Land value tax in online games and virtual worlds (2022)(progressandpoverty.substack.com)
progressandpoverty.substack.com
Land value tax in online games and virtual worlds (2022)
https://progressandpoverty.substack.com/p/land-value-tax-in-online-games-and
411 comments
This comment is a bit surprising to me. Your point seems to be that strong policies which impose significant good will face significant resistance and so there's no point doing them.
I don't think that makes any sense. Workers rights, regulations around dumping waste, capital gains taxes... There are a lot of things that we already have which some people with power have a strong incentive to remove. We had to fight to implement and to keep these, but goddamnit is it worth it!
I don't see why we shouldn't be optimistic here because historically speaking things have gotten much much better! To me, a gradual and consistent ramping up lvt would be probably the most progressive policy a country could pass at this point :D
I don't think that makes any sense. Workers rights, regulations around dumping waste, capital gains taxes... There are a lot of things that we already have which some people with power have a strong incentive to remove. We had to fight to implement and to keep these, but goddamnit is it worth it!
I don't see why we shouldn't be optimistic here because historically speaking things have gotten much much better! To me, a gradual and consistent ramping up lvt would be probably the most progressive policy a country could pass at this point :D
The problem (and for the record I favor LVT myself) is that many of the other things you mention -- the 8 hour workday, environmental regs, etc. -- have clear positive effects that an average person doesn't have to take action to benefit from. If you tried to take them away, people would notice and object.
For a typical homeowner, the effect of LVT would be pretty neutral, by design. Proposals I've seen advocate changing the _distribution_ of single-family home taxes between land and improvements, but not the _total_.
Yes, LVT would discourage speculators from buying land as an investment without improving it, which is a societal good. But it's not direct and short term like many of your other examples.
I think GP's point stands that rolling back LVT would be highly desired by big landowners (who could then return to do-nothing land appreciation and rents for their profits rather than be required to actually _do something_ with the land to earn over its taxed value), while the average Jane couldn't care less, because it wouldn't really impact her tax bill.
That sort of situation is not stable long term. To make it more stable, you'd need to set it up so that LVT lowered the average voter's tax bill. I'm not sure how feasible that is.
For a typical homeowner, the effect of LVT would be pretty neutral, by design. Proposals I've seen advocate changing the _distribution_ of single-family home taxes between land and improvements, but not the _total_.
Yes, LVT would discourage speculators from buying land as an investment without improving it, which is a societal good. But it's not direct and short term like many of your other examples.
I think GP's point stands that rolling back LVT would be highly desired by big landowners (who could then return to do-nothing land appreciation and rents for their profits rather than be required to actually _do something_ with the land to earn over its taxed value), while the average Jane couldn't care less, because it wouldn't really impact her tax bill.
That sort of situation is not stable long term. To make it more stable, you'd need to set it up so that LVT lowered the average voter's tax bill. I'm not sure how feasible that is.
> you'd need to set it up so that LVT lowered the average voter's tax bill. I'm not sure how feasible that is.
Highly feasible!
https://www.commonwealth.ca/ < These guys propose a citizen's dividend/sovereign wealth fund
Alternatively, it would be easy to lower taxes in parallel with the increased revenue. The nice thing about taxes is that they are paid in dollars - meaning you can spend them all sorts of different ways ;)
Or if you want, "georgist" theory proposes lowering (improvement) property taxes/income taxes/capital gains taxes/sales taxes which introduce deadweight losses. A tax is fundamentally a disincentive so why are we disincentivizing working/building but not speculation? Plenty of room for improvement ;)
> which is a societal good. But it's not direct and short term like many of your other examples.
Excellent point! Reminds me of a certain climate-related topic ;) Again though - I think there is reason to be optimistic. Public awareness is gradually increasing[1], housing/zoning policy discussion is a hot topic these days, and young kids are volunteering/attending rallies at a higher rate than any previous generation[2]
[1] https://trends.google.com/trends/explore?date=all&q=land%20v... [2] https://www.statista.com/statistics/1448606/us-political-act...
Highly feasible!
https://www.commonwealth.ca/ < These guys propose a citizen's dividend/sovereign wealth fund
Alternatively, it would be easy to lower taxes in parallel with the increased revenue. The nice thing about taxes is that they are paid in dollars - meaning you can spend them all sorts of different ways ;)
Or if you want, "georgist" theory proposes lowering (improvement) property taxes/income taxes/capital gains taxes/sales taxes which introduce deadweight losses. A tax is fundamentally a disincentive so why are we disincentivizing working/building but not speculation? Plenty of room for improvement ;)
> which is a societal good. But it's not direct and short term like many of your other examples.
Excellent point! Reminds me of a certain climate-related topic ;) Again though - I think there is reason to be optimistic. Public awareness is gradually increasing[1], housing/zoning policy discussion is a hot topic these days, and young kids are volunteering/attending rallies at a higher rate than any previous generation[2]
[1] https://trends.google.com/trends/explore?date=all&q=land%20v... [2] https://www.statista.com/statistics/1448606/us-political-act...
> I think GP's point stands that rolling back LVT would be highly desired by big landowners (who could then return to do-nothing land appreciation for their profits rather than be required to actually _do something_ with the land to earn over its taxed value), while the average Jane couldn't care less, because it wouldn't really impact her tax bill.
I think the average person actually cares an incredible amount about property taxes, especially when it comes to local politics. Local news stations talk all the time about "property tax relief", and there's a general sentiment from just about everyone involved in local politics that property taxes are a useless drain. Which in some cases they are - property taxes really only "work" when they roughly approximate LVT, but it leaves suburbanites feeling overtaxed (because they are, compared to the value of their land) and they have massive political power.
I think that if LVT was simply touted as a "Property Tax Relief Plan", you could make it have massive, massive support. It wouldn't be perfect, but you could give eveyr single person a massive tax credit based on what LVT revenues would bring in, and make up for that tax credit with the LVT.
For example - if you lived in a city of 100,000, and total LVTs bring in $200,000,000, you could give every single person a $2000 "Tax Relief Credit" deductible from all city taxes. You change nothing about how much money is raised, only the distribution, and in a way where 95% of people visibly see their tax bill go down. Good luck getting rid of that!
I think the average person actually cares an incredible amount about property taxes, especially when it comes to local politics. Local news stations talk all the time about "property tax relief", and there's a general sentiment from just about everyone involved in local politics that property taxes are a useless drain. Which in some cases they are - property taxes really only "work" when they roughly approximate LVT, but it leaves suburbanites feeling overtaxed (because they are, compared to the value of their land) and they have massive political power.
I think that if LVT was simply touted as a "Property Tax Relief Plan", you could make it have massive, massive support. It wouldn't be perfect, but you could give eveyr single person a massive tax credit based on what LVT revenues would bring in, and make up for that tax credit with the LVT.
For example - if you lived in a city of 100,000, and total LVTs bring in $200,000,000, you could give every single person a $2000 "Tax Relief Credit" deductible from all city taxes. You change nothing about how much money is raised, only the distribution, and in a way where 95% of people visibly see their tax bill go down. Good luck getting rid of that!
>Local news stations talk all the time about "property tax relief", and there's a general sentiment from just about everyone involved in local politics that property taxes are a useless drain.
That is because they are not marginal, and they are not land value taxes.
You basically get rewarded for leaving a large piece of land undeveloped in the middle of an urban area. You do no work, and reap all the gains of appreciation while society around you does the work of making the place desirable to live, hence making the land desirable to buy.
You also get armed protection via military, police, and courts, and all of their salaries are disproportionately paid by everyone else doing work.
Earned income instead of property tax is the biggest and most perverse subsidy from working people (especially young) to non working asset owners (and older people) and hence collect rent.
On top of that, we give lower tax rates to capital gains, and on top of that, we let land owners indefinitely defer taxes via 1031 exchanges. Exactly the opposite of what a just society would want to incentivize. We take from laborers and give to owners (and their descendants). And then dream about becoming owners ourselves.
That is because they are not marginal, and they are not land value taxes.
You basically get rewarded for leaving a large piece of land undeveloped in the middle of an urban area. You do no work, and reap all the gains of appreciation while society around you does the work of making the place desirable to live, hence making the land desirable to buy.
You also get armed protection via military, police, and courts, and all of their salaries are disproportionately paid by everyone else doing work.
Earned income instead of property tax is the biggest and most perverse subsidy from working people (especially young) to non working asset owners (and older people) and hence collect rent.
On top of that, we give lower tax rates to capital gains, and on top of that, we let land owners indefinitely defer taxes via 1031 exchanges. Exactly the opposite of what a just society would want to incentivize. We take from laborers and give to owners (and their descendants). And then dream about becoming owners ourselves.
I like this angle... Focus first on the fact that I'm having to pay taxes to put a roof over my head while the developer down the road is driving up land prices by squatting on an empty lot while paying pennies!
> I like this angle... Focus first on the fact that I'm having to pay taxes to put a roof over my head while the developer down the road is driving up land prices by squatting on an empty lot while paying pennies!
As a resident of the northeast, I've only owned 2 homes in the suburbs of a city. For those, the value of the land comprised 63% and 57% of the overall value of the property. I imagine that ratio changes as one moves away from the city.
As a resident of the northeast, I've only owned 2 homes in the suburbs of a city. For those, the value of the land comprised 63% and 57% of the overall value of the property. I imagine that ratio changes as one moves away from the city.
Depending on who you ask, LVT would ideally replace all taxes, including income, so the property tax bill would be the only tax you paid. In this scenario, getting rid of LVT would be a significant undertaking, and very noticeable.
This is no longer actually possible. LVT at 100% generates less revenue than all other methods of taxation combined across all levels of government. This was the original idea but government is now too large for it.
Joseph Stiglitz proved what he called the Henry George Theorem which shows basically that useful government expenses will always show up as increased land value that matches or exceeds the cost.
Unfortunately, it is true that a fair amount of government expenses are not useful. (i.e. do not constitute a public good in the economic sense)
Unfortunately, it is true that a fair amount of government expenses are not useful. (i.e. do not constitute a public good in the economic sense)
The Henry George Theorem also requires the public good to be local. Military spending for example is a public good that doesn't show up in land value increases.
Also in some cases (often with environmental spending) there is an external downward pressure on land value that is offset by an increase but you don't necessarily get an increase from the original neutral value if the pollution didn't occur.
Also in some cases (often with environmental spending) there is an external downward pressure on land value that is offset by an increase but you don't necessarily get an increase from the original neutral value if the pollution didn't occur.
Why do you think it's no longer possible? What does the size of the government have to do with tax rates of land?
If you add up the value of all the land, how does it compare to the budget of the government.
If the budget is, say, 100% of the value of the land, you're stuffed? I mean, obviously you can set a tax rate as multiples of value but land almost immediately becomes worthless and all multiples of 0 are 0.
If the budget is, say, 100% of the value of the land, you're stuffed? I mean, obviously you can set a tax rate as multiples of value but land almost immediately becomes worthless and all multiples of 0 are 0.
100% LVT isn't 100% of land value it's 100% of land rents. If the bare land would rent for $2,000/month the tax is $2,000/month. You can't realistically raise the tax beyond this amount because you'd effectively be making land economically unhabitable outside of cases where the improvements were so large that you weren't significantly hindered by having some of the improvement rent absorbed.
At a 100% LVT the price of land is $0 (or more accurately equal to the price of the improvements on it). Above 100% LVT the price of land is negative so building any improvement immediately loses money and a whole host of other negative consequences.
At a 100% LVT the price of land is $0 (or more accurately equal to the price of the improvements on it). Above 100% LVT the price of land is negative so building any improvement immediately loses money and a whole host of other negative consequences.
Where would all the people go to live, out to the ocean?
I only give away the land, not the property on it. I assume in the real world we'd get some financial engineering to holding companies and peppercorn rents and so on - but as with every other tax there is a simply an inflection point where receipts drop to zero (if you tax income at 100%, people will simply stop working).
If you give away the land to someone else, but still own the building on it, the person you gave the land to would have to pay land value tax and they would pass that onto you in rent.
By definition the land has a market value of zero because that is what was paid for it
Who would pay money for an asset with zero returns at all (or indeed negative returns due to a bunch of administrative costs)
Who would pay money for an asset with zero returns at all (or indeed negative returns due to a bunch of administrative costs)
Rest assured, if you can extract value from something, the tax office won't value it at zero.
Neither does the market, btw.
Neither does the market, btw.
The claim is that 100% of land rent in the US is smaller than income tax + sales tax + property tax + corporate tax. You can no longer replace every tax in the system with land rents unless you shrink the size of government.
If we eliminated all other methods of taxation, what do you think would happen to rents? Would they increase, decrease, or stay the same? How do you think this affects the amount collected through a Land Value Tax?
The value of the land is a function of the amount of money one could make off the land, which is a function of the overall economy. A coffee shop next to lots of office buildings can sell lots of overpriced coffee which affects the value of the land it occupies. If the economy gets bad the coffee shop will likely not make as much money, so the taxes off the land will be less as well.
I don't think you should read the above comment as a lack of optimism, but instead as warning that conviction is required to enact the optimistic vision.
Yes, strong policies which impose significant good will always face significant resistance because finite resources cause many to see the world as a zero-sum game. This is the progressive vs reactionary battle.
Yes, strong policies which impose significant good will always face significant resistance because finite resources cause many to see the world as a zero-sum game. This is the progressive vs reactionary battle.
You've read it correctly.
> I don't see why we shouldn't be optimistic here because historically speaking things have gotten much much better! To me, a gradual and consistent ramping up lvt would be probably the most progressive policy a country could pass at this point :D
This is probably more feasible than you think. A hybrid or split rate combining both land and property taxes is not only possible but apparently exists in practice in some cities, for example Pittsburgh.
https://www.chicagofed.org/-/media/publications/chicago-fed-...
This is probably more feasible than you think. A hybrid or split rate combining both land and property taxes is not only possible but apparently exists in practice in some cities, for example Pittsburgh.
https://www.chicagofed.org/-/media/publications/chicago-fed-...
Not everyone shares the same value judgements of what is good and bad.
Are you trying to say that any kind of discussion around ethics or values is pointless because it's possible for people to disagree?
I think it's much better to discuss actual policies rather than to question the point of even being able to have discussions around what people think would make for a better world.
I think it's much better to discuss actual policies rather than to question the point of even being able to have discussions around what people think would make for a better world.
I think they are pointing out that if the first principles are completely different, everything that follows after will be different also. What is good/bad determines what policies should be pursued, and those actual real-world police’s may be as different as night and day.
You need to fight for keeping any accomplishments you’ve got. US rolled back many child labor regulations, so we have 14 years old killed by sawmills again. It’s not like the US banned children from mines because it was economically more profitable.
How many 14 year olds getting a job even find a sawmill or a mine to apply to in the US?
Concerns over child labor when working at McDonalds or Walmart is one thing, but it's a real stretch to go straight to 14 year olds dying in sawmill accidents.
