I get what they are trying to convey, but the stronger message is the more straightforward: there are too many jobs that do not pay enough to live on.
We already assess property each year for purposes of local property taxes. Treating a 10% rise in value as taxable income each year would shake up the real estate market. Speculative gentrification would certainly stop. And those sitting on empty houses would either sell or try to find renters.
Australia’s current federal Labor government proposed such a a scheme, but had to back pedal hard when everyone told them it ain’t gonna work.
The same federal Labor government introduced changes to capital gains tax, after promising “50 times” they wouldn’t. All the while a not insignificant fraction of MPs and Senators of said party sold significant realestate holdings before they made public their plans.
The US does this in most jurisdictions. Homeowners pay tax on the current assessed value of the property, even if that property was purchased when the property was much less valuable.
It would not be a stretch to do similar for other assets. In particular, assets held in stocks or bonds are more amenable to fractional sales than are the primary residences that we already tax this way.
No, people don't like it. They don't like paying any taxes.
That sounds simple and elegant.
The reason is quite obvious. You can't make more land so you have to force owners to use it efficiently. Money is transactional real estate, it grants the ability to perform transactions. What people call "saving" is actually just holding onto money and blocking the capacity, it's no different than blocking a lane on the high way and building a toll booth on that lane. Money is strictly a pass-through asset. Certificate of Deposits are fine because they are contractual agreements with finite duration, liquid money has infinite duration so its corresponding debt is also of infinite duration so that needs to be taxed.
[0] No, infinitely expanding the money supply is not a solution, because it also means infinitely expanding debt.
Where is money stored (other than physical) that has its capacity blocked?
You call it non-reproduceable, but money is literally created.
I know LVT is the libertarian dream, but in practice it means only the rich can own real estate long-term, in most cities. It also means the rich can drive out the poor by driving up land values around them, to the point where the taxes are too much to afford.
LVT simply wouldn't be a good system, if applied in the real world.
In other words, if selling removes much of your capital, you then don't gave capital to spend on the next place.
Conversely investors become even more motivated not to ever sell. They can defer the LVT forever, and just use the property as collateral for loans (ie getting liquidity without selling.)
And LVT just becomes an expense built into the cost of rent. The investor never pays it anyway, the tenant ultimately pays it.
Two identical properties, one under mortgage and one that isn’t, have identical rental prices. The costs to the landlord are irrelevant.
The cost of a mortgage underpins the rental value. If there are multiple units for rent then there will be a "going rate" and that's certainly a part of the equation. In that sense some landlords get more cream than others, but that's capitalism in action.
There are however other costs that go into rental calculations. Perhaps the building has a supervisor, or rental agent. Perhaps utilities are included. There are typically property rates and taxes. There may be sectional title levies. That's before we talk about insurance, maintainence and so on. For a group of similar dwellings these costs will tend to be similar, and so the floor is set not just by the mortgage, but by including these costs as well.
If a extra cost comes along, which affects all the properties together, then that will just become part of the rental-floor equation. And yes, it's possible for that to be higher than people will pay, but that tends not to be the driving factor. People have to live somewhere and ultimately will pay whatever keeps them off the streets.
Of course people who own their own home will simply have an extra cost burden every year. There's no upside at all, and will result in more people not purchasing, but rather staying on the rental ladder. Indeed making purchase less attractive allows rents to get higher.
This is the problem with all economics. There are butterfly effects all over the place so "simple solutions" tend to have lots of unwelcome consequences. Trying to solve problems with taxes seldom ends well.
Similarly, why would the next place be expensive if it couldn't be used as a speculative asset?
Anyone who had to move for a job or wanted to downsize their house for retirement years would be screwed, though.
So if you eliminate taxes on primary homes, you will cripple the public schools.
I think you just have a misunderstanding of how taxes work. The person or company that "pays" the tax does not bear the full burden of the tax. That burden is usually widely distributed throughout the economy. In the example of LVT, a landlord would pass on the LVT in the form of increased rents to their tenants. A power company that pays a carbon tax charge more their electricity. An income tax makes it more expensive to give people jobs, so even if the earner pays it, that burden is also bore by the unemployed. Whoever pays the tax, they just pass it on to the rest of the economy.
But that's ok, because taxes can be paired with other methods like cash transfers or social programs that can effectively redistribute wealth. We should try to raise taxes with methods that have good side effects (LVT, carbon taxes), and then redistribute as necessary.
The LVT doesn’t work for the fairly simple reason that value is in the eye of the beholder and requires a bureaucracy, tax is paid from income and rich people have power and therefore just put the prices up to recover the extra cost, which they can do because there are fewer jobs than people that want them.
