[larsiusprime]

Two things:

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

Not true. Only the unimproved value of land is meant to be taxed. This amounts to a complete exemption on taxes on buildings.

The current proposal that is often on the table is not to go for classical 100% Georgist LVT, but to simply collect the exact same amount of property taxes we do now, but to shift the burden off of buildings and onto land. This can be done right now with existing property tax regimes. The burden would fall mostly on underutilized land, parking lots, and vacant lots in city centers, where the lion's share of land value is concentrated. Proposals for this sort of reform are in the works right now in various US cities.

If you'd like to see a practical policy paper on the subject see here by Tideman, Kumhof, Hudson, and Goodhart (the Goodhart of Goodhart's Law, by the way): https://voxeu.org/article/post-corona-balanced-budget-fiscal...

2) Georgism is not just about real estate. It's about properly dealing with scarce economic assets that can't be created and which invite speculation

Norway's sovereign wealth fund is an extremely successful example of applying Georgist principles to natural resources, for just one example:

https://progressandpoverty.substack.com/p/norways-sovereign-...

[TimPC]

My default reaction to 1) is that I dislike it. I feel like the incentive to labour to accept the tax of unimproved land value instead of property tax is the removal of income and sales taxes that accompany it. Taxing unimproved land value instead of improved land value in a system as close as possible to the current one feels like a massive wealth transfer from homeowners to condo developers. As it is, condos represent a problem for many communities in that they are often taxed at lower percentage rates and have a lower market value than houses. This means communities consisting of more condos have lower tax revenue per capita compared to communities consisting of more houses. Suburbs resist densification because the decreased revenue per capita generally means declining services. I think this a fundamental cause of NIMBY that largely gets ignored.

[geocon]

I think you have a mistaken view of who is actually making money in this equation. Developers do not make all that much money from building housing, which is actually a productive contribution to society. Homeowners, on the other hand, make hand over fist by simply sitting on land absorbing rents: https://pbs.twimg.com/media/EyJN_g3UUAIW0f0?format=jpg&name=...

https://www.wsj.com/articles/homes-earned-more-for-owners-th...

Secondly, suburbs are drastically subsidized by denser development. They resist densification because they don't want to pay their fair share. https://www.strongtowns.org/journal/2020/4/16/when-apartment...

[TimPC]

I think it's misleading to measure things in revenue per square foot. Most government services aren't provided based on the number of square feet but rather based on the number of people. The per capita revenue for denser developments is lower than the per capita revenue for single family housing. When you get to rural densities you have issues of providing services because of the lack of scale of communities but suburbs are generally dense enough to afford services like police, fire, community centres and hospitals.

[adgjlsfhk1]

the counter examples are things like roads, pipes, wires, and Public transit which make to up a high percent of city and state budgets and scale with density.

[TimPC]

These examples are fair. At the provincial level Transport, Pipes and Wires all are small enough expenditures to not warrant their own category breakdown in the budget and are lumped into a 14.6% of budget other category.

At the city level it's tricky because the breakdown my city provides in the budget separates into capital and operating rather than other categories. From what I can tell from the 50 page report, water pipes cost approximately 25% of budget and transport costs approximately 5%. Wires aren't listed in enough details to get an estimate.

My best sense from the numbers in the breakdown is the expenses for my suburb breakdown into roughly 60% per capita items, and 40% per area items. So 60% of our budget gets more expensive as you add people with low per capita taxation and 40% gets cheaper as you add more density.

[ericd]

How old is your community? Because road expenses are relatively low when they're new, but many communities aren't being fiscally responsible enough to budget appropriately for road maintenance.

[pyradius]

Yep the suburbs are a money-loser for governments as noted in https://www.youtube.com/watch?v=7Nw6qyyrTeI

[TimPC]

Suburbs are a money-loser for governments if you allocate income tax revenue at the location of the job. That isn't really a fair allocation though, as suburbs are part of the reason professionals take jobs in big cities. If you either average the income tax revenue between where someone lives and where someone works or put it entirely where someone lives suburbs easily pay for themselves.

[pyradius]

Alas there is no relationship between an income tax and personal consumption of spatial services. There is absolutely no coherent reason to do as you suggest, and every reason for the land to pay the cost of delivering those services, along with the rest of the rental value of land.

[TimPC]

I’m not suggesting altering the flow of tax money. I’m suggesting changing how it’s measured when you determine which communities are sources and sinks. It’s very superficial to say a city with a job generates 100% of the income tax from that job when the city doesn’t house the person and provides barely and services to that person or their family. If you measure things that way of course cities are the only tax sources. But it’s a bad way to measure things.

