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Does Georgism work? Five years later

233 pointsby 1d agoastralcodexten.com
142 comments
6h agoHN ↗

"Doing policymaker's work for them" is something like 80% of lobbying.

If you have something you want done in your town, and you come with the work done AND not asking for funding, you're likely to get it.

If you come with the work done and a PLAN for getting the funding, you also have a good chance of success.

5h agoHN ↗

Unfortunately, most of the political changes that I want to see go against some special interest. Examples include liberalizing professional licensing, reducing medical paternalism, and streamlining the litigation system. I can think of a zillion ways to do this, but every one of them cuts out some toll booth with concentrated benefits and diffuse costs, and our political system is not capable of dealing with such things in a reasonable way.

I am very open to be told strategies to fight this more effectively without becoming a full time career activist for years on end for one issue at a time.

3h agoHN ↗

The OP is saying, if you show up with a bill to fix one of these problems, in a scoped way — like, actual working text they can put to a vote, not a general ideal of what to do — and can explain exactly what you're trying to solve, you have a decent chance of them putting it on the floor.

Just in general saying "please fix professional licensing" isn't actionable, you aren't doing the work for them. You're asking them to turn a vague idea into law, when it wasn't their problem to start with.

3h agoHN ↗

You can do the work, but what is it worth if the competition is a very generous campaign donation in exchange for keeping the status quo

2h agoHN ↗

I think the challenge is that when such things get to the floor, you find out that special interests kick in with ad campaigns or backroom deals.

1h agoHN ↗

Have you tried?

I'm not saying this doesn't happen, but probably 80% of the value of lobbying comes from just showing up and talking to the representative. You won't know what works, unless you do the same.

5h agoHN ↗

I think LVT does have a history in US, e.g Pittsburgh.

Also Georgism is 100% LVT -> A land tax alone has been the recommendation of many economists before and after George - From Smith, Riccardo, Mill to Friedman. Across classical, neoclassical, Keynesian, Austrian schools. If there's one thing economists can agree on, it's that land tax is better than income tax.

5h agoHN ↗

Random thought, would be it be good to extend land tax to use of all common public goods. E.g. radio frequencies, mining, water, CO2 pollution. Things you own, licensed or consume that take from the common good. Obviously this need constant tweaking E.g. as new tech makes different things valuable.

5h agoHN ↗

Yes, pricing negative externalities is a good idea. Unfortunately some are more or less expensive to price/enforce

5h agoHN ↗

Yes, it's been suggested that all scarce inputs to the economy should be taxed. And yes the idea of Georgism is to let market set the prices and tax based off of that.

It does become complicated when the scarce inputs are things like highly specialized labor. Georgism wouldn't tax that monopoly, though our current systems (progressive income taxes) do. Many people would want a system which penalizes businesses for buying up e.g. all the veterinarians in a city and charging monopoly prices.

5h agoHN ↗

Many people would want a system which penalizes businesses for buying up e.g. all the veterinarians in a city and charging monopoly prices.

As powerful as taxes are to create change, you don't need to use them to solve every problem out there.

3h agoHN ↗

Georgism is not about scarcity, it's about economic land: inputs to production which are fixed in quantity, and that you can't make more of. This is a very different characteristic than scarcity, because many scarce things can be increased, and should be if they are needed.

Taxing specialized labor goes against that spirit, because specialized labor can be created. And in fact taxing the labor would result in less of it being there, the exact opposite of the optimal result.

1h agoHN ↗

Yes, the right generalization of Georgism is the taxation of economic rent in its various forms - something which George himself opposed.

2h agoHN ↗

Doesn’t the veterinarian own their own skills, after having spent decades in school to learn them (and perhaps being saddled with student loans to do so?)

What if they just moved? Or should we have US-style global taxes following them around even then?

1h agoHN ↗

Monopoly busting doesn't need to be solved by the tax system, right? Isn't that a separate issue?

Although, maintaining a monopoly by owning land becomes more difficult with a LVT. It theoretically becomes easier for a new vet to find a place and setup shop in the city, and then the Monopoly is busted.

5h agoHN ↗

The good news is that as different things become valuable their value changes, I guess? So if radio frequency stops being useful, the LVT put on it also drops pretty hard.

The bad news is now you have to assess the value of a lot more things in order to do this (the value of clean waterways in a certain state, the value of IP taken away from the common culture) that may not have a direct market value.

5h agoHN ↗

How does one even put a direct financial value on clean water, clean air, lack of noise pollution, etc.?

These things have different values to different people. While most everyone wants them in some form, there is a huge spectrum between “it won’t kill me this month” and “living in pristine Mt. Fuji”.

Should private companies be allowed to pollute sparse remote areas with no population?

Does it have a financial value if nobody goes there?

2h agoHN ↗

I mean — valuing things is not always that hard: how much are you willing to take to go without?

5h agoHN ↗

Other replies supporting taxing externalities and scarce resources are correct, but it can be generalized as taxing undesirable behavior to disincentivize it.

4h agoHN ↗

The generalization I would use is that governments should tax any scarce resource based on the amount of revenue it should produce if used effectively, rather than the revenue a given consumer can actually produces. Whether that is land, radio spectrum, or clean air.

“Undesirable behavior” is overly broad to the point of being actively misleading, and gets you into sin taxes. smut or drugs are not the scarce resources anybody is talking about here.

4h agoHN ↗

Not misleading. Rent-seeking is an undesirable behavior, and it's the primary behavior a land value tax targets. Hoarding limited resources is an undesirable behavior. Making products that have negative environmental impacts is an undesirable behavior.

3h agoHN ↗

But that is what the land tax folks are doing. They want dense cities and transit. They tax the "undesirable behavior" i.e. parking lots and lower density usage.

3h agoHN ↗

You're kind of describing two different ideas: pigouvian taxes, and taxing The Commons.

What both have in common is that economists from all different schools of thought widely agree that they're the least distortionary taxes.

5h agoHN ↗

It's the tax with the most positive impact AFAIK, especially when the other taxes are removed or at least adjusted accordingly.

But it probably is also a cooperation problem, thus we prefer a slow but accelerating apocalypse.

All these graduates need some value from their education after all, and if we reduce doing actively harmful things like the current tax system, others will be superior to us by transforming resources more quickly into waste.

Since the latter process is extremely profitable, and again, so many people have education in optimizing the resources->money->waste pipeline, it would be a luddite and anti-science thought to listen to the science and stop this.