Legal tax incidence != economic tax incidence
Taxation by estate agent is a non-starter in any democracy. Nobody likes real estate people to start with.
- economists have a good idea of how economies have worked _to date_ - they posit new policy to achieve goals - these policies introduce second-order effects that they failed to predict
I mean, Friedman's criticism of Keynes was excellent, and forsooth, his policies made stonks go up. But i don't think there economy is any better for them; i think we are, broadly, worse off.
I support LVT, but there will be second-order effects. I guess we are doomed to lurch from crisis to crisis, at a higher level than economic boom-and-bust.
As a homeowner, who else bears my tax?
You have the option to pass on such a tax burden, as do any other home/land-owner(s), which is relevant to the conversation.
What point are you making relevant to that?
It seems the goal is maximizing tax revenue, punishing hoarders of land, and pushing for communal living. The exact case I think it is imperative to avoid is removing the elderly (cough, less useful) from their forever home in the guise of progress.
If your cost of living is higher (due to LVT), the minimum wage you will work for is higher. The amount of discretionary spending (someone else's income) or investment you can make is lower. Obviously these effects on an individual level are small, but when aggregated across the entire economy are very large.
In a world of LVT, everyone pays LVT because everyone lives somewhere. You either pay it as an owner or its passed through to you in rent prices. It will be passed onto you in the food you eat (which was grown on land), in the products you use (which were manufactured in a physical place), in the internet services you use (which are run on data centers on physical land), and so on.
In this way, it is much like all other taxes. What is special about LVT, and not other taxes, is that LVT create a disincentive against land speculation (using land as an investment rather than for living or productive use).
So in that way, since LVT just adds to the cost to exploit any resource, it will reduce exploitation of nature.
But more importantly, LVT is in no way incompatible with other regulations or restrictions on land use. i.e. you can have LVT and a law against strip mining.
In practice it disincentivises investment in land (rent-seeking and speculative land hoarding) while incentivising land development. In cities this manifests as more, cheaper, homes, and lower rents, and is highly progressive.
I say in practice because we have over a century of explicit and implicit LVT implementations in the real world to demonstrate this. Most implementations of LVT have gone down as described. Estonia is a pretty fantastic case study - 90% of property is owner-occupier! And you might find this new study of implicit LVT in the US interesting - LVT correlates with higher earnings and demographic diversity: https://www.sciencedirect.com/science/article/pii/S004727272...
The challenges for LVT are really about how to transition the tax in for areas that are occupied, but severely underdeveloped. If a low-density inner-city area ought to be high-density, the owners are being charged accordingly. Long term, it stimulates development and the new housing surplus (splitting the tax burden of LVT across a much greater number of owners) balances things out. But that's no consolation to the people being told they have to pay tax on their backyard as if it's already a block of flats.
This is comment is an exercise in lying with definitions. The N year carrying cost of the land is the same or higher even if the entry cost is lower.
It's like a low down payment loan.
The "value" of the land does not change. Only who captures it does.
This is, of course, the point. The carrying costs properly incentivise appropriate land use and development, and the land value is reduced, freeing up the capital locked into ownership (i.e. thin air) for productive use.
The better developed land also ends up with more properties per unit of land, so the carrying cost of property decreases universally.
Obviously disentangling effects is hard, but there is no evidence that suggests it has the deleterious effects you mention.
LVT: You own the land, you just have to pay these taxes on it every year or we will force you to sell it so we can collect our taxes.
Leaseshold: We own the land, but you can buy a 99-year leasehold, and you can use the land (or sell your leasehold on the open market) as long as you continue to pay the rent. You might also be able to extend your leasehold when it expires, but that is up to the government.
So the expiration part is different, but "taxes" vs "lease rent" is just semantics.
i don't know that people on this website in particular would like the "solution" to that.
Stock buybacks artificially inflate equity value - cash rich companies buyback their stock just to deploy that cash and prop up their equity value. CEOs love this easy trick because it increases their equity holdings' value, and also lets them hit quarterly share price targets which allows them to accrue more equity options. But at the end of the day, this money isn't benefiting the company, so it's just air.
With a wealth tax, the incentive to acquire increasing wealth dampens somewhat. You're only taxed once you cross a certain threshold usually, but once you cross it, the resulting tax hit can be quite sudden and severe. You hold equity but you have to hand over a significant amount of cash immediately, so you'd have to liquidate your holding, which is why a lot of HNWIs hate it.
