LVTfan

Your possession would be just as secure as it is today. If a huge city grew up around it, your property taxes would rise over time, and at some point, your single family home would be surrounded by skyscrapers, and no longer be using the land effectively. But if you were wedded to that house in that location, and had the funds to continue to pay your property tax, or your land value tax, you could stay forever. No one would stop you.

Occasionally one sees a diner in a skyscraper neighborhood. Under LVT, their incentive would be to find another place to conduct business, perhaps on the 1st floor of a taller building, and let the site be redeveloped to meet current needs.

To the degree that Coca-Cola is harming people, they owe something. Coke likely occupies a very valuable site in Atlanta, and perhaps has O&O bottlers on locally valuable sites, near centers of population, served well by transportation infrastructure that brings ingredients in and finished products to the customers. When communities start collecting the full value of those sites (and stop burdening the buildings and equipment with taxes) who will be harmed?

Should Coca-Cola be taxed on its good will? or for adding to people's satisfaction?

The biggest promoters of Henry George's single tax were business people who saw a way to a more just society in which all could prosper. But there were others -- railroad, steel, other monopolies -- whose continued position depended on keeping their monopolies, and they were less than enthusiastic about the concept.

Who owns the land in the central business district of most cities? Often it is the corporations that use it, but frequently it is trusts of people long dead, whose heirs just keep enjoying the ever-rising land rent. They didn't create the value. The corporations should pay for the value of the land they use; so should the trusts who collect the land rent of our most valuable sites.

And the value of Warren Buffett's holdings might be affected, but the freer market it will create will provide opportunities for all sorts of entrepreneurs to work their business plans.

And recall the data on how concentrated stock ownership is.

And as Adam Smith pointed out, it is there, and visible. It can't be hidden, can't be spirited out of town or offshore during the dark of night. You don't even need to know who it is that owns it; as long as they pay their land value tax, they can remain anonymous.

You might search for the term "unearned increment." It was a common expression to point out what people who reaped but did not sow receive due to our failure to collect the economic rent.

One person's unearned increment is another's — and likely many others' — lost birthright. Who is entitled to it? All of us! How do we implement this? Land value taxation.

Paying more than 30% of one's income for housing-related expenses -- not just rent and utilities, or PITI plus utilities plus maintenance -- has become almost universal.

It is a form of sharecropping.

And then we must pay the dumb taxes on top of it. Sales taxes, wage taxes.

Taxing land value fully would bring the purchase price of a home down to the depreciated value of the structure plus something for the lovely mature landscaping. Instead of a downpayment on the land and building, one would, in effect, be purchasing the building from its current owner, and taking over the stream of location-based payment to the community. No down payment on that. Mortgages would be smaller, and shorter, and the sum of the mortgage payment and one's land value tax would be a lot less than the current sum of one's housing-related costs plus the dumb taxes. If one wanted to move from one city to another, selling one's home would be easier because more people could afford it, and in one's new city, one could afford a similar home, because wages in the new city would support the higher tax on the higher land value there.

Today, moving from Peoria to NYC or Silicon Valley is a whole other ballgame.

Phase this in, removing the dumb taxes, one after another, and collecting an increasing share of the annual value of the land, and our children will have better opportunities to thrive.

A carbon tax and a tax on cigarettes are very consistent with the single tax. They're taxes on externalities imposed on the community.

Solar energy is an infinite resource, so there is no reason to charge for it, but for scarce or finite resources, pay for what you take.

The assessor's job is just to determine the value of the various sites. It is said that a group of locally knowledgeable people could sit around a table with a large map of the community, and they'd quickly reach a consensus about what is the most valuable site in the city. And then they could go block by block determining the relative value of the various neighborhoods. From that, a land value map could be derived, and likely it would get a few tweaks from the community.

As Bushwick becomes popular, because of better transit, or community amenities or whatever, yes, the unimproved value of the sites served by them go up. A school develops an excellent reputation? Up go the land values. (Some say that in most suburban towns, the superintendent of schools is the highest paid employee, in part because s/he can influence "property values" -- more precisely, land values -- more than any other single person.)

My first acquaintance with Elizabeth Warren came from a book she wrote about 2003, whose title was something like "The Two Income Trap: How Middle Class Parents are Going Broke" and in part it was from seeking the best public schools for their children, and paying a huge share of their income for it, seldom to be matched by single parents.

Frederick Law Olmsted realized early on that even a huge project like Central Park could be funded from the increase in land value it created in the neighborhoods surrounding it.

May I suggest that if you've not read Henry George's thought yourself yet, you take some time with them? There are two sections of the Schalkenbach site devoted to them -- first, the books, articles and speeches themselves, and then an introduction to HG's thought, with perspectives from a number of writers, mostly recent. With the latter group is a short version of Progress and Poverty entitled "Significant Paragraphs."

