Comments on: The Gilded Age, Henry George, the Land Value Tax and the Progressive Era

The Gilded Age, Henry George, the Land Value Tax and the Progressive Era

kliuless — Fri, 19 Feb 2016 00:21:45 -0800

Kim-Mai Cutler: Nothing Like This Has Ever Happened Before - "San Francisco Bay Area poverty rates in all nine counties have increased in the last economic cycle, even with the Facebook and Twitter IPOs and private tech boom. The main transfer mechanism is land and housing costs, as rising rents and evictions push service and other low-wage workers to the brink. [Henry] George's solution was a single land tax that would replace all other government revenue sources. If an owner wanted to develop their property to make it more useful or productive, George argued that they should have the right to keep the value from those efforts. But increases in the value of underlying land were created by — and ultimately belonged to — the public at large." (previously: 1,2,3)

Because no one could create land, it would be impossible to tax it out of existence. In contrast, property taxes disincentivize people from using land more productively, since re-developing land leads to higher re-assessments. A century later, Nobel Prize winner Joseph Stiglitz would prove out a Henry George theorem, showing that in certain cases increased investment in public goods boosted land rents by at least that much. This suggests that land taxes alone could be enough to sustain public or government expenditures. Milton Friedman would call them the "least bad tax," while Karl Marx called George's ideas "capitalist's last ditch" with a hint of friendly contempt. George would publish these ideas in his seminal work "Progress and Poverty,"[pdf] which would go on to sell several million copies and kick off the Progressive Era. "Progress and Poverty" captured the zeitgeist of the times. The parallels between the late 19th century Gilded Age, named after a Mark Twain and Charles Dudley Warner novel about a speculative land deal gone awry, and the modern era are striking... A missing piece of [Carlota] Perez's work, that often goes underemphasized by the private investment community, is the role of government in creating an equitable framework that allows everyone to participate in benefits of technological change. This is not an argument in favor of big government for big government's sake; it's to point out that when technology changes the complexity or structure of society, citizens have to push public institutions to transform themselves too. "Golden ages are not brought by markets alone," Perez told me. "Historically, they have never done it." If Perez is right, the polarization and disillusionment obvious in the 2016 presidential primaries through the rise of Bernie Sanders and Donald Trump is just the beginning of something else. Broad institutional and governmental change is what the Gilded Age triggered in the ensuing Progressive Era. George's ideas would echo for many decades and influenced an entire generation of leaders from Leo Tolstoy to Sun Yat Sen to George Bernard Shaw.

A Long Game - "A new generational land cartel has emerged with Californian Baby Boomers protecting entitlements and higher property values for themselves in the form of land-use restrictions and Proposition 13. Global capital has been subverting and taking advantage of these favorable legal and taxation protections on real estate in a extremely low interest-rate world. All of this has come at the cost of the state's working and middle class and its future workforce." Home is where the cartel is - "Homeowners understand their actions not as monopolizing the housing market but as protecting their homes and neighborhoods from the market. The libertarian 'deregulatory' rhetoric by which market urbanists sometimes make their case is counterproductive."[1,2] also btw...

