Sorry, we’ll just rent it to you and increase the monthly payment on an annual basis.
I could take a few different paths to back up my claim that property taxes are the most evil form of taxes, but I’ll stick with the angry rant. There is no topic that gets me hotter under the collar than property taxes, and I’m flummoxed when so-called libertarians are pro-property taxes. I’m not big into purity tests for libertarians, but I may just make an exception for the Georgists.
Instead of doing a comparative analysis of different types of taxes, I’m going to explain why land is no different than any other sort of personal property in the realm of justifying taxation, and I’m also going to explain why land is different from other property in the realm of personal liberty. Perhaps if I can be persuasive in showing that there is no good reason to single out real property for a possession tax and there is plenty of good reason to single out real property for protection from government, I can make a decent case for deep-sixing property taxes.
The Marxist Fallacy of Labor as Value
Cutting to the chase, the single most glaring flaw of Georgism is that it’s predicated on the labor theory of value. It ignores the value of capital, the value of ingenuity with regard to capital, and the value of taking on risk. In a simplistic Georgist view, we can somehow separate the value obtained through labor from the value inherent in a product. See, to the Georgist, sand is sand, and it’s owned by the community. If you bag it up and sell it, you’re only entitled to be compensated for the service of bagging it. If you melt it into glass, we somehow have to separate out the value of the sand from the value of the glass, and the value of the sand goes to the government to be used to the benefit of the community. Of course, like any other crypto-communist solution, the Georgist government is going to have to appoint omniscient superhumans to staff the boards and councils used to determine exactly how much of the $100 for the glass pane is for the communal sand and how much is for the transformation to glass. Nevermind the fact that the guy buying the pane of glass wouldn’t have even paid a penny for the untransformed sand. You know, because he needs a pane of glass, not a sandbox. Nevermind, also, the next-door neighbor who wouldn’t pay a penny for the pane of glass, but would pay $20 for the untransformed sand.
Tearing this down to its most basic, Georgist economics suffers from the same misconception as socialism, that there is a “true price” for a good, and that the “true price” reflects some “true input value” of capital and some “true transformative value” of the labor put into the capital.
Can’t Quite Describe It
Much like the ubiquitous water weenie, it’s near impossible to grab hold of the difference between land and land-derived goods in the Georgist philosophy. What makes land community owned but my coffee table mine? This is where the stupidity of the property tax shines through. See, if the coffee table is 100% mine, then I had to have, at some point, paid the community for the portion of natural resources (trees) that were used to build my table. Assuming that a sales tax was this theoretical payment, it still makes no sense that I must pay a yearly remittance on my land. The TOP MEN have decreed that 6% of my table was community owned, and I paid 6% tax to purchase the table. However, property tax is infinite taxation. It is countably infinite, but it is infinite nonetheless. If I were to own the land forever, I would pay property taxes forever. If it worked like the table, a property owner would be allowed to pay a one-time fee to the community for the value of the underlying natural resources (standard “there’s no such thing as true value” disclaimers apply), and then own the property sans encumbrance.
The fact that property tax is infinite taxation leads to one of two conclusions. Either 1) natural resources are infinitely valuable and labor sullies that infinite value (a premise that can be dismissed without discussion); or 2) something magical happens when you transform natural resources that makes them no longer property of the community. Even if we were to accept the second premise, it still does not explain why improved land is still subject to property tax. Like the water weenie, any coherent classification of what is subject to property tax seems to slip through our hands.
Property Ownership as Deprivation of the Community’s Right
The single most unconvincing portion of Georgism is this pervasive hostility to private ownership of natural resources. This concept that the “community” owns the land and all value inherent therein. This neo-feudalist idea that the modern Crown grants the modern peasant a tenancy on the land to make public good come from the land is antiquated and hostile to natural rights theory. It amazes me to see so many otherwise brilliant libertarian thinkers fall hook, line, and sinker for this magical thinking that bestows upon the government special rights and privileges made up wholecloth, rather than granted from its constituents. Basic application of the NAP says that 5 guys with guns and badges can’t do anything that 5 guys with guns and torches can’t do. Similarly, the “community” (or society or the government or whatever name we give a collection of people) does not have a claim to the property unless members of the community, in the aggregate, have at least that same claim to the property. If no other person has a legitimate claim to the property, then who could? God? Gaia? The government is ill equipped to adjudicate ownership conflicts between man and God (much good it would do, anyway).
I have found no convincing philosophical argument establishing a communal right to land. In fact, most Georgists seem to shift to a more utilitarian mode of argumentation when this comes up.
Property Taxes: the Original Penaltax
I see that my rant is running long and getting incoherent, so I’ll quickly wrap it up. Property taxes are a tax on inaction, much like the O-care penaltax. Broadening that out, if government were truly a product of a Social Contract, and that contract were to be said, with a straight face, to be voluntary, there would need to be some course of action able to be taken to openly reject said Social Contract. No action is more clearly a refutation of society and the Social Contract than hermitage, and the modern equivalent: homesteading. A self-confinement to one’s dwelling, self-sufficiency, nearly non-existent use of the community assets. One’s dwelling is their retreat from the “community.” Furthermore, it is a mandatory part of human existence. People can exist without incomes, without commerce, without vices. However, even the homeless have a cardboard box and a sleeping bag. To tax one’s dwelling is to reach into that last corner of their life untouched by the “community” and say “we still own you, even when you try to get away.”
Appeals to fairness be damned. Ones right to property ownership is not subject to some balancing test against the desires of the community. Either land can be owned outright, or we are slaves captured by a do-gooding master.
Sorry for the sloppy article. I may address property taxes as payment for community services in the comments, but needless to say, I think it is just petty rationalization. Selling one’s soul to the Devil isn’t less Hellish just because they got a few trinkets in return.
I pay 12k a year in property tax out in eastern long island. For that price you think they would let me build a shed or a deck in my yard without asking permission and paying for permits.
What? And let the poors who live near the rich just build whatever they have a mind to? This is madness, sir. Madness!
THIS! IS! EASTERN LONG ISLAND!!!
*Kicks Brett L into unpermitted kiddie pool*
I’m over $1k a month in New Jersey now – despite the housing market still sucking.
Part of the reason the market sucks so bad.
Ahhh, New Jersey, the only state that makes Illinois’ property taxes look not bad by comparison
Wow. Just wow.
Try $1.7k/month 🙁
Michigan is dirt cheap by comparison. In my neighborhood I’m paying $500ish a month in taxes and that is considered outrageous by most people. As a comparison my dad, with a house that cost twice as much as mine, is paying the same rate I am. But he lives out in the country/not-quite-a-suburb.
My suburb has one of the best schools in state, so lots of people move in, send their kids to school. and get out of town as soon as the last one graduates. It makes for a high churn of houses, which go up, up in value with every sale. We are talking little 1200sq foot homes going for $250k. Again, Michigan house prices are pretty cheap compared to some of the insanity I see on the east/west coast. Of course wages are generally lower here too.