His vision and clarity are remarkable and inspiring. 120 years ago, his ideas were widely understood throughout the English speaking world. (There were also a lot of hilarious misinterpretations by people who hadn't read, as is often the case.)

And if you explore a bit, you'll find some good websites and blogs devoted to his thought.

And those who are late to the game and buy a piece of land comparable to their entrenched competitor who bought years ago are paying multiples of the property tax.

Those late to the game who decide to rent are paying rents based on current land values, but their landlords, who may have owned the property for 10, 20, 30, 40 years, are paying to the community based on their purchase price. It becomes a form of sharecropping. Landlording can be very profitable, especially in California, if you own or inherit property from someone who bought it decades ago. Cui bono?

Most of his stock holdings occupy land in very valuable places, and aren't paying much in property tax.

The principle is to pay for what you take, not for what you make. His modest home, likely on a modest lot, in a not-huge city, is worth little.

For a while, he had a couple of places in Malibu, and he told the WSJ what he thought of Proposition 13, keeping the taxes ridiculously low. Arnold Schwarznegger told him to go do pushups. Buffett saw the injustice.

The radio spectrum -- those airwaves we say belong to the American people -- should be treated as our common treasure, not purchaseable by corporations. Lease them out for, say, 5 years or 10 years, and then put them up for bids again.

We all need clean air. We all need clean water. Those who use lots of water are usually charged by their local utility for what they take. Some farms and water bottlers deplete the local resource, and they ought to be charged for what they take from the commons, if the carrying capacity can't handle it.

Supermarkets in Manhattan are amazingly inventive in providing a lot of groceries in a space whose smallness would be unimaginable in suburbia -- and is difficult to "social distance" in today.

In the city, that supermarket woudl not be a single-story building; it would have a 20- or 40- or more story building overhead, and all those users would share the land value tax.

And the building would not be taxed, so no downside to fully developing, and regularly redeveloping, the lot to serve human needs.

Were we to treat Land -- sites, and natural resources, including clean air, clean water, and things like geosynchronous orbits, fisheries, electromagnetic spectrum -- as our COMMON treasure, our source of natural public revenue, instead of something to be privatized, our wealth concentration problem would be much much smaller.

Instead, we permit individuals and corporations and trusts to privatize the value and we tax it only very lightly --- they get to keep the lion's share, just as if they made it themselves.

It isn't the AMOUNT of land they use, but the value of what they use. An acre of good farmland might be $2500. An acre in Manhattan might be $250 million and up. The rental value of the land is proportional to the value of the land.

And when the Single Tax was conceived, it was already abundantly clear that urban land values were far above rural land values, and rising much faster.

Few tech companies will want to locate where there isn't already broadband, good schools, cultural amenities, a range of interesting restaurants, and ready pool of the talents they need, not to mention infrastructure such was water, sewer, medical care, etc. And to the extent that they create jobs in such places, they will probably be quite welcome.

How much of the rent on your apartment is due to its location? might be 10% in a small town, but it is likely more like 50% in most cities (unless the landlord is providing a lot of services -- doorman, flowers in the lobby). In his land value tax, he'd be paying for the value of the site. In a highrise, that value gets used by dozens of housing units in each column.

You wouldn't see a tax bill because you're not a landowner. But you'd be paying your share via your monthly rent. And your rent would not rise: your landlord is already charging what the market will bear.

And if there is a vacant lot next door, its owner would be motivated to build on it or sell to someone who would. That would likely reduce the rise in your monthly rent.

An acre of farmland might be worth $2500 or $5000, and that land has been improved by clearing, draining, fencing, etc. (improvements done by the current or an earlier owner or his tenant). LVT is based on the UNIMPROVED value of the land, so if there were an as-yet-uncleared acre nearby, it and the acre of farmland would be assessed at the same value.

An acre in midtown Manhattan might be worth $250 million to as much as $1.25 billion, before we look at the building that is on it. (An acre is a big lot in Manhattan -- a whole city block.) A tiny lot in Manhattan sells hundreds of thousands of dollars, due to its location, which the seller didn't create. The old building on it may be worth nothing.

And the 100x100 lot with a new hotel on it and the 100x100 lot next door with just a parking lot, or maybe just a chain link fence, would be assessed identically. The unimproved value of the land.

Farmers would pay little under LVT. In fact they'd be advantaged, because their buildings and equipment would not be taxed. The owners of sites in our major cities would pay in proportion to the value of their site. And frequently the land is already leased to someone who puts a building on it, which gives a sense of the value of the land at the time the lease was negotiated -- a value which is not always made public.

And why would we want to tax wages, or sales, if we could obtain from the value of land much of the revenue we need, while providing a boost to the economy via removing the deadweight loss of dumb taxes?

The valuation for insurance purposes is generally not the current, depreciated value of the building, but the cost to rebuild, at today's material and labor prices, and with modern materials and systems.