Red Vienna lives - "A unique system nearly a century in the making has created a situation today in which the city government of Vienna either owns or directly influences almost half the housing stock in the capital city. As a result, residents enjoy high-quality apartments with inexpensive rent, along with renters' rights that would be unheard of in the U.S. Viennese have decided that housing is a human right so important that it shouldn't be left up to the free market."
What's happened to U.S. housing inequality? - "Over the past year or so, economists have been paying more attention to the role of housing in economic inequality in the United States. Many have pointed to the value of housing as the prime reason for the decline in the share of income going to labor. Research by Matt Rognlie of the Massachusetts Institute of Technology finds that the increase in the share of income going to capital since 1948 has gone entirely to housing... it looks as though the main driver of the rise in the housing inequality is the value that people are putting on different neighborhoods. Increased housing segregation seems to be the main culprit, as the rich decide to use their increased income to live in rich neighborhoods, which in turn increases housing inequality."
Are Economists in Denial About What's Driving the Inequality Trainwreck? - "You may see a lot of towers owned by new billionaires along Manhattan's 57th street, but real estate is not the major contributor to wealth inequality. Rather, in Manhattan, the Bay area, London, and similar places, incredibly expensive real estate is a symptom of wealth that has been accumulated by other means."
Your Landlord Is a Drag on Growth - "After many decades of essentially ignoring the role of land, economists are starting to reconsider. Some are worried that landlords are hurting growth by making it too expensive to live in highly productive cities. Now, some are starting to think about how land figures in the rise in inequality."
The New Exclusionary Zoning - "If low-income families can't afford the suburbs and the cities, where should they go? For the first time in American history, it makes sense to talk about whole regions of the country "gentrifying"—whole metropolitan areas whose high housing costs have rendered them inhospitable to low-income families, who, along with solidly middle class families, also feeling the crunch, have been paying higher housing costs or migrating to low-housing cost (and low-wage) areas like Texas, Arizona, or North Carolina. Underlying both of these phenomena—high housing costs in the suburbs and high housing costs in the cities—is a relatively straightforward problem of supply and demand. A city's ability to remain affordable depends most crucially on its ability to expand housing supply in the face of increased demand. Among the people who care most about high housing costs there is a lack of understanding of the main causes and the policy approaches that can address them. The central message of this Article is that the housing advocacy community—from the shoe-leather organizer to the academic theoretician—needs to abandon its reflexively anti-development sentiments and embrace an agenda that accepts and advocates for increased housing development of all types as a way to blunt rising housing costs in the country's most expensive markets."
How technological innovation can massively reduce the cost of living - "Part of the cost of shelter is the land, and part is the cost of the building. Putting aside, at least for purposes of this article, fanciful schemes to create more land, the amount of land available is approximately fixed. This means that there are three ways to reduce the cost of shelter: 1) build more densely (i.e., share expensive land between more households), 2) reduce the cost of construction, and 3) make currently cheap and underutilized land more accessible and useful."
Supply and demand still works - "Build more housing and rents fall. Rents in Seattle, Denver, and Washington, DC appear to be easing significantly. In what a local business paper describes as an 'alarming deterioration'—though renters probably have different words for it—the average Seattle rent fell by $59 in the last quarter of 2015, following a long period of rapid increases. Not coincidentally, vacancies also increased by a full percentage point."
The Steady Rise of Renting - "In the aftermath of the economic crisis, renters have been caught in a devastating bind as rents have risen while incomes decline. Average rents increased by 22.3 percent between 2006 to 2014, while average incomes declined by 5.8 percent."
Where Sprawl Makes It Tougher to Rise Up the Social Ranks - "Dense metros tend to offer more economic opportunity than less compact cities do."
Happiness Tip of the Day: Ditch the Commute - "One final point: behavioral economics tells us that we quickly get used to big houses but we never get used to commuting. So when you have a choice, go for the smaller house closer to work."

By: flabdablet

flabdablet — Fri, 19 Feb 2016 01:43:53 -0800

Because no one could create land, it would be impossible to tax it out of existence. Pretty easy to end up taxing it at a rate that an existing owner couldn't possibly afford, though; I'm not sure that a tax that would promote gentrification is actually as just as George cracked it up to be. In general, it seems to me that taxes ought to be imposed on things it doesn't hurt to disincentivize (like disproportionately stratospheric incomes and assorted kinds of economic rent-seeking) and things whose side-effects force the Government to spend more (like pollution, energy inefficiency and smoking). I'm suspicious of One Tax To Replace Them All on the grounds that every complex problem has simple solutions that are wrong.

By: tel3path

tel3path — Fri, 19 Feb 2016 01:45:49 -0800

I have been a Georgist for many years, but I've given up trying to tell people about it. It won't solve the problems of any one individual, and as far as political beliefs are concerned people would rather stay in their comfort zone which is usually moaning about capitalism in some half-baked uncomprehending way. Rent-receivers don't want to solve this problem for obvious reasons, and non-rent-receivers have their own urgent problems to deal with in the immediate term.

