Free State Project Forum

FSP Community => Miscellaneous => Topic started by: RhythmStar on August 16, 2003, 09:34:18 am

Title: Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 16, 2003, 09:34:18 am
I see folks arguing about free markets versus government, seemingly  trapped between the Scylla of Socialism and the Charybdis of Corporate Fascism.   Always, favored economists or philosophers are cited as providing the logic and inspiration behind all manner of solutions, aiming to maximize or minimize one side or the other.  However, no matter which side one takes, the other is able to rightly point out chinks in their opponents' armor.

Could it be that, despite logically valid points to go around for both views (depending on your assumptions), both sides are fundamentally wrong?

I think so.   And I think I have found a page that really sums up the difference between the economics of Henry George and those of his Left- and Right-wing alternatives.  Always curious, I would really like to see what the folks here think of this:

How Do We Divide the Fruits of Labor? (http://www.henrygeorge.org/isms.htm)

It's not long on text, but it says a lot. ;)

RS

Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on August 16, 2003, 01:32:48 pm
interesting link - thank you!
Title: Re:Economics According To George (Henry George, that is...)
Post by: Norris on August 16, 2003, 01:56:28 pm
The definition of "Unearned income from land" could be debated for centuries, both sides finding chinks in the other's armor.

I had rent houses and can guarantee you that my profits weren't unearned, so much that I quit that "job".

I currently buy and sell land for a living. Much of what I make is "unearned" return on investment, some of it is "wages" for asset enhancement and asset management.

Georges scheme sounds like a redistribution scheme aimed at punishing people like me who have put their capital in one place instead of another. Sounds pretty arbitrary to me.
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 16, 2003, 04:00:01 pm
Norris,

The value of the improvements you make are yours to keep.  That includes rent for houses and any other material investments.   Georges proposal punishes no one and in fact abolishes all taxes on the fruits of labor.  

We are all used to looking at land + improvements = property.  In Georges proposal, land is land and improvements and their revenues are not taxable.

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: lloydbob1 on August 16, 2003, 04:15:16 pm
I heard a speech about George a long time ago. If I remember corectly and I might not, he said that property should not be owned as we define it, but, belongs to someone for their lifetime and then reverts back to society.
I didn't like this then and I don't now.  Property is defined as that which one disposes of, which means I can leave my property to my children or anyone I want after, or before, for that matter my death.
Again, I might remember it wrong.
Lloyd
Title: Re:Economics According To George (Henry George, that is...)
Post by: Matt Nellans on August 16, 2003, 04:35:12 pm
I owe no debt to society at all, ever.

The rights of the individual supercede any communal interest, always.

Only in a handful of matters do individuals cede some control...defense, courts etc.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Norris on August 16, 2003, 05:07:51 pm
Rythmstar,
That doesn't clarify it much.
First of all, land without improvements doesn't generate much rent, mine generates none. That said, the other potential source of revenue for "society" whould be the profit made on the appreciation when I sell.
If the state siezed that profit  from landowners, the value of land would drop to a fraction of what it is today since nobody would want to hold it.
 This might be solved by a massive, one time compensation to landowners, which seems unrealistic. Also the potential revenue would be diminished considerably by the lack of buyers.

With the profit on appreciation going to the state, a distinction would have to be made regarding the exact value of the improvements, timber, crops etc. which whould make transactions expensive and necesitate a bureaucracy to document it.

Has George estimated how much revenue this would bring in and what percentage of current revenues that would amount to?  I think it would be way down in the single digits.  It would be mighty hard to sell such a transition, especially if current landholders are compensated for the loss of appreciation rights.

Title: Re:Economics According To George (Henry George, that is...)
Post by: Johnny Liberty on August 16, 2003, 05:31:24 pm
My understanding is that the "landholder" is taxed yearly on the value of the land, not any capital improvements built on the land. The trade off on this single tax on raw land is the elimination of income taxes taken from wages or capital (stocks, bonds, businesses).

As to the revenue calculated to be generated from such a scheme in one of free states, ?
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 16, 2003, 06:10:27 pm
BTW, here is another link that goes into more detail on the tax issue:

Taxes -- What Are They Good For? (http://www.henrygeorge.org/rem0.htm)

George proposed a 5% royalty to the landholder in order to capitalize the price of land and bring market forces to bear therein.  Put another way, the tax on land rents would be 95%. Wouldn't that high a land tax impoverish the landowners?  Not at all!

Firstly, the Single Tax would only apply to the LAND rent, not the portion of the tenant's rent that applied to the improvements thereof.  Also, there would be no other taxes.  Let's run the numbers on a scenario to see how it all works.

Current Situation:

Land Value = $100
Improvements = $100
Tenant Rent = Land Value + Improvements = $200
Income+Other Taxes = 50%

Landholder Net Income ($200 rents less taxes) = $100

On the Tenant's side, they have to gross $400 to pay their 50% taxes and still have $200 for the rent.  How they eat is anyone's guess.

The Government has a gross revenue of $300 out of the deal!  

Does that seem equitable to anyone?

Now, let's use the George formula:

Land value = $100
Improvement value = $100
Tenant Rent = Land Value + Improvements = $200
Land Tax = 95%

Landholder net income (rents less taxes)  = $105, so they just got a raise in real income.  How is this punishment?

On the tenant's side, life is good, as they own no land, they pay no taxes!  They went from nothing to eat after making $400 and paying half to taxes and half to rent, to having $200 left over after rent.

The government's share in this is just the $95 from the land tax.  

We can see here that the original Georgist proposal increases real income for the landholder slightly, while providing a windfall for the tenant.  Government makes slightly less than the landholder.  So, Labor is rewarded greatly, while Landholders do better than today and the Government is restricted to 23.75% of the pie.  Labor's fruits are not even on the taxation table.

Is this more equitable, or not?  If not, then why?

RS



Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 16, 2003, 06:22:24 pm
BTW, say the government needed to increase revenue by 20% to pay off a war or something else we voted it to do.  How do they do it?  They increase the tax value of land by 20%.  How does that result:

Land value = $120
Improvement value = $100
Tenant rent = $220
Land tax = 95%

Landholder net income = $106 (yes, they get a raise)
Tenant net income = $180 (they voted for it, let them pay for it)
Government income = $114 (20% more than they had)

Note that the Single Tax does not penalize the minority (the landholders) for the democratic programs voted in by the majority (the tenants).  Thus, the majority will think twice before they vote themselves a fat benefit package, as they pay for it!

Still sound socialistic?

RS

Title: Re:Economics According To George (Henry George, that is...)
Post by: Norris on August 16, 2003, 07:37:52 pm
Rythymstar,
If the govt, rather than the market determines the taxable value of the land, nobody would want to make any improvements on the land as doing so would introduce the unknown variable of taxes.
Currently, an average rent house has a land value of about 15% of the improvement value.  This is determined by the market value of lots vs  finished homes. If the rent is 1000 and the home is worth 100000, the annual tax is 15k-5%------considerably more than  the 12k gross annual rent.
Now the landlord has a negative cash flow and the govt turns to him to pay for a war ?  Sure sounds like landowners getting penalized if my arithmetic is correct.

If the answer is raise the rent, then the landlords option to do this hinges on the tenants alternatives. In such a pay-for-war scenario money would be tight and the landlord would lower his rent while his taxes are increased, thus a disproportionate load on the landlord. Passing the tax increase on is not a sure thing.

Also, you have not addressed the appreciation issue ( I guess there won't be any appreciation on a liability anyway)  will appreciation be taxed? How to compensate landowner for the one time loss of net value?

If, when such a plan is implemented, one landlord has a renthouse with a land value of 6% of the property value and another has a rent house with a land value of 35% of the property value, how will the bureaucrats compensate the latter?

Wouldn't everyone end up living in high rise apartments where land tax is low just to avoid tax?

If a landowner like me who doesn't recieve any rent and only profits by being a buy-low-sell-high-artist, does he pay any tax?












Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 16, 2003, 08:19:15 pm
Rythymstar,
If the govt, rather than the market determines the taxable value of the land, nobody would want to make any improvements on the land as doing so would introduce the unknown variable of taxes.

I know this is hard to get used to, since land appraisal has always included improvements. It has taken me a while to see the picture.  However, the whole point of the Georgist  concept is the abolition of taxes on labor or the fruits of labor.  Therefore, improvements would not be discouraged by taxes.  

In fact, to hold land without improvement would be a tax burden with no recompense.   So, rather than retard improvement, the Single Tax would spur improvement to unprecedented levels, as there would be no tax consequences at all.  In fact, the only way you could hold title to land without getting a negative cash flow as a result would be to improve the land and make a profit by industry, rents, or user fees.

Quote
Currently, an average rent house has a land value of about 15% of the improvement value.  This is determined by the market value of lots vs  finished homes. If the rent is 1000 and the home is worth 100000, the annual tax is 15k-5%------considerably more than  the 12k gross annual rent.

I am not sure that the current value structure is not skewed in some way as a result of the current tax system, but I do recognize that actual valuations should be market driven.  However, the question remains as to what the market would value land at under the Single Tax.

Quote
Now the landlord has a negative cash flow and the govt turns to him to pay for a war ?  Sure sounds like landowners getting penalized if my arithmetic is correct.

To the contrary -- the landowner gets a 5% royalty on every tax dollar the government collects.  The tenant pays the tax, if the landowner properly passes the tax onto the tenant, not the landowner.  Of course, if there are no tenants, then the landowner must find another business to create a postive cash flow on the land (a factory, a water park, a garbage dump, etc.).  If they cannot, then why are they landowners to begin with?  Just to monopolize the land and keep others from turning it to productive use?   Keeping the land is fine, but either use it to the benefit of the economy, or pay the tax as an expense.

Quote
If the answer is raise the rent, then the landlords option to do this hinges on the tenants alternatives. In such a pay-for-war scenario money would be tight and the landlord would lower his rent while his taxes are increased, thus a disproportionate load on the landlord. Passing the tax increase on is not a sure thing.

The tenants pay no taxes.  They have 50% more money than they did before.  So, they can afford to pay a higher tenant rent to cover higher land taxes and higher improvement rents, if such becomes necessary.

Quote
Also, you have not addressed the appreciation issue ( I guess there won't be any appreciation on a liability anyway)  will appreciation be taxed?

The appreciation of your improvements will not be taxed at all.  Build a 50-unit apartment on a vacant lot and pay the exact same tax as the single-family dwelling on the lot next door.  You pocket the difference because you made the investment.  It is your money!

Quote
How to compensate landowner for the one time loss of net value?

I am not convinced that this even occurs.  As my spreadsheet (which I am happy to share) shows, the landholder makes more real money than before, as does the tenant.  The government is reduced by 2/3, but that's what we Libertarians want anyway, right?  And if the majority votes to spend more, they must do so knowing it comes out of their rents, while providing a 5% royalty to the landlord.  

Quote
If, when such a plan is implemented, one landlord has a renthouse with a land value of 6% of the property value and another has a rent house with a land value of 35% of the property value, how will the bureaucrats compensate the latter?

Such disparities would not exist in the Georgist system, as all lands in similar economic zones would be taxed the same.  See the picture here:

Click to see image (http://www.henrygeorge.org/images/mono.gif)

Quote
Wouldn't everyone end up living in high rise apartments where land tax is low just to avoid tax?

The free market would have a hand in the tax value, in the form of votes.  If we vote for exhorbitant programs via government, then we pay exhorbitant land taxes.  However, as tenants outnumber landholders, they would bear the brunt!

Quote
If a landowner like me who doesn't recieve any rent and only profits by being a buy-low-sell-high-artist, does he pay any tax?

Not if he sells fast enough!   However, I suggest that you really are not so much in the business of selling land (under the Georgist system, land is a liability), as improvements.  In some cases of excellent location, you might carry the tax and sell the unimproved land to someone who wanted to do the improvements themselves.  However, more likely, you would buy unimproved land very cheaply, then invest in the land by making (non-taxable) improvements, then sell the land based on the value of the improvements.  

IOW, the Georgist system removes the inflationary aspects of land speculation and shifts the economic emphasis to the production of useful improvements to the land.  I believe this would lead to an enormus economic expansion, especially when you consider that no labor or products or interest would be taxed!

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: lloydbob1 on August 16, 2003, 09:09:19 pm
The only eqitable tax system is a per capita tax.
When the government incurs a legitimate expense the costs are divided up by the number of people in the geographical area that the program benifits.
An individual pays X, a family of 5 pays 5X.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Norris on August 16, 2003, 09:22:41 pm
Rythmstar,

You haven't answered the questions regarding the inequities of the transition from the current system to the George system.

Since all taxes are concentrated in the land rent tax, a vacancy could bankrupt a landlord quickly. Or is the tax only applied to income?

If, as you say, an owner of a 50 unit apt complex pays the same tax as the neighbor who has a single unit on an identical lot, there certainly would be a massive population shift to multi family units. The transition to George's system would be very costly to owners of property having a high land-to-value ratio.

As you explained it, we would have a land rent tax rather than land property tax or land capital gains tax, do I have this right?

Currently hundreds of thousands of landlords pay mortgages on their rent houses and have little cash flow at all. They hope to profit from appreciation. That's how it was for me.  Any disruption in cash flow would be disastrous. In the roller coaster years following such a transition most would get foreclosed.

If the gov't increases the tax value of the land to pay for a war, landlords in the above situation would bankrupt.

You say disparities in land-to-value ratios would not exist because all lands in similar economic zones would be taxed the same, but  properties in similar economic zones have can have drastically different land to value ratios due to square footage, waterfront etc. If You have a 800 sq ft waterfront cottage renting for 1200 a month and I have a 2000 sq ft home (not waterfront) across the street renting for 1200 a month, our land rent taxes wouldn't be the same. Under the Georgian system, you would be penalized with much higher tax since your land is worth 5 times as much as mine.

If the Georgian system removes the inflationary aspect of land speculation, are you saying that vacant, unimproved land would get taxed even if there is no rental income?

I do make most of my money on the buy-lo-sell-hi method. If I made improvements the IRS would re-categorize me as a dealer-developer and force me to pay self employment tax and regular income tax, instead I only pay 15% cap gains. How would George treat me?
Title: Re:Economics According To George (Henry George, that is...)
Post by: Brian Kelley on August 16, 2003, 10:35:19 pm
GAAP do not qualify "unearned income"; the IRS does.

How do we divide the fruits of labor? "We" don't. You don't. I don't. Henry George doesn't. I keep what's mine, and you and George and everyone else leaves me alone. How about that?

Whenever I hear someone speak of "we", I start wondering what of mine he wants. In this case, it's income from real estate. It's the same with "fairness", which is a way for politicians to justify taking something of mine with which to buy votes.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Brian Kelley on August 16, 2003, 10:56:09 pm
By the way, I recently posted an opinion on the question of "common" property. It, like "common good", is a fallacy, as I cannot be considered an owner of a piece of real estate unless I can dispose of my shares as I see fit.

This idea which George calls common property is in actuality already in effect, as eminent domain exists. Also, real estate is routinely confiscated by several other means: 1) taxes 2) de facto seizure through environmental restrictions 3) actual seizure of mineral rights 4) deprivation of the full value through zoning restrictions. I would work against all these things, and would never agree to a proposal such as the one outlined in the articles referenced here. Private property is the foundation of capitalism and of liberty.

I was reading Eric Hoffer last night;

"The real "haves" are they who can acquire freedom, self-confidence, and even riches without depriving others of them. They acquire all of these by developing and applying their potentialities. On the other hand, the real "have nots" are they who cannot have aught except by depriving others of it. They can feel free only by diminishing the freedom of others, self-confident by spreading fear and dependence among others, and rich by making others poor."
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 16, 2003, 11:02:01 pm
Rythmstar,

You haven't answered the questions regarding the inequities of the transition from the current system to the George system.

True.  I am not certain of the best way to make the transition.  Some states, such as New Hampshire, are close already -- abolish the Sales and Capital Gains taxes and you're practically there!  Of course, the Feds would still be taxing you, but maybe a Georgist system in NH would (if successful) spark a rethink there too.

As a practical matter, the best way would be for someone to simply buy out the current owners.  Or, buy unimproved land from the existing public lands, then form a Georgist colony.  However, in my spreadsheet, the landowner with tenants gets an immediate increase in real income, due to the abolition of taxes.  So, while it is hard to express the transaction in familiar terms, the landholders would indeed be compensated.

Quote
Since all taxes are concentrated in the land rent tax, a vacancy could bankrupt a landlord quickly. Or is the tax only applied to income?

The Land Tax is actually referred to as a Rent.  So, I presume that the rent is due as long as the person holds the title.

Quote
If, as you say, an owner of a 50 unit apt complex pays the same tax as the neighbor who has a single unit on an identical lot, there certainly would be a massive population shift to multi family units.

I would think the major incentive for multi-family dwellings would be the tax-free improvement rents available to the developers.  


Quote
The transition to George's system would be very costly to owners of property having a high land-to-value ratio.

Perhaps.  I can't claim to have all of the variables worked out, but I still get the nagging feeling that current valuations are not representative of valuations under the Single Tax.  One has to examine the reason for the high valuation -- is it largely because of improvements, or is it intrinsic to the land itself in an unimproved state?  

Also,  I must admit that the notion of variations in land taxes based on economic zones is my embellishment.  George does not include that, I think, preferring a flat rate for all lands.  To me, it only seemed reasonable that intrinsically more desireable locations might be appraised higher.  However, it may be that a common rate is the better solution.

Perhaps it is a good time to remember that the only purpose of taxation at all is to fund the legitimate activities of government.  I think reducing that cost by at least 2/3s of its current size would be a Good Thing.  IAC, as long as the revenue is sufficient to fund the government, then there is no reason to charge more for one plot of land over another.

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As you explained it, we would have a land rent tax rather than land property tax or land capital gains tax, do I have this right?

There would be no land capital gains, as land would be a liability to own.  The land rent is due from the landholder, but they should pass it on to their tenants, or to the expenses of whatever activities they perform on the land to gain income.  Or, the wealthy might simply lounge on the land and live off the tax-free income of their Interest or other investments.  Their choice.

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Currently hundreds of thousands of landlords pay mortgages on their rent houses and have little cash flow at all. They hope to profit from appreciation.

Appreciation would still occur, but it would be appreciation of the improvements (the house) and thus be tax free.  

As a practical matter, the land rent should not be set so high as to overcome the benefit to all from the abolition of all other taxes.  In my spreadsheet example,  an arbitrary valuation of 50/50 to land/improvements was used. If I use your figure of a land/improvements ratio of 85/15, then I get the following:

Aggregate tax rate: 50%
Land Value: $100
Improvement Value: $15
Tenant Rent (land + improvements): $115

Landowner pre-tax: $115
Landowner after tax income: $57.50

Tenant pre-tax (arbitrary amount near 4 times rent): $400
Tenant after-tax: $200
Tenant after-rent: $85

Government revenue: $257.50

Note how Gov makes the most by far from this single economic transaction stream in the current system?

Using the Georgist formula with your value ratio:

Land tax rate: 95%
Land Value: $100
Improvement Value: $15
Tenant Rent (land + improvements): $115

Landowner pre-tax: $115
Landowner after tax income: $20.00

Tenant pre-tax (arbitrary amount near 4 times rent): $400
Tenant after-tax (no tax to tentant): $400
Tenant after-rent: $285

Government revenue: $95

Note that the tenant has an extra $200 to spend?  That suggests to me that the landowner's improvements are undervalued, as is the land itself!  Let's see what happens when we adjust those values to approach the tenant's previous net:

Land tax rate: 95%
Land Value: $150
Improvement Value: $100
Tenant Rent (land + improvements): $250

Landowner pre-tax: $250
Landowner after tax income: $107.50

Tenant pre-tax: $400
Tenant after-tax (no tax to tentant): $400
Tenant after-rent income: $150

Government revenue: $142.5

Now, both the landowner and the tenant are demonstrably more well-off than they were before.  And the government is getting a bit more than I would prefer, but the government's take is reduced by a 3rd.  

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That's how it was for me.  Any disruption in cash flow would be disastrous. In the roller coaster years following such a transition most would get foreclosed.

As demonstrated, the actual cash-flow to the landholder is increased by greater liquidity in the market, since all taxes aside from the land tax are abolished.  This means that land rents (the land tax) and improvement rents (the other part of the tenant rent) both rise to more accurately reflect their value.  If the mortgage remains the same, the landowner has positive cashflow from this git-go.

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If the gov't increases the tax value of the land to pay for a war, landlords in the above situation would bankrupt.

Again, the tenants pay no taxes and constitute the majority of the voters.  So, as long as landholders pass the land tax directly to the tenant, then an amazing thing happens -- the majority pays their own way, even when the bill comes from Uncle Sam.  This is (I think) an even more profound corollary of the Single Tax than the abolition of all other taxes!  :)

I have to go now and get some programming done (sigh), but this has been a most enjoyable discussion.  Thank you very much, as you are helping me understand this area and my own thoughts on it better.  You obviously have a lot more experience with land ownership than I do.

I be back! :)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: Leonard on August 17, 2003, 09:18:32 pm
Georgism has a certain simplicity to it, and I cannot say it is as bad as taxing everything (the way we currently do).  However it is still flawed from a free market perspective.

It's worth it for people that really think that "land", or anything else, is "unearned", to read Rothbard's critique of Georgism (http://www.mises.org/rothbard/georgism.pdf).  Rothbard makes a number of arguments, but to my mind the most trenchant is in demolishing the idea that there is any such thing as "land", as a category, sitting out there with value pre-attached waiting to be taxed.

"Land" in its raw state has exactly zero value.  That's because in its raw state, there are no people anywhere near it, and thus, it produces nothing.  As soon as you introduce people, land starts to gain value; but it gains value from them, and in fact "the" value is not singular, but rather plural: the values for any bit of land is in the minds of the people that perceive it.  The value is entirely in us, for value is subjective.  Everything that makes land valuable - improvements such as clearing, draining, and tilling; having people nearby to eat produce; buildings put on it; having people nearby to want to rent the buildings - all of these things are products of human effort, not of the land itself.  Practically all of what has value in the real world is produced by man, not natural.

There is, practically speaking, no such thing as wealth that falls from the sky.  All wealth is a result of human activity, and should belong to them that created it.  
Title: Re:Economics According To George (Henry George, that is...)
Post by: Leonard on August 17, 2003, 09:22:37 pm
That said, if we must have a system of wealth confiscation, I think basing it on land is practically speaking a good idea (not the least because georgist arguments can be made with a straight face by many libertarians).  

Case in point: New Hampshire, which collects practically all the taxes it runs on via property taxation.  The nearly-single tax in NH has the effect of reining in the state, because the people can see it clearly, and hate paying it.  (This is by no means one of the standard arguments for Georgism.)
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 17, 2003, 11:19:26 pm
That said, if we must have a system of wealth confiscation, I think basing it on land is practically speaking a good idea (not the least because georgist arguments can be made with a straight face by many libertarians).  

Case in point: New Hampshire, which collects practically all the taxes it runs on via property taxation.  The nearly-single tax in NH has the effect of reining in the state, because the people can see it clearly, and hate paying it.  (This is by no means one of the standard arguments for Georgism.)

Actually, that very argument is made at the Georgist site, only it is encapsulated in the Canons of Taxation:  http://www.henrygeorge.org/canons.htm (http://www.henrygeorge.org/canons.htm)

A tax that "falls directly on the ultimate payer" has precisely the quality you speak of -- letting people see plainly what government services cost.   I believe that such awareness breeds vigilance, which in turn serves to keep government running more efficiently than it ever can with a broad, complex, 'hidden' taxation.

Also, as to the point about Rothbard and his assertion that land in its raw state has zero value... well, that's precisely the tenet underlying the Single Tax.  It is the productivity increases that come with the economic development that confer land its perceived value (along with natural aspects like harbor access, etc.).   A bay without a harbor and wharf has little (if any) value.  Put a town around it and a railroad leading out of it and shippng to and from, and the land becomes very valuable indeed.   Thus, society is the appreciator of land value, and the Single Tax allows society to recover a share of that value, to pay for services, such as recognizing and enforcing land titles, etc., that facilitate such appreciation.

IAC, it's ultimately all about whether or not there is to be government at all.  If there is, then the Single Tax is the least onerous of all possible taxes, as this leaves all capital and labor free to flourish.    

In addition, I think the corollaries are very healthy for society.  Land not able to be pressed into immediate profit is left fallow --- No Man's Land, as Zack would say -- because holding title to idle land is a liability.  Ultimately, I think that would be a good thing, as more open land means an easier path for those who would press it into production.  Land becomes its own economic stimulus package. :)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: Norris on August 18, 2003, 02:20:43 pm
Leonard,
Somewhat off the subject but I disagree with your land value comments in reply#17 paragraph3.

Raw, barren and unimproved land has considerable value in that it contains an increasingly precious commodity--- solitude.
The only way a freedom lover/nature lover/privacy lover like me can enjoy the outdoors is to buy his own land. I'm currently in the process of selling a section of desert for well over double what I paid for it, the buyer is paying to insure his solitude.

More than once I've profited by selling land to adjacent landowners by instilling fear in their hearts that I intended to develop (I'm such a rat).

What makes land valuable often is what it DOESN'T have around it.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Norris on August 18, 2003, 02:51:03 pm
Rhythmstar,
In principle, I'm undecided how well the Georgian system would function. There are so many variables and it would take weeks to sort it out.

With an objective like FSP, one must find ground between principle and pragmatism.

If FSP were starting with an uninhabited island and if the Georgian principle is sound, then we might have something.
Selling liberty isn't easy. Having the Georgian system on our platform would cast a dark cloud of uncertainty on property owners. I couldn't sell it to the rich or the poor. The suggestion of such a complicated transition  would place too much of a burden on voters to analyze.

In any case, it's interesting speculate what problems would arise and what market forces would look like both during the transition and after the dust settles.
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 18, 2003, 10:52:55 pm
RhythmStar-

You are one brave dude taking on these Rothbardians on private privledge rights!!!

Read what David Nolan founder of the Libertarian Party and world-famous World's Smallest Political Quiz had to say about the land value tax - and please note valuation comments...BRILLIANT!:

"What kind of taxation is least harmful? This is a topic still open for debate. My own preference is for a single tax on land, with landholders doing their own valuation; you'd state the price at which you'd be willing to sell your land, and pay taxes on that amount. Anyone (including the tax collector) who wanted to buy it at that price could do so. This is simple, fair, and minimizes government snooping into our lives and business. Is this "the" libertarian position on taxes? No. But all libertarians oppose any form of income tax. "

http://www.lp.org/lpn/9503-essence.html

Also one must also understand that the money collected in the form of site valuation does NOT have to go into the hands of any government official. A better solution is for it to converted into a pro-rata "citizens dividend" and then if you will have people pay users fees for what the user.

http://www.progress.org/dividend/cdwhence.html

For all those others who are not swayed by reason - one last propsal.
             "Just through the damn money in the sea"

we still we be better off as a society rather than having this money being pocketed by private individuals via gov't granted priviledge...

BillG (not Gates)
Title: Re:Economics According To George (Henry George, that is...)
Post by: Brian Kelley on August 18, 2003, 11:06:01 pm
IAC, it's ultimately all about whether or not there is to be government at all.  If there is, then the Single Tax is the least onerous of all possible taxes, as this leaves all capital and labor free to flourish.    

It is not the least onerous of all possible taxes. That would be no tax. Barring that, a voluntary tax would be less onerous. A lottery would be much less onerous than this confiscation of land through extremely high taxation.

Nevada has done quite well with low property taxes, and could have gotten by entirely without them by taxing gambling revenue if the state hadn't wanted so badly to control real estate. This is what every state wants, because only free people own private property.

If a government doesn't have ultimate control over land, what power has it really got?

This Georgian scheme eliminates real estate as private property. The reason this scheme is so often called communist is that the first plank in the communist manifesto is abolition of private property.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Brian Kelley on August 18, 2003, 11:16:17 pm
With an objective like FSP, one must find ground between principle and pragmatism.

Never sacrifice your principles for pragmatism. That's what Bill Clinton does.
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 18, 2003, 11:22:58 pm
FWIW, I downloaded and read the Rothbard paper.  I expected more.  The man is barely able to contain his political prejudice enough to even seem to provide a rational and well-supported refutation (he in fact fails to deliver this).  Rothbard does less in his whitepaper to debunk George with numbers (the presumable home-court for an economist) than I did to support George in a few BB messages.  Also, he is incorrect in his assertion that George proposes a 100% tax.  Rather, the proposal is for 95%, which seems like a trivial difference, but when you compare the results (I started with a 50/50 split), the 95% tax actually seems to yield better results (odd that).

I always knew software engineering was more of a 'hard' science than economics.  Now I have the proof.  (sigh)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: Norris on August 19, 2003, 08:12:46 am
With an objective like FSP, one must find ground between principle and pragmatism.

Never sacrifice your principles for pragmatism. That's what Bill Clinton does.
That's a good philosophy that usually doesn't work.
If, after our move, the media tells our chosen state we are here to implement private roads, prostitution, legal heroin, the Georgian system, privatizing all their Federally owned hunting grounds and forests to be developed/harvested  by the private sector, and myriad other issues that are correct according to Randite libertarian philosophy but have more pain than gain, the only ones to benifit from FSP will be the moving companies.

The workable area between principle and pragmatism is a very narrow corridor, possibly too narrow for FSP to succeed, freedom advocates are few.
Title: Raw land is valueless
Post by: Leonard on August 19, 2003, 09:39:29 am
Raw, barren and unimproved land has considerable value in that it contains an increasingly precious commodity--- solitude.

