[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