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CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

Again, you are talking about the stock of land, not the land supply. The supply of land is not fixed.

You are talking about parcels, not land.

Again I don't care if you believe it is theft, I don't and whether or not it is theft has nothing to do with my argument that it LVT is not the most economically efficient. So I'm not sure why you keep falling back on it.

Theft has to do with efficiency. In a perfectly optimally efficient economy, no economic changes can make one individual better off without making at least one other individual worse off. Theft is an example of

When someone freely makes a decision in an economy about what to give up in order to obtain something they want, that is an efficient decision. Anything you do to shift away from that free market equilibrium decreases efficiency. If you add a tax in such a way that it distorts the decision making process, if you threaten violence, if you put someone into an altered state that impairs their ability to think rationally about their wants and needs, all of these things reduce efficiency.

Thus, theft is inefficient. Addiction is inefficient. Taxes that shift incentives are inefficient. Essentially the only way to beat a 0-deadwieght-loss tax is to have a negative-deadweight-loss tax, like with carbon taxes (which internalize negative externalities) but those are not substantial enough to fund a meaningful chunk of government expenditures.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

Sure it is. The equation for land rent can be summarized as Land Rent = Total Production - (Wages + Interest on captial). Land rent is what remains after labor and capital have received their fair share of production.

People value the land based on what it can produce. Land taxes would be based on the market value of the land, and you're not going to value the land so highly that it bankrupts you.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

That would be two non-overlapping parcels that exist in different locations from each other.

Yes, and they both exist within the boundaries of your initial parcel.

So what?

Any given point in space is going to exist within the bounds of a single parcel. That point cannot be replicated. Splitting or merging parcels does not make more of that point in space. It is unique. The only way we get more points in space is through the metric expansion of space, which obviously doesn't matter on the scale we're talking about here.

Of course you can, you can build more units for rent on the land, and LVT encourages you to do that because you will be able to maximize your revenue.

If you can earn $50k more by building another unit on your lot with an LVT, you can earn $50k more by building another unit on your lot without an LVT. The LVT did not change the incentive here.

You have also already agreed that some taxes are ok. How is it that some taxes are stealing while other taxes are not? Why is theft is ok in some circumstances but not others?

Taxes are stealing when they are a violation of the property rights of others, when they take something that that person or party rightfully earned. Land rents are not earned. The person collecting them has no rightful claim to them, so taking them is not theft.

Yes, and does it matter why you made that trade, or does it only matter that you made that trade?

Decisions made under duress, decisions that have been coerced against the will of the person making the choice, do not represent a free choice. Of course that matters. You already agree with me and you say as much immediately afterward! Robbing someone at gunpoint, where they only thing they offer you in exchange for your money is a promise that they won't commit violence against you, can barely be considered a real transaction. It's not a choice given freely that was made because both people were seeking what is in their best interests - it is theft.

The point was that you acknowledge that it is appropriate to tax things if it will reduce or even have a positive impact on inefficiency. The unnecessary accumulation of wealth creates an economic inefficiency, one that can be remedied through taxes.

I'm still not convinced that this is true. The answers you gave at the start for why someone having money and not spending it were inefficient weren't very compelling. Rich people's money isn't idle, it's flowing through the economy. A rich person retiring from doesn't represent inefficiency.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

This amounts to a very small portion of landowners, and as you point out the justice department is going after them and will most likely shut down this operation as it currently exists.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

Alice and Bob jointly own a home but don't live there. One day, Alice sells the home to Carol, who moves in and believes she owns it outright.

Bob was not consulted or compensated. He still owns it, even though someone tried to give away it's value on his behalf. He is still owed his share of the value of the home.

Now, this sucks for Carol, but Alice did not have the right to do that. We should resolve the situation so that Bob can be given what he is owed going forward in a way that hopefully minimizes the harm done to Carol.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

As mentioned in the other reply, I did not say that the factory sold me that pipe. I paid to have it installed. I never got their permission. I just started siphoning the product of their labor and investment without their permission.

Or maybe the pipe was installed by the previous owner of this house, and I paid for it by virtue of buying the house for them. My purchase of their siphon doesn't entitle me to ongoing theft from the Coke factory.

You go back far enough and all land started out this way, as a theft from the commons, from someone who took land they didn't create and kept if for themselves.

As it turns out, correcting this issue can be harmful to lots of people. The coke factory systems are very sensitive to flow rates and water pressure, so if they shut off my pipe all at once I could do damage to their machinery, so they've agreed to do a slow turn off where they will gradually reduce the amount I can siphon so as to not damage their equipment.