Sure.  But the value is in the minds of those that can benefit from that solitude - usually the neighboring owners.  The piece of land itself, as it was created, is not what has value.  The value comes from its proximity to something else.

We can see this easily enough by a simple thought experiment.  I own 40 acres of trees on a hilltop in East Tennessee.  Let us assume they are quite remote.  Would you swap them for one acre next to your house, assuming both parties retain full rights to develop?  Of course not.  

There is a mighty hole at the center of Georgist thought.  The values that land has are a result of human efforts.  Almost none of its values are inherent.  How much is an acre worth on the moon?  How much was an acre worth in the stone age?  How many acres of land would it take to induce you to take a one-way trip back to the stone age?  If you think on these questions you will find that land has value, for you, largely because of things not on or part of it - i.e., that it has cheap transport connections to places where you can buy necessities, and see people you love; that it exists in a society where you can get modern medical care, computer services, etc.  In your case, that it separates you from other things.  None of these things are inherent in the land.  Therefore the "raw" land (if such a thing were identifiable) has almost no value at all.  Almost all of its value, for you, is derived from human actions.
Title: What Georgism Taxes
Post by: Leonard on August 19, 2003, 09:54:17 am
RS, while it is true that Rothbard is an economist, he is an Austrian.  And we are not particularly into numbers.  We are more into philosophy.  In any case one does not debunk philosophical ideas, like the basis for taxation, with numbers.  If I say that the average American pays $2157 in income taxes that says exactly zero about whether or not income taxation is morally acceptable.

Rothbard used 100% for a very good reason, IMO: there is nothing in Georgism that excludes it.  You say George proposed 95%.  Very well, why?  Under what principle?  Either the raw land really is collectively owned, or it is not.  If it is, under what principle do we "give away" even 5% of the rent?

If Georgists cannot articulate a good philosophical reason why their tax should be 1, or 2, or 95, or 100%, then there is no reason to think that it would be any particular value.  And we know from the real world that taxation levels tend to creep up.  What's the difference between 95 and 96%, especially given that The Children have some new, serious needs?!

Rothbard criticizes the single tax at 100%, I would guess, because it is easiest to do so there.  It is easier to analyze, and it is easier to show extreme, bad results.  You, of course, have the option to say that 100% is right out for you.  But until you can rule it out of the philosophy as a whole, Rothbard's criticisms apply.

Incidentally, I think that most, if not all, of Rothbard's arguments will end up applying practically as strongly for a 95% level as for 100%.  I don't recall any that rely on that last 5% - the market distortion in land speculation, for instance, is still very much there when holding land is "only" penalized 19/20 as much.  This still will have the effect of (almost) eliminating speculation and its important market function of allocating land to the highest value.  But I'd have to reread the thing carefully to be sure that all the arguments still hold weight.
Title: Re:What Georgism Taxes
Post by: RhythmStar on August 19, 2003, 12:04:16 pm
RS, while it is true that Rothbard is an economist, he is an Austrian.  And we are not particularly into numbers.  We are more into philosophy.  In any case one does not debunk philosophical ideas, like the basis for taxation, with numbers.  If I say that the average American pays $2157 in income taxes that says exactly zero about whether or not income taxation is morally acceptable.

Dictionary problem then.  My definitions of economist and moral philosopher hold that they are different, albeit not mutually exclusive, things.

Quote
Rothbard used 100% for a very good reason, IMO: there is nothing in Georgism that excludes it.  You say George proposed 95%.  Very well, why?  Under what principle?  

The royalty to landholders is intended to capitalize the value of land and bring market forces to bear on that process.   It is a pragmatic consideration.

Quote
Either the raw land really is collectively owned, or it is not.  If it is, under what principle do we "give away" even 5% of the rent?

A right of property in movable things is admitted before the establishment of government. A separate property in lands not till after that establishment.... He who plants a field keeps possession of it till he has gathered the produce, after which one has as good a right as another to occupy it. Government must be established and laws provided, before lands can be separately appropriated and their owner protected in his possession. Till then the property is in the body of the nation.  --Thomas Jefferson

The land is not owned by anyone.  Two people arguing over who owns the land is like two fleas arguing over who owns the dog.  How can you own something you neither created, nor destroyed?  The land is here for us to use and the only claim we have on it as individuals is that which our fellow humans deign to respect, or that we impose upon others by force of arms.   A decent discussion of the origins of this culture's attitudes towards land titles (note the royal ring to that :) ) is found here:  

Are You a Real Libertarian or a Royal Libertarian? (http://www.geolib.com/essays/sullivan.dan/royallib.html)

Quote
If Georgists cannot articulate a good philosophical reason why their tax should be 1, or 2, or 95, or 100%, then there is no reason to think that it would be any particular value.  And we know from the real world that taxation levels tend to creep up.  What's the difference between 95 and 96%, especially given that The Children have some new, serious needs?!

Children?  What's that got to do with anything here?  We're talking about tax policy, economic growth, and proper checks and balances.  As for value, the value of land is created by society... even wilderness is so valued by it's relative nature when compared to the urban areas -- if all were wilderness, none would appreciate!  Furthermore, it is only the Law that grants title to land.  So, if we are to live as civilized beings and not Afghani warlords, our land is ruled by Law and that rule not only grants and defends our Titles, it appreciates the value of the land.   Land I might add that is only morally held in a private, government-enforced  monopoly, if it is put to some valued use (even if that use is a wildlife park).

Personally, I think the Austrian School does the world a bit of disservice by making a utilitarian science for the efficient and prosperous organization of society into religion.  Reasonable humans are allowed (indeed inevitably fated) to disagree.  In all other domains but religion, such disagreements may be solved with negotiation and compromise.  In making economics a religious discipline, the Austrian school introduces an element of absolutism that is counter-productive.   If this school is to be the savior of freedom, no wonder we are so oppressed... by moral absolutists!

Quote
Rothbard criticizes the single tax at 100%, I would guess, because it is easiest to do so there.  It is easier to analyze, and it is easier to show extreme, bad results.  You, of course, have the option to say that 100% is right out for you.  But until you can rule it out of the philosophy as a whole, Rothbard's criticisms apply.

I say Rothbard has criticized nothing but his own misunderstandings of the innards of the Georgist concept.  I believe this is simply because he is steeped in the European Royalist tradition and suffers from a severe case of Throneroom Envy.   He has internalized the old saw "A man's home is his castle."  Dominion is a fallacy of Heavenly proportions, as there simply is no such thing, if you reject force and fraud.  

Your works are your property.  God's works are no man's property.  Yet, we have all been given the right to share in God's works, as we need a site upon which to produce our own works (our True Property).  So, there is no conflict between the Single Tax and private property.  In fact, the Single Tax is merely a utilitarian method of funding the government, whose law enforcement activities grant and defend the very titles that the landholder possesses.

Quote
Incidentally, I think that most, if not all, of Rothbard's arguments will end up applying practically as strongly for a 95% level as for 100%.  I don't recall any that rely on that last 5% - the market distortion in land speculation, for instance, is still very much there when holding land is "only" penalized 19/20 as much.  This still will have the effect of (almost) eliminating speculation and its important market function of allocating land to the highest value.  But I'd have to reread the thing carefully to be sure that all the arguments still hold weight.

Try rereading it with a spreadsheet handy.  You might be suprised at the results.  :)

The Single Tax does not impoverish landholders, as both they and the tenents benefit from much greater liquidity in the markets.  And with no taxes at all on labor or capital (and no hidden tax in the form of complex tax laws), the Free Market in True Property booms, making the Single Tax a minor annoyance.  Yet, because of the ability of the minority landholders to pass the tax onto the majority tenants as PART of the tenant rents, the unlanded majority must carry the brunt of the Single Tax, which is the best way I can think of to keep them from picking their more successful fellow's pockets (as they do today).

RS

Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 19, 2003, 12:42:59 pm
BTW, here is a great Henry George quote:

"No theory is too false, no fable too absurd, no superstition too degrading for acceptance when it has become imbedded in common belief. Men will submit themselves to torture and to death, mothers will immolate their children, at the bidding of beliefs they thus accept."

Henry George, Social Problems


:)

RS

Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 19, 2003, 10:05:31 pm
Quote
I am not certain of the best way to make the transition.  Some states, such as New Hampshire, are close already -- abolish the Sales and Capital Gains taxes and you're practically there!  Of course, the Feds would still be taxing you, but maybe a Georgist system in NH would (if successful) spark a rethink there too.

The way to make the transition is with a simple "tax shift" concept...an individual's total amount of "property" tax remains the same but the amount of tax on buildings is "shifted" onto land!

http://www.progress.org/geonomy/rppaper.html (http://www.progress.org/geonomy/rppaper.html)

Read a Georgists from NH (Rep. Dick Noyes) tax shift bill infront of the NH Legislature in 2003:

http://www.gencourt.state.nh.us/legislation/2003/hb0439.html (http://www.gencourt.state.nh.us/legislation/2003/hb0439.html)

This is happening in Philadelphia as we speak!

From the City Controller Jonathan Seidel (7th paragraph down):

"As one way to reduce Real Estate Tax burdens for Philadelphia homeowners we can change how we tax property. As I recommended in my November 2002 Tax Structure Analysis          Report, I advocate for a system that will tax buildings less and tax land more to encourage individuals to maintain and improve their properties while discouraging speculation and blight by decreasing incentives to allow buildings to decay. Based on my analysis, such a system would reduce Real Estate Taxes on nearly 80 percent of residential property owners. Similar systems in Harrisburg and Allentown have reduced abandonment, encouraged development, and generated popular approval."


http://www.philadelphiacontroller.org/testimony_bill020490.htm (http://www.philadelphiacontroller.org/testimony_bill020490.htm)

NH would be an easy place to build a minarchist gov't (as stated by Jason et al 2/3 reduction) structure on top of the already existing "property tax" structure. This is a way to unite everybody from the Greens to the Libertarians behind a philosophically consistent policy...no taxes on the fruit's of ones labor (what we make) and onto things that we take from the commonwealth (user fees on land values as they relate to location), other pollution into our commons & government granted priviledge (currency, ballot access, corp. charters, public education, etc). with the fees being directly rebated to the citizens (in the form of a dividend) on a pro-rata basis never touching a beaurocrats grubby little hands. Now there would be no longer need for social welfare and no whining from the "progressives" about hurting the disadvantaged!
Title: Critiques of Georgism
Post by: JasonPSorens on August 23, 2003, 06:18:48 pm
In my view, Georgism has some fundamental flaws that are responsible for relegating it to crank status in economics for more than a century.

The first flaw is the idea that the value of unimproved land can be separated from the value of improved land.  A piece of land with improvements on it has a certain market value: for the land and the improvements.  It has no market value for the land itself, because the land and the improvements are inseparable.  David Nolan's suggestion that the land owner put a selling price on his land, and have that selling price taxed, is self-evidently ridiculous: you can't sell land by itself without the improvements on it.  You can guess at what the value of the "unimproved portion" of the land is by looking at nearby unimproved plots, but this isn't possible in many places (Manhattan), and is very imperfect everywhere.

The second flaw is that the Single Land Tax (SLT), even if implemented, can have deleterious economic effects.  The intuition behind the SLT is that land has perfectly inelastic supply, so that a tax on land doesn't reduce its supply, the way taxes on consumption, income, and land improvements can reduce productive effort.  But in reality, there are many ways you can "consume" the value of your land so that it is worth less and is taxed at a lower rate.  You can eliminate possible agricultural uses by carting off the soil or by treating it so that nothing grows there.  The SLT encourages sprawl because it taxes at a higher level land that is in or close to metropolitan areas, thus providing incentives to use lower-value rural land for habitation (incentives beyond the market incentive of price).  Thus, it is curious that environmentalists would support the SLT, because the SLT has some of the same harmful consequences for the environment that property taxes do.

Third, the SLT probably does discourage land speculation, forcing original landholders unlucky enough to own land assessed at high value to sit on their property because no one wants to buy it from them - but this is a bad thing.  Land speculation is a positive because it helps the market arbitrage land values and allocate land to its most productive uses.  There are temporary overvaluations and undervaluations, just as there are undervaluations and overvaluations of company equities in stock markets, but the markets do tend toward equilibrium, and allowing people to make profits off land sales helps the market move faster.  For example, land speculation can be important in revitalizing old neighborhoods, especially when you consider that people holding land for profit are likely to support measures, such as crime reduction, that increase the sale value of their land.

All of the above reasons combine when one considers the disturbing possibility that government could arbitrary set land value assessments, as RhythmStar suggests could be done in time of war.  If gov't arbitrarily reassesses land at higher values when it wants, then market distortions are bound to result.  An extreme case is the assessment of 1 ha of swampland at the same value of 1 ha of prime pastureland (BTW, does clearing forestland to make pasture count as an "improvement" for SLT purposes?  If so, how do you assess the value of a given piece of land "as if it had never been cleared, centuries ago"?  If not, aren't you providing incentives against productive use?  Maybe that's where an environmentalist might hop on board the SLT program).  In that event, the swampland owner is expropriated for the benefit of the pastureland owner, and the value of swampland falls well below its market value, which might be low anyway but include the possibility of finding rare wildlife or flora - in which case the SLT again promotes the destruction of wild habitat.

The moral assumptions of Georgism are also flawed.  Georgism confounds its empirical and normative aspects: supposedly, the SLT not only solves all economic ills and helps the market function, but accords with the correct metaphysical view of the earth.  The basic flaw is the assumption that land is collectively owned.  Land is not collectively owned.  In its natural state, land is unowned, or you might even say commonly owned.  But because something is unowned or commonly owned at one point does not mean it cannot be appropriated.  Land can only be collectively owned if the people living on it and having a right to it agree by contract to pool their land together and hold it collectively in perpetuity.  Then private appropriation from the collective would be wrong.

The assertion that land cannot be owned by humans because it is created by God proves too much.  After all, everything is created by God or by nature.  Not just land, air, and water - but human genes, individual personalities, the strength and weakness of human bodies, and so on.  One's talents, abilities, interests, personality traits, and perhaps even behavioral tendencies are determined by nature, and we are not responsible for them.  So does that mean that we cannot own our own bodies and minds?  The problem with Georgism is that it takes the workmanship ideal too seriously - the idea that whatever "you" create, you own, and whatever you don't create, you don't own.  But what do "we" create?  We don't really know, because we don't really know what aspects of "us" we are ultimately responsible for.
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 23, 2003, 08:19:53 pm
Finally, a post with some meat on its bones!  :)

I'm in the midst of rolling out a new application this weekend, so I don't have time for a complete response, but allow me to address one of the more fundamental challenges on the nature of property.

Jason said:
Quote
The assertion that land cannot be owned by humans because it is created by God proves too much.  After all, everything is created by God or by nature.  Not just land, air, and water - but human genes, individual personalities, the strength and weakness of human bodies, and so on.  One's talents, abilities, interests, personality traits, and perhaps even behavioral tendencies are determined by nature, and we are not responsible for them.  So does that mean that we cannot own our own bodies and minds?

Not at all.  One simply has to acknowlege the difference between sentient beings, who are creators themselves, and dirt.  

The one who created the dirt owns the dirt, but has left this creation (and much else) in the care of His other creations (us).  He did not leave it to me, or Zack Bass, or Jason Sorens exclusively, but to all of us.  How do we know this?  Because we are capable of such knowledge.  In fact, according to my particular belief set, the very reason we have Reason is to make such observations.

Yes, it is therefore "unowned", but only in the sense that all of us share equal common rights to access said unowned property.

On the unquoted point about unownedness not precluding appropriation, while it is true, is it moral?  If you own an object, that also does not preclude its appropriation by someone who has greater Force to apply.  We would both call that immoral.   If one accepts the notion that we all share equal rights of access to unowned property, then does not the individual who unilaterally appropriates unowned land, to the exclusion of the access rights of others, practice Force against them?  How is it that the usurper claims a just title?

In agrarian times, if a person planted a crop, then that land was theirs to use until the harvest.  The principle was the investment of labor, which was thought to confer at least temporary use rights.  After the harvest, even Thomas Jefferson wrote that no permanent right to the land survived.  Next season, all should have the same right to plant that land (first come, first serve).  In Jefferson's view, while rights to self and the fruits of one's labor were held to pre-exist government, enduring titles to land could not exist until after the establishment of government.  

I think Jefferson held this view because of the consent of the governed to be bound by the laws of said government.  Thus, the government could issue and enforce the deeds that would provide landholders with enduring rights to a given plot of land.   One could say that this is the most basic function of government beyond the protection of humans from violence -- the establishment and enforcement of land deeds.  Out of this, all else grows -- all industry and labor require a place to be conducted.  If we simply view the SLT as a user fee for the establishment and enforcement of land deeds, what's the complaint?

Quote
The problem with Georgism is that it takes the workmanship ideal too seriously - the idea that whatever "you" create, you own, and whatever you don't create, you don't own.  But what do "we" create?  We don't really know, because we don't really know what aspects of "us" we are ultimately responsible for.

We create that which is the result of our willful actions.  Some of those creations are tangible objects, others are merely ideas.  Others are less lofty and comprise our various bodily effluvia.  All of these things are our property, because it is through our actions that they come to be.

On the 'ultimately responsible for' point, I think it is important not to delve too deeply into cosmological enigmas.  It is common sense that we are responsible for our actions.  If we are not, then all discourse is as pointless as it is inevitable, for our words and reactions were then ordained since the beginning of time.  

Our works are only possible because of the natural resources that sustain us.  Those resources are there for all of us to benefit from, but for the sake of practicality, we must establish some rules.  This we do by governments, which are the grantors and enforcers of land deeds.  The consent of the governed is what makes this moral, rather than rule by force.  Since some government is desireable to foster a prosperous community, and such government must be funded, and since taxing labor and the fruits of labor is taxing something that is definitely owned by the creator (little 'c'), as opposed to something owned by the Creator, the SLT seems to be the most metaphysically satisfying, least coercive and least economically-damaging tax available.

BTW, rather than simply send words back and forth on the issue of what taxes are more or less onerous from an economic standpoint, I think we should use comparative numerical analysis.  It really is more illustrative.   If you'd like, I'll share a simple spreadsheet that could serve as a sort of tax-model scratch pad.  Perhaps by adding a few more variables, if could become a useful tool outside the limited context of the STL vs broad-based tax issue.

:)

Later,  

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: JasonPSorens on August 24, 2003, 10:37:10 am
Is it moral or immoral to appropriate unowned land?  Sometimes it might be immoral, but surely in some cases it is moral.  John Locke thought unowned land could be appropriated by the first comer so long as its productive capabilities were not wasted, and so long as everyone else who could not appropriate the land was better off for it - because of the productive use of the land made by the appropriator.  This seems pretty reasonable.  It's clear that private property in land promotes overall economic well-being, providing incentives to take care of the land and make it produce.  Allowing landowners to pass land to their descendants provides an even longer time horizon and promotes good stewardship.  Perhaps you could say that Georgism allows for this, but that this is really just "holding land in trust for society" rather than "owning land," but the differences seem negligible if the property rights really are secure.  In some circumstances, extreme inequalities in land ownership, usually resulting from historical conquest, as in Latin America and parts of Asia and Africa, can be harmful - but the proper solution here is a comprehensive redistribution of private land rights, rather than the SLT.

Is the SLT just a fee for recognizing land deeds?  If so, then the above philosophical distinction between common property held in trust and private property vanishes, because land deeds recognize private property in land.  But the rational way to recognize property rights in land and pay for that recognition would be to have a lump-sum fee on transfer or drawing up of land titles and deeds, and then a small annual fee to support the police and court system that protect all life, liberty, and property (not just property in land).  That may look more like a capitation tax or a wealth tax (or a combination of the two) than an SLT.  Certainly, a rate approaching 95% could never be justified as a fee for recognizing the deed and enforcing it.

The problem with comparing the SLT to other tax systems numerically is that on my contention, the SLT is fundamentally incoherent, since land values cannot be determined with any accuracy in most cases.  The problem therefore is not that the SLT is more expropriative than other tax systems (who knows whether it is?), but that any system of "pure land" assessments is bound to be arbitrary and to create distortions in the land market.
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on August 24, 2003, 12:50:20 pm
Hi,
I won't be able to contribute much to this thread as I am 'weak' in my knowledge.  But, that never stopped me before... LOL

somewhere in this thread it was said that land is limited and so 'inelastic' (I think this is what was said).  I disagree.  Land on earth is finite, and even in that respect, there is land under the ocean which can be used (maybe not economically with todays technology, but there are inherent obstacles that prevent future generations from developing 'undersea' communities) - also, floating man-made islands are possible.  Obviously, where I was going with the whole 'earth is finite' was that there is land and resources just out of our grasp in the solar system... these will be developed as soon as the population of earth forces the prices of the current land areas to increase above the cost of 'land' off-world.  This fact  was never even an option available to most of the economists and such that you all are referencing which indicates to me that their ideas might tend to be inherently flawed because it is based on the closed system of earth.

I don't mean to get all 'spacey' on you folks, I realize the realities of space travel and colonization, but I have ULTIMATE faith in the free market to overcome these obstacles and costs... all that needs to happen is an appropriate increase in 'demand' for land.

I do hope we all figure out the 'best' way to deal with property rights in respect to homesteading, first comers, etc  BEFORE we start migrating off-world because it will be harder to correct a flawed system if we expand use of that system out into the cosmos...

just a thought, don't mind me,
michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 24, 2003, 02:15:02 pm
Is it moral or immoral to appropriate unowned land?  Sometimes it might be immoral, but surely in some cases it is moral.  John Locke thought unowned land could be appropriated by the first comer so long as its productive capabilities were not wasted, and so long as everyone else who could not appropriate the land was better off for it - because of the productive use of the land made by the appropriator.  This seems pretty reasonable.  It's clear that private property in land promotes overall economic well-being, providing incentives to take care of the land and make it produce.  Allowing landowners to pass land to their descendants provides an even longer time horizon and promotes good stewardship.  Perhaps you could say that Georgism allows for this, but that this is really just "holding land in trust for society" rather than "owning land," but the differences seem negligible if the property rights really are secure.  In some circumstances, extreme inequalities in land ownership, usually resulting from historical conquest, as in Latin America and parts of Asia and Africa, can be harmful - but the proper solution here is a comprehensive redistribution of private land rights, rather than the SLT.

Is the SLT just a fee for recognizing land deeds?  If so, then the above philosophical distinction between common property held in trust and private property vanishes, because land deeds recognize private property in land.  

FWIW, I see no need to hold that the SLT requires a 'held in trust' status for the land.  Sure, some people do, but some people advocate using the SLT as a means to provide an equally-distributed 'general dividend' to the citizenry.  I do not, as any taxes levied in excess of government expenses would be a source of market distortion, similar to what we currently have. Any excess taxes (save a percentage to account for the natural variability of such aggregate totals... say 5%), should be given back to the taxpayers on a pro-rata basis, perhaps in the form of an assessment rebate subtracted from the next year's taxes.   Anyway, even under SLT, land deeds are held to be durable, saleable and assignable, so any practical difference  between the current system and SLT on that point is in the eyes of the beholder.

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But the rational way to recognize property rights in land and pay for that recognition would be to have a lump-sum fee on transfer or drawing up of land titles and deeds, and then a small annual fee to support the police and court system that protect all life, liberty, and property (not just property in land).  That may look more like a capitation tax or a wealth tax (or a combination of the two) than an SLT.  Certainly, a rate approaching 95% could never be justified as a fee for recognizing the deed and enforcing it.

I also felt that 95% was too high a rate.  Then, I built a spreadsheet to compare the results of an SLT with the current system.   The variables I used were these:

Variables:

1. Aggregate Tax Rate as a Percentage of Income (subsuming all taxes)
2. Land Value
3. Improvement Value
4. Tenant Rent (Land Value + Improvement Value)
5. Tenant Gross Income
6. Tenant After-Tax Income (Tenant Income - Aggregate Tax)
7. Tenant Disposable Income (Tentant After-Tax Income - Tenant Rent)
8. Landholder Net Income (Tenant Rent - Aggregate Tax)
9. Government Revenue (Tenant Gross Income + Tenant Rent * Aggregate Tax Rate)

Under the SLT, the Aggregate Tax is 0%, but a Land Tax Rate is added. Result

1. Aggregate Tax Rate = 0
2. Land Tax Rate
3. Land Value
4. Improvement Value
5. Tenant Rent (Land Value + Improvement Value)
6. Tenant Gross Income
7. Tenant After-Tax Income (Tenant Income - Aggregate Tax)
8. Tenant Disposable Income (Tentant After-Tax Income - Tenant Rent)
9. Landholder Net Income (Tenant Rent - Land Tax)
10. Government Revenue (Land Value * Land Tax Rate)

When plugging different numbers into this, I discovered first that the current system is enormously inequitable.  The combined government makes way more money from the 2 taxpayers than they get to keep for themselves, if the aggregate tax rate is 50%.  This is due to the double-taxation of income -- triple taxation in the case of corporate income!  I realize that income tax really ought to be broken out from sales and other taxes, but the income tax is the greatest portion and the multiple taxation of incomes has to be most distortive tax possible!

Anyway, I also found that reducing the Land Tax rate was not really needed, so long as you kept at least 5% of the value for the landholder.  The reason is that so much money is freed up in the market.  The tenant pays no direct taxes at all.  Of course, the landholder passes on the expense of the land tax to the tenant, but that still leaves the tenant with a windfall.  The natural result of that in a free market would be for the landholder to increase the amount of the improvement rent.  The unintuitive result was that, with a 95% land rent tax, there is an equilibrium where both the landholder and the tenant have about twice the money left over that they do today (effectively doubling real wealth), while the government still gets a bit over 1/3 of it's current revenue.   Isn't one of the goals of the FSP to reduce government size (and thus spending) by 2/3?

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The problem with comparing the SLT to other tax systems numerically is that on my contention, the SLT is fundamentally incoherent, since land values cannot be determined with any accuracy in most cases.

What is 'accurate' in terms of value?  In running a business, you set your prices to the maximum that the market can bear, but never less than cost (unless you are willing to buy marketshare by losing money on each sale).  In the SLT economy, there is great liquidity, as there are no taxes on Labor or Capital.  Thus, the real value of land improvements is able to emerge.  Furthermore, the incentive to develop is not reduced.... it is instead spurred!

On the value of the land itself, this could be a simple, utilitarian calculation -- the value of the land is proportional to the cost of the government services provided to the landholder and their tenants.  Personally, I like that method, as it corrals the cost of government into one formula, where everyone can see.  

If government is to be limited and expenses thus reduced, then there may be no pressing reason for a large land tax.  Perhaps a Uniform SLT, with all deeded lands paying the same rate, based on the simple division of taxable acres to the annual budget, is best.  So long as landholders pass this cost onto tenants, then the cost of government is plain to all and the illusion of governmental free lunches is gone.

However, maybe this is not the only acceptable method.  Perhaps we could take a que from Nolan and simply say that the landholder sets land rent.  Maybe not directly, as this would be too open to abuse, but indirectly by calculating an appraisal of land value vs improvement value.  The real estate business already has empirical methods for determining the value of unimproved land.  Why not let their methods be used and then allow the market price of the properties in the area set the land tax?  While I still think the USLT is a better idea, based on simplicity and honesty of purpose, this other approach would allow all the chaos of the free market into the mix, if this is really more preferred.  :)

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The problem therefore is not that the SLT is more expropriative than other tax systems (who knows whether it is?), but that any system of "pure land" assessments is bound to be arbitrary and to create distortions in the land market.

Compared to the distortions of the current income-centric system, the distortion of land values brought by the SLT would be as pond ripples to tsunamis.  In return for that interference, you would free Labor and Capital from any further distortions at all.  All taxation is distortive to markets.  The broad-based tax philosophy wants to distort all markets by taxing everything, presumably thinking that if every market bears a portion of the burden, no market is unduly disturbed.  The apparent outcome of this is that hugely distortive taxes, like the 'progressive' income tax, are tolerated, primarily because the nickel-and-dime collection methods and chaotic disturbances of markets taxed and regulated into free-market parodies, keep people from understanding the real costs of government.  

At least the SLT, like the New Hampshire property tax, would keep the taxpayers vigilant, as any government excess would have clear and personal financial consequences to all.

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 24, 2003, 03:12:42 pm
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In my view, Georgism has some fundamental flaws that are responsible for relegating it to crank status in economics for more than a century.

BillG: E. F. Schumacher, author of "Small is Beautiful: Economics as if  People Mattered", challenged modern economic orthodoxy, questioned our blind  allegiance to technology, and suggested that spiritual and human values  were more important than profit and deserved greater respect than the  "material world". For his courage and originality, he was often called a crank. To  that he would reply that a crank is "small, safe, cheap, comprehensible,  non-violent and efficient, a perfect tool of intermediate technology and  very good for starting revolutions".

Leo Tolstoy's appreciation stressed the logic of George's postulate: "The chief weapon against the teaching of Henry George was that which is always used against irrefutable and self-evident truths. This method, which is still being applied in relation to George, was that of hushing up .... People do not argue with the teaching of George, they simply do not know it."

Of course one makes themselves a prime target of both the left & the right when you try to synthesizes the eternal truths of both - other libertarian should know this well in reference to civil liberties issues. A reference for future reading of how neo-classical economist deliberately tried to marginalize the teachings of George - proving the power of his ideas...btw - he was almost elected mayor of NYC.

http://www.taxreform.com.au/essays/corrupt.htm (http://www.taxreform.com.au/essays/corrupt.htm)

Please keep in mind Georgism (Land Value Taxation) never claims to solve all the problems of the world but the belief is that it is ESSENTIAL for human liberty, dignity, & fairness.