Concerns over child labor when working at McDonalds or Walmart is one thing, but it's a real stretch to go straight to 14 year olds dying in sawmill accidents.
Indeed, these days it's more likely to be meatpacking or auto parts
Saw mill, industrial lathe, or spot welder; I'm not sure it matters too much which one of these is killing desperate and poor children being abused for profit
Do you have any stats on how many children are actually dying in these ways, and whether it is in fact disproportionately hurting the poor?
I have a hard time believing many children are dying in this way in the US today but I'm happy to be wrong and learn something new if there is real data there.
I have a hard time believing many children are dying in this way in the US today but I'm happy to be wrong and learn something new if there is real data there.
Looks like the current stats are focused more on the 69% increase from '19 to '22 in illegally employed children across the US. [1] (https://www.dol.gov/newsroom/releases/whd/whd20220729)
Actually, that report includes a few examples of children killed on the job. Like a 16 year old who died while working in construction, he fell about 160 feet to the ground after trying to jump from a roof to a nearby powered lift. In Nashville. [2] (same link as [1])
It also details the rise in children being employed to do hazardous labor.
Killed in sawmills is a bit of hyperbole, but it's not far off from the truth it seems.
Actually, that report includes a few examples of children killed on the job. Like a 16 year old who died while working in construction, he fell about 160 feet to the ground after trying to jump from a roof to a nearby powered lift. In Nashville. [2] (same link as [1])
It also details the rise in children being employed to do hazardous labor.
Killed in sawmills is a bit of hyperbole, but it's not far off from the truth it seems.
That report basically includes a few anecdotes without data though, plus data that actually could go against the idea the regulations are the fix. If the stats are showing how many children are illegally employed it really has no basis on whether existing regulations or rollbacks made a difference, the employers and the kids weren't trying to follow the law.
You're absolutely right, it's not a report. It's a press release.
I did dig and found another news article about the anecdote included.
https://www.wkrn.com/news/local-news/nashville-family-advoca...
It looks like there is a discrepancy between State and Federal law, so the employers may indeed be acting in a twisted version of good faith. Despite the fact that Federal law supersedes state law. [2] https://www.shrm.org/topics-tools/news/all-things-work/child...
I'm not implying regulations are the fix, I just think it's a little fucked up.
I did dig and found another news article about the anecdote included.
https://www.wkrn.com/news/local-news/nashville-family-advoca...
It looks like there is a discrepancy between State and Federal law, so the employers may indeed be acting in a twisted version of good faith. Despite the fact that Federal law supersedes state law. [2] https://www.shrm.org/topics-tools/news/all-things-work/child...
I'm not implying regulations are the fix, I just think it's a little fucked up.
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Or dangerous agricultural work like picking and processing tobacco.
it was indirectly more profitable. no child labor -> children would have no distractions for grade school -> more chldren graduate -> graduates tend to contribute more to the national economy.
At least that was the theory. Clearly private lobbyists and various interests groups who want to erode the country don't care about such factors.
At least that was the theory. Clearly private lobbyists and various interests groups who want to erode the country don't care about such factors.
> it was indirectly more profitable.
Exactly: Child labor laws are more profitable for society; child labor is more profitable for a small set of individuals. Lobbying by interest groups is often pushing away from the former and towards the latter.
ETA: In line with this sub-thread, I'd say: There are and always will be private interest groups lobbying against the former and towards the latter; and so there will always need to be public interest groups lobbying against the latter and towards the former. That applies to LVT as much as environmental and labor protections.
Exactly: Child labor laws are more profitable for society; child labor is more profitable for a small set of individuals. Lobbying by interest groups is often pushing away from the former and towards the latter.
ETA: In line with this sub-thread, I'd say: There are and always will be private interest groups lobbying against the former and towards the latter; and so there will always need to be public interest groups lobbying against the latter and towards the former. That applies to LVT as much as environmental and labor protections.
As does a healthy middle class who get what they want (e.g. homeownership).
AFAIK modern capitalism doesn't incentivise behaviours that cause broad economic growth over a long period without any short-term profit. That's what governments are needed for.
Child labour in mining is uneconomic though. You'd still get children here-and-there for whatever reason, but mining involves hugely expensive machines doing most of the work, or heavy lifting that a child can't do. If you're comfortable spending $10 million on a machine and putting a small child behind the wheel, odds are great you'll go bankrupt trying to run a mine.
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I genuinely doubt 14 year olds are being killed on any mass scale by sawmills in the United States. That seems incredibly hyperbolic.
The closest thing I could find was a single 16 year old killed in Wisconsin last year. Very sad, but n=1, and the attribution to 'rolling back' child labour regulations seems spurious (did the previous regulations prevent 16 year olds from working?).
Edit: I'm noting the downvotes, but I stand by this. Just because something plays into your political preconceptions doesn't mean it's true. (We should all be doubly sceptical of spurious factoids that just so happen to perfectly align with our political views!)
The closest thing I could find was a single 16 year old killed in Wisconsin last year. Very sad, but n=1, and the attribution to 'rolling back' child labour regulations seems spurious (did the previous regulations prevent 16 year olds from working?).
Edit: I'm noting the downvotes, but I stand by this. Just because something plays into your political preconceptions doesn't mean it's true. (We should all be doubly sceptical of spurious factoids that just so happen to perfectly align with our political views!)
- The 16 year old in Wisconsin you found
- 16 year old in Mississippi last July: https://www.nytimes.com/2024/01/16/business/mississippi-marj...
- Iowa allowing teens 14.5+ years old to drive to work. https://www.iowapublicradio.org/state-government-news/2024-0...
- 16 year old loses both legs in Washington: https://www.lni.wa.gov/news-events/article/24-01
This was with a few minutes of searching. You have to filter out child labor deaths abroad and other breaking news, but the deaths are there and they're increasing.
Note that for each death that results in a successful lawsuit, you should assume there are other deaths happening where the family either (1) couldn't afford to bring a case, (2) agreed to private settlement, or even (3) it just didn't get big enough to make the broader news.
- 16 year old in Mississippi last July: https://www.nytimes.com/2024/01/16/business/mississippi-marj...
- Iowa allowing teens 14.5+ years old to drive to work. https://www.iowapublicradio.org/state-government-news/2024-0...
--- Using data from the National Household Travel Survey, the fatal crash rate per mile driven for 16-19 year-olds is nearly 3 times the rate for drivers ages 20 and over. Risk is highest at ages 16-17.
--- Given that Risk increases as age decreases, 14-15 year olds are at a high risk of fatal injury while driving on the road. https://www.iihs.org/topics/fatality-statistics/detail/teenagers
- 16 year old loses both legs in Washington: https://www.lni.wa.gov/news-events/article/24-01
This was with a few minutes of searching. You have to filter out child labor deaths abroad and other breaking news, but the deaths are there and they're increasing.
Note that for each death that results in a successful lawsuit, you should assume there are other deaths happening where the family either (1) couldn't afford to bring a case, (2) agreed to private settlement, or even (3) it just didn't get big enough to make the broader news.
- Washington: "Washington’s youth employment laws identify prohibited duties for workers under 18 years old. Rotschy had a student learner exemption permitting minors to do some work that is otherwise prohibited, but use of the walk-behind trencher was not part of the exemption."
-Alabama: "The department’s Wage and Hour Division found Apex Roofing illegally employed the teen in violation of a Fair Labor Standards Act child labor hazardous occupation order that prohibits workers under the age of 18 from engaging in dangerous jobs designated by the act, including roofing or construction operations."
-Iowa : I would like to see data that shows the crash rate for teens going to/from work vs general teen driving.
In half of the examples, the company was having the worker do prohibited work. If the company is breaking the law, how does the fact that labor laws were changed affect that?
-Alabama: "The department’s Wage and Hour Division found Apex Roofing illegally employed the teen in violation of a Fair Labor Standards Act child labor hazardous occupation order that prohibits workers under the age of 18 from engaging in dangerous jobs designated by the act, including roofing or construction operations."
-Iowa : I would like to see data that shows the crash rate for teens going to/from work vs general teen driving.
In half of the examples, the company was having the worker do prohibited work. If the company is breaking the law, how does the fact that labor laws were changed affect that?
Children are easier to convince or coerce to do work that is prohibited.
I'm not sure your intentions with trying desperately to convince yourself that it's safe and reasonable to have children work dangerous jobs.
14 year olds can work all sorts of jobs already, they can make money and learn skills.
There is obviously a reason these laws were passed. So the evidence you are so sure does not exist has been around for a century. These laws weren't vibe based.
I'm not sure your intentions with trying desperately to convince yourself that it's safe and reasonable to have children work dangerous jobs.
14 year olds can work all sorts of jobs already, they can make money and learn skills.
There is obviously a reason these laws were passed. So the evidence you are so sure does not exist has been around for a century. These laws weren't vibe based.
Its interesting that the takeaway here is that teenagers are too fragile to do a job and must forego learning a new skill. Is the idea really that it's okay to die on the job as long as you are 18 or older?
Roofing companies shouldn't have anyone falling off the roof, there are OSHA regulations for a reason. 16 year olds being bad drivers has nothing to do with their employmwnt status. Using trenchers is dangerous no matter who you are, that isn't age related and if we are collectively concerned with how much damage they can do we should not use the machines.
Protecting and teaching kids is totally reasonable, but how far down the path of trapping them in a bubble do we really want to go?
Roofing companies shouldn't have anyone falling off the roof, there are OSHA regulations for a reason. 16 year olds being bad drivers has nothing to do with their employmwnt status. Using trenchers is dangerous no matter who you are, that isn't age related and if we are collectively concerned with how much damage they can do we should not use the machines.
Protecting and teaching kids is totally reasonable, but how far down the path of trapping them in a bubble do we really want to go?
As a global society we've generally agreed that if you are under the age of 18 you are not grown enough to make decisions that could put yourself or society at risk.
- You cannot sign up for the military, even though you might know how to aim and fire a weapon.
- You cannot vote in elections.
- You cannot purchase nicotine, alcohol, or other drugs. (In the USA this age is higher at 21)
So the takeaway is that yes, teenagers are too fragile and don't have the risk assessment capacity to work some of these dangerous jobs.
Yes, we have OSHA and other safety regulations. Still the jobs are dangerous. Adults are more likely to call this out or recognize when these regulations are being disregarded, but a 14 year old might not realize that what they are doing is more dangerous than it should be.
- You cannot sign up for the military, even though you might know how to aim and fire a weapon.
- You cannot vote in elections.
- You cannot purchase nicotine, alcohol, or other drugs. (In the USA this age is higher at 21)
So the takeaway is that yes, teenagers are too fragile and don't have the risk assessment capacity to work some of these dangerous jobs.
Yes, we have OSHA and other safety regulations. Still the jobs are dangerous. Adults are more likely to call this out or recognize when these regulations are being disregarded, but a 14 year old might not realize that what they are doing is more dangerous than it should be.
> You cannot sign up for the military, even though you might know how to aim and fire a weapon.
> You cannot vote in elections.
These two are both linked. In the US, military enrollment age was 20-45 (The Enrollment Act). Around the two world wars it was lowered to 18, primarily because they didn't have enough troops and most kids graduated high school at 18.
The 26th amendment set the voting age to 18 because that's what the draft age was already set to.
Neither had anything directly to do with developmental differences by age. The first followed social norms for schooling age and the second just followed along.
> You cannot purchase nicotine, alcohol, or other drugs. (In the USA this age is higher at 21)
There are many studies showing the risks of consuming these chemicals are much higher for people under the age of around 20. I don't know if those data were known before age limits were set, but there is a good reason to keep it today that has nothing to do with teenagers' ability to make decisions. Alternatively, I'd be just as happy seeing these also removed and us better teaching kids what the risks are so they can make their own decisions.
> You cannot vote in elections.
These two are both linked. In the US, military enrollment age was 20-45 (The Enrollment Act). Around the two world wars it was lowered to 18, primarily because they didn't have enough troops and most kids graduated high school at 18.
The 26th amendment set the voting age to 18 because that's what the draft age was already set to.
Neither had anything directly to do with developmental differences by age. The first followed social norms for schooling age and the second just followed along.
> You cannot purchase nicotine, alcohol, or other drugs. (In the USA this age is higher at 21)
There are many studies showing the risks of consuming these chemicals are much higher for people under the age of around 20. I don't know if those data were known before age limits were set, but there is a good reason to keep it today that has nothing to do with teenagers' ability to make decisions. Alternatively, I'd be just as happy seeing these also removed and us better teaching kids what the risks are so they can make their own decisions.
> As a global society we've generally agreed that if you are under the age of 18 you are not grown enough to make decisions that could put yourself or society at risk.
What "global society" is this? Most of the world by numbers doesn't seem to have signed on to this agreement. Well-off countries may have made child labor largely illegal, though some of it persists inside their borders, but this just moves most of it offshore. Not that the places where it lands didn't have child labor before, but the scale of their operations grow with exports and industrialization.
What "global society" is this? Most of the world by numbers doesn't seem to have signed on to this agreement. Well-off countries may have made child labor largely illegal, though some of it persists inside their borders, but this just moves most of it offshore. Not that the places where it lands didn't have child labor before, but the scale of their operations grow with exports and industrialization.
You can sign up for the military in the USA at 17 with parental permission; you can't be sent overseas until you're 19 in that case (IIRC).
Car dependent suburbs where children spend 18 years at home, with no sidewalks to walk on and nowhere to walk to, and no public transport, only the schoolbus or their parents' car: fine.
Children banned from working in sawmills: "how far down the path of trapping them in an overprotective bubble do we really want to go?!".
We could do a lot to let children be more independent, interact more with the world, be able to walk or ride to school or to the shops or to friends' houses or to parks or to get jobs in various places to avoid bubbling them, first. The kind of company wanting to hire a 16 year old for its sawmill seems far more likely to be doing it for cheap labour than for the child's good.
Children banned from working in sawmills: "how far down the path of trapping them in an overprotective bubble do we really want to go?!".
We could do a lot to let children be more independent, interact more with the world, be able to walk or ride to school or to the shops or to friends' houses or to parks or to get jobs in various places to avoid bubbling them, first. The kind of company wanting to hire a 16 year old for its sawmill seems far more likely to be doing it for cheap labour than for the child's good.
Lots of kids die at school too.
Yes and for this exact reason, many argue for better gun safety regulations. I grew up before mass shootings became a daily occurrence (this is not hyperbole), but I still had at least one classmate in Junior High and HS die every year from gun related deaths. Either being shot and killed intentionally by a friend's parent or from suicide using their parent's gun.
We’re up to three terribly sad anecdotes. Even if we multiply that by a hundred to account for the shadow deaths you mention, we’re still nowhere near a mass epidemic in a country of over 300 million.
The claim, though, was that rolling back labour law has led to the situation deteriorating, so we would need statistics from today, to compare with statistics from the 1970s, 1950s, etc. Are children dying at work at a higher rate today than they did in 1950? 1970?
