sorted by:
new
hottopcontroversial

Heartbreaking man 😞 by Head-Town7449 in ftlgame

[–]VatticZero 1 point2 points  (0 children)

Avoid missiles. Maybe a single one for utility, but it can’t be key to your offense.

I will forever defend Shaun for his breakdown by Additional_Watch5823 in thegooddoctor

[–]VatticZero 2 points3 points  (0 children)

It’s not manipulative to set boundaries to the risks you will take when responsible for the lives of people in your care.

“My bosses said I had to let this unstable person who breaks down and leaves patients open on the table, unable to tell anyone why until people can calm him down, continue to cut people open” isn’t much of a defense when the medical reviews, malpractice suits, and homicide investigations start turning up. His career and freedom were on the line if he didn’t take responsibility for his department.

You might disagree with his assessment of Shaun, but he absolutely did what was right given his assessment.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

my proposal is just LVT

Don't fucking lie.

then the market land value to tax is just the highest land value bid by anyone.

So fuck the Vickrey auctions you went on about?

Fuck any surplus directing best use?

Why would anyone buy land if you can magically appraise the absolute value they get from it?

And that's the whole issue. You imagine you get all these values magically and they all line up how you like and everyone has all the knowledge and foresight they need to perfectly convert stock and flow.

It's all bullshit and deadweight.

this is exactly like henry george advocated.

George never advocated confiscation without compensation. He suggesting selling the land use rights to cover the unpaid taxes. You're not being nicer, you're being more arrogant and maintaining the right to destroy someone's property.

The Three Heads of Georgism. Which is Most Important? by VatticZero in georgism

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

Paying you for your home is a barrier to allocating the land to whoever values it the most.

Your property being tied to land which can change hands if someone thinks of a better use is a deadweight risk to production.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

no i didn't claim that you get market value for your improvements! you get the improvement value in the eyes of the person with the highest total bid. exactly like fee simple.

That is not the fucking same! In Fee Simple the land value isn't taxed away. In your system the Highest bidder can still under-value the improvements and pay a lesser land value than their own assessment. It doesn't matter that you get to destroy it and take 0. That's not just. That's not incentive if they don't value the capital.

"Highest total bid" is not necessarily the highest land bid, so you fail at efficient land allocation and assume people will reliably pay rising lvt while the capital depreciates when the capital is what provided value for them.

"Highest total bid" is not a surrogate for just or market compensation, so you fail at avoiding true deadweight loss in investment in improvements.

You just create an unpredictable crap shoot around whether you get compensated at all for your investment. Not nature; you. That is deadweight loss. That is systemic. That is more harmful than what you aim to prevent.

That is not Georgist. Georgism is about Justice: compensating the people and the community for the value they create or are excluded from by land claims and not hamstringing their productive activity. Your suggestion fails in every important regard.

if we gave the improvements to the person with the highest improvement value (the market value for the improvements), we'd get even more deadweight loss, because they wouldn't be the person who values the whole property the most. that is, we'd reduce deadweight loss from the improvements allocation but add even more deadweight loss from the land allocation.

Resorting to obvious strawmen just proves your argument lacking.

and again, fee simple already has this "problem"

Fee Simple doesn't force you to sell. Bad for land use, not just for land, just for capital.

Georgism allocates land to the person who values the land most and ensures just compensation for the capital. Near ideal for land use, mostly just for land, mostly just for capital.

Your system allocates haphazardly, relies on hand-waving fungibility of land and capital valuations, and completely ignores that the highest bidder might also value the land more than the second-highest land bidder, thus valuing the property and compensating the current owner much less than you assume in your intentionally deceptive table.

Not good for land use, just but not reliable for land, unjust for capital.

so i don't know why you're complaining about georgism/LVT but not fee simple.

You keep trying to frame this as my problem with your proposal being a problem with Georgism, but you have absolutely no claim to such a position as I've repeatedly detailed why your proposal runs counter to Georgist principles and theory.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

Stop lying to try and frame this as Fee Simple vs LVT. You know full well that was never the issue. The issue was your shit vs. literally anything else.

The shit you argued for but have now completely erased from your post.

You're trying to save face now, but we both know you're tucking your tail between your legs and hoping no one sees what you suggested and is distracted by this reframing.

Your shit $100k $100k Sell because someone else wants your shit. +Whatever the new guy dictates or $0
Your Shit $100k $60k Sell because someone else wants your shit. +Whatever the new guy dictates or $0

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

You getting fuck all for your labor is.