Also...modern-day Georgism is now called Geo-libertarianism (some also call it Geoism or the study of Geonomics) which embraces a far more comprehensive critique than just land value taxation and includes other natural resources (air, water, land), as well as, other government granted priviledges (electromagnetic spectrum, intellectual property, currencies, etc). This idea is starting to take a more prominent place in our civil discourse (especially amongst the more thoughtfully pragmatic, radical decentralistic wing of the Greens - of which I am a proud member) under a broader conversation around the enclosure of the "new" commons which you seem to have made reference to: "commonly owned"

see SkyTrust:
http://www.skyowners.org/ (http://www.skyowners.org/)

see "Silent Theft - The Private Plunder of Our Commonwealth"":
http://www.silenttheft.com/ (http://www.silenttheft.com/)

see Tomales Bay Institute:
http://www.earthisland.org/tbi/commons_state.html (http://www.earthisland.org/tbi/commons_state.html)

here is a Geo-libertarian Green proposal in front of the PA Greens:
http://www.pagreenparty.org/platform/proposals.html (http://www.pagreenparty.org/platform/proposals.html)

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The first flaw is the idea that the value of unimproved land can be separated from the value of improved land.  A piece of land with improvements on it has a certain market value: for the land and the improvements.  It has no market value for the land itself, because the land and the improvements are inseparable.

BillG: Well, you obviously have never had to pay a property tax bill here in NH (I mean not yet of course!). It clearly states on your bill what your building is assessed for and what your land is assessed for...

The Simple Tax Shift (STS) concept would allow the taxing body to shift a higher percentage of your property tax onto land from buildings but the amount paid out of pocket would be the same.

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The second flaw is that the Single Land Tax (SLT), even if implemented, can have deleterious economic effects.

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The SLT encourages sprawl because it taxes at a higher level land that is in or close to metropolitan areas, thus providing incentives to use lower-value rural land for habitation (incentives beyond the market incentive of price).  Thus, it is curious that environmentalists would support the SLT, because the SLT has some of the same harmful consequences for the environment that property taxes do.

BillG: Sorry Jason but the exact OPPOSITE effect takes place. Anyone who is holding onto land nearest the city will pay a large burden for speculating thus will have to sell their land to someone who will optomize it's use. Speculators force developers out to marginal lands. Optomizing land use as it relates to it's location means that a huge number of housing will infill downtown (remember no tax on buildings) lowering the costs for rents (supply vs. demand) taking pressure off of the marginal lands. Greens are starting to come around to the fact that you can't have open space if your are not willing to optomize the urban core...This in addition to the ideas put forth by the Sky Trust advocates will encourage people out of their cars and back into vibrant & healthy urban areas...

http://www.progress.org/sprawl/jeffkris.htm (http://www.progress.org/sprawl/jeffkris.htm)

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Third, the SLT probably does discourage land speculation, forcing original landholders unlucky enough to own land assessed at high value to sit on their property because no one wants to buy it from them - but this is a bad thing.

BillG: Wrong again - Take two side-by-side plots of land - exactly the same size - in Atlantic City...one has the Trump Casino on it the other nothing. They would pay exactly the same land value tax! Call Donald and see if he would like to buy the empty lot!

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he moral assumptions of Georgism are also flawed.  Georgism confounds its empirical and normative aspects: supposedly, the SLT not only solves all economic ills and helps the market function, but accords with the correct metaphysical view of the earth.  The basic flaw is the assumption that land is collectively owned.  Land is not collectively owned.  In its natural state, land is unowned, or you might even say commonly owned.  But because something is unowned or commonly owned at one point does not mean it cannot be appropriated.  Land can only be collectively owned if the people living on it and having a right to it agree by contract to pool their land together and hold it collectively in perpetuity.  Then private appropriation from the collective would be wrong.

The assertion that land cannot be owned by humans because it is created by God proves too much.  After all, everything is created by God or by nature.  Not just land, air, and water - but human genes, individual personalities, the strength and weakness of human bodies, and so on.  One's talents, abilities, interests, personality traits, and perhaps even behavioral tendencies are determined by nature, and we are not responsible for them.  So does that mean that we cannot own our own bodies and minds?  The problem with Georgism is that it takes the workmanship ideal too seriously - the idea that whatever "you" create, you own, and whatever you don't create, you don't own.  But what do "we" create?  We don't really know, because we don't really know what aspects of "us" we are ultimately responsible for.                                                                

BillG: Geo-libertarianism is based on these three principles:

1. the right to life - since we are land animals the right to life can have no meaning without a right to land on which to live and to make a living

2. equal freedom of all - the right to use our faculties, move around as long as we don't interfere with others rights to do the same. From this a corollary right to the equal access to the earth.

3. self-ownership - you own yourself and the fruits of your intellectual and manual labor.

Jefferson talked about this as the right to the usufruct of the earth - the right to both use the earth and to the fruits of one's labors thereon. The rights of self-ownership and liberty lead to the principle of labor-based property. The Geo-libertarian corollary of this principle is that you cannot monopolize that which no one created. One has no more right than one's equal share of the earth (though one may rent this priviledge), especially those aspect of it that are scarce and/or capable of being monopolized, such as land surfaces. This would deny others their equal right to life and the use of the earth.

The best analogy that I can think of is if we were able to "appropriate" our sky (air/oxygen) and individual owners were able to charge you for it's use - no one would see this as just - right?

For a more detailed explanation see "Libertarian Party at Sea on Land"

http://members.aol.com/_ht_a/tma68/kyriazi.htm (http://members.aol.com/_ht_a/tma68/kyriazi.htm)
Title: Re:Economics According To George (Henry George, that is...)
Post by: JasonPSorens on August 24, 2003, 03:52:14 pm
FWIW, I see no need to hold that the SLT requires a 'held in trust' status for the land.  Sure, some people do, but some people advocate using the SLT as a means to provide an equally-distributed 'general dividend' to the citizenry.

Why would you want to distribute a general dividend to the citizenry?  I don't see any argument for expropriating people beyond what's necessary to maintain basic institutions of law and perhaps also a safety net to prevent people from falling  below the utility level they'd enjoy in a hunter-gatherer society with no property (i.e., to satisfy the Lockean proviso).  But anyway, I see that we agree here:

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I do not, as any taxes levied in excess of government expenses would be a source of market distortion, similar to what we currently have.

But I think BillG does believe in the "general dividend" idea, so the above is for his benefit. ;)

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Anyway, even under SLT, land deeds are held to be durable, saleable and assignable, so any practical difference  between the current system and SLT on that point is in the eyes of the beholder.

Good!  So now the issue is whether the SLT distorts markets more or less than other types of taxes.  More on that below.

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The unintuitive result was that, with a 95% land rent tax, there is an equilibrium where both the landholder and the tenant have about twice the money left over that they do today (effectively doubling real wealth), while the government still gets a bit over 1/3 of it's current revenue.   Isn't one of the goals of the FSP to reduce government size (and thus spending) by 2/3?

Sure, but other kinds of taxes could probably accomplish this just as well, depending on administration costs, how assessments are made, and other factors that will vary over time and space.  I can see a capitation tax, a wealth tax, a flat income tax, a property tax, a single land tax, a general tariff, and a general sales tax being the "least bad" tax under different circumstances.  I don't see any particular advantages of the SLT that are universally applicable, unless you compare it to the current system, which is worse than a lot of alternatives!

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What is 'accurate' in terms of value?  In running a business, you set your prices to the maximum that the market can bear, but never less than cost (unless you are willing to buy marketshare by losing money on each sale).  In the SLT economy, there is great liquidity, as there are no taxes on Labor or Capital.  Thus, the real value of land improvements is able to emerge.  Furthermore, the incentive to develop is not reduced.... it is instead spurred!

But you're assuming here that "pure land," net of improvements, can be accurately assessed.  Once the probability that land assessments will be inaccurate is factored in, then one sees that the real value of land improvements does not necessarily emerge in this system.  An extreme case would be that in which land assessments are basically randomly assigned, so that taxpayers are effectively drawing their tax liabilities out of a hat.  This system of random taxation doesn't tax capital or labor either, but it might still have deleterious consequences compared to taxes that do fall upon labor and capital!

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On the value of the land itself, this could be a simple, utilitarian calculation -- the value of the land is proportional to the cost of the government services provided to the landholder and their tenants.  Personally, I like that method, as it corrals the cost of government into one formula, where everyone can see.  

I think that might be a very plausible system of taxation under a wide range of circumstances, but I don't see what it has do with a land tax. ;)  You might consume a lot of government services but own little land of value.  The value of gov't services might have to do with its protection of your improvements that you've made on the land you own, or maybe even intangible assets like equity, insurance, etc.  (Does a flat income tax better approximate a user fee on gov't services?  I don't know; as far as I know, no one has ever tried to calculate this.)


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If government is to be limited and expenses thus reduced, then there may be no pressing reason for a large land tax.  Perhaps a Uniform SLT, with all deeded lands paying the same rate, based on the simple division of taxable acres to the annual budget, is best.  So long as landholders pass this cost onto tenants, then the cost of government is plain to all and the illusion of governmental free lunches is gone.

True, but here the advantage of the SLT is not in the L - land - but in the S - single.  Any single tax is likely to be transparent and simple: a flat income tax, a flat wealth tax, a flat property tax, a capitation tax, a flat general sales tax.  Any of these taxes would keep taxpayers vigilant and the cost of government apparent, so long as there was only one tax, applied evenly to all.
Title: Re:Economics According To George (Henry George, that is...)
Post by: JasonPSorens on August 24, 2003, 04:21:00 pm
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The first flaw is the idea that the value of unimproved land can be separated from the value of improved land.  A piece of land with improvements on it has a certain market value: for the land and the improvements.  It has no market value for the land itself, because the land and the improvements are inseparable.

BillG: Well, you obviously have never had to pay a property tax bill here in NH (I mean not yet of course!). It clearly states on your bill what your building is assessed for and what your land is assessed for...

Well, of course the government can send you a bill with a number on it; the question is whether that number can generally be accurate. ;)  (In the same way, governments use eminent domain to force people off their property & pay them what those governments think it's worth.)

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BillG: Sorry Jason but the exact OPPOSITE effect takes place. Anyone who is holding onto land nearest the city will pay a large burden for speculating thus will have to sell their land to someone who will optomize it's use. Speculators force developers out to marginal lands.

That doesn't make sense: speculators hold land simply to sell.  If land were valuable enough for development purposes, a speculator would sell it and a developer would buy it.  You're assuming that somehow the market doesn't clear.

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Optomizing land use as it relates to it's location means that a huge number of housing will infill downtown (remember no tax on buildings) lowering the costs for rents (supply vs. demand) taking pressure off of the marginal lands.

Downtown buildings won't be taxed, but downtown land will be, and since downtown land is worth a great deal more than out-of-town land, taxes on downtown land will be higher, helping (like property taxes) to push people out of town.

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Third, the SLT probably does discourage land speculation, forcing original landholders unlucky enough to own land assessed at high value to sit on their property because no one wants to buy it from them - but this is a bad thing.

BillG: Wrong again - Take two side-by-side plots of land - exactly the same size - in Atlantic City...one has the Trump Casino on it the other nothing. They would pay exactly the same land value tax! Call Donald and see if he would like to buy the empty lot!

What about a plot the same size that's two miles down the road?  Will it be assessed at the same value as these two plots?  Or will it be assessed at lower value because it's out of town?  Let's assume all these plots have improvements on them, so that there is no market value for the unimproved land.  Not only will the plot next to the casino have a higher market value than the plot down the road because of its proximity to the casino, it will have a higher tax liability.  So demand for that plot would be lower than it would be were there no taxes on land whatsoever.  This will cause the market value to decline to bring demand back up, ultimately simply shifting the cost of the land tax from the eventual buyer onto the unlucky first owner when the tax was imposed.

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1. the right to life - since we are land animals the right to life can have no meaning without a right to land on which to live and to make a living

That wouldn't be an argument for taxing land, but for redistributing it to everyone.  But I disagree with the premise anyway, because in an advanced market society you don't need to own land to make a living (I've never owned land).

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2. equal freedom of all - the right to use our faculties, move around as long as we don't interfere with others rights to do the same. From this a corollary right to the equal access to the earth.

That last sentence is not a corollary but a deduction from a hidden premiss, that "accessing earth" previously appropriated by someone else does not violate that person's equal freedom.  So it assumes that land is different from other things, like bodies.

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3. self-ownership - you own yourself and the fruits of your intellectual and manual labor.

If you own your own body, which you did not create, then why is it impossible for you to own land that you also did not create?

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Jefferson talked about this as the right to the usufruct of the earth - the right to both use the earth and to the fruits of one's labors thereon. The rights of self-ownership and liberty lead to the principle of labor-based property. The Geo-libertarian corollary of this principle is that you cannot monopolize that which no one created.

Monopolization isn't the issue, though; the solution for monopolization might be (depending on what caused the monopolization) a general redistribution of private land rights, but not their abolition.

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One has no more right than one's equal share of the earth (though one may rent this priviledge), especially those aspect of it that are scarce and/or capable of being monopolized, such as land surfaces. This would deny others their equal right to life and the use of the earth.

This departs very substantially from Locke's and Jefferson's view.  Let's say that all the available land was appropriated by our ancestors 400 years ago, and let's assume it was appropriated justly and used well.  Let's assume also that all land titles were passed down through the generations justly, through voluntary trade and gift.  Today, we enjoy a much higher standard of living as a result.  Now, just because one of my ancestors sold land, and therefore I don't own any, what gives me the right to demand land from someone else who did receive it justly?  Nothing.  Unequal shares in land will develop over time, and we shouldn't be concerned about that, because our standard of living today is much higher than it would be had no one appropriated land 400 years ago (in the hypothetical).

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The best analogy that I can think of is if we were able to "appropriate" our sky (air/oxygen) and individual owners were able to charge you for it's use - no one would see this as just - right?

Well, air can't be appropriated; it's literally impossible (at this stage in time).  But the electromagnetic spectrum might be another example: there's nothing wrong with letting people appropriate all of it, so long as the right of appropriation was open to everyone when the spectrum was discovered.  It benefits us to have the spectrum divided up into private shares and developed.
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on August 24, 2003, 04:39:49 pm
lovely debate on both sides!  Keep it up boys!  you are helping me understand my own dogmatic view...


the cheering section,
michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 24, 2003, 06:46:23 pm
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The first flaw is the idea that the value of unimproved land can be separated from the value of improved land.  A piece of land with improvements on it has a certain market value: for the land and the improvements.  It has no market value for the land itself, because the land and the improvements are inseparable.

BillG: Well, you obviously have never had to pay a property tax bill here in NH (I mean not yet of course!). It clearly states on your bill what your building is assessed for and what your land is assessed for...

Well, of course the government can send you a bill with a number on it; the question is whether that number can generally be accurate. ;)  (In the same way, governments use eminent domain to force people off their property & pay them what those governments think it's worth.)

Under the USLT notion, land value is reserved for funding government.  Each dollar of the annual buget is divided equally over each acre of taxable land.   Thus, the 'value' of land is irrelevant.  In fact, land is no longer an asset at all, but a liability!  This has a number of salutory effects on society.  Instead of speculating on land per se, economic interest is focused on the economic potential of the uses of the land -- particularly for those activities that generate revenue, such as rental property and manufacturing.

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BillG: Sorry Jason but the exact OPPOSITE effect takes place. Anyone who is holding onto land nearest the city will pay a large burden for speculating thus will have to sell their land to someone who will optomize it's use. Speculators force developers out to marginal lands.

That doesn't make sense: speculators hold land simply to sell.  If land were valuable enough for development purposes, a speculator would sell it and a developer would buy it.  You're assuming that somehow the market doesn't clear.

Actually, speculators simply look for investments that make money.  If buying and holding land is no longer where the money is, then speculators will shift their investment strategies to match.  So, market clearing dynamics taken into account, the focus of speculators will shift from land speculation to construction speculation, or short-term land speculation where the immediacy of impending development combines with excellent location to inflate the selling price far above the LTV.  It is the position of SLT advocates (and especially USLT) that such conditions will be more likely to occur in-town than out.  

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Optomizing land use as it relates to it's location means that a huge number of housing will infill downtown (remember no tax on buildings) lowering the costs for rents (supply vs. demand) taking pressure off of the marginal lands.

Downtown buildings won't be taxed, but downtown land will be, and since downtown land is worth a great deal more than out-of-town land, taxes on downtown land will be higher, helping (like property taxes) to push people out of town.

Which is why I am leaning more and more to the USLT.  By totally removing the LTV differential between in-town and out-of-town lands, the desired attraction of urban development will be most facilitated, even super-charged.  Likewise, as the LTV of remote areas will be the same as downtown lots, the desireability of buying up huge tracts of undeveloped land in outlying areas will be lessened.  

In the absence of a ready plan to make economically productive use of such lands, they would likely be allowed to remain fallow, which is precisely what enviros would prefer.  Conversely, considering the LTV, the Sierra Club would be unlikely to be able to buy up such lands and take them off the market forever.  Instead, they would remain under State control until such time as someone wanted to assume the LTV liability.   The Sierra Club might be able to operate a wildlife park or hunting range, which would be good for the enviros and good for the hunters, as long as they were able to meet each other half way. :)

BTW, on Flat Income Taxes and other even tax schemes, I am confident they can all be shown to be less positive in their results than USLT.  Even a flat income tax gives the government more as I make more.  To what end?  The government does not need more revenue just because I make more income!  And let us not forget that a flat income tax, like consumption-based taxes, is regressive, falling more heavily on the backs of the poor than on the wealthy.  This only facilitates more inequities in society, while at the same time introducing impossible-to-predict fluctuations in government revenue.  

Why not free Labor and Capital?  Why not limit taxation to the annual budget of government?  Why not spread the burden in an equal manner, yet still allow free market dynamics to play, while not directly imposing a regressive burden on the poor?  USLT does all these things. Does any other system deliver them as efficiently, with as little complication?

RS

Title: Re:Economics According To George (Henry George, that is...)
Post by: Duodecimal on August 24, 2003, 09:37:57 pm
But the electromagnetic spectrum might be another example: there's nothing wrong with letting people appropriate all of it, so long as the right of appropriation was open to everyone when the spectrum was discovered.  It benefits us to have the spectrum divided up into private shares and developed.

The EM spectrum can't be appropriated either; I find the very concept absurd. It's like claiming ownership on middle-C or the letter Q. I posted about this in some other thread, but I likened the appropriation of an electromagnetic frequency with claiming that you own the volume of air that others can hear you screaming in. We found ways of dealing with people who interfere with our speaking (called civility). There's nothing special about the frequencies our natural voices can't hit but technology can.

How do you improve the EM spectrum? How do you, like land or cars or your CDs, prevent others from utilizing a resource that has no physical form (like Ideas. Indidentally, the concept of IP and patents strikes me as equally false for the same reasons).
Title: Re:Economics According To George (Henry George, that is...)
Post by: JasonPSorens on August 24, 2003, 09:46:14 pm
But the electromagnetic spectrum might be another example: there's nothing wrong with letting people appropriate all of it, so long as the right of appropriation was open to everyone when the spectrum was discovered.  It benefits us to have the spectrum divided up into private shares and developed.

The EM spectrum can't be appropriated either; I find the very concept absurd. It's like claiming ownership on middle-C or the letter Q. I posted about this in some other thread, but I likened the appropriation of an electromagnetic frequency with claiming that you own the volume of air that others can hear you screaming in. We found ways of dealing with people who interfere with our speaking (called civility). There's nothing special about the frequencies our natural voices can't hit but technology can.

Well, yeah, there is something special about those frequencies: namely, we can't hear them without special devices designed to tune into them. ;)  You can effectively "appropriate" the sound space of a room by yelling at maximum volume, crowding out all other voices.  (Civility - the practice of speaking in turns - solves this.)  You can effectively "appropriate" a piece of the electromagnetic spectrum by running an extremely powerful broadcast tower that crowds out all weaker signals at a given frequency.  But that's inefficient, so a better solution is to allow "homesteading" of the sections of the spectrum.  This is pretty analogous to what happens when land titles come to be recognized.  It's more efficient to recognize private property than to let people fight over it - that's true of both land and the electromagnetic spectrum.
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 25, 2003, 08:52:46 pm
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Is it moral or immoral to appropriate unowned land?  Sometimes it might be immoral, but surely in some cases it is moral. 

BillG: If we regard human beings as having equal moral worth, then it is morally wrong for some to be masters and others slaves...All land is monopolized, since new land cannot be created or imported. The landlords give you choice: which plot of land do you wish to be located in? You the tenant have no choice as to having to live on some land. Your only choice is which monopolist will take the rent that naturally and properly belongs to you in the first place as a member of the community. Similiarly - suppose someone put you in prison and there were several empty cells you could be put into. The guard says, choose one of the cells. Is this choice voluntary? Relative to the cells, yes, you choose one. But the greater context of being in prison is involuntary, so the choice of cells is also involuntary

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John Locke thought unowned land could be appropriated by the first comer so long as its productive capabilities were not wasted, and so long as everyone else who could not appropriate the land was better off for it - because of the productive use of the land made by the appropriator.

BillG: John Locke said (quote) "God gave the world to men in common....He that leaves as much [land] for another to make use of does as good as take nothing at all."

Hence John Locke's proviso that one has "property" in land only to the extent that there is "enough, and as good left in common for others."  When there is not, land begins to have rental value. Thus, the rental value of land reflects the extent to which Locke's proviso has been violated, thereby making community-collection of rent, through Land Value Taxation (LVT), a just and necessary means of upholding the Lockean principle of private property.

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In some circumstances, extreme inequalities in land ownership, usually resulting from historical conquest, as in Latin America and parts of Asia and Africa, can be harmful - but the proper solution here is a comprehensive redistribution of private land rights, rather than the SLT.

BillG: What do you consider extreme? Does "usually resulting from historical conquest" apply to Britain?  

In Britain 70% of land is still owned by less than 1% of the population. So of the 60 million acres available - 40 million acres are owned by 6,000 families. To contrast this with Ireland, which people should remember went thru the potato famine during the 1850's (can anyone say "landownership") in 2001 52,000 new homes were built in a population of 3.4 million whereas Britain, managed a mere 170,000 in a population of 60 million!.

The failure to re-distribute land in the Britain is one of the prime factors why they have under-performed during most of the 20th century. Of all the political philosophers who have come along in history there was no greater friend to Ireland than Henry George!

http://www.schalkenbach.org/library/george.henry/landforthepeople.html (http://www.schalkenbach.org/library/george.henry/landforthepeople.html)

So to answer your "proper solution" - "SLT" is a comprehensive redistribution of private land rights !!!!

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Certainly, a rate approaching 95% could never be justified as a fee for recognizing the deed and enforcing it.

BillG: It is not necessary for efficiency for the pure land rent to belong to the individual title holder. Economists use the term "economic rent" for payments beyond what is needed to put a factor of production to efficient use. Land rent is economic rent, since the land is already there, and for real estate, the amount of land within some boundary line is fixed. So when rent is used for the public finances, it does not reduce the quantity of land. The rent will not be passed on to the tenant, since the payment of the rent to a community does not change the supply or demand for land.

The use of rent for public revenues therefore has no excess burden, no burden on society or the economy. Taxes on income, goods, and transactions do have an excess burden, since by raising the price and reducing the quantity of goods, resources do not get allocated to where the people most want them. Taxes on labor and goods raise prices, while rent-based payments do not affect the rent, and they lower the price of land rather than raise it.
Title: Re:Economics According To George (Henry George, that is...)
Post by: JasonPSorens on August 25, 2003, 10:00:53 pm
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Is it moral or immoral to appropriate unowned land?  Sometimes it might be immoral, but surely in some cases it is moral.

BillG: If we regard human beings as having equal moral worth, then it is morally wrong for some to be masters and others slaves...

Not owning any land doesn't make me a slave.  Many landowners are worse off financially than I am.

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All land is monopolized, since new land cannot be created or imported. The landlords give you choice: which plot of land do you wish to be located in?

That's a weird definition of monopolization.  By that standard, everything is monopolized.  "The soap manufacturers give you a choice: which bar of soap do you wish to buy?"

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You the tenant have no choice as to having to live on some land. Your only choice is which monopolist will take the rent that naturally and properly belongs to you in the first place as a member of the community.

Why does land naturally and properly belong to me as a member of the community?  What about soap?  Should every member of the community be provided a bar of soap?  If not, what makes land different from every other commodity?  (And let's not go back to the erroneous assumption that land is uniquely uncreated. ;))

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John Locke thought unowned land could be appropriated by the first comer so long as its productive capabilities were not wasted, and so long as everyone else who could not appropriate the land was better off for it - because of the productive use of the land made by the appropriator.

BillG: John Locke said (quote) "God gave the world to men in common....He that leaves as much [land] for another to make use of does as good as take nothing at all."

Exactly - but if you interpret Locke's proviso in the stringent way that you do below, a contradiction emerges, which Nozick identified:

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Hence John Locke's proviso that one has "property" in land only to the extent that there is "enough, and as good left in common for others."  When there is not, land begins to have rental value. Thus, the rental value of land reflects the extent to which Locke's proviso has been violated, thereby making community-collection of rent, through Land Value Taxation (LVT), a just and necessary means of upholding the Lockean principle of private property.

The problem with this view is that if any private appropriation could eventually result in leaving "not enough and as good" land for future appropriators, then the prior private appropriation that forced this situation was also wrong, and so on all the way back to the beginning.  So no private appropriation is possible.  But clearly Locke did not believe this, b/c he thought private appropriation was both possible and desirable.  The answer lies in Locke's discussion of how the development of money affects the proviso.  As Nozick teased out, the development of a money system reduces the impact of the proviso, because many people can earn a good living without owning land, as would be necessary in an agricultural barter economy.  In modern capitalist systems, the only effect of the proviso then is to provide a justification for relief programs for those who fall below the standard of living that they would enjoy in a society without private appropriation of land: the primeval hunter-gatherer society.  These are the people harmed by private appropriation, and the residue of the primeval common right to land creates a right to some level of assistance from the nearby community.

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In some circumstances, extreme inequalities in land ownership, usually resulting from historical conquest, as in Latin America and parts of Asia and Africa, can be harmful - but the proper solution here is a comprehensive redistribution of private land rights, rather than the SLT.

BillG: What do you consider extreme? Does "usually resulting from historical conquest" apply to Britain?  

It probably applies to Ireland and the Highlands and Islands of Scotland still; in Britain, a comprehensive redistribution of land would probably cause more problems than it would solve, especially since it would be impossible to sort out those harmed and benefited by the Anglo-Saxon and Norman conquests.

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So to answer your "proper solution" - "SLT" is a comprehensive redistribution of private land rights !!!!

I disagree.  There are inherent problems in calculating the SLT and in distributing the revenues raised by it.  I would much rather simply redistribute land titles and let the new private owners retain full property rights in them.

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Certainly, a rate approaching 95% could never be justified as a fee for recognizing the deed and enforcing it.

BillG: It is not necessary for efficiency for the pure land rent to belong to the individual title holder. Economists use the term "economic rent" for payments beyond what is needed to put a factor of production to efficient use. Land rent is economic rent, since the land is already there, and for real estate, the amount of land within some boundary line is fixed. So when rent is used for the public finances, it does not reduce the quantity of land.

Right, that's the view relying on the inelasticity of supply of land.  But it's impossible in practice to separate out what part of land rent is economic rent.  Take again the example of forestland that was cleared centuries ago for pasture.  What is the value taxed here?  The value of the land as if it were forest, or the value of the land as pasture?  If the former, there's a real calculation problem; if the latter, you're taxing an "improvement" and theoretically discouraging future improvements.
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on August 25, 2003, 10:42:08 pm
BillG,
What would be the effect(positives/negatives) of utilizing this method in regard to any resource?  Not just land, air, or water - but to oil, gold, minerals, etc?  or does it only work for land?


michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: underwater on August 25, 2003, 11:21:32 pm
I am glad to see this Georgist discussion! I consider myself to be a geolibertarian and believe that the Georgist doctrine comes closest to elucidating a system of "fair" or "just" taxation. Of course, I doubt that Georgist politics can or should be forced down upon people. One of my goals is to create a corporation in the Free State that owns land. Then, people can rent land from the corporation by buying land-shares that entitle them to occupy a piece of land in exchange for rent (i.e. a negative dividend). Rent revenue might go towards improving the community by hiring security, paving roads, lighting streets, and so on. Some of the rent will be put in a special fund that will be used to charter future corporations. Thus, the first voluntary Georgist community, if successful, will spawn other communities which in turn will spawn even more until the whole Free State experiences a peaceful (and decentralized) Georgist revolution. Of course, this might not happen  :-[ - but at least the idea can be tested in the marketplace of ideas!

Also, note that the "ownership" in my Georgist land company is based on ownership of shares not ownership of land. A land-share would basically give you a voting right in the company. Thus, the community (or shareholders) decides how the collected rent should be allocated. BillG's group might focus on social spending while another group might focus more on infrastructure. In any case, a "nation" of these communities could form with the "federal government" taxing all the separate communities for rent. The taxation of communities and not individuals at the federal level would allow people to effectively protest excessive taxes through non-payment with less fear of reprisals.
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on August 26, 2003, 01:32:12 am
Underwater,
wow, sometimes I just plain don't understand - what you are proposing is totally available to you and others in a true free market, as you pointed out so efficiently.  Though I am no georgist (as I understand it), I do support your right to attempt to implement your ideas as long as no force or coercion is involved.  This is where I think you differ from the other Georgists in this thread - they do not welcome the competition in the 'marketplace of ideas' and feel the need to use the force of government to enact suck a system.  I like your approach much better and it sounds no different then homeowners associations etc that would crop up in a libertarian society.