The claim, though, was that rolling back labour law has led to the situation deteriorating, so we would need statistics from today, to compare with statistics from the 1970s, 1950s, etc. Are children dying at work at a higher rate today than they did in 1950? 1970?
We don't need death statistics to know that children working with poverty wages to make rich people richer is bad.
Your argument is that unless we have thousands dying, it's fine?
I don't understand why people are even arguing this. Children working is never going to make society better. It might make more money for a few, but that's about it.
I honestly can't believe I'm seeing people arguing against child labor laws. I thought this was the kind of thing that you'd read in books and think "those were crazy times" but never witness it, yet here we are.
Your argument is that unless we have thousands dying, it's fine?
I don't understand why people are even arguing this. Children working is never going to make society better. It might make more money for a few, but that's about it.
I honestly can't believe I'm seeing people arguing against child labor laws. I thought this was the kind of thing that you'd read in books and think "those were crazy times" but never witness it, yet here we are.
Do you think work experience itself has any benefit to young people?
No. It's pretty much always a result of another system failing. We're not talking about a kid helping out in their mom and pop's shop. We're talking about kids working in meat plants because it's cheap labor.
If they have to work to help out with money, then our system has failed in providing an adequate environment for a kid to grow up.
If a child wants to learn a craft or pick up specific skills, that should not be done in a work environment that can put them in danger. Again, that's another failure of the system.
Most of us already have to basically work until death since they can't ever properly retire, so I see zero benefits in forcing humans that are still developing into that reality even sooner.
If they have to work to help out with money, then our system has failed in providing an adequate environment for a kid to grow up.
If a child wants to learn a craft or pick up specific skills, that should not be done in a work environment that can put them in danger. Again, that's another failure of the system.
Most of us already have to basically work until death since they can't ever properly retire, so I see zero benefits in forcing humans that are still developing into that reality even sooner.
Do you think there's any benefit from the population of "young people with experience" being 16 instead of 20?
Do you think it outweighs those involved having a higher risk of maiming for lower compensation?
Do you think it outweighs those involved having a higher risk of maiming for lower compensation?
>> I honestly can't believe I'm seeing people arguing against child labor laws.
And where are you seeing these people, exactly?
My argument is that the claim “winding back labour law has caused a rise in workplace deaths involving children in sawmills” is unsupported by any statistical evidence, and very likely false. There are no statistics that support this claim.
False assertions are no way to debate about policy, provided we want good policy that is actually effective at keeping people safe. Such policy must be evidence based, and not vibes and feels based.
You’re battling a strawman of your own creation.
And where are you seeing these people, exactly?
My argument is that the claim “winding back labour law has caused a rise in workplace deaths involving children in sawmills” is unsupported by any statistical evidence, and very likely false. There are no statistics that support this claim.
False assertions are no way to debate about policy, provided we want good policy that is actually effective at keeping people safe. Such policy must be evidence based, and not vibes and feels based.
You’re battling a strawman of your own creation.
Okay, let's assume then all this thread is about being pedantic, and not because you're actually against child labor laws. My bad.
Still not sure how sending kids to work will increase their safety. You've mentioned evidence but I've never seen any evidence that supports it increases their safety. We've seen evidence it can decrease their safety since some are killed/injured, even if you dismissed it as not statistically relevant.
So in the end, this goes both ways: we don't have evidence that allowing kids to work improves their lives or society, making it a bad policy.
My guess these policies were based on greed, not "vibes". Clearly better, right?
Still not sure how sending kids to work will increase their safety. You've mentioned evidence but I've never seen any evidence that supports it increases their safety. We've seen evidence it can decrease their safety since some are killed/injured, even if you dismissed it as not statistically relevant.
So in the end, this goes both ways: we don't have evidence that allowing kids to work improves their lives or society, making it a bad policy.
My guess these policies were based on greed, not "vibes". Clearly better, right?
I’m not saying sending kids to work will increase their safety, and - again - I’m honestly not sure how you’re getting that from what I’ve said. I would respectfully suggest reading the posts of others in good faith.
I’m saying there exists no evidence that the number of children dying in sawmills has dramatically increased as a result of changing labour laws. This is important, not pedantic, because it goes to the heart of the claim that modern labour law has changed in a way that harms children. If the data isn’t there, this claim is false. If this claim is false, we shouldn’t be rushing to revise labour law on the basis of it.
One person can claim that modern labour law kills children, another can claim it protects children. Until some statistics come in, all of this is noise.
Labour law exists to protect workers. It is too important to get wrong, such as by rushing into ill considered changes on the basis of vibes or feels. There may well be other reasons to adjust labour law - based on facts and hard evidence that it’s not working in some way.
I don’t understand why you seem to take such umbrage at the view that important safety laws should be made on the basis of actual data, so we can ensure they’re effective.
I’m saying there exists no evidence that the number of children dying in sawmills has dramatically increased as a result of changing labour laws. This is important, not pedantic, because it goes to the heart of the claim that modern labour law has changed in a way that harms children. If the data isn’t there, this claim is false. If this claim is false, we shouldn’t be rushing to revise labour law on the basis of it.
One person can claim that modern labour law kills children, another can claim it protects children. Until some statistics come in, all of this is noise.
Labour law exists to protect workers. It is too important to get wrong, such as by rushing into ill considered changes on the basis of vibes or feels. There may well be other reasons to adjust labour law - based on facts and hard evidence that it’s not working in some way.
I don’t understand why you seem to take such umbrage at the view that important safety laws should be made on the basis of actual data, so we can ensure they’re effective.
Yes, that sawmill incident was with 16-year-old, but there are more at other industries. E.g. WI regulations were relaxed to allow 14-years-old work 40 hour weeks as well part of the year. If there is not enough pushback fatalities are a matter of time.
> I genuinely doubt 14 year olds are being killed on any mass scale by sawmills in the United States
...because in small scale, instead, would be acceptable?!
...because in small scale, instead, would be acceptable?!
> ...because in small scale, instead, would be acceptable?!
Because it’s generally a bad idea to legislate for over a third of a billion of humans on the basis of rare freak accidents.
Because it’s generally a bad idea to legislate for over a third of a billion of humans on the basis of rare freak accidents.
This is not how legal systems work.
It is probably a "rare freak accident" to be shot by a baboon but nonetheless it is illegal to to create dangerous situations like giving a loaded weapon to animals at the zoo.
https://en.wikipedia.org/wiki/Child_labour is very much illegal around the world, yo.
It is probably a "rare freak accident" to be shot by a baboon but nonetheless it is illegal to to create dangerous situations like giving a loaded weapon to animals at the zoo.
https://en.wikipedia.org/wiki/Child_labour is very much illegal around the world, yo.
You're (wilfully?) misunderstanding. No one is saying that laws somehow magically cease to apply to unusual events (wut?). The argument is that good legislative lawmaking is based on data and evidence. Rushing to make legislation to respond to (media coverage of) freak occurrences rarely leads to good lawmaking.
Try to engage in good faith. You don't really think that people don't know what child labour is illegal, and require a Wiki link to elucidate this obscure fact. You're just performing outrage. Why do so? What benefit does doing so bring you, or anyone else?
Try to engage in good faith. You don't really think that people don't know what child labour is illegal, and require a Wiki link to elucidate this obscure fact. You're just performing outrage. Why do so? What benefit does doing so bring you, or anyone else?
No, you literally wrote "it’s generally a bad idea to legislate for over a third of a billion of humans on the basis of rare freak accidents".
> Rushing to make legislation to respond to (media coverage of) freak occurrences rarely leads to good lawmaking.
I agree. Yet, laws against child labor already exist and they work as a "blanket" safety mechanism against all threats to children, regardless of what incident might happen.
> Try to engage in good faith. ... You're just performing outrage.
Please do not accuse other people of acting in bad faith.
> Rushing to make legislation to respond to (media coverage of) freak occurrences rarely leads to good lawmaking.
I agree. Yet, laws against child labor already exist and they work as a "blanket" safety mechanism against all threats to children, regardless of what incident might happen.
> Try to engage in good faith. ... You're just performing outrage.
Please do not accuse other people of acting in bad faith.
> No, you literally wrote "it’s generally a bad idea to legislate for over a third of a billion of humans on the basis of rare freak accidents".
I genuinely have no idea what your point is. The most generous reading I can give this is that you took my words to be an assertion that we should abolish all laws relating to workplace accidents, but that is a farcical misinterpretation. Both on its face, but especially in the context of the wider discussion.
> I agree. Yet, laws against child labor already exist and they work as a "blanket" safety mechanism against all threats to children, regardless of what incident might happen.
Of course they do. I'm unsure why this requires explanation. What's the alternative? Non-blanket child labour laws? What would that even look like? Again, I have no idea what your point is.
> Please do not accuse other people of acting in bad faith.
This exchange began when you accused me, in a one line comment, of finding the death of children acceptable. If that was intended to be a good faith, constructive comment, I'm happy to hear how exactly.
More broadly, I reject your view that bad faith comments ought not be called out. Why not? In the best case, it helps a person become aware that they're not engaging constructively; alternatively, it's informative for others, and can help them from entering into a pointless discussion.
I genuinely have no idea what your point is. The most generous reading I can give this is that you took my words to be an assertion that we should abolish all laws relating to workplace accidents, but that is a farcical misinterpretation. Both on its face, but especially in the context of the wider discussion.
> I agree. Yet, laws against child labor already exist and they work as a "blanket" safety mechanism against all threats to children, regardless of what incident might happen.
Of course they do. I'm unsure why this requires explanation. What's the alternative? Non-blanket child labour laws? What would that even look like? Again, I have no idea what your point is.
> Please do not accuse other people of acting in bad faith.
This exchange began when you accused me, in a one line comment, of finding the death of children acceptable. If that was intended to be a good faith, constructive comment, I'm happy to hear how exactly.
More broadly, I reject your view that bad faith comments ought not be called out. Why not? In the best case, it helps a person become aware that they're not engaging constructively; alternatively, it's informative for others, and can help them from entering into a pointless discussion.
I do not think teenagers represents 333 millions people in the U.S.A.
They’re using hyperbole to illustrate the point; don’t miss the point or deliberately try to derail the conversation.
I would judge that someone falsely claiming that 14 year olds are being killed in sawmills as a result of policy changes they dislike is the one deliberately trying to derail the conversation more than someone who correctly claims "no, that is false".
The burden of proof is certainly on the person claiming there's an increase in child labor death. However just because they didn't provide proof doesn't make the claim "false".
The increase in child labor-related deaths is happening and will continue as child labor laws are rolled back in states across the US.
The increase in child labor-related deaths is happening and will continue as child labor laws are rolled back in states across the US.
> The increase in child labor-related deaths is happening and will continue as child labor laws are rolled back in states across the US.
You’re accepting the claim because you already believe it to be true, but both you and the original person making the claim have no evidence for this. This is a very dangerous style of political argument. “Well, there are no facts here, but this claim reinforces my already existing beliefs, so the vibes check out!”
We want policy around workplace safety to be evidence based, not vibes and feels based, because the former will save lives and the latter will not.
You’re accepting the claim because you already believe it to be true, but both you and the original person making the claim have no evidence for this. This is a very dangerous style of political argument. “Well, there are no facts here, but this claim reinforces my already existing beliefs, so the vibes check out!”
We want policy around workplace safety to be evidence based, not vibes and feels based, because the former will save lives and the latter will not.
I'm curious why you think these laws were enacted in the first place? Do you think there was not evidence back then which convinced a majority of people to want that big change?
They were based on mountains of data, collected methodically over a number of years to make an ironclad case for reform. That’s good law making! I support this!
However, data from 1910 is accurate for 1910, not for 2024. If children are dying en masse in workplaces today, it ought not be difficult to collate the data required to tighten the laws further. And yet, all I’ve seen is assertions, vibes, and vague conspiracy theories.
Policy making is a balancing act; we calibrate laws for the circumstances as they develop. The only way to do this intelligently, or even competently, is on the basis of evidence.
However, data from 1910 is accurate for 1910, not for 2024. If children are dying en masse in workplaces today, it ought not be difficult to collate the data required to tighten the laws further. And yet, all I’ve seen is assertions, vibes, and vague conspiracy theories.
Policy making is a balancing act; we calibrate laws for the circumstances as they develop. The only way to do this intelligently, or even competently, is on the basis of evidence.
Fair. I am willing to wait for evidence that a 14 year old was killed in a sawmill as a result of these policy changes before cementing my conclusion that it was a false claim.
The use of hyperbole is actually misses the point and derails the conversation.
If a point is valid and clear hyperbole isn't needed. Concerns over children dying in job related accidents or being made to work extreme hours or in bad conditions is a fine point. Children falling into sawmills just muddies the waters and will draw in people who disagree that that is a concern at all.
If a point is valid and clear hyperbole isn't needed. Concerns over children dying in job related accidents or being made to work extreme hours or in bad conditions is a fine point. Children falling into sawmills just muddies the waters and will draw in people who disagree that that is a concern at all.
> They’re using hyperbole to illustrate the point; don’t miss the point or deliberately try to derail the conversation.
Hyperbole is by definition false, its use illustrates nothing beyond the speaker's willingness to stretch the truth.
In this case, to make political claims. Ought we organise our societies on the basis of political claims 'illustrated' by bombastic falsehoods?
Hyperbole is by definition false, its use illustrates nothing beyond the speaker's willingness to stretch the truth.
In this case, to make political claims. Ought we organise our societies on the basis of political claims 'illustrated' by bombastic falsehoods?
We are already so high up this tree you can no longer see the ground. There, one more hyperbolic falsehood for you.
You could make the same theoretical argument against most taxes though. If it were possible to unwind corporate taxes through raw political connections it'd have happened by now for example. Or capital gains tax in its entirety.
That is actually a great theoretical argument against taxes generally by the way - there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support.
That is actually a great theoretical argument against taxes generally by the way - there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support.
>there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support.
people who say this need to remember what makes the most money vs. what are the actual most necessary goods for basic civilization. Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on.
There's definitely tons of corruption, but we do need someone with a wider scope to budget for the "boring" stuff.
people who say this need to remember what makes the most money vs. what are the actual most necessary goods for basic civilization. Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on.
There's definitely tons of corruption, but we do need someone with a wider scope to budget for the "boring" stuff.
> Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on.
People fund it with their electric bill every month. If the business isn't viable and can only stay open through massive government subsidies that's a much more fundamental problem.
Why does the government get to decide what is best for people to spend their money on? If consumers really would prefer to spend money in TV and sport merchandise, well it's their damn money to spend and none of the government's concern.
People fund it with their electric bill every month. If the business isn't viable and can only stay open through massive government subsidies that's a much more fundamental problem.
Why does the government get to decide what is best for people to spend their money on? If consumers really would prefer to spend money in TV and sport merchandise, well it's their damn money to spend and none of the government's concern.
> Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on.
But people are funding it. They're not the ones borrowing from Macquarie, but they are the ones paying them back. Is there a more direct way to do this, is the question.
