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Comment by advisedwang | Hacker News Reader

Do LVT proponents believe economic activity that requires minimal land ownership relative to the profit should be untaxed?

E.g.

* Offshore oil drilling

* Tech companies

* Fully remote CPAs

* Electricians

* etc

It seems very weird large sections of the economy become virtually untaxed, requiring a MASSIVE tax burden on the others. The simplicity of the LVT plan kinda hides that it implies a huge restructuring of the economy.

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Proponents of the Land Value Tax as a single tax would probably say that those activities should be untaxed.

Proponents of the Land Value Tax, but not as a single tax would probably be more mixed.

Restructuring of the economy isn't a hidden part of the Land Value Tax, it's the point.

I don't think very many LVT supporters think it should be the sole or even primary source of taxation. The main point I see being made is that property taxes as designed today discourage development, whereas a LVT would encourage it. Property taxes are only about 10% of overall US taxation, and a switch to LVT would have its intended effect even if they became a smaller piece of the pie.

The LVT would get rolled into rent, which would propagate through the economy. I think the chief effect of a fixed LVT would be discouraging passive land investment (since you've got to collect rent to pay your LVT). IMO, while this might be beneficial for increasing the housing supply, a progressive LVT would be even better. A progressive LVT would put larger landowners at a disadvantage in the rental market, because their tax would be higher on an equivalent parcel than a smaller landowner. By ensuring a larger number of smaller landlords, I think you'd see a more diverse and competitive rental market.

I think we can't make LVT the only tax. Other good taxes are consumption taxes, pollution taxes, resource usage taxes. You can also add some business revenue taxes like recently popular idea in EU of a digital tax. I would also tax IP protection (if you want to sell your stuff here and have IP/copyright protected we will take % of your sells). I think the worst possible taxes are capital gain tax an corporate income tax. Those should be 0. They only create incentives for various shenanigans and have a lot of other negative consequences.

LVT proponents also typically advocate for pigovian taxes (tax things you want less of to disincentivize it) and taxes on rent-seeking activities. So, offshore drilling would probably be hit with something like a carbon tax (directly or indirectly) and tech companies might get hit with a tax regarding their monopolies or IP. The CPAs and the electricians would get off easy, though.

Georgism holds that productive economic activity gets absorbed into land value.

Georgism was designed in a completely different economy. Google's productive activity has very little to do with the land it owns.

Google's productive activity mostly accrues to NIMBY homeowners in the Bay Area rather than the material living standards of anyone connected with Google.

That statement seems clearly wrong to me. Google's productive activity is benefiting NIMBY homeowners rather than, say, the owners of Alphabet stock? I'm going to need to see some evidence before I believe that.

Copyrights.

Domain names.

Patents.

Huge amounts of data.

Those are the "land" of the modern economy. Land value tax arguably may have made sense for a 19th century economy; I think it's completely missing the point for a 21st century one. Land isn't the major source of wealth any more.

I feel like someone watched a Gundam series (reader's choice!) and saw space colonies and endless space war as aspirational. How the heck are you supposed to assess and collect taxes on O'Neill cylinders or moon bases?

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