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Would it really be disastrous?

Say a house rents for $2,000 / month. $1,000 of that is the land, and $1,000 the house.

The land value tax is $1,000. We'll pretend this is an ideal world. If the interest rate is 12% then house+land is worth 100,000.

But imagine the they misappraise the land. So instead they charge 1,500 a month. Then that means the house+land is worth $50,000. That's not ideal but it doesn't seem catastrophic.

If a piece of land is underdeveloped and they charge a little too much, the person just surrenders that land to the government which auctions it off. If no one wants to buy it they know they mispriced the land.

>That's not ideal but it doesn't seem catastrophic.

>If a piece of land is underdeveloped and they charge a little too much, the person just surrenders that land to the government which auctions it off.

I would say a situation where I surrender my land to the government is catastrophic. Feels like it would easily turn into forced sales.

You're surrending land because land isn't worth anything and you don't want it anymore.

The whole point of Georgism is to make land really cheap, by making it expensive to own.

Most places already assess the value of land separately from improvements; when you get your property tax bill they’re often broken out. The process of separate assessment is well established!

True. But the argument that assessment is subjective, and prone to error, is true. But such errors in land value are at least fairly easy to peer review. It is all a matter of public record.

But for income, if you hide it all in the Cayman Islands, who is to say how much income you made or not? The errors could be off by many orders of magnitude and we wouldn't even know.

And more importantly, taxing the right thing imperfectly is better than taxing the wrong thing perfectly.

Taxing people imperfectly for polluting is good. Taxing people for doing good deeds is bad, even if assessed perfectly.

> In real life you can't accurately assess land value separately from improvements

Hmm, is this true? It seems to me like the value of owning that 'space' wouldn't be that hard to evaluate separately from the stuff on it.

When you say improvements here, do you mean improvements to land itself, like removing poison from the soil or reshaping it to be more flat, or 'improvements' meaning properties built on the land?

Generally improvements would mean "housing/commercial/industrial structures built on the land". The tricky part is that the land value can change quite a bit year-to-year, and the structures built on it can also both decrease or increase in value.

I don't actually see a legitimate rebuttal to argument #2 (passing the tax on). In the article, the author simply says "...no, because land is special in that it is scarce and nobody can make any more of it." It's not clear to me that this is an argument against the proposition that the tax will be passed on. Indeed, you could argue that it makes it more likely, since the scarcity of land gives the landowner more economic leverage (ie, if you don't like our rents, go try to buy your own land). There may very well be a sound economic argument that explains why the tax wouldn't just raise rents, but I don't see it in this article.

I believe the next article in the series will explain it, but you can search google for "tax incidence land value tax" to find an explanation as to why. The short answer is that if you pass on the lvt to the tenant that means you just increased the land rent, so the land value goes up and then the land valye tax goes up. You can't repeat that into perpetuity because the tenant is already paying as much as they can afford (in aggregate). So you lose your tenant if you try to pass it onto them.

Well, 1 is right. Land just doesn't matter that much today.

Take Google, for instance. What does Google own? They own some land - some fairly expensive land. But they also own a bunch of code and data, and they own google.com, which is probably the most valuable of the three. Why tax the land, and not the domain name?

And, if you go by just about the first thing the article says, if your goal is to cut down on rentiers, well, land isn't the primary mechanism for rentiers any more. Intellectual property, maybe?

From the article:

> For Georgists, land is the key to understanding the whole economy.

Yeah... it really isn't. That was becoming decreasingly true even in 1879; now it's laughable.

Did you read the rest of the article where it established the fraction of wealth in the nation that is due to land?

Why are all the dumpy and decrepit houses in Silicon Valley worth 10x what they would be in the rest of the country? What is the value of the lane in Silicon Valley versus the market caps of the various companies there?

If there's a trillion dollar company, and the houses around it go for 2 million each, and 80% of the value is in the land of those houses; that's only 400k houses to equal the market cap of the company.

Also take note of the other analyses of the growth of inequality in the 21st century. The growing inequality isn't coming from stock market values, it's mostly coming from housing.