Keep it up sir!  Tho, I think both Rhythm and c5367 will disagree with you... I want to see their reasons if they do...

michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 26, 2003, 03:39:49 pm
I am glad to see this Georgist discussion! I consider myself to be a geolibertarian and believe that the Georgist doctrine comes closest to elucidating a system of "fair" or "just" taxation. Of course, I doubt that Georgist politics can or should be forced down upon people. One of my goals is to create a corporation in the Free State that owns land. Then, people can rent land from the corporation by buying land-shares that entitle them to occupy a piece of land in exchange for rent (i.e. a negative dividend). Rent revenue might go towards improving the community by hiring security, paving roads, lighting streets, and so on. Some of the rent will be put in a special fund that will be used to charter future corporations. Thus, the first voluntary Georgist community, if successful, will spawn other communities which in turn will spawn even more until the whole Free State experiences a peaceful (and decentralized) Georgist revolution. Of course, this might not happen  :-[ - but at least the idea can be tested in the marketplace of ideas!

Also, note that the "ownership" in my Georgist land company is based on ownership of shares not ownership of land. A land-share would basically give you a voting right in the company. Thus, the community (or shareholders) decides how the collected rent should be allocated. BillG's group might focus on social spending while another group might focus more on infrastructure. In any case, a "nation" of these communities could form with the "federal government" taxing all the separate communities for rent. The taxation of communities and not individuals at the federal level would allow people to effectively protest excessive taxes through non-payment with less fear of reprisals.


Sounds like an excellent idea!  

Have you done any research on the Arden Georgist colony in Deleware?

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 26, 2003, 08:16:05 pm
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BillG,
What would be the effect(positives/negatives) of utilizing this method in regard to any resource?  Not just land, air, or water - but to oil, gold, minerals, etc?  or does it only work for land?

michael

BillG: How about for starters the problems in the Middle East viz. Iraq Oil revenues? (notice the reference to land reform...)

From Fareed Zakaria's (the "other" Yale graduate...)Newsweek article: "How to Wage Peace" - 4/21/03

http://www.fareedzakaria.com/articles/newsweek/042103.html (http://www.fareedzakaria.com/articles/newsweek/042103.html)

Read under The Curse of Oil
"But perhaps the best approach is to create a national trust--with transparent and internationally monitored accounting--into which all oil revenues flow. These revenues could be spent only in specified ways: on, for example, health care and education. The World Bank has been experimenting on such a model with Chad, the tiny oil-rich African state. Alaska is another successful version of this model. Steven Clemons of the New America Foundation          points out that Alaska distributes its oil revenues directly to its residents, bypassing the corruption usually created by leaving it in the hands of governments or oligarchs. This is a variation of land reform, redistributing wealth broadly, which was crucial in spurring democracy in Japan and almost all other feudal societies."
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 26, 2003, 09:11:42 pm
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Not owning any land doesn't make me a slave.  Many landowners are worse off financially than I am.

BillG: It has nothing to do with whom is richer than whom...the point is that you have to live or produce wealth somewhere, right? And if you have to pay rent out of your wages (some people pay up to 50% of their income on rents) what is the difference between that and having to pay taxes on what you make - the landlord becomes the government. By collecting land values - landlords will have to now optomize it's use creating a housing supply & quality this state (NH) has never seen (remember no taxes on buildings) in the areas that we want it...downtowns w/ resulting drop in rents, creating more walkable, livable cities and getting people out of their cars (remember the war in Iraq?). We will have to change the zoning laws to allow infilling but we will seriously alleviate the sprawl issue. Now after minarchist government (2/3 less right) is paid for (courts, police, etc) the remainder should be returned to the rightful owners - those that created the land value in the first place - the citizens of the local community directly as the populations rise or through residual effects of public infrastructure investments (you could get rid of all these to by making new landowners pay for the infrastructure by collecting increase land values). One could take the "citizens dividend" (land values being only one source of the dividend) and apply it towards the rent living potential rent free!  

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That's a weird definition of monopolization.  By that standard, everything is monopolized.  "The soap manufacturers give you a choice: which bar of soap do you wish to buy?"

BillG: Geesh - what college did you get your Phd from?  ;)
Since soap can be created (or imported) unlike land it can never be monopolized...

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Why does land naturally and properly belong to me as a member of the community?  What about soap?  Should every member of the community be provided a bar of soap?  If not, what makes land different from every other commodity?  (And let's not go back to the erroneous assumption that land is uniquely uncreated. )

BillG: Like my good friend Ronald Reagan use to say (god bless his frail mind!) "There you go again"...
Not LAND Jason - land VALUE (in the form of rent)!!! Yes, title to land should remain in private hands and passed down to heir, etc...

The rationale for the equal ownership of RENT is that no human being created what was provided by nature, and therefore as equal beings, we are equally entitled to natural opportunities and benefits that nature affords.

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I disagree.  There are inherent problems in calculating the SLT and in distributing the revenues raised by it.

prior thread:
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Well, of course the government can send you a bill with a number on it; the question is whether that number can generally be accurate

BillG: As I had said in one of my other posts when you get a bill for your taxes in NH you are shown a value for your buildings and a value for your land. I have a unique perspective on this because I have recently built a home (GC'd it), sold it and purchased another home all with the last 5 yrs.

Built home in '96 for $75/sqft x 3000 sqft =210K
Land was 90K so house cost 300K

sold house in '02 for 450K so 150K profit in mostly land value over 5 yrs...how much do you think material and labor prices have risen in 5yrs with inflation running at about 2-4%??? (maybe 25K - tops)

Now I just bought a house for 400K and it is also 3000 sqft @ $100/sqft replacement cost (not GC'd myself) = 300K so my land value is 100K.

When I look at my tax bill it says buildings 270K and land 80K and I pay a tax rate of $25/1000 or $8,750- make sense right?

Here is what a simple tax shift would look like...

on land $100/1000 so $8,000 (90%)
on buildings $2.77/1000 so $750 (10%)

what is so difficult about that????

I'll take up the Nozick/Locke question another time...I'm beat! You are making my karma numbers look bad because of your monopoly position within this organization   ;D
Title: Re:Economics According To George (Henry George, that is...)
Post by: JasonPSorens on August 26, 2003, 09:47:10 pm
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Not owning any land doesn't make me a slave.  Many landowners are worse off financially than I am.

BillG: It has nothing to do with whom is richer than whom...the point is that you have to live or produce wealth somewhere, right? And if you have to pay rent out of your wages (some people pay up to 50% of their income on rents) what is the difference between that and having to pay taxes on what you make - the landlord becomes the government.

I get to choose my landlord, not my government.  There are lots of expenditures that are not discretionary, just like rents (food, clothing).  The analogy with taxation only holds moral force if rent were demonstrated to be coercive.

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By collecting land values - landlords will have to now optomize it's use creating a housing supply & quality this state (NH) has never seen (remember no taxes on buildings) in the areas that we want it...downtowns w/ resulting drop in rents, creating more walkable, livable cities and getting people out of their cars (remember the war in Iraq?). We will have to change the zoning laws to allow infilling but we will seriously alleviate the sprawl issue.

I agree with the goals here, but I don't see how the SLT accomplishes all of this.  Prior to the 1950s, home and work did tend to be integrated into a single community, but the difference between then and now does not have to do with land taxation.  The secret of returning to that sort of arrangement then probably has to do with other factors.

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Now after minarchist government (2/3 less right) is paid for (courts, police, etc) the remainder should be returned to the rightful owners - those that created the land value in the first place -

They create value for the land by demanding it, in the same way that demand creates monetary value for other goods & services. But it would be passing strange to reward customers for the value that they place on products, and not the owners and producers who offer goods & services for public use.

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BillG: Geesh - what college did you get your Phd from?  ;)
Since soap can be created (or imported) unlike land it can never be monopolized...

So something is monopolized if it has inelastic supply?  That's certainly a far cry from the dictionary definition.  Note that inelastic supply doesn't automatically entail economic rents.  Often it can be good to have a relatively inelastic supply of something, such as money.

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The rationale for the equal ownership of RENT is that no human being created what was provided by nature, and therefore as equal beings, we are equally entitled to natural opportunities and benefits that nature affords.

I think it is more desirable to encourage people to take maximum opportunity of the benefits afforded by nature, which will naturally result in differential rewards.

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BillG: As I had said in one of my other posts when you get a bill for your taxes in NH you are shown a value for your buildings and a value for your land. I have a unique perspective on this because I have recently built a home (GC'd it), sold it and purchased another home all with the last 5 yrs.

Built home in '96 for $75/sqft x 3000 sqft =210K
Land was 90K so house cost 300K

sold house in '02 for 450K so 150K profit in mostly land value over 5 yrs...how much do you think material and labor prices have risen in 5yrs with inflation running at about 2-4%??? (maybe 25K - tops)

Now I just bought a house for 400K and it is also 3000 sqft @ $100/sqft replacement cost (not GC'd myself) = 300K so my land value is 100K.

When I look at my tax bill it says buildings 270K and land 80K and I pay a tax rate of $25/1000 or $8,750- make sense right?

Here is what a simple tax shift would look like...

on land $100/1000 so $8,000 (90%)
on buildings $2.77/1000 so $750 (10%)

what is so difficult about that????

In the last case you're using replacement value for the home rather than market value.  It's a subtle distinction, but it does enter into the economics.  There are plenty of aspects of a home that may give it value (or reduce its value) relative to a replacement home of the same size built on the same property.  So when you bought the house for 400K, we don't really know what part of that value comes from the land if there were no house.  Of course, the whole point of appraising things (not just land) is to figure out what a market price for something should be without actually figuring out by putting it up for sale.  I'm sure the science has advanced to a point where egregious errors would be unlikely, and the SLT, relying as it does on land appraisals, might not distort markets terribly if appraisals were independent of gov't influence.  If, however, gov't controlled valuations (and this has been a problem w/ property taxes in some jurisdictions, so it would presumably arise w/ the SLT as well), we could see revaluations whenever gov't needed revenue, which would not only increase effective tax rate but also could lead to severe distortions in property markets.

My point in critiquing the SLT is not to single it out as worse than other tax systems - they all have their hazards and disadvantages - but to debunk the idea that it is the best tax system under all reasonable circumstances.


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You are making my karma numbers look bad because of your monopoly position within this organization   ;D

Heh... I dunno, my karma wasn't too hot either before we shut it off! ;)
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 26, 2003, 09:50:50 pm
>>live rent free

Why collect more in LVT than the Minarchist government needs to operate?  Wouldn't it be better to let that money stay in the non-government economy?   Once you start letting the government take in more than it needs, you start to create problems.

Also, I think the claim that LVT is not passed on to tenants is incorrect.  I know that I would charge my tenants every penny of LVT, plus the rental value of my improvements.  I am pretty sure others would do likewise.  In fact, unless landholders did that, you would create a pernicious free-loader class of tenants, who could vote in any sort of government program they wanted, secure in the knowledge that the landholders would somehow pay for it!   By passing the full LVT plus improvement rents onto the tenants, then you have a self-limiting governor built into the system -- the LVT will stay low, because the majority of tenants will not want higher tenant rents!

BTW, that's pretty funny about the soap question.  I guess Jason is having trouble making the functional distinction between Common Property (what God made) and Private Property (what humans made).   It seems to simple, but I guess it's one of those paradigm-shift things like Kuhn talks about.  Until you make the paradigm shift, it just doesn't make sense, as it conflicts with your inner dictionary.  

Hopefully, this will wear off after a while.  :)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 26, 2003, 10:15:14 pm
>>live rent free

Why collect more in LVT than the Minarchist government needs to operate?  Wouldn't it be better to let that money stay in the non-government economy?   Once you start letting the government take in more than it needs, you start to create problems.

<snip>

BTW, that's pretty funny about the soap question.  I guess Jason is having trouble making the functional distinction between Common Property (what God made) and Private Property (what humans made).   It seems to simple, but I guess it's one of those paradigm-shift things like Kuhn talks about.  Until you make the paradigm shift, it just doesn't make sense, as it conflicts with your inner dictionary.  

Hopefully, this will wear off after a while.  :)

RS

BillG: The question is who is the rent going to go to - make no mistake it WILL be collected by someone! If it goes into private hands like it has for centuries we will never get at the huge inequity problems that we have in this country around government granted privledge and the stealing from the commons and the POLITICAL CLASS that it creates. This is fundamentally why I am opposed to government stewardship of our commonwealth. Because the Replicrats continue to steal it - you remember the golden rule...those who have the gold rule!

So why do you keep on assuming the economic rent collected has to go into the hands of government? An independent third party does the assessments (like we do in NH) the money goes into a independent trust fund w/dividends going directly to the citizens equally.

My fall back position is collect the money - support the minarchist gov't and throw the rest of the money in the ocean! I am completely and drop dead serious on this - we would still be better off as a society than to allow the rent to go to private landowners!

BTW - Georgist call what you are referring to viz. "paradigm shift"...seeing the cat!

http://www.cooperativeindividualism.org/gilchrist_neil_seeing_the_cat.html (http://www.cooperativeindividualism.org/gilchrist_neil_seeing_the_cat.html)
http://www.earthsharing.org.au/cat.html (http://www.earthsharing.org.au/cat.html)

I'll get back to you on why it is not passed on to tenants...

Can someone carry the torch here please - this guy Jason is killing me!!! I am new to these parts - what is his role in the FSP, anyway?
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 26, 2003, 11:20:11 pm
Jason is the Chairman and Founder of the FSP.  A young Yale Phd and generally good guy, despite not being a Georgist. :)

On the bright side, I think we can all agree that some kind of uniform Single Tax would be far preferable to the current system.  Particularly if society as a whole were to adopt some other Single Tax,  Georgist colonies like Arden, only less compromised, might be formed.  If under something like the 'freehold' concept, such communities could perhaps opt out of the non-LVT tax system and just pay some kind of community 'user fee', the basic economic soundness of the LVT wouldn't be too disturbed.

The only way to prove the point is to demonstrate it.  :)

RS

(BTW, by 'compromised' I mean that Arden still has to pay DE and Fed taxes.  Still, they have done pretty well from what I can find.)
Title: Re:Economics According To George (Henry George, that is...)
Post by: underwater on August 26, 2003, 11:36:02 pm
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Have you done any research on the Arden Georgist colony in Deleware?

Yes, there are more communities than just Arden:

"Between 1894-1950, seventeen land trusts were started by Georgists and referred to as Enclaves of Economic Rent. Fairhope, Alabama was the first; Arden was second and Ardencroft was number seventeen."
http://www.ardenclub.com/georgists.htm (http://www.ardenclub.com/georgists.htm)

Everyone should also read the following:

"In 1895 and 1896, a group of "single taxers" moved to Delaware from Pennsylvania with the idea of persuading the state to adopt a plan where only land, not buildings on it, would be taxed. What was done on the land was not anyone's concern, according to the group."
http://www.delawareonline.com/newsjournal/local/2003/02/03freestateprojec.html (http://www.delawareonline.com/newsjournal/local/2003/02/03freestateprojec.html)
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on August 27, 2003, 03:23:14 am
I am glad to see this Georgist discussion! I consider myself to be a geolibertarian and believe that the Georgist doctrine comes closest to elucidating a system of "fair" or "just" taxation. Of course, I doubt that Georgist politics can or should be forced down upon people. One of my goals is to create a corporation in the Free State that owns land. Then, people can rent land from the corporation by buying land-shares that entitle them to occupy a piece of land in exchange for rent (i.e. a negative dividend). Rent revenue might go towards improving the community by hiring security, paving roads, lighting streets, and so on. Some of the rent will be put in a special fund that will be used to charter future corporations. Thus, the first voluntary Georgist community, if successful, will spawn other communities which in turn will spawn even more until the whole Free State experiences a peaceful (and decentralized) Georgist revolution. Of course, this might not happen  :-[ - but at least the idea can be tested in the marketplace of ideas!

Also, note that the "ownership" in my Georgist land company is based on ownership of shares not ownership of land. A land-share would basically give you a voting right in the company. Thus, the community (or shareholders) decides how the collected rent should be allocated. BillG's group might focus on social spending while another group might focus more on infrastructure. In any case, a "nation" of these communities could form with the "federal government" taxing all the separate communities for rent. The taxation of communities and not individuals at the federal level would allow people to effectively protest excessive taxes through non-payment with less fear of reprisals.


Sounds like an excellent idea!  

Have you done any research on the Arden Georgist colony in Deleware?

RS

LOL - you said that just to spite me! j/k
Title: Re:Economics According To George (Henry George, that is...)
Post by: Duodecimal on August 27, 2003, 05:44:38 am
I'd take HR25 over SLT any time. The problem Jason posed on the impossibility of objectively pricing land (indeed, objectively pricing anything) is insurmountable.
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 27, 2003, 07:02:44 am
>>objective pricing

Why bother?  

Call me overly pragmatic, but if the land rents are going to be used for operating the Minarchist government, why not just go with the variation I suggested earlier -- a uniform land value tax derived by taking the annual budget and dividing it by the number of taxable acres?    Simplicity has its virtues.

The problem with this other tax is that it taxes goods and services.  This has all sorts of distortive effects on the economy, while doing nothing to address the fundamental issue of why our common heritage should be appropriated by individuals to begin with.  

Those things you make, or that someone else makes that you buy, these are the real property of humans.  These other things -- spectrum, air, waterways, land... they are not derived in the same way, and they should not be treated in the same way in the economy.  They are only acquired privately by force and government-granted privilege, unlike the fruits of labor, or even the formation of capital.

However, the real benefit of the LVT is in freeing labor and capital from taxation.  It amazes me that people who claim that taxes are so evil and so oppressive would elect to place them on every transaction in the marketplace, when they could choose to abolish those taxes and let the common heritage pay for the common expense of government.

:)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: JasonPSorens on August 27, 2003, 08:33:20 am
>>live rent free

Why collect more in LVT than the Minarchist government needs to operate?  Wouldn't it be better to let that money stay in the non-government economy?   Once you start letting the government take in more than it needs, you start to create problems.


Yep, I completely agree w/ you here.  The LVT/SLT wouldn't be bad if the rate were such that it just covered basic government services.  Raising it so that there is a "citizen's dividend" left over is inefficient, because the LVT will be passed to renters and consumers in the form of higher rents and prices.  So creating a citizen's dividend through higher taxes, administered by a bureaucracy, would be like transfusing blood from your right arm to your left, while spilling a little in the process.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Duodecimal on August 27, 2003, 08:34:26 am
Firstly, no tax is ever fair nor does any tax not distort human action. Lesser evil and lesser distortion is the only possibility.

A factory worker doesn't own the factory's product. He owns his labor, which he exchanged for a wage. The factory owner consumes that labor and produces the final product, which is the property of the factory owner. (The factory workers are free to form a syndicate where they own the factory, and they would be can do so in a free market, so in that case they would own their product. But otherwise, it's not the case.)

All taxes distort markets since they are all restrictions on free choice - even your SLT. Jason pointed out how it distorts land use, even (and especially) if it goes by your equal distribution proposal. If those who wish to conserve land are granted non-taxable status, that there is a distortion that affects economic growth without regard over whether people benefit more from a woodland or, say, a hospital.

What about socially beneficial operations that operate at very low margins? Will they be granted non-taxable status as well? If so, who gets to determine whether a particular land use is taxable or not? If to keep such corruptability from creeping into the system it is decided that all land is equally taxable, then all land owners must find a way to generate revenue from their holdings in order to pay the tax. This has consequences for those who want to conserve pristine land and virgin forests (which I suppose is a goal of geo-libertarians?).

That's a problem I have with any government system: any power is a target for corruption, whether it's to decide taxable status or the level of taxation for given land uses. If the system is to be kept simple, so that all landowners are taxed equally regardless of land use, then conservation is attacked unless the government appropriates land as public (probably from people who can't afford to pay taxes). Government ownership of land is another opportunity for corruption - who may buy it? Who will get to use it?


The whole Georgist system hinges on the philosophy that since man doesn't create something, it is a common heritage. But man does create land, and continues to do so, and will do more of it as technology advances. Island airports in Hong Kong and Japan, and a significant amount of land in the Netherlands, are all man-made. These exceptions to the rule will be less so more and more as time passes. An entity that creates land has every right to appropriate it and an SLT on that land would be every bit as unjust as any other tax since it is not common heritage but labor's fruit.

There is nothing special about land, any more than there's anything special about any other form of property. All resources are limited, everything has a finite supply, whether it's land, energy, pens, telephones, labor, credit, apartments - everything. Man can manufacture land, he can manufacture atmosphere (we don't need to on Earth but we can do it in Lunar corridors when we need to). Man can not create energy, he can only convert it. Does that mean we have to have an SET? Man can not create matter either, so technically everything is therefore a common heritage, every atom, every photon.

There is no logical foundation to segregate land from anything else.
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 27, 2003, 09:40:52 am
So why do you keep on assuming the economic rent collected has to go into the hands of government? An independent third party does the assessments (like we do in NH) the money goes into a independent trust fund w/dividends going directly to the citizens equally.

I dunno.  It just seemed to follow from discussing LVT as a replacement for other government-collected taxes.   However, reading Underwater's plan and seeing what the Ardens have done, I realize that a private corporation that owns the land as a sort of land trust could provide many of the benefits.  In fact, the corporation could perform all the normal functions of local government, with the joint ownership of the citizens providing the tie that binds, as well as the negation of the exploitive problems that a purely profit-driven privatization would bring.

Quote
My fall back position is collect the money - support the minarchist gov't and throw the rest of the money in the ocean! I am completely and drop dead serious on this - we would still be better off as a society than to allow the rent to go to private landowners!

Why do that?  Just charge the bare minimum needed!  Let everyone have reasonable rents.  In the real world, escaping the overarching taxes of state and federal government won't be possible (at least for a while), so the whole scheme has to be tailored to maximize the leverage available from LVT towards local administration, rather than the grander benefits of broad-based tax abolition.

:)

RS

Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 27, 2003, 10:17:03 pm
Quote
I get to choose my landlord, not my government.  There are lots of expenditures that are not discretionary, just like rents (food, clothing).  The analogy with taxation only holds moral force if rent were demonstrated to be coercive.

BillG: I must be a glutton for punishment! Oh well, here goes...
Jason, the point is you may get to choose your loandlord but you don't get to choose NOT to pay your rent - right? It is coercive because you have to live and produce somewhere??? If I had a piece of land I could grow my own food and make my own clothes...If I don't have access to land I can't make it (no matter what Duo says to the contrary...)

Quote
Prior to the 1950s, home and work did tend to be integrated into a single community, but the difference between then and now does not have to do with land taxation.  The secret of returning to that sort of arrangement then probably has to do with other factors.

BillG: Like?

Quote
They create value for the land by demanding it, in the same way that demand creates monetary value for other goods & services. But it would be passing strange to reward customers for the value that they place on products, and not the owners and producers who offer goods & services for public use.

BillG: Well, what creates the demand for land? answer: rising populations in a specific local & public infrastructure investments. Falling populations - falling land values.

There you go again - you are equating products which we create via human labor that can't be monolpolized with something that is not created by anyone and can be monopolized...

Quote
So something is monopolized if it has inelastic supply?  That's certainly a far cry from the dictionary definition.  Note that inelastic supply doesn't automatically entail economic rents.  Often it can be good to have a relatively inelastic supply of something, such as money.

BillG: No, if something that has an inelastic supply is monopolized it creates economic rent. The economic rent of an inelastic supply of money is called (drumroll please) INTEREST. When the feds pull back on the money supply interest rates go up...

Quote
I think it is more desirable to encourage people to take maximum opportunity of the benefits afforded by nature, which will naturally result in differential rewards.

BillG: I would agree if it weren't possible to monopolize land (think what it would be like if air could be monopolized!). I would agree if our "free market" system had a way to account for "externalities" (read pollution) so that buyers and sellers would be be properly informed rather than "socializing the effects" resulting in declining health (increasing medical costs) for us all. And talk about unworkable (like your critique of "objective" pricing - doesn't the market create an objective price?) how anyone can suggest with a straight face that individuals should be required to prove exactly who damaged you when we are talking about airborne carcinogens is beyond me!

Now get this...coming from a Green no less - differential rewards should come exclusively from whatever (dare I say God-given) talents we bring to bare, using all of our faculties (mind & body), in mixing our labor with nature...

Quote
In the last case you're using replacement value for the home rather than market value.  It's a subtle distinction, but it does enter into the economics.  There are plenty of aspects of a home that may give it value (or reduce its value) relative to a replacement home of the same size built on the same property

BillG: Like?

Quote
So when you bought the house for 400K, we don't really know what part of that value comes from the land if there were no house.

BillG: Silly me...I forgot to mention there is a wooded vacant lot (same size) right next to me that just went on the market for $110K...hmmm - sounds about right, huh?

Quote
If, however, gov't controlled valuations (and this has been a problem w/ property taxes in some jurisdictions, so it would presumably arise w/ the SLT as well), we could see revaluations whenever gov't needed revenue, which would not only increase effective tax rate but also could lead to severe distortions in property markets.

BillG: How about this instead...all collected land value rents (appraised & collected via private companies and recently sold properties) are re-distributed and then people pay a head count for essential services (police, courts, jails, etc) Now when re-valuations occur the incentive will be for citizens to keep as much $ as possible in their pocket...

Quote
My point in critiquing the SLT is not to single it out as worse than other tax systems - they all have their hazards and disadvantages - but to debunk the idea that it is the best tax system under all reasonable circumstances.

BillG: The hell with the best tax system - I am making the claim that it is morally right and infact essential to creating a just society based on liberty for all.

So, if I can offer valid historical and current proof to my claims of the benefits of LVT from a team of geo-libertarians would the FSPers grant the opportunity at the proper time & place?
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on August 27, 2003, 10:58:49 pm
I don't see a problem, BillG -you are free to voice your opinions and state your case... I find it very interesting...

Quote
Posted by: BillG (not Gates)  Posted on: Today at 08:17:03pm  
Quote
I get to choose my landlord, not my government.  There are lots of expenditures that are not discretionary, just like rents (food, clothing).  The analogy with taxation only holds moral force if rent were demonstrated to be coercive.
 

BillG: I must be a glutton for punishment! Oh well, here goes...
Jason, the point is you may get to choose your loandlord but you don't get to choose NOT to pay your rent - right? It is coercive because you have to live and produce somewhere??? If I had a piece of land I could grow my own food and make my own clothes...If I don't have access to land I can't make it (no matter what Duo says to the contrary...)


who is preventing anyone from 'access to land'?  Has anyone ever been denied that ability to purchase a piece of land if the owner agreed to the transaction?  It seems that in saying so, you also say you are being 'denied' your own personal Limosine soley because you may not be able to afford it.

I still don't agree that it is even possible to monopolize all land, or that land is finite (no, I am not a flat-worlder...lol)... I discused this before but it was ignored, I figure becaue I must not know what I am talking about.....

How is any other 'natural' commodity different from land in the first place?  If you say that 'land' is finite, then obviously gold, iron, plutonium, etc are also finite and should be considered 'common'.

When I try to break down your proposal it comes across like this:  a method of taxation on property owners with a different idea for distributing the funds (different as opposed to the current method)

Quote
I am making the claim that it is morally right and infact essential to creating a just society based on liberty for all.

Here is the foundation: You claim that everyone has a right to land... so do I.
When I say 'right to land' I mean: the ability to own, in every sense of the word, a piece of property on which I can do with as I please, without outside interference.  If I am forced to pay, for the duration of my life, my childrens lives, and so on, a 'tax' on a piece of property, then I really don't 'own' it at all - I am just renting it, and renters disrespect property to a much greater extent than owners ever did.  It seems that your proposal is: By being born, I am forced to pay for my living on this earth for the rest of my life, with no recourse available to me ever!  If an analogy could be made, I would say that the free market treats people more like indentured servants, whereas Georism treats people as slaves... at least I can produce my way out of servitude in the free market... I can't break the chains in Georism.

thank you, and, hang in there BillG, I do respect your tenacity and persuasive arguments with Jason, it seems to be pushing both of you to really be clear and concise in your posts and is helping me greatly...

off to the sidelines again,
michael

ps: still think that saying land is finite constitutes a very narrow view of humankind and our abilities...
Title: Re:Economics According To George (Henry George, that is...)
Post by: Elizabeth on August 28, 2003, 10:42:29 am
LIBERTARIANISM AND LAND VALUE TAXATION
John H. Beck
Professor of Economics
Gonzaga University

I.  LIBERTARIAN FOLLOWERS OF HENRY GEORGE
   For some libertarians any tax is illegitimate (Feser 2000).  However, one tax that has received some support from libertarians who advocate a limited government financed by taxation is a tax on land values.  The most famous advocate of land value taxation is Henry George, the author of Progress and Poverty (1879).  Yeager (1984) identifies several libertarian views shared by Henry George, including his opposition to protectionist trade policy, his rejection of socialism, and his defense of natural rights including property rights.  Several prominent libertarians in the early twentieth century were influenced by Henry George, including Albert Jay Nock, author of Our Enemy the State (1935), and Frank Chodorov, who became the director of the Henry George School of Social Science and editor of the Freeman in 1937 (Nash 1996, 11-14; Raimondo 1993, 114-129).  Maurice Allais, one of four future Nobel prize winners attending the first meeting of the Mont Pelerin Society in 1947, declined to sign the society's Statement of Aims because its defense of private ownership of land conflicted with his Georgist ideas (Hartwell 1995, 42).  This illustrates that Georgist ideas about land ownership and taxation have frequently been divisive among libertarians.  Yeager (1984, 160) notes that Murray Rothbard rejected George's moral and economic arguments for land value taxation, although Rothbard applauded George's discussion of patents and copyrights as well as his advocacy of free trade.