Apart from that, there's a very common and profitable way of getting yield from people's everyday life while also rewarding them: cars.

Live somewhere, but everything you do requires a vehicle.

You'll see so many beautiful places.

But you also have to rant about the evil urban population that pays for your car, gas, roads, parking space and special subsidies.

It would be unlivable out there in the wilderness without this totally natural subsidization.

5h agoHN ↗

There was also a community in the deep south. And I once read a case study about a town that tried it in, IIRC, New Mexico.

Full LVT never works. It always ends up shot through with exceptions and loopholes and, in the case study, inducing corruption. And it's all predictable, too, if you know anything about taxation policy and American political culture. For full LVT you'd need to start from a blank slate, not just from a legal perspective but from people's expectations about property ownership.

49m agoHN ↗

An analogy just occurred to me. Imagine an income tax not on what you currently earn, but on what you could earn given your schooling, credentials, experience, etc, and the available jobs within your region. Imagine how utterly unfair people would feel about that, and how quickly such a scheme would fall to widespread political pressure.

I get why an LVT makes sense from an economic perspective, but in practice it feels nearly as unfair as the above. Residents especially, but small and medium sized businesses would very quickly lobby to eviscerate an LVT. Imagine long-time residents getting kicked out not because a developer wants to make buck, but because the tax system requires that to happen. There's zero chance such a scheme could survive intact politically. In Pittsburg it's an LVT in name only, with a long list of exceptions and curious appraisals. And once it's applied ad hoc, which it must, there's all manner of distortions and incentives for corruption.

There are many ways for land use and tax policy to improve, but you have to come at from the perspective of improving the existing system, not revolutionizing it with an LVT. And you could probably get closer to an LVT by smart incremental reform than you could by trying to nominally pursue an LVT.

5h agoHN ↗

The fact that economically right wing economists like Milton Friedman supported LVT is a great argument against landlord type labelling LVT as far-left and attempting to push the idea outside the Overton window. I think the only valid argument against is it is that a significant LVT would punish those who've worked for their wealth as they've already paid significant income tax. But there are plenty of ways to introduce it gradually. Other arguments boil down to vested interests when I dig into it.

5h agoHN ↗

You can say that land tax might be better than income tax but it's hard to argue that both land tax and income tax is better than just income tax. This is the biggest reason why new tax modalities are considered unworkable.

5h agoHN ↗

I think land + income is better. It's what I have where I live, and I'd like to see the balance shifted more towards land.

4h agoHN ↗

This presupposes a balancing, when in reality it only ever goes up, and when it goes down it leads to lapses in services where the bill comes due later, with interest

4h agoHN ↗

We already have property tax + income tax, and property tax is land value + value of improvements. From TFA, the immediate proposal is just allowing the property tax to assess the land value and value of improvements at two different rates, with the rate on improvements decreasing to remove incentives against improvements.

3h agoHN ↗

Does a parking lot in Manhattan pay the same cost per acre than a 50 story apartment block does?

3h agoHN ↗

Author of TFA certainly argues that land and income is better than just income.

3h agoHN ↗

Personally I’d rather Land tax revenue be distributed evenly as a citizens dividend, and separate from the taxes leveed to make the society which allows people to have income and wealth.

Those who use their fair share are no change, those using more see taxes go up, those using less see a rebate.

The more valuable Land a business uses the more they have to pay, encouraging more efficient utilisation. Their competitor using less Land has lower taxes and can thus out compete them.

Land of course isn’t just dirt, it’s any limited natural resource.

4h agoHN ↗

I think LVT does have a history in US, e.g Pittsburgh

Yeah, I looked at the map in the article and thought, wait a minute, why is Pennsylvania not colorcoded if Pittsburgh has a land value tax? So the map is only showing states that do? I didnt know there were any states that tax land. But do remember being confused when I moved to Pittsburgh by there being two separate taxes - for land and for property.

I also think that the pittsburgh example shows that LVT is meaningless. All homeowners care about here is their total real estate tax. How it is split between land and property nobody pays attention to.

3h agoHN ↗

All homeowners care about here is their total real estate tax. How it is split between land and property nobody pays attention to.

Right, because there's already a home on the property.

Anyone who owns a parking lot or vacant lot, will care very much about the split.

3h agoHN ↗

If there's one thing economists can agree on, it's that land tax is better than income tax.

This is overstating the case by a lot. There is a lot of discussion about land value taxes being efficient for various means, but there are far fewer economists who would suggest that 100% LVT is a good idea.

It just wouldn’t be popular. It would instantly get filled with holes and exceptions and distorted until it tries to approximate something else.

Some of the high level economic features that 100% LVT advocates want, like forcing people out of their properties when they become too valuable for other uses, are actually extremely unpopular with people who actually live in homes. You would get a wave of cases where grandma got pushed out of her forever home because the LVT got too expensive and a developer bulldozed it to build a strip mall instead. Under the economic model this is a good thing because the land is being used for its best value, but people actually hate this stuff.

Land value taxes are also really bad at progressive taxation. The hardcore LVT people think this is a good thing because they talk about taxes as “disincentivizing extra work” but we all know that taxes have never stopped people from earning money. Going full LVT puts us in ridiculous situations where someone who earns $500K for a tech company but works remote from a luxurious house somewhere where land is not valued much will pay almost nothing in taxes, but a family with modest income who works a trades job (which generally requires being close to a population center) will have to live in some form of housing subject to very high taxation, therefore paying a lot in taxes.

If you still don’t see it, imagine the outrage when people realized that some billionaires are barely paying more in taxes than a family of four in a modest house in a city where land is valuable.

The more you read about Georgism you more you realize how it’s not as popular with economists as it’s portrayed. There is valuing in taxing land, but we already do that! The debates about eliminating other taxes and replacing them all with LVT is something else, and it’s not universally popular at all.

2h agoHN ↗

there are far fewer economists who would suggest that 100% LVT

Yeah that's the exact distinction I was drawing. The article says Georgism but talks about land tax in general, which is popular with many non-Georgist economists.

However, I have to take issue with your example

1) Land is effectively nationalized under 100% LVT. Worker likely own (the profits of) more land than before

2) The value of the land where the tradesman works is already used against him, to extract the majority of hte profits of his labor. He already pays the land value tax - to his landlord. From his perspective, the burden changes little while the wealthier lose an avenue to make money without working.

