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Author Topic: Economics According To George (Henry George, that is...)  (Read 30475 times)

BillG

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Re:Economics According To George (Henry George, that is...)
« Reply #75 on: August 31, 2003, 09:33:34 pm »

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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...

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Duodecimal

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Re:Economics According To George (Henry George, that is...)
« Reply #76 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?
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Terry 1956

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Re:Economics According To George (Henry George, that is...)
« Reply #77 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.                                                                          
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Terry 1956

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Re:Economics According To George (Henry George, that is...)
« Reply #78 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?
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Terry 1956

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Re:Economics According To George (Henry George, that is...)
« Reply #79 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.
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Terry 1956

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Re:Economics According To George (Henry George, that is...)
« Reply #80 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.
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Terry 1956

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Re:Economics According To George (Henry George, that is...)
« Reply #81 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).
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RhythmStar

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Re:Economics According To George (Henry George, that is...)
« Reply #82 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.

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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.

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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.

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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.

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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.    

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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.

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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.

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So, I suppose we can only agree to disagree.

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

RS
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RhythmStar

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Re:Economics According To George (Henry George, that is...)
« Reply #83 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
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Terry 1956

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Re:Economics According To George (Henry George, that is...)
« Reply #84 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
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Terry 1956

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Re:Economics According To George (Henry George, that is...)
« Reply #85 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?
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Terry 1956

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Re:Economics According To George (Henry George, that is...)
« Reply #86 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.
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BillG

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Re:Economics According To George (Henry George, that is...)
« Reply #87 on: September 06, 2003, 01:23:20 pm »

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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?
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Terry 1956

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Re:Economics According To George (Henry George, that is...)
« Reply #88 on: September 06, 2003, 01:52:34 pm »

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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.
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Terry 1956

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Re:Economics According To George (Henry George, that is...)
« Reply #89 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.
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