By: CincyBlues

CincyBlues — Fri, 19 Feb 2016 05:11:40 -0800

Another hat tip to you, kliuless. This helps add to the context: The US Economy Has Not Recovered and Will Not Recover The proposal to tax economic rent does not mean taxing you on the rent that you pay your landlord or taxing your landlord on the rent that you pay him such that he ceases to provide the housing. By economic rent Hudson means, for example, the rise in land values due to public infrastructure projects such as roads and subway systems. The rise in the value of land opened by a new road and housing and in commercial space along a new subway line is not due to any action of the property owners. This rise in value could be taxed in order to pay for the project instead of taxing the income of the population in general. Instead, the rise in land values raises appraisals and the amount that creditors are willing to lend on the property. New purchasers and existing owners can borrow more on the property, and the larger mortgages divert the increased land valuation into interest payments to creditors. Lenders end up as the major beneficiaries of public projects that raise real estate prices. Similarly, unless the economy is financialized to such an extent that mortgage debt can no longer be serviced, when central banks lower interest rates property values rise, and this rise can be capitalized into a larger mortgage. Another example would be property tax reductions and legislation such as California's Proposition 13 that freeze in whole or part the property tax base. The rise in real estate values that escape taxation are capitalized into larger mortgages. New buyers do not benefit. The beneficiaries are the lenders who capture the rise in real estate prices in interest payments. Taxing economic rent would prevent the financial system from capitalizing the rent into debt instruments that pay interest to the financial sector. Considering the amount of rents available to be taxed, taxing rents would free production from income and sales taxation, thus lowering consumer prices and freeing labor and productive capital from taxation. With so much of land rent already capitalized into debt instruments shifting the tax burden to economic rent would be challenging. Nevertheless, Hudson's analysis shows that financialization, not wage suppression, is the main instrument of exploitation and takes place via the financial system's conversion of income streams into interest payments on debt.

By: Hypatia

Hypatia — Fri, 19 Feb 2016 05:30:53 -0800

My 100 unit building, formerly well-managed and renting at market rates, has just been acquired by a notorious slumlord--so notorious that the Boston Globe has written several exposés about him; so notorious that his many court-imposed fines are a cost of doing business. I wish that, in the same way that persons convicted of animal cruelty can be barred from owning animals for a certain amount of time , we could prevent people with this many housing convictions from entering into further landlord-tenant relationships; but no, that would be too close to telling people they can't make money.

By: srboisvert

srboisvert — Fri, 19 Feb 2016 05:46:36 -0800

By economic rent Hudson means, for example, the rise in land values due to public infrastructure projects such as roads and subway systems. I haven't read the links yet so I don't know if they mention the Japanese method for capturing this: Their transit agency owns the land around each station. So when the value goes up that money goes right back into the transit system that created the wealth.

By: panama joe

panama joe — Fri, 19 Feb 2016 06:35:52 -0800

So, can anyone tell me how Ed Lee still has a job? Seriuosly, how do you preside over the worst housing crisis since the fucking earthquake and still get to keep your job?

By: entropicamericana

entropicamericana — Fri, 19 Feb 2016 06:45:20 -0800

The Growth Ponzi Scheme. This really lays it all out there.

By: Heywood Mogroot III

Heywood Mogroot III — Fri, 19 Feb 2016 07:10:59 -0800

I was living in SF area during the first tech bubble of the late 90s and marveled at how quickly rents were shooting up. Something didn't seem quite right about that, it seemed like a bug in the economy where the high-paying and high wealth-creating jobs were getting their high salaries creamed off by the local owners of rental housing. But rent control etc. was "socialism" (the bad kind) to my mind of the time, I had been sufficiently indoctrinated in the Free Market Fairy / Invisible Hand jazz. Ca. 2003 I discovered Georgism and the whole world made a lot, lot more sense (and made the world a lot more brutal too, making it clear how much our current economy is modeled on a game of Monopoly). FRED putting up the data a while back made me able to visualize what's been going on, too. https://research.stlouisfed.org/fred2/graph/?g=3vTz shows housing used to be 1/6 of wages, now it's 1/4 (some housing expense comes out of non-wage income, but this matches personal experience too so it's close enough). Fun thing about Georgism is that so much of the intelligentsia of the day got into it, and it was a mass movement. http://www.staneb-music.org/119what-they-say-about-henry-georgephp.php Then it was purged from society with prejudice. Maybe someday I can say I was into Georgism before it was cool, but yeah, that's a tough chance in prospect. Politicians aren't going to run on lowering peoples' home values, or building more housing for poor people, especially as our socio-political continues to go to hell.

