Interesting! I wonder though what is specific to land which is different from any other asset or capital in general according to Georgists?
But it's easy as hell to tax land and impossible to avoid the tax (just show up with cops, what the hell are they going to do, move the land? - and if they don't pay, just sell the land to someone else, although usually the aim is to collect the tax when transactions happen) So tax it. 100%. Georgism's tax suggestions go: have that 100% land tax (not property tax), have no other taxes, that's it. Also tax networks which have an inherent monopoly effect, it was also suggested by Henry George.
Nothing to do with agrarian points of view, really. Georgism was created in SF, it was most popular in NYC, and it was talking about the problems of the first properly modern cities in America and Britain.
The revenue man wanted granddaddy bad, headed up the holler with everything he had, ‘fore my time but I’ve been told, he never came back from Copperhead Road...
But this can be said for anything, no? After all the value of every asset is socially constructed, whether that's shares in a company or land seems irrelevant, so if you buy that logic I feel like the Marxist case makes more sense instead of just arbitrarily stopping at land.
It also seems counterintuitive because it would essentially mean that someone who holds billions in shares or digital assets has no tax burden under the Georgist logic but a small independent farmer does.
> It also seems counterintuitive because it would essentially mean that someone who holds billions in shares or digital assets has no tax burden under the Georgist logic but a small independent farmer does.
Someone living like a billionaire probably owns a much higher value of land (if only what's under their mansion) than a small independent farmer. The land value tax would end up being built into food prices, so farmers wouldn't lose out on the whole unless they're currently growing wastefully; maybe farming would be pushed onto less valuable land, that's sort of the point (but in practice that mostly happens already; farmers near towns wanting to expand would get gradually pushed out via higher taxes rather than getting a windfall for selling up, which is bad for those individual farmers but better for society as a whole).
People don't make the land but they do make the value of the land. Even if that just consists of recognizing the potential in what is already there. LVT does nothing to distinguish between value resulting from the actions of the owner—apart from a very limited set of formally recognized "improvements", mainly permanent structures—and value resulting from the actions of others. And even if part of the "unimproved" value does result from others' actions, these others are not, in general, the ones receiving the tax.
The same is true of the existing system - currently owners pocket all of the value increase despite the vast majority of it being nothing to do with them. LVT is a recognition that most of the value of land comes from the actions of others - not just a handful of immediate neighbours but the whole surrounding community (e.g. most of the value of land in a given city gets its value from the entirety of that city) - and so should rightfully go to an organisation that represents that community as a whole.
Except for the property taxes and local sales taxes which pay for all these things supposedly contributing "unearned" value to the land... and which over time add up to more than the increase in land value.
> despite the vast majority of it being nothing to do with them
> to an organisation that represents that community as a whole
[citation needed x 2]
LVT eliminates the financial incentive to take personal or collective private action to improve the community as a whole. Rather than increasing the value of your property (and your neighbours') your only reward is to be saddled with additional taxes above and beyond the cost of the improvements. The LVT model essentially assumes that the only source of community-level improvements worthy of remuneration is the government. Which is obviously nonsense. If I contribute to the community at my own expense, the benefits accrue not to me but to the government—which may represent "us" in a vague, manipulative sense but certainly doesn't represent me—to be spent more often than not on things I explicitly do not want and which are contrary to my own interests. Governments love to act as though they enjoy an agent/principal relationship with their constituents but neglect the fact that an agent has a individual duty to each principal, not just the majority position. It's an inherent conflict of interest to serve multiple principals with conflicting goals.
Of course, property taxes have a similar issue, but at least they don't have an explicit goal of negating all profit to the property owner; you don't get the full benefit of contributed improvements but you do get the majority of it.
Any organisation that purported to represent the community well enough to make community-level improvements (which will almost inevitably make things worse for some people even if they're a huge gain for the community as a whole), like "we should demolish these buildings to put a rail line in" or "should this area be a park or a factory", would have to incorporate the same feedback mechanisms and so on that would make it a de facto government.
If you're doing something that really improves the community as a whole, under LVT the community government should be willing to fund it, since they'll get back all the value. Indeed they have an incentive to seek out ways to improve the community and encourage neighbourhoods to improve themselves, unlike today.
> Governments love to act as though they enjoy an agent/principal relationship with their constituents but neglect the fact that an agent has a individual duty to each principal, not just the majority position. It's an inherent conflict of interest to serve multiple principals with conflicting goals.
Of course it is. Doing anything on a community scale is inherently difficult, and there will inherently be winners and losers. LVT actually helps even that out though - the gains of community-scale improvements accrue to the government of the community as a whole, but by the same token they also bear the cost of any local deteriorations.