I’m in New York, and I pay about $250/month combined property/school taxes (before the insidious STAR rebate)
What the holy hell? 12k a year? That is robbery. I just paid my property taxes. 300 clams for the year on just under a two acre lot with a 1500 sq ft shop and an apartment. Granted the living space I reside in is unknown to mr property assessor as mr building inspector never knew I built it. Nor does he need to. Fuck him.
an apt out back?
Im jealous of the shop.
I built it above the south end of the shop. It is small. But I was used to living in tents so it is cool with me. I hope to build a house someday.
I should have made the shop twice as big. Never enough room.
Yeah, I drew a plan for a shop/ apt sized house when I was in HS as part of the CAD program. I still have em somewhere. It’s mostly a garage/shop with a room to sleep in and a decent sized kitchen.
A room? When I was a kid, I had to sleep under the kitchen table where I now keep my orphans!
well, in my first draft I had a second room for the concubines.
Living on Lawn Guyland is the first of your problems. :-p
“Calling robc, calling robc”
A note: he isn’t a strict Georgist, but was (is?) in favor of SLT.
Nice article, though the basic premise is easy enough to state that I don’t know why people disagree with it at all. The whole purpose of a property tax is to force people to participate in the market in some way and to eventually cause all property to default to the state when the taxes fail to come in. It’s to rob people of homes intergenerationally. The estate tax is intended to speed up the process, which puts it just behind property tax as the most evil and coercive form of taxation.
Inherent/estate tax is evil.
It punishes people for succeeding and wanting to take care of their family for posterity. The whole premise seems to be rooted in this: Hey man. You’re dead so why should your lazy kids get the money? It should go back into the ‘pot’ because if it stays inside your family (even though it’s *yours*) we’ve deemed it immoral.
I’m responsibly trying to set things up for my daughter. Somehow, these assholes thinks it’s wrong and feel part of my (hopefully) sound decisions to settle my finances belongs to them is beyond insulting. Worse, they hide behind the violence of the government to take it rather than come try and take it face to face.
Like I said, evil.
People have summed this up as “Capitalism is based upon greed and socialism upon envy.” Property has been in your family for generations is something for others to be envious of, therefore they want the state to take it.
And I don’t complain about the former. “Greed” is just a reformulation of a natural state of being. If there is enough water in the watering hole for one animal to survive off of to the detriment of others, it will drink it and let the others die of thirst because it values its life. Every living thing takes as much as it can of whatever it can that will increase its chances of survival. Beavers don’t sit around moralizing about damming up waterways and depriving living things downstream of water, thereby killing lots of trees to suit their purposes. We share or trade because it increases our own chances of survival.
As it has been said: Capitalism is the worst economic system, except for all the others.
Property/estate taxes go against that natural order and follow an even more vicious one: take from the weak and give to the strong. Prettied up with “law” and normalized because the weak can’t fight it, but as you said, an extension of the state’s monopoly on the use of violence. The moment one can kill agents of the state without punishment for trespassing on land for the purposes of stealing it at the behest of the state is the moment these taxes die. That pretty much means they’ll never die, because states always protect their own with extreme violence, regardless of the guilt of their agents.
I disagree. Income taxes are the worst kind.
Income taxes at least make some kind of perverse sense.
Property taxes make no sense.
It can, if you see it as a form of head tax loosely based on income as the nicer home you have the assumption is that you have the income to pay a specific property tax. Other taxes especially consumption taxes would be too easily avoided for a city looking to fund itself.
Property taxes really are a relic of the notion that all land belongs to the sovereign, and he would allow people to live on and use his land as long as they paid for the privilege. The names of the different kinds of title to land reflect this, still. “Fee” title is derived from “fief” title. You don’t own land in the US or other fee title jurisdictions; you own an estate in land (which is actually a form of intangible property).
The evil of income taxes is that the calculation and collection of them strips away all privacy for your economic life.
Naturally, because of American exceptionalism, we have both (a) brutal property taxes based on medieval notions of landholding, AND (b) income taxes that ensure every economic thing you do is exposed to the government.
What I’ve been wondering is where do we go to escape this or is the only option putting the gentry to the sword?
Libertopia floating island?
We’ll take a page from that other page and have a Glibertarian Cruise, except we’ll take over the ship and start a seasteading community.
I already have a good pirate flag!
I already have a good pirate flag!
Do you also have an island girl?
No island girl. I’m too stuck to mountains and snow. I suppose I’d trade my truck for a wicked boat though, If we do get Libertopia Island afloat.
I always imagine fondly the idea that a seasteading community would be wonderful – for about 5 minutes – and then the dream kinda degrades into a remake of Waterworld.
What you wantin’ with this white man’s world?
Serious answer? There isn’t anyplace to escape it. All land on earth is claimed by at least one nation state.
There is no escape until there is a mass groundswell of support for massively less government in all facets of our lives. So essentially never.
Isn’t there a treaty about no one claiming Antarctica?
Eh, I kind of counted it because multiple nation states would (at least they say they would) intervene militarily if you tried to set it up as a sovereign entity, so it still kind of falls under their purview.
If you can 1) figure out how to make it habitable, 2) figure out how to make it profitable, and 3) figure out how to keep the armies of the earth from descending on your head like Thor’s hammer, then you’ll have something.
so you’re saying we should kill this ice age off for good?
There might be useful land under there.
1) It is year round habitable, sustainable without outside support is an issue. Fuels, spares, and food are the big items being imported is my understanding.
2) Tax shelter or natural resource exploitation I think would be good bets. Alternatively, ethics free research haven.
3) Convince a large nation that you will be a useful client state or, in the alternative, clandestine buildup of area denial weapons systems under some kind of corporate cover.
All land on earth is claimed by at least one nation state.
Claimed, yes, but that doesn’t necessarily mean it’s enforceable. Or that said state even has control over the land now.
If you set up a highly militarized and armed society of soldier-citizens in say, western Pakistan or one of the Central Asian countries they’d have a hell of a time trying to stop you.
LIBERTOPIA!!!!
Perhaps it violates the NAP but this is actually something I’ve been considering from a practical standpoint. Although, from an economic standpoint, something costal Africa would be better in the long run I presume. There are places where the local ‘sovereign’ is not exercising control. If they are unable to exclude my army then tough.
Although, from an economic standpoint, something costal Africa would be better in the long run I presume.
Coasts along major shipping lanes run the risk of de facto liberation justification by the trade superpower (in this case, the U.S. obviously). Inland does diminish overall trade viability, but can be substituted with a survey and prioritization of local mineral resources (also, in the case of Central Asia, you could effectively control some major drug smuggling if you wanted).