No, I did not in fact read the whole thing. My life is too short.

Only 400k houses? I don't think that supports your point very much. Apple, Amazon, or Google have land footprints that are far smaller than 400,000 houses.

And, the growth in inequality is coming from land? The top 0.01% have what percent of their assets in land? And, which came first? Did they make their money on stocks and then buy the land to diversify? Or did they make the bulk of their initial money on the land?

> In its 2019 10-K filing with the U.S. Securities and Exchange Commission last week, Amazon listed its global real estate footprint at the end of 2018 at an astounding 288 million square feet of offices, warehouses, retail stores and data centers.

That's 10.3 sq. miles. SF has a density of 17,246 people per square mile. Manhattan has a density of 75,000 people per square mile. Granted, most of Amazon's real estate are warehouses in sparsely-populated areas.

Main point is that not all homes are houses. Many are high-rise condominiums/apartments.

According to dirk löhr a big chunk of stock market valuation is based on real estate and ultimately land. Once you include other land like monopolies like spectrum or patents you're looking at more than 60% of the value of a given stock being tied up in those things. Bill gates owns a huge amount of farm land. Land is still one of the biggest factors of production and the biggest driver of inequality in the 21th century.

> Once you include other land like monopolies like spectrum or patents you're looking at more than 60% of the value of a given stock being tied up in those things.

Yeah, see, that's part of my point. Why just do land, and not "other land like monopolies like spectrum or patents"? Or domain names? Some of those are pretty valuable...

> Bill gates owns a huge amount of farm land.

Sure he does. How did he get the land? Well, he made a ton of money on Microsoft stock, and eventually he sold some of it, and bought land. How much of his money did he make via stock, and how much via land? (Granted, he had the stock longer...)

By the "growth in inequality" what I'm really talking about is the share of the economy that's distributed to capital rather than labor.

Section 1.4 presents extensive documents that land represents a majority of the assets in nearly all advanced economies. And not agricultural land, residential land. This comes from Piketty and others.

It also shows the analysis that other tacked on to Piketty to show that the increase in the share of the economy returning to capital comes from housing.

Finally, the linked article compares the size of the LVT to a 100% tax on all billionaires, and it turns out that the billionaires don't have that much of a share of the economy. It took decades for their billionaires to build their wealth, but that wealth would only fund about a year of US gov expenditures. Whereas the LVT serves to almost fund every year in perpetuity. (Though I also support additional taxes too)

To actually alleviate inequality, we don't need to just tax the billionaire capitalists, we also need some amount of tax on the multimillionaires that have also been taking money away from labor through increased returns to their housing assets.

All this is to say is that perhaps your intuitions about the economy might not be right, and if you evaluate some of the data here, you might come away with a radically changed view of who has all the wealth in our nation, and where it is held (largely in land).

A big issue is a pure land value tax is politically unpopular. That would mean significantly raising taxes for agricultural land. For most single family homes

Agricultural land is of low value compared to urban land. And this policy would remove or at least offset the income and sales taxes that fall directly upon farmers' labor.

Agricultural land is low value per sq ft but not low value in itself.

For example the article (read it last night) says agricultural land is worth $3k/acre or thereabouts. So a small 100 acre farm is worth about $300k, though I’m sure it can be $1m in areas good for farming and $100k in arid areas.

A lot of people own a lot of farmland but just for leasing to actual farmers (so the entirety of the income of the property is land rent, as opposed to a regular landlord who also collects building rent). Because the only use-value of the land is land rent, under Georgian the exchange-value of the land on the open market essentially becomes $0. The exchange value is then just a bidding mechanism for who gets to use the land. There is basically no longer any reason at all to hold the land and lease it.

I think that’s good overall because I agree with the author and George himself that rentiership is destructive and warps the economy. However, you are instantly making an asset worthless. This affects not only farm-landlords but also owner-farmers who now own worthless - in the sense it has little price on the open market - land. It seems like a great idea overall but so painful in the short term that it’s a non starter politically.