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Comment by jdjdndndbd | Hacker News Reader

Random thought, would be it be good to extend land tax to use of all common public goods. E.g. radio frequencies, mining, water, CO2 pollution. Things you own, licensed or consume that take from the common good. Obviously this need constant tweaking E.g. as new tech makes different things valuable.

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Yes, it's been suggested that all scarce inputs to the economy should be taxed. And yes the idea of Georgism is to let market set the prices and tax based off of that.

It does become complicated when the scarce inputs are things like highly specialized labor. Georgism wouldn't tax that monopoly, though our current systems (progressive income taxes) do. Many people would want a system which penalizes businesses for buying up e.g. all the veterinarians in a city and charging monopoly prices.

> Many people would want a system which penalizes businesses for buying up e.g. all the veterinarians in a city and charging monopoly prices.

As powerful as taxes are to create change, you don't need to use them to solve every problem out there.

Georgism is not about scarcity, it's about economic land: inputs to production which are fixed in quantity, and that you can't make more of. This is a very different characteristic than scarcity, because many scarce things can be increased, and should be if they are needed.

Taxing specialized labor goes against that spirit, because specialized labor can be created. And in fact taxing the labor would result in less of it being there, the exact opposite of the optimal result.

Yes, the right generalization of Georgism is the taxation of economic rent in its various forms - something which George himself opposed.

> something which George himself opposed.

Do you have a source on this?

> economic rent

What's the definition of this term?

Basically money you make by owning some legal right rather than by doing something productive

> Georgism is not about scarcity, it's about economic land: inputs to production which are fixed in quantity, and that you can't make more of.

I think people get tripped up on this specifically because a growing demand for something with fixed/inelastic supply will naturally tend to cause that thing to become scarce given enough time, and it's that scarcity as applied to land that's making Georgism look more and more like a good idea.

Doesn’t the veterinarian own their own skills, after having spent decades in school to learn them (and perhaps being saddled with student loans to do so?)

What if they just moved? Or should we have US-style global taxes following them around even then?

Monopoly busting doesn't need to be solved by the tax system, right? Isn't that a separate issue?

Although, maintaining a monopoly by owning land becomes more difficult with a LVT. It theoretically becomes easier for a new vet to find a place and setup shop in the city, and then the Monopoly is busted.

Randall Wray frames this as “tax bads not goods”. In other words: don’t tax payroll, we want companies to hire. Don’t tax labour: we want people to work. Don’t tax company profits: we want profitable companies. DO tax pollution. DO tax interest income: we don’t want people to get money for doing nothing. DO tax resource usage. If your houses are too big tax house volume. If your land is being banked tax vacancy and so on.

Interest income is not taxed under Georgism btw, except for income on land speculation.

If you buy company x, restructure the business, start turning a profit, then sell the company -> that income (capital gains under current system) is untaxed in Georgism

If you buy an empty lot, wait 10 years to sell it to someone at a higher price, then all that profit is taxed (before it is realized too).

You're kind of describing two different ideas: pigouvian taxes, and taxing The Commons.

What both have in common is that economists from all different schools of thought widely agree that they're the least distortionary taxes.

This is Norway's approach with Hydropower and Petroleum: https://blog.landeconomics.org/p/book-review-the-natural-div...

The good news is that as different things become valuable their value changes, I guess? So if radio frequency stops being useful, the LVT put on it also drops pretty hard.

The bad news is now you have to assess the value of a lot more things in order to do this (the value of clean waterways in a certain state, the value of IP taken away from the common culture) that may not have a direct market value.

How does one even put a direct financial value on clean water, clean air, lack of noise pollution, etc.?

These things have different values to different people. While most everyone wants them in some form, there is a huge spectrum between “it won’t kill me this month” and “living in pristine Mt. Fuji”.

Should private companies be allowed to pollute sparse remote areas with no population?

Does it have a financial value if nobody goes there?

I mean — valuing things is not always that hard: how much are you willing to take to go without?

Yes, pricing negative externalities is a good idea. Unfortunately some are more or less expensive to price/enforce

Here in Germany there was a bidding frenzy for 3G frequencies. The end result was simply that 3G was more expensive than in other countries and reception was worse.

Other replies supporting taxing externalities and scarce resources are correct, but it can be generalized as taxing undesirable behavior to disincentivize it.

The generalization I would use is that governments should tax any scarce resource based on the amount of revenue it should produce if used effectively, rather than the revenue a given consumer can actually produces. Whether that is land, radio spectrum, or clean air.

“Undesirable behavior” is overly broad to the point of being actively misleading, and gets you into sin taxes. smut or drugs are not the scarce resources anybody is talking about here.

Not misleading. Rent-seeking is an undesirable behavior, and it's the primary behavior a land value tax targets. Hoarding limited resources is an undesirable behavior. Making products that have negative environmental impacts is an undesirable behavior.

But that is what the land tax folks are doing. They want dense cities and transit. They tax the "undesirable behavior" i.e. parking lots and lower density usage.

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