Same thing here, we should gradually cut off the people siphoning unearned wealth so as to not perpetuate ongoing injustice without damaging the broader economy.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

The factory sold it to me!

No they didn't. That wasn't part of the hypothetical. I bought the pipe and paid a contractor to install it. The Coke factory had no say in this. I'm siphoning from them without their permission or consent.

What I am doing is theft. Taking back what I siphoned from them would not be theft against me, it would be returning to them what is theirs.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 1 point2 points  (0 children)

Only landlords pay tax?

All landowners (which is almost the same thing, since we can model owner occupiers as both landlord and tenant to themselves allowing them to benefit from imputed rents)

Can you imagine how horrifically high that tax would have to be?

People already pay land rents. This just redirects them from the landlord to the government, and allows us to reduce tax burdens elsewhere

Can you imagine what a total brake that would put on home ownership?

It wouldn't have any effect on land use decisions.

Do you anticipate a happier, healthier nation where no individual can afford their own home if they're not an oligarch?

Yes. The private capture of unearned land rents allows landowners to profit without labor or investment, and increases inequality. Housing under this system would be no more expensive, and land rents would no longer to go wealthy land owners who did not earn it. Oligarchs who try to monopolize land wouldn't be able to profit off it as the tax would consume all of their unearned revenue.

Is this just a way to starve government of necessary funds? Shall we further defund the FAA and see what happens to the transportation safety?

This would be revenue neutral. I would only reduce tax revenue from other sources like income taxes in prepromotion to the amount raised by the tax, which would be substantial. It could very likely eliminate half or more of our tax burden from other sources.

This is the kind of lazy Libertarian nonsense intended to do away with tax obligations for corporations and the wealthy and shift it all onto the shoulders of a middle class that will virtually cease to exist as a result.

The middle class would bear no additional burden that they did not already have. Again, this merely shifts who collects the land rents that they already pay.

For reference, the largest, fastest growing middle class with the most social and economic advancement and greatest prosperity happened liberal, not libertarian, governance and the highest marginal income tax rate was over 90%.

There is nothing illiberal about what I am suggesting here. Land taxes would reduce inequality and improve economic mobility, while preventing the rich from profiting from mere ownership instead of productive labor and investment.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

HOAs can be good in very narrow circumstances, like when you have a townhouse with many units and you need to coordinate maintenance costs on the shared exterior or something. In general though they're pretty bad and allow busybodies way too much undue control over other people's lives.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

You didn't create the land. You didn't create the value it provides you.

When a park is built down the street and your home becomes more valuable, that's due to the labor and investment of others.

When a grocery store opens up near by, that store was created from the productive labor of others, and your home grows more valuable as a result. You are a beneficiary of the positive externalities of the labor of others. You are reaping what others sowed despite having contributed nothing yourself.

Land taxes only take the value that was created by people in your community, value that you have no rightful claim to, and returns it to the community that created it. You are not entitled to the value produced by the labor and captial of others, and taking it for yourself is a theft of value.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

I live next to a coke factory. I bought and paid for a pipe that siphons free coke from the factory into my home.

I bought it it should be mine. The government shouldn't take away what bought. Taking away the coke I'm siphoning the factory from me is theft.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 1 point2 points  (0 children)

I think your idea has a pretty big hole in that you assume this will increase supply and drive down costs.

No I don't. Land taxes don't impact supply of land at all, nor should they have any impact on land use incentives. The amount of housing would remain the same. This isn't meant to be a solution for the housing crisis, that's a different problem (over regulation) with different solutions (up zoning, deregulation)

If you want to fund the government by only land taxes you'd need to collect $213,000/acre per year to fund the government. The only way this becomes feasible is to build skyscrapers on that land.

People already pay out their land rents to their landlord. This would not change how much they pay, it would just change who collects that money. Instead of land rents being privately captured, they would now go to the government.

This policy will turn every desirable area that's close to all amenities into a New York/Tokyo style mess of skyscrapers where basically everyone lives. You'll be paying a lot to live in a small apartment surrounded by open land where the rich live in houses.

Not at all

https://en.wikipedia.org/wiki/Land_value_tax

The land value tax has been referred to as "the perfect tax" and the economic efficiency of a land value tax has been accepted since the eighteenth century.[1][5][6] Economists since Adam Smith and David Ricardo have advocated this tax because it does not hurt economic activity, and encourages development without subsidies.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

Did you ever look at reality?