3) A luxurious house / lifestyle still requires paying land tax on the things you consume (the land of course and notably energy sources, minerals, timber, building materials, etc). The kind of spartan lifestyle required to truly avoid this tax works now too - incorporate as a company and don't pay yourself a salary.

4) I think very few people care about a $500k salary tech workers, or footballers, or what have you. It's the billionaire oligarchs influencing politics who attract the most attention.

5) Current day oligarchs derive a lot of their wealth from land and other monopoly rents, not from simply 'working more' or 'contributing more value'. This is resented by many. When people get rich by contributing (relatively more) value, they are usually widely praised

5h agoHN ↗

I’ve since learned that overly online keyboard warriors are the least important people to convince. The most important people are on your local city council or state legislature. Furthermore, instead of wasting time with hard cases or elected officials who are dead-set against your ideas, you’re much better off finding and working with people who are already interested in your principles. This often means giving up on your own city or state, at least for the time being, and pursuing a “succeed anywhere” strategy instead.

We're about to have a board vote eliminating single-family zoning (I expect us to win) and this rings extremely true about local politics. If you count "votes" in Facebook comments --- Facebook is where all our local politics happen --- you'd think this is the most contentious issue in the world. But in our last mayoral election, you'd draw the same conclusion about the race being tight, and in fact the progressive rinsed the moderate by a huge margin.

The same thing is very true of public meetings; the turnout for comment at those things is almost never representative of the area's median sentiment. "No" turns out for everything; "yes" rarely does.

I spend a lot of time in online arguments with opponents, on the theory that I'm not really writing to the person I'm arguing with but rather to everyone quietly reading comments. But it's almost certainly the case that the only conversations that have really mattered have been with electeds themselves.

5h agoHN ↗

Which is maddening, given how much damage these existing policies are doing, and how many other zeitgeist issues (homelessness, affordability, robust economic growth etc) are downstream of this.

I wonder if this movement needs a form of performative extremism somewhere (think bridges being forcibly closed for causes), so that then the mainstream notices the sensible compromise and pushes for it. The YIMBY's have never played Overton Window games, but maybe they need to hold their nose and play it.

4h agoHN ↗

think bridges being forcibly closed for causes

Has irritating the Average Joe ever resulted in political support from Joe? I can't help but think that these guys sitting in front of traffic, forcing normal people to be late for work, are just doing damage to their own causes, in hopes of just getting some "visibility" to those causes. Yea, it's visible now--visible as something annoying and ultimately counterproductive.

4h agoHN ↗

Local politics are very different, especially in responsiveness, to state and national politics.

4h agoHN ↗

Famously sit ins and marches across public streets and bridges did some work for the civil rights movement, but they were certainly not popular with the locals either.

4h agoHN ↗

Parent is not claiming that protesters generally gain support for their own cause. Parent claims that protests shift the Overton Window such that more reasonable stances can fall within and gain support.

4h agoHN ↗

Yes. Thank you. And actually, when you have a non-politically charged conversation offline with some of the political operatives that cause these bridge shutdowns, they will admit that this is their goal as well. They know it's ragebait, but bait nonetheless.

3h agoHN ↗

as a general case yes, people like things more the more times they hear about them.

trump constantly doing annoying stuff for instance, was good for him getting elected.

visibility correlates positively with likeability

4h agoHN ↗

The same thing is very true of public meetings; the turnout for comment at those things is almost never representative of the area's median sentiment. "No" turns out for everything; "yes" rarely does.

That’s the exact opposite of the experience I’ve had in my town.

It seems that money is the primary driver of turnout at town council meetings. I live at the top of a mountain with 1 real road and 2 smaller frequently closed roads down to the city below. Developers really want to build up here, but there’s no way to widen the road, and no realistic way to build more. There’s not enough flat land to build enough jobs, shopping, dining etc… up here, so increasing density just means more cars making the trip 30 minutes into the city.

Every single time there’s an issue about development, you get dozens of real estate agents, developers, and people who work in construction showing up because their bank account depends on it. Every local election, you have candidates bankrolled by out of town developers.

“No” is much less well organized and will only occasionally turn out in larger numbers than “Yes” despite dominating in elections.

4h agoHN ↗

People say the same things here, where I know them not to be true, but I don’t know anything about your municipality. I know what the social science says about this, and the common sense intuition that never occurs to people to turn out in favor of apartments they’re not going to live in, but does occur to people who want to stop it. Your mileage obviously varies.

4h agoHN ↗

I'm betting the developers are for single-family homes not apartments. The only NIMBY I'm for is anti-SFH.

3h agoHN ↗

High density is more profitable for developers, they have no interest in supporting SFH zoning.

2h agoHN ↗

I know that not to be true in my area as well.

2h agoHN ↗

cost per unit actually goes up as buildings get larger, so it really depends on the market. i don’t really know any developers who actively oppose upzoning in my region, but the SFH builders I think have an easier and more lucrative job than the ones doing urban infill.

2h agoHN ↗

and the common sense intuition that never occurs to people to turn out in favor of apartments they’re not going to live in

That ignores all the people who have other incentives to build.

Depending on the area you probably have about 10% of the people who have jobs that directly benefit from new construction (construction workers, plumbers, electricians etc…) or who are married to people who do. Then you have all the people who work or own businesses in sectors that indirectly benefit from new construction or directly benefit from increased density.

In my town of 8k people, I’ve seen 30 people from those groups show up in support of a new sub division vs half a dozen against.

3h agoHN ↗

Are there any public meetings with the developer stepping up and saying “I need to make money, please approve!”. That seems… counter productive

3h agoHN ↗

It’s usually them saying something more like “this will bring jobs”, “growth is inevitable” etc…

3h agoHN ↗

And by jobs what they mean is that they will import labor to build housing you can't afford in your neighbourhood.

3h agoHN ↗

A new house makes every other lower quality house cheaper by providing an alternative. What matters is the total supply of the houses as good or better as the one you want.

2h agoHN ↗

Assuming a perfectly efficient market sure. But in reality an expensive house next door raise the price of the cheap house next door because home prices are heavily influenced by the amount banks will loan, and appraisals are heavily influenced by nearby property values.

Plus other reasons like people want to live in good school districts and higher income areas tend to have better schools.

2h agoHN ↗

This is well studied, and I don't believe that's true: a luxury development _reduces_ rents in the immediate surrounding area.