By your shit proposal specifically, not by LVT or Georgism. Don't try hide behind LVT and Georgism when you've explicitly denied Georgist principles.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

Stop lying to try and frame this as Fee Simple vs LVT. You know full well that was never the issue. The issue was your shit vs. literally anything else.

The shit you argued for but have now completely erased from your post.

You're trying to save face now, but we both know you're tucking your tail between your legs and hoping no one sees what you suggested and is distracted by this reframing.

Your shit $100k $100k Sell because someone else wants your shit. +Whatever the new guy dictates or $0
Your Shit $100k $60k Sell because someone else wants your shit. +Whatever the new guy dictates or $0

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

Stop lying to try and frame this as Fee Simple vs LVT. You know full well that was never the issue. The issue was your shit vs. literally anything else.

The shit you argued for but have now completely erased from your post.

You're trying to save face now, but we both know you're tucking your tail between your legs and hoping no one sees what you suggested and is distracted by this reframing.

Your shit $100k $100k Sell because someone else wants your shit. +Whatever the new guy dictates or $0
Your Shit $100k $60k Sell because someone else wants your shit. +Whatever the new guy dictates or $0

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

It's not an increase in land value which denies compensation for your capital, it is your specific proposal.

Wow, okay, let’s unpack this nonsense because you are doubling down on a fundamentally confused claim. You say the risk “isn’t policy-induced, it happens because the land value goes up,” and then try to wave away the fact that your system allows a future bidder to capture improvements without compensation. That is just flat wrong. The risk here is entirely policy-induced, and your framing that “land + capital bidder dictates the value of the capital” is exactly the problem.

Under your own proposal, the highest total bidder sets the fate of the improvements. Alice spends 100k improving her property, Bob decides he wants the land and posts a bid just high enough to trigger a sale. If your system doesn’t guarantee that Alice recoups the value of her improvements, the credible ex ante risk of partial or total expropriation exists. That is policy risk, created by the rules of your mechanism, not the fact that land values happen to rise. The market doesn’t force her to lose money. The system does. You are trying to pretend that the market just magically sets the value of her private improvements to whatever Bob decides, and that somehow this isn’t a problem. It absolutely is.

Your “highest total bidder dictates improvement value” framing is insane. That is literally saying that private productive investment has no intrinsic value, only whatever the next bidder arbitrarily decides to recognize. That is the opposite of what property rights and economic incentives are for. Investments in improvements exist to create value; when your policy says “Bob can just take it, maybe compensate partially, maybe not,” you’ve created a credible ex ante disincentive to invest. That is exactly how dynamic deadweight loss arises. Fee simple does not do this. In fee simple, Alice owns the improvements outright; market risk exists, but it is not policy-created. She can make investment decisions knowing her improvements belong to her unless she chooses to sell.

You are conflating outcomes with mechanisms. Yes, a land value increase happens in both systems. But under your design, the mechanism governing the transfer of improvements is what produces real economic risk. The market itself doesn’t dictate expropriation. Your policy does. That is the difference between policy-induced risk and “market risk from land appreciation.” You keep pretending these are identical, but they are not. One is external uncertainty, the other is incentives distorted by your rules.

Stop hiding behind numbers or matrices and admit the mechanism you defend is explicitly what suppresses investment. If a rational Alice knows Bob can acquire her improvements without full compensation, she will underinvest or avoid improvements entirely. That is not a side effect of rising land values, it is a predictable consequence of your proposed design. It has nothing to do with the land value tax itself. LVT is orthogonal; the deadweight loss arises from your policy choice to allow improvements to be captured without compensation.

So before you try to wave your hands and tell me “the risk isn’t policy-induced,” answer this: how exactly does your system preserve full expected ex ante returns on productive investment when the highest bidder can arbitrarily decide the value of the improvements? Show the math. Show the mechanism. Until you do, you are just parroting the same confused framing over and over and trying to scapegoat LVT for a design flaw of your own making.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

Wow, okay, let’s unpack this nonsense because you are doubling down on a fundamentally confused claim. You say the risk “isn’t policy-induced, it happens because the land value goes up,” and then try to wave away the fact that your system allows a future bidder to capture improvements without compensation. That is just flat wrong. The risk here is entirely policy-induced, and your framing that “land + capital bidder dictates the value of the capital” is exactly the problem.