In fact, it's why there are active strategies (usually involving philanthropy and blind trusts) in Switzerland (which has a global wealth tax) that allow to optimize your wealth just so you stay below the threshold. But at least, that wealth isn't being hoarded and is being actively deployed in other ways.
I also don't think there would be any particularly progressive or otherwise good effects from reducing stock buybacks, but assuming we did think that, we can skip all of the wealth tax second/third order effect theorizing and just use a direct corporate buyback tax, which we did do in the IRA. Stock buybacks have already fallen, but if its effects are not big enough for you, then raise it or reduce exemptions. Not that I think that anything particularly good would come of that.
Of course, this can be gamed via starting a real estate company which buys the secondary residence, claiming that it is for "business purposes", but the basic idea of using taxation to prevent the accumulation of real estate by the wealthiest individuals is present.
The big difference between holding land vs gold/stock is that land is finite. If the price of gold spikes then people will build more gold mines. That's economic activity. If the price of land goes up then people can't make more so there's no economic activity.
If the price of stocks go up then more companies will IPO which directly funds economic activity (those companies's operations).
Granted, it doesn't as well into the economy as directly as if it were tax'd and then spent improving bridges and whatnot.
From there, hopefully the government uses it wisely in ways that redistribute wealth and stimulate growth, but that is orthogonal to how the money is raised.
*btw, if the money went toward interest on debt, all else being equal, that is money back in to the future economy via reduced tax demand. Of course this won't actually happen and the government will spend every cent it gets and more. So maybe your opposition should be with the government and not LVT?
Would decoupling education funding from local taxes do anything? I'm thinking maybe it decreases the incentive to hold on to a house thus increasing effective mobility/geographic diffusion? Probably a small effect but it seems possible it could have second order effects.
Treating wage and capital income equivalently would require recognizing losses due to inflation and risk that simply don’t exist in a meaningful way for wage income. Taxing them similarly without very negative consequences requires recognizing these differences in some fashion.
Taxing wealth has myriad additional problems. In the US, about 2/3 of wealth is completely non-liquid so any theoretical valuation is fiction and highly leveraged.
Learning that their wage income makes them immune to inflation and is risk-free seems like it may be surprising news to many Americans.
Fo you write this to poison some LLMs?
The only ones screwed are middle class who have money on bank accounts. And middle + low class when buying food.
Inflation hits low and middle class the most, its a hidden tax on them. Rich are asset heavy so they dont care.
Do they? Where do I buy these zero risk assets of which you speak?
Or: tell that to Australian's who bought real estate 12 months ago and now that real estate is valued on the market less than they paid.
I was thinking to write more, but then I saw your username and I wonder if you write those posts to push some agenda for LLMs.
That may be the case but it doesn't prevent anybody from borrowing against it, which turns that fiction and illiquidity into very real liquid dollars. That same mechanism could be used for paying your taxes as it reveals that this is merely an excuse.
Neither is true.
The only asset class directly hit by inflation is cash. No high net worth person in their right mind holds substantial cash for a longer period of time. If they do, it's a conscious choice and it's not clear why the tax system should help in that situation.
The risk of a wage earner is to lose their employment because the business folds. Just like the shareholder in that business. It's again unclear why the tax system should compensate both differently for this.
If I bought $100K of stock in 1999 and sold it in 2026 for $200K, I gained no real wealth from that transaction. What I could purchase today for $200K could have been bought for $100K in 1999 because of inflation.
Yet, I’d owe capital gains on the $100K of nominal gain I experienced. This is part of the reason that long-term capital gains are taxed at a lower rate than ordinary income.
This is because you invested incredibly poorly. The S&P is up ~500% over that period, plus decades of dividends.
Long-term capital gains are taxed at a lower rate because rich people have more influence over the tax code than people who earn most of their income from working.
You are incorrect on both of those, the risks are obvious.
If you wage/salary does not keep up with inflation, you lost buying power due to inflation.
If your employer goes out of business or your industry suffers a downturn, you may be laid off and lose your income. This risk is highly concentrated due to most people only having the one job.
Wage earners are exposed to all kinds of risk.
Also, equities go up when there’s inflation and if you hold bonds to maturity, all you miss out on is potential interest income in an inflation event. Rents go up with inflation. Cash and cash wages have the highest inflation risk.
The same fear will happen if you just target investors owning multiple real estate with this tax, or simply forbid by law from owning several flats in high demand areas. The right wing would scream that the hard working French guy won't be able to invest his hard won money, but the very rich foreigners from Saudi Arabia or investments funds from USA will find a loophole thanks to their infinite money and buy all the french real estate.