By: CincyBlues

CincyBlues — Fri, 19 Feb 2016 07:16:04 -0800

It sure sounds similar, srboisvert. I have an ongoing curiosity about Japanese political economy (both present and historically) but have never been able to do more than dip my toes in the water. I do know that Hudson did his dissertation on Erasmus Peshine Smith, who was a US functionary/minister to Japan during the Meiji restoration. But I don't know enough about Smith to know if he had connections to Henry George and/or whether he might have helped transmit George's ideas to influential folks who helped shape Japanese political economy.

By: Mei's lost sandal

Mei's lost sandal — Fri, 19 Feb 2016 08:30:00 -0800

Thanks kliuless for the introduction to Georgism, and the writing of Kim-Mai Cutler.

By: GuyZero

GuyZero — Fri, 19 Feb 2016 11:43:42 -0800

Can someone give me the implementation of Georgism in a nutshell? A tax on land value, which happens in some places (though not California), and a tax on economic rents? Where a rent tax would sometimes be equivalent to an income tax and sometimes not?

By: tel3path

tel3path — Fri, 19 Feb 2016 13:56:16 -0800

SLOGAN EXPLANATION Don't tax production. Do tax landownership. By occupying a piece of land just for yourself, you monopolize a resource that naturally belongs to all of humanity, therefore you owe rent to the community for the UNIMPROVED value of the land (you can improve it as much as you want and that won't be taxed). The community, by working next to your piece of land, is increasing the value of your land without your having to lift a finger. Therefore, production should not be taxed. ---- EXTENDED EXPLANATION Right now, we have the community paying rent to the landowner instead of vice versa. Thus rent becomes a form of taxation for which producers get no benefit. Plus, every stage of the production process involves some use of land, therefore costs the producer some rent. So it doesn't just affect how much you pay for your living space or office space, it affects the price of all goods and services everywhere in the chain. This is why the margin of production (i.e. the place where labour is sold at the lowest price) is getting pushed out to Neptune. And this is why we're all getting bled dry. ----- Things like pollution, other kinds of monopoly, etc. are considered destructive and therefore should be subject to tax. Productive labour is productive so, not taxed. ----- In practice, you wouldn't just annihilate income tax and wallop landowners with ginormous tax bills all at once. That would be brutal, shocking and counterproductive. Instead, what you do is reduce it over a 25-year period. Each year a little more off income tax, each year a little more on land tax. ----- SOME FUNDAMENTALS Because we can't make more land, a person occupying a piece of land is monopolizing a resource that by natural law belongs to every human. Therefore, you as a landowner must pay rent to the community for exclusive use of community resources. While the community engages in productive labour around your land, they are increasing the value of your land without your having to lift a finger. Therefore, producers should not be taxed on production. Under this system of taxation, it becomes uneconomic to buy land and hold it out of use in order to profit from the productivity of the community around that land. This is speculation and is the most destructive thing you as an individual can do to the economy. --------- Ever thought, "I can't make a difference! I'm just one person"? Well, good news, if you go out and buy a house and hold it out of use in order to profit from it, you can be personally responsible for fucking up the local economy at the very least, and maybe more!!! But under Georgism, this would just be a waste of money so you wouldn't do it. This also goes for the oligarchs who buy up property in London that just stands empty, as an "investment". ==== SOME EVEN MORE FUNDAMENTAL FUNDAMENTALS Henry George insisted on clear definitions for three components of the economy: land, labour and capital. He was clear on these definitions, in ways many classical and contemporary economists are not. Land is land, plus all unprocessed natural resources. Labour is work that produces an output with exchange value. - Thus, a giant redwood in the forest is land, a bonsai tree is the product of labour. Capital is wealth in the process of exchange. - wealth is a thing you own that has exchange value. - The couch you're sitting on is a thing, has exchange value, therefore is wealth. - Your garbage doesn't have exchange value, so it's not your wealth. - If you convert your garbage into compost to use in your garden, then it is your wealth. - If you use your composted garbage in your organic-vegetable-box business, or sell it to someone, it becomes capital. - Money isn't wealth, it's just a way of counting what one person owes to another. Take away all the money in the economy, and everybody would be screwed in terms of buying power, but we'd all still have the same amount of wealth because we'd all have the same amount of stuff. - In George's definition wealth had to be a tangible thing. Nowadays we talk about service economies where the thing being exchanged isn't a tangible thing, but we won't get into that here. ===== Land is not like capital or labour, because Land is the one thing, out of these three, that a) nobody can exist without, and b) we can't make more of if we run out of it. You can't exist without land because, uh, you're a three-dimensional land animal. if you're going to exist at all you have to exist in space. There is no way around this. And the fundamental human right - George believed in natural law - was the right to exist. Unlike practically all other systems of social justice, Georgism is not going to existence-shame you or make you feel guilty for doing the things you need to do in order to live. On the contrary, it actually champions your right to exist! In three-dimensional space! Are you going to say "ha ha smarty, I'll just build a skyscraper, I don't need no stupid land?" Unless you can build a skyscraper that hovers in midair, you still have to build it on land. That's WHY skyscrapers exist - because land in cities is so valuable, buildings have to be built vertically so as to have the most usable space for the least amount of land. Are you going to say "well I'm just gonna live in midair, or on that abandoned oil rig in the North Sea!" Nuh uh. In order to construct a living space you need building materials that come from natural resources that come from the land. For one thing. More realistically, in order to have say a houseboat, you have to have a mooring, which costs - you guessed it - an arm and a leg in land rent. Are you going to flail your arms and say that land isn't a finite natural resource somehow, because it's just infinite or somehow you think you can make more of it? (People have done this.) Well - you're wrong. Land is finite, and we can't make more of it. The end.