But people are funding it. They're not the ones borrowing from Macquarie, but they are the ones paying them back. Is there a more direct way to do this, is the question.
> If it were possible to unwind corporate taxes through raw political connections it'd have happened by now for example. Or capital gains tax in its entirety.
But this has more or less been done for the most powerful, e.g. corporate income tax exists but Apple doesn't pay it, capital gains tax exists but is deferred until you sell the shares and then rich people don't do that. So then Rockefellers don't pay the tax, but you do as an ordinary peon who has a good run messing around on Robinhood, or when you start making withdrawals from your IRA. Meanwhile we can't get rid of the tax which now only applies to the middle class because people claim that you're trying to give a tax cut to the billionaires who aren't actually paying it.
> there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support.
It's really an argument for tax simplification.
As far as I can tell the way tax policy works is that rich people hire lawyers and PR firms to cast the forms of taxation they would actually have to pay as regressive (e.g. consumption taxes, because you can't register the Rolls Royce without paying the tax and you can't sell into the jurisdiction without collecting VAT) and the forms they can avoid through shell games and accounting tricks as The One True Way To Tax The Rich (e.g. "profit" taxes, because profit is fuzzy around the edges and has high inter-region liquidity), which the rich then weasel out of and leave only the middle class paying the tax.
But this has more or less been done for the most powerful, e.g. corporate income tax exists but Apple doesn't pay it, capital gains tax exists but is deferred until you sell the shares and then rich people don't do that. So then Rockefellers don't pay the tax, but you do as an ordinary peon who has a good run messing around on Robinhood, or when you start making withdrawals from your IRA. Meanwhile we can't get rid of the tax which now only applies to the middle class because people claim that you're trying to give a tax cut to the billionaires who aren't actually paying it.
> there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support.
It's really an argument for tax simplification.
As far as I can tell the way tax policy works is that rich people hire lawyers and PR firms to cast the forms of taxation they would actually have to pay as regressive (e.g. consumption taxes, because you can't register the Rolls Royce without paying the tax and you can't sell into the jurisdiction without collecting VAT) and the forms they can avoid through shell games and accounting tricks as The One True Way To Tax The Rich (e.g. "profit" taxes, because profit is fuzzy around the edges and has high inter-region liquidity), which the rich then weasel out of and leave only the middle class paying the tax.
I looked for some reliable numbers on Apple's tax payment and didn't find any, so I won't comment on that, but I do want to say some things about...
> capital gains tax exists but is deferred until you sell the shares and then rich people don't do that
This gets pretty quickly into the philosophical what-are-we-doing-here-exactly of taxes, but:
1) Shares don't do very much on their own, so there isn't really a problem with that. I mean, dude owns a billion in shares - if they earn income dude will pay tax, if they don't the only true to get to the value is to sell them.
I imagine there are some gaping loopholes involving charities and debt, but that isn't anything to do with the deferment of the tax.
2) Because of inflation - and asset inflation is markedly higher than CPI - CGT is effectively a wealth tax because fairly quickly most of the value of an asset is the inflationary component. I've got gold bars where I allegedly am making a 100-and-something% return and that just flies in the face of the inert reality of the metal itself. The tax is markedly unfair, anyone trying to be a responsible saver ends up paying much more of their income in tax than someone who just spends it on the day and it effectively becomes a wealth tax that stops anyone in the middle class moving up over time. Moving wealth between assets is catastrophic to your financial health once CGT is a factor.
There are a bunch of quirky distortions in the tax system. CGT might even be one of the contributing factors to why people don't tend to have savings (although the biggest factor is probably psychology). Rationally speaking saving is quite an inefficient use of money if you end up paying CGT.
> capital gains tax exists but is deferred until you sell the shares and then rich people don't do that
This gets pretty quickly into the philosophical what-are-we-doing-here-exactly of taxes, but:
1) Shares don't do very much on their own, so there isn't really a problem with that. I mean, dude owns a billion in shares - if they earn income dude will pay tax, if they don't the only true to get to the value is to sell them.
I imagine there are some gaping loopholes involving charities and debt, but that isn't anything to do with the deferment of the tax.
2) Because of inflation - and asset inflation is markedly higher than CPI - CGT is effectively a wealth tax because fairly quickly most of the value of an asset is the inflationary component. I've got gold bars where I allegedly am making a 100-and-something% return and that just flies in the face of the inert reality of the metal itself. The tax is markedly unfair, anyone trying to be a responsible saver ends up paying much more of their income in tax than someone who just spends it on the day and it effectively becomes a wealth tax that stops anyone in the middle class moving up over time. Moving wealth between assets is catastrophic to your financial health once CGT is a factor.
There are a bunch of quirky distortions in the tax system. CGT might even be one of the contributing factors to why people don't tend to have savings (although the biggest factor is probably psychology). Rationally speaking saving is quite an inefficient use of money if you end up paying CGT.
> 1) Shares don't do very much on their own, so there isn't really a problem with that. I mean, dude owns a billion in shares - if they earn income dude will pay tax, if they don't the only true to get to the value is to sell them.
Are you aware of the "buy, borrow, die" strategy? In short, you can borrow against the value of appreciated assets to get income during your lifetime, then pass the assets (and the debt) on in inheritance, and your heirs don't have to pay any capital gains tax because of cost-basis step up when they sell the assets to pay the debt. You effectively avoid any taxation on the appreciation.
Are you aware of the "buy, borrow, die" strategy? In short, you can borrow against the value of appreciated assets to get income during your lifetime, then pass the assets (and the debt) on in inheritance, and your heirs don't have to pay any capital gains tax because of cost-basis step up when they sell the assets to pay the debt. You effectively avoid any taxation on the appreciation.
You don't need shares for this - you can be mortgaged up to the hilt and pass on the house to your heirs when you die, and they sell the house to pay off the mortgage.
But all the money you borrowed needs to have been spent, or it's subject to inheritance tax (or paying back the debt it came from), and all that spending needs to be on things that are taxed with VAT, with employees providing services you buy who are paying income tax, and the businesses you're buying from paying corporation tax, etc etc. Tax is never avoided; it's just paid through other means.
But all the money you borrowed needs to have been spent, or it's subject to inheritance tax (or paying back the debt it came from), and all that spending needs to be on things that are taxed with VAT, with employees providing services you buy who are paying income tax, and the businesses you're buying from paying corporation tax, etc etc. Tax is never avoided; it's just paid through other means.
But this is kind of my point. Capital gains tax is a dumb tax, it mostly screws middle class people and creates several perverse incentives, and we'd be better off to use a simple consumption tax instead. The argument against this is supposedly that "rich people" are the ones who pay capital gains tax, but in practice "rich people" are the ones in the best position to avoid paying it using fancy accountants and cross-border shenanigans. The middle class people actually paying it wouldn't be any worse off with a consumption tax that lacks all of those perverse incentives, and might even end up paying less because then the super rich would pay the same rate as they do instead of a lower one.
Consumption tax screws the working and middle classes the absolute most because they consume the most as a % of their income.
There's a reason it was pushed mostly by billionaires.
LVT is the most egalitarian tax. It's completely unavoidable for land owners, renters pay nothing at all, it skews highest on the biggest landowers and it doesnt disincentivize productive investment or productive work.
There's a reason it was pushed mostly by billionaires.
LVT is the most egalitarian tax. It's completely unavoidable for land owners, renters pay nothing at all, it skews highest on the biggest landowers and it doesnt disincentivize productive investment or productive work.
> Consumption tax screws the working and middle classes the absolute most because they consume the most as a % of their income.
This is the rich corporation PR that I'm talking about.
So here's Richie Rich not spending most of his income, but also not selling any shares unless he wants to buy something. In fact, he doesn't sell shares even then, because instead he borrows money to buy things, so there are never any capital gains. Without a consumption tax he pays no tax at all.
But you're saying we need this tax, whose practical effect is to tax middle class people on the inflationary component of asset price increases, because they spend more of their income. Instead you want to tax middle class people on their income. But then what benefit do they receive by using an income tax which immediately taxes all of their income?
This is the rich corporation PR that I'm talking about.
So here's Richie Rich not spending most of his income, but also not selling any shares unless he wants to buy something. In fact, he doesn't sell shares even then, because instead he borrows money to buy things, so there are never any capital gains. Without a consumption tax he pays no tax at all.
But you're saying we need this tax, whose practical effect is to tax middle class people on the inflationary component of asset price increases, because they spend more of their income. Instead you want to tax middle class people on their income. But then what benefit do they receive by using an income tax which immediately taxes all of their income?
Please. Corporations would LOVE to zero out corporation taxes and replace them with a consumption tax.
For years Steve Forbes the billionaire was the face of "the consumption tax". You dont get richer or more corporate than that fucker.
I dont want to tax the middle classes on their income either. It's regressive just not AS regressive as a consumption tax.
I want a land value tax.
For years Steve Forbes the billionaire was the face of "the consumption tax". You dont get richer or more corporate than that fucker.
I dont want to tax the middle classes on their income either. It's regressive just not AS regressive as a consumption tax.
I want a land value tax.
LVT ignores that there are other resources that may be hoarded. In particular, companies can hire all the employees with the skills necessary to build a competitor and have them do busy work to avoid having to innovate or compete on the merits of their products.
This is essentially the same thing as buying up land and leaving it fallow, but with human resources instead of land. In some ways this is worse, as society has already invested in training those workers.
This is essentially the same thing as buying up land and leaving it fallow, but with human resources instead of land. In some ways this is worse, as society has already invested in training those workers.
Employees are not a finite resource. Pay enough to hire half of the chartered accountants and that will drive the creation of more. Demand follows supply.
Land is finite. Buy half of all the land and that won't exactly drive the creation of more land will it? It'll just drive up the price of existing land.
This is in a nutshell why some things in America are dirt cheap (e.g. electronics, clothes) while houses keep getting more and more absurdly priced.
Land is finite. Buy half of all the land and that won't exactly drive the creation of more land will it? It'll just drive up the price of existing land.
This is in a nutshell why some things in America are dirt cheap (e.g. electronics, clothes) while houses keep getting more and more absurdly priced.
> It's completely unavoidable for land owners, renters pay nothing at all,
In this world, renters pay all of the expenses incurred by land owners via a payment we call "rent".
Note that LVT discourages diverse development. You see an empty piece of land that should be filled with condos. I see an open space that lets me see something other than condos.
In this world, renters pay all of the expenses incurred by land owners via a payment we call "rent".
Note that LVT discourages diverse development. You see an empty piece of land that should be filled with condos. I see an open space that lets me see something other than condos.
In this world renters already pay a 100% land value tax. Levy a land value tax on landlords and renters will neither pay more nor less. It's already baked into market rent.
There is law, economic or otherwise that a business has to make a profit. With an LVT you cant profit from land speculation only providing a good, well maintained property which uses space efficiently.
LVT does not discourage diverse development. It only discourages land hoarding and inefficient use of land (e.g. San Francisco's one family homes).
There is law, economic or otherwise that a business has to make a profit. With an LVT you cant profit from land speculation only providing a good, well maintained property which uses space efficiently.
LVT does not discourage diverse development. It only discourages land hoarding and inefficient use of land (e.g. San Francisco's one family homes).
Excellent comment
The argument/discussion about taxes has to start by discussing what functions and services we want to be handled by the state.
There are taxes that are there to nudge people and encourage certain things, but all in all the point is to finance the state.
In most developed countries the state, in one form or another, has taken on many functions and services and that implies that taxation has to be significant. So before discussing cutting tax we need to think about what the state should offload (if anything) first.
There are taxes that are there to nudge people and encourage certain things, but all in all the point is to finance the state.
In most developed countries the state, in one form or another, has taken on many functions and services and that implies that taxation has to be significant. So before discussing cutting tax we need to think about what the state should offload (if anything) first.
I would love to have that discussion, as I agree instinctively, having worked with local and national government bodes in the UK - it does seem as though the current way is very expensive. But what could we chop off without making it much worse?
I think its a bit different. In other scenarios like income, capital gains or even sales tax, its tied to the taxee gaining something. Its the price of doing business and an evaluation can be made by the taxee. Incentives are pitted against each other and chalked up to the price of doing business.
An LVT feels like pure downside to the taxee. There are no beneficial _direct_ effects. Its psychologically very different, especially for residential land.
An LVT feels like pure downside to the taxee. There are no beneficial _direct_ effects. Its psychologically very different, especially for residential land.
Meh, the only cogent argument against taxation is "I like the Mad Max franchise so much I'd vacation there". Everything else is just trying to find someone else's pocket to pick to pay for the services one enjoys. Anyway, we're currently pretty damn close to having unwound corporate taxes. Check this out:
https://taxfoundation.org/data/all/federal/historical-corpor...
> Everything else is just trying to find someone else's pocket to pick to pay for the services one enjoys
That's an argument for taxation, not against it.
That's an argument for taxation, not against it.
Tell me you don't know where roads come from without telling me you don't know where roads come from...
Roads are approximately 0% of GDP. In fact a quick check suggests that the US annual deficit is larger than road construction spending [0] so funnily enough it is probably feasible to get rid of all taxes in the US and reduce the deficit and still have roads.
People love bringing up roads in this sort of topic for some reason but they really aren't a big enough spending target to be worth it.
[0] https://fred.stlouisfed.org/series/TLHWYCONS#0
People love bringing up roads in this sort of topic for some reason but they really aren't a big enough spending target to be worth it.
[0] https://fred.stlouisfed.org/series/TLHWYCONS#0
Roads are just one example. Either you get the concept or you dont.
I'd say it is more that if you pick any real line item that taxes are spent on (topics like welfare, warfare, debt and medicine) you start hitting highly political topics where there is usually a good argument that the taxation and spending is making things worse on net.
So people have to pick trivial examples to try and brush aside that all the realistic ones are actually up for debate.
So people have to pick trivial examples to try and brush aside that all the realistic ones are actually up for debate.
The tell me...without construction is not a substitute for discussion. What do you actually mean, in non-Youtube comment-speke.
Neither is rampant pedantry. Either you grasp the concept that government services and institutions literally make society possible and cost money or you don't.
That doesn't seem relevant to the first comment you replied to.
The easiest answer to this is a very slow phase in. LVT doesn't need to be 100%. You can start it at 1% and have it set to increase slowly over time. This means that, for currenty owners, it will come into effect so slowly that it doesn't matter. You can even phase it in so slowly that on the timelines that they might want to sell it, it doesn't matter too much. And, at every point along that phase in, you get incremental improvements.
This doesn't resolve the ongoing incentive to remove the LVT, creating immediate value for the current land-owners.
This is a pretty weak argument, in my opinion: "we shouldn't do this because powerful people who don't benefit will try to undo it."
It's not an argument not to do it. I'm just pointing out that it isn't enough to make the world a better place, you need to have a plan ready for how to keep it that way or we just get captured again.
No you don’t because no plan survives first contact with reality. You simply have to keep plugging the benefits and make it politically infeasible for MPs/Congress/Etc. to undo it.