> Of course, property taxes have a similar issue, but at least they don't have an explicit goal of negating all profit to the property owner; you don't get the full benefit of contributed improvements but you do get the majority of it.
Property taxes are a completely backwards way to approach this kind of thing, because they punish the owner for the one kind of community improvement that they actually fully control and spend their own money on. Under LVT you keep the full value of your buildings, landscaping and so on (which are the result of your own toil); you pay taxes on the value of the unimproved land, which is a function of the community as a whole rather than your individual efforts.
Labor is in theory infinitely expandable. Capital is infinitely expandable. Land (and natural opportunities) is fixed in supply, so according to Georgists there is no moral argument for favoring somebody for its monopolization. It should be community owned and rights of use to it should be given out to people, priced by a market mechanism.
Labor and capital don't suffer from fixed supply or renewability so according to Georgists there is no need to prevent it from expanding, eg. by slapping taxes on it.
Georgist movement is also known as single-tax or zero-tax movement, because they advocate that there should be no taxes on labor, consumption or capital. The only tax implemented should be the natural monopoly tax (land value tax). They say it would be enough to finace government from it because there are crazy trillions of dollars parked in real estate. Real estate price is actually land value price (location, location, lovation), so only land tax would suffice and there is no need for property taxation, which is actually product of someone's labor.
Some Georgists say that Land Value Tax is not even a tax but a payment for exclusive rights of use. You pay for the service the government gives you directly, therefore it's not a tax. In this way they argue you can run a society with exactly ZERO taxes and paradoxically raise even more money than current tax system.
Same with domain names. People are interested in using shorter domains like abc.com, not long ones such as xyajfbeusnfdbdjak.craptld
The scarcity applies to a grade of land or string, not to all land in the Universe or string space in total.
It is difficult to compare the 'grades' of land, because the grading is not discrete but somewhat continuous.
The hypothetical expansion of the human race in the coming centuries has no bearing on decisions that are made with the next years and decades in mind.
Economic rent like this pops up even in human-made domains of potentially infinite expanse, such as the internet. There is no limit to the number of domain names which may exist yet some are far more valuable than those which can be claimed for low-to-no cost. Even social media platforms are valued to include the economic rent of their own user communities. For example, even if there came along a social media platform which was better than Facebook in every way, users would still value Facebook more because it has more community and community-generated activity and content.
One obviously should be able to LEASE the land from the people if they intend to do something useful with it, but otherwise, you are just going to have the land accumulate in the hands of ultra-wealthy who just sit on it. It will appreciate in value since there will be fewer and fewer patches to buy, and then you have a bunch of kids from Succession acting like they own the world, since they happened to inherit it by purely winning the birth lottery.
The social value of private ownership isn't in permitting owners to profit, it's in aligning incentives so that a resource is put to the most productive use. Very often those willing to pay the most money are the ones with the most productive use, and so long as there's a private owner his interests are usually to sell to the highest bidder. More importantly, a private owner can't be corrupted into selling to lower bidders, whereas bureaucratic owners (public or private) can be.[1]
I [very briefly] researched Georgist taxation systems in the U.S. when taking a seminar on land use regulation. My tentative conclusion was that they weren't very effective because the bureaucratic systems for appraisal were very quickly corrupted--not to benefit individual politicians, but to satisfy the electorate, who often find such taxation schemes unfair.
[1] A private owner with multiple interests might be willing to sell one interest to a lower bidder in exchange for a higher bid for some other interest, though.
I agree with you that Georgism isn't perfect. However, I haven't seen a better solution.
You can't. No one person can. That's why centralized economic planning doesn't work. (I'm not trying to suggest that Georgism is centralized planning, or that Georgism doesn't appreciate the value and necessity of price signaling.) And private ownership doesn't necessarily lead to the most efficient allocation. But the point is that private ownership is a stable regime. There are an infinite number of regimes that would offer better allocation, but we haven't yet seemed to find one that is stable, or that we can make stable. (A big part of the problem, I suspect, is cultural, so I don't mean to suggest that Georgist systems are inherently unworkable, just evidently unworkable in recent American history. I think our social and political cultures play a big part in what make land value taxation seem unfair.)
That said, if the public believes land isn't being put to good use it can purchase the land at market price.[1] That still leaves accidental and speculation profits in private hands, but theoretically it puts a ceiling on inefficient allocation. Unfortunately, in some ways (particularly politically) eminent domain powers are at their nader in the U.S. Which is a big part of the reason why we can't accomplish things like California Highspeed Rail. I think that drives home the point that Georgist taxation is less workable today than it ever has been in recent history.