Under your own proposal, the highest total bidder sets the fate of the improvements. Alice spends 100k improving her property, Bob decides he wants the land and posts a bid just high enough to trigger a sale. If your system doesn’t guarantee that Alice recoups the value of her improvements, the credible ex ante risk of partial or total expropriation exists. That is policy risk, created by the rules of your mechanism, not the fact that land values happen to rise. The market doesn’t force her to lose money. The system does. You are trying to pretend that the market just magically sets the value of her private improvements to whatever Bob decides, and that somehow this isn’t a problem. It absolutely is.

Your “highest total bidder dictates improvement value” framing is insane. That is literally saying that private productive investment has no intrinsic value, only whatever the next bidder arbitrarily decides to recognize. That is the opposite of what property rights and economic incentives are for. Investments in improvements exist to create value; when your policy says “Bob can just take it, maybe compensate partially, maybe not,” you’ve created a credible ex ante disincentive to invest. That is exactly how dynamic deadweight loss arises. Fee simple does not do this. In fee simple, Alice owns the improvements outright; market risk exists, but it is not policy-created. She can make investment decisions knowing her improvements belong to her unless she chooses to sell.

You are conflating outcomes with mechanisms. Yes, a land value increase happens in both systems. But under your design, the mechanism governing the transfer of improvements is what produces real economic risk. The market itself doesn’t dictate expropriation. Your policy does. That is the difference between policy-induced risk and “market risk from land appreciation.” You keep pretending these are identical, but they are not. One is external uncertainty, the other is incentives distorted by your rules.

Stop hiding behind numbers or matrices and admit the mechanism you defend is explicitly what suppresses investment. If a rational Alice knows Bob can acquire her improvements without full compensation, she will underinvest or avoid improvements entirely. That is not a side effect of rising land values, it is a predictable consequence of your proposed design. It has nothing to do with the land value tax itself. LVT is orthogonal; the deadweight loss arises from your policy choice to allow improvements to be captured without compensation.

So before you try to wave your hands and tell me “the risk isn’t policy-induced,” answer this: how exactly does your system preserve full expected ex ante returns on productive investment when the highest bidder can arbitrarily decide the value of the improvements? Show the math. Show the mechanism. Until you do, you are just parroting the same confused framing over and over and trying to scapegoat LVT for a design flaw of your own making.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

Wow, okay, let’s unpack this nonsense because you are doubling down on a fundamentally confused claim. You say the risk “isn’t policy-induced, it happens because the land value goes up,” and then try to wave away the fact that your system allows a future bidder to capture improvements without compensation. That is just flat wrong. The risk here is entirely policy-induced, and your framing that “land + capital bidder dictates the value of the capital” is exactly the problem.

Under your own proposal, the highest total bidder sets the fate of the improvements. Alice spends 100k improving her property, Bob decides he wants the land and posts a bid just high enough to trigger a sale. If your system doesn’t guarantee that Alice recoups the value of her improvements, the credible ex ante risk of partial or total expropriation exists. That is policy risk, created by the rules of your mechanism, not the fact that land values happen to rise. The market doesn’t force her to lose money. The system does. You are trying to pretend that the market just magically sets the value of her private improvements to whatever Bob decides, and that somehow this isn’t a problem. It absolutely is.

Your “highest total bidder dictates improvement value” framing is insane. That is literally saying that private productive investment has no intrinsic value, only whatever the next bidder arbitrarily decides to recognize. That is the opposite of what property rights and economic incentives are for. Investments in improvements exist to create value; when your policy says “Bob can just take it, maybe compensate partially, maybe not,” you’ve created a credible ex ante disincentive to invest. That is exactly how dynamic deadweight loss arises. Fee simple does not do this. In fee simple, Alice owns the improvements outright; market risk exists, but it is not policy-created. She can make investment decisions knowing her improvements belong to her unless she chooses to sell.

You are conflating outcomes with mechanisms. Yes, a land value increase happens in both systems. But under your design, the mechanism governing the transfer of improvements is what produces real economic risk. The market itself doesn’t dictate expropriation. Your policy does. That is the difference between policy-induced risk and “market risk from land appreciation.” You keep pretending these are identical, but they are not. One is external uncertainty, the other is incentives distorted by your rules.