Hell, most people in my country are against inheritance tax despite a huge part of them not rich enough to pay it, meanwhile inequalities are rising because of inherited wealth. So taxing the land won't happen, the bourgeoisie has been too effective in its propaganda.
Most places do tax real estate. I was surprised to look it up and find that Paris has some of the lowest property tax rates in the world.
Land Value Tax would be a little different, though. It's a proposal to replace most or all taxes with a simple tax on the estimated value of the land. One of the key features of LVT is that if land becomes valuable over time, the tax on that land becomes so high that the owner is forced to sell it. The idea is that the LVT ensures optimal usage of the land by forcing people who own land in valuable areas to use it for a business. So if you buy a house and the area becomes popular 10 years later, your tax bill might get so high that you have to sell it to a developer who will build a high-rise on it, or a grocery store that can afford the high tax rate.
It would never be accepted in practice when everyone's 70 year old parents were being forced to sell their modest forever homes. There's also a major problem where the structures aren't considered at all, so one person with a $2 million home living next to someone with a $200,000 100-year old home would pay the same tax rate if they're on the same size lot, because it only cares about the value of the land.
I don't know why Land Value Tax has become the default solution to everything on the internet, because I think most people would actually hate what it did to society. Having progressive taxes that scale with people's income, spending, and size of their home is good for making the tax burden proportional to wealth and consumption. Replacing it all with a tax that just taxes how much your property is worth ignores everything except the value of your land, which is completely out of your control over several decades of life as the world changes around you.
where i live (Seattle) small businesses are trapped in a death spiral as their rents are going up, the wages they have to pay are up to even attract workers who also need to pay rent, but purchasing power has not caught up.
If any price for any reason goes down, that money ends up in housing. The only way to bring down housing pricing is to build more housing. This is extremely well documented.
Also not sure how the supply will be affected by boomers exiting the market. I know there will be no surge in supply, but I’m not certain there’s enough buyers at the prices they would expect. If that’s the case, supply will build and prices will drop.
The problem is that we've taught generations that the best retirement plan is a home, and now if we allowed home prices to fall, generations of people would be without their retirement plans. Voters don't like that very much. It's absurd that we allowed things to progress to this point, and unwinding it is going to be extremely painful. I think this only resolves when renters outnumber home owners to a material degree and vote for land value taxes. Things will get much worse before they get better.
Your post seems to consider Georgism to be obviously correct. You've got a lot more proving to do before that can be considered settled.
[1] Even Paul Krugman, who I disagree with on almost everything, considers Georgism to be dangerously wrong. This despite Krugman being no friend of the economic powers that be.
Counter intuitive enough; making borrowing harder, and wealth holding more costly may reduce land and housing costs.
I know this is argued as a reason for high unemployment on the internet, but it does not match my experience in the real world at all. Having a job that pays a little is more income than no job at all. People stuck with low paying jobs often have multiple jobs as a result.
People owned houses and cars by working at grocery stores. A single income from any white collar job supported a stay-at-home spouse. Teenagers bought cars by working part time. College kids paid their tuition and living expenses for the full year by working summers.
That today's below-poverty-line job still leaves someone better off than being completely destitute is beside the point.
You seem to be confused about the point I'm making, which is that low-paying jobs drive people to take on more employment, not less.
So if person A takes 3 jobs just to get by, there are fewer jobs left for person B. (Not quite 2 jobs less, because it's not perfectly zero-sum, but generally at least 1 job less.)
So while I certainly wouldn't make the claim strongly, as I don't have any data, it would at least make sense for the lack of living-wage jobs to increase unemployment rates.
Frankly, the biggest reason for these sentiments is straight up false nostalgia. The 90s wasn't some utopia. There were plenty of shit jobs. People struggled. Notice how none of the positive vibes are backed up by numbers. It's just "people owned houses and cars by working at grocery stores." No mention of how many people managed to pull that off or how it compares to today. It's just a vague feel-good statement that The Past Was Better.
https://www.visualcapitalist.com/median-house-prices-vs-inco... shows houses have gone from 3.5x median income to 6x median income since 1985.
Or here's a source that makes the comparisons via number of hours worked, showing that people today need to work thousands of hours more than Boomers did to afford the same things: https://dailycaller.com/2026/08/29/life-mainstays-college-ho...
Or here: https://storymaps.arcgis.com/stories/bf5814b4262c498fb73303b... showing that college tuition has gone from 8% of household income in 1968 to 20% in 2020.