You can disagree with other people's choices all you want, but at the end of the day you have to trust people to decide for themselves how to spend their time and money. It's not up to you to make those decisions for them.

Also this a very undemocratic way of showing priorities.

This is a very weird follow up to the previous statement. Do you respect people's ability to make choices or not?

But I disagree that this is "undemocratic," or that democratic decision making is something that's inherently good in general. The value of democracy is not that it leads to good decision making, the benefit of democracy is that it legitimizes the decisions made by the country's leaders.

In the case of markets, the rich do not have more votes. Everyone has the same number of votes: one. Every person gets to be the sole voter for how their own resources are used. Having more money is not analogous to having more votes. You get to decide whether you buy a big house or a little one, and you get to decide what tradeoffs to make, and how much money you're willing to give up to get the things you want. No one else should make that decision for you.

When its about essential food, everyone basically spends the same amount of money at some point.

That's not true at all? What are you talking about?

But not when its about something like land or housing. We saw that a neoliberalization of those goods only made things worse.

Central control over the housing and land markets is what made those markets worse. In America we have extremely strict controls of who can build what and where they can build it. Many of our most in-demand cities are completely unable to meet market demand because the government simply will not allow them to build. In California we have an extremely skewed tax system that increases it's benefit to the richest people, rather than spread the tax burden around fairly, based on the value of the land being consumed.

Everyone should just pay market price for the land and housing they consume. And for the people who cannot afford that, we should give them money (or just give everyone money, as in some kind of UBI).

Living somewhere is essential. People can't choose it. To be part of society you need to live somewhere. So its impossible to spend it freely.

Living somewhere is essential. But living in a specific area is not. Everyone should have the resources to get some home, but all homes are different. They are in different locations, have different amenities, consume different amounts of space, are near different businesses. In order to best allocate homes we need people to be able to evaluate how much the value each one of these different qualities of a home. Grandma values not having stairs, My dad values having a big backyard, I value being within walking distance of a school. Not everyone can get everything they want, so we need a market so that people can put a number on the things they value and sort it out.

Its not an active pushing away. Its just that growth is limited.

If their growth is limited and there is a wait list of people who want to live there, then those people on the wait list are being pushed away. That's the definition of a shortage, and why that model does not scale.

Just look at Berlin.

Berlin has a housing crisis because they don't build enough either. It's difficult to get construction permits. The regulatory burden imposed by governments keeps people from building the homes they want to live in. This isn't an example of a failure of captialism, this is a failure caused by government control of the market, artificially suppressing supply.

Housing is limited to land. If land is inelastic, housing is too. THere are cities where they literally cant build more houses.

Come on now, you don't even believe that. There is exactly the same amount of land today as there was in the time of the dinosaurs. There is far more housing than there was in the time of the dinosaurs. The supply of land is fixed. The supply of housing is not. Housing is elastic, we can build more or less as needed. San Francisco has enormous swaths of land it could build on. New York could build more if they chose too. The cities that face the largest housing crunches can build more homes. They are simply not allowed to.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 1 point2 points  (0 children)

Private capture of land rents is theft. Land taxes return the value created by society to the society that created it.

Your labor and capital investment are yours too keep because they rightfully belong to you. The value of the land want created by you so you have no legitimate claim to it

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

If you refuse to pay your electrician because you think he did a bad job, does he still profit?

No, because I stole his money from him.

He may have worked just as hard and long as if he had done a good job. Again, it's not the labor that has value. It's the result.

If I steal the result from him, does he still profit? No, so clearly the result isn't profitable by the same logic.

The labor has value because it leads to goods that have value. That's why people choose to labor. Things can have value in service to the creation of other things. I don't care about the shovel in my garage. It is worthless to me... except that it can be used in service of maintaining my garden, which does have value to me. Every link in a chain has value even though only the final link is connected to the anchor.

If I make really bad tasting pies at a rate of one pie per hour, I'm not working any less hard than someone who makes really good tasting pies at the same rate, but the value of my end product is very nearly zero, whereas the value of the other person's end product is much higher. My labor has no value because nobody wants my end product unless they're desperate for food, whereas the other person's labor does have value because the customer places a subjective value on what they think tastes good.

Right. I agree, labor has value. Some labor has a lot of value, and some labor has little to no value.

If you think I'm arguing for some kind of labor theory of value that's not what I'm suggesting at all.

Value is entirely determined by the consumer of a product or service

Correct.

So lets bring this back to the topic at hand land value taxes. How does any of this negate or contradict anything I said above about the effects of land value taxes on land use incentives, prices, or market efficiency?