II.  ARGUMENTS FOR LAND VALUE TAXATION
   There are both equity and efficiency arguments for land value taxation.  The equity argument is that land is given by nature and the value of the land was not created by human effort.  Furthermore, increases in the value of land are caused by public services and economic development in the neighborhood, not by the effort of the landowner.  For example, the construction of an interstate highway will increase the value of land near a highway interchange as this becomes a more desirable site for business development.  Therefore, it is argued, because the landowner has done nothing to deserve the gain from his ownership of land, the government should capture this gain through taxation and use it for the benefit of all members of society.  However, as discussed in section IV below, there are also equity arguments against replacing the current system of property taxation with a tax only on land values.
   The efficiency argument for land value taxation is that, unlike almost all other taxes, it does not discourage productive activity or distort choices among consumer goods.  A tax on wages discourages work effort.  The property tax on improvments discourages construction and other improvements.  Tariffs on imported goods discourage international trade.  But the supply of land is fixed, given by nature.  A tax on the value of land (based on its potential use), will not discourage the landowner from making the land available.  The owner must pay the same tax regardless of what he does or does not do with the land.  It should be noted that the method of assessing land values is crucial; changes in the market value of land attributable to permanent improvements to a site should not be included in the taxable land value.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Elizabeth on August 28, 2003, 10:43:34 am
continued



III.  POLITICAL CONSIDERATIONS
   Advocates of any tax reform proposal need to consider likely sources of opposition and support and to devise strategies to minimize opposition and build a coalition of supporters.
   Opponents of land value taxation have often charged that this would shift the burden of taxation to farmers, who own large areas of land (Peirce 2003, 6).  Although in fact family farmers might benefit from an increase in the tax rate on land value offset by a reduction in the tax on improvements (Wenzer 1999, 239-268), a reform strategy assuaging farmers' fears would have greater chance of success.  Limiting land value taxation to urban areas rather than adopting it as the "single tax" for all state and local government revenues would eliminate opposition from farmers.
   Environmentalists are not often allies of libertarians, but land value taxation is one issue which both might support.  Environmentalists support replacing the property tax on improvements with land value taxation in urban areas because it would encourage more development in urban centers and discourage sprawl (Durning and Bauman 1998, 57-65; Wenzer 1999, 205-223).

IV.  IMPLEMENTATION ISSUES
   "An old tax is a good tax."  This adage does not merely reflect the fact that people prefer the taxes to which they have grown accustomed to new, unfamiliar taxes.  The implementation of any tax reform affecting the taxation of durable assets raises serious equity issues, and land is the most durable of assets.  This is due to the phenomenon of "tax capitalization."  The value of an asset reflects the present value of the expected future income to be derived from that asset.  Anticipated future taxes reduce the expected future income and thus are "capitalized" in the value of the asset.
   To understand how tax capitalization may create inequities when unexpected tax reforms are implemented, consider an unanticipated shift from a property tax applied at the same rate to land and improvements to a tax on only land value that yields the same total revenue.  Compare the effects of this change on the values of two properties, a parking lot and a parcel with a ten-story office building.  Almost all of the value of the parking lot is the land value, but most of the value of the parcel with the office building consists of "improvements."  The market value of the office building will increase as the anticipated future taxes fall, and the value of the parking lot will fall as the tax rate on the land value increases.  When the current owners of these properties purchased them, they each paid a price that reflected the expectation that the old property tax system would continue into the future.  The unanticipated tax reform causes a "windfall gain" to the owner of the office building and a "windfall loss" to the owner of the parking lot.  Many people consider such windfalls "unfair."
   One method to ameliorate such windfalls is to implement tax reforms gradually.  For example, rather than immediately abolishing the property tax on improvements and imposing a tax on land values sufficient to raise all the desired revenue, a "split-rate" property tax might be adopted.  Under this system the land component of property values is taxed at a higher rate than the tax rate on improvements.

V.  EMPIRICAL STUDIES OF LAND VALUE TAXATION
   Pittsburgh, along with a few smaller Pennsylvania municipalities, has had a "graded" or "split-rate" property tax for several decades.  Prior to 1979, the city of Pittsburgh taxed land at twice the rate applied to structures (although county and school district property taxes applied the same rate to land and improvements).  After 1980, the city of Pittsburgh raised its rate on land to about five times the rate on structures.  This policy change provides an opportunity for researchers to test empirically whether land value taxation really does have the beneficial effects ascribed to it by theoretical analyses.  Oates and Schwab (1997) analyzed building activity in 15 "rust belt" cities from 1960 to 1989 and found a significant increase in building activity in Pittsburgh after the 1980 tax reform.  Of course such empirical studies are plagued by the difficulty of measuring the effect of a change in one variable when other variables that might affect the outcome are changing as well.  In the case of Pittsburgh, the increase in taxes on land was accompanied by large tax abatements on new structures although there was no decrease in the property tax rate applied to old buildings.  Oates and Schwab conclude that the revenue raised by the land tax increase allowed the city to grant tax abatements on new building and to avoid raising other taxes that would have discouraged economic activity in the city.  Additional studies showing the effects of the split-rate tax in Pennsylvania are Bourassa (1987 and 1990) and Cord (1983).
   Cord (1983, 172-173) briefly mentions evidence of the effects of land value taxation compared to the conventional property tax on land and improvments from Australia.  A more extensive study of the Australian experience was done by Edwards (1984), who found that the value of new housing and the housing stock was greater in Australian communities that taxed land at a higher rate than improvements than in communities with a uniform property tax on land and improvements.

VI.  CONCLUSION
   For libertarians who believe markets generally allocate resources efficiently, the best tax is one which creates the least distortion of market incentives.  A tax on the value of land meets this criterion.  Furthermore, the benefits of local government services will be reflected in the value of land within the locality.  Therefore, it may be deemed fair that landowners pay taxes to finance these services in proportion to the value of the benefits they receive.  Although Henry George advocated a tax on land values as the "single tax" to replace all other taxes, a tax on land value seems especially appropriate for municipal governments.  If a complete shift from the current property tax to a tax on land value alone seems too radical, municipal governments might reduce the property tax rate on improvements while imposing a higher tax rate on the value of land.
   Land value taxation has been under consideration in several eastern European countries.  As reported by Youngman and Malme (1999), Estonia adopted a tax on the market value of land in 1992.  Nations considering a tax structure fostering a market economy in the post-communist era may present one of the most promising opportunities for implementing land value taxation.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Elizabeth on August 28, 2003, 10:44:16 am
continued



REFERENCES
Borcherding, Thomas E.; Patricia Dillon; and Thomas D. Willett.  "Henry George:  Precursor to Public Choice Analysis." American Journal of Economics and Sociology 57 (April 1998): 173-182.
Bourassa, Steven C.  "Land Value Taxation and New Housing Development in Pittsburgh." Growth and Change 18 (Fall 1987): 44-55.
Bourassa, Steven C.  "Land Value Taxation and Housing Development:  Effects of the Property Tax Reform in Three Types of Cities." American Journal of Economics and Sociology 49 (January 1990): 101-111.
Cord, Steven B.  "Taxing Land More Than Buildings:  The Record in Pennsylvania."  In The Property Tax and Local Finance, pp. 172-179.  Edition by C. Lowell Harriss.  New York:  The Academy of Political Science, 1983.
Durning, Alan Thein, and Yoram Bauman.  Tax Shift:  How to Help the Economy, Improve the Environment, and Get the Tax Man off Our Backs.  Seattle:  Northwest Environment Watch, 1998.
Edwards, Mary E.  "Site Value Taxation in Australia:  Where Land Is Taxed More and Improvements Less, Average Housing Values and Stocks Are Higher." American Journal of Economics and Sociology 43 (October 1984): 481-495.
Feser, Edward.  "Taxation, Forced Labor, and Theft." The Independent Review 5 (Fall 2000): 219-235.
Gaffney, Mason.  "Equity Premises and the Case for Taxing Rent."  American Economic Review 82 (May 1992): 274-279.
George, Henry.  Progress and Poverty.  New York:  Walter J. Black, 1942.
Hartwell, R. M.  A History of the Mont Pelerin Society.  Indianapolis:  Liberty Fund, 1995.
Horton, Joseph, and Thomas Chisholm.  "The Political Economy of Henry George:  Its Ethical and Social Foundations." American Journal of Economics and Sociology 50 (July 1991): 375-384.
Martin, Thomas L.  "Protection or Free Trade:  An Analysis of the Ideas of Henry George on International Commerce and Wages." American Journal of Economics and Sociology 48 (October 1989): 489-501.
Nash, George H.  The Conservative Intellectual Movement in America.  Wilmington, DE:  Intercollegiate Studies Institute, 1996.
Netzer, Dick.  "On Modernizing Local Public Finance:  Why Aren't Property Taxes in Urban Areas Being Reformed into Land Value Taxes?" American Journal of Economics and Sociology 43 (October 1984): 497-501.
Nock, Albert Jay.  Our Enemy the State.  New York:  Free Life Editions, 1973.
Oates, Wallace, and Robert Schwab.  "The Impact of Urban Land Taxation:  The Pittsburgh Experience."  National Tax Journal 50 (March 1997): 1-21.
Peirce, William S.  "The Progressives and the Property Tax:  Ohio's Constitutional Convention of 1912."  Paper presented at the Public Choice Society meeting, Nashville, TN, March 2003.
Raimondo, Justin.  Reclaiming the American Right:  The Lost Legacy of the Conservative Movement.  Burlingame, CA: Center for Libertarian Studies, 1993.
Teti, Dennis.  "The Socialist Idealism of 'Supply Side' Economics -- Henry George's Progress and Poverty." The Political Science Reviewer 14 (Fall 1984): 195-228.
Wenzer, Kenneth C. (ed.), Land-Value Taxation. M.E. Sharpe, 1999.
Whitaker, John K.  "Enemies or Allies?  Henry George and Francis Amasa Walker One Century Later."  Journal of Economic Literature 35 (December 1997): 1891-1915.
Yeager, Leland B.  "Henry George and Austrian Economics." History of Political Economy 16 (1984): 157-174.
Youngman, Joan, and Jane Malme.  "Issues in Land Taxation and Property Taxation in Central and Eastern Europe." In Proceedings, 91st Annual Conference on Taxation, pp. 137-143.  Washington, DC:  National Tax Association, 1999.
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 28, 2003, 12:19:03 pm
Well, do we have a "closet" geo-libertarian in our midst (& on the board) or are your just trying to enlighten all sides of the issue Elizabeth?

btw - don't know if you remember our chance meeting early on in Nashua at Border's...

"what a long strange trip it's been..."
Title: Re:Economics According To George (Henry George, that is...)
Post by: Elizabeth on August 28, 2003, 12:41:54 pm
Well, do we have a "closet" geo-libertarian in our midst (& on the board) or are your just trying to enlighten all sides of the issue Elizabeth?

btw - don't know if you remember our chance meeting early on in Nashua at Border's...

"what a long strange trip it's been..."

No, this talk was given by a professor on the panel I attended when I spoke in Idaho.  He just finally wrote up his notes, and I thought, how timely!  I'm not a Georgist, but not out of policy, just out of ignorance.  I haven't had the time/inclunation to look into it.

I know on strike-the-root.com they get into Georgist arguments all the time -- or at least they used to, when I hung out there.

I has been a long trip... and many miles more to go!  :)
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on August 30, 2003, 03:05:54 pm
Elizabeth,

Just wanted to (belatedly) say thanks for the informative post regarding LVT and Libertarianism!

Reviewing all this information and the ongoing threads on the national sales tax (a.k.a. the 'Fair Tax' proposal), I think we can at least say that most of us agree that some form of Single Tax system, wherein the income tax is abolished, is the way to go.  On the points recommending one over the other, have these observations:

1) A consumption tax is more economically distortive than LVT, for all the reasons stated earlier in this thread.

2) A consumption tax requires extra rules to keep it from being regressive.  

3) A consumption tax does not produce a stable revenue stream for government, which encourages either government borrowing, or higher taxes to build up government supluses as a hedge against revenue shortfalls.  The LVT would be a very stable revenue source, allowing more effective cash management and reducing the structural incentives to raise taxes even when spending stays the same.

HOWEVER, there is no denying that switching to LVT would be overall more challenging than a consumption tax.   Not so much in urban areas, but in a large agricultural state, it might be hard to do.

:)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 31, 2003, 07:44:29 pm
Quote
HOWEVER, there is no denying that switching to LVT would be overall more challenging than a consumption tax.  Not so much in urban areas, but in a large agricultural state, it might be hard to do.

BillG: RS - not if NH is choosen as the Free State...with most taxes being raised thru the local property tax and everyone's tax bill clearly stating what the building is worth and what the land is worth...a "simple tax shift" strategy that allows different tax rates on buildings vs. land is all that is needed.

Read the bill by a current Geo-libertarian lawmaker that was voted down this year

http://www.gencourt.state.nh.us/legislation/2003/hb0439.html (http://www.gencourt.state.nh.us/legislation/2003/hb0439.html)
Title: Re:Economics According To George (Henry George, that is...)
Post by: Duodecimal on August 31, 2003, 07:48:21 pm
It's a consumption tax instead of social security, medicare, income, capital gain, payroll, interest, estate, and dividend taxes.

The biggest beef I have with the geolibertarian proposed taxes is that they are based on the philosophy that no one has right to land, only 'society', and that government, as a representative of 'society', has the God-given right to tax people who use land.

We can not reconcile our differences because I believe neither in god, nor 'society', nor government. Basing the rightness of a tax on such philosophy persuades me not at all.

The reason I favor a sales tax over a land tax as the lesser of evils is because consumption, by virtue of economic theory, is not the generator of wealth. Worrying about hurting demand is nonsense because it is human nature to demand everything. No one is ever happy, either wanting more than what they have or wanting what they have to be better. Demand is always infinite as long as any supply is desirable, and don't forget that there's 20% to 30% of tax already built in to the price of all consumables by way of taxation on businesses.

A sales tax that replaces all such federal taxes will have little net effect (it's been calculated to perhaps raise average prices by 3%). What it will do is remove the burden of accounting and reporting every private detail of our working lives to the Government. What it will do is make it obvious, on every receipt, what it costs to receive government 'benefits'. There's another thread on the national sales tax, so I'll end there.

Back to the subject of this thread -  taxation on land attacks wealth generation as much as taxation on capital gains, dividends, payrolls, and income. A tax on consumption may, on the other hand, contain the debt-financed exploding beast of US consumerism by making savings immediately more worthwhile (the savings rate is negative, which will have catastrophic consequences once foreign banks start realizing that the dollar's value is not the primary concern of the FRB).

So, I suppose we can only agree to disagree.

Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 31, 2003, 08:29:22 pm
Quote
The biggest beef I have with the geolibertarian proposed taxes is that they are based on the philosophy that no one has right to land, only 'society', and that government, as a representative of 'society', has the God-given right to tax people who use land.

BillG: Wow Duo, this is a total mischaracterization...

Geo-libertarianism is based on a philosophy that no one has EXCLUSIVE right to land or better yet - everyone has...an EQUAL right to the commons - which includes land.

Quote
We can not reconcile our differences because I believe neither in god, nor 'society', nor government. Basing the rightness of a tax on such philosophy persuades me not at all.

The economic rent that results from the monopolization of land and is created by increasing populations and investments in public infrastructure will - make no mistake about it - BE collected. When the property is sold all of the economic rent is pocketed by the individual landowner. So, the pertinent question then, if you believe that the money is society's and not the individual's, how the money is collected by what entity? Frankly I don't care who (God, society, government, or the easter bunny) does the collecting as long as the rent is returned to the rightful owners...
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on August 31, 2003, 08:50:33 pm
...and it is exactly in the differing opinions of who these 'rightful owners' are that is the source of disagreement...

got a question: who is 'everyone' in this 'everyone is the rightful owner' - is it everyone within 1 mile of the particular property, everyone within the city? the state? the nation? the world? off-world?

just wanting to understand and define things more clearly...

michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on August 31, 2003, 09:33:34 pm
Quote
got a question: who is 'everyone' in this 'everyone is the rightful owner' - is it everyone within 1 mile of the particular property, everyone within the city? the state? the nation? the world? off-world?

BillG: Land values should be collected and distributed as locally as is practical, water issues should correspond to watersheds or bio-regions, and the "Sky Trust" scheme is a national issue...

Title: Re:Economics According To George (Henry George, that is...)
Post by: Duodecimal on August 31, 2003, 10:44:32 pm
How do we decide the membership of these commissariats that decide the constitution of locality and bio-regions, and the extent of practicality?
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 02, 2003, 10:02:01 am
My understanding is that the "landholder" is taxed yearly on the value of the land, not any capital improvements built on the land. The trade off on this single tax on raw land is the elimination of income taxes taken from wages or capital (stocks, bonds, businesses).

As to the revenue calculated to be generated from such a scheme in one of free states, ?
                                                                               
There is a fairly good critque of Henry George's Single Tax Theory by Rothbard at  Mises.org, just use  the search.                                                                          
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 02, 2003, 10:33:09 am
My understanding is that the "landholder" is taxed yearly on the value of the land, not any capital improvements built on the land. The trade off on this single tax on raw land is the elimination of income taxes taken from wages or capital (stocks, bonds, businesses).

As to the revenue calculated to be generated from such a scheme in one of free states, ?
                                                                               
There is a fairly good critque of Henry George's Single Tax Theory by Rothbard at  Mises.org, just use  the search.                                                                          

                                                                                 I also have some ideas on why I think George's ideas aren't accurate and would not work, at least on a large scale. I also think his idea on land and natural resource ownership is wrong on political ethical grounds I will disuss more on that later.    I also think George's labor theory of value is wrong also.                                                                                  I  mostly agree with Rothbard on landownership procurement as he describes in "Ethics Of Liberty" in terms of political ethics. That being said I think his first user argument has its problems in that so much land has been aquired otherwise, and who would the first user pass it on to, all his children, his first born, his mothers family, his wifes family, or the elders of the clan.                                                                                       I think this is one area where Constitutional economic ( coming to agreements) may play a role and it's Wicksell unaniminty principle and some horse trading.                                                                                 For example  say the government took my  home to build the freeway, do I really want to dig up the pavement and rebuild. Well maybe I do, after all it was my property or was it and what about the property I know own? Well Possesing is 9/10 of the law but what if a Cherokee could prove the land was owned by his great great, great, great, great grandmother. Would it matter that I was part Cherokee? Now what if  another person proved his ancestors came from another tribe and they owned the land before the Cherokee? Now what if another person proved  the member of the other tribe property that he now lives own belongs to him by inheritance.                                                                          What about desendance of slaves? What about repayment for taxes taken?
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 02, 2003, 11:00:04 am
Rythymstar,
If the govt, rather than the market determines the taxable value of the land, nobody would want to make any improvements on the land as doing so would introduce the unknown variable of taxes.
Currently, an average rent house has a land value of about 15% of the improvement value.  This is determined by the market value of lots vs  finished homes. If the rent is 1000 and the home is worth 100000, the annual tax is 15k-5%------considerably more than  the 12k gross annual rent.
Now the landlord has a negative cash flow and the govt turns to him to pay for a war ?  Sure sounds like landowners getting penalized if my arithmetic is correct.

If the answer is raise the rent, then the landlords option to do this hinges on the tenants alternatives. In such a pay-for-war scenario money would be tight and the landlord would lower his rent while his taxes are increased, thus a disproportionate load on the landlord. Passing the tax increase on is not a sure thing.

Also, you have not addressed the appreciation issue ( I guess there won't be any appreciation on a liability anyway)  will appreciation be taxed? How to compensate landowner for the one time loss of net value?

If, when such a plan is implemented, one landlord has a renthouse with a land value of 6% of the property value and another has a rent house with a land value of 35% of the property value, how will the bureaucrats compensate the latter?

Wouldn't everyone end up living in high rise apartments where land tax is low just to avoid tax?

If a landowner like me who doesn't recieve any rent and only profits by being a buy-low-sell-high-artist, does he pay any tax?













Think about this also, why shouldn't the rent be based on the unimproved value without adding in the   services offered in the community. I guess what I am trying to say set the value of the land as if it was in the middle of nowhere, the owner may habe being doing fine without all those people moving in, without the extra police service they wanted, the sewer service, the fire protection service, the new roads, schools etc. Also why should it be a annual payment, why not a lump sum payment. I have one partial of 3 acres which is appraised at 9,000 dollars, 20 years ago before so many people moved in, I could not have sold it for 750 an acre, in fact my grandparents sold a 20 acre partial next door to a paper mill for 350 acre. I recently bought an ajoining acre for 6,000 dollars. A farm near by broken up into lots sold between 5,000 an acre  and 10,000 an acre, a lot of it brush and woods. The change in value of 350 to 750 an acre to 5,000 to 10,000 an acre in 20 years is not justified in much of any way by additonal government services, it is strickly consumer demand.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 02, 2003, 11:12:26 am
The only eqitable tax system is a per capita tax.
When the government incurs a legitimate expense the costs are divided up by the number of people in the geographical area that the program benifits.
An individual pays X, a family of 5 pays 5X.
                                                                               A per Capita tax would be ok but I think any tax that is agreed on would be ok with the economic incentive being- a low rate.The rate should be in the constitution and It would be better if the lowest government level collected the tax. As an example, say the tax was on gross income or gross property value. The state would  tax the gross value or income of the county, the county would tax the gross value or income of the lowest level of government, which I think should be  private covenant( or contractual) neighborhoods or small towns. The lowest level of government would obtained the revenue by what ever legal means the local citizens agreed to, which might not even be a tax, they might have other revenue sources.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 02, 2003, 12:20:49 pm
I guess what Iam trying to say  is Constitutional agreements( based on consent) on property rights, taxes and spending would be a very good idea. For example would a person agree to secure property rights in land etc, give up reparation claims, social security claims etc if all the governments property and assets ( with the exeption of a small pertcentage set aside for core government operations such as police, miltary, local roads with individual direct access and courts) where divided equally to each citizen. Plus a percentage of the tax( set in the constitution) take would go directly to each adult citizen equally as a citizens dividen. For example if the agreement was Nation wide and the tax was 5% to 10% of GDP ( with the federal government taxing the state government, the state taxing the county and the county taxing the local government)Total for federal, state and state division governments( the private local governments could charge more according to the contract).Federal , state and county governments  total surely could operate on 2%( around 200 billon today) of GDP to 5%GDP( around 500 billon) with the percentage balance to be issued to each adult citizen equally a a citizens dividen. Even if the 10% fiqure was set in the constitution, that would be only a third of what it is today. Personally I would perfer the 5% fiqure which would be around 17% of the 30% plus of GDP taxes take today. If government operations took 300 billon of the 500 billon that would leave around 1,000  or so for each citizen. Now as the economy grew both the governments share and the citizens dividen would increase so maybe people would want to put a constitutional limit on the increase on  the governments share or maybe both, if the tax take went over a certain limit the surplus would go back to the local governments( the private governments).
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 02, 2003, 08:04:52 pm
It's a consumption tax instead of social security, medicare, income, capital gain, payroll, interest, estate, and dividend taxes.

Presume you mean the so-called Simple Tax?  I realized that the proposal was to replace other taxes. So, both LVT and the Simple Tax are ideally Single Tax solutions.

Quote
The biggest beef I have with the geolibertarian proposed taxes is that they are based on the philosophy that no one has right to land, only 'society', and that government, as a representative of 'society', has the God-given right to tax people who use land.

Actually, that is pretty much diametrically opposed to the LVT philosophy.   Rather than believing that no one has a right to land, the belief is that everyone has the same right to land, as well as other God-given (or, if you prefer, natural) resources. (Note that this specificaly does not include crops, even though humans did not invent corn, at least not the growing kind.)   Where government grants and enforces individual monopolies on land (deeds), the idea is that the deed holder pays a Land Value Tax to the government, or other designated agency.  The deed is still durable, saleable and assignable, so it is just like any other deed.

People who don't pay their property taxes today already get their deed taken.  So, this arrangement is no different in terms of deed holding.

Quote
We can not reconcile our differences because I believe neither in god, nor 'society', nor government. Basing the rightness of a tax on such philosophy persuades me not at all.

You don't need anything more than the logical recognition that exclusive rights of ownership are naturally attached to yourself and the fruits of your labor.  Those things that pre-existed you (and all humans, for that matter) are our common heritage.  No other entities are required by this.

Quote
The reason I favor a sales tax over a land tax as the lesser of evils is because consumption, by virtue of economic theory, is not the generator of wealth. Worrying about hurting demand is nonsense because it is human nature to demand everything. No one is ever happy, either wanting more than what they have or wanting what they have to be better. Demand is always infinite as long as any supply is desirable, and don't forget that there's 20% to 30% of tax already built in to the price of all consumables by way of taxation on businesses.

Demand may be monetized only to the extent that people both desire and can afford something.  So, taxes definitely have an effect on the demand that may be realized as business transactions in a given market.   Equating emotional demand to monetized demand is materially incorrect --- they are two different things.

Quote
A sales tax that replaces all such federal taxes will have little net effect (it's been calculated to perhaps raise average prices by 3%). What it will do is remove the burden of accounting and reporting every private detail of our working lives to the Government. What it will do is make it obvious, on every receipt, what it costs to receive government 'benefits'. There's another thread on the national sales tax, so I'll end there.

A national sales tax shifts the collection and reporting burden for everyone onto the business owner.   The net simplicity of paperwork to be filed would increase, but it still has to be collected and reported.   Also, it causes government revenue to vary with consumer spending, which encourages government borrowing and/or overtaxing to hedge revenue bets.    

Quote
Back to the subject of this thread -  taxation on land attacks wealth generation as much as taxation on capital gains, dividends, payrolls, and income.

How so?  All interest, capital gains, payrolls and other economic transactions are tax-free.  Land value speculation is greatly reduced, but this is overall a good thing, as it causes speculators to bet on construction, products, stocks and other instruments of wealth that are tied to labor.  Just buying up land and sitting on it won't be profitable, unless the economic development in the area creates an immediate demand for the plot in excess of its LVT (a possibility).  And any improvements to the land (buildings, factories, crops, etc.) are 100% tax free.

Quote
A tax on consumption may, on the other hand, contain the debt-financed exploding beast of US consumerism by making savings immediately more worthwhile (the savings rate is negative, which will have catastrophic consequences once foreign banks start realizing that the dollar's value is not the primary concern of the FRB).

Consumption is bad when financed by government debt.  Eliminate the debt and the incentive (and even the ability) to borrow and consumption can follow the free market, rather than having consumption taxes distort the flow.

Quote
So, I suppose we can only agree to disagree.

It's OK.  We're allowed to disagree. :)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 02, 2003, 08:16:44 pm
...and it is exactly in the differing opinions of who these 'rightful owners' are that is the source of disagreement...

got a question: who is 'everyone' in this 'everyone is the rightful owner' - is it everyone within 1 mile of the particular property, everyone within the city? the state? the nation? the world? off-world?

just wanting to understand and define things more clearly...

michael

As a practical matter, 'everyone' is everyone who is a citizen of the jurisdiction granting and enforcing the deed.  There is no built-in reason to complicate it further.  Since land deeds are typically granted by the state, then I suppose that 'everyone' would be everyone who is a resident of said state.

Theoretically, for LVT to work nationally, some sort of Federalization of land deeds would have to occur, or perhaps the Federal government would get a cut from LVT collected by the States.  

In the meantime, the LVT concept scales down pretty well, with working examples done privately using the corporate form.   Apparently, there is enough economic leverage in the rent reform alone to make it work, even in the midst of all these other taxes.

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 06, 2003, 11:07:42 am
>>live rent free

Why collect more in LVT than the Minarchist government needs to operate?  Wouldn't it be better to let that money stay in the non-government economy?   Once you start letting the government take in more than it needs, you start to create problems.


Yep, I completely agree w/ you here.  The LVT/SLT wouldn't be bad if the rate were such that it just covered basic government services.  Raising it so that there is a "citizen's dividend" left over is inefficient, because the LVT will be passed to renters and consumers in the form of higher rents and prices.  So creating a citizen's dividend through higher taxes, administered by a bureaucracy, would be like transfusing blood from your right arm to your left, while spilling a little in the process.
                                                                               
I would tend to agree with most any tax if it was by consent, in other words if a group did not like the tax it could leave the constitutional association( the state or federal or treaty association such as NATO
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 06, 2003, 11:20:39 am
>>live rent free

Why collect more in LVT than the Minarchist government needs to operate?  Wouldn't it be better to let that money stay in the non-government economy?   Once you start letting the government take in more than it needs, you start to create problems.


Yep, I completely agree w/ you here.  The LVT/SLT wouldn't be bad if the rate were such that it just covered basic government services.  Raising it so that there is a "citizen's dividend" left over is inefficient, because the LVT will be passed to renters and consumers in the form of higher rents and prices.  So creating a citizen's dividend through higher taxes, administered by a bureaucracy, would be like transfusing blood from your right arm to your left, while spilling a little in the process.
                                                                               
I would tend to agree with most any tax if it was by consent, in other words if a group did not like the tax it could leave the constitutional association( the state or federal or treaty association such as NATO
   The seperation should be by unamious consent of those leaving and the constitution should spell out any debt issues for the seceding group. I think one of the problems of many constitutions and as far as I can see the problem of the Articles Of Confederation , there is no power to blackball to kick a political body out of the union. Now if this was done, should the Union pay a  seperation fee to the blackballed poltical body or should it be settled in court?
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 06, 2003, 11:46:22 am
>>live rent free

Why collect more in LVT than the Minarchist government needs to operate?  Wouldn't it be better to let that money stay in the non-government economy?   Once you start letting the government take in more than it needs, you start to create problems.