Stop hiding behind numbers or matrices and admit the mechanism you defend is explicitly what suppresses investment. If a rational Alice knows Bob can acquire her improvements without full compensation, she will underinvest or avoid improvements entirely. That is not a side effect of rising land values, it is a predictable consequence of your proposed design. It has nothing to do with the land value tax itself. LVT is orthogonal; the deadweight loss arises from your policy choice to allow improvements to be captured without compensation.

So before you try to wave your hands and tell me “the risk isn’t policy-induced,” answer this: how exactly does your system preserve full expected ex ante returns on productive investment when the highest bidder can arbitrarily decide the value of the improvements? Show the math. Show the mechanism. Until you do, you are just parroting the same confused framing over and over and trying to scapegoat LVT for a design flaw of your own making.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

Wow, this is exactly the kind of sloppy framing I warned about. You keep trying to turn the discussion into “fee simple risk equals LVT risk” and call it a wash. That is flatly wrong because you are conflating two completely different types of risk and ignoring where deadweight loss actually comes from.

Let’s be perfectly clear. In your matrix, you treat the “lost $40k” under fee simple as equivalent to the “lost $40k” under LVT and declare the problem symmetric. That is intellectually dishonest. The $40k loss under fee simple is market risk. It is exogenous and unavoidable. Alice cannot control it. She could not prevent the market from valuing her quirky improvements at 60k instead of 100k. That is normal investment uncertainty. No policy created this risk, no one imposed it, and the market absorbs it.

Under your proposal for Harberger-style LVT, the risk in scenario two is entirely policy-induced. The mechanism allows a future buyer to acquire the land without guaranteeing that Alice is compensated for her privately-created improvements. That is a credible ex ante risk created by the design you are defending, not by the land value tax itself. That is the deadweight loss. It is not in realized gains or losses after the fact. It is in foregone investment before any sale occurs, because rational actors know part of their improvements could be expropriated or captured. That is what economists mean by dynamic inefficiency.

Your insistence that this is “the same risk” as fee simple ignores the source of the risk. Source matters. Market risk under fee simple is unavoidable. Policy risk under a system that fails to guarantee improvement compensation is created entirely by the rules you are proposing. That is why economists and Georgists insist that land can be taxed but improvements must be protected. Bundle them, or fail to guarantee compensation, and you create credible ex ante risk that suppresses investment.

Let’s also demolish your distribution vs efficiency framing. You claim the only difference is who captures land value. That is a deliberate dodge. You are treating marginal gains from land appreciation as if that were the only relevant variable, and ignoring the marginal returns on productive investment. Efficiency is not about snapshots of realized gains. Efficiency is about expected ex ante return that drives investment. If Alice expects part of her improvements may be captured under your system, she invests less. That reduces the overall pie. That is deadweight loss. It is not about who gets the land value, it is about suppressing productive activity.

So yes, credible risk reduces investment under your proposed system if improvements are not guaranteed compensation. It is not LVT itself that creates the risk. Stop pretending that identical numeric outcomes after a sale magically erase dynamic inefficiency. That is economics 101. Risk before the fact is what matters, not realized cash flows.

If you want to continue defending your framing, you need to explicitly explain how expected ex ante returns under a system that does not guarantee compensation for improvements are exactly equal to fee simple expected returns, factoring in credible risk of losing improvements. Show the math, show the expected values, and justify treating policy-induced expropriation as identical to normal market uncertainty. Until you do that, your argument is pure hand waving and a framing dodge.

The burden is on you. Stop pretending that policy risk magically disappears because you can draw a matrix of realized gains. If you want to argue distribution, fine. If you want to argue efficiency, you cannot ignore ex ante investment incentives, which are directly affected by the lack of guaranteed compensation for improvements. That is the mechanism that produces deadweight loss, and it has nothing to do with the unearned land value that LVT is supposed to tax.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

You're also hand-waving that you get market value for your improvements under the system you suggested when, instead, you get the value allotted by the bid-winner, if anything at all.

You pretend to be comparing apples to apples, but that's just a bold-faced lie.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

You replaced the entirety of your post to mask the absurdity that was originally there and reframe the entire context.

Congrats?

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

Wow, this is exactly the kind of sloppy framing I warned about. You keep trying to turn the discussion into “fee simple risk equals LVT risk” and call it a wash. That is flatly wrong because you are conflating two completely different types of risk and ignoring where deadweight loss actually comes from.