What you describe applies to pretty much any tax on any asset.
E.g. "if you tax bitcoin as capital gains that will only create an incentive to remove it because then the value of bitcoin will go up."
E.g. "if you tax bitcoin as capital gains that will only create an incentive to remove it because then the value of bitcoin will go up."
A proper analogy would be a yearly tax on bitcoin sitting idly in your wallet, not a capital gains tax. Land is already subject to capital gains tax.
SIdenote: this is the case right now in Netherlands (and 2 or 3 other European countries) and has been for decades. They tax capital value instead of capital gains value.
So, if you bought $100K of bitcoin, then 10 years later the value of bitcoin drops by 50% you not only lost $50K you also paid taxes just for possession of the bitcoin? That seems awful. It'd also incentivize a lot of people to get "hacked" and lose their bitcoin.
This pattern has been observed in practice, such as in France: https://en.wikipedia.org/wiki/Wealth_tax#Capital_flight
This pattern has been observed in practice, such as in France: https://en.wikipedia.org/wiki/Wealth_tax#Capital_flight
Well what's fair depends on your situation.
Let's say you invest 100k in Bitcoin and 10 years later it's 1M. In a capital gains system you would pay 252000 EUR in taxes on that (assuming 28% capital gains tax, which at least 1 country in Europe actually has).
In the capital tax system you would have paid between 15.000 and 100.000 EUR of taxes on that over the same 10 years. Which is... much less.
So you could argue that the tax on capital is much more "fair". It's definitely MUCH simpler in terms of administration, because you never ever have to prove the cost-basis of your investment. All you need to know is your current P&L. There are a lot of US brokers out there who deliberately "forget" to provide a cost basis when you buy shares (hello and fu DriveWealth).
Let's say you invest 100k in Bitcoin and 10 years later it's 1M. In a capital gains system you would pay 252000 EUR in taxes on that (assuming 28% capital gains tax, which at least 1 country in Europe actually has).
In the capital tax system you would have paid between 15.000 and 100.000 EUR of taxes on that over the same 10 years. Which is... much less.
So you could argue that the tax on capital is much more "fair". It's definitely MUCH simpler in terms of administration, because you never ever have to prove the cost-basis of your investment. All you need to know is your current P&L. There are a lot of US brokers out there who deliberately "forget" to provide a cost basis when you buy shares (hello and fu DriveWealth).
> In the capital tax system you would have paid between 15.000 and 100.000 EUR of taxes on that over the same 10 years. Which is... much less.
Unless bitcoin crashes to zero. Then you've not only lost the $100K you spent to buy the bitcoin. You've also paid these taxes just because you possessed this now-worthless asset.
This is why capital taxes suck: you haven't actually made any money until you sell the asset. You can easily end up paying taxes on something that has zero value.
Unless bitcoin crashes to zero. Then you've not only lost the $100K you spent to buy the bitcoin. You've also paid these taxes just because you possessed this now-worthless asset.
This is why capital taxes suck: you haven't actually made any money until you sell the asset. You can easily end up paying taxes on something that has zero value.
Yes, however I'd argue that land, maybe more than other property, is one of the main property rights that government exists to enforce. If the land value tax becomes a land property rights enforcement subscription payment, maybe it makes more sense to have it be an annual payment so that the government (courts, cops, etc) makes sure others respect that you own the land.
Property taxes and property ownership are fundamentally at odds with each other.
Fundamental rights should never be taxed and the government should never be able to take them away from us. If either of those are true then it's a privilege not a right.
As soon as a government can tax me just for owning a piece of land, rather than for the original purchase of the land or the produces I make and sell from the land, I no longer have a right to property ownership. At that point I am effectively renting the land from the government.
That landlord can take the land back if I don't pay my taxes. They can even kick me off the land if they decide they need it, graciously throwing some money at me based on whatever they think my claim to ownership is worth while they send me packing.
Fundamental rights should never be taxed and the government should never be able to take them away from us. If either of those are true then it's a privilege not a right.
As soon as a government can tax me just for owning a piece of land, rather than for the original purchase of the land or the produces I make and sell from the land, I no longer have a right to property ownership. At that point I am effectively renting the land from the government.
That landlord can take the land back if I don't pay my taxes. They can even kick me off the land if they decide they need it, graciously throwing some money at me based on whatever they think my claim to ownership is worth while they send me packing.
You say that the government should never be able to take away land from us that we own. But what if they take away the services that guarantee other people don't take away that land from us?
In that way, they're not taking the land, they're just ceasing to provide police officers, judges, courts, etc., to ensure no one else takes the land.
I think I agree with you in theory, that if we own it, we own it, and yet I think "owning" something is a social construct protected by institutions doing services.
It almost seems like the debate in software where companies have often shifted to subscription SaaS models and customers want to be able to own the software outright. And customers say they don't want updates, but often they still want security updates and for as long as the product exists, which is an ongoing service software companies provide, not so dissimilar to services governments might provide to protect land.
In other words, if I buy a plot of land, does that entitle me to 10 years of someone defending my land borders? 100? 1,000? And if not and i have to defend those borders myself, do we really have government property rights or lots of individuals with guns saying who owns which property?
I dont think it HAS to be paid with property taxes, but i also dont think the concept of infinite ownership makes sense either.
In that way, they're not taking the land, they're just ceasing to provide police officers, judges, courts, etc., to ensure no one else takes the land.
I think I agree with you in theory, that if we own it, we own it, and yet I think "owning" something is a social construct protected by institutions doing services.
It almost seems like the debate in software where companies have often shifted to subscription SaaS models and customers want to be able to own the software outright. And customers say they don't want updates, but often they still want security updates and for as long as the product exists, which is an ongoing service software companies provide, not so dissimilar to services governments might provide to protect land.
In other words, if I buy a plot of land, does that entitle me to 10 years of someone defending my land borders? 100? 1,000? And if not and i have to defend those borders myself, do we really have government property rights or lots of individuals with guns saying who owns which property?
I dont think it HAS to be paid with property taxes, but i also dont think the concept of infinite ownership makes sense either.
Are governments really protecting our land borders in that situation though, or protecting their monopoly such that they are the only ones who can take it from us? Governments can absolutely protect our borders, my only issue is that it should be universal and governments should also be ensuring that even they can't strip us of land that we own based on the existing laws and social contracts that are fundamental to our society.
I totally agree that land ownership is propped up on by social contracts, and that we have institutions meant to enforce those contract. I'd be okay with getting rid of land ownership entirely if it also meant getting rid of all those centralized powers that are supposed to defend it but sometimes do the opposite.
I totally agree that land ownership is propped up on by social contracts, and that we have institutions meant to enforce those contract. I'd be okay with getting rid of land ownership entirely if it also meant getting rid of all those centralized powers that are supposed to defend it but sometimes do the opposite.
Because of what you said, I'm starting to think about human rights and how governments also provide services to protect citizens from others and yet, if I don't pay any tax as a citizen, often the government still provides those services to me, because it's not just for my benefit but the benefit of the community.
So I wonder if this is kinda what you meant about still guaranteeing those rights as property as well.
And also, if i understand correct, youre saying that you just want the governments to abide by the social contracts and laws that exist to protect these land rights, not revoke them, correct?
I think i may really enjoy a proper conversation with you about this and I struggle sometimes in these long HN chains to learn and reply.
So I wonder if this is kinda what you meant about still guaranteeing those rights as property as well.
And also, if i understand correct, youre saying that you just want the governments to abide by the social contracts and laws that exist to protect these land rights, not revoke them, correct?
I think i may really enjoy a proper conversation with you about this and I struggle sometimes in these long HN chains to learn and reply.
> Property taxes and property ownership are fundamentally at odds with each other.
This makes absolutely no sense.
> Fundamental rights should never be taxed and the government should never be able to take them away from us.
Property is not a fundamental right and never has been. Firstly, a huge number of people do not own land (which an LTV would apply to) so in declaring it a fundamental right, you'd need to start thinking about how to get land to those people. Good luck doing that without violating the "fundamental right" of the existing property owners.
Secondly, many cultures (past and present) simply don't recognise property rights in the way outlined in the legal codes of western governments. Traveller communities & nomadic tribes, for example, have far fuzzier concepts of property ownership than you or I understand.
This makes absolutely no sense.
> Fundamental rights should never be taxed and the government should never be able to take them away from us.
Property is not a fundamental right and never has been. Firstly, a huge number of people do not own land (which an LTV would apply to) so in declaring it a fundamental right, you'd need to start thinking about how to get land to those people. Good luck doing that without violating the "fundamental right" of the existing property owners.
Secondly, many cultures (past and present) simply don't recognise property rights in the way outlined in the legal codes of western governments. Traveller communities & nomadic tribes, for example, have far fuzzier concepts of property ownership than you or I understand.
To be clear I'm talking about the US here. I actually very much align with the views of some other cultures where land can not be owned at all. I'd much prefer that model, it just isn't what we have today.
> This makes absolutely no sense.
For something to be a right means that we are each entitled to it simply by being human [1]. Free speech, for example, is a right that isn't supposed to be infringed upon regardless of what you say.
Privledges come with strings attached. you have the opportunity to drive a car but not the right to do so. You have to be licensed, you have to pay taxes, you have to register your vehicle, etc. If you don't follow the rules you may lose that privledge.
Many of the US founding fathers wrote extensively about the importance of property rights [2]. They also viewed slaves as property and took land from loyalists after the revolutionary war was over, so by no means am I saying they were perfect. The history of the right to property ownership literally goes back to the creation of our country though.
The right to own property doesn't mean that everyone must own some though, I'm not sure where you're getting that. The government doesn't have to ensure that everyone does own land, only that everyone can own land.
[1] https://helpfulprofessor.com/rights-vs-privileges/ [2] https://www.hillsdale.edu/educational-outreach/free-market-f...
> This makes absolutely no sense.
For something to be a right means that we are each entitled to it simply by being human [1]. Free speech, for example, is a right that isn't supposed to be infringed upon regardless of what you say.
Privledges come with strings attached. you have the opportunity to drive a car but not the right to do so. You have to be licensed, you have to pay taxes, you have to register your vehicle, etc. If you don't follow the rules you may lose that privledge.
Many of the US founding fathers wrote extensively about the importance of property rights [2]. They also viewed slaves as property and took land from loyalists after the revolutionary war was over, so by no means am I saying they were perfect. The history of the right to property ownership literally goes back to the creation of our country though.
The right to own property doesn't mean that everyone must own some though, I'm not sure where you're getting that. The government doesn't have to ensure that everyone does own land, only that everyone can own land.
[1] https://helpfulprofessor.com/rights-vs-privileges/ [2] https://www.hillsdale.edu/educational-outreach/free-market-f...
So let's look at the United States. By your definition, this "property right" is still not fundamental, as Property Tax seems to be a thing. [1]
According to the US Constitution, property is outlined as a right but not inalienable. Clearly it's possible for governments to take property with due process (i.e. a process written down) and they don't mention taxing them at all. Article 17 of the Universal Declaration of Human Rights also doesn't mention taxation, so I still don't see how any of this supports your argument that property taxes violate property rights.
[1] https://en.wikipedia.org/wiki/Property_tax_in_the_United_Sta...
According to the US Constitution, property is outlined as a right but not inalienable. Clearly it's possible for governments to take property with due process (i.e. a process written down) and they don't mention taxing them at all. Article 17 of the Universal Declaration of Human Rights also doesn't mention taxation, so I still don't see how any of this supports your argument that property taxes violate property rights.
[1] https://en.wikipedia.org/wiki/Property_tax_in_the_United_Sta...
> So let's look at the United States. By your definition, this "property right" is still not fundamental, as Property Tax seems to be a thing. [1]
That was actually the core of the original point I was trying to get at, I may have just done a poor job explaining it.
Property ownership should be a fundamental right in my opinion, and at least based on their writing that's an opinion shared by our country's founders.
The existence of property taxes and the state's power to claim eminent domain both show that it isn't treated as a right.
> Clearly it's possible for governments to take property with due process (i.e. a process written down)
Well clearly that is how it is being handled today, but that doesn't mean it should be that way. Though rare, you will occasionally find stories of individuals who's land was taken by the government ad the person is effectively thrown out on their ass. I don't think that should ever be possible, I don't care what the government would like to use the land for.
I actually saw this happen just a few years ago. The cities of Orange Beach and Gulf Shores, aong with the Alabama stage government, were all fighting over where a new bridge to the barrier island should go and who would get to tax it. A plan was drawn up putting the bridge on part of the canal where homes already existed on both sides.
The owners were forced out and given under market rate for the houses. This was in 2017 or so if I remember right, property value there has gone crazy in recent years meaning they also lost all that potential growth in value. Anyway, the legal fight over the bridge ultimately swung a different way and the homes were taken only to sit vacant and abandoned as the bridge is now going elsewhere.
This should never happen in my opinion, plain and simple. If I lawfully own a piece of land and followed all the rules the government shouldn't be able to kick me out and effectively use my land as a piece on a political game board.
That was actually the core of the original point I was trying to get at, I may have just done a poor job explaining it.
Property ownership should be a fundamental right in my opinion, and at least based on their writing that's an opinion shared by our country's founders.
The existence of property taxes and the state's power to claim eminent domain both show that it isn't treated as a right.
> Clearly it's possible for governments to take property with due process (i.e. a process written down)
Well clearly that is how it is being handled today, but that doesn't mean it should be that way. Though rare, you will occasionally find stories of individuals who's land was taken by the government ad the person is effectively thrown out on their ass. I don't think that should ever be possible, I don't care what the government would like to use the land for.
I actually saw this happen just a few years ago. The cities of Orange Beach and Gulf Shores, aong with the Alabama stage government, were all fighting over where a new bridge to the barrier island should go and who would get to tax it. A plan was drawn up putting the bridge on part of the canal where homes already existed on both sides.
The owners were forced out and given under market rate for the houses. This was in 2017 or so if I remember right, property value there has gone crazy in recent years meaning they also lost all that potential growth in value. Anyway, the legal fight over the bridge ultimately swung a different way and the homes were taken only to sit vacant and abandoned as the bridge is now going elsewhere.
This should never happen in my opinion, plain and simple. If I lawfully own a piece of land and followed all the rules the government shouldn't be able to kick me out and effectively use my land as a piece on a political game board.
If the founders intended that, they had the opportunity to make that explicit in the constitution. They even reference “due process” so it’s clear they had something in mind. It’s just not what you’re claiming.
Sometimes there's only a single tax allowed. Like in the US the federal government can only tax income unless they change the constitution.
LVT as the single tax would be much harder to repeal.
LVT as the single tax would be much harder to repeal.
This is close to, but not entirely, true. The US federal government also has the power to levy direct capitation taxes (taxes that are effectively constant per-person without regard to any other factors).
In practice, those taxes are impractically regressive, but the federal government does have that power under the Constitution.