By: Heywood Mogroot III

Heywood Mogroot III — Fri, 19 Feb 2016 18:21:36 -0800

Georgism in a nutshell Profits from mere ownership of natural wealth should be taxed. Actually, mere ownership of the commons itself is what should be taxed. So a parking lot and a 100 story skyscraper in NYC could and should bear the same tax burden. (Perhaps the skyscraper should incur taxes for adding to local traffic and blocking neighbors' sunlight . . .) -- the idea at any rate is to tax the unimproved value of the real estate and not the actual capital investment of the improvements. Implicit in land tax regimes is zoning -- unimproved land value is driven by *how much* can be built on a given plot of land. There's so much low-hanging fruit -- resource extraction ("severance taxes"), EM spectrum leases that a Georgist system shouldn't start hitting the middle class home-owner much at all. There are many implementation details that make a land value tax regime frightening to home owners, and we'd need to avoid all that, but theoretically the LVT regime is AFAICT a very good idea, much better than the insane system we have now, where we actually penalize people for improving their properties! For urban lots, the value of the lot is based on everything *outside* the lot lines. . .

By: homunculus

homunculus — Fri, 19 Feb 2016 21:43:11 -0800

San Francisco tech worker: 'I don't want to see homeless riff-raff'. In an open letter to the city's mayor Ed Lee, entrepreneur Justin Keller said he is 'outraged' that wealthy workers have to see people in pain and despair The Other Justin Keller Schools Tech Bro With Same Name On Homelessness In SF

By: flabdablet

flabdablet — Mon, 22 Feb 2016 04:11:48 -0800

While the community engages in productive labour around your land, they are increasing the value of your land without your having to lift a finger. Another way for the value of your land to increase is via straight-up positive feedback. Consider a neighborhood whose land improvements consist mainly of rental housing. The ability to turn a profit by buying a block in such a neighborhood and building rental housing on it makes blocks in that neighborhood desirable; that increases the unimproved value of those blocks, which jacks up the land tax. Landlords will pass that increase on to tenants, some of whom will thereby be forced to move out; those who replace them will be able to afford to pay more rent. That will make local rents go up, which will increase the profitability and therefore the desirability of blocks in the neighborhood, and the whole thing just spirals upward. Ultimately it's the tenants, not the rent-collecting landlords, from whom the land tax gets extracted, and the net effect would be to create gentrification hotspots that push out the poor.