The risk of US intervention has not escaped me. Hence somewhere Africa away from a shipping lane. As long as there is somewhere for a viable port. The number one problem is getting colonists to emigrate, and if you’re surrounded that becomes very difficult.
Kekistan?
FWIW, someone is trying to do what you describe, in Eastern Europe.
I kind of do want to treat it seriously. To that point, to what extent should we as libertarians value the declared borders of nations as opposed to the enforced borders of nations? I’m all for seasteading, but land has economic advantages. Personally I’d prefer to build an artificial island but there are ‘international law’ issues with that. I’m not convinced the NAP requires me to accept territorial claims as opposed to territory where the boundaries have been settled by force.
I think unoccupied land that is claimed by a nation might be up for grabs. I think running into a town, taking it over (by force) and then claiming it to be a nation is a NAP violation.
If a state votes to leave the union, or become its own nation, that is fine.
That is more or less where I’ve ended up. I’m not saying we go all viking and sac occupied towns and worked fields. From an international law standpoint, my claim to unoccupied land is as good as any other government – which is to say it is as good as my ability to keep others out of it. This is one of the few areas left I think where recognized law tracks natural law.
Bir Tawil. IIRC correctly, Egypt and Sudan have different ways of defining their border. There is some Sudanese that Egypt says belongs to Egypt and vice versa. But both countries argue that Bir Tawil belongs to the other nation and have renounced their claim to said land. https://www.theguardian.com/world/2016/mar/03/welcome-to-the-land-that-no-country-wants-bir-tawil
As usual, it is the British’s fault.
While I’m not a fan of income taxes, they at least have some relationship between ability to pay and the tax bill. If you make no income, you pay nothing in income tax. (For the most part, although there are plenty of exceptions. )
If you lose your job, the state doesn’t care when it is time to pay your property taxes. Your options are ‘fuck you, pay us’, or sell your home.
This. There’s no way to remove yourself. Let’s say you work hard, make a nice nest egg, buy some land and build a house. You set it up to where you practically never need to go to town. They will come and take you off your land.
Sales taxes make even less sense to me. Two parties trade something. The state is entitled to a cut of that because why?
They are not entitled; most people feel the need to submit to authority, and that authority feels the need for an income. What are the options for providing that income?
A justification for a sales tax is the state acting as a broker. They are securing passage of goods and materials and provide police and courts should one of the parties defraud the other.
It’s not perfect, but I find a sales tax to be the most reasonable.
Well, if taxes are a way of claiming ownership, property taxes are the government claiming ownership of your house and income taxes are the government claiming ownership of you.
It is a permanent mortgage on your property. You never truly own your property. And yet, it is the oldest tax in this country.
I’ll say this about the Georgists, at least they don’t believe in any other taxes other than ‘property taxes’, which is more than can be said for some ‘libertarians’.
Interesting side note, the Knights of Labor (the first large labor union in America) were Georgists. As was most of the labor movement until the Industrial Workers of the World burst on the scene (including the American Federation of Labor). The idea of Georgism prevented American labor unions from embracing socialism, like in Europe, at the turn of the 20th Century.
I’d take a Georgist over a socialist any day of the week
if government were truly a product of a Social Contract, and that contract were to be said, with a straight face, to be voluntary,
But that’s the whole point of calling it “The” Social Contract with capital letters. It’s not a real contract. It’s a social one, er, the social one that just exists and we all have to abide by it whether we consented or not. It’s just called a contract.
Regarding the social contract, I’ve had more than one lefty tell me that you are re-upping your agreement to it every nanosecond that you aren’t actively living somewhere else. The ability to decline it, in essence, is the ability to move someplace else with a different social contract. Don’t like O-care? Move to Singapore.
That’s obviously stupid for reasons that everyone here will easily recognize, and so I won’t go into it. But that’s the response I’ve gotten.
Is one of the obviously stupid reasons that it’s hard to become a citizen or permanent legal resident of most nations?
Many proggies I talk to seem to think that most nations on earth as as welcoming as the USA.
Aleph-one. The infinity of countable numbers.
I’m not big into purity tests for libertarians, but I may just make an exception for the Georgists.
You and me both, bro. Their Single Land Tax is an excellent tool for breaking up feudal property holdings after a Glorious Revolution, but its a communalist nightmare otherwise.
“the Georgist government is going to have to appoint omniscient superhumans to staff the boards and councils used to determine exactly how much of the $100 for the glass pane is for the communal sand and how much is for the transformation to glass.”
Wouldn’t that be more akin to a sales tax?
Also, you make a strong case, but I still feel that be taxed for the privilege of providing for my family is the most immoral tax.
I just got my assessment yesterday. My property value has gone up 7%!
Mind you, property taxes are not going up. No, but the valuation that drives my property tax is going up 7%. So my taxes will go up 7% as well. But they didn’t raise my taxes. Taxes stayed the same. Apparently I’m going to get 7% more utility out of my house, or I have to pay 7% more because other people would pay more for my house, or something.
Talk to a real estate agent or lawyer about taking a case to the taxing authority, showing that you would not be able to sell the house for the price at which they valued it.
I might. I just cringe at the arbitrariness and audacity of it. “We need $X therefore your property is worth $Y”.
Well, they said they wouldn’t raise the tax.
Property Taxes are the Single Worst Form of Taxation Ever Devised by Man
Worse than jizya?
(looks it up, is disappointed to discover that it is not some form of Jihadist-Bukkake)
*….. yadda yadda ‘band name’… yadda yadda
Good band name.
Goddammit Gilmore.
¯\_(ツ)_/¯
If there must be a tax, lump-sum would work the best.
Or, take the government budget, divide by the number of citizens (including the government officials), and send everyone their bill.
^^this^^
All those fucking griefer theives wouldn’t be bitching for more and more and more retarded ass social services if “fair share” meant we each paid the same amount for equal access to the same shit.
But if we paid the same amount for equal access that wouldn’t be fair to the poor. /progie logic
The “poor” who are “poor” entirely because of their “income.”
Because income alone, not the balance between income vs. expenditures, is what makes one “poor.”
What does “fair” mean anyway?
It’s where I won second prize for “Best in Show” before turning Ol’ Mabel into a delicious pork sandwich.
Whatever the progressive hive mind thinks at that moment.
In a just world, it would mean we all pay the same for the same access.
In prog world, it means sticking the government’s guns into the ribs of anyone making more than they think is just and robbing them.
It means the ball landed between the lines extending from home plate through first and third respectively.
If you want people to realize exactly what taxes do to them, get rid of paycheck deduction. Everyone has to cut a check to the fed on April 15.
My mother’s view on taxes changed once she started sending huge checks to the IRS every quarter.
^ Yes!! ^ I also subscribe to this theory. If folks had to pay the taxman themselves instead of letting their employer do it–and subsequently only looking at their net pay instead of their gross pay–I suspect taxes would be a lot lower, at least.
