Nothing Like This Has Ever Happened Before – Gilded age in SF compared to today

A land tax would be regressive because it would have a bigger effect on middle class people compared to the 1%, because for a person representing the middle class a house purchase (which includes the land the house sits on) it's gonna be the biggest ever purchase from his/her life, while for a hedge-fund manager worth $5+ billion an extra money that he would have to pay on his Hamptons house is a blip in the ocean.

You mentioned a lot of economists, but you left out J.S. Mill, who at some point was strongly in favor of proportionally higher inheritance taxes. That kind of tax wold effect the hedge fund managers a little more, and it sounds fairer to the middle classes.

It seems to me that this only made sense when land was the main form of wealth for any given estate at the time.

Ted Turner isn't having a problem paying his property taxes. The rich will never have a problem paying their property taxes. It's the poorest that struggle with it. Fully distributed land value taxes discourage property ownership by the non-wealthy, which will increase wealth inequality.

If you then plan to create exclusion lines based on wealth or income, that drop people out of having to pay property taxes - well then you're just going to create a lot of other problems in which you're punishing people just above that line that can hardly afford the tax either.

If you want to use a very finely graduated property taxation approach, good luck fairly managing it across a nation as large and diverse as the US in terms of incomes / land values / standards of living / et al.

If you make a person pay $3,000-$4,000 annually on their homeowners taxes per year, with said person having a median income in a house valued at the median, then what you'll accomplish is every ten years you're guaranteed to have completely wiped out all value gain created by that person owning their home and paying down their mortgage.

Property taxes are just about the most regressive taxation device ever implemented. The only thing worse is the basic income, in which the rich are given a welfare hand-out.

They aren't implemented because they are incompatible with political dogma (I won't even call it ideology, as this implies a level of intellectual consistency), and these issues are used as tribal rallying calls which are much more valuable to politicians than implementing better policy ever was.

Land use tax, no matter how economically efficient, won't get implemented because the villains of taxation these days aren't heavy land users. I can run a hedge fund from a few floors in a Manhattan sky scaper. It would have the land footprint of perhaps 10 large coffeeshops. Google and Apple have barely any land footprint compared to any factory of any size. Any land tax implementation that would see hedgefunds, Google and Apple "pay their fair share" (while raising enough revenue to replace income and sales taxes) would be grotesque and certainly not economically efficient.

The general objection is that it's pretty unfair to farmers. And well, all land owners. What's special about land? What's the difference between someone with a million dollars worth of gold and a million dollars worth of land? The first pays no tax.

And maybe they shouldn't, if you aren't earning anything or spending on anything. Income tax fairly taxes everything that is earning money. It distributes taxes over the whole economy rather than specific parts, which is why it's the most politically acceptable solution.

https://en.wikipedia.org/wiki/Land_value_tax

So you have somebody who is going to build a factory and they pick a nice piece of low value rural land. But once there is a factory, people build housing for the workers and stores and so on, and now you have a whole town centered on the factory and the value of the land goes up. But the reason the value of the land goes up is because of the factory.

So the next thing you know the factory owners realize they're sitting on a "high value" piece of land, so they put all the machinery on trucks and carry it fifty miles down the road where the land is still cheap and they don't have to pay high taxes. And then the process repeats.

It seems like the result would be a preposterous amount of urban sprawl and inefficiency. Anything that doesn't actually care about its location but attracts other investment would keep getting moved, which would destroy the value of the third party investment.

Third parties would then respond by making their investments mobile (e.g. living in mobile homes or selling food from food trucks instead of building houses or restaurants). Every time the taxing authority said the piece of land where everybody is has significantly more value than the piece where nobody is, everything moves down the road again.

And that's the extreme case but you get the same thing in the suburbs. You don't want a house which is near anything because the land value will be higher which is now a liability, so build it a little further out and you'll have a longer commute but your taxes will go down by $10,000/year.

Because it isn't the land that has value, it's the people and the stuff. If you tax land highly non-uniformly then the people and stuff will spread out.

https://www.marxists.org/archive/marx/works/1881/letters/81_...

I doubt he was afraid it would work:

> I said of it in 1847, in my work against Proudhon: “We can understand that economists like Mill” (the elder, not his son John Stuart, who also repeats this in a somewhat modified form) “Cherbuliez, Hilditch and others have demanded that rent should be paid to the state in order that it may serve as a substitute for taxes. This is a frank expression of the hatred which the industrial capitalist dedicates to the landed proprietor, who seems to him a useless and superfluous element in the general total of bourgeois production.”

Basically, the concept of paying land/ground rents was well established in many European countries, only usually the recipients would be land owners that were often the nobility, rather than the state. So replacing ground rents to one of the large estates with taxes to the state to replace other taxes was naturally attractive to the capital-owners in countries where this was widespread. Marx recognised elsewhere that George and others were going further, but saw it basically de-facto as a means for the capitalists to rip the rug out under the last of the landed nobility and make them rather than the bourgeoisie the source of funding for the state. So yes, a delay for socialism, and that may be one reason for Marx to dislike it, but I read his criticism more as disdain over basically dragging up an old idea as a halfway house when in his eyes there were already far better alternatives on the table.

But this history of ground rents also gives you the reason it has not and will not be enacted anytime soon: Many of these land owners were, and still are, tremendously powerful. And many new large land-owners have arisen. In the UK, for example, large parts of central London is in the hands of a handful of large estates which still collects ground rent or rents out land on a shorthold basis, after they eventually managed to reverse the decline that followed the introduction of estate taxes. Many of these major London estates are still in the original family ownership (e.g. Grosvenor, Portman, Cadogan, Bedford) - and you will find similar estates if not often of the same age - all over the place. The vested interests in fighting such a tax regime is in most countries vast and extremely well connected. It is a fight few would want to take.

As long as people are interested in eating, drinking, partying, culture, socializing and having casual sex - cities as most desirable places to live are inevitable.

The gentrification could be viewed as a very subtle form of segregation - that you could just price out people you don't want to mix with from the places you deem desirable.

Couldn't you ? I have no idea if this is workable in Fairhope, specifically, but ... if this is the main feature of a land tax regime, it seems like you could fairly easily game this ...

You gain control of the land (either through purchase or 99 year lease or whatever) and then you create an option to buy (or option to assign lessee) that is transferable to a third party and then you can camp on that appreciating "asset" just like people now do with the land itself.

I'm sorry if it's a bit imprecise or hand-wavy, but you get the idea - you only need to create a derivative of the property (which should be trivially easy) in order to work around the inability to sit on appreciating land.

Am I mistaken ? Am I missing something ?

So, a single unelected and unaccountable entity managing a centrally-planned economy? This is the utopian vision?

This might seem like a minor difference but it actually isn't, because taxes generally cause changes in behaviour. Sometimes those changes are desirable: Carbon taxes, "sin" taxes, etc. More often the change is undesirable (as when we tax investment, wages, or consumption). (And, very frequently, those changes in behaviour results in the actual burden of the tax shifting. Payroll taxes are levied on businesses, but nobody actually thinks they pay them.)

Tax housing, and you'll get less housing. Since people like housing (that's why they build it), that's considered a Bad Thing. Tax land, and you'll...get the same amount of land. With a few very minor exceptions, the amount of land is fixed. No distortions, no deadweight costs, and no real ability to shift the economic burden of the tax.

(or some such thing)