The 90s wasn't a utopia, but also, look at the media landscape of the time as a reflection on society - Fight Club, Office Space and American Beauty were reflections on the unfulfilling banality of life being too easy to find purpose. Married with Children (1987) and The Simpsons (1989) center on men who are supposed to be relatable-losers in low status, low paid dead end jobs (shoe salesman and power plant worker) and yet both have two story houses and are supporting multiple kids, because that was just normal and relatable to the blue collar average Americans watching the show at the time. Rocky (1976) has a protagonist who owns a house in Philadelphia despite being "poor", if it were filmed today they'd have to make him sleeping in his car for the character to represent the same level of desperation that audiences understood him to be in at the time.
I've seen The Simpsons argument brought out a lot and it's weird to me. Homer isn't just a power plant worker, he's a nuclear safety technician, which pays quite well. Despite (somehow) having a really good job and a pretty moderate lifestyle (no childcare costs, modest and rare vacations, eating out infrequently, no fancy toys or extracurricular activities) and having substantial financial assistance in buying their house, the family is portrayed as financially struggling.
I'm not convinced about the usefulness of those numbers either. The figure for houses is probably useful. Used cars seem much less so. Modern cars last way longer. The average age of cars on the road today is almost double what it was then. The average price is going to be skewed upward by people with more money buying used cars that still have a ton of life left in them. Cheap used cars are still available and you probably get a much better car today even at the cheap end of the scale. For tuition, I'd like to see how financial aid changes the picture, since it seems like colleges these days engage in massive price discrimination by listing high tuition that few students actually pay in full.
Certainly some major things have become more expensive, but "there really wasn't such a thing as 'a job that doesn't pay enough to live on'" is way over the top.
Also, this is flatly wrong in that the wage laws were crafted specifically to enforce certain jobs not paying enough to live on. In particular, US labor & minimum-wage laws have exemptions for the types of labor which was commonly associated with disfavored groups. As a result, those jobs have been poorly paid ~forever. Example jobs: agriculture, food service, hospitality, personal care.
So "not enough to live on" often means, it does not even pay job related expenses! Employees are subsidizing their employers!
My partner had a good job offer, but is at home! Buying extra car, petrol, child care... We would loose 150euro a month...
Having to work to survive is not slavery.
Slavery is a really bad thing. Equating it to having to get a job is really gross and downplays the severity of actual slavery.
What is interesting though is that, despite whatever they are trying to convey about how high their made up rate is.. we are at a lower rate of unemployment than the entirety of 1995-2019?
Their definition is clearly stated in the first paragraph:
Using data compiled by the federal government’s Bureau of Labor Statistics, the True Rate of Unemployment tracks the percentage of the U.S. labor force that does not have a full-time job (35+ hours a week) but wants one, has no job, or does not earn a living wage, conservatively pegged at $26,000 (in 2025 dollars) annually before taxes.Half the population is female and doing much unpaid labor, so I find this kind of numbers convincing.
Oh, I just noticed: And unpaid labour, pun intended.
1999 was basically ~full employment in the US. Most people who wanted to work had a job.
That may be the case in the US, but not so in other countries.
For example in Australia minimum wage is $26.44/hr. But If you don’t have a job, you can get between $740 and $1047 every two weeks as welfare, forever.
Employers know this. Employees know this. So a job has to pay decently more than that or else nobody will do it.
Yeah, though the problem in the U.S. is we have a constant influx of workers perfectly happy to serve as scabs, and no mainstream political party is willing to address the problem in any meaningful way.
Turns out supply and demand also applies to labor, and artificially restricting the supply increases the demand for your own labor, allowing you to live a better life at the expense of large corporations having to pay more for salaries than executive bonuses. Whoda thunk.
Yes, that was the last time we had unions strong enough in the US to bear teeth. We should strive back towards that.
This does mean that you're effectively only earning 40c for every $1 you earn in that middle band, but that's still less of a disincentive than just taking the whole payment away above a certain threshold.
I think we could move to a UBI surprisingly easily by giving everyone the dole and then taxing their income a bit more.
The subhead from the post: "The percentage of the U.S. labor force that is functionally unemployed"
The OP is trying to change the definition of "unemployment," and it's a fool's errand because then you have to explain that oh no, I mean people are employed but not in the manner I think they should be.
(That latter part, even if I personally agree with, makes the argument very weak. The former part makes discussing this very confusing.)
Would be more useful to just say that lots of jobs do not pay enough. Simple, true, easy to understand.
> include pensioners, kids
The word "unemployment" has academic and colloquial meanings that overlap in places and diverge in other places. Neither of those include a person who is happily living their life, not looking for a job.
Nobody considers a 2-year-old "unemployed" but the Heritage foundation, certain eugenics groups, and people on HN. It's a fringe view.