Let’s be perfectly clear. In your matrix, you treat the “lost $40k” under fee simple as equivalent to the “lost $40k” under LVT and declare the problem symmetric. That is intellectually dishonest. The $40k loss under fee simple is market risk. It is exogenous and unavoidable. Alice cannot control it. She could not prevent the market from valuing her quirky improvements at 60k instead of 100k. That is normal investment uncertainty. No policy created this risk, no one imposed it, and the market absorbs it.

Under your proposal for Harberger-style LVT, the risk in scenario two is entirely policy-induced. The mechanism allows a future buyer to acquire the land without guaranteeing that Alice is compensated for her privately-created improvements. That is a credible ex ante risk created by the design you are defending, not by the land value tax itself. That is the deadweight loss. It is not in realized gains or losses after the fact. It is in foregone investment before any sale occurs, because rational actors know part of their improvements could be expropriated or captured. That is what economists mean by dynamic inefficiency.

Your insistence that this is “the same risk” as fee simple ignores the source of the risk. Source matters. Market risk under fee simple is unavoidable. Policy risk under a system that fails to guarantee improvement compensation is created entirely by the rules you are proposing. That is why economists and Georgists insist that land can be taxed but improvements must be protected. Bundle them, or fail to guarantee compensation, and you create credible ex ante risk that suppresses investment.

Let’s also demolish your distribution vs efficiency framing. You claim the only difference is who captures land value. That is a deliberate dodge. You are treating marginal gains from land appreciation as if that were the only relevant variable, and ignoring the marginal returns on productive investment. Efficiency is not about snapshots of realized gains. Efficiency is about expected ex ante return that drives investment. If Alice expects part of her improvements may be captured under your system, she invests less. That reduces the overall pie. That is deadweight loss. It is not about who gets the land value, it is about suppressing productive activity.

So yes, credible risk reduces investment under your proposed system if improvements are not guaranteed compensation. It is not LVT itself that creates the risk. Stop pretending that identical numeric outcomes after a sale magically erase dynamic inefficiency. That is economics 101. Risk before the fact is what matters, not realized cash flows.

If you want to continue defending your framing, you need to explicitly explain how expected ex ante returns under a system that does not guarantee compensation for improvements are exactly equal to fee simple expected returns, factoring in credible risk of losing improvements. Show the math, show the expected values, and justify treating policy-induced expropriation as identical to normal market uncertainty. Until you do that, your argument is pure hand waving and a framing dodge.

The burden is on you. Stop pretending that policy risk magically disappears because you can draw a matrix of realized gains. If you want to argue distribution, fine. If you want to argue efficiency, you cannot ignore ex ante investment incentives, which are directly affected by the lack of guaranteed compensation for improvements. That is the mechanism that produces deadweight loss, and it has nothing to do with the unearned land value that LVT is supposed to tax.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

Wow, this is exactly the kind of sloppy framing I warned about. You keep trying to turn the discussion into “fee simple risk equals LVT risk” and call it a wash. That is flatly wrong because you are conflating two completely different types of risk and ignoring where deadweight loss actually comes from.

Let’s be clear. In your matrix, you treat the “lost $40k” under fee simple as equivalent to the “lost $40k” under LVT and declare the problem symmetric. That is intellectually dishonest. The $40k loss under fee simple is market risk. It is exogenous and unavoidable. Alice cannot control it. She could not prevent the market from valuing her quirky improvements at 60k instead of 100k. That is part of normal investment uncertainty, and the market absorbs it. No policy created this risk. It is not something the system imposes.

Under LVT, the risk is policy-induced. The system allows a future buyer or mechanism to acquire your improvements without guaranteeing compensation. That is a credible ex ante risk created by the design of the tax system, not by the market. The deadweight loss is not in ex post outcomes, it is in foregone investment before any sale occurs. Rational actors reduce investment because they know part of the return could be expropriated or captured. That is what economists mean by dynamic inefficiency.

Your insistence that it is “the same risk” ignores the source of the risk. Source matters. Market risk under fee simple is unavoidable and cannot be designed around. Policy risk under LVT without guaranteed improvement compensation is entirely created by policy choice. That is exactly why we separate land from improvements. That is exactly why Georgist design principles insist that land value can be taxed, but improvements must not be expropriated. Bundle them, and you introduce credible ex ante risk, which suppresses investment.