Yep, I completely agree w/ you here.  The LVT/SLT wouldn't be bad if the rate were such that it just covered basic government services.  Raising it so that there is a "citizen's dividend" left over is inefficient, because the LVT will be passed to renters and consumers in the form of higher rents and prices.  So creating a citizen's dividend through higher taxes, administered by a bureaucracy, would be like transfusing blood from your right arm to your left, while spilling a little in the process.
                                                                                A citizens dividen as such should not have much bureaucratic overhead, the surplus would just be sent to each citizen in equal amounts.The dividen should of course be set as a percentage of tax take, in the constitution and the tax rate should be set in the constitution. Any deductions or reduced rates for certain citizens should be set in the constitution. For example I think NH.  has some reduced rates and defered rates on local property tax, this could be done on  state wide but it should be in the constitution.As a economic incentive( so  people will not take their property and leave the union) the tax rate should be low and that I see as a problem with the LVT, now if it allows for income varations I would be more  supportive of it. If my unimproved value on 4 acres is 10,000 and the tax rate is 500 dollars an acre, I would not have a problem paying the 2,000 bucks with my 30,000 a year income but my widowed neighbor with 40 acres might have a problem paying her tax of 20,000 bucks on a fixed income of 10,000 a year.
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on September 06, 2003, 01:23:20 pm
Quote
If my unimproved value on 4 acres is 10,000 and the tax rate is 500 dollars an acre, I would not have a problem paying the 2,000 bucks with my 30,000 a year income but my widowed neighbor with 40 acres might have a problem paying her tax of 20,000 bucks on a fixed income of 10,000 a year.

BillG: If your 30K in income came solely from providing apartments (remember no tax on buildings) on those 4 acres do you think people in the community would hesitate to ask for the collection of the 20K if they knew that it would deter the use of land that causes sprawl - especially since they know that "optimizing" the use of the land could produce 300K (your 30K income x 10 times the area) income for your neighbor and the social benefit of reduced rents, affordable housing, more vibrant cities that get people out of their cars, etc?
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 06, 2003, 01:52:34 pm
Quote
If my unimproved value on 4 acres is 10,000 and the tax rate is 500 dollars an acre, I would not have a problem paying the 2,000 bucks with my 30,000 a year income but my widowed neighbor with 40 acres might have a problem paying her tax of 20,000 bucks on a fixed income of 10,000 a year.

BillG: If your 30K in income came solely from providing apartments (remember no tax on buildings) on those 4 acres do you think people in the community would hesitate to ask for the collection of the 20K if they knew that it would deter the use of land that causes sprawl - especially since they know that "optimizing" the use of the land could produce 300K (your 30K income x 10 times the area) income for your neighbor and the social benefit of reduced rents, affordable housing, more vibrant cities that get people out of their cars, etc?
                                                                             
Well, if that was the rate I agreed to in the community contract, I imagine the association would collect but I probally would not agree to such high rates to begin with. My widowed neighbor with the 40 Acres and fixed income probally would not even agree to the 5% of unimproved value rate if it was going to cost her twiced her annual income.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 06, 2003, 02:04:08 pm
Listen, I agree there is a paradox  for  individual liberty if a person has no land to be self sufficent or at least the land where he can attempt to be self sufficent nor can he find the job or business he wishes to work in.Thus he has to work for others but working to help prevent the above does not call for one solution.Dogmatic one size fits all solutions aren't workable nor just in most cases.
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 06, 2003, 07:28:09 pm
As a economic incentive( so  people will not take their property and leave the union) the tax rate should be low and that I see as a problem with the LVT, now if it allows for income varations I would be more  supportive of it. If my unimproved value on 4 acres is 10,000 and the tax rate is 500 dollars an acre, I would not have a problem paying the 2,000 bucks with my 30,000 a year income but my widowed neighbor with 40 acres might have a problem paying her tax of 20,000 bucks on a fixed income of 10,000 a year.

Actually, this (the landed widow) is the conundrum I was thinking of when I said earlier in the thread that switching to LVT on a grand scale might be difficult.  

In New Hampshire, I think it can be done painlessly -- just subtract the current assessment for improvements and add it to the land value column.  Voila!  Land Value Taxation without any pain at all.   You would then immediately see a boom in new construction, as the current tax penalty on improvements would be gone.

Yet, herein lies the seed of the aforementioned conundrum -- as new construction booms, greater demands will be made on goverment (fire departments, police, etc.).  The natural way to deal with this under LVT is to raise the LVT rate.  Since LVT rates should be based on the cost of government (at least I think so),  as economic development proceeds, so demand for government services rises, and so rises the LVT.   This is offset by the wealth created by the economic development.

HOWEVER,  I have proposed that instead of taxing different areas of land at greater rates than others, that all land should be taxed the same.   The reason for this is that I also suggest that the LVT be no more than the budget required by the minimal Minarchist government.  

LVT Rate per Acre = StateBudget / TaxableAcres

Thus all the voodoo is dispelled -- the LVT is to fund government, and the pain is proportional to the land you own.   Presumably, there is great economic benefit to owning land, so those with huge tracts of land should have no problem.   I have dubbed this variation on George's theme the Uniform Land Value Tax (ULVT).   In terms of economic disruption and overall fairness, it has attractions -- even enough to get Jason to conceed that it wouldn't be so bad (in his eyes) as non-uniform LVT.   Problem solved?

Mostly, I think, except for one thing -- the royalist culture has used land deeds as a respository of private wealth, like a bank.   And mixing improvement taxes into the land taxes has provided the method for allowing large monopolies on undeveloped land to exist (i.e. a widow holding 40 acres of undeveloped land), and to even be considered great assets -- her 'unimproved' assessment may be very low on 40 acres, while the 1/2 acre plot next door with the fancy house gets taxed to death!  In contrast, LVT makes land monopolies (deeds) into liabilities -- only improvements are assets!  And under ULVT, all land is taxed the same.

I view the conversion of unimproved land monopolies from wealth repositories into tax liabilities as a good thing.  A land monopoly is a government-granted privilege that denies all others their natural rights to the same land.  Such exclusivity is a necessary evil for economic development to progress, but the bargain is fair enough if (and only if) there is compensation to society for the deed.  

Under the current system, unimproved land is bought up in the hope that the artificial scarcity thus created will drive up the price.  This is akin to damming up the river so you can charge $2 a bottle for water to the suddenly-thirsty downstream communities. (Yes, I mean to equate the pre-existing water rights of the downstreamers with the pre-existing common rights to unimproved land.)   It is unfair and coercive, even when bad government allows it.  

So, the landed widow may be living off of a fixed income.  If we keep with New Hampshire, as the construction boom surrounds her, the demand on government services inevitably causes a rise in ULVT.   There is an urge to say this is bad, since the widow then either has to put the land to use, or suffer economic damage.   However, the fact is that holding a monopoly on those 40 acres is a great luxury... those wealthy enough can do it, but those not so rich need to either put the land to use or lose the land deed to those who can.

In the widow's case, all she really has to do is let someone build some nice, tax-free rental houses, or some other revenue-generating activity (hunting or logging leases?).   She would be richer and more economic development of the land would result.   So, taken in context, the widow's plight under rising LVT due to a construction boom is no different than her plight anyway, as taxes rise.  Except that under LVT, she has a ready means to generate more income, tax free.

:)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 07, 2003, 12:56:34 am
Rhythm, why do you keep referring to land ownership as a 'monopoly'?
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 07, 2003, 06:08:20 am
Rhythm, why do you keep referring to land ownership as a 'monopoly'?

Because that's exactly what it is.  

BTW, intellectual property rights are also monopolies (as a published songwriter, I have a bit of experience with the Copyright office).  And just like land titles, intellectual property rights are government-granted privileges, awarded to spur economic development (or should be).  

Sadly, due to the royalist influence, most people today believe in the dominion theory regarding land, which is basically a holdover from the days of the King's Divine Right to Rule.  Oh well.

Royal Libertarians (http://www.geolib.com/essays/sullivan.dan/royallib.html)

:)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 07, 2003, 09:40:17 am
How is land ownership a monopoly?  If I own an acre and you own an acre, I don't have a monopoly.  If I owned 80% of ALL land, then, sure, I have a monopoly.  Your description of monopoly dilutes the meaning - it could then be applied to all property: I have a monopoly over my house/car/bicycle/etc - while it might be true in the most literal sense, it isn't very descriptive or helpful way to describe ownership.  

monopoly implies ownership
ownership does not imply monopoly
Title: Re:Economics According To George (Henry George, that is...)
Post by: Duodecimal on September 07, 2003, 10:59:34 am
I would agree with the stance on intellectual property, as I mentioned earlier. But the big difference here, where georgists are wrong, is that land is not the same as ideas.

You and I can use the same idea at the same time. As Jefferson said, I can light my candle from yours without darkening you. But that doesn't apply to land, or bicycles, or DVDs. With real property, someone can claim exclusive use. You can not exclusively use an idea, and the government's protection of 'intellectual property' violates real property rights by, for example, forbidding someone to use his own laboratory to synthesize HIV-fighting medicines when those formulae are covered by patents.

The ability to exclusively use something defines real property in this sense. That is how patents, copyrights, and IP are wholly distinct from land.

Again, my philosophy is that no tax is just and that no tax is harmless. The greatest danger of Georgism is that it validates specific taxation as a moral imperative based on a specific communal philosophy of value. Getting a foot into the door in favor of theft, even though georgists define selling land as theft of "society's" generated value, is the same first step on a slippery slope that all justification of government appropriation of power.

Land is no different from any other resource. All matter is given by nature, and the value of all things can be said to gain value from society

To extend the georgist philosophy, our society's culture prices diamonds, wholly subjectively, as more valuable than food, water, and even land. If our culture thought diamonds were objects of evil, they would have no real value and fetch no real price premium. Therefore, the price premium of diamonds are generated by society and their appreciation in value over their raw state should be taxable. Diamonds are scarcer than land and in high demand due to the subjective value members of our society place on owning them.

And just as we don't need to own diamonds to survive, I don't need to own land to survive. I rent (and won't own land in this bubble environment). My employer, the largest regional brokerage firm outside New York, does not own any land for its headquarters or operations facility. Monopoly on ownership is not a danger even if it were possible in the first place.
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 07, 2003, 12:38:33 pm
How is land ownership a monopoly?  If I own an acre and you own an acre, I don't have a monopoly.  If I owned 80% of ALL land, then, sure, I have a monopoly.  Your description of monopoly dilutes the meaning - it could then be applied to all property: I have a monopoly over my house/car/bicycle/etc - while it might be true in the most literal sense, it isn't very descriptive or helpful way to describe ownership.  

monopoly implies ownership
ownership does not imply monopoly

First, land is not a product.  You cannot produce any new planetary surface.  So, once again, any human has just as much right to use a given piece of unimproved land as any other (this is the Jeffersonian view).  A human cannot actually 'own' land anymore than I can 'own' a song.  However, the government can grant you a deed to the land and enforce it for you, just as the goverment can grant me exclusive use rights to a song.   In both cases, we (as government-created monopolists) get to corner the market on our limited monopolies.

Why is this not like owning a car?  Because even if all the cars are bought, more cars can be made.   The State cannot make more land to give deeds to, so even though the US is nowhere near actually occupied, it is 100% legally occupied.  The royalist State is the penultimate land monopolist, controlling 100% of the available land within its borders.  The deeds it grants make the recipients little land monopolists, controlling 100% of the use of the land in their deed, whether it is just enough for them to live, or a vastness bigger than most nations.   And the effect of such today is to the disservice of all.

Let's let Winston Churchill elaborate on this last a bit:

Land monopoly is not the only monopoly, but it is by far the greatest of monopolies -- it is a perpetual monopoly, and it is the mother of all other forms of monopoly.

Unearned increments in land are not the only form of unearned or undeserved profit, but they are the principal form of unearned increment, and they are derived from processes which are not merely not beneficial, but positively detrimental to the general public.

Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position -- land, I say, differs from all other forms of property, and the immemorial customs of nearly every modern state have placed the tenure, transfer, and obligations of land in a wholly different category from other classes of property.

Nothing is more amusing than to watch the efforts of land monopolists to claim that other forms of property and increment are similar in all respects to land and the unearned increment on land.

They talk of the increased profits of a doctor or lawyer from the growth of population in the town in which they live. They talk of the profits of a railway, from the growing wealth and activity in the districts through which it runs. They talk of the profits from a rise in stocks and even the profits derived from the sale of works of art.

But see how misleading and false all those analogies are. The windfalls from the sale of a picture -- a Van Dyke or a Holbein -- may be very considerable. But pictures do not get in anybody's way. They do not lay a toll on anybody's labor; they do not touch enterprise and production; they do not affect the creative processes on which the material well-being of millions depends.

If a rise in stocks confers profits on the fortunate holders far beyond what they expected or indeed deserved, nevertheless that profit was not reaped by withholding from the community the land which it needs; on the contrary, it was reaped by supplying industry with the capital without which it could not be carried on.

If a railway makes greater profits it is usually because it carries more goods and more passengers.

If a doctor or a lawyer enjoys a better practice, it is because the doctor attends more patients and more exacting patients, and because the lawyer pleads more suits in the courts and more important suits. At every stage the doctor or the lawyer is giving service in return for his fees.

Fancy comparing these healthy processes with the enrichment which comes to the landlord who happens to own a plot of land on the outskirts of a great city, who watches the busy population around him making the city larger, richer, more convenient, more famous every day, and all the while sits still and does nothing.

Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits still. Every one of those improvements is effected by the labor and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived.

While the land is what is called "ripening" for the unearned increment of its owner, the merchant going to his office and the artisan going to his work must detour or pay a fare to avoid it. The people lose their chance of using the land, the city and state lose the taxes which would have accrued if the natural development had taken place, and all the while the land monopolist only has to sit still and watch complacently his property multiplying in value, sometimes many fold, without either effort or contribution on his part!


Continued next message...

Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 07, 2003, 12:39:03 pm
But let us follow this process a little further. The population of the city grows and grows, the congestion in the poorer quarters becomes acute, rents rise and thousands of families are crowded into tenements. At last the land becomes ripe for sale -- that means that the price is too tempting to be resisted any longer. And then, and not until then, it is sold by the yard or by the inch at 10 times, or 20 times, or even 50 times its agricultural value.

The greater the population around the land, the greater the injury the public has sustained by its protracted denial. And, the more inconvenience caused to everybody; the more serious the loss in economic strength and activity -- the larger will be the profit of the landlord when the sale is finally accomplished. In fact, you may say that the unearned increment on the land is reaped by the land monopolist in exact proportion, not to the service, but to the disservice done. It is monopoly which is the keynote, and where monopoly prevails, the greater the injury to society the greater the reward to the monopolist. This evil process strikes at every form of industrial activity. The municipality, wishing for broader streets, better houses, more healthy, decent, scientifically planned towns, is made to pay more to get them in proportion as is has exerted itself to make past improvements. The more it has improved the town, the more it will have to pay for any land it may now wish to acquire for further improvements.

The manufacturer proposing to start a new industry, proposing to erect a great factory offering employment to thousands of hands, is made to pay such a price for his land that the purchase price hangs around the neck of his whole business, hampering his competitive power in every market, clogging him far more than any foreign tariff in his export competition, and the land price strikes down through the profits of the manufacturer on to the wages of the worker.

No matter where you look or what examples you select, you will see every form of enterprise, every step in material progress, is only undertaken after the land monopolist has skimmed the cream for himself, and everywhere today the man or the public body that wishes to put land to its highest use is forced to pay a preliminary fine in land values to the man who is putting it to an inferior one, and in some cases to no use at all. All comes back to land value, and its owner is able to levy toll upon all other forms of wealth and every form of industry. A portion, in some cases the whole, of every benefit which is laboriously acquired by the community increases the land value and finds its way automatically into the landlord's pocket. If there is a rise in wages, rents are able to move forward, because the workers can afford to pay a little more. If the opening of a new railway or new tramway, or the institution of improved services of a lowering of fares, or of a new invention, or any other public convenience affords a benefit to workers in any particular district, it becomes easier for them to live, and therefore the ground landlord is able to charge them more for the privilege of living there.

Some years ago in London there was a toll bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings offended the public conscience, and agitation was set on foot, municipal authorities were roused, and at the cost of the taxpayers, the bridge was freed and the toll removed. All those people who used the bridge were saved sixpence a week, but within a very short time rents on the south side of the river were found to have risen about sixpence a week, or the amount of the toll which had been remitted!

And a friend of mine was telling me the other day that, in the parish of Southwark, about 350 pounds a year was given away in doles of bread by charitable people in connection with one of the churches. As a consequence of this charity, the competition for small houses and single-room tenements is so great that rents are considerably higher in the parish!

All goes back to the land, and the land owner is able to absorb to himself a share of almost every public and every private benefit, however important or however pitiful those benefits may be.

I hope you will understand that, when I speak of the land monopolist, I am dealing more with the process than with the individual land owner who, in most cases, is a worthy person utterly unconscious of the character of the methods by which he is enriched. I have no wish to hold any class up to public disapprobation. I do not think that the man who makes money by unearned increment in land is morally worse than anyone else who gathers his profit where he finds it in this hard world under the law and according to common usage. It is not the individual I attack; it is the system. It is not the man who is bad; it is the law which is bad. It is not the man who is blameworthy for doing what the law allows and what other men do; it is the State which would be blameworthy if it were not to endeavor to reform the law and correct the practice.

We do not want to punish the landlord. We want to alter the law.  -- Winston Churchill



Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 07, 2003, 01:58:39 pm
Rhythm,
Mr. Churchill is very eloquent, but the following phrase, in my view, discredit his view of land:
Quote
Unearned increments in land are not the only form of unearned or undeserved profit, but they are the principal form of unearned increment, and they are derived from processes which are not merely not beneficial, but positively detrimental to the general public.
Who is he to determine if a particular profit is deserved or not?  The sale of land, like any other transaction of a commodity or service, benefits both buyer and seller and is not the business of anyone else to determine the value or profit to either.

lets start out with a clear area, say a valley: no body in sight.  First person comes along and places a claim on this property or a portion of it.  Perhaps he is a 'spectulator' in that he sees the attributes of this property to hold some potential future value (minerals, near to water, heavily forested, a good sopping point between two cities, etc) and takes the risk that the land will rise in value as others discover the same about the area.  More people move to the area, snatching up claims of land until the whole valley is 'owned'.  These folks build houses, a town, maybe try to get a railroad to go through, maybe start industry - all in effort to attract more people and increase value.  Combined, yes, they have a 'monopoly' on the area - but this doesn't prevent others from doing the same in the next valley and competing with the first.  But, this only holds true as long as there are more valleys to 'claim'.  After all the land is owned.  Then 'other' people are reduced in their choices: rent land or buy land.  But no monopoly exists because everyone has the ability to become a land owner.  People can join their capital together to make purchases if land values rise to a point where individuals cannot easily afford land.  We are far from that point currently, but lets take a look into the future:  earth population of 20 billion - all areas are owned and all land is extremely expensive, so expensive that it becomes more economically efficient to expand to the seas, space, etc... Only if you assume that we are restricted to current land areas does your 'monopoly' hold any sort of water... this is true when you look at any natural resource (as ALL resources are) in a finite space.  The universe is not finite and human ingenuity is not limited either...
The Georist view is fine, and makes some sort of 'societal' sense, I think people should be able to do as they have done in your examples in New Hampshire etc where a group of folks buy a large tract of land and then institute a Georgian system on it.  As long as there were no property taxes due to the state/federal government then I am sure this system would flourish and be free to compete with other methods of private land distribution.  The problem comes in when a government forces property taxes from the land owners.  Property taxes (in whatever form) make it impossible for any person to NOT be apart of society and not control their lives and future.  Suppose a farmer just wanted to grow enough food for his family and not be 'beholdin' to anyone on the outside, fast-paced world.  He couldn't due to taxation.  If a city grew up around his property and these taxes (georian or otherwise) rose in respect to value, he would be forced off his property.

Quote
First, land is not a product.  You cannot produce any new planetary surface.  So, once again, any human has just as much right to use a given piece of unimproved land as any other (this is the Jeffersonian view).  

Land is a product - it is just not often a product of man.  But man CAN create land, or at least convert resources into a place that allows him to dwell on (ie: dutch dikes, oil rigs, space stations, and in the future: moon colonies, asteroid developments, other worlds, etc).  Yes, every human has the 'right' to use a given piece of land, just as we all have the 'right' to work or to eat or to play.  It is more an 'ability' than a right tho - I have the 'right' to exercise my abilities/talents as I see fit in an effort to feed myself, clothe myself, own a car, own land - but none of these are an entitlement and if I choose to just do nothing, then I suffer the consequences (starvation, limited mobility, etc).

michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: Duodecimal on September 07, 2003, 02:16:44 pm
But we have created new land areas. Hong Kong's international airport. The dikes of Denmark. And eventually, artificial islands at sea. There's a chunk of southern England created from the Chunnel, and the same goes for a bit of Manhattan.

Calling land a perpetual monopoly is nonsensical. It passes from owner to owner like all other property. The amount of land is less fixed than the amount of gold (because gold, unlike land, is not being created). Churchill is wrong. Georgists are wrong. There is no strong logical foundation for segregating land as a unique resource any more than water or wheat.

Churchill assails the state for making the current system possible. However, land ownership is possible without the state as long as men are willing to defend their property. He assails the same State that would tax land ownership at some subjective rate as set by some appointed or elected bureau of busybodies.

Electricity generation, water works, the growing and movement of food supplies, the availability of healthcare, and the dissemination of information are all as vital as land. Gold can not be created, and its value is also subject to market forces and subjective estimations. Fundamental theories of value are completely ignored by all these georgist musings.
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 07, 2003, 03:13:15 pm
>>Hong Kong Airport

This did not increase the surface area of the Earth one square centimeter.   Labor added improvement value.  Under LVT, none of that would be taxable.

As for the fruits of labor being critical, indeed -- they are the True Property of humans.  They should not be taxed at all!   Instead, all the taxes necessary should be taken from LVT, which is the product of no human and the common heritage of all.

BTW, let's read what Mark Twain has to say on the issue:

Archimedes

by Twark Main [Mark Twain?]

"Give me whereon to stand", said Archimedes, "and I will move the earth." The boast was a pretty safe one, for he knew quite well that the standing place was wanting, and always would be wanting. But suppose he had moved the earth, what then? What benefit would it have been to anybody? The job would never have paid working expenses, let alone dividends, and so what was the use of talking about it? From what astronomers tell us, I should reckon that the earth moved quite fast enough already, and if there happened to be a few cranks who were dissatisfied with its rate of progress, as far as I am concerned, they might push it along for themselves; I would not move a finger or subscribe a penny piece to assist in anything of the kind.

Why such a fellow as Archimedes should be looked upon as a genius I never could understand; I never heard that he made a pile, or did anything else worth talking about. As for that last contract he took in hand, it was the worst bungle I ever knew; he undertook to keep the Romans out of Syracuse; he tried first one dodge and then another, but they got in after all, and when it came to fair fighting he was out of it altogether, a common soldier in a very business-like sort of way settling all his pretensions.

It is evident that he was an over-rated man. He was in the habit of making a lot of fuss about his screws and levers, but his knowledge of mechanics was in reality of a very limited character. I have never set up for a genius myself, but I know of a mechanical force more powerful than anything the vaunting engineer of Syracuse ever dreamed of. It is the force of land monopoly; it is a screw and lever all in one; it will screw the last penny out of a man's pocket, and bend everything on earth to its own despotic will. Give me the private ownership of all the land, and will I move the earth? No; but I will do more. I will undertake to make slaves of all the human beings on the face of it. Not chattel slaves exactly, but slaves nevertheless. What an idiot I would be to make chattel slaves of them. I would have to find them salts and senna when they were sick, and whip them to work when they were lazy.

No, it is not good enough. Under the system I propose the fools would imagine they were all free. I would get a maximum of results, and have no responsibility whatever. They would cultivate the soil; they would dive into the bowels of the earth for its hidden treasures; they would build cities and construct railways and telegraphs; their ships would navigate the ocean; they would work and work, and invent and contrive; their warehouses would be full, their markets glutted, and

The beauty of the whole concern would be That everything they made would belong to me.


Continued next message...
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 07, 2003, 03:14:24 pm
It would be this way, you see: As I owned all the land, they would of course, have to pay me rent. They could not reasonably expect me to allow them the use of the land for nothing. I am not a hard man, and in fixing the rent I would be very liberal with them. I would allow them, in fact, to fix it themselves. What could be fairer? Here is a piece of land, let us say, it might be a farm, it might be a building site, or it might be something else - if there was only one man who wanted it, of course he would not offer me much, but if the land be really worth anything such a circumstance is not likely to happen. On the contrary, there would be a number who would want it, and they would go on bidding and bidding one against the other, in order to get it. I should accept the highest offer - what could be fairer? Every increase of population, extension of trade, every advance in the arts and sciences would, as we all know, increase the value of land, and the competition that would naturally arise would continue to force rents upward, so much so, that in many cases the tenants would have little or nothing left for themselves.

In this case a number of those who were hard pushed would seek to borrow, and as for those who were not so hard pushed, they would, as a matter of course, get the idea into their heads that if they only had more capital they could extend their operations, and thereby make their business more profitable. Here I am again. The very man they stand in need of; a regular benefactor of my species, and always ready to oblige them. With such an enormous rent-roll I could furnish them with funds up to the full extent of the available security; they would not expect me to do more, and in the matter of interest I would be equally generous.

I would allow them to fix the rate of it themselves in precisely the same manner as they had fixed the rent. I should then have them by the wool, and if they failed in their payments it would be the easiest thing in the world to sell them out. They might bewail their lot, but business is business. They should have worked harder and been more provident. Whatever inconvenience they might suffer, it would be their concern, and not mine. What a glorious time I would have of it! Rent and interest, interest and rent, and no limit to either, excepting the ability of the workers to pay. Rents would go up and up, and they would continue to pledge and mortgage, and as they went bung, bung, one after another, it would be the finest sport ever seen. thus, from the simple leverage of land monopoly, not only the great globe itself, but everything on the face of it would eventually belong to me. I would be king and lord of all, and the rest of mankind would be my most willing slaves.

It hardly needs to be said that it would not be consistent with my dignity to associate with the common rank and file of humanity; it would not be politic to say so, but, as a matter of fact, I not only hate work but I hate those who do work, and I would not have their stinking carcasses near me at any price. High above the contemptible herd I would sit enthroned amid a circle of devoted worshippers. I would choose for myself companions after my own heart. I would deck them with ribbons and gewgaws to tickle their vanity; they would esteem it an honour to kiss my glove, and would pay homage to the very chair that I sat upon; brave men would die for me, parsons would pray for me, and bright-eyed beauty would pander to my pleasures. For the proper management of public affairs I would have a parliament, and for the preservation of law and order there would be soldiers and policemen, all sworn to serve me faithfully; their pay would not be much, but their high sense of duty would be a sufficient guarantee that they would fulfil the terms of the contract.

Outside the charmed circle of my society would be others eagerly pressing forward in the hope of sharing my favours; outside of these would be others again who would be forever seeking to wriggle themselves into the ranks of those in front of them, and so on, outward and downward, until we reach the deep ranks of the workers forever toiling and forever struggling merely to live, and with the hell of poverty forever threatening to engulf them. The hell of poverty, that outer realm of darkness where there is weeping and wailing and gnashing of teeth - the social Gehenna, where the worm dieth not, and the fire is not quenched - here is a whip more effective by far than the keenest lash of the chattel slave owner, urging them on by day, haunting their dreams by night, draining without stint the life blood from their veins, and pursuing them with relentless constancy to their graves. In the buoyancy of youth many would start full of hope and with high expectations; but, as they journeyed along, disappointment would follow disappointment, hope would gradually give place to despair, the promised cup of joy would be turned to bitterness, and the holiest affection would become a poisoned arrow quivering in the heart!

What a beautiful arrangement - ambition urging in front, want and the fear of want bringing up the rear! In the conflicting interests that would be involved, in the throat-cutting competition that would prevail, in the bitterness that would be engendered between man and man, husband and wife, father and son, I should, of course, have no part. There would be lying and cheating, harsh treatment by masters, dishonesty of servants, strikes and lockouts, assaults and intimidation, family feuds and interminable broils; but they would not concern Me. In the serene atmosphere of my earthly paradise I would be safe from all evil. I would feast on the daintiest of dishes, and sip wines of the choicest vintage; my gardens would have the most magnificent terraces and the finest walks. I would roam mid the umbrageous foliage of the trees, the blooming flowers, the warbling of birds, the jetting of fountains, and the splashing of pellucid waters. My palace would have its walls of alabaster and domes of crystal, there would be furniture of the most exquisite workmanship, carpets and hangings of the richest fabrics and finest textures, carvings and paintings that were miracles of art, vessels of gold and silver, gems of the purest ray glittering in their settings, the voluptuous strains of the sweetest music, the perfume of roses, the softest of couches, a horde of titled lackeys to come and go at my bidding, and a perfect galaxy of beauty to stimulate desire, and administer to my enjoyment. Thus would I pass the happy hours away, while throughout the world it would be a hallmark of respectability to extol my virtues, and anthems would be everywhere sung in praise.

Archimedes never dreamt of anything like that. Yet, with the earth for my fulcrum and its private ownership for my lever, it is all possible. If it should be said that the people would eventually detect the fraud, and with swift vengeance hurl me and all my courtly parasites to perdition, I answer, "Nothing of the kind, the people are as good as gold, and would stand it like bricks, and I appeal to the facts of today to bear me witness."  