I bring this up a lot during the next few months. I tell people to look at what was deducted. Could they write a check for that? What does it go to? That’s just income.
Most of my coworkers are considered 1099-employees, so it’s pretty much business as usual around here to pay your own taxes quarterly.
I had no idea how foreign that concept was to some people.
Right, because it’s your fucking JOB to compute your tax bill 4 times a year and submit it to the government. Sure, they’re supposedly “due” it, but they can’t be fucking bothered to invoice you for the amount due. I mean, what do you think they are.. a… corporation?
My 17 yo son bitches every time he gets a paycheck, particularly after I told him where the money goes. Funny, he’s already lining up cash jobs for the summer.
They can be taught.
Raising that one right, there, Tundra!
Yess! It’s been fun watching my roommate become a libertarian. He made more his first year out of school than his parents combined. Which is awesome for him. But then he saw how much they took.
I miss painting houses for cash. 15 an hour, bonuses for finishing a project early. I got to work with my brother too.
having to file paperwork just to get some of it back is irritating enough.
Automatic withholding is the real evil here.
Thanks, Friedman!
Another evil is how multiple countries around the world split taxes into employees share and employers share, as if it is not the same thing. Employer cares how much money he pays, employee how much he receives, the difference is tax.
I’d adopt your idea AND change tax day to be early in November.
Last Friday before election day?
Income Tax day should be the first Monday of every month (or the first Tuesday following the first Monday, in case of holiday), for the previous month’s income.
I’m also an advocate for moving tax day to be very close to election day. Somehow I think that might push people to vote for lower taxes.
I would definitely support such a change in the tax law.
We would then need to figure out how to solve the gov’t spending problem. In some ways, it’s the more serious one.
I make well under $15/hr, but because of how I set up my withholding when my job changed from temp to permanent, I have to cut a check to the taxman this year.
Inheritance tax is right up there, as well.
Thanks, trashy. Your rant is spot on and makes me want to fight someone…
we could have a bracket playoff, where all the evil taxes duke it out for most vile.
Income has a strong seed, and I’m with Trsh that Property is 1st. Gas seems like a low teen underdog story.
I also love how people without any children are forced to pay a school tax.
Rufus said it so I didn’t have to
You be quiet and pay to have the next generation indoctrinated, Evolutionary Dead End.
It’s like… the only winning move is not to play… but then I still have to pay to not play. This is bullshit!
Time to invoke the Kobayashi Maru strategy!
Think of it as a ‘Free Time and Not Changing Diapers’ tax.
I’ve never changed a diaper or held a baby. I have no strong desire to do either.
Thankfully the next generation of commenters will not have to worry about little Rivenites blue-balling them.
You aren’t nearly thankful enough the king lets you grow crops for him.
Personally I find income taxes worse than a SLT. I am not really a georgist per se but I would find a SLT more acceptable. Less bureaucracy, less invasion of privacy does not directly punish inovation, good business sens, hard work etc. You pay a tax on the basic resource, and you have all the incentive to find a more efficient way to use said resource.
I think the difference between land and other property is that land is quite finite. We keep telling the lefties that economy is not zero sum. Well land is zero sum. Nothing to do with the labor theory of value imo. Its more like that no labor entered into creating land/natural resources. They just exist and on Earth they are limited.
As to the pane of glass, the sand I assume has a market and a market value. You don’t need to evaluate hoe much the sand contributes to the glass, just the quantity of sand and the market value of sand.
The problem I see is that is causes people to then work the land, which they might not have done if there was no tax on it. That’s not the worst unintended consequence, but it does change people’s behavior coercively. If I have a small plot of land that I just want my house on, I shouldn’t owe the king money for that.
But if you decide to do something, you should report to the king every penny you make so he can take his percentage …
Then way I figure, you can work a few years set aside money to pay the tax get a property somewhere where the land is cheap and the tax is low and you’re good.
But it goes up when the budget gets tight. along with inflation, a retired couple may lose their house before they die because they prioritize food over paying the tax. or as they die. Their children won’t get it.
Well this can be done like this: the government does not tax your land and gets it when you die. If your children want it they can help you pay your tax. It is not ideal, but we are not talking about ancapistan here. If we admit there must be some tax I find land more palatable than income.
I’m a sales or use guy. Really, Prop tax would be ok if it was held to a very small number, based not on what was built on it or how it was used. very small, very flat. And in the constitution or something, so the numbers can’t change when the budget gets fucked up.
Really, all we want is to be taxed less, and to have a budget that reflects that. How is the hard part because we try to minimize violations of the NAP and talk about how each tax is wrong.
I will start with the first obvious error: A Georgist opposes property taxes too. George, in fact, only supported the Single Land Tax, which is entirely different from a property tax, for some of the reasons you argue against the property tax.
In my next post, I will defend the SLT as possibly the only moral form of taxation.
The only thing that is taxed is the increase in the value of the land when it is sold, right?
Something like that?
No, the value of the land. Any improvements are untaxed.
Basically, it is anti-rent-seeking, by extracting the rents from the owner of the land.
No, the value of the land.
Here’s where I get tossed around. I think that property “value” is bullshit in the first place. Value is subjective, thus the crude sand/glass analogy. Another analogy I left out was one of felling a tree on a lot. If I fell a tree to make a canoe, it doesn’t increase the value of the land. However, if I fell the next tree over to make a cabin, and felling the tree opens up a spectacular view for the cabin, then the value of the property, even setting aside the improvement (the cabin) seems to have gone up. If I sell the land after felling the first tree, I have a gain of zero value for the land. If I sell the land after felling the second tree, I have to pay for the increase in value caused by the first tree being felled and the increase for the second tree being felled. In essence, I’m being punished for being innovative. The central authority couldn’t envision the increased value from the first felling, so the innovator is saddled with all of the taxation.
If you opened up a view, you “improved” the land. The intrinsic value of the land hasnt changed. But, I agree it is tough to value. Easier than property taxes are to value though. One is value of land. Other is value of land plus building.
But I can give you a real world example that is basically your argument and I admit it is a tough one to account for.
My Mom owns (with her siblings) my grandparents farm. They lease it out. Formerly, they leased out two of the three fields, the third was the “swamp field” and was basically unusable for all of history. My Dad installed tiles under it to drain it to the bordering creek, and now they lease all 3 fields.
Under an SLT, that should qualify as an improvement and be untaxed. I am not sure if that is going to require maintenance or if for the forseeable future that field is just a field. I could see 100 years from now the tile being forgotten about and the government trying to claim that the land value is based on 3 field, not 2.
My point being the view is an improvement just as much as the cabin is and shouldnt be taxed. Ditto the drained field.
The intrinsic value of the land hasnt changed.
You realize there is no such thing as intrinsic value, right?
Of course. All my posts should probably have quotes all over them.