By: tel3path

tel3path — Mon, 22 Feb 2016 05:26:08 -0800

I think there's some misunderstanding here. You're correct that building and improving housing is productive labour that increases the unimproved value of the land. You're also correct that a house builder or owner who charged rent to tenants based on the improvements of labour would get more for their labour. Earnings from labour like house-building are capital, not economic rent, so even though the tenant's monthly bill for it is called "paying the rent" it's important not to confuse the entirety of that bill with economic rent. So in your example, imagine a vacant lot which I improve with the labour of housebuilding. Both vacant lots on either side of me are now worth more because of what I've done. That doesn't mean it's possible to expand from there into an entire community where the only source of wages is building and renting out housing. That would be a pyramid scheme. If there is no other economic activity that anybody can engage in while living in that community, then nobody will have the wages to pay the rent bills. Either there are wage-earning opportunities in accessible areas nearby, in which case the unimproved value of the land ISN'T coming solely from housebuilding/improvement; or there aren't, in which case the unimproved value of the land is correspondingly limited and thus, so is land tax.

By: tel3path

tel3path — Mon, 22 Feb 2016 05:44:07 -0800

I find that this chapter explains it better than I do.

By: flabdablet

flabdablet — Mon, 22 Feb 2016 06:26:14 -0800

wage-earning opportunities in accessible areas nearby That's where automotive transport kind of brings George undone. "Nearby" covers way, way more territory than it did in his day, and dormitory suburbs and even towns are now quite common.

By: tel3path

tel3path — Mon, 22 Feb 2016 07:21:59 -0800

It doesn't bring it undone at all. With respect, I think you are not understanding the source material. I urge you to read all of it, but in particular this chapter. You are also missing the importance of making it *costly* for landlords to hold land out of use. Right now it's profitable for landlords to monopolize unused land, which is what is vampirizing productivity out of the economy in London and surrounding areas while massively increasing the rent burden on the population, pushing workers out further and further, and correspondingly increasing rents further and further out from the capital.

By: GuyZero

GuyZero — Mon, 22 Feb 2016 09:46:59 -0800

But land tax is a thing that does exist today so where exactly does Georgism diverge from reality? That land tax values should be higher? And does it propose taxing other forms of economic activity? What's happening with labour and capital?

By: tel3path

tel3path — Mon, 22 Feb 2016 10:32:48 -0800

Georgism proposes REPLACING all tax on production with tax on the unimproved value of land. We are not talking about a world where we all live exactly the same way except that we also get a massively increased tax bill ON TOP OF paying rent to a landlord for occupying space. Therefore: you do not pay income tax. You do not pay sales tax or VAT. The company you work for doesn't pay taxes on these things either. If it owns any land it pays tax on that land, but that's it. (Remember we don't switch over from 0% to 100% land tax all in one go, we do this over 25 years so it's not a punitive shock that just makes things worse) At present, especially in London, a lot of real estate has been bought for speculative purposes by oligarchs who aren't using it, they're just letting the price of the land increase because of the increased scarcity. This increases living costs for everyone in London while vampirizing productivity out of the economy. Under land value taxation, this kind of land speculation would be pointless because the landowner would only make a loss. When the speculators relinquished their land, the scarcity and inflated price of land would decrease in a way proportionate to the artificiality of the increase. Furthermore, the only way to make a profit off that land now would be by improving it through productive labour. Because the only way to make money at ANYTHING from now on would be through productive labour.

By: GuyZero

GuyZero — Mon, 22 Feb 2016 10:40:33 -0800

But that would have the effect of disproportionately punishing land-intensive businesses wouldn't it? Not that I love WalMart, but WalMart would pay tons of tax and Amazon would pay a lot less. Commodity extraction businesses which run close to breakeven would face large tax bills when intellectual property-based businesses would pay very little tax. Does Georgism say anything about intellectual property monopolies?

By: tel3path

tel3path — Mon, 22 Feb 2016 11:04:21 -0800

Georgism frowns on monopolies of any kind. It considers monopoly to be something destructive, and yes Georgists would tax destruction, in a way they would not tax production. As for Wal-Mart, they would have to find a way of using their land profitably or they would go under, same as any other business [is SUPPOSED to work]. They might however have a better chance of actually being able to use their land profitably under a system where production was not taxed. Isn't Wal-Mart de facto government funded anyway? Remember, they'd have 25 years to make the transition. Nobody's talking about pulling the rug out from under people all at one go.

