be able to have a return on investment on the taxed capital in the country.

As I wrote before, countries are competing for investor money, that's why it's important how they collect and distribute taxes. The counterforce is usually corruption inside the political system though.

The landlord, as evidenced by the fact that you are calling the land good or bad prior to having been developed by the landlord, should earn no profit based on that difference, because that difference would exist regardless of who – if anyone – is the landlord.

If the landlord makes some particular investment in addition to the "natural" or community-driven component of the land's value, she will keep all of the upside from that investment.

To repeat: All the gains generated by improvements upon the land – or enhancements in the "usability" of the land – will be retained by the landlord.

That is sufficient incentive for landlords to productively develop on valuable land. More importantly, it is a disincentive to speculating on that land (or withholding it from the market/withholding it from productive use). This is of course a behavior you see all over high value areas.

They neither made the land nor made it valuable, so they're not "providing" it in any meaningful sense. They're relinquishing their state provided entitlement to expel users of the land with state-backed violence. In exchange for resources.

[Links to PDF] https://www.webarchive.org.uk/wayback/en/archive/20070411120...

Yes. Desirability and infrastructure near land increases it's unimproved value.

Edit: Some of this is more or less what’s happening when buying a property based on a mortgage. The bank decides what the property might be worth, and what the new owner will be able to pay in rent. It must be possible to do slight adjustments in this scheme so that the rent ends up as tax instead.

As Bushwick becomes popular, because of better transit, or community amenities or whatever, yes, the unimproved value of the sites served by them go up. A school develops an excellent reputation? Up go the land values. (Some say that in most suburban towns, the superintendent of schools is the highest paid employee, in part because s/he can influence "property values" -- more precisely, land values -- more than any other single person.)

My first acquaintance with Elizabeth Warren came from a book she wrote about 2003, whose title was something like "The Two Income Trap: How Middle Class Parents are Going Broke" and in part it was from seeking the best public schools for their children, and paying a huge share of their income for it, seldom to be matched by single parents.

Or inherit. Mayfair is rented out by the Duke of Westminster not because him or any or his ancestors did anything as crass as buying it but because he traces his lineage back to a mate of William the conqueror (note : not William the buyer. Conqueror. The distinction is important you see) in 1066.

Broadly speaking, all land wealth is derived this way, no matter how many hands it passes through on the way to its current owner.

You no doubt believe that the act of buying and selling land and working with it somehow "morally sterilizes" it. It does not. If Mayfair was sold it would still be conquered wealth.

I am very well aware that investments do not necessarily pay off immediately and you know very well that that is not what I am talking about at all.

Then it should become obvious that some part of the profit is due to "work" i.e. investing money in an area by building upgrading, and some part is due to other people doing the same. So in a hot new area, a bunch of people moving in, opening hip restaurants, renovating old buildings, improving parks contributes to the landlords profit, because an empty lots value will rise as well.

If you don' allow substitutes then every brand has a monopoly on the products of their brand. Technically that's a monopoly. But nobody complains about McDonalds having a monopoly on McDonalds burgers.

I'm not talking about long-term, but the initial effect of LVT coming into effect. If the landlord has to pay more then that's an increase in cost. Landlord income was likely at equilibrium before LVT. Those that could afford to lower prices to outcompete others probably already did so. As a result I don't see how we can expect landlords to eat the cost instead of passing it on.

>If anything, it encourages building more, so that the income from the rent can be used to the pay the LVT.

Sure, but this also requires housing to be as profitable (or more) as other uses of the land. It might make sense to turn that housing into something else.

Just to be clear, I'm not arguing about what it would be like in the long-term. I'm talking about the transition between going from not having LVT to having LVT. It's not at all clear to me that this wouldn't disrupt housing.

One assumes that the people I'm renting the lots to are permitted to use the road as part of their contract. But let's make this simple and say that I offer a perpetual agreement to let anyone use this road at cost, whether they rent from me or not. The road is a loss-leader; I intend to make my money by renting out the land, not by operating a toll road.

There are plenty of examples of communities with their own private roads and other services. Not everything of value to a community is provided by the government.

> you can get your reward by selling the plot

That won't work. Whoever buys it would be taking over the LVT payments, so that expense will come out of the resale value of the property.

> Under LVT what you can't do is just sit on it for years at no cost to yourself, but great costs to others just in case it turns out to be a lottery ticket.

And here we once again have someone failing to see the economic value of speculation.

The only reason to "sit on" the land and not use it would be that any use you could put the land to now would interfere with taking advantage of an even more valuable opportunity which you anticipate in the future. Not holding the land in readiness for that more valuable future use under such circumstances would be destructive.