3h agoHN ↗

But it's almost certainly the case that the only conversations that have really mattered have been with electeds themselves.

General public debates with people who disagree do matter a bit because the electeds must believe that there is a group of people who will stand up and defend them (convincingly) from pressure if they take action. A certain amount of background buzz is indirectly helpful.

But yeah, seriously attempting to convince keyboard warriors or hard opponents is a complete waste of time. There often aren't a lot of them and once someone has spent enough time on a topic to adsorb most of the arguments then there isn't any reason to expect them to change their mind later on. Persuasion is for people who haven't formed a clear stance yet and there are occasional rare wins when someone changes their mind although it shouldn't be counted on.

3h agoHN ↗

But yeah, seriously attempting to convince keyboard warriors or hard opponents is a complete waste of time.

Especially since these days it is entirely unclear whether a given keyboard warrior is actually a human being at all.

3h agoHN ↗

id guess the arguments you had to convince non-existent readers also helped make a stronger case to the electeds?

2h agoHN ↗

I haven't read anything about Georgism that would specifically argue for or against single-family zoning. I own a single-family house, I already pay high property taxes, and I pay high income taxes. I think it would be more fair to me and everyone else to drop both, and tax the land my house is on, even if that came out to the same amount of tax I paid per year. If that tax was used to provide a UBI to people who don't own land, great. And I'm fairly conservative. I don't think this aligns as a modern progressive or conservative issue.

That all being said, I find expropriation to be loathsome, and I think the movement to destroy single-family zoned neighborhoods is a species of evil that borders on satanic.

2h agoHN ↗

That all being said, I find expropriation to be loathsome, and I think the movement to destroy single-family zoned neighborhoods is a species of evil that borders on satanic.

Isn't restricting what people can lawfully do with their own land a form of expropriation?

2h agoHN ↗

Isn't restricting what people can lawfully do with their own land a form of expropriation?

Imagine you own land subject to a restrictive covenant. The restrictive covenant might actually have positive value to you – if the entire neighbourhood has a restrictive covenant prohibiting certain land uses, that gives your neighbourhood a character, people are willing to pay for the character the covenant enforces – maybe the existence of the covenant was actually a factor in convincing you to purchase this specific property. Suppose a legislative change invalidates the covenant – that's the government taking away from your land something you value about it. Isn't that an expropriation?

And I don't think there is a fundamental logical difference between a restrictive covenant on the title, and zoning as a government-imposed land use regulation. Some buyers choose a property because of its zoning, its zoning is something they know about and value; if the government changes the zoning, and that takes away from their property something they valued about it, isn't that an expropriation?

Note, I'm not arguing that removal of zoning and restrictive covenants is always wrong – maybe sometimes it is the right thing to do, all things considered. I'm simply arguing against the position "land use limitation = expropriation, removal of it = not expropriation" – even if something is expropriation, sometimes expropriation is justifiable

2h agoHN ↗

I mean, I personally loathe the concept of HOAs so the government abolishing them sounds like a wonderful thing to me.

And if you just buy a property and don't actually make this agreement, I definitely don't see a problem with abolishing it. We're talking about the government telling you what you can do with your land, and then stopping doing that.

2h agoHN ↗

Real property is a bundle of rights in land and its fixtures – that's the standard definition in academic legal theory

If there was already a zoning or restrictive covenant, and you knew about that when you bought the land – then the ability to do with the land what that zoning or covenant prohibits is not part of the rights to the land you acquired, and the enforcement of that zoning/covenant isn't denying you any of the rights you paid for.

Besides that, private property is (almost always) a creation of the government. [0] I own a house. If I trace the chain of land titles, it ultimately ends in a government land grant; the government got it by stealing it from the Indigenous people. The government land grant was issued on the condition of obeying the government's laws as in force from time-to-time. You can't sell what you don't own; the original land grant recipient didn't own the land independent of that condition, so none of the subsequent purchasers could either. So the government restricting my ability to use the land I purchased isn't an infringement of any of the rights I actually paid for.

[0] I live in Australia; under Australian law, "native title" is considered to pre-exist Australia's current British-imposed system of governance, but all other land titles derive their legal existence from being created by that system; I don't think the situation in the US is fundamentally different, all non-Indigenous US land titles derive from action of the state or federal governments, or the colonial governments, or the Mexican or Spanish or French or Dutch or Russian or Hawaiian governments

2h agoHN ↗

It really doesn't have much to do with planning or zoning, I imagine it predates that. A lot YIMBYs are also georists but a LVT wouldn't really address issues created by planning.

Zoning and planning distorts land values so georgism alone won't solve land use problems. E.g. Demand for land with fewer property rights (such as single family zoning, or a heritage restriction) will be lower than the site next to it that allowed building a 200 floor residential tower. In turn its land value will be lower.

It might still yield a high rent tho, but maybe not more than a new well maintained apartment.

48m agoHN ↗

A lot YIMBYs are also georists but a LVT wouldn't really address issues created by planning.

It wouldn't directly address those planning issues, but it aligns the financial incentives of the body politic between residential homeowners and the rest of the community. Normally residential homeowners have huge financial incentive to make housing scare and expensive, the LVT removes that financial gain from causing misery.

2h agoHN ↗

the movement against SFH zoning is not about destroying single family zoned neighborhoods, it’s about not forcing every lot to require a SFH. i’m not sure how your comment on expropriation was meant to read, but SFH zoning itself is more of a taking. people who want to live in a single-family-only neighborhood should find a spot on the edge of town where development pressure is low, not weaponize land use regulations to make it illegal to build what the market wants near jobs and amenities.

and while an LVT doesn’t really care about zoning, depending on how close to a city center your SFH is, a well calibrated LVT might dramatically increase your overall tax burden even if you dropped all other taxes. SFH zoning is manufactured scarcity; LVT prices scarcity correctly, and there’s no upper bound on that value, especially since land taxes become divorced from income.

1h agoHN ↗

> i’m not sure how your comment on expropriation was meant to read

I should have clarified that. I meant it in the context of Georgism. The concept of Georgism was manifestly against the government actually redistributing owned land; instead, landlords would divest themselves of the land if the only utility they got from it was rent. What Georgism says you're paying for when you pay LVT on the land you own is the exclusive right to private use of that land, which comes at the expense of everyone else who doesn't "own" (or essentially, lease) the right to live on it or build on it.