:)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 07, 2003, 03:25:02 pm
BTW, here is a link to a more modernist analysis that looks to land monopolies as they have existed in other countries and how land reform was brought about.   Not exactly Georgist, but informative nonetheless.

http://csf.colorado.edu/forums/pkt/dec98/0195.html (http://csf.colorado.edu/forums/pkt/dec98/0195.html)

And a bit of Scottish flavor:

http://www.siol-nan-gaidheal.com/environ.htm (http://www.siol-nan-gaidheal.com/environ.htm)

:)

RS



Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 07, 2003, 03:46:40 pm
...and when you take viirtually any idea to an extreme, it fails... all land will not ever be owned by one person

yet another interesting quote of a historical someone who could not possibly even dream of what human achievement could attain... and in their little, narrow view of earth and human endeavors they may have been correct... but not so today...

instead of quoting folks who might have a different view in our current, modern world... what about your views, Rhythm?  What are your answers to these questions:

Should gold, silver, salt, minerals, all natural resources be made 'public', ie: have a Georgian system of taxation placed upon them?

Land on the Earth itself may be limited, but what about 'land' outside of our world? the moon? other planets and planetary objects? other solar systems, etc?  Are we really 'limited' or just currently technologically impaired?

A Georgist System could evolve unmolested and unfettered in a purely private property (no taxes) world - but the reverse is not true... so why not have an overall private property system and institute Georgism within, thereby not infringing on anyones freedoms?

and, btw, "Give me whereon to stand", said Archimedes, "and I will move the earth." - I understood the quote to be more along the lines of "Give me a proper lever, and I shall move mountains" which is entirely truthful, and we do move mountains by the very same principal.

michael

Interesting article BTW - I like how it shows that private ownership of land is better for the overall economy and points out the repressive nature of governmental or feudal systems of land management.
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 07, 2003, 09:33:44 pm
...and when you take viirtually any idea to an extreme, it fails... all land will not ever be owned by one person

Not in the US.  However, in European monarchies, the crown was basically the owner of all land.  It did not last, but the reverbrations are still felt round the world.   And while our University friend above claims the Homestead Act prevented true land monopolies from forming in the US, it's a warped kind of logic.  The land was stolen from the Indians by the State, then deeded out to the State's clients.  This provided the illusion of no land monopoly for those clients, until the Act was deactivated, but the Indians were pretty sure what was happening.

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yet another interesting quote of a historical someone who could not possibly even dream of what human achievement could attain... and in their little, narrow view of earth and human endeavors they may have been correct... but not so today...

It is important not to confuse SciFi with reality.  I am an advocate of technology... a sort of technocrat, really.  Yet, I do not believe that the fundamentals of Earth-bound real-estate are going to be impacted by planetary exploration any time soon.  Nor will we colonize the sea floor, nor will we build huge floating cities on the sea (or the Great Lakes).  In time, we may do all those things, but for this century, I see the lot of humankind remaining primarily a land-based, Earth-bound affair.  So, there is plenty of motivation to try and get it right.

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instead of quoting folks who might have a different view in our current, modern world... what about your views, Rhythm?  What are your answers to these questions:

Should gold, silver, salt, minerals, all natural resources be made 'public', ie: have a Georgian system of taxation placed upon them?

Philosophically, all non-artificial things are our common heritage.  So, there would be no moral objection to a rent or use fee being imposed, if such were needed.  However, my whole position turns on the idea that all taxes should be abolished, except for the ULVT, and that this tax should be calculated by dividing the annual budget for government by the number of taxable acres.   There is no fancy, gew-gaw encrusted voodoo behind this -- it is a simple, utilitarian method of financing government without taxing the means of production (capital or labor).   Presuming (as I do) that the ULVT will be precisely sufficient to the finance of the government (see formula above), then I would have to say that no, I do not believe their should be a tax on extractive products, even though their could be such a tax under Georgist philosophy.

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Land on the Earth itself may be limited, but what about 'land' outside of our world? the moon? other planets and planetary objects? other solar systems, etc?  Are we really 'limited' or just currently technologically impaired?

Anything we create is the fruit of labor and therefore not eligible for taxation in a Georgist framework.  So, if you create a floating, hydrogen-fueled city orbiting Jupiter, none of that living area would or should be taxed.  However, the hydrogen that you sucked up from Jupiter is not the fruit of labor, so it would be a candidate for taxation, if such taxes were needed.  

Frankly, there is no reason I can see that taxes would be needed at all.  User fees could drive the whole thing -- a power bill, a hydrogen bill, etc.  Unless the technology required to create new habitat was something individuals could command, all such communities would be collectives -- either of the corporate or communal forms.   So, you would get what you signed on for.

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A Georgist System could evolve unmolested and unfettered in a purely private property (no taxes) world - but the reverse is not true... so why not have an overall private property system and institute Georgism within, thereby not infringing on anyones freedoms?

As a theoretical point, there is no objection.  However, I think there are greater barriers to AnCap than there are to a Georgist tax policy. :)

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and, btw, "Give me whereon to stand", said Archimedes, "and I will move the earth." - I understood the quote to be more along the lines of "Give me a proper lever, and I shall move mountains" which is entirely truthful, and we do move mountains by the very same principal.

That's the problem with historical information -- there is always intepretation, translation, and just plain error. (shrug)

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Interesting article BTW - I like how it shows that private ownership of land is better for the overall economy and points out the repressive nature of governmental or feudal systems of land management.

If you are speaking of the Mueller piece, which praises family farms, I would like to point out that the new land monopolists are not individuals or families at all.  Instead, we have corporate conglomerates and government itself.   Family farms and ranches are not able to compete with these entities it seems.

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 08, 2003, 03:16:50 am
Whew! Finally, you at least acknowledged the possibilities outside the earth - no, I realize it isn't possible today, tomorrow, or even 50 or 100 years from now... but it is possible and because it is, all that is needed to make it come to pass is sufficient demand and an unrestricted free market that will attempt, best as we humans can manage, to fill that demand.  Thank you for at least stating your opinion on that stuff - I was beginning to wonder if I was just talking to myself.

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However, in European monarchies, the crown was basically the owner of all land.  It did not last, but the reverbrations are still felt round the world.
I see alot of similarities between a monarchy and our current government - since we all have to pay 'rent' to the government for our private property(land) and we are restricted in its use by the dictates of others (often small minorities) we really are just serfs to the government.  You are right on in your evaluation that ownership of land is very powerful and in fact is a monopoly - a government owned monopoly.  Just as self-ownership is extremely powerful (or the converse, slave ownership), that is exactly why I feel that land should be owned by a variety of individuals, not concentrated in the hands of the few (government).  Something so necessary, so intrinsic to our survival, needs to be in private hands...

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Philosophically, all non-artificial things are our common heritage.
I guess that it then breaks down into what you believe as far as evolution/creationism et al.  And what exactly is common heritage?  Just because we are human then we, as a race, own all we survey?  What about other creatures (I will leave out the extremely rare possiblity of aliens and such since even the discussion of such things seems to somehow invalidate anything else I might have to say due to the 'scifi' nature) like dolphins or primates or any other kind of life that just might exist in the solar system or nearby?  Unfortunately life in the universe seems to follow the 'might makes right' analogy, even in human social interaction or regarding land ownership - the only real way you can 'own' something is if you can successfully defend it from others.  This is as true in the wild (the hunting ranges of animals, etc) as it is in humans (the whole 'stealing' land from the indians, the roman empire, etc).

I guess that my real problem with the Georgist system is I don't see much difference between a piece of land or a clay pot which I 'mixed my own labor' into - it is all just matter, just as we are matter, its kinda like saying that the sun owns the planets because it used its gravity well to shape them and hold them.  I see it as some sort of slippery slope - either people can 'own' stuff, or they can't... trying to put things into different classes (which they are not in reality) by saying some things can be 'owned' but others can't seems inconsistent.  OK, so to this you will bring up air or the oceans or something - just because we cannot currently easily divide up a resource does not mean it can't be owned.  Air is air - a stupid statement, BUT, its important.  Since you would agree if I 'created' air (mixed together the appropriate elements/gases - grew the plants that made oxygen, etc), put it into a self-contained bubble - it would be 'my' air, not just the bubble, but also the air inside.  And there is no difference between the air I 'created' and the air in earths atmosphere - EXCEPT that it is impossible currently to divide up/seperate the atmosphere into private little parcels...

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A Georgist System could evolve unmolested and unfettered in a purely private property (no taxes) world - but the reverse is not true... so why not have an overall private property system and institute Georgism within, thereby not infringing on anyones freedoms?
 

As a theoretical point, there is no objection.  However, I think there are greater barriers to AnCap than there are to a Georgist tax policy.
Why do you equate having not property tax to AnCap?  My above statement works just as well in a minimalist society also.

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That's the problem with historical information -- there is always intepretation, translation, and just plain error. (shrug)
Yes, I agree, and I didn't mean to imply that my statement was in fact THE one true literal translation... just pointing out that I remember it differently, and , considering my memory in regards to holding actual factual data - I would say that my version is more than likely incorrect...

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If you are speaking of the Mueller piece, which praises family farms, I would like to point out that the new land monopolists are not individuals or families at all.  Instead, we have corporate conglomerates and government itself.  Family farms and ranches are not able to compete with these entities it seems.
I own land and am also a partner with others in land ownership - does that make me a corporate conglomerate or a branch of government?  Sheesh, if I can do it, anyone can!  Its just a matter of priorities and market decisions - perhaps I put off buying that new car so I can invest in some land... I don't see how I now am a monopolist... I might even let you and your geolibs(not meaning to slander/stereotype or anything , just making a little joke)  live rent-free on the property considering that I think you would probably take care of it quite nicely  :)  j/k

I think we are at an impass regarding land.  The more you make me think about any form of taxation on land the stronger I feel that it is wrong and harmful.  I don't think that I am doing very well stating my views and don't see either of us changing in our beliefs... but it has been an enlightening experience, as always, sir!

michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 08, 2003, 05:28:15 pm
I see alot of similarities between a monarchy and our current government - since we all have to pay 'rent' to the government for our private property(land) and we are restricted in its use by the dictates of others (often small minorities) we really are just serfs to the government.

Actually, serfs were considered as much a part of the property as the trees.  So, it is overstating things to claim we are serfs.  The direct historical corollary is the landed gentry of England -- we are manor lords, which is really just a fancy, high-class sort of tenant.  The rent is called taxes (or in the old days tribute), but the net effect is the same.  

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You are right on in your evaluation that ownership of land is very powerful and in fact is a monopoly - a government owned monopoly.  

Then I guess I can consider my explanation to your question of why I keep referring to land ownership as land monopoly a success. :)

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Just as self-ownership is extremely powerful (or the converse, slave ownership), that is exactly why I feel that land should be owned by a variety of individuals, not concentrated in the hands of the few (government).  Something so necessary, so intrinsic to our survival, needs to be in private hands...

Why private?  The air is essential, yet we do not feel that someone must have title to breath.  Land is like air (for the sake of this discussion) in all particulars save one -- you can exclude others from using a particular plot of land by force of arms.

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Philosophically, all non-artificial things are our common heritage.
I guess that it then breaks down into what you believe as far as evolution/creationism et al.  And what exactly is common heritage?

'Common heritage' is comprised of those things all sentient beings inherit in common.  On Earth, it means the air, the water, the ground and the underground.  Off-planet, it means any unoccupied locale we can reach.

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Just because we are human then we, as a race, own all we survey?

Just because we are sentient creatures, we have the right to use the commons, so long as we do not destroy the commons in the process.

They hang the man and flog the woman
Who steals the goose from off the Common,
But leave the greater villain loose
Who steals the commons from the goose


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What about other creatures (I will leave out the extremely rare possiblity of aliens and such since even the discussion of such things seems to somehow invalidate anything else I might have to say due to the 'scifi' nature) like dolphins or primates or any other kind of life that just might exist in the solar system or nearby?

Ethical sentient beings find that indigenous life has the right to its native environment.  I happen to think this is proportional to the level of sophistication of the life in question, with any species being a thing of wonder in the mostly-lifeless Universe, and higher creatures commanding individual (as opposed to species) rights, according to their self-awareness.  So, it is OK for hunters to hunt, but unethical (and stupid) for hunters to extinct their prey.  

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Unfortunately life in the universe seems to follow the 'might makes right' analogy, even in human social interaction or regarding land ownership - the only real way you can 'own' something is if you can successfully defend it from others.  This is as true in the wild (the hunting ranges of animals, etc) as it is in humans (the whole 'stealing' land from the indians, the roman empire, etc).

Also known as the 'law of the jungle', this unreasoning perspective on survival is one of the main things civilization (and law) was invented to counteract.   By recognizing each others' rights (and respecting them), we can accomplish infinitely more than we can as lone avatars wandering the wilderness (although I sense that many folks would gladly return to that way of life).   As human ethical sophistication evolves, we will find that this same dynamic can work to our favor in our relationships with other species, both higher and lower than ourselves.

BTW, life does not follow 'might makes right', as the foodchain and the competition for survival is an amoral process.   Morals come from awareness and the power to choose.  Because we are aware of cruelty and we can choose not to be cruel, we have the moral obligation to do so.  We might find the lion's disembowelment of the still-screaming antelope cruel, and such an action by a human would be cruel, but the lion is just feeding and has no knowledge of cruelty per se.  

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I guess that my real problem with the Georgist system is I don't see much difference between a piece of land or a clay pot which I 'mixed my own labor' into - it is all just matter, just as we are matter, its kinda like saying that the sun owns the planets because it used its gravity well to shape them and hold them.  I see it as some sort of slippery slope - either people can 'own' stuff, or they can't... trying to put things into different classes (which they are not in reality) by saying some things can be 'owned' but others can't seems inconsistent.  

How so?  I fashion an axe out of stone and wood -- is it not mine?   Don't you feel just as entitled to go down to the river and pick a flint from the bank to make your own axe as I did?  Wouldn't the axe that you make be yours and yours alone?

If I saw you with your fine axe (like mine) and decided then to claim exclusive rights to all the flint along that bank, as no other outcropping of quality flint was known to us, would you not feel that I was doing harm to you? That I had no authority to claim such ownership?  Thus, is not the flint along the bank in a different category of things (those things we did not make) than our axes (those things we did make)?  This seems pretty logical to me.

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OK, so to this you will bring up air or the oceans or something - just because we cannot currently easily divide up a resource does not mean it can't be owned.  Air is air - a stupid statement, BUT, its important.  Since you would agree if I 'created' air (mixed together the appropriate elements/gases - grew the plants that made oxygen, etc), put it into a self-contained bubble - it would be 'my' air, not just the bubble, but also the air inside.  And there is no difference between the air I 'created' and the air in earths atmosphere - EXCEPT that it is impossible currently to divide up/seperate the atmosphere into private little parcels...

Of course there is a difference -- your air is the fruit of your labor, while the air we are breathing now is the fruit of the Creator's labor.   Even if these different volumes of air are chemically identical, the manner of their creation and thus the rights pertaining to them are different.

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A Georgist System could evolve unmolested and unfettered in a purely private property (no taxes) world - but the reverse is not true... so why not have an overall private property system and institute Georgism within, thereby not infringing on anyones freedoms?

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As a theoretical point, there is no objection.  However, I think there are greater barriers to AnCap than there are to a Georgist tax policy.
Why do you equate having not property tax to AnCap?  My above statement works just as well in a minimalist society also.

How can there be a minimalist society with only private property?   In fact, how can there be a world where all land is owned?  Oh, I see... it would be a slave world, where one could sit in their virtual chains paying a fee to do so, as well as a fee to walk somewhere, and as soon as technically feasible, a fee to breath.  I guess we can add taxes on the money we spend and the labor we perform and the income we receive as well?  Yes, let's tax everything!

Boy, that sure sounds like freedom! (not)

:)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 08, 2003, 05:35:24 pm
As a economic incentive( so  people will not take their property and leave the union) the tax rate should be low and that I see as a problem with the LVT, now if it allows for income varations I would be more  supportive of it. If my unimproved value on 4 acres is 10,000 and the tax rate is 500 dollars an acre, I would not have a problem paying the 2,000 bucks with my 30,000 a year income but my widowed neighbor with 40 acres might have a problem paying her tax of 20,000 bucks on a fixed income of 10,000 a year.

Actually, this (the landed widow) is the conundrum I was thinking of when I said earlier in the thread that switching to LVT on a grand scale might be difficult.  

In New Hampshire, I think it can be done painlessly -- just subtract the current assessment for improvements and add it to the land value column.  Voila!  Land Value Taxation without any pain at all.   You would then immediately see a boom in new construction, as the current tax penalty on improvements would be gone.

Yet, herein lies the seed of the aforementioned conundrum -- as new construction booms, greater demands will be made on goverment (fire departments, police, etc.).  The natural way to deal with this under LVT is to raise the LVT rate.  Since LVT rates should be based on the cost of government (at least I think so),  as economic development proceeds, so demand for government services rises, and so rises the LVT.   This is offset by the wealth created by the economic development.

HOWEVER,  I have proposed that instead of taxing different areas of land at greater rates than others, that all land should be taxed the same.   The reason for this is that I also suggest that the LVT be no more than the budget required by the minimal Minarchist government.  

LVT Rate per Acre = StateBudget / TaxableAcres

Thus all the voodoo is dispelled -- the LVT is to fund government, and the pain is proportional to the land you own.   Presumably, there is great economic benefit to owning land, so those with huge tracts of land should have no problem.   I have dubbed this variation on George's theme the Uniform Land Value Tax (ULVT).   In terms of economic disruption and overall fairness, it has attractions -- even enough to get Jason to conceed that it wouldn't be so bad (in his eyes) as non-uniform LVT.   Problem solved?

Mostly, I think, except for one thing -- the royalist culture has used land deeds as a respository of private wealth, like a bank.   And mixing improvement taxes into the land taxes has provided the method for allowing large monopolies on undeveloped land to exist (i.e. a widow holding 40 acres of undeveloped land), and to even be considered great assets -- her 'unimproved' assessment may be very low on 40 acres, while the 1/2 acre plot next door with the fancy house gets taxed to death!  In contrast, LVT makes land monopolies (deeds) into liabilities -- only improvements are assets!  And under ULVT, all land is taxed the same.

I view the conversion of unimproved land monopolies from wealth repositories into tax liabilities as a good thing.  A land monopoly is a government-granted privilege that denies all others their natural rights to the same land.  Such exclusivity is a necessary evil for economic development to progress, but the bargain is fair enough if (and only if) there is compensation to society for the deed.  

Under the current system, unimproved land is bought up in the hope that the artificial scarcity thus created will drive up the price.  This is akin to damming up the river so you can charge $2 a bottle for water to the suddenly-thirsty downstream communities. (Yes, I mean to equate the pre-existing water rights of the downstreamers with the pre-existing common rights to unimproved land.)   It is unfair and coercive, even when bad government allows it.  

So, the landed widow may be living off of a fixed income.  If we keep with New Hampshire, as the construction boom surrounds her, the demand on government services inevitably causes a rise in ULVT.   There is an urge to say this is bad, since the widow then either has to put the land to use, or suffer economic damage.   However, the fact is that holding a monopoly on those 40 acres is a great luxury... those wealthy enough can do it, but those not so rich need to either put the land to use or lose the land deed to those who can.

In the widow's case, all she really has to do is let someone build some nice, tax-free rental houses, or some other revenue-generating activity (hunting or logging leases?).   She would be richer and more economic development of the land would result.   So, taken in context, the widow's plight under rising LVT due to a construction boom is no different than her plight anyway, as taxes rise.  Except that under LVT, she has a ready means to generate more income, tax free.

:)

RS

                                                                               
Why should she do that if it is rightfully her property and why should she agree to a constitution where she can't hold on to her property in a natural state until she needs the income from a sale(My grandparents sold their acreage which was mostly unused for medical expenses). I think you are right the LVT would be hard to do in Say WY. or Montana. NH I think has tax defrement and reductions for some on local property tax, so do it on a LVT or maybe have a split rate as some PA. local governments have.                          




Personally I would perfer for all government levels either a per Capta tax or a sales tax because it is very transparent. If all the government levels was passed to the local government Today as a per Capta tax it would be on average 9,000+ bucks each or over 36,000 dollars for a family of 4. If it was a sales tax it would be around 40%. Either way people would be filling the town halls and county court houses at every meeting until the tax was lowered a lot.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 08, 2003, 06:06:36 pm
Rhythm, why do you keep referring to land ownership as a 'monopoly'?

Because that's exactly what it is.  

BTW, intellectual property rights are also monopolies (as a published songwriter, I have a bit of experience with the Copyright office).  And just like land titles, intellectual property rights are government-granted privileges, awarded to spur economic development (or should be).  

Sadly, due to the royalist influence, most people today believe in the dominion theory regarding land, which is basically a holdover from the days of the King's Divine Right to Rule.  Oh well.

Royal Libertarians (http://www.geolib.com/essays/sullivan.dan/royallib.html)

:)

RS
                                                                               
The government has no real need or politically ethical right to grant copyrights or patents, contracts can serve the same purpose.                                                                                Now  it is true that government deeds to land and natural resources can be highly unethical. It is also true that exclusive use of  a area of land is a monoply on that area but that is not politically unethical if the owner come by the land by rightful means.A orginal homesteader( the first finder and user) has exclusive right to the land he uses. He also has a right to sell  or give the land to others for their exclusive use.                  
        Now if the orginal  user and finder did find and use the land that no one else had found or used, it does not matter that he did not create the land and that others will not have the use of the land, it is still his because his work is in the land.Now if he uses a 1000 acres for living mostly a hunter and gatherer lifestlyle( effcentcy does not make a play) that is his right as long as he did not take the land from others who where using it. There is a limited amount of land, finders and users are keepers and that is that. Except for a major detail, a good deal if not most land has been stolen  swindled or extorted over the years from first users. Even today eminet domain is used to build presidential libraries and private shopping malls.
Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 08, 2003, 06:24:06 pm


Why private?  The air is essential, yet we do not feel that someone must have title to breath.  Land is like air (for the sake of this discussion) in all particulars save one -- you can exclude others from using a particular plot of land by force of arms. Actually air is diffrent from land, land used has a begining and end.

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Philosophically, all non-artificial things are our common heritage.
I guess that it then breaks down into what you believe as far as evolution/creationism et al.  And what exactly is common heritage?

'Common heritage' is comprised of those things all sentient beings inherit in common.  On Earth, it means the air, the water, the ground and the underground.  Off-planet, it means any unoccupied locale we can reach.                                                                                                                                                                              But it is not necessarily a common heritage, their is a legitmate reason for exclusion as a defense in others destroying or subverting your work. If all natural resources belong to everyone equally and those who restrict a use to others, people can abuse and trash the resources they have and the claim by taxation or other means the resources others used as good stewards.

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Just because we are human then we, as a race, own all we survey?

Just because we are sentient creatures, we have the right to use the commons, so long as we do not destroy the commons in the process.

They hang the man and flog the woman
Who steals the goose from off the Common,
But leave the greater villain loose
Who steals the commons from the goose


Quote
What about other creatures (I will leave out the extremely rare possiblity of aliens and such since even the discussion of such things seems to somehow invalidate anything else I might have to say due to the 'scifi' nature) like dolphins or primates or any other kind of life that just might exist in the solar system or nearby?

Ethical sentient beings find that indigenous life has the right to its native environment.  I happen to think this is proportional to the level of sophistication of the life in question, with any species being a thing of wonder in the mostly-lifeless Universe, and higher creatures commanding individual (as opposed to species) rights, according to their self-awareness.  So, it is OK for hunters to hunt, but unethical (and stupid) for hunters to extinct their prey.  

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Unfortunately life in the universe seems to follow the 'might makes right' analogy, even in human social interaction or regarding land ownership - the only real way you can 'own' something is if you can successfully defend it from others.  This is as true in the wild (the hunting ranges of animals, etc) as it is in humans (the whole 'stealing' land from the indians, the roman empire, etc).

Also known as the 'law of the jungle', this unreasoning perspective on survival is one of the main things civilization (and law) was invented to counteract.   By recognizing each others' rights (and respecting them), we can accomplish infinitely more than we can as lone avatars wandering the wilderness (although I sense that many folks would gladly return to that way of life).   As human ethical sophistication evolves, we will find that this same dynamic can work to our favor in our relationships with other species, both higher and lower than ourselves.

BTW, life does not follow 'might makes right', as the foodchain and the competition for survival is an amoral process.   Morals come from awareness and the power to choose.  Because we are aware of cruelty and we can choose not to be cruel, we have the moral obligation to do so.  We might find the lion's disembowelment of the still-screaming antelope cruel, and such an action by a human would be cruel, but the lion is just feeding and has no knowledge of cruelty per se.  

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I guess that my real problem with the Georgist system is I don't see much difference between a piece of land or a clay pot which I 'mixed my own labor' into - it is all just matter, just as we are matter, its kinda like saying that the sun owns the planets because it used its gravity well to shape them and hold them.  I see it as some sort of slippery slope - either people can 'own' stuff, or they can't... trying to put things into different classes (which they are not in reality) by saying some things can be 'owned' but others can't seems inconsistent.  

How so?  I fashion an axe out of stone and wood -- is it not mine?   Don't you feel just as entitled to go down to the river and pick a flint from the bank to make your own axe as I did?  Wouldn't the axe that you make be yours and yours alone?

If I saw you with your fine axe (like mine) and decided then to claim exclusive rights to all the flint along that bank, as no other outcropping of quality flint was known to us, would you not feel that I was doing harm to you? That I had no authority to claim such ownership?  Thus, is not the flint along the bank in a different category of things (those things we did not make) than our axes (those things we did make)?  This seems pretty logical to me.

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OK, so to this you will bring up air or the oceans or something - just because we cannot currently easily divide up a resource does not mean it can't be owned.  Air is air - a stupid statement, BUT, its important.  Since you would agree if I 'created' air (mixed together the appropriate elements/gases - grew the plants that made oxygen, etc), put it into a self-contained bubble - it would be 'my' air, not just the bubble, but also the air inside.  And there is no difference between the air I 'created' and the air in earths atmosphere - EXCEPT that it is impossible currently to divide up/seperate the atmosphere into private little parcels...

Of course there is a difference -- your air is the fruit of your labor, while the air we are breathing now is the fruit of the Creator's labor.   Even if these different volumes of air are chemically identical, the manner of their creation and thus the rights pertaining to them are different.

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A Georgist System could evolve unmolested and unfettered in a purely private property (no taxes) world - but the reverse is not true... so why not have an overall private property system and institute Georgism within, thereby not infringing on anyones freedoms?

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As a theoretical point, there is no objection.  However, I think there are greater barriers to AnCap than there are to a Georgist tax policy.
Why do you equate having not property tax to AnCap?  My above statement works just as well in a minimalist society also.

How can there be a minimalist society with only private property?   In fact, how can there be a world where all land is owned?  Oh, I see... it would be a slave world, where one could sit in their virtual chains paying a fee to do so, as well as a fee to walk somewhere, and as soon as technically feasible, a fee to breath.  I guess we can add taxes on the money we spend and the labor we perform and the income we receive as well?  Yes, let's tax everything!

Boy, that sure sounds like freedom! (not)

:)

RS
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Title: Re:Economics According To George (Henry George, that is...)
Post by: Terry 1956 on September 08, 2003, 06:50:01 pm


Why private?  The air is essential, yet we do not feel that someone must have title to breath.  Land is like air (for the sake of this discussion) in all particulars save one -- you can exclude others from using a particular plot of land by force of arms. Actually air is diffrent from land, land used has a begining and end.

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Philosophically, all non-artificial things are our common heritage.
I guess that it then breaks down into what you believe as far as evolution/creationism et al.  And what exactly is common heritage?

'Common heritage' is comprised of those things all sentient beings inherit in common.  On Earth, it means the air, the water, the ground and the underground.  Off-planet, it means any unoccupied locale we can reach.                                                                                                                                                          

How can there be a minimalist society with only private property?   In fact, how can there be a world where all land is owned?  Oh, I see... it would be a slave world, where one could sit in their virtual chains paying a fee to do so, as well as a fee to walk somewhere, and as soon as technically feasible, a fee to breath.  I guess we can add taxes on the money we spend and the labor we perform and the income we receive as well?  Yes, let's tax everything!

Boy, that sure sounds like freedom! (not)

:)

RS
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Privately owned land and liberty are far from being opposites, in fact mass common owned land would subvert liberty. Yes there is a liberty paradox in having standing room and living room but common control and dogmatic taxation schemes are not the answer for all. A size 18 shirt is will not work for every man but in Central Planning production schemes it may seem the most efficent means to produce mens shirts.
                                                                                  Personally I think the world starting today would be better off with Anarcho Capitalism than it is today especially if it was a polycentric constitutional order like Randy Barnetts idea but I think as a hedge it would be better to also have a constitutional public government as long as people where free to secede.
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on September 09, 2003, 07:35:20 pm
RhythmStar wrote:
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Yet, herein lies the seed of the aforementioned conundrum -- as new construction booms, greater demands will be made on goverment (fire departments, police, etc.).  The natural way to deal with this under LVT is to raise the LVT rate.  Since LVT rates should be based on the cost of government (at least I think so),  as economic development proceeds, so demand for government services rises, and so rises the LVT.   This is offset by the wealth created by the economic development.

HOWEVER,  I have proposed that instead of taxing different areas of land at greater rates than others, that all land should be taxed the same.   The reason for this is that I also suggest that the LVT be no more than the budget required by the minimal Minarchist government.   

