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Economics According To George (Henry George, that is...)

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JasonPSorens:

--- Quote from: 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.


--- End quote ---

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.

Duodecimal:
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.

RhythmStar:

--- Quote from: BillG (not Gates) on August 26, 2003, 10:15:14 pm ---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.
--- End quote ---

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!
--- End quote ---

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

BillG:

--- 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.
--- End quote ---

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.
--- End quote ---

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.
--- End quote ---

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.
--- End quote ---

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.
--- End quote ---

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
--- End quote ---

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.
--- End quote ---

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.
--- End quote ---

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.
--- End quote ---

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?

LeopardPM:
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.
 
--- End quote ---

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...)
--- End quote ---


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.
--- End quote ---

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...

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