Georgism distinguished between ownership by individuals for productive use and ownership by either (a) individuals for rent-seeking or (b) governments as stewards.

You may be right about LVT pricing scarcity where I live winding up higher than my current tax basis, but even that would make sense since I have to earn a lot and therefore pay inordinate income tax to have the ability to live in a single family home near to a city center already. If where I lived were less important to me, under Georgism, I could simply move to the burbs. But there is a funny corrolary to that which Georgism seems to intuitively grasp and which is orthogonal to the argument between manufactured scarcity and progressive housing policies. (And maybe this is a gap in Georgism's argument):

I live in inner southeast Portland, Oregon. Along all our east-west avenues there are tons of Amazon boxes (what we call studio / one bedroom 4-6 story cheaply constructed wooden apartments with a patina of modern amenity). And tons of local businesses. Between the major arteries it's almost all single family homes. This makes it one of the last cities in America where you can live in a SFH within walking distance of everything, including downtown. Street parking is still free here, and a lot of people don't need a car at all. I live in an SFH within two blocks of apartments where the waiters and bartenders and shopkeepers live who work at the businesses on the avenues. It's truly mixed use. However, they've now rewritten the zoning law to allow tearing down houses as small as mine (1200 sqft) and replacing them with 4-plexes. The problem with the Amazon boxes is that they don't provide room for families. No one is building 3 bedroom apartments with a yard where you can raise your kids in the city. My Dad grew up in a shared row house in Baltimore. No one's building that.

Which gets to the heart of the matter, which is that a major reason that this city and this area are so desirable is precisely because those SFHs exist between all the major streets. The spending value (and social value) of the essentially middle class people who are willing to buy a house where they don't need a car and want to raise their family in the city center is widely overlooked by people campaigning to eliminate SFH zoning; but without those people, you end up with neighborhoods where everyone is under 30 and relatively transient, without much money to spend in the local economy or any deep ties to the place. The apartments decay, and most of the work reasons for living there disappear.

Eliminating SFH zoning is an opinionated, political form of slow redistribution that preferences a certain age group and a certain socioenconomic position over others. It reduces actual diversity, and produces monocultural places like Seattle and Santa Monica where only the very rich can raise a family in town, and everyone else is a young renter.

And here's the kicker where Georgism may be right: In the end, eliminating SFH zoning only redistributes property from individuals and families (like me) to corporate landlords.

1h agoHN ↗

i appreciate the thoughtful response, and the fact that it’s rooted in a desire to maintain some element of diversity.

i’d play your observation back at you though: there’s more than just young renters and nuclear families in terms of household typologies, and nearly all of the other ones (childless couples, empty nesters, older singles aging in place) would also benefit from ownership (or “rooted”) housing opportunities that things like a quad would provide in these neighborhoods. household size across the US has been shrinking for decades, and there is truly a lot of demand for smaller homes at all stages of life. instead of looking at the quadplex in the SFH neighborhood as a way for “young renters” to displace families out of the neighborhood, it’s an opportunity for other households to take root or make a life transition without having to leave.

if quads in SFH neighborhoods are just being overrun with young transient renters, it probably means there’s not enough “amazon boxes”, and may be related to broken zoning at the upper end of the spectrum.

also, this is all without saying… it is entirely possible for children to be raised in a home that is not a detached SFH! it is certainly a preference for a lot of people, but it is not a hard requirement. and missing middle buildings like the 2/4/6 plexes are some of the best non-SFH buildings for doing that, where you can more easily have 2-3 bedrooms and some sense of a yard.

36m agoHN ↗

I think we largely agree on the fact that SFHs should not be the only option for young families or empty nesters or aging couples. (As an aside, all of the above live in SFHs on my block, as well as young single renters in their 20s who share SFHs as roommates). I brought up Baltimore rowhouses for that reason. My Mom grew up in a duplex in LA with a backyard... my brother is raising his own kids in almost an exact copy of that duplex.

I'm not sure what you mean about the lack of new construction of that type coming from broken zoning at the upper end of the spectrum. Maybe uou could elaborate. The upper end of the spectrum in Portland is... almost everyone with money moves to either the oldest exclusive homes in one of two very non-diverse neighborhoods (Laurelhurst or the West Hills), or else they move to the exurbs and build McMansions out in the farmland. Neither is really actively engaged in a community beyond a homeowner's association, and neither is walkable or a place where people of different economic and cultural backgrounds get to interact for everyone's benefit.

So maybe what I'm trying to say is that the high upper end (homes over $1M, let's say), is going to remove itself anyway, and that yes there should be more construction of 2-4-plexes which are not Amazon boxes... but there seems to be no incentive to build those things, and I don't even know how you could do so on a 1200 sqft lot.

In the interim, Portland has eased lots of rules on the use of ADUs and trailers in backyards and even yurts. I bought my home for $450k and the range in the area goes up to $800. This tells you that what I'm arguing for is a working middle class that should have access to living in the city with a modest back yard.

But I do feel like the crusade against SFHs has a distinctly classist, anti-middle-class, anti-family quality to it... and what I mean to say is that it is the working middle class families in the upper end of housing on those avenues who anchor those blocks and keep the neighborhoods livable and loved and who keep the businesses in business. I've seen what's happened to such inner city SFH neighborhoods in Los Angeles, and it turns into somewhere that no one would want to live if they didn't have to, with no community or neighborhood to speak of. Row houses and shared brownstones in East Coast cities have fared slightly better as an attractive living pattern.

Ultimately too, your argument is that not everyone should live where they live, because more people want to live in that spot, so if they want space they should move to the suburbs. My argument is that not everyone can afford to live exactly where they want, either way, but that doesn't logically imply that you should increase density as much as possible in a mixed and vibrant neighborhood just because people want to live there. At a certain point it will lose the very thing that makes people want to live there in the first place. Not even to get into the fact that no one actually works downtown anymore or commutes away from the neighborhood, so this is purely a choice for most people.

You still didn't address my point that every SFH torn down for a 4-plex just redistributes individual middle class ownership to financial corporations.