BillG: No, No, No, No - did I say NO!
Increasing demands on gov't services are the result of increasing populations! If economic activity is optimized in a central core area the infrastructure & services needs will be concentrated and economies of scale for services can be brought into account...

But the major piece you are missing is that as populations rise in a locale the value of the land rises! If the LVT rate remains the same while land values increase there should be no need for raise "more" money than what is already being raised.

The LVT can be flat but the value of land is different depending on it's location...

I have to tell you I just don't get this ULVT stuff...either the rent collected is rightfully the landowner's or it is society's. Why not give it ALL back to society pro-rata in the form of a citizen's dividend and then just charge a per head fee for the minachist government services? and then valued add fees for additional services (fire, security, garbage, etc) or they can purchase them privately?
Title: Re:Economics According To George (Henry George, that is...)
Post by: chez on September 09, 2003, 07:35:23 pm
I know I'm late to this thread, but I wanted to express my happiness that I'm not the only follower of Henry George. I'm not going to argue the topic myself, because I've seen arguments about this go on endlessly, but I just wanted it to be stated that there are porcupines who subscribe to this ideology.
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on September 09, 2003, 07:41:53 pm
I know I'm late to this thread, but I wanted to express my happiness that I'm not the only follower of Henry George. I'm not going to argue the topic myself, because I've seen arguments about this go on endlessly, but I just wanted it to be stated that there are porcupines who subscribe to this ideology.

BillG: Welcome aboard Pup! If NH is selected there is a REAL opportunity to create a true freedom-based society simply by splitting the tax rate then shifting the taxes off of buildings (entirely) and completely on to the value of land.

If you move to NH the Geo-libertarians here would welcome another voice of reason rowing against the Rothbardian tide!
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 09, 2003, 10:50:16 pm
RhythmStar wrote:
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Yet, herein lies the seed of the aforementioned conundrum -- as new construction booms, greater demands will be made on goverment (fire departments, police, etc.).  The natural way to deal with this under LVT is to raise the LVT rate.  Since LVT rates should be based on the cost of government (at least I think so),  as economic development proceeds, so demand for government services rises, and so rises the LVT.   This is offset by the wealth created by the economic development.

HOWEVER,  I have proposed that instead of taxing different areas of land at greater rates than others, that all land should be taxed the same.   The reason for this is that I also suggest that the LVT be no more than the budget required by the minimal Minarchist government.   

BillG: No, No, No, No - did I say NO!
Increasing demands on gov't services are the result of increasing populations! If economic activity is optimized in a central core area the infrastructure & services needs will be concentrated and economies of scale for services can be brought into account...

40 acres of woods with a few houses around don't usually have much in the way of government services.  Take the same land and add lots of houses and you have lots of need for government services.  True, the reason is that people moved there, but the reason they moved there was that the improvements to the land (houses, etc.) were built.  So, construction booms and population growth go hand in hand.   Either way you want to attribute it, the cost of government services will go up.

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But the major piece you are missing is that as populations rise in a locale the value of the land rises! If the LVT rate remains the same while land values increase there should be no need for raise "more" money than what is already being raised.

The LVT can be flat but the value of land is different depending on it's location...

Market value can indeed exceed LVT assessed value.  And that will most likely happen in urban areas.  Here, we seem to agree. :)

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I have to tell you I just don't get this ULVT stuff...either the rent collected is rightfully the landowner's or it is society's.

Rent on the land, sure -- give it all to pay for government (but no more than that).  But the use of my improvements is not free!  So, tenant rent is not the same thing as LVT rent -- it is the combination of the LVT plus the user fee for the improvements.  I worked it all out in a spreadsheet earlier in the thread. :)

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Why not give it ALL back to society pro-rata in the form of a citizen's dividend and then just charge a per head fee for the minachist government services? and then valued add fees for additional services (fire, security, garbage, etc) or they can purchase them privately?

Why overcharge the landowners to begin with?   The tenants pay no direct taxes at all!  According to my calculations, both tenant and landlord will have about twice as much net income, even with the government still taking in 55% of it's current take (assuming a 50% aggregate mostly from income taxes).   What's not to like?

The citizen's dividend stuff is something I used to muse about in my younger days.  I thought "Why not just run the country like a big corporation and give everyone a share? Wouldn't that solve the poverty and other social ills?"  I am no longer so sure it would.   It might, but it also might enable a bunch of on-the-dole freeloaders like you have in Great Britain.

Anyway, my motivation in the ULVT idea is to keep the government from cashing in with high taxes on city property and thus driving developers to the outskirts.  Also, by having the ULVT rate set by the simple formula  LVT = Budget / Taxable Acres, all the grousing about government tax value assessments goes away.  

Why tax at all, if not to fund the Minarchist government?  If this is true, then why not set the tax rate by simply dividing the budget across the revenue source?  

OTOH, I am not against user fees financing certain things.  Toll roads, for example.  The more government services that can be met by user fees, the less that the base ULVT that everyone has to pay can be.  This might end up being a small tax!

Well, anyway, that's the problem with us software engineers... always trying to redesign everything.  :)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 10, 2003, 02:41:54 pm
user fees and such are great, but if a service provided by the government can be paid for by collecting fees... then why have that service be a government function at all?  user fees should be the last step on the road to total privatization...

Welcome Mr. Pup!  Yes, you have Georgian friends here (count me as just a friend tho...).  And I would like to see the Georgists have the ability to experiment their land tax ideas in an area in the FS - perhaps if enough of you georgists are around you can all pool your resources and purchase a large tract of land and 'go to town' so to speak...

but, I would not vote for such a plan state-wide, only vote for the end of property taxes at all
Title: On Commonwealth Taxes
Post by: RhythmStar on September 18, 2003, 07:28:25 pm
Just an update...

I have stated before that I did not ascribe to the GeoLib notion of taxing "everything that moves", or more accurately, every form of special privilege enforced by the government to the economic gain of the so privileged.  My reasoning has been that there really is no need to levy taxes everywhere the Georgist theory of unearned incomes might be applied, if the purpose of taxation was to fund a minimum government.   It has recently occurred to me that there may indeed be a reason for such taxes -- fairness to the landowner.

As discussed earlier, the one harsh aspect of ULVT (the Uniform Land Value Tax) theory is the 'landed widow' problem.  Basically, as populations rise and economic development ensues, those landed folk with fixed incomes and undeveloped lands would see their LVT rise, perhaps to the point of losing their land.   One can argue that it is inevitable that some people may lose their land to non-payment of property taxes, as this happens even today, but that does not make it any less harsh.

Then, I realized that the ULVT, if made to bear the cost of government alone, would be inescapably too high, even when it is affordable. The economic/population growth and subsequent increase in public costs is not the sole result of the use of land, it also derives from the use of things like electromagnetic spectrum, and other natural (and naturally common) resources.  With every resource privilege administered by the government comes a cost of administration and law enforcement.  That cost should be carried by the receiver of the privilege, not the land owners!

Of course, I do still differ with the notion that these 'rents' should be calculated by their economic production, with the intent of redistributing a portion of that rent to the populace (the 'citizen's dividend' idea).  Those not in possession of a government title to land, spectrum, or whatever, benefit themselves from the economic output of these resources by having jobs, places to rent, food and other goods to buy, and a plethora of other benefits of free enterprise, so it's not like they are being oppressed or anything (after all, they live tax free).  

:)

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on September 18, 2003, 08:41:34 pm
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I have stated before that I did not ascribe to the GeoLib notion of taxing "everything that moves"

Ok, then let just call it something else more fitting than taxes. How about this ... the capturing of Community Created Economic Scarcity Rents (CCESRs or "cesars")

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every form of special privilege enforced by the government to the economic gain of the so privileged

Some privilege happens from the lack of enforcements of equal access to the commons - like using the Sky for a pollution sink (read: dump)

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My reasoning has been that there really is no need to levy taxes everywhere the Georgist theory of unearned incomes might be applied, if the purpose of taxation was to fund a minimum government.

Here is where we run into the point of divergence. The Geo-libertarian purpose for CCSER is NOT to fund a minimum government! The purpose is to insure INDIVIDUAL LIBERTY thru SOCIAL JUSTICE! Nothing more and nothing less!

Remember if the economic scarcity rent is pocketed by the landowner (btw - it use to be called landHOLDER) that means that the rent they charge is a TAX on the fruits of the tenants wages!

Taxation equals theft!

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It has recently occurred to me that there may indeed be a reason for such taxes -- fairness to the landowner.

huh?

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As discussed earlier, the one harsh aspect of ULVT (the Uniform Land Value Tax) theory is the 'landed widow' problem.  Basically, as populations rise and economic development ensues, those landed folk with fixed incomes and undeveloped lands would see their LVT rise, perhaps to the point of losing their land.  One can argue that it is inevitable that some people may lose their land to non-payment of property taxes, as this happens even today, but that does not make it any less harsh.

Well they wouldn't lose their lands if they were better utilized. Let's be clear about the tradeoff - allow someone to continue underutizing their land closer to the urban core so more farmland is "developed" continuing sprawl and dependence on the car...

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With every resource privilege administered by the government comes a cost of administration and law enforcement.  That cost should be carried by the receiver of the privilege, not the land owners!

Fine then collect all the CCESRs distribute it in the form of a citizens dividend pro-rata and then charge a head fee for the administrative and law enforcement. Anyone who doesn't pay doesn't get the CD...simple and efficient.
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 18, 2003, 11:36:00 pm
BillG:
I know we brushed upon this earlier, but, could you restate your answer to this question:

Do you believe that we humans are relegated<sp?> to living on this planet forever?  If not, how much longer until it is possible for humans to 'colonize' and/or terraform other worlds?


not trying to change the conversation topic, it just occurs to me that I would me in favor of a Georgist System within a closed environment - in which case your description of landowners 'taxing' non-landowners is valid.  I don't think it is valid when there is opportunity to 'find' or 'create' more land, no matter how hard it is to succeed in achieving that 'opportunity'.

michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 19, 2003, 11:32:02 am
I would me in favor of a Georgist System within a closed environment - in which case your description of landowners 'taxing' non-landowners is valid.

Yes!  This the reason that the non-Georgist land system has not been a source of obvious problems in the US -- there has (until recently) been a supply of undeveloped lands that the government could essentially give away (see Homestead Act).  Contrast this to England, where all lands were legally occupied centuries ago and whose system I feel had a lot to do with George's take on things and, indeed, the entire land monopoly debate.

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I don't think it is valid when there is opportunity to 'find' or 'create' more land, no matter how hard it is to succeed in achieving that 'opportunity'.

michael

One essential concept is perhaps the basis of all eco-centric philosophy -- there is only one planet in the whole, vast Universe where human beings are perfectly adapted, since humans evolved there:  Earth.  No matter where else we go, we will not find a biosphere that suits us.  It will be too hot, or too cold, or have the wrong atmosphere, or be filled with poisonous spores, or have too much of a certain wavelength of light, or a million things I can't think of.  And particularly in our own solar system (currently the only reachable set of planets), we have no world but Earth where we can live as animals in nature, rather than machine symbiotes requiring a vast technological plant to manufacture the devices that allow us to eat, drink and breath.  And we still haven't licked the gravity issue, which makes in-space living so far impractical.  

Thus, the scarcest resource in the Universe for humans is Earth's biosphere, which is our common heritage because it is essential for the survival of the whole species.  What each one of us does here affects all of us in time.

Put another way, only on Earth may humans walk free, not in political freedom (although that would be nice), but free from the constraint of lifesupport suits.

Anyway, as I have stated before, I think in space there is no issue -- as everything there necessary for survival (save base elements and energy) must be manufactured, there is no bioshpere Commons in space.  All livable spaces there are the fruits of labor,  which is not the natural situation here on Earth at all!

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on September 19, 2003, 11:55:42 am
BillG:
I know we brushed upon this earlier, but, could you restate your answer to this question:

Do you believe that we humans are relegated<sp?> to living on this planet forever?  If not, how much longer until it is possible for humans to 'colonize' and/or terraform other worlds?


not trying to change the conversation topic, it just occurs to me that I would me in favor of a Georgist System within a closed environment - in which case your description of landowners 'taxing' non-landowners is valid.  I don't think it is valid when there is opportunity to 'find' or 'create' more land, no matter how hard it is to succeed in achieving that 'opportunity'.

michael

Michael - it is my belief that within the next 10 - 20 years we will hit "peak oil" status on this planet thus I don't think realistically we will have the energy supplies to propel & sustain us in any significant way in space. Simple laws of physics...but why go anywhere else when we can agree what is wrong here and fix it?

essentially you are describing the "Lockean proviso"

http://www.info.human.nagoya-u.ac.jp/~iseda/works/proviso.html (http://www.info.human.nagoya-u.ac.jp/~iseda/works/proviso.html)
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 19, 2003, 12:00:17 pm
Ah Ha!  then these are the true points of contention between us... let us move the debate into that realm then...

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One essential concept is perhaps the basis of all eco-centric philosophy -- there is only one planet in the whole, vast Universe where human beings are perfectly adapted, since humans evolved there:  Earth.  No matter where else we go, we will not find a biosphere that suits us.  It will be too hot, or too cold, or have the wrong atmosphere, or be filled with poisonous spores, or have too much of a certain wavelength of light, or a million things I can't think of.  


perfectly adapted? we ae not 'perfectly adapted' to the earth - unless you show me a tribe of folks running naked in Alaska.  We are extremely good at Adapting tho!  And we constantly modify our environment to suit our needs:  air conditioning, warm clothes, lighting, housing, transportation, etc.  If there is any creature on earth capable of adapting to non-earth environments or modifying those environments to be more 'adaptable' - it is us!  We spend 60-90% of our life inside (counting sleeping)  - this 'inside' could easily be an enclosed environemt on another planet or in space.

No, we don't have the technology or the money to take on such grand adventures, BUT, that is SOLELY because we don't yet have the demand!  You can see it coming, I can see it coming - it may take a few hundred years but there is no escaping the fact that either we WILL figure out how to happily exist off-world or we will smother ourselves from over-population or finally use up all of earths limited resources.

Allowing a purely free market in land and maintaining private property rights is the MOST efficient way for us, as a species, to determine when, where, and how we will break out of this gravity well and realize our true potential as inhabitants of this universe.  ANY forced modification to private property will distort this ultimate 'paradigm shift' (second time Rhythm made me use this word) as is in the inherent nature of government to do so.

Don't deny our TRUE heritage, it is not the earth, it is the universe! (lol - I love soapboxes!)

michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 19, 2003, 12:19:04 pm
Hi BillG!
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Michael - it is my belief that within the next 10 - 20 years we will hit "peak oil" status on this planet thus I don't think realistically we will have the energy supplies to propel & sustain us in any significant way in space. Simple laws of physics...
ok, don't know what you mean by 'peak oil' status, but, if you are saying that our energy supplies are dwindling and soon we will not have enough energy for space travel and such... then let me debate ya...
The ONLY problem we have is the initial energy required to get us out of our gravity well.  This energy does not need to take the form or petroleum products or chemicals even... electromagnetic rail launch systems, satellite tethered space elevators, even nuclear explosion powered lift vehicles (ug-I hate the thought also).  The point is there is plenty of energy here on earth and energy hitting the earth from the sun... we already have technologies to start harnessing it.

in regards to supporting/maintaining life in space:  Once we have overcome the hurdle of the whole getting into space thing, then we have unlimited resources AND energy at our disposal.  Every element we need for survival is more abundant in space then on our planet - water?  we have comets, ice moons, etc to mine - we can also manufacture water with a decent supply of oxygen (the one element that IS rare in space I believe).  Energy? the sun, also many other sources but the sun dwarfs all other sources.

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but why go anywhere else when we can agree what is wrong here and fix it?
Why go anywhere else?  simple, because we will naturally over-populate this planet.  In addition, we do have limited resources here, not just 'land'.  Our ultimate future lies in space no matter what... I can't see how this can be denied - it can be postponed through government population control, genocide, wars, etc... but I don't think that anyone advocates those methods...

gettin' spacey,
michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 19, 2003, 03:03:28 pm
>>perfectly adapted

Well, all is relative.  Biological adaptation is not aimed at making us personally comfortable.  The fact that we as a species are dominant in virtually every land habitat on the planet demonstrates that we are as adapted as we (or any other creatures) are likely to get, given our range.   My point is that you can survive here without a spacesuit.  In equatorial zones, you don't even need clothes, as long as you stay in the forest.  That is as 'perfect' as it gets, my friend.

Elsewhere in the solar system, we cannot live at all, except by the heroic application of technology, much of which has yet to be invented.  

For example, your bones leach away in space, due to the lack of gravity.  Until we can generate gravity fields (quite possibly never), or build on such a gargantuan scale as to be able to use centrifugal force as a substitute (too small and the difference between the feet and the head is too great for health or comfort), we will not be able to live anywhere that doesn't have significant gravity.  Martian humans, for example, will likely lose the ability to visit Earth very shortly, as their bones will become too delicate for the gravity.  In a way, this illustrates my point even better -- Earth humans need Earth to survive.

As for the free market being the best way to distribute fixed Earthly resources, well, there is nothing in LVT that changes that.  All LVT is really is a privilege tax.  The same ability to buy and sell land titles would exist, but we would be free of income tax, labor tax, sales tax and capital tax.  In their place, a tax on government-enforced exclusive rights to fixed natural resources would apply.  

FWIW, in the event that technology does someday make space living and the interplanetary diaspora reality, then Earthly resources would become even more valuable and exclusive, as then people will know the true (and I'm betting astronomical) cost of space faring culture.

:)

RS




Title: Re:Economics According To George (Henry George, that is...)
Post by: BillG on September 20, 2003, 09:54:26 am
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ok, don't know what you mean by 'peak oil' status, but, if you are saying that our energy supplies are dwindling and soon we will not have enough energy for space travel and such

Peak Oil:

http://www.siliconinvestor.com/insight/editorial.gsp?id=76186 (http://www.siliconinvestor.com/insight/editorial.gsp?id=76186)
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 20, 2003, 10:14:03 am
Bill,
Thanks for the article, once again, very interesting.  If a reader were to accept the theory then the smart thing to do immediately is to invest in oil futures heavily before the upcoming shift to natural gas.  Also spreading some investment around in the 'best' natural gas companies would be prudent.

none of my business, but, have you done either?  not that this is an indication necessarily of your belief of the theory, I am just curious...

michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 20, 2003, 10:36:04 am
Bill,
Thanks for the article, once again, very interesting.  If a reader were to accept the theory then the smart thing to do immediately is to invest in oil futures heavily before the upcoming shift to natural gas.  Also spreading some investment around in the 'best' natural gas companies would be prudent.

none of my business, but, have you done either?  not that this is an indication necessarily of your belief of the theory, I am just curious...

michael

There is no doubt in my mind that prudent investing in oil and gas is a money-making proposition.   The stuff is getting rarer and the various invasions of the NeoCons, rather than bringing the price down, is actually going to contribute to high prices, as the continuing sabotage of the Iraqi oil delivery infrastructure demonstrates.   When the House of Saud goes into its inevitable tailspin, this will reach an even more desperate pitch.

However, I note that at some point, alternative energy becomes a better investment than petroleum.  Those technologies are the future.

RS
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 20, 2003, 10:36:09 am

FWIW, in the event that technology does someday make space living and the interplanetary diaspora reality, then Earthly resources would become even more valuable and exclusive, as then people will know the true (and I'm betting astronomical) cost of space faring culture.

:)

RS

why do you suppose that resources on the earth would become more valuable as we move into space?  Do you disagree that there are plenty of resources in the solar system, or that they are just very expensive to gather?

I think the biggest expense of resource gathering in space is 'time' and 'energy' - energy is virtually limitless in space so not a problem, time (the time to travel to where the resources are) cn be overcome by using robotic mining operations and transportation systems.

;)

michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: RhythmStar on September 20, 2003, 11:06:45 am

FWIW, in the event that technology does someday make space living and the interplanetary diaspora reality, then Earthly resources would become even more valuable and exclusive, as then people will know the true (and I'm betting astronomical) cost of space faring culture.

:)

RS

why do you suppose that resources on the earth would become more valuable as we move into space?  Do you disagree that there are plenty of resources in the solar system, or that they are just very expensive to gather?

I think the biggest expense of resource gathering in space is 'time' and 'energy' - energy is virtually limitless in space so not a problem, time (the time to travel to where the resources are) cn be overcome by using robotic mining operations and transportation systems.

;)

michael

Let's say you have robots mining iron in the asteroid belt.  What can you do with it?   It won't be economical to send to Earth (if you just drop it, it burns up in the atmosphere, if you have some kind of shuttle, it costs a fortune).   The same dynamic would be in play for just about any human-friendly gravity well.   You can use it for space-based manufacture, but humans can't live in space, they can only visit (gravity again).   So, the real obstacle for space-faring culture isn't raw materials, time, or energy, it's gravity.   There is no indication that we will develop a practical gravity-control technology.  In fact, there is more evidence that we will develop practical quantum cell-phones before we develop artificial gravity.  

Now, I don't want to sound too negative.  There is the possibility that some future convergence of nanotech and molecular biology might enable us to mitigate the bone-loss problems, and whatever else might develop if we then remained in low gravity for extended periods (years instead of months).   In that case, the gravity argument weakens, but the livable biosphere problem remains.  

Everything you do offplanet, you have to do in an enclosed lifesupport system, in hard vacuum/high radiation, or perhaps in the Martian environment.  This will be very costly.  Unlike Earth, you can't just fire up the blast furnace -- no oxygen-rich atmosphere to waste on that!   So, even processes we take for granted on Earth, like making steel, will require complete reengineering.   Not saying it's undoable, but I am saying that the cost of doing such things on a scale to rival Earth-bound industry will be quite large.  By comparison, Earth will seem cheap, but will therefore be expensive, as instead of value being perceived as we do now, it will be perceived in terms of interplanetary scarcity.  There's a lot of expensive-to-engineer space and barren rock out there where people could conceivably create artificial habitats (if they have artificial gravity), but there is only one Earth.

BTW, I note that the only reason Earth has an oxygen-rich atmosphere is the action of living plants.  Without the biosphere, this critical resource depletes as surely as petroleum is being depleted.   This fact further limits the amount of Earthside that can be employed by basic industry, as too much destruction of biosphere will turn fundamental operations like steel smelting into oxygen mining operations, with the same long-range future as petroleum.

RS

Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 20, 2003, 11:07:11 am
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However, I note that at some point, alternative energy becomes a better investment than petroleum.  Those technologies are the future.

RS

Quite true, so to maximize profits along these lines one would buy mostly oil contracts now, sell these when oil hits the roof and alternative energy is still getting its legs, and invest in alternative at that point - it would depend on natural gas and how economical it is overall because if society changes to being natural gas based and if we have enough of that resource for another 50-100 years, then it will put off alternative energy research just as petroleum does now.

michael
Title: Re:Economics According To George (Henry George, that is...)
Post by: LeopardPM on September 20, 2003, 11:28:50 am
Rhythm,
In my 'space is great' ideology, I make the following assumptions:

We will NOT discover a method for generating gravity or anti-gravity in the next 300 yrs

All space-based human habitations will necessarily need to be both large and rotating due to the reasons you mentioned.

Manufacturing processes requiring 'blast furnaces' and such will at first be substituted by processes which do not require the gulping down of precious oxygen - a focusing of solar mirrors on a point can generate more heat than any blast furnace, I believe.  Possibly new chemical technology might be developed that achieves the same effect of altering/smelting ore into its elements, BUT, it would be foolish to depend on some fantasy of what MIGHT be possible in the future.

Any human habitation in space or off-world would require large areas of agricultural space for two reasons: oxygen generation (which actually requires very little space/human (I think a figure I saw was around 25 sq yds of grass per human), and food generation.  Plants can be grown successfully without gravity and so these areas would probably be non-rotating and attached to the rotating human habitation.

An enclosed system is not so expensive - it all depends on how you do this.  For instance, the most expensive method would be to manufacture the 'shell' - this would require extensive radiation shielding and protection against micro-meteorites, etc.  An alternative would be to hijack a couple of larger asteriods (probably 1/2 to 2 mile size) and mine/tunnel them out to form the colony - the reason I say a couple is that they would be attached together by tethers or a structure and rotated around each other for gravity.

Just noticed that this discussion has transcended the thread topic... would you care to move to a new thread or do you not think this space topic to be interesting/productive?

michael
Title: Re: Critiques of Georgism
Post by: JasonPSorens on May 31, 2006, 07:13:15 pm
In my view, Georgism has some fundamental flaws that are responsible for relegating it to crank status in economics for more than a century.

The first flaw is the idea that the value of unimproved land can be separated from the value of improved land.  A piece of land with improvements on it has a certain market value: for the land and the improvements.  It has no market value for the land itself, because the land and the improvements are inseparable.  David Nolan's suggestion that the land owner put a selling price on his land, and have that selling price taxed, is self-evidently ridiculous: you can't sell land by itself without the improvements on it.  You can guess at what the value of the "unimproved portion" of the land is by looking at nearby unimproved plots, but this isn't possible in many places (Manhattan), and is very imperfect everywhere.
...

Quote
All of the above reasons combine when one considers the disturbing possibility that government could arbitrary set land value assessments, as RhythmStar suggests could be done in time of war.  If gov't arbitrarily reassesses land at higher values when it wants, then market distortions are bound to result.  An extreme case is the assessment of 1 ha of swampland at the same value of 1 ha of prime pastureland (BTW, does clearing forestland to make pasture count as an "improvement" for SLT purposes?  If so, how do you assess the value of a given piece of land "as if it had never been cleared, centuries ago"?  If not, aren't you providing incentives against productive use?  Maybe that's where an environmentalist might hop on board the SLT program).  In that event, the swampland owner is expropriated for the benefit of the pastureland owner, and the value of swampland falls well below its market value, which might be low anyway but include the possibility of finding rare wildlife or flora - in which case the SLT again promotes the destruction of wild habitat.

I just discovered that F.A. Hayek agreed with me!  :D

"There still exist some organized groups who contend that all these difficulties [of externalities in land use] could be solved by the adoption of a 'single-tax' plan, that is, by transferring the ownership of all land to the community and merely leasing it at rents determined by the market to private developers. This scheme for the socialization of land is, in its logic, probably the most seductive and plausible of all socialist schemes. If the factual assumptions on which it is based were correct, i.e., if it were possible to distinguish clearly between the value of 'the permanent and indestructible powers of the soil,' on the one hand, and, on the other, the value due to the two different kinds of improvement--that due to communal efforts and that due to the efforts of the individual owner--the argument for its adoption would be very strong. Almost all the difficulties we have mentioned, however, stem from the fact that no such distinction can be drawn with any degree of certainty. In order to give the necessary scope for private development of any one piece of land, the leases that would have to be granted at fixed rents would have to be for such long periods (they would also have to be made freely transferable) as to become little different from private property, and all the problems of individual property would reappear. Though we might often wish that things were as simple as the single-tax program assumes, we will find in it no solution to any of the problems with which we are concerned."

The Constitution of Liberty (1960), pp. 352-53
Title: Re: Economics According To George (Henry George, that is...)
Post by: Gabriel on May 31, 2006, 07:39:52 pm
The improved vs unimproved problem is why many geos advocate a land area tax rather than a land value tax: If you tax everything at the same rate you don't have to worry about splitting out that value.

This doesn't help with situations like your swamp-and-farm scenario where land has widely disparate undeveloped values within the same taxing jurisdiction, but other solutions could be found. One that springs readily to mind would be a reverse auction on low-value land: If the land-area tax rate is such that nobody wants to own the swampland, step the tax on that land downwards until somebody is willing to buy it.
Title: Re: Economics According To George (Henry George, that is...)
Post by: Mike Lorrey on May 31, 2006, 10:00:20 pm
The improved vs unimproved problem is why many geos advocate a land area tax rather than a land value tax: If you tax everything at the same rate you don't have to worry about splitting out that value.

This doesn't help with situations like your swamp-and-farm scenario where land has widely disparate undeveloped values within the same taxing jurisdiction, but other solutions could be found. One that springs readily to mind would be a reverse auction on low-value land: If the land-area tax rate is such that nobody wants to own the swampland, step the tax on that land downwards until somebody is willing to buy it.

Ah, the old "all the market can bear" form of coercive taxation. Just another way to figure out the highest price at which someone is willing to enserf themselves to a bully.
Title: Re: Economics According To George (Henry George, that is...)
Post by: RalphBorsodi on May 31, 2006, 11:25:35 pm
Quote
Almost all the difficulties we have mentioned, however, stem from the fact that no such distinction can be drawn with any degree of certainty

you would think that Hayek would know the difference personal utility values and a market valuation...

one is subjective and the other is objective.
Title: Re: Economics According To George (Henry George, that is...)
Post by: JasonPSorens on June 01, 2006, 10:03:13 am
Quote
Almost all the difficulties we have mentioned, however, stem from the fact that no such distinction can be drawn with any degree of certainty

you would think that Hayek would know the difference personal utility values and a market valuation...

one is subjective and the other is objective.

But we can never know what the market valuation of a totally unimproved piece of land is, b/c there is no market for such pieces of land (they don't exist, except maybe in Antarctica).
Title: Re: Economics According To George (Henry George, that is...)
Post by: RalphBorsodi on June 02, 2006, 12:05:03 am
Quote
Almost all the difficulties we have mentioned, however, stem from the fact that no such distinction can be drawn with any degree of certainty

you would think that Hayek would know the difference personal utility values and a market valuation...

one is subjective and the other is objective.

But we can never know what the market valuation of a totally unimproved piece of land is, b/c there is no market for such pieces of land (they don't exist, except maybe in Antarctica).

this is duplicating the discussion in another thread...