Comment by throw123123123 | Hacker News Reader

Comment by throw123123123 | Hacker News Reader

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> They totally can. Go to any marketplace and see for yourself: sellers set prices. Buyers can negotiate, accept or refuse, but the seller setting the price (ask) is completely unilateral and happens billions of time every day.

There is some subtlety about talking about prices conceptually. Both sellers and buyers can make an offer or a bid at any price, but market prices are the result of sellers and buyers meeting - about making the actual exchange.

In this context, saying "sets prices" would mean that the buyer takes the price, not that the seller has made a listing at an arbitrary number. Offering 1$ for a car and not buying a car is not setting a price - neither is Asking 1000000$ and not getting an offer.

Rent prices are paid at all because there is a benefit to the land. If the Ask for the land is higher than the value, it will meet demand and validate the price.

> If this theory had been correct than raising taxes on businesses would not result in the increase of consumer prices.

Thats not true - economic incidence requires evaluation in a case by case basis. It depends on the relative market strength or demand/supply elasticity. For example, a tax on life saving medication is borne by the consumer, but a tax on skittles is born on the skittles manufacturer (as consumers replace skittles with other candy).

The point is that the economic incidence on unimproved land is very much against the landlord - he can't do anything with the unimproved land but rent it.

For longer, wider and more interesting historical analysis of LVT I recommend reading from source - Henry George and Provery and Progress, a book denouncing homelessness and land speculation in...San Francisco, 100 years ago.

I understand what you are trying to say but your concept of market price is only applicable to fungible goods. "Market price" for land leases makes very little sense and only implies that it's whatever price you've managed to negotiate. There are no supply/demand curves, there is no spread, nothing like you are used to with pricing fungible goods.

But that is not the point of my argument, your original assertion was that "the land owner doesn't have any bargaining power - his only choice is to not rent the land and absorb the loss of all value." Now you are saying seller and buyer negotiate? Why would they do if the seller has no bargaining power?

> but a tax on skittles is born on the skittles manufacturer (as consumers replace skittles with other candy)

Why then a 1kg of Skittles on Amazon.co.uk costs more than 50 oz (1.5kg) of the same on Amazon.com (GBP 9.43 vs USD 9.98)? Is it really because British people want to taste the rainbow so much more than Americans?

> I understand what you are trying to say but your concept of market price is only applicable to fungible goods. "Market price" for land leases makes very little sense and only implies that it's whatever price you've managed to negotiate. There are no supply/demand curves, there is no spread, nothing like you are used to with pricing fungible goods.

To make sure I understand - you say that because each land is as unique as an NFT, the market for every single piece of land has supply of 1, and the classical supply/demand curves don't make sense/apply.

I have multiple answers to that concept:

1- From a mathematical abstraction, the key to riches would be to get one land and split it into as many sub-pieces of land as possible and sell them all at the same price as the larger one!

2- There are differences between fungibles and non-fungibles, crypto has taught us, but overall most properties are similar and allow for the exchange of a non-fungible for another. Each land NFT is unique, but there are many land NFTs, and they compete against each other as if they were fungible. Each wine is unique too, even each bottle of wine is unique! but albeit this does affect demand, it doesn't turn supply to perfect inelasticity. There are subsitutions!

> But that is not the point of my argument, your original assertion was that "the land owner doesn't have any bargaining power - his only choice is to not rent the land and absorb the loss of all value." Now you are saying seller and buyer negotiate? Why would they do if the seller has no bargaining power?

Bargaining power to increase rents to cover the land value tax - he cant change the supply of land, or repurpose it for something else.

> Why then a 1kg of Skittles on Amazon.co.uk costs more than 50 oz (1.5kg) of the same on Amazon.com (GBP 9.43 vs USD 9.98)? Is it really because British people want to taste the rainbow so much more than Americans?

I've waited all my life to a microeconomics conversation about skittles. The bigger question, sir, is why do blue skittles sell at the same price as all the other skittles, when they are clearly the worst.

Many equal goods have different prices in different parts of the world for cost of labor, supply, taxes, etc etc. I have no idea in this particular case why it would be so, but relevant to economic incidence of taxes, sales taxes do change supply/demand curves of skittles bought on amazon. Because skittles are a unique product, but also substitutable for other non-sales taxable foods, its very likely both producer and purchaser eat part of the tax hike - they both lose.

Not exactly as NFT, which has no value at all and, in fact, is chiefly traded on the basis of other NFTs of exactly the same kind (but for some reason considered different).

The market model of fungible goods is based on maximizing the product number of items and price. It means that sellers will be increasing price as long the number of items sold also increases and will decrease price when the number of item sold drops, since the supply and demand is monotonic (someone willing to sell at $X will also sell at $X + anu positive number and someone willing to buy at $X will also buy at $X - any positive number) there is naturally a point where the number and price product is at the maximum. It still is affected by taxation and adding taxes moves prices up but this is besides the point.

None of the above applies to the land lease. The number of items to sell is 1, the value that the seller is maximizing is the lease value. If the price is too high then the land will stay unleased for longer time than acceptable to the particular seller and that may cause him to lower the price. The land will stay unleased longer because the prospective buyers will be choosing cheaper land elsewhere even if they otherwise would have chosen this particular parcel. But if all land owners are hit with the same tax then all of them can raise price and that will not affect unleased time because there won't be a price advantage for the buyer to go elsewhere.

>I have no idea in this particular case why it would be so, but relevant to economic incidence of taxes, sales taxes do change supply/demand curves of skittles bought on amazon.

Okay, we agree then. I was under impression you said they don't. Or you meant just sales taxes? What about VAT? What if there had been special Skittles tax in UK, would the manufacturer eat that since it's not a sales tax and the sellers are very inclined to just take a loss according to you?

LVT is not the same tax to all land, its precisely based on land rent.

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