In practice, those taxes are impractically regressive, but the federal government does have that power under the Constitution.
orangesite(2)
Sure there are ways it could technically be implemented, but that doesn't say whether it should be implemented. Why is an LVT inheritly good for us? And is it so good that we should trick the public into not realizing a new tax was forced on them and the government was stealing more of their money?
There are more than enough words spilled on the first topic by better writers than myself. If you click around the archives of the substack the linked article is from, you will find plenty. As for the second point: usually LVT is proposed as a more efficient alternative to current taxes, not as an entirely new tax on top of all the currently existing taxes.
In fact, there are people in this thread (inaccurately) accusing the author of being a "single taxer", since there are some Georgists who believe that an LVT could potentially be the only tax.
In fact, there are people in this thread (inaccurately) accusing the author of being a "single taxer", since there are some Georgists who believe that an LVT could potentially be the only tax.
> freed of its shackles and allowed to appreciate again. Some of this would be immediate, as thousands of dollars in taxes shift away from land and back onto labour, enterprise, and commerce
Oh not again with the trickle-down story. It doesn't work, it never worked.
The only way that money trickles is in the pockets of the landowners, from there it will be used to lobby politicians or stored in some fiscal haven.
On the other hand, as long as that money is taxed it can be used by the state for the people. Build infrastructure, improve education, healthcare, etc.
That's how you get money to "trickle down". That is, of course, if the state isn't to o busy making arms manufacturers rich.
Oh not again with the trickle-down story. It doesn't work, it never worked.
The only way that money trickles is in the pockets of the landowners, from there it will be used to lobby politicians or stored in some fiscal haven.
On the other hand, as long as that money is taxed it can be used by the state for the people. Build infrastructure, improve education, healthcare, etc.
That's how you get money to "trickle down". That is, of course, if the state isn't to o busy making arms manufacturers rich.
> That's how you get money to "trickle down". That is, of course, if the state isn't to o busy making arms manufacturers rich.
If you won't trust in the state parentally taking from some and giving to others, nor trust in people making transactions between each other on what they find valuable, what do you want? Is there a third option?
If you won't trust in the state parentally taking from some and giving to others, nor trust in people making transactions between each other on what they find valuable, what do you want? Is there a third option?
I don't see any other option. We should remember that we are the state, in theory. It's the whole point of a state. If that isn't the case anymore, we should fix it.
The main problem is that nowadays states operate on the basis of the same false trickle-down fable.
They don't build stuff, they pay corporations to do it for them and expect that money to somehow flow down to the people. We can clearly see that doesn't happen as inequality keeps growing.
The main problem is that nowadays states operate on the basis of the same false trickle-down fable.
They don't build stuff, they pay corporations to do it for them and expect that money to somehow flow down to the people. We can clearly see that doesn't happen as inequality keeps growing.
We aren't the state, though. The state is the governing body and its surrounding entities, funded through taxes, that controls the justice system and the military.
I don't think it's a good idea to conflate "the state" and "the country" or "society". The state is the most powerful entity in the country, but it's not the only one.
And I've probably said this elsewhere, but inequality is not important. We keep hearing about it every day, so it sounds important, but it's not. Unless it's being done deliberately to keep people down, e.g. in a feudal or 20th century socialism country, but even then the fundamental problem is authoritarianism, not inequality. Inequality is a symptom, and not always of something bad.
I don't care that Tesla owners in the early 2010s had Roadsters and I didn't. Roadsters paved the way for Model Ss, which paved the way for Model 3s, which - if the Cybertruck hadn't got in the way - paved the way for Model 2s.
I don't care that at some point in history only rich people had (terrible) glasses. Basically everyone (outside of impoverished countries whose government officials absorb the cash from overseas to help) now has access to high quality lenses - far better than those the rich people of the past could access.
Temporary inequality leads to - over time - an uplift of the fundamental things for everyone. That's the only thing that matters - the baseline now vs what it used to be. Not the difference between baseline and the rich. The rich will spend on a thousand trivial things that won't matter, but also on things that will eventually be accessible to everyone.
I don't think it's a good idea to conflate "the state" and "the country" or "society". The state is the most powerful entity in the country, but it's not the only one.
And I've probably said this elsewhere, but inequality is not important. We keep hearing about it every day, so it sounds important, but it's not. Unless it's being done deliberately to keep people down, e.g. in a feudal or 20th century socialism country, but even then the fundamental problem is authoritarianism, not inequality. Inequality is a symptom, and not always of something bad.
I don't care that Tesla owners in the early 2010s had Roadsters and I didn't. Roadsters paved the way for Model Ss, which paved the way for Model 3s, which - if the Cybertruck hadn't got in the way - paved the way for Model 2s.
I don't care that at some point in history only rich people had (terrible) glasses. Basically everyone (outside of impoverished countries whose government officials absorb the cash from overseas to help) now has access to high quality lenses - far better than those the rich people of the past could access.
Temporary inequality leads to - over time - an uplift of the fundamental things for everyone. That's the only thing that matters - the baseline now vs what it used to be. Not the difference between baseline and the rich. The rich will spend on a thousand trivial things that won't matter, but also on things that will eventually be accessible to everyone.
> We aren't the state
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
That's literally in the constitution and not just that of the USA.
> I don't care that
Rich people do care, they want the best healthcare the world can provide, the best education for their children, and want it now, not in 50 years when the "rising tide lifts all boats". Do you consider yourself inferior to them? Then why wouldn't you care?
> Temporary inequality leads to - over time - an uplift of the fundamental things for everyone
"A rising tide lifts all boats", "Trickle down" these are all aphorisms invented by rich people in order to justify their hoarding while there are people who can't afford a roof over their heads. To keep the outcasts calm, waiting for their turn to enjoy a small fraction of what others enjoy entirely now.
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
That's literally in the constitution and not just that of the USA.
> I don't care that
Rich people do care, they want the best healthcare the world can provide, the best education for their children, and want it now, not in 50 years when the "rising tide lifts all boats". Do you consider yourself inferior to them? Then why wouldn't you care?
> Temporary inequality leads to - over time - an uplift of the fundamental things for everyone
"A rising tide lifts all boats", "Trickle down" these are all aphorisms invented by rich people in order to justify their hoarding while there are people who can't afford a roof over their heads. To keep the outcasts calm, waiting for their turn to enjoy a small fraction of what others enjoy entirely now.
> > "We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
> That's literally in the constitution and not just that of the USA.
I don't see how this is relevant to whether the state is synonymous with the population of a country.
> Do you consider yourself inferior to them? Then why wouldn't you care?
I don't consider "inferior" to be "I don't have a Porsche and they do". Or even "I can't force taxpayers to pay for a $10m operation and followup treatment and someone else can afford it out of the value they've created", which I think is what you're thinking I should say.
Is that what you're saying? Happy to discuss, but you seem to be talking in emotive language rather than speaking plainly, and I'm just trying to get at the a plain description of what you mean.
> That's literally in the constitution and not just that of the USA.
I don't see how this is relevant to whether the state is synonymous with the population of a country.
> Do you consider yourself inferior to them? Then why wouldn't you care?
I don't consider "inferior" to be "I don't have a Porsche and they do". Or even "I can't force taxpayers to pay for a $10m operation and followup treatment and someone else can afford it out of the value they've created", which I think is what you're thinking I should say.
Is that what you're saying? Happy to discuss, but you seem to be talking in emotive language rather than speaking plainly, and I'm just trying to get at the a plain description of what you mean.
> I don't consider "inferior" to be "I don't have a Porsche and they do".
You keep fixating on luxury cars for some reason, I'm talking about fundamental rights recognized in the universal declaration of human rights. I couldn't care less about owning a Porsche or a Tesla.
I care about the health and education of my family and I don't want to live in a society where people die because of lack of treatments. You say "a $10m operation", I'm sorry to say that shows again you're out of touch. People die every day because they can't afford insulin, which costs about $3 per vial to produce.
You keep fixating on luxury cars for some reason, I'm talking about fundamental rights recognized in the universal declaration of human rights. I couldn't care less about owning a Porsche or a Tesla.
I care about the health and education of my family and I don't want to live in a society where people die because of lack of treatments. You say "a $10m operation", I'm sorry to say that shows again you're out of touch. People die every day because they can't afford insulin, which costs about $3 per vial to produce.
> You keep fixating on luxury cars for some reason, I'm talking about fundamental rights recognized in the universal declaration of human rights. I couldn't care less about owning a Porsche or a Tesla.
I'm not fixating - there's no point introducing pop psychology. They're just an easy way to explain a mechanism. I also mentioned hyper-expensive medical treatments, and corrective lenses. If you only saw luxury cars in that list, I don't think you should be diagnosing anyone else with fixation.
> People die every day because they can't afford insulin, which costs about $3 per vial to produce.
This isn't a human rights issue; nor is it a rich people bad issue. It's an economics/corruption/bad regulations issue. People get rich by making something lots of people want for $3 a go. People want to do that.
I'm not fixating - there's no point introducing pop psychology. They're just an easy way to explain a mechanism. I also mentioned hyper-expensive medical treatments, and corrective lenses. If you only saw luxury cars in that list, I don't think you should be diagnosing anyone else with fixation.
> People die every day because they can't afford insulin, which costs about $3 per vial to produce.
This isn't a human rights issue; nor is it a rich people bad issue. It's an economics/corruption/bad regulations issue. People get rich by making something lots of people want for $3 a go. People want to do that.
> It's an economics/corruption/bad regulations issue
And who's going to fix that if not the state?
And who's going to fix that if not the state?
In a functional democracy, the state is working in the best interest of the people. And your assertion that GP is arguing that the state is "synonymous with the population" is a straw man, as they didn't say that.
Let's look at the phrase "value they've created" that you used. That's a bit of an idealistic way of thinking. After all those with money and power in society have historically used that money and power to get more money and power. Does a king sitting on a throne produce more "value" than the farmers that feed his cities? Does the hedge fund manager choosing stocks to buy and companies to liquidate produce more value than doctors who save people's lives?
Let's look at the phrase "value they've created" that you used. That's a bit of an idealistic way of thinking. After all those with money and power in society have historically used that money and power to get more money and power. Does a king sitting on a throne produce more "value" than the farmers that feed his cities? Does the hedge fund manager choosing stocks to buy and companies to liquidate produce more value than doctors who save people's lives?
> We should remember that we are the state, in theory. It's the whole point of a state. If that isn't the case anymore, we should fix it.
Who is the "we" in this?
Who is the "we" in this?
Us. It's a figure of speech, no need to take it so literally.
> funded through taxes
Whatever your views, this is simply wrong.
A state that controls its own currency doesn’t need taxes.
They only exist to control inflation. We could achieve the same thing with high interest rate, printing all the money we need and having zero tax on anything.
Taking out loans creates money, including when private banks do it. That’s what national debt does too.
Whatever your views, this is simply wrong.
A state that controls its own currency doesn’t need taxes.
They only exist to control inflation. We could achieve the same thing with high interest rate, printing all the money we need and having zero tax on anything.
Taking out loans creates money, including when private banks do it. That’s what national debt does too.
The currency only has value because of taxes.
What do you mean - if US government cuts taxes, value of USD goes down?
Definitely. There would be more dollars in circulation for a start. Ultimately the government is the final "sink" for dollars in the system. That and loan repayments (but unlike taxes, loan repayments could be made in any currency).
This is the first time I've encountered anybody else who has figured this out and says it openly.
For those who wonder how: If it wasn't for taxes being collected in the currency of the government, people and businesses would conduct their affairs in other currencies that do not decrease in value from inflation. That's also the reason why there will never be any simple taxation system, such as land value tax or whatnot. In order to keep everybody using the government currency, the taxes demanded in that currency has to be applied to every and any economic activity imaginable, otherwise people will flock to other currencies after having paid their dues, and the government currency value collapses.
This is also the reason why the public sector workforce is of an enormous size, even in supposedly capitalist countries. Public sector workers cannot choose another currency for their paycheck.
This is the reason why most third world countries cannot create a stable government currency: Their tax collection is not effective or comprehensive enough. Unless all the population is put under government issued money by rigorous taxation, they will choose other currency.
For those who wonder how: If it wasn't for taxes being collected in the currency of the government, people and businesses would conduct their affairs in other currencies that do not decrease in value from inflation. That's also the reason why there will never be any simple taxation system, such as land value tax or whatnot. In order to keep everybody using the government currency, the taxes demanded in that currency has to be applied to every and any economic activity imaginable, otherwise people will flock to other currencies after having paid their dues, and the government currency value collapses.
This is also the reason why the public sector workforce is of an enormous size, even in supposedly capitalist countries. Public sector workers cannot choose another currency for their paycheck.
This is the reason why most third world countries cannot create a stable government currency: Their tax collection is not effective or comprehensive enough. Unless all the population is put under government issued money by rigorous taxation, they will choose other currency.
> This is the first time I've encountered anybody else who has figured [taxes keep currency value up] out and says it openly.
Wut? This is one of the basic principles of Modern Monetary Theory, and reams upon reams have been written on it.
https://en.wikipedia.org/wiki/Modern_monetary_theory
Wut? This is one of the basic principles of Modern Monetary Theory, and reams upon reams have been written on it.
https://en.wikipedia.org/wiki/Modern_monetary_theory
I'm not saying the same thing as the Wikipedia page. They say that taxes can counter inflation by reducing spending. But this comes from the erroneous belief that inflation is created by spending (or even worse, by labour wages). Inflation is created by an increase in the money supply, which mainly comes from completely different debt than consumer spending.
I'm not saying like them that increased taxes reduce inflation and props up the currency value in this way. The evidence is against this. What I'm saying is that a comprehensive taxation system that gets into every imaginable nook and cranny of economic activity or life in general, is what is required to give the government currency any value at all. Without having complicated taxes on basically everything, the currency would be worthless or worth much less, as we see in the third world. The US of course has the option to bully other countries to use their currency, by military means. But this is not true for the euro or pound, for example.
I'm not saying like them that increased taxes reduce inflation and props up the currency value in this way. The evidence is against this. What I'm saying is that a comprehensive taxation system that gets into every imaginable nook and cranny of economic activity or life in general, is what is required to give the government currency any value at all. Without having complicated taxes on basically everything, the currency would be worthless or worth much less, as we see in the third world. The US of course has the option to bully other countries to use their currency, by military means. But this is not true for the euro or pound, for example.
This is an interesting theory. Basically, as I understand it, you already want to do these things, but since the government can compel you to pay tax on them in its currency, you stick to that currency out of convenience/necessity. If the taxation system is not comprehensive (or you can evade it), you will use the official currency as little as possible, diminishing the amount of useful things transacted in it and thus its value.
Yes! That's exactly how I meant. And it doesn't matter too much if the taxes are high or low, what's important is that they are collected on every activity. I think the prime example is sales taxes in the different states in the US. They are so low (0%-7%) as to be marginal, and collecting them surely costs the consumer economy much more than the gains the state governments have from them.