2h agoHN ↗

you’re much better off finding and working with people who are already interested in your principles

after five years in the trenches of local housing/urban policy in my city, this is my biggest takeaway. i don’t think i’ve ever even once changed someone’s mind who was a staunch NIMBY, even with a reputation as one of the most accessible and persuasive local policy advocates/writers. but I have been able to build coalitions of hundreds of people by finding people who were already mostly with me, and just shifting them from inactive->active.

there’s also a lot of power in the energy of building for the future. when we passed our big SFH elimination ordinance two years ago, we had a packed city council meeting that, numerically, had 50/50 of residents speaking for/against. but for the city council, watching a parade of retirees 65+ come up and say the same thing over and over again (“i’m not sure this is right for our city”) vs an equal sized but diverse group of people of all ages and life stages speak about all of their different housing needs and dreams for the future, the weight in the room was overwhelmingly in favor; the new zoning passed unanimously.

49m agoHN ↗

(author here) Another thing I've noticed is that you never know how or what will happen until you try. I was following legislation in one state and learned that literally dozens of people from all kinds of organized opposition came out to testify against a proposed bill and it quickly died in committee, exactly the kind of brutal pushback that demoralizes people against trying. Then, Jackson Arnold's experience in Kentucky was almost the exact opposite. He approached a local government official, who got excited about it but needed a state enabling law. The official in turn got in touch with a state republican, who basically went "seems fine," and inserted it into a giant omni bill, and it sailed through the legislature. Now they're working on local implementation.

You never know until you try.

5h agoHN ↗

I guess here's an issue. I bought 13 acres - mostly because I hate hearing basketballs bouncing, other people's TVs, and "boom cars".

So if we're going to start taxing me at a million per year, can I start taxing those loud people a million a year so I can live in the city to pay for medical bills for my brain to go through the bouncing basketball.

Mind you, everyone else in my area has 10 - 15 acres and it's just a dead area. Just people that ran away from the city. There's absolutely no "value" in this land as no one wants to even be here and drive 40 minutes to get to a grocery store.

5h agoHN ↗

Isn't the idea that it's a land value tax, and not just a land tax. The land in your example is not particularly valuable. Unless I have misunderstood the idea.

5h agoHN ↗

Then your land would likely be priced at the nominal amount per acre x 13 since the demand for that area is low and diffuse. Not a horrible outcome, and, could encourage you to make the land "productive" to at least cover the tax. Tree farms are lovely.

5h agoHN ↗

What about conservation? On my land, after clearing a bit around the house for fire safety and "pest" prevention, I kept most of the native rainforest. I planted a few syntropic lines of fruit trees, but they cannot cover the land tax I already pay. All my gardening and land management at large is a money sink (unless we consider touching grass an investment).

4h agoHN ↗

LVT is about assessing improvements, conservation can be understood as an improvement and valued as such. For the same reasons that urban parks should have a different tax assessment than low value surface parking lots.

5h agoHN ↗

LVT is assessed on land value. Your 13 rural acres aren't insanely valuable and would not be assessed a million dollars a year under a Georgian model.

5h agoHN ↗

Ok, that makes sense to me then. I thought I was going to be taxed for unused land.

4h agoHN ↗

The idea here is that unused land in a city should be highly taxed, but unused land in rural areas should not.

3h agoHN ↗

I don't even think "unused" is helpful framing. I'd say, property taxes should be assessed on land, not productive imps. If you want to keep your expensive urban downtown land a parking lot, fine, but it shouldn't be subsidized by lower taxes than your neighbor with a high-rise.

2h agoHN ↗

The point of Georgism is to get rid of the 'unused' part. You're just taxed on land, full stop, based on the most valuable things that could probably be done with it right now.

Land in a city center? Hefty taxes, identical for a parking lot and a skyscraper, because the parking lot could be a skyscraper instead.

Land in a low population rural area? Low taxes, because the likely uses are homes or businesses that could be built in any other rural area.

3h agoHN ↗

One of the main points made in TFA is it's important to communicate that single-family homes outside of city centers will tend to see lower taxes if you go from property tax to LVT, because in the city most of the value in your home is the land, but that ratio flips the further you get from the city center.

Obviously this assumes a single tax-base; if you are not in the same tax base of the city, then you're probably still fine, since if everybody has similarly valued lots, the taxes will be shared similarly between them.

5h agoHN ↗

The LVT seems to me to be a lot like a carbon tax: a wonderful technocratic idea that is politically untenable. LTV would be great for humanity, but very bad for present homeowners. Since homeowners are wealthy and thus more politically engaged on average, I just don’t see how this could ever get passed. Instead of starting with an impossible task, why not start instead with a merely incredibly unlikely task: repeal proposition 13.

4h agoHN ↗

In most cases LVT would be the same or lower than current property taxes. Only empty lots would pay more.

3h agoHN ↗

TFA literally shows how it is better for homeowners

3h agoHN ↗

I think that GPs point still stands if you replace homeowners with the sort of organization that own en-masse the sort of empty lots that would lose out.

3h agoHN ↗

The problem is that the issue is rarely LVT vs market-rate property taxes.

It's usually up against some insane shit like Prop 13

2h agoHN ↗

Carbon tax was great for me. I made money. Maybe you should have used less carbon.

5h agoHN ↗

Eh... After finishing the article, did I miss the section where the author discuss if Georgism actually works?

Did it actually increase the amount of housing? Reduce wealth disparity? Got enough taxes so cities can make commutes better?

4h agoHN ↗

Yes, you did. Re-read the end of section III, around the part with the final two color coded images.

3h agoHN ↗

Those are the change in tax rates between properties. And the wins on that section are about votes to change the tax policy.

4h agoHN ↗

Too soon to say apparently? They got some laws passed.

4h agoHN ↗

There's a lot here to absorb, but one thing I've always wondered about Georgism and Land Value Tax is whether land supply is actually inelastic:

Land, however, is not built. Land is inelastic in supply, and landowners don’t “provide” land the way laborers provide labor and investors provide capital; they un-provide land by excluding others from using it. Building supply can change in response to a tax change, but land supply cannot.

But many cities actually can increase their land supply via land reclamation. This can be done by filling in waterways or otherwise altering the landscape to make it suitable to build on. Chicago, for example, built the land under the Adler Planetarium by filling in rubble along the shore of Lake Michigan. Boston is an even more impressive example; Back Bay used to be a bay of the Atlantic Ocean, not an entire neighborhood of a city with very high cost of living.

Cities can also lose land. Sometimes this is due to natural causes like erosion, sea level rise, or disasters like earthquakes and volcanic eruptions. Other times a lack of regulation might permit pollution to make land unlivable or infeasible to build on. Land owners can't create natural disasters, but they can advocate for policies that strongly influence effective land supply, such as whether building codes allow building on certain kinds or soil or require resistance to earthquakes.

