[beaeglebeach]

I've always found it interesting HN is so focused on Georgism given it's leanings. It works out fine for hyper capitalists who eek out highly efficient use of land for stuff like a steel mill but is arguably devastating to the average joe who uses it for economically unprofitable uses like a place to let his toddler or dog play.

Property tax is definitely more preferable to the prol and even programmer wage slave, who can eek out low taxes on a larger leisure plot by not improving it and won't be forced to drill for oil or something to pay the George tax like it held a higher averaged common value.

In many senses property tax is progressivism while Georgism land tax is a hyper capitalist steamroller that cares not you've barely been able to improve the land with a decrepit mobile home and meanwhile taxes the baron with the gold plated loan shark palace the same.

[refurb]

I think Georgism has three main pitfalls:

- Under the premise that a land tax should extract all value from the land leaving the improvements to the owner, it would expectedly be very high land tax near urban centers and very low taxes in rural areas. In order to maximize the return on urban plots, the builder is incentivize to build the smallest units possible in the greatest quantity. This is great for young professionals who dig living in studios, but would make family-sized housing of multiple bedrooms extremely expensive.

- What do you do for all the people who will see a massive increase in taxes? Force them to sell? I'm pretty sure that's political suicide for any politician. Or do some sort of exemption like Prop 19 al la California? Now we're back at square one.

- Who decides what the productive value of the land is? Presumably someone will need to set it, as there is no objective way to determine it (like there is with the value of raw land). Nor would it stay static over time, since improvements around a property, increase the productive value of the land. That's a huge opportunity for politics to come into play to game the valuations, and create special exclusions to buy votes.

And if you think about it, we have a quasi-land tax already in place. In CA, the tax rate is static, and most of the value of a house is in the land anyways. So owners (ignoring Prop 19) are paying a property tax based on the value of the land. I do recognize it's the market value of the land, which is different than Georgism which is the productive value of the land.

[ethanbond]

A land value tax is not on the “productive value of the land.” It’s on the unimproved value of the land, I.e. raw land value.

And no, Prop 19 is not effectively a land tax, it in fact yields the exact opposite effect which is appreciation in the land does not impact a landowner’s tax bill. Under LVT, fluctuations in land price directly affect the landowner’s tax bill.

[solatic]

The deeper question is whether society should subsidize inefficiency for the sake of social stability. You're making the claim that social stability is always preferable, but this is more widely considered to be debatable at best.

  * Should healthcare payers (whether private, through regulations on private insurance, or public, e.g. Medicare) be forced to pay hundreds of thousands of dollars for life-extending care for the terminally ill in great pain, thus inflicting responsibility for those rising costs on the rest of society?
  * Should the elderly be spared from rising property taxes on the mostly-empty houses where they raised their families, so that they won't be forced to move, thus making housing shortages worse?
  * Should we prevent employers from firing people from jobs which are no longer needed, like gas station attendants, so that those workers will have guaranteed employment, thus preventing consumer prices from falling?

At the very least, it's debatable, and not obviously a good thing.

[beaeglebeach]

As an ancap you're the first to ever accuse me of this, and my mere ability to view outcomes from perspective of others is in no way the claim you've accused me of making.

[nerdponx]

> I've always found it interesting HN is so focused on Georgism given it's leanings. It works out fine for hyper capitalists

That seems pretty much right on target for HN.

[epistasis]

This is absolutely wrong, the average person owning a home would be far better off with a land value tax than property tax, it's typically a tax cut. Gen the increased economic efficiency helps a ton.

The only people who "lose" are speculative land bankers and exploitive landlords.

[onionisafruit]

Can you give an example where property tax changed to land value tax and a home owner was better off?

[at_compile_time]

If the rental value of the land were taxed away (replacing other, less-efficient taxes), the primary beneficiaries would be all those who can't currently afford to own their own home. The market doesn't care if you never intend to rent out the land you live on, it could be rented out and will be priced accordingly. Worse, land values are known to go up, and the market accounts for that too. You aren't just buying something you don't intend to rent out at prices dictated by how much it could be rented out for, you're also paying more for it because everyone else wants to speculate on its value.

Land value taxes attack both of these factors. The rental value is taxed away, and appreciation is also taxed away in the form of higher taxes on more valuable land.

Land owners usually clamor the other way. They want their land value to appreciate, as it does when society progresses, technology advances, and land values remain largely untaxed. As much as I favor it, land value taxation has a self-defeating quality to it. After enactment, land values fall because land ownership would be benefit and obligation in equal measure. Suddenly, every land owner has a direct incentive to get the tax repealed so that their property value can reinflate. It's one of those collective action situations where we can't have nice things because everyone wants what is better for them and worse for everyone.