It’s more reasonable to measure where taxes are coming from by some combination of where people live and where they work. If you do this then suburbs are not tax sinks. This isn’t saying you change how you distribute tax revenue it’s only saying you change how you measure where it comes from.

[imtringued]

That's a recipe for corruption. If a politician receives no strings attached income taxes even if those are intended to be spent to improve location and pay for infrastructure, he is sure to spend them as if they have none of those strings attached.

[TimPC]

I never said to give the income tax to the suburbs. I said the model of whether or not suburbs are tax sources or tax sinks depends on how this is computed. People create models where cities that swell to double the size in the day generate all the tax revenue and every other community is a financial burden. This isn’t saying cities get all the money. I’m just saying how you measure tax generation has big impacts on which communities generate more taxes than they consume.

[bombcar]

The density difference between many suburbs and many so-called urban areas isn’t that great sometimes. The main defining aspect of suburbs is the lack of much besides housing.

[anamax]

A shopping center without parking is almost always less valuable than one with parking.

Yet, Georgists think that a shopping center without parking, one with parking, and a parking lot should all be taxed the same.

[colinmhayes]

Taxing people for doing good things disincentivizes people from doing good things. Taxes shouldn't be a punishment for being successful. Georgists think real estate should be taxes based off the unimproved value of the land, what the owners do with the land is up to them, but if they don't use it well their taxes will put them underwater and someone else will make better use of it.

[anamax]

My point is that parking lots can easily be the best use.

[imtringued]

Okay, let's assume land is expensive and you do need the parking lots. Georgism just tells you, please use the land more efficiently. Underground parking or a multi story garage become profitable as they reduce the amount of land being used and therefore reduces land value taxes you have to pay. Ethical tax avoidance!

[anamax]

You do know that you're substituting expensive parking for cheap, right?

However, you are demonstrating that Georgist "efficient land use" is not particularly desirable. (Moreover, "efficient" land use is rarely that important.)

Georgism does push towards a monoculture and a particularly horrible one at that.

For example, Georgism punishes someone who puts some open space between buildings, even though open-space is clearly a good thing.

As I wrote previous, Georgists confuse having an equation that they can "optimize" with having a useful idea on how to allocate resources in the real world.

Yes, Georgism lets you do some calculations, but that doesn't imply that doing those calculations is worthwhile. (This is a problem with economics as a field.)

And, no, the "witticisms" don't make your case. They actually argue that Georgists are dangerous fools.

[colinmhayes]

If parking lots are the best use the LVT will be low enough to be negligible. If the LVT is causing the owner to not be able to afford parking lots the area needs more buildings and less parking lots, even if that's just a parking structure.

[anamax]

> If the LVT is causing the owner to not be able to afford parking lots the area needs more buildings and less parking lots, even if that's just a parking structure.

In what universe is "fewer parking lots" the solution to "not enough parking lots"?

As Orwell wrote, “There are some ideas so absurd that only an intellectual could believe them.”

[colinmhayes]

I mean tbh we just have a paradigm difference. IMO there is no such thing as not enough parking lots. They're wasteful eyesores that encourage a horrible externality.

[imtringued]

You mean Georgists think that taxes on all of those should be $0? Yes, that is the entire point of Georgism, only the land is taxed because land can be used for anything and if the land value is higher than the shopping center can afford, then it means people want something more valuable than a shopping center there.

[throwaway4aday]

> the land value

I think this is the key issue that gets glossed over. Who decides the land value? How is that decision arrived at? Is it a purely bureaucratic process where the community has no say? Is it set at a federal level where it will likely be completely disconnected from the reality of a particular municipality?

A lot would hinge on the answers to these questions and I'd take a bet that if this were ever implemented it would be done wrong and would result in many unforeseen negative outcomes.

I think we should stop trying to revive outdated 19th century economic theory and actually put in some work to create a modern one that accounts for the age we live in.

[brightly-salty]

Common solutions include appraisal (like property taxes are today) or a Vickrey auction, where we auction off the land, and the first place bidder gets it at the price of the second bid.

[throwaway4aday]

Ok, but my question was for more detail on how such an appraisal would work and then what the second order effects would be. For something this big we need to think through several generations worth of downstream consequences. We already have many examples of how such revolutionary economic changes can lead to disaster and mass death when people get caught up with the spirit of the idea and don't sit down and do the hard math to work out all of the details ahead of time.