It is why I have argued that ED is impossible, as a fair market value can be determined except by a willing buyer and a willing seller.
Well, the taxable value of the unimproved land is an entirely artificial number, that would be assigned by a taxing agency subject to the same incentives as every taxing agency. You can expect that “fiat” land value to go up over time as the state needs more revenue, regardless of any improvements that are, or are not, made.
So exactly the same as with property tax or even income tax, as they make up a magical inflation number to adjust brackets each year.
I have this argument quite often with my accountant over the value of my capital asset inventory. How do you determine the value of an asset? The street value today is not the street value tomorrow.
Please Do! My understanding of Georgism comes from Wikipedia, a few articles on the internet, and sparring with people on TSTSNBN. I’m happy to be proven wrong on what I have gleaned of the Georgists.
Henry George: Georgists::John Maynard Keynes:Keynesians
I said above that the SLT is a good tool for breaking up feudal land holdings. And, that’s pretty much what George wanted, by my understanding – he really did want all land held in common, and objected to the notion that any private party could own land. He was pretty much a narrow-gauge communist, and his tax is based on rather outdated and strange ideas about land and the economy.
I think the logical end-point of Georgism is, in fact, direct state ownership of the entire land mass of the country, with every single person paying rent to the government, directly or indirectly. Naturally, when everyone is a tenant/renter, privacy is stone cold dead (your landlord can come into your rented abode at any time, you know), and the door is even wider open than it is now for the state to control everything, because everything happens on the state’s property.
But, I haven’t studied this terribly much, and a sophisticated presentation of the case would be very welcome, robc.
My understanding is that while George would have preferred that, he found it unworkable. He thus defaulted to having the government enforce property rights and extracting the rents from the owners via the SLT.
I have a theory about the ideal tax for a libertarian society – a stamp tax. Unlike the awful stamp tax of the Colonial Era, this tax would be voluntary and would apply only to contracts. Its cost would be some minor percentage of the value of said contract (say five basis points, but again, it’s negotiable.). Now, people would be free to enter into contracts without the stamp, but they wouldn’t be legally enforceable in a court of law. The advantage of this is that it would be an actual charge for an actual service rendered for a function at least theoretically within the legitimate purview of the state.
Any thoguhts?
Who gets the first subsidies?
I said for a libertarian society. 🙂
I was a big proponent of the Fair Tax some years back. I argued at that time that they should have named it the “Free Tax”, since one was free to pay it or not, depending on how lavishly one wished to live (i.e. buying your clothes from yard sales would entail no taxes).
Plenty of opportunities to subvert the tax, probably, but what’s wrong with that?
I prefer no taxes; the government should charge fees for its services at the point of use. 9-1-1 becomes a “900” number. The police and firefighter brings a credit card machine in the vehicle.
If we cannot have that, lump sum (or “divide the bill”) taxation.
After that, tariffs on exports (make the foreigners who buy our stuff fund our government)
After that, tariffs on imports (you pay the tax whether you buy a Chinese TV or not, since domestic TVs would be priced higher), which would avoid the loss of privacy
Figure out a way to limit gov’t spending, though.
Assuming any tax is moral, what would a moral tax look like?
One, it wouldn’t violate natural law.
Two, it would have no deadweight loss (or close enough to it to not matter).
As far as the deadweight loss issue goes, a land tax has no deadweight loss as the supply curve is vertical (or is that horizontal, econ axis confuse me). Okay, maybe not perfectly vertical, it is possible to create new land. But its as close as any tax is going to get. And this is important, as deadweight loss is proportional to the square of the tax rate. If you double a tax, you quadruple the deadweight loss. So you can see just how bad a tariff increase from 1.5% to 10% would be.
But, now, the natural law issue. I like natural law, I like Locke. However, Locke’s arguments about property rights and natural law are complete bunk. As are everyone elses, except maybe the Jews. “God gave this land to us” seems like a straightforward valid claim, if hard to prove. I come to my views on this not from George and his socialistic views, but from Mises, who, as best I recall, was not a big friend on the commies. He thought property rights were important, but they were literally of a might makes right claim. We have to just draw a line and say “From this point on, we acknowledge the property rights, the fact the the owners at time t=0 stole the land from someone else is tough luck.” George also valued the practical value of property rights.
Just to further fan the flames, anyone who claims they deserve to profit from the mere fact of owning land is a rent-seeker. And rent-seeking needs to be eliminated. So why should these rents go the state? Someone has to store the deeds. A watchman state that protected our lands from invasion and provided courts for disputes could easily be funded by a small land value tax, and thats the way it should be.
Flame away
He thought property rights were important, but they were literally of a might makes right claim. We have to just draw a line and say “From this point on, we acknowledge the property rights, the fact the the owners at time t=0 stole the land from someone else is tough luck.”
I don’t know what you’re on about. It’s every bit as just and natural as deciding who will wield supreme executive authority by having strange women lying about in ponds lob scimitars at people.
I will think about your arguments.
Rent-seekers; aren’t they performing a market service by holding land in reserve?
It’s been awhile since I read anything on the Classical Economists, but they were hot for the whole rent-seeker problem. They also lived in a small territory bounded by ocean, so it seemed more pronounced a problem to them than to, say, Americans, who had, practically speaking, unlimited land (at the time).
Still basically do. we could all fit in texas.
Assuming any tax is moral, what would a moral tax look like?
1) It would be able to be avoided and/or throttled by the taxpayer’s actions and inactions
2) It would be closely related to the services provided
3) It would avoid incentives against self-sufficiency
Who was the person here (might have been the Other Site) who I argued with over the concept of voluntarily paying for the military? That was a weird discussion.
Shit, it might have been Citizen X.
3 is why i think property tax is immoral.
It’s coercive. It forces you to produce something. What if you wanted a wild nature preserve?
property tax or land tax?
I agree with you on property tax, but under a land tax, stop using rent-seeking to fund your nature preserve.
stop using rent-seeking to fund your nature preserve.
Can you explain why having a nature preserve is considered rent-seeking? I’m just not seeing the connection.
All property generates rents.
Whether you collect them or not.
https://en.wikipedia.org/wiki/Economic_rent
It includes George’s definition.
Property. I’ll wait for your article before I try to say anything about SLT. I don’t know enough about it.
what I meant by nature preserve was that by taxing the property, you change people’s behavior. the state coercively adjusts peoples individual values and wants. they now need to make use of the land, and in a profitable way. Which many people naturally want to do, but others may not. Some might want to have a few acres to walk around in, away from people. Some might want a commune, where they live off that land but never sell anything they produce. that one seems a little cult-y, but whatever. I wasn’t saying people should rent seek for an animal farm.
I disagree with #2 because if you have that, you can eliminate the tax altogether and just charge for the service. Which handles #1 and #2.