The rational policy would be to abolish sales taxes and transfer that tax burden by increasing other taxes – but the purpose of the sales tax is primarily to make sure business is always conducted in the government currency, and thereby giving the US Dollar a value. Try to use a foreign currency, bullion, or whatnot to purchase consumer goods in any big box store and you'll be shown the door. The same in most of Europe. Then try to use your foreign dollars or euros to buy consumer goods in the third world, and your money will be more than welcome.
The rational policy would be to abolish sales taxes and transfer that tax burden by increasing other taxes – but the purpose of the sales tax is primarily to make sure business is always conducted in the government currency, and thereby giving the US Dollar a value. Try to use a foreign currency, bullion, or whatnot to purchase consumer goods in any big box store and you'll be shown the door. The same in most of Europe. Then try to use your foreign dollars or euros to buy consumer goods in the third world, and your money will be more than welcome.
> Inflation is created by an increase in the money supply
This is wrong again, it’s velocity of money, not net supply. Inflation is possible with a fixed supply of money, I.e. gold
This is wrong again, it’s velocity of money, not net supply. Inflation is possible with a fixed supply of money, I.e. gold
If we disagree on this there can be no fruitful exchange.
Also why cryptocurrency will never replace fiat currency. Not that it was ever really meant to, but you know.
A cryptocurrency where all the voting nodes are run by the state could fulfill the same objective. The problem is that cryptocurrencies as we know them are based upon a publicly verifiable ledger. Inevitably, the state would want an "off the books" way to move money around, which would lead to a shadow currency, and the resulting disequilibrium would destabilize either the state or the "official" currency.
Public ledger is also a privacy (and potentially fungibility) nightmare.
> If you won't trust in the state parentally taking from some and giving to others
That's not how it works. The state is tasked with keeping the public good - such as basic infrastructure. "Parentally (...) giving to others" imply that the government taxes your money to do welfare only (and you implied it in a derogatory manner for that matter, which shows your inclinations).
Welfare is important, but not the only function of a government.
> nor trust in people making transactions between each other on what they find valuable
Those should absolutely be regulated and taxed. "people making transactions between each other on what they find valuable" are looking only for their private benefit, society be damned.
That's not how it works. The state is tasked with keeping the public good - such as basic infrastructure. "Parentally (...) giving to others" imply that the government taxes your money to do welfare only (and you implied it in a derogatory manner for that matter, which shows your inclinations).
Welfare is important, but not the only function of a government.
> nor trust in people making transactions between each other on what they find valuable
Those should absolutely be regulated and taxed. "people making transactions between each other on what they find valuable" are looking only for their private benefit, society be damned.
> imply that the government taxes your money to do welfare only
No - this is in the context of the constrasting "trickle down" theory (also derogatory). I took that to mean that instead of trickling down, we should be taking from people who produce the most value and giving it to others. Not we should replace trickle down theory with infrastructure spending - those are not related.
> "people making transactions between each other on what they find valuable" are looking only for their private benefit, society be damned.
Those people are society. Babysitters earning some pocket money; local tradespeople doing jobs; actual community things like churches and running clubs and schools and game cafes; local produce creators. Stuff to spend on locally. That's what makes up society, and those transactions are how it happens.
Society is not a bureaucrat allocating some funds to spend on a committee to decide how round bananas are allowed to be, or whether all children should learn new math or old math, the teacher's opinion be damned. The state is not society.
No - this is in the context of the constrasting "trickle down" theory (also derogatory). I took that to mean that instead of trickling down, we should be taking from people who produce the most value and giving it to others. Not we should replace trickle down theory with infrastructure spending - those are not related.
> "people making transactions between each other on what they find valuable" are looking only for their private benefit, society be damned.
Those people are society. Babysitters earning some pocket money; local tradespeople doing jobs; actual community things like churches and running clubs and schools and game cafes; local produce creators. Stuff to spend on locally. That's what makes up society, and those transactions are how it happens.
Society is not a bureaucrat allocating some funds to spend on a committee to decide how round bananas are allowed to be, or whether all children should learn new math or old math, the teacher's opinion be damned. The state is not society.
> taking from people who produce the most value and giving it to others.
Nice hand-wave. This presumes some people produce most value, and they bear the burden of carrying others (who receive value).
This is all very vague. I disagree with this notion pf how government works until you can be clearer of who you are talking about.
> Those people are society.
So is a drug dealer. Or a con artist. Among many others.
The state exists in part to regulate what is allowed or not.
Babysitters, Local tradespeople, their clients, etc and so forth benefit from it.
Nice hand-wave. This presumes some people produce most value, and they bear the burden of carrying others (who receive value).
This is all very vague. I disagree with this notion pf how government works until you can be clearer of who you are talking about.
> Those people are society.
So is a drug dealer. Or a con artist. Among many others.
The state exists in part to regulate what is allowed or not.
Babysitters, Local tradespeople, their clients, etc and so forth benefit from it.
> Nice hand-wave. This presumes some people produce most value, and they bear the burden of carrying others (who receive value).
I mean, that's actually how it works, only the people who produce most value are the workers, and the people who receive most of it are the capital owners.
I mean, that's actually how it works, only the people who produce most value are the workers, and the people who receive most of it are the capital owners.
I agree, to an extent.
I seriously doubt that's the dynamic GP was referring to.
I seriously doubt that's the dynamic GP was referring to.
>>"people making transactions between each other on what they find valuable" are looking only for their private benefit, society be damned.
We absolutely should not be restricting any mutually voluntary interaction, regardless of the motivations of those party to that interaction.
Note that "mutually voluntary" means no other party having their rights violated by that interaction, which would preclude actions like polluting
We absolutely should not be restricting any mutually voluntary interaction, regardless of the motivations of those party to that interaction.
Note that "mutually voluntary" means no other party having their rights violated by that interaction, which would preclude actions like polluting
> Note that "mutually voluntary" means no other party having their rights violated by that interaction, which would preclude actions like polluting
I don't think this is a rights issue, because it's too difficult to understand. Even simple transactions require contracts, and imagine all the (changing) regulations on what is or isn't deemed acceptable, and how that could be misused. Does noise pollution count? How much CO2 can I breath out before I'm violating your rights? Rights have to be simple; the stuff that will change needs to be laws.
I don't think this is a rights issue, because it's too difficult to understand. Even simple transactions require contracts, and imagine all the (changing) regulations on what is or isn't deemed acceptable, and how that could be misused. Does noise pollution count? How much CO2 can I breath out before I'm violating your rights? Rights have to be simple; the stuff that will change needs to be laws.
In principle, noise and CO2 emission could be restricted, but of course the justifiability of the specific noise/CO2 emission restriction depends on the details.
In principle, interactions that any reasonable person agrees are mutually voluntary, should absolutely not be restricted. This is a human rights issue.
The devastating COVID lockdowns show what happens when we accept the notion that human rights can be infringed for the "greater good". That justification is what the PRC in China uses for all of its heavy handed intrusions in personal liberties, from limits on free speech to religious and ideological control.
The only morally consistent argument against the authoritarianism, that is more substantive than "what that state does is wrong, because we don't do it", is one based on the principle that mutually voluntary interactions shouldn't be restricted.
In principle, interactions that any reasonable person agrees are mutually voluntary, should absolutely not be restricted. This is a human rights issue.
The devastating COVID lockdowns show what happens when we accept the notion that human rights can be infringed for the "greater good". That justification is what the PRC in China uses for all of its heavy handed intrusions in personal liberties, from limits on free speech to religious and ideological control.
The only morally consistent argument against the authoritarianism, that is more substantive than "what that state does is wrong, because we don't do it", is one based on the principle that mutually voluntary interactions shouldn't be restricted.
It's not about taking versus not taking. The rules of the game that we've put in place favor the haves. The end state of that is a return to fiefs and serfs, if we don't see a revolution first.
We need to create new rules to the game that give the advantage to the small. That lets us keep a "free market" without the homogenization and consolidation. For example, consider progressive taxes based on business size/revenue/etc. If there was a 90% top level corporate tax rate based on company size/revenue, we'd reverse the trend towards mergers and consolidations literally overnight. If most government regulations were relaxed for small businesses (say <= 20 employees) it would provide a massive boost to entrepreneurship. Instead we have rules that favor the big guys.
We need to create new rules to the game that give the advantage to the small. That lets us keep a "free market" without the homogenization and consolidation. For example, consider progressive taxes based on business size/revenue/etc. If there was a 90% top level corporate tax rate based on company size/revenue, we'd reverse the trend towards mergers and consolidations literally overnight. If most government regulations were relaxed for small businesses (say <= 20 employees) it would provide a massive boost to entrepreneurship. Instead we have rules that favor the big guys.
It would boost entrepreneurship, but would mean any business that requires 1000 people to function at all may never be built. I don't think it's worth only listing the pros of a change.
Can you provide an example of something that couldn't be built by a cooperative formed by a number of smaller companies, each trying to solve a part of the problem in an economically viable way?
I don't think there is anything that can't be built. It's me a matter of the increased expense and inefficiency making things too expensive to be practical.
Lots of products society would benefit from are cut already with the current status quo as they wouldn't bring enough profits or VC style growth.
- Products that significantly benefit from vertical integration like Tesla and iPhone
- Apple throwing around their 800lb gorilla weight to have better user privacy and bankroll TSMC’s latest process node
- Apple being able to afford gigantic SoC dies in iPhone, compared to android where manufacturers nickel and dime on the SoC and users get flaming pieces of shit clocked to high heaven
- Apple throwing around their 800lb gorilla weight to have better user privacy and bankroll TSMC’s latest process node
- Apple being able to afford gigantic SoC dies in iPhone, compared to android where manufacturers nickel and dime on the SoC and users get flaming pieces of shit clocked to high heaven
All those things could be accomplished by a group of businesses entering collective purchasing agreements, without giving one company the power to punish governments.
i like that apple has the power to punish the EU over chat control, for example
Especially since there is no new value generated that could trickle down. Such "rent seeking" is only redistribution towards lend owners.
The end state for trickle down economics is serfs and fiefdoms. We're seeing it now.
I think you must have misread the comment. The comment is very clearly anti-landowner and saying if an LVT were repealed, labour and enterprise would be taxed instead, which is bad.
Nothing to do with trickle down.
Nothing to do with trickle down.
Indeed, tax is the single most effective measure so far we've found to trickle money out of the rich, and sometimes to the benefit of the poor.
I read that part not as "trickle-down", but as "the tax would have to be collected from other sources".
Unearned rents is questionable. People have always understood the value of land and have worked hard to be able to purchase it and vote + participate in local government to help protect the value of that land. Especially in the US, that mostly worked quite well. We still have huge amounts of extremely cheap land that could be made desirable with enough hard work. You can still buy a crazy amount of land in parts of the country for like $50k.
Done right, an LVT can actually increase land value. Suppose you are a developer that owns a plot of land in a desirable area but there are some abandoned building nearby that a stingy owner refuses to sell. With a regular property tax, if you make significant improvements like add park space, nice trees, landscaping, etc. to your building you pay much more property tax while the stingy owner pays nothing but benefits from increased property value. LVT at least partially penalizes the freeloaders. They must pay more LVT if the area around them improves. It prices an unpriced externality which is generally a good thing.
There might be one thing the rich dislike more than taxes: freeloaders
Done right, an LVT can actually increase land value. Suppose you are a developer that owns a plot of land in a desirable area but there are some abandoned building nearby that a stingy owner refuses to sell. With a regular property tax, if you make significant improvements like add park space, nice trees, landscaping, etc. to your building you pay much more property tax while the stingy owner pays nothing but benefits from increased property value. LVT at least partially penalizes the freeloaders. They must pay more LVT if the area around them improves. It prices an unpriced externality which is generally a good thing.
There might be one thing the rich dislike more than taxes: freeloaders
> We still have huge amounts of extremely cheap land that could be made desirable with enough hard work. You can still buy a crazy amount of land in parts of the country for like $50k.
Land is made desirable mostly from what productive use it has. ie: being near jobs. There's not really any hard work any one individual can do to make some random plot of land in Kansas more valuable than its current market price.
> participate in local government to help protect the value of that land.
This is a nice euphemism for blocking new construction and restricting housing supply.
Land is made desirable mostly from what productive use it has. ie: being near jobs. There's not really any hard work any one individual can do to make some random plot of land in Kansas more valuable than its current market price.
> participate in local government to help protect the value of that land.
This is a nice euphemism for blocking new construction and restricting housing supply.
Not only being near jobs but being developable at all. There are lots in the hollywood hills that go for $40k. Why that low for such prime land you might ask? I’d assume you’d find out the reason fast as soon as the current owner unloads their lemon onto you for a mere $40k.
> Done right, an LVT can actually increase land value.
Land value is a measure of supply and demand. But most of the demand isn't for land in particular, it's for indoor space. If you have LVT and don't have density restrictions -- or just don't have density restrictions regardless of LVT -- then people are going to build until the cost of indoor space falls to the construction cost. Then land values will be low because it's being used efficiently, and there is a de facto ceiling on the price -- if you want to add 100 stories of new space and land is dirt cheap then you might build a hundred single-story buildings, but if land gets even slightly more expensive than that you can just build twenty 5-story buildings instead, which is what people would do rather than paying for five times more land unless it's prohibited.
LVT increases this incentive even more, because not only would you have to pay for more land, you would have to pay the LVT on more land, so now it makes sense to build ten or twenty story buildings. Meanwhile if you're not going to build a ten or twenty story building (or in a place like NYC, a hundred story building), holding onto an underutilized lot will cost more than it's worth, so the land values become negligible. This ignoring the overall premise of LVT which is that the tax should be equal to the land value, so even if land values were high, the tax would just offset them and zero them out -- until the high tax incentivized even more construction.
But there is a different reason the argument doesn't apply to this -- or to any other tax. Governments have budgets. If they currently get money from a tax, and you propose to get rid of the tax, and your proposal is to cut spending, the people currently receiving the money (often politically connected corrupt industries or government unions) will fight you. If you propose to get rid of the tax without cutting spending by instituting or raising some other tax, the people you propose to tax instead will fight you. The status quo is sticky.
Land value is a measure of supply and demand. But most of the demand isn't for land in particular, it's for indoor space. If you have LVT and don't have density restrictions -- or just don't have density restrictions regardless of LVT -- then people are going to build until the cost of indoor space falls to the construction cost. Then land values will be low because it's being used efficiently, and there is a de facto ceiling on the price -- if you want to add 100 stories of new space and land is dirt cheap then you might build a hundred single-story buildings, but if land gets even slightly more expensive than that you can just build twenty 5-story buildings instead, which is what people would do rather than paying for five times more land unless it's prohibited.
LVT increases this incentive even more, because not only would you have to pay for more land, you would have to pay the LVT on more land, so now it makes sense to build ten or twenty story buildings. Meanwhile if you're not going to build a ten or twenty story building (or in a place like NYC, a hundred story building), holding onto an underutilized lot will cost more than it's worth, so the land values become negligible. This ignoring the overall premise of LVT which is that the tax should be equal to the land value, so even if land values were high, the tax would just offset them and zero them out -- until the high tax incentivized even more construction.