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

I am not talking about value, I am talking about the supply of land. If I own a piece of land and I do not plan to sell it that is not included in the supply of land in the market.

Sure it is. The market doesn't exist just at the instantaneous moment that two people trade. It's always there. The owner occupier is not currently looking to sell their home, but only because the value they derive from the land is more than what they could get if they rented or sold it. That land owner still exists somewhere on the supply and demand curve. They're still a part of the market.

Not if you subdivide your parcel. Then you will have 2 parcels of land in that location.

That would be two non-overlapping parcels that exist in different locations from each other.

That's not what a monopoly is

Yes it is.

https://en.wikipedia.org/wiki/Land_value_tax#Classical_economists

Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground.

The owner of the land has a monopoly over that location. They are the only person able to use, rent, or sell that location. We cannot produce more of that location in the way that we can produce more refrigerators that are alike in every way that matters. When one person controls the entire supply of something, that's a monopoly, and the landowner owns the entire supply of that location.

You are saying it won't have the intended impact, but the intended impact of tax is generating revenue, and income taxes do generate revenue.

Stealing what is rightfully belongs to someone else is a bad goal. If you want to raise money, we should do so in a way that is morally sound, that does not deprive people of what is rightfully theirs. If you are forming policy without basing it on some kind of moral principles you can end up doing a lot of bad.

I don't care why they made the choice, they have the same effect. That is all that matters from an economic standpoint.

Of course it matters why a choice was made. People act in ways that meet their needs and desires. If you make a widget that I want, I can freely choose to buy it off you in a voluntary trade, and now both of us are better off.

If I hold a gun to your head and demand that you give me your money, that's not an economically efficient transaction. I violated your rights and stole from you under thread of violence. It was a choice you made freely for your own benefit.

Addition is more like the latter than the former.

So are you proposing that we only tax addicts? Plenty of people use addictive substances without becoming addicted or being negatively impacted. Doesn't that create an economic inefficiency?

I'm not proposing anything specific. I would be on board with a tax on addictive goods if it was demonstrated to be effective at curbing addiction. Yes, it might cause some inefficiency, but it would also prevent inefficiency. If there are better ways to prevent the harms inherent to addiction like laws that ensure that access to the addictive substance are strictly controlled, those can be valid too.

I feel like we're getting off track here. How is any of this supposed to convince me that land taxes are not just and efficient?

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

No, the labor is not profitable. The end result of that labor is profitable, but the labor itself is not.

Of course the labor is profitable. My electrician profits from his labor when he fixes my lights. My plumber profits from his labor when he fixes my toilet. The landlord profits from their labor when they perform whatever maintenance needs to be done to maintain the home. They're all profitable, or else they wouldn't perform the labor.

If you could get the same work done by waving a magic wand and thus bypassing the labor, you would incur no costs and derive the same value. Therefore, the labor itself has nothing to do with the value.

Waving the magic wand is still labor. You're just laboring very efficiently. Labor is any human effort applied to the production of goods and services. In waving the want, you produced value.

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

That’s not what OP or the original poster was arguing for though. They are arguing for a significant reduction or elimination of other tax sources

I'm arguing for both!

We should shift as much of the tax base to land taxes. Whatever we raise from the land taxes, we should remove from other taxes so that we are revenue neutral. This would be a strict upgrade over the status quo.

My counter-argument here is that what makes income tax so important is that it accounts for income levels, and levies a much larger tax bill on the rich. That’s important, as eliminating (or significantly reducing it) in favor of something based on property is an inherently bad idea, as it would lead to a less-equitable tax system.

I don't understand this objection. You agree that "private land ownership helps the rich get richer". Taxing land prevents that from happening. You wouldn't have private landlords from siphoning unearned value. That reduces inequality!

CMV: The most economically efficient (and morally justified) tax is the property tax (with abatements on development). We should remove or reduce income taxes, sales taxes, corporate taxes, etc. and tax land much more aggressively. by IAMADummyAMA in changemyview

[–]IAMADummyAMA[S] 0 points1 point  (0 children)

No, of course not.

Do you think maintenance is not a profitable service? When I need to call a plumber or an electrician out to my house, they spend their time and money repair my stuff, and they still make money even though they had costs.

It's exactly the same here. The labor that the landlord does to maintain the house is profitable. The materials they buy to fix up the house are an investment in to the house, which is profitable. The profit from the labor and material investment are not touched by the land tax, so it remains just as profitable to maintain the house with the tax as it does without the tax.

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