Does this change the calculus from a Georgist economic perspective? If not, why?

4h agoHN ↗

The key is that land is accidental in a way - people don’t want “land” per se they want to DO something with the land - and if the valuations are high enough you get multiple uses.

The reality is that in the vast majority of places the valuations just aren’t there.

4h agoHN ↗

All that is true and I suppose there could be tax policies to encourage land reclamation, but this is more likely to run into environmental concerns. It’s literally an edge case.

1h agoHN ↗

on the other hand, having been enacted almost nowhere, what is there to discuss besides theoreticals and edge cases?

4h agoHN ↗

one thing I've always wondered about Georgism and Land Value Tax is whether land supply is actually inelastic

It isn't actually perfectly inelastic, but looking at land reclamation (and erosion!) relative to the ease with which places to live can be added to a locale, the supply of land is relatively inelastic. Even then, that kind of misses the core of George's argument about land value.

George himself distinguished land from labor and capital by looking at it through the lens of whether the economic value of a piece of land needed to be attributable entirely to improvements undertaken on that land. This is his "all natural opportunities or forces," and those are where the constraint lies.

For land reclamation in particular, there are two things to look at: (1) the value attributable to the land reclamation effort; and (2) the residual site value. (2) is land rent, and the Georgist model really is predicated on the relationship the surrounding community has with a piece of land. As it goes, if the community's feelings toward, say, a reclaimed waterfront are tepid, that reclaimed land won't have much value (even if the land reclamation were undertaken at great expense!), and won't command high land rents.

3h agoHN ↗

You are confusing "location" and "dirt"

When georgists refer to land, they are referring to locations - not dirt.

Locations refer to the sections of physical 2D space that makes up a country. Why 2D when the world is 3D? Because parcels are allocated and segmented based on a 2D model.

Locations are best thought of as being similar to "spectrum" (what typically gets auctioned off every few years to the highest bidder) - there is a total fixed amount. Nobody made the physical space, and nobody will make more of it in the future. It all existed before life even began on this planet, and it will exist long after all of us are dead.

1h agoHN ↗

Land means location in this context. Filling in seabed (which are literally termed "water parcels" as a term of art) to make dry land is technically improving it. The straightforward policy recommendation is therefore to exempt reclaimed land from taxation (perfectly in line with a policy of not taxing improvements) for e.g. the first 50 or so years (well past the investment horizon) and begin taxing it as conventional land thereafter -- this comports with George's philosophy for how to handle edge cases like e.g. landscaping that start off as improvements but over a long enough time horizon eventually become regarded as part of the permanent landscape.

Alternatively, reclaimed land is usually a state initiated enterprise in most cases. In those situations, the land can simply be leased out by the state. This is literally what NYC did with Battery Park city!

https://blog.landeconomics.org/p/georgism-through-land-leasi...

19m agoHN ↗

Take the Netherlands as an extreme example of this; something like 17% of the country is reclaimed land. There's not many places you could do that.

Since unreclaimed "land" if it can be owned, can not generate any rents, it won't be taxed at all. But if all the additional value of making it usable were taxed away with a full LVT, it creates very little incentive to reclaim it and make it usable.

I think the best thing to do would be to exempt reclaimed land from land value tax for a period of time. Just like we grant monopolies for patents for a fixed value of time to incentivize sharing of the secrets.

If you got 50 years on reclaimed land without tax, it would heavily incentivize its creation.

Cities can also lose land. Sometimes this is due to natural causes like erosion, sea level rise,

When there's a full LVT, the transactional sale price for land is very close to $0, because your land rents are taxed away. That leaves only the buildings as something that's lost to the natural disaster, so in many ways this might be far better for property owners.

It would also alleviate many of the challenges with relocation when necessary, from flooding, etc. Since the land is no longer the valuable part of the relationship estate, only the building must be moved/replaced.

4h agoHN ↗

Georgism, or the tax on the unimproved value of the land, is the fairest tax I (and many others) can imagine. It directly counters one of the ugliest part of any economy/society - rent seeking.

Suppose you see an area in upward economic trajectory, you buy a bunch of land/properties, then do fuck-all for the next 30 years while the hard work of everyone around that land causes your land's value to increase. You contribute nothing, while benefitting from others' contributions. All this while someone who could have used that land/property for a more productive used is deprived of it. Georgism directly counters that by taxing any 'base land value' that you own.

Georgism and the 'taxing progressively higher any property a person directly/indirectly owns after first N properties' are seriously very much needed around the world, economic rent-seeking steals from future generations.

3h agoHN ↗

...the 'taxing progressively higher any property a person directly/indirectly owns after first N properties' are seriously very much needed...

I don't see it in the article, but the progressive nature of the tax is important. It makes it harder for large landowners to pass along the tax, since they must compete with smaller landlords. The net effect should also stabilize land appreciation, which will no longer rise with rapidly increasing wealth disparity as it has in the past couple of decades. And we won't need clunky, patchwork solutions like the ban on home ownership by private equity.

1h agoHN ↗

What prevents the landlord rent seekers from just charging more rent? Wont they all uniformly raise rent, because they are all uniformly having their taxes increased?

This is the argument again Georgism I have the hardest time countering.

1h agoHN ↗

A whole section of the article is about this. "Can Land Value Tax Be Passed on to Tenants?"

15m agoHN ↗

Landlords tend to raise rent to the maximum value they can.

If they could raise rents, why haven't they already?

And if their costs go up and they can't make ends meet, they will sell the property, possibly at a loss, and the lower value will lower taxes.

But this won't happen, because the landlord's taxes won't rise. They'll almost certainly fall, as shown in the abundant data. And if for some reason the landlord's property tax does rise, it's because it's a ridiculously underused parcel in an area of really really high value, like a duplex next to 10+ story buildings. Which means it may be best to let 100-300 people use that parcel rather than ~10.

The LVT shifts tax burden away from homes and businesses and towards empty lots and parking lots.

1h agoHN ↗

rent seeking

I would worry that you just substitute a rent seeking landlord with a rent seeking government (local?).

4h agoHN ↗

>> boring scut work of implementation. Now I realize that the boring scut work is actually what precedes, and even leads to, changing the consensus.

