[clairity]

> "In particular, the taxes on property ownership are supposed to capture the entire value of renting the property."

No. once again, invariably, multiple people make this mistake in every thread about the land value tax.

'economic rents' are not the colloquial 'rent' we pay for housing we don't own. economic rents are UNproductive, meaning simply income produced by ownership itself, rather than in the productive delivery of service (in this case, housing). LVT only seeks to tax away that unproductive part (economic rents). the productive part would include the costs of mortgage(s), insurance, utilities, upkeep, and a small profit (aka risk premium).

[TimPC]

Agreed. This is an oversimplification. We'd attempt to tax away the value of the rent of the unimproved land which is less than the value of the improved land.

Of course, taxes will actually be set in accordance with what the government needs for revenue since this is supposed to be a single tax. Elsewhere in the thread I've tried to estimate Georgist land taxes based on current revenue needs and found them to be quite high.

[clairity]

LVT has nothing to do with improved vs. unimproved land. both improved and unimproved land have productive and unproductive aspects.

LVT is solely targeted at economic rents. this is the key to understanding LVT. otherwise, the idea that it's the most economically efficient tax will not make sense, and the tax itself will not seem to make sense.

on the other hand, what the government will do tax-wise is political, not economic. constitutionally, the tax cat is out of the budget bag, so we have little hope of restraint there. politicians will always try to expand government because it benefits them, no matter what rhetoric they spout.

(i.e., taxes are high because politics, not LVT.)

[geocon]

One of the nice things about LVT is that it aligns those incentives though, since what increases tax revenue the most is investment in public infrastructure and services. It's the Henry George Theorem at work: https://en.wikipedia.org/wiki/Henry_George_theorem

[clairity]

that's assuming politicians are compelled at least a little bit by the public good. unfortunately, our politico-economic systems have become more and more captured by moneyed interests, insulating politicians from those wider incentives.

but to be fair, that's not unique to georgism. we need to solve for that problem generally.

[imtringued]

When politicians want more money they often raise taxes because passing good policies is difficult and the relationship between their policy and tax revenue is not obvious. With a land value tax politicians have a very easy way of increasing tax revenue, do something productive.

The countless times a government has cut important services and investments to get a short term cash influx have always lead to misery. Greece ended its public healthcare for the sake of austerity and now they are further in debt. Operating a hospital should be something that is a revenue stream for the government (through land value taxes), not a burden to be distributed across people through taxes.

[brightly-salty]

I think it would be at least partially solved by reorganizing government to be based upon subsidiarity :) but yes, this isn’t necessarily a question which political economy can or should solve

[hushpuppy]

> 'economic rents' are not the colloquial 'rent' we pay for housing we don't own. economic rents are UNproductive, meaning simply income produced by ownership itself, rather than in the productive delivery of service (in this case, housing). LVT only seeks to tax away that unproductive part (economic rents). the productive part would include the costs of mortgage(s), insurance, utilities, upkeep, and a small profit (aka risk premium).

Except the LVT premise is bullshit.

Lets say I have a house I rent out for 1800 dollars a month. About 500 dollars of that will go to taxes (income, property, etc).

Out of the rest I take 600 dollars and am in the process of fixing up two more houses that I bought from a tax sale that were made unlivable through crackhead squatters.

So that leaves me about 700 dollars more. Out of that I need to save probably about 300 dollars a month to cover costs associated with owning homes. Such as the need to replace roofs or water heaters or hire arborist to take down dying trees before they destroy my neighbor's property, etc.

Then that leaves me with 400 dollars that I reinvest in other companies. So it goes to doing thing like buying bonds, etc.

The only thing that is "unproductive" here is the money being paid to the federal governemnt to go murder brown people half way around the world.

The entire intellectual basis of this "Georgian" stuff is completely bogus. The theories about monopolies are wrong. The theories about how to solve the tragedy of the commons is wrong as well. The economic efficiency theories are wrong, etc etc etc.

[TimPC]

So you say you have $1000/month out of $1800 that are unrelated to providing rent in the unit being rented and you feel there is no possibility that you're capturing some sort of economic rent when you have more than 50% profit margin on the rent you charge. I think something is bullshit but it's not the economic theory.

[smeeth]

You appear to be arguing that if you spend income in a productive way then the income was productive income.

That's simply incorrect, it's not how economics works. For example, if I stole $2000 from you and used it to fix houses/invest it would not magically become productive income.

The comment above you is pointing out that excess income a landlord makes because people are willing to pay a premium to lease a scarce or rare good they own doesn't contribute to the rest of the economy in the same way selling a hotdog does. Ergo, unproductive income.

[imtringued]

One of the absurd things about our modern economy (it's actually a recurring problem) is that we keep spending more and more on the same on already existing values. People complain about ever increasing debt and borrowing but most of that money isn't even being spent "into" the economy, it's just used to buy land from rich individuals.

The reason why this is not "productive", is pretty straight forward. It's unproductive because nothing is being produced. We are selling what's already there long before humans existed.

[geocon]

Really? Care to tell that to the various Nobel laureate economists who have endorsed land value taxation? Do you really think you understand economics better than Paul Samuelson, Milton Friedman, Joseph Stiglitz, William Vickrey?

[klyrs]

Regardless of my vehement disagreement with GP, you're attempting an [appeal to authority](https://en.m.wikipedia.org/wiki/Argument_from_authority) which is utterly unconvincing.

[User23]

Compounded by the fact that there are no Nobel Laureate economists.

And that those supposed authorities have been teaching absolute nonsense like loanable funds.

If you want to learn about the economy, the only useful option is to look to working market participants. Some rando at the fixed income desk has forgotten more about how the economy works than those pompous frauds.

[imtringued]

Hey, I like loanable funds in a 100% reserve system with demurrage but that is not the world we live in

[8note]

By comparison to alternative housing, hotels, the housing rent is unproductive other than repairs and getting contracts.

Once you have a lease, it's unproductive as it comes, purely getting money for owning something