#3 works with the SLT: just don’t file a deed and hope you don’t get arrested/shot for trespassing.
It is nice idea, but it assumes some sort of natural law property right that doesnt exist.
My idea for a SLT would be a 6% tax on land value.
Split 3 ways: 2% to local, 2% to state, 2% to feds.
The lot for my new house (moving in 3 weeks) went for 43k. So my total annual tax would be $2580.
That is probably about what my property tax will be. And I won’t have to pay sales tax or income tax or etc etc, because of the S in SINGLE LAND TAX.
I could live with that.
What about the mortgage interest deduction?
Assuming any tax is moral, what would a moral tax look like?
Ooh, let’s tax “morals” and moralizing. *uck Schumer hardest hit. 😉
Just to further fan the flames, anyone who claims they deserve to profit from the mere fact of owning land is a rent-seeker.
Except that mere ownership of land carries with its risks and liabilities. Why shouldn’t I charge whoever wants to use my land for the risks and liabilities that I am taking so that they can use my land?
I also find the idea that there is some segment of the value of land that is inherent or intrinsic to the land itself, irrespective of any improvements, to be a dead end. At best, this is a number not found in nature or the market. What’s the intrinsic value of the Moon, in dollar figures? Its unimproved, its land, it must have an intrinsic value, right? Intrinsic value is a McGuffin, and when you make a McGuffin the foundation of tax system and property rights, you’re probably asking for trouble.
Everyone wants to talk about what happens when land values go up. But when land values go down, nobody wants to discuss that.
The best way to understand most people’s mental model of wealth is that it contains no concept of risk.
Serious question. Why is expecting to profit from land rent seeking? If someone owns it, I can buy it – maybe to use or maybe sell it later at a profit ( like any other kind of property).
Thanks all for starting this.
“anyone who claims they deserve to profit from the mere fact of owning land is a rent-seeker. And rent-seeking needs to be eliminated.”
Having some land available for rent is of great utility. What if someone is spending a year or so living in a certain area and it doesn’t make financial sense to buy a house?
Also, wouldn’t that be an injunction against renting out anything? Should rent-a-car businesses be shut down?
Oh boy, they’re really doubling down on the ‘Illegal immigration is the anti-slavery movement of our time’ argument over at a certain other place.
meanwhile, we’re discussing the morality of various taxation schemes.
Huh.
They always say that (insert SJW hobby horse) is the movement of our generation.
bowels?
It must suck not being in Pennsylvania. Ed Rendell ran on eliminating property taxes entirely by legalizing casinos. As Rendell was elected and PA has casinos, you can be sure that property taxes no longer exist in PA.
It is known.
That reminds me, actually, of a tax scheme I cooked up a while back: The Ad Hoc Lottery
See, every week, the local police department, the local public school, the local health authority, etc. all host a lottery. Citizens can purchase lottery tickets of any of these. Half the collected revenues are deposited in the host’s bank account, the other half are paid out in winnings. All other taxes are eliminated.
So, if you want to fund, say, the local high school, you “pay your tax” by buying one or more lottery tickets.
We already have this. The PA lottery benefits older Pennsylvanians. How? I don’t know. But the ads SAY it does, so it does.
NB: I am sure older people don’t buy lottery tickets at an above-average rate. They purely benefit from this arrangement.
The PA lottery benefits older Pennsylvanians. How? I don’t know.
It gives them something to live for every week?
I googled..
As an aside, I think it’s funny how most state governments regulate gambling as though a craps table is a nuclear reactor, saying that such games of chance are corrupting and inherently unfair. Yet, many of these same states run the lottery, which statistically has a lower payout rate than any casino game. Plus, they allow lottery tickets to be sold in every supermarket and gas station, often times in vending machines where underage individuals can purchase them unhindered.
Is gambling good or evil? Make up your mind, gubmint!
My $0.02
Due to the nature of land, not an arbitrary commodity, not created by labour and it is strictly limited in supply, and as one can get an exclusive use of a piece, it may be considered acceptable for the government to levy a tax on the real value of the unimproved land. This tax is as payment for both the original license and the ongoing protection of said property by government, through police, military, courts of law etc. The government should not overtax improvements on land which are made, obviously, by labour or investment on the part of the owner and have little to do with the original land license.
Such a tax has some advantages. It can be considered less random than many others – except the percentage, off course, which is nothing if not random, like the value of any tax -, it can raise a decent amount of income and deter speculative bubbles in land and real estate; it does not impose a tax burden on economic activity and on the labour of humans – which are entitled to the product of their activity. Also, as land can be safely considered as impossible to hide, it will not be likely that some people will evade the tax and some will not, which is the current situation and leads to significantly different taxes paid by people of similar wealth and income. The deterrence of speculative bubbles in land and real estate should not be understated, as some economic crises were fueled by such bubbles.
That is a prettier way of making my argument for me. Thanks!
A few questions:
1) What does labor have to do with anything? This is one of my core critiques of Georgism. It seems that there is a notion similar to the labor theory of value that somehow classifies property based on whether it has been “transformed” by human hands.
2) What does it being “strictly limited in supply” have to do with anything? The Mona Lisa is more limited in supply than land, but libertarians don’t argue for taxation of paintings.
3) Payment for the license? My “doesn’t sound very libertarian” alarm is going off. This is right out of the divine right of kings feudalist playbook. The Sovereign owns all the land and gives you an estate on it. I really don’t see how feudalism and libertarianism can coexist.
4) Entitlement to product of labor. While this is true, it is largely irrelevant when they are not entitled to ownership of their dwelling. What dignity is there in liberty if man must work to serve the state just to have a place to sleep at night?
re 1) Locke argued that land is claimed under natural law by mixing your labour with the land. So it isn’t just a labor theory of value thing. George’s view on it was that a person deserved 100% of the fruits of their labors, labor shouldn’t be taxed at all. He was thus separating the thing that labor created, such as a house, from the thing that just existed, such as land. Like me, he disagreed with Locke on natural law and land, but still was very libertarian-friendly when it came to labor.
re 3) As I said above, someone has to store the deeds. We arent talking anarchy, if their is a government and courts, they need to be funded somehow, and a fee on deeded land seems reasonable to me.
re 4) Dwelling would be untaxed as an improvement. Sure, the land underneath would be, but you didn’t build that land (if you did, I wouldnt tax it).
Dwelling would be untaxed as an improvement. Sure, the land underneath would be
Really sucks for the elderly poor. SLT basically says “suck it old man, you’re gonna work till you die”
Or you save enough to pay the tax, or you have a pension of some sorts, or you have kids and they help you. If you retire somewhere where the value of land is cheap, the tax may not be much. If you want to retire in Manhattan, true it will cost some.. Or you cut a deal and the government gets your property in lieu of tax owed only after you die. Land tax or not, you have to save for retirement. And without income tax, the years you work will earn you more. And society in general will be a lot better off.