See every enterprise project. The code for s written, the app is promoted as working in this department and the the project gets funded and approved. Under some other manager

4h agoHN ↗

Yes, it works. It makes childless gloomy cities that are now also going bankrupt (see: Austin, TX).

Because why would you move into a shoebox-sized apartment that costs as much as a single-family home and doesn't have any grocery stores nearby (see: Manhattan)?

But don't despair! Your unit 31E will be allowed an individualized door knob and a space for a whimsical 4x5 inch placard.

4h agoHN ↗

Sorry: serious question. What do you mean?

3h agoHN ↗

Austin does not have a land value tax.

2h agoHN ↗

Austin is the main example of consequences of densification.

1h agoHN ↗

Austin doesn't crack the top 100 (!) list of densest cities in America on Wikipedia. What are you talking about?

1h agoHN ↗

You are attacking a strawman of your own invention, since LVTs have nothing whatsoever to do with Austin.

1h agoHN ↗

This guy has been grinding his axe and wasting folks' time here for years. Even when shown how middle-density towns are the most efficient for utilities, taxes, infrastructure, etc. Even when confronted with the falling rents of Tokyo and yes Austin in times when they've briefly overbuilt. Don't bother arguing with economics deniers.

3h agoHN ↗

You are confusing property taxes with land value taxes

2h agoHN ↗

No, I'm not. LVT is a vehicle designed to force density in housing.

4h agoHN ↗

A compelling review of the authors work, but I think there would be benefit from dropping the early references to UBI: LVT is an interesting approach and line of reasoning. UBI is a political hotbed with deeply acrimonious feelings on all sides.

When you align one idea with an external one, you are adopting all that external baggage - it's a cheap way to get a few additional people to agree, but at the cost of a bunch of other people seeing what they perceive as warning signs of a class of ideas they are suspicious of.

It's important to have confidence in your idea, on its own merits.

3h agoHN ↗

It's actually a really key part of the functioning of the LVT. It is fuel to grow the economy, just like the LVT is the stick that punishes those who hold back the economy by hoarding land.

At least, that's my opinion. Carrot based economic policies have a tendency of working in multiples of the money involved, and penalties a bit less than that.

3h agoHN ↗

It's freakishly weird to see this at the top of HN. I had never heard or read anything about Georgism until last week, when I stumbled onto it after randomly seeing a photo of a 100-year-old billboard on the Wikipedia page for the term "speculation". I spent a few days researching it on and off. In fact, I just navigated to HN from the last page I was reading about it. It seems like a clever way to address a number of very pressing modern issues.

Serendipity, I guess.

2h agoHN ↗

This place has always had a soft spot for Scott Alexander, and in turn he loves to talk about Big Systemic Fixes.

It never ends.

34m agoHN ↗

This piece was not written by Scott Alexander.

I think it's better to say that HN readers have a soft spot for clever solutions that seem like hacks. And the LVT is really a huge societal hack to unlock a lot of prosperity and eliminate a lot of poverty.

41m agoHN ↗

Georgism has been mentioned many, many times in the 15 years you've been on HN. How could you not know about it?

24m agoHN ↗

shrug I must've missed it. I guess the fact that I was enchanted when I read it last week, and I've been here 15 years, illustrates something about common zeitgeist that I had stopped ascribing to HN awhile ago.

2h agoHN ↗

1. It does work

2. Even if it didn't work, Georgism is fundamentally a more just and fair system.

3. The world really needs it right now. Housing, wealth inequality, climate change, the inability for most populations to understand how to properly balance aspects of capitalism and socialism.

Friends let their friends know about Georgism! Do the right thing!

2h agoHN ↗

One of the problems with many of these tax proposals is that it’s not accompanied by a reduction in taxes. So it’s basically just a tax increase masquerading as innovative tax policy. It would be great if cities were to reduce the spend by a 30% while they are at it.

At the very least, it would be great if politicians implemented it as tax neutral and as originally designed: the ONLY tax, and including renters. Some jurisdictions are doing it that way.

It’s unclear to me what problem it seeks to solve. Market value changes for every asset, not just land, and unearned wealth creation is common. Should all software engineers return the 50% of their salary that market forces caused to increase and give it to typists?

I will probably believe it more when the proponents act on their recommendations, say, if Lars sells his house and sends the 50% appreciation he says in his blog he didn’t earn, as a gift to the Federal Government so that Trump can hire a few more ICE agents.

My concern is also aligned with Orwell in Notes on Nationalism: “One has to belong to the intelligentsia to believe things like that: no ordinary man could be such a fool.”

2h agoHN ↗

The standard reform we actually pitch is a revenue neutral swap for existing property taxes. The tax we are reducing is the building tax, shifted onto land instead.

2h agoHN ↗

It's deeply weird how little interest there seems to be the inquiry of why Georgism failed in the past despite being an enormously popular political movement. It was tried. And abandoned. Investigating that history would yield a lot more compelling information than musing about the hypotheticals of what would happen if it was implemented now.

2h agoHN ↗

He literally has an entire section of the essay on this question with two linked articles that explain it in more detail.

2h agoHN ↗

Our city council always discusses it, then bails on implementation once property owners raise hell. Classic NIMBYism.

1h agoHN ↗

its unclear to me how you could pay for the massive tax burden of a modern state with a single tax. while i agree in theory that taxation of land is the most "fair" type of tax, it does not seem possible that eg. the federal US government could obtain $7,000,000,000,000 from a %5 tax rate on land, without making it completely unaffordable for the average citizen to own a modest home.

if you were to couple Georgism with a massive reduction in state spending i would be more on board i think.

1h agoHN ↗

It's already unaffordable for the average citizen to own a modest home in much of the country. Only if you worked and then moved to a cheaper place.

Also, I don't think it precludes a sales tax or tariffs, etc.

1h agoHN ↗

i think it generally does preclude other taxes, although i'm sure there are people who consider themselves georgists who would also want to see other forms of taxation.

but yes, home ownership is becoming increasingly unaffordable for a number of reasons, including increasing government spending...

1h agoHN ↗

Those taxes have different uses, jurisdictions, and payers, as does a property tax. So it may not be a good idea to have one exclusive type.

1h agoHN ↗

Would love to see a large-scale simulation of LVT rollouts instead of just small pilot programs. The edge cases must be wild.

1h agoHN ↗

Buried in the middle, a whole section on "won't landlords just pass costs into tenants" passed over with the weakest deflections. This is willful naivety.