By: GuyZero

GuyZero — Mon, 22 Feb 2016 11:11:00 -0800

Yeah, I get that there's an ideal way to transition things. I just want to get a better understanding of how it differs from the current tax scheme incentives & disincentives.

By: tel3path

tel3path — Mon, 22 Feb 2016 11:19:42 -0800

I can only tell you about overall principles, as I'm not an expert on either the current tax landscape in the USA and elsewhere, nor on any detailed implementation proposals. I can tell you that in general, businesses would actually have to be profitable in order to succeed. It would also, in general, be much easier for businesses to turn a profit because not only would they not be paying tax on production but their workers wouldn't be paying income tax or sales tax either. And if Wal-Mart still managed to survive despite still being so unprofitable that its underpaid workers had to rely on government benefits to survive (like they do now), at least those benefits would be getting paid for out of Wal-Mart's land tax pockets.

By: Heywood Mogroot III

Heywood Mogroot III — Mon, 22 Feb 2016 18:43:41 -0800

And does it propose taxing other forms of economic activity? What's happening with labour and capital? theoretically the Georgist "Single Tax" targets landlords, oil companies, and all the other owners of the commons. The tricky bit is what is considered "capital" -- the neoclassical school erased the line between "land" and "capital", if it's got a price it's capital now. Miseans are against the Georgist "Single Tax" so that gives it cred in my book, LOL. This is the best response I've found to Rothbard. I'm not a purist about policy, things can be modified e.g. give businesses a payroll and/or export credit deduction against LVT assessments or what have you. But the amount of land that is wasted by expanses of parking lots in my town is criminally negligent policy. Cheaper not building parking structures, but if we had them we'd have a much more compact and livable city here.

By: Heywood Mogroot III

Heywood Mogroot III — Mon, 22 Feb 2016 18:45:26 -0800

Georgism frowns on monopolies of any kind I wouldn't go that far. Henry George sold his books, he didn't give them away.

By: Heywood Mogroot III

Heywood Mogroot III — Mon, 22 Feb 2016 18:53:51 -0800

land tax is a thing that does exist today so where exactly does Georgism diverge from reality? Prop 13 has utterly defanged the LVT in California. this beachfront house in Santa Cruz is a particularly egregious example, $90,000 assessed value on a $2-3M location. This example is just a stick-it-to-the-rich example (but think of the untaxed valuation of California's coastal lands!) . ... more productively a Georgist site value tax would incent people sitting on properties blocking desired higher-density construction to either build up or sell to someone who can.

By: GuyZero

GuyZero — Mon, 22 Feb 2016 20:11:11 -0800

yeah, prop 13 is kind of ass, but California is only 12% of the US population and lots of places have fair market value property taxes.

By: GuyZero

GuyZero — Mon, 22 Feb 2016 20:11:52 -0800

Also note that that assessed value resets the second the house gets sold, so Santa Cruz will get its money soon enough.

By: flabdablet

flabdablet — Mon, 22 Feb 2016 20:41:26 -0800

the only way to make money at ANYTHING from now on would be through productive labour And patent trolling. Don't forget the patent trolling.

By: flabdablet

flabdablet — Mon, 22 Feb 2016 20:45:56 -0800

Georgists consistently underrate the creativity of society's rent-seekers. There will always be a segment of the population with the skills and the amorality to make a more-than-comfortable living off gaming the system in completely legal ways.

By: kliuless

kliuless — Tue, 23 Feb 2016 11:22:19 -0800

yes, but what if there were (creative) metaprocesses of evaluability to determine whether behaviour is rent-seeking and/or generating externalities and where they fall?

If people don't look at your data and arrive at a consensus as to what that data means in terms how we should respond – then we cannot create the new institutions we require because we cannot come to any objective agreement as to what they should do or how they should do it or whether they're doing their job... So, what is to be done? The only hope is to try to contain or minimize the power and relative size and dominance of unevaluables in our lives which get to achieve their special positions of profitability through their relationship with the state. Maximize accessibility and evaluability. Which optimizes decisions. Which incentives progress in reality-tested institutions experiencing competition. Which maximizes the long-term social benefits of those decisions.

like you could just ask (a bunch of!) people :P