Or you save enough to pay the tax,
Irrelevant. The disincentive against quiet enjoyment of one’s land is what I’m poking at. A family could theoretically live in perpetuity without paying a penny in income and sales tax. At the very least, they could structure their lives in a way that allowed them to live tax free in tight times. That’s wholly impossible with a property/LVT.
That is true … But I find it the lesser evil as opposed to progressive income taxes
1. I would say it is nothing to do with the labor theory of value, more like you have the right to your own labor, irrespective of what it is. So if you build something on the land, it has nothing to do with the land and as such should not be taxed extra
2. Mona Lisa was created by a human, land was not. Mona Lisa or any such unique art object is not in any way essential to the economy and human life in general, land is. As such land is quite different.
3. It may not sound libertarian, but the fact of the matter is outside anarchist societies, titles of property derive from the government and the government enforces such titles. You will not get allodial title anywhere. This is from the point of view of the world we live in, not some ideal libertarian world.
4.What dignity is there if a man must pay a arbitrary percentage of his income? A sales tax on his food? A head tax for existing? It is not ideal, but I find it better than alternatives in the current world.
What dignity is there if a man must pay a arbitrary percentage of his income? A sales tax on his food? A head tax for existing?
At least the first two are taxes on voluntary actions. The third is one I lump in with the SLT as particularly evil because it taxes involuntary inaction. There is a dignity in providing shelter and basic sustenance to yourself and your family. SLT directly attacks the first half of that dignity. Income tax and sales tax certainly attack the second, but not as completely and inescapably.
titles of property derive from the government and the government enforces such titles
Pragmatism seems a pretty weak foundation for a philosophy of taxation. Most Georgists don’t argue simply that the SLT is a more efficient tax structure. They argue that it is a more moral tax structure. What is has nothing to do with what should be.
Mona Lisa was created by a human, land was not.
Irrelevant. The Mona Lisa is the same as land in one aspect: it is strictly limited in supply. Explaining that it’s different from land in other ways doesn’t bolster your argument that one of the reasons land is different is because it is “strictly limited in supply.”
At the end of the day, it seems that all roads lead to one overarching principle, which is that individual property ownership exists only so far as the property was created/transformed by labor, and that everything else is communally owned. I really haven’t seen a good defense of that principle yet. The discussion usually falls back to utilitarianism. As such, I’ll pose this question: what about labor makes property individually ownable?
I really dont get your Mona Lisa argument. The strictly limited is one of the way they are similar, in other ways they are not. So overall they are not similar. What does it matter if they are similar in one way. When I described land I used multiple characteristics which make it unique, what is the relevance that one of the several characteristics may be shared by other things? All those characteristics combine to make it what it is. If something is not limited but needed for human existance than it is not an issue. If something is limited but not striclty necessary no problem. When both occur there will be conflict between humans. Property resolves this conflict. Anyway i have to go away now maybe ill come back to the thread later
When I described land I used multiple characteristics which make it unique, what is the relevance that one of the several characteristics may be shared by other things?
You said not arbitrary, not created by labor, and strictly limited in supply. My point was that strictly limited appears to have no relevance. I’m not exactly sure what an “arbitrary commodity” is in the first place, thus my ignoring it. (Do you mean fungible?)
I’m sure I could think of an example of something that isn’t created by labor and is strictly limited in supply that isn’t land, and we’d be back at it. My deeper question is the one that I asked somewhere else in this thread. Why does labor somehow transform something from collectively owned to individually ownable?
Where does ownership come from?
It is a theoretical question, but I think labor tends to be the general answer. Even Locke used labor when it came to land, but I don’t accept his argument.
Where does ownership come from?
My (on the fly) definition: Ownership is a claim to property (absent force, fraud, or coercion) that is senior to all other claims to the property.
IOW, if I say it is mine, it is mine unless I violate the NAP in treating it as mine, or unless somebody else legitimately said it was theirs before I said it was mine.
So we return Georgia to the Cherokee?
This is why I went with the Mises view on it, which led me to support the Georgist view on the SLT.
So we return Georgia to the Cherokee?
To the extent that it can be proven that this certain individual owns this certain parcel, yes. A burden of proof must be met. I have no problem with recording acts and statutes of limitations to eliminate the ability of the Cherokee to claim the Smith family’s McMansion just because the Cherokee were known to roam that area.
Not my style top answer in a dead thread but… Strictly limited has relevance in that on something that is not limited you have no need of property there is plenty for all. No one has historically claimed property over sunlight. Fresh water in areas where it is abundant was never subject to strong property claims, fresh water sources in the desert were the most essential thing to own.
By arbitrary commodity I meant something that is not land mostly …
So the downside is the recurring nature of property taxes? What if land was subject to a sales tax, with any transferal being subject to the tax? It is not in my state, but I am ignorant of other state taxes.
I would say that the biggest downside is the recurring nature. I think that taxes on inaction are worse than taxes on action.
I live in the People’s Republic of Cook County and they love to try to increase your property assessment every year. My condo association had to hire a lawyer to fight the hike in our assessment costs and we won but I suspect that our lawyer had to give a little bribe money to Joseph Barrios, the asshole Assessor of Cook County. The guy is blatantly corrupt and have private interests in real estate in the city while always lobbying the government to raise property taxes, but yet he’s elected every year.
My fiancé, a Democrat, even thinks the taxes levied on us by the city and county are bullshit.
Always germane to this type of discussion:
Samuel told all the words of the Lord to the people who were asking him for a king. 11 He said, “This is what the king who will reign over you will claim as his rights: He will take your sons and make them serve with his chariots and horses, and they will run in front of his chariots. 12 Some he will assign to be commanders of thousands and commanders of fifties, and others to plow his ground and reap his harvest, and still others to make weapons of war and equipment for his chariots. 13 He will take your daughters to be perfumers and cooks and bakers. 14 He will take the best of your fields and vineyards and olive groves and give them to his attendants. 15 He will take a tenth of your grain and of your vintage and give it to his officials and attendants. 16 Your male and female servants and the best of your cattle[c] and donkeys he will take for his own use. 17 He will take a tenth of your flocks, and you yourselves will become his slaves. 18 When that day comes, you will cry out for relief from the king you have chosen, but the Lord will not answer you in that day.”
And yet they still wanted a king.
It is absolutely ingrained in the human mind to demand to be ruled over.
10% flat tax rate? I want that King too.
Yeah looks pretty sweet in comparison to now. But he also takes your sons & your daughters, which isn’t cool.
But what would it have evolved in to? The British hand rested mighty lightly on us colonials in 1775 compared to our own system now, and yet the British have become even worse.
But he also takes your sons & your daughters, which isn’t cool.
It hasnt been that long since the draft went away. And I still had to register for selective service, just in case.