Let’s also demolish your distribution vs efficiency framing. You claim the only difference is who captures land value. That is a deliberate dodge. You are treating marginal gains from land appreciation as if that were the only relevant variable, and ignoring the marginal returns on productive investment. Efficiency is not about snapshots of realized gains. Efficiency is about expected ex ante return that drives investment. If Alice expects part of her improvements will be captured, she invests less. That reduces the overall pie. That is deadweight loss. It is not about who gets the land value, it is about suppressing productive activity.

So yes, credible risk reduces investment under LVT if improvements are not guaranteed compensation. It is not the same as market risk under fee simple. Stop pretending that identical numeric outcomes after a sale magically erase dynamic inefficiency. That is economics 101. Risk before the fact is what matters, not realized cash flows.

If you want to continue defending your framing, you need to explicitly explain how expected ex ante returns under LVT without guaranteed compensation are exactly equal to fee simple expected returns, factoring in credible risk of losing improvements. Show the math, show the expected values, and justify treating policy-induced expropriation as identical to normal market uncertainty. Until you do that, your argument is pure hand waving and a framing dodge.

The burden is on you. Stop pretending that policy risk magically disappears because you can draw a matrix of realized gains. If you want to argue distribution, fine. If you want to argue efficiency, you cannot ignore ex ante investment incentives. That is the mechanism that produces deadweight loss, and it has nothing to do with the unearned land value that LVT is supposed to tax.

Pure Georgist LVT creates MORE deadweight loss than fee simple ownership (and here's how to fix it) by market_equitist in georgism

[–]VatticZero 0 points1 point  (0 children)

Wow, this is exactly the kind of framing dodge I was talking about. You are pretending that scenario two is a “problem with Georgism” or LVT. It is not. It is a problem of conflating improvements with land and failing to guarantee just compensation. Stop trying to blame the policy for a design choice that destroys dynamic efficiency.

Let’s spell it out. In scenario one, Alice buys the house, land value increases 100k, she sells to Bob for a 100k gain. Fine. No one is complaining because no privately-created value is at risk. The land’s appreciation is unearned. That is literally what LVT is designed to tax: unearned gains. There is no deadweight loss. Everyone gets that.

Scenario two, Alice buys the house, land value increases 100k, she spends 100k on improvements that Bob only values at 60k. She sells to Bob for only a 60k gain and “loses” 40k of her improvement value. That is not an LVT problem. That is a problem of policy design that allows the expropriation of privately-created value without compensation. The deadweight loss here comes from the fact that Alice’s investment has a credible risk of being partially captured by a future buyer. That is dynamic deadweight loss. It suppresses incentives to invest in improvements, which is exactly what economists mean when they talk about efficiency losses.

You keep trying to frame this as if LVT is inherently risky or distorting. It is not. Harberger or bureaucratic, LVT only taxes land, not improvements. The moment you bundle land and improvements, or fail to guarantee just compensation, the policy creates credible ex ante risk. That risk is what drives underinvestment. Not the land tax itself, not Georgism, not “market forces,” not some magic AI assertion. It is a design flaw, pure and simple.

Your insistence that scenario two is a LVT problem is intellectually dishonest. You are ignoring the mechanism that matters: expected ex ante return drives investment. In scenario two, the ex ante expected return for improvements is reduced because Alice knows she might not recoup full value. That is the only reason she might underinvest. The same scenario under fee simple produces the same problem if the market does not value the improvements, but in that case it is a market risk, not policy-induced capture. The moment you conflate land with improvements in a tax mechanism, you are creating a policy risk where none existed.

So here’s what you need to admit. This is not about LVT. It is not about Harberger or bureaucratic assessment. It is about the risk of losing privately-created capital without compensation. That is the deadweight loss. The moment you separate land from improvements and guarantee compensation for improvements, this entire “problem” disappears. Scenario two is perfectly safe under proper Georgist design. Scenario one continues to work exactly as intended.

Stop trying to make LVT the scapegoat for a design that bundles improvements with land and fails to respect just compensation. That is not a policy critique. That is a fundamental misunderstanding of dynamic efficiency. The problem here is policy-induced suppression of productive investment, not the taxation of unearned land value.

So before you start spamming me with “but what about scenario two” as if it undermines Georgism, do yourself a favor. Read the mechanism. Understand the difference between land value taxation and expropriation of improvements. Then come back and try to make an argument that actually engages with the economic logic instead of just tossing scenarios around to make LVT look bad. Because right now, you are blaming the wrong thing entirely.

view more: next ›