[1] That's required by law in some countries, like the U.S. In some other countries it's not technically required by law but it's often the case that the government does pay market price, simply because to do otherwise would seem unfair and lead to political backlash.
HSR would be easier with a land value tax - there would be a negative incentive to hoard land, so land acquisition costs would be minimised.
California is a great example: HSR battles and Prop 13 revenue dilemmas are things that land value taxes are directly intended to resolve in favor of the public wealth. But both of these phenomena have strong public support propping them up, directly and indirectly. Prop 13 was passed precisely because the public was concerned about the threat of people being priced out of their homes, and that sentiment is at least as strong today as it was back then. Land value taxes would systematize homeowners' worst fears, and they won't be placated by arguments or even evidence that shows that they're better off on average.
I'm tempted to say that people are just irrational or that the public often wants contradictory things, but that would be lazy--true but lazy. In any event, my point is that resolving these things requires more than simply engineering a system that works better on paper. Incentives have to be aligned not just in dollars, but also in votes; not just at the outset, but also on an ongoing basis. Georgist land value taxation schemes are fundamentally predicated on consistent, long-term application. Once exceptions are made it crumbles because not only do perceptions of unfairness increase, the utility of the regime declines. This is true of alot of things, even traditional land taxation, but it's especially true of land value taxes.
[1] Or at least I'll concede that point. It's not obvious to me if and how prospective public works projects would figure into land values under a Georgist system, especially in the rural areas where HSR battles seem to be the worst. (AFAIK, the more urban areas in and around Fresno were acquired and bulldozed rather quickly.) Particularly with land value taxation, the devil is in the details.
So profit that comes solely from owning a natural resource isn't earned; however, profit that comes from the labor of extracting the resource or from making something with the resource is.
However, under that definition there essentially is no such thing as "unimproved value"—unclaimed and unpreserved land would quickly become unusable for any purpose—and the proper LVT assessment in the vast majority of cases would be zero, or else so low as to not be worth collecting.
Additionally, we don't know how much coal there is to still be discovered - we know very well how much land there is.
If LVT is implemented, then there would be incentive to over-extract from the land anything that is valuable and can be avoided from taxation (such as fertility, or minerals, or anything else that rises from the land).
I dont think this can be sustainable - because without clear, exclusive ownership that lasts indefinitely, why would anyone value the land at all?
For the same reason that people already rent property they don't own. There are all sorts of value-generating activities that require exclusive right to some land.
yeah, basically you can go prospecting on anyone's private land (some caveats)
The central thesis of Henry George is that a person is entitled to all value s/he creates. No one creates the value of natural resources like land (but also ocean, radio spectrum, etc.), but landlords get to monopolize its value. Since they have no claim to what they did not create, it would be economically just to tax that value and distribute it.
>paradigm seeks solutions to social and ecological problems, based on principles of land rights and public finance which attempt to integrate economic efficiency with social justice.[6][7]
>Georgism is concerned with the distribution of economic rent caused by natural monopolies, pollution, and the control of commons, including title of ownership for natural resources and other contrived privileges (e.g., intellectual property). Any natural resource which is inherently limited in supply can generate economic rent, but the classical and most significant example of 'land monopoly' involves the extraction of common ground rent from valuable urban locations. Georgists argue that taxing economic rent is efficient, fair, and equitable. The main Georgist policy recommendation is a tax assessed on land value
However, my understanding is that Georgism generally applies its arguments to natural resources in general; it's just that land has traditionally been the most important natural resource. You could also probably extend its arguments to other forms of economic rent.
Producing enough in the growing season to sustain yourself through the off season is... no small amount of work. You need a reasonably large amount of capital in the form of tools and knowledge to have a reasonable shot at doing so with only your labor. And unless you have a lot of capital in the form of advanced machines, it would be a huge amount of labor.
But that's not the real problem; the real problem is how chancy farming is. Too much rain? no food this year. Not enough rain? no food this year. I mean, there are a lot of things technology can do (like, say, tile drainage and irrigation) that make the growing conditions wider, those things can require significant capital and/or labor, and even then, you can have too much or too little rain. Even if you do everything right, if you are depending on growing your own food, there's a reasonable chance of not getting significant calories for a year or two just 'cause the weather was bad.
Most of our farm subsidies go to crop insurance; the government essentially sees to it that our farmers are made whole if it rains too much or too little, which makes farming a lot more certain, and helps ensure our overproduction of food. (note, I totally support my tax dollars being used for this; If there's anything the world should overproduce, it's food.)
Look at the famine in Guatemala, as people can’t grow enough food due to climate change, leading to mass migration
(Or a ruined old-money aristocrat turned novelist. Or a 21st century San Francisco tech bro who has just realised that he’ll never be able to afford a house.)