That’s why it’s really hard for people to grasp the concepts of liberty and economic freedom. It’s risky and it doesn’t always work out but you are in complete control of your life. People don’t like that and would rather be given given assurances that their lives will be easy and risk free.
*why should be after That’s.
Fixed it for you.
Only 10%? I assume the Knesset has bothered to try to keep tax rates that low.
“Land is the only thing that matters; it’s the only thing that lasts!”
“You ain’t no kind of man, if you ain’t got land.”
Lex Luthor on Land
This has been a great article and comment section. No crazy name calling and I learned a bunch.
Ditto. I am profoundly skeptical of the SLT. I don’t really think there’s much of a theoretical argument for its superiority, really. To me, it would come down to whether, in practice, it would be less prone to abuse than the alternatives. I can see some arguments there, but my concern is that when the government is, in effect, everybody’s landlord, it will act like everybody’s landlord.
I’m not convinced, but will wait for Robc’s take.
I just don’t trust the gov to not raise it arbitrarily when they
needwant some money.I dont trust them either. I know they will. Just like they do with any other tax.
So, amongst the crappy alternatives, the one that doesnt have a deadweight loss killing the economy in general seems like a good choice.
Lets run down benefits vs other common forms of taxation:
Pros:
1. No deadweight loss
2. Respects the fruits of your labor
3. Doesnt violate natural law
4. Is anti-rent-seeking
5. Literally is limited in amount of money the state can raise (without destroying peoples willingness to own land at all)
Cons:
1. Tough to value properly
2. The state can abuse it
3. Prevents you from living “off the books”.
Other that #3, the other cons apply to other taxes as well. And #3 applies to many of them too.
And Pro #4 and Con #3 are in conflict anyway. Depending on how you are self-sufficient, if you are “living off the land”, you are rent seeking. Taking advantage of the value of the land to grow food or hunt or whatever is rent-seeking.
Pro #5 is why the SLT will never happen. There is a pretty hard cap on the amount of money that can be raised. If you raise the tax above the economic rents generated, why own the land?
I would prefer your system to the current one; might still complain about it.
https://www.youtube.com/watch?v=BXWvKDSwvls
thumbs up.
Its a good discussion. I think a devoted post from somebody knowledgable would be interesting. Caveat: I have little real acquaintance with this theory. In the finest tradtion of the internet, though, a few uninformed comments on the pros:
1. No deadweight loss
I think this means it no distortive effects on the economy? I think it would introduce distortions, because it is taxing a major asset that people need for productive activity. By making the cost of that asset relatively high, there’s a distortion. Maybe less than other taxing schemes, but still a distortion.
2. Respects the fruits of your labor
Well, except you’ve still got to come up with the cash to pay the tax, which will presumably be from the fruits of your labor.
3. Doesnt violate natural law
Its a tax. If you don’t pay, men with guns will come and make you. Like any tax, its got a built-in violation of the NAP, at least. I’m not sure its possible to have a tax that doesn’t violate natural law, simply because any tax is an involuntary exaction.
I don’t think its possible to have a tax that doesn’t distort the economy, doesn’t take the fruits of your labor, and doesn’t violate natural law. The SLT may be better on these issues than alternatives, but I would be wary of overstating the case.
4. Is anti-rent-seeking
It institutionalizes rent-seeking by the state (directly or indirectly) on every piece of property, doesn’t it?
5. Literally is limited in amount of money the state can raise (without destroying peoples willingness to own land at all)
People have to have land to use, regardless of whether they own it or not. If the rates are so high that nobody wants to own the land, well, they will still have to use land, and they will have to pay “rent” to the state to do so, whether its in the form of a land tax or in the form of a user fee or whatever. Old wine, new bottles.
I think this means it no distortive effects on the economy?
I looked at the graphs and read a little bit about this deadweight loss. I’m not an economist, nor do I play one on TV. Most of my economics “knowledge” comes from taking micro in high school and reading a few books. I didn’t recognize the term deadweight loss, but I tried to figure out what it was going after. In essence, it seemed a lot like opportunity cost, except that it expressly said that it wasn’t opportunity cost in some definition I read.
In doing further research, deadweight loss is the distortive effect of price ceilings or taxes that accounts for the consumers that are “left out” of the market because their marginal benefit exists at a price somewhere between the distorted market price and the free market price.
The Georgist argument seems to be that since the supply curve for land is theoretically vertical (a contention I am quite skeptical of), a tax on land is free of deadweight loss.
I’m really skeptical of “asymptotic” economics. Economics isn’t purely mathematics, and things like vertical supply curves don’t seem to capture the sociological parts of economics.
Huh huh…you wrote weenie. /Butt-head
I would love to see the face of a progressive reading all this.
Just ask any California prog about Prop 13 and observe how they start frothing.
ROADS AND BRIDGES SHRIEK SHRIEK SHRIEK ANARCHY DOOMSDAY!
Couldn’t agree more. I’ve always felt that way, but it’s rare that I’ve found anyone agree with me. Something argle blargle something roads and bridges.
My reasoning is that it basically means that no one owns private property in the USA. 2nd of all, and more important, it keeps individuals from becoming self sufficient. I could retire now and live off a few acres, if I didn’t have to pay property tax.
Do you know when property taxes were first invented? I mean I know it’s a local thing and it didn’t start up everywhere at the same time. But someone told me years ago that it started back around the turn of the 20th century somewhere and then spread like wildfire to other locations.
My reasoning is that it basically means that no one owns private property in the USA.
We really don’t. The SLT is oddly anachronistic, in that it ramps up the “fee title” system that we have, where the state is still the ultimate residual owner and charges a fee for the privilege, to something that more overt in its denial of your real property rights than our current system. Its a property tax, and there’s no getting away from that. It just sets your land value as the unimproved “intrinsic” value of the land, which is unmoored from market value or any external reality. At least the current market-value based system of property taxation has some connection to the real (real estate) economy. Taxing “intrinsic” value is taxing based on a number entirely made up by the taxing authority.
I’m playing devil’s advocate from a position of relatively little knowledge, so I don’t want to come off as too much of a catass; I want robc and trsh to know how much I enjoyed this post and the discussion.
One of the more annoying things about property taxes is that they’re tied to the supposed value of the land and as a result, they’re capable of skyrocketing if some developer builds a ritzy subdivision nearby. I know people who bought a cheap house with modest property taxes only to see those taxes go up 50 percent when some land value-enhancing thing is built somewhere in the area. If we’re going to have a government and taxes – which is likely the inevitable state of things until we can get this libertarian moment underway – then the taxes need to be low, few, and predictable.
Anyway, this was a great article. One of the things that irked me about The Other Site was the years-long decrease in core philosophical issues to make room for more flavor-of-the-week social commentary issues. Cheers, Trash Minister! (that’s how I’m inclined to read your handle instead of the more likely “Trash Monster”)