A 50 year old building, with old systems, may be fully depreciated, but if one had to rebuild, one would need far more than the current building is worth.

When one buys a home with a mortgage, the bank requires an appraisal. In some places, the forms don't even break out land value from building value, or they do it badly. An appraisal merely compares the subject house with others that have sold recently in the same area. Better location? $15,000 more (or, in California, $100,000 more) Inferior location? subtract $15k or $100k. 1 more bathroom? Add $5,000 (CA: might be $5k or $50k) new kitchen vs 20 y/o kitchen? Add $10k, $50k or $100k, or more, depending on what is typically spent in that neighborhood. For each "comparable" add up all the pluses and minuses, and add that to the transaction price for that property. Average those, and the subject house value is estimated. Land value is in there, but not explicit.

California has assessors, too, who, after a property has sold, update the assessment on it to equal the transaction price. Some goes to land, some to the building. (check out listings at realtor.com, and fully expand the property history info. Notice when the previous transaction was, and look at the increases. They are in reality mostly land value. Buildings don't appreciate. Land rises and falls in value --- mostly rises.)

But appraisers and assessors are very different.

Every teardown provides a clear picture of the land value for that neighborhood: the transaction price plus the cost of clearing off the old building. The similar sized lot next door is worth just as much. And the value of whatever improvement is on it is the difference between what the building-plus-land is currently worth, and the value of the land -- pretty much the depreciated value of the existing improvements.

Map these values, and you have a pretty good tool for good land assessments. And for lots a wider or narrower, or deeper or shallower, there have been very usable tables for over 100 years. NYC was doing this in the first decade of the 20th century.

A tax on land values asks us to pay to exclude others from our site. In the middle of nowhere, that price can be $0. On valuable sites, it can be quite high.

Today, a lot of city land is leased, and the tenant pays the landlord for the use of the land. The higgling of the market sets the price. There is a lot of revenue potential there, and collecting it for public purposes doesn't take from anyone something he created.

And that can't be said for sales taxes, or wage taxes, or taxes on buildings.

and so often it gets invested in land, which includes not just the sites under our feet, but vital natural resources, the kind that are finite in supply.

They generally locate where they can draw on a pool of talented people, and those people are drawn by social amenities, good schools, good infrastructure. All those things contribute to land value.

I suppose I should mention the title of the Michael Kinsley article in Vanity Fair: "The Obscure Economist Silicon Valley Billionaires Should Dump Ayn Rand For"

And if you're curious about the range of people who have taken notice of George's ideas, search on "quotable Nobels" and from that page, see "quotable notables."

fair enough! and not easy. My grandparents, remarkably, were subtle and much more patient than I am.

I do not believe that HG's ideas will solve all our problems, but I do believe that recognition of what he saw and enactment of his recommendation will put us on the road to solving a lot of problems that are generally regarded as unsolvable -- housing affordability and supply, poverty, sprawl, pollution, water shortage, wealth concentration, money in politics, better cities among others. Necessary, though not sufficient. And it is frustrating that so few people are even remotely familiar with the ideas.

Two of my favorite recent books on the subject are "The Mason Gaffney Reader: Essays toward Solving the Unsolvable" and Walt Rybeck's "Re-Solving the Economic Puzzle."

I think there are solutions, and want others to have the chance to consider them!

I moved there because it was lovely, and was consistent with something I have long felt strongly about. My late grandparents were lifelong Georgists, and never mentioned the Ardens to me. (I'm a late-bloomer -- I shared their perception of the problems, but kept thinking there had to be another way to solve them; when I failed to find it, I looked more closely at what Henry George had to say, and found it very persuasive.) For a recent article, look at Michael Kinsley's, in the September Vanity Fair. But people from across many spectra embrace George's analysis and George's remedy; it is a third way, coming out of the traditions of classical economics, not the neo-classical economics that is widely taught today.

George's most famous book was entitled "Progress and Poverty" ... it was dedicated, "to those who, seeing the vice and misery that spring from the unequal distribution of wealth and privilege, feel the possibility of a higher social state and would strive for its attainment." Its subtitle is a mouthful:"an inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy."

The book is quite analytical, a logical analysis. If you want to see where it is going, jump to the final "book" before you read the rest.

Or you might start with a collection of essays entitled "Social Problems." They still read well today, and, among other things, show why a Constitution written in the 18th century simply can't be frozen in time, and needs to be reconsidered in light of 21st century realities. Some of my favorite quotes are from "Social Problems."

Both books are online and at Amazon or schalkenbach.org; there is also a fine modern abridgment of P&P, and audio is available at hgchicago.org.

As a part time resident, and a passionate Georgist, I love the Ardens. The three villages function separately for governance, but socially they're one, and there is a lot going on. The history is fascinating. (If you have access to newspapers.com, read it chronologically. I'm still working through it.) If you're in the area in early September, don't miss the Arden Fair.