I'd much rather be taxed for my land usage than my income and spending, and not spend the majority of my working life indebted to a bank because land, one of the necessities of life, is a non-depreciating asset with considerable rental value, prone to speculative bubbles. I would rather be incentivized to use my land well by a tax rate that doesn't care what I do with it, than be punished for development through property taxes that go up if I try to use the land better (not that I could if I wanted to, but restrictive zoning bylaws are a separate problem).

Any transition to LVT would need to be done gradually to prevent our finance/insurance/real-estate-based economy from cratering. This would require collaboration and collective force of will far beyond what our ossified society is actually capable of. It's more than just tax policy, it's the idea that land appreciation belongs to the landlord rather than to the society that caused it. I'm convinced that we would sooner collapse than transform something so fundamental.

[jjav]

> This is absolutely wrong, the average person owning a home would be far better off with a land value tax than property tax

Everything I've read about LVT is that it would indeed hurt individual regular people home owners the most.

With LVT the tax assessor is free to declare that your plot of land would be a lot more profitable with a highrise apartment building on it, so now you're going to get taxed as if one existed there. Even if all you own is an old shack.

[epistasis]

Most people do not live on a plot of land where a highrise is economically feasible.

Those who do already have homes worth astonishingly high values.

Check out ant actual evaluation of LVT, such as Lars' Doucet's. Or places where it has been implemented (Vancouver pre 1970s, parts of Pittsburgh, etc.).

[beaeglebeach]

The LVT was relaxed in Vancouver in part because of the grandparent noted concerns of the democratic vote of the average joe in small non-profit-seeking property holdings that can't bear the (functionally regressive) tax the same as the ibanker overlords squeezing a skyscraper of tenants in faux-luxury studios dry.

[epistasis]

I think your last sentence there bears out that you have enough bias on the issue that perhaps the real concern is that it allows sky scrapers.

Since dropping the LVT, Vancouver has used restrictive permitting and extreme downzoning to keep homeowners very wealthy, but also keep a far larger number of people from having access to land in Vancouver.

In a normal city, you don't go from sprawl of single family homes to sky shapers, you have gradual addition of duplexes, then triplexes, then a smattering of small apartment buildings, and finally, only then perhaps, taller towers in a very tiny number of locations.

This is the reality of normal development that has not been restricted by zoning. That Vancouver has so restricts housing that a skyscraper is tenable in so many locations next to sprawl homes is an indictment of the lack of so many other options in between.

Certainly not a problem for a land value tax, that's a societal problem is a city ruined by exclusionary planning.

[beaeglebeach]

I have no problem with skyscraper. I'm for the abolition of taxes, which are in practice a massive transfer of wealth from poorer to richer. LVT is a transfer of tax balance from those unable to improve their land, to the rich who can. LVT accelerates this balance towards the skyscraper landlord-baron.

[jjav]

> Most people do not live on a plot of land where a highrise is economically feasible.

Over the whole country, you're right.

But let's be honest, the strongest advocates of LVT are not pushing to implement it in some sleepy village in the middle of nowhere just to lower taxes on the villagers.

LVT is always brought up as a solution in expensive areas as a tool to pull people out of their homes (because there is no way they could afford the taxes so they have to move out) and give the land to corporate developers to build big apartment buildings.

[epistasis]

Wrong. The most serious proposal for LVT right now is in Detroit, where it is going to be used to give resident home owners a tax break, and charge land speculators more than they are currently being charged.

My political organization that advocates for LVT is also driving through bills for social housing, not for big corporate developers.

Where do these strange ideas come from?

[jjav]

> Where do these strange ideas come from?

Here is a link to a site that is promoting LVT, so any biases they have would be in favor of LVT.

https://www.progress.org/articles/the-implementation-of-land...

Quote:

"A third possibility is for the retired persons to move to a lower-rent neighborhood, as many anyway move to assisted living or to an apartment."

We can see that it is an accepted goal of LVT to pull poorer/fixed-income people out of their homes so developers can have the land.

[waihtis]

A classic case of theory vs reality. Some things that look good on paper in a limited scope are devastating when used in more complex contexts. See also: communism and all it's other variants.

[at_compile_time]

Communism only looks good on paper if you know nothing about human behavior.

Georgism aims to take the best aspects of capitalism (market-driven optimization) while restraining some of its worst qualities (speculative bubbles driving higher prices and rents which in turn strangle the economy).

[waihtis]

> Communism only looks good on paper if you know nothing about human behavior.

Yet even HN is full of people dreaming of the proletariat revolution