But there is a different reason the argument doesn't apply to this -- or to any other tax. Governments have budgets. If they currently get money from a tax, and you propose to get rid of the tax, and your proposal is to cut spending, the people currently receiving the money (often politically connected corrupt industries or government unions) will fight you. If you propose to get rid of the tax without cutting spending by instituting or raising some other tax, the people you propose to tax instead will fight you. The status quo is sticky.
Done right land is worthless under land value tax. Ideally the vast majority of then unimproved lands rents will flow to the government through the tax. An asset with no profits is worthless.
Is there some rationale for setting the LVT rate so that the land is worthless?
That seems unnecessary and counter-productive. If I were designing the system, I would want both the government and the landowner to share in the appreciation of the land. If a nice park is to be built next to some land in a city, interests are more aligned if both the city and the landowner share in the benefit.
That seems unnecessary and counter-productive. If I were designing the system, I would want both the government and the landowner to share in the appreciation of the land. If a nice park is to be built next to some land in a city, interests are more aligned if both the city and the landowner share in the benefit.
Because land belongs to society at large. The entire idea that someone can own land is nonsensical. Private ownership exists to encourage people to create stuff but land can not be created. When land value increases it is not because of anything the landowner did, but because of what society did. The gains should go to society.
Its also more effective at removing speculation the higher it is. LVT is one of the few taxes with no deadweight loss, so even if it wasnt the most morally acceptable tax it still is the most economically beneficial one so we should try to collect as much as possible through it.
Its also more effective at removing speculation the higher it is. LVT is one of the few taxes with no deadweight loss, so even if it wasnt the most morally acceptable tax it still is the most economically beneficial one so we should try to collect as much as possible through it.
>When land value increases it is not because of anything the landowner did, but because of what society did. The gains should go to society.
Nicely landscaping your home can increase the surrounding home values, especially when other neighbors do it also. Conversely if neighbors have junker cars and trash on their property or if you're in a city surrounded by abandoned buildings, land value decreases.
Nicely landscaping your home can increase the surrounding home values, especially when other neighbors do it also. Conversely if neighbors have junker cars and trash on their property or if you're in a city surrounded by abandoned buildings, land value decreases.
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You solve this by implementing the LVT as a small tax rebate on top of traditional property taxes. Something along the lines of an "Improvements Rebate" or whatever polls best. This is much more politically palatable, you can pair it with a small increase in tax to some currently unpopular sector. Very slowly over time you can increase the property tax, while increasing the LVT rebate. Now those who might want to kill LVT now have a more complicated job of negotiating simultaneously to remove a popular benefit while adjusting overall tax rates, a much more complicated proposal.
LVT also has the drawback of being more complicated to calculate than property taxes, and therefore makes convincing constituents that it is being implemented fairly harder. When it is a negative (cost), this complexity makes it easy to attack, while a positive is more defendable (sure it's a tricky calculation, but it gives me money back in my pocket).
LVT also has the drawback of being more complicated to calculate than property taxes, and therefore makes convincing constituents that it is being implemented fairly harder. When it is a negative (cost), this complexity makes it easy to attack, while a positive is more defendable (sure it's a tricky calculation, but it gives me money back in my pocket).
Continuing to be an equal society, or not seeing that reverse, requires strong institutions (as in culture).
You are right. And right now we see so much institutional deconstruction due to lobbying, fear of being anti dogmatic, and straight up propaganda that this should concern everybody.
This is also why regulation and transparency is needed for massive social networks.
You are right. And right now we see so much institutional deconstruction due to lobbying, fear of being anti dogmatic, and straight up propaganda that this should concern everybody.
This is also why regulation and transparency is needed for massive social networks.
I think you're right that it would require a revolution, but we've had those before and come out OK, so it's not so far-fetched or scary as it sounds. It's definitely not going to be voted into law by any local or state legislature without great civil unrest to motivate it.
However, as the landowning class concentrates and we run out of valuable "frontier", it becomes an inevitability.
As a history lesson, we used to have feudalism in New York from before the revolutionary war up into the 1800s. It was a grandfathered-in political-economic system initiated by the Dutch to encourage high-class immigration and patronize friends of the governor, which the English expanded and the nascent U.S. extended to curry favor with the wealthy families who'd supported the revolution.
That system, too, was really valuable for the people who had that privilege. But eventually they were outnumbered and overthrown, in a movement that was pretty revolutionary [1]. By the time it happened, we had innovated new ways to develop wealth that didn't require rent-seeking landlordship and monopolies (this was the era of the industrial revolution), so it'd become significantly less politically-tasteful, even in comparatively bourgeois and aristocratic circles, to depend on these ancient monopolies for access to wealth. But, ultimately, it was a popular (and, at times, violent) revolution that tipped the scales towards reform.
I think it'll probably happen at the municipal or state level before it happens at the federal level. Most likely in NY (again!) or CA, if I were a betting person.
[1]: https://en.wikipedia.org/wiki/Anti-Rent_War
However, as the landowning class concentrates and we run out of valuable "frontier", it becomes an inevitability.
As a history lesson, we used to have feudalism in New York from before the revolutionary war up into the 1800s. It was a grandfathered-in political-economic system initiated by the Dutch to encourage high-class immigration and patronize friends of the governor, which the English expanded and the nascent U.S. extended to curry favor with the wealthy families who'd supported the revolution.
That system, too, was really valuable for the people who had that privilege. But eventually they were outnumbered and overthrown, in a movement that was pretty revolutionary [1]. By the time it happened, we had innovated new ways to develop wealth that didn't require rent-seeking landlordship and monopolies (this was the era of the industrial revolution), so it'd become significantly less politically-tasteful, even in comparatively bourgeois and aristocratic circles, to depend on these ancient monopolies for access to wealth. But, ultimately, it was a popular (and, at times, violent) revolution that tipped the scales towards reform.
I think it'll probably happen at the municipal or state level before it happens at the federal level. Most likely in NY (again!) or CA, if I were a betting person.
[1]: https://en.wikipedia.org/wiki/Anti-Rent_War
That's a fun piece of history, thanks.
Some states of Germany are currently introducing it. I don’t see any land owners revolting about long term implications. Many bitch about the transition because reevaluating land is some paper work.
Everybody seems to believe that it will not make much of a difference. I assume it depends on the municipalities to raise it in the future.
Everybody seems to believe that it will not make much of a difference. I assume it depends on the municipalities to raise it in the future.
What new tax is that? Or do you mean the changes to the Grundsteuer (which is more like an update to the value that is being taxed, I think, and it was a forced change).
Baden-Württemberg does it right. The other states not (yet).
This seems to be the German Georgists: https://www.grundsteuerreform.net/
This seems to be the German Georgists: https://www.grundsteuerreform.net/
A lot of the costs for the state, city etc. are billed separately in a lot of places.
Also, given the demographic projections, land will not be a limiting factor in the long-term anyway.
Also, given the demographic projections, land will not be a limiting factor in the long-term anyway.
When is the last time (a subset of) Germans revolted about anything though?
You can say the same thing about workers' rights and environmental protection laws too. Progress shouldn't be taken for granted.
Rents are "unearned" in the same way all appreciation is unearned. You spend your money on something, anybody else could also have spent that money on it, but the person who does spend the money on it enjoys the appreciation, if any, because they pay the opportunity cost.
> because land value always goes up
Tell that to the people who left urban St. Louis and Detroit and Cleveland in droves over the last 75 years. Their land didn't just go down in value; it went to less than zero. You'd literally have to pay somebody to take it and it's a huge burden on those municipalities.
The problem with Georgism is that, yes, land is different than other things in that you can't make more of it, but it's also the same as most things in most ways that matter.
> because land value always goes up
Tell that to the people who left urban St. Louis and Detroit and Cleveland in droves over the last 75 years. Their land didn't just go down in value; it went to less than zero. You'd literally have to pay somebody to take it and it's a huge burden on those municipalities.
The problem with Georgism is that, yes, land is different than other things in that you can't make more of it, but it's also the same as most things in most ways that matter.
So someone who buys and empty piece of land, and holds it while everyone else around them invests money in the neighbourhood, deserves the gain they realize. That's an interesting worldview.
>Tell that to the people who left urban St. Louis and Detroit and Cleveland in droves over the last 75 years.
Tell them that I was speaking in general? If the value of your home can explode or crater for reasons outside your control, perhaps it would be wiser for housing to not be so expensive so that families need to have everything invested in their home.
>The problem with Georgism is that, yes, land is different than other things in that you can't make more of it, but it's also the same as most things in most ways that matter.
That isn't really an argument that the fixed supply of land doesn't matter, you're just asserting that it doesn't. It also doesn't suggest anything we should be doing instead, so what are you contributing here?
>Tell that to the people who left urban St. Louis and Detroit and Cleveland in droves over the last 75 years.
Tell them that I was speaking in general? If the value of your home can explode or crater for reasons outside your control, perhaps it would be wiser for housing to not be so expensive so that families need to have everything invested in their home.
>The problem with Georgism is that, yes, land is different than other things in that you can't make more of it, but it's also the same as most things in most ways that matter.
That isn't really an argument that the fixed supply of land doesn't matter, you're just asserting that it doesn't. It also doesn't suggest anything we should be doing instead, so what are you contributing here?
> It also doesn't suggest anything we should be doing instead
We should just simply allow a free market in housing and housing construction. That's the obvious solution on the table and the one we should try before we bother revisiting eccentric tax schemes from the 19th Century.
We should just simply allow a free market in housing and housing construction. That's the obvious solution on the table and the one we should try before we bother revisiting eccentric tax schemes from the 19th Century.
Also it is not just the "landed gentry" who will feel like they lost their investments but also the 64% or so of Americans who own their own homes. [1]
Ithaca NY has the unusual situation that much of the land is owned by universities, colleges and other non-profits that don't pay property taxes so residential property taxes are high. In recent years tenant organizations have come to perceive that any increase in property taxes is going to be added to their rent so in addition to trying to get more money out of Cornell they are becoming increasingly spending skeptic.
[1] https://www.financialsamurai.com/u-s-homeownership-rate/
Ithaca NY has the unusual situation that much of the land is owned by universities, colleges and other non-profits that don't pay property taxes so residential property taxes are high. In recent years tenant organizations have come to perceive that any increase in property taxes is going to be added to their rent so in addition to trying to get more money out of Cornell they are becoming increasingly spending skeptic.
[1] https://www.financialsamurai.com/u-s-homeownership-rate/
Yes, it would need to be implemented gradually. It would be enough to start by slowly shifting taxes from buildings and improvements and onto land values. This would only negatively affect those with a greater than average amount of their home value in the land rather than the house, and maybe those people should have a fire lit under them during an housing crisis. Everyone recognizes that housing should be cheaper, just so long as it's not their house that's cheaper, and they're too busy wondering why their children haven't started families yet to notice the contradiction.
If you have an alternative solution that would drive investment and lower housing prices, I'd love to hear it. Most of the solutions I've seen proposed are some form of dumping money on the fire in the hopes of cooling things off. Housing too expensive? Here's a first-time home-buyer's tax credit.
The tax exempt hedge funds that also provide post-secondary education are another matter entirely.
If you have an alternative solution that would drive investment and lower housing prices, I'd love to hear it. Most of the solutions I've seen proposed are some form of dumping money on the fire in the hopes of cooling things off. Housing too expensive? Here's a first-time home-buyer's tax credit.
The tax exempt hedge funds that also provide post-secondary education are another matter entirely.
Good thing that developers aren't elected lol.
Not sure if there's a word for a dictatorship, but you're totally able to just leave if it's not your thing.
Most of the real world ones tend to put up walls and guards facing inwards. Or hold your family hostage.
Which hopefully doesn't give Blizzard any ideas.
Not sure if there's a word for a dictatorship, but you're totally able to just leave if it's not your thing.
Most of the real world ones tend to put up walls and guards facing inwards. Or hold your family hostage.
Which hopefully doesn't give Blizzard any ideas.
Phil Spencer is already trying to move development to Alcatraz island. -- likely true.
> An upside and downside of LVT, depending on your perspective, is that the imposition of a LVT would seriously lower land values.
I would really like you to elaborate on this point. Sure, I guess if land comes with an extra $X of tax attached to it, the net value of land is lower. But it encourages things like building taller buildings, because a 2 story apartment building can't break even with the land tax but a 20 story building can. Land in the middle of SF's financial district or Manhattan isn't cheap: a strong argument can be made that building taller denser buildings increases land value.
I would really like you to elaborate on this point. Sure, I guess if land comes with an extra $X of tax attached to it, the net value of land is lower. But it encourages things like building taller buildings, because a 2 story apartment building can't break even with the land tax but a 20 story building can. Land in the middle of SF's financial district or Manhattan isn't cheap: a strong argument can be made that building taller denser buildings increases land value.
Just summarize Progress and Poverty, okay. One important note is the "land value" always refers to the undeveloped value of the land. The tax pretends that it's an empty lot with no improvements, taken in the context of its district or neighbourhood. We want the land developed to it's best use, so we make sure not to tax those improvements.
Do land values encourage density, or does density increase land values? It's the productivity of the surrounding society that drives both. Land is valuable because people want to live and work there, and because the land is valuable it makes sense to build up, and as more people live there more culture and services become available, attracting more people. It's a virtuous cycle.
If the rental value of the land is taxed away, the only income a property can generate is based on the rental of the buildings on it. The first order effect is that the stream of rental income is diminished, lowering its value as an asset. Landowners would try to pass the taxes along to their tenants, but the taxes are not evenly distributed on all landowners, so doing so would only drive people renting houses into more land-efficient options and would skew the rental vs ownership decision wildly in favour of ownership.
Because development becomes the only means of generating income from a property, undeveloped property becomes a tax liability instead of being a speculative asset that appreciates over time. Land that had been held out of use enters the market, lowering prices further. This surface-level parking lot in SF's financial district [1] and the thousands like it across North America become something more useful. Because the speculative value of land is being taxed away, land appreciates as its potential for productive use increases, not merely because everyone is buying land because land goes up in value because everyone is buying land.
[1] - https://maps.app.goo.gl/Wtfts56A72BCkmvP8
The more developed a piece of land is, the lower its effective tax rate becomes because the taxable value of the land does not include improvements. This incentivizes development, and disincentivizes sprawl.
gets on soapbox
If you want a small house and a big yard, nobody is telling you that you can't do that, but that's land that other people can't use, and I think that society has more right to tax you for holding a fixed and finite resource for your own use (land value taxes) than it does to tax the the products of your hard work and enterprise (taxes on income, commerce, and property). We want people to use the land wisely so that is some of it for everyone, and we want people to work hard and invest their resources, so why do we tax things exactly the other way around?
It's a multivariate differential field equation. I've summarized it as briefly as I can.
Do land values encourage density, or does density increase land values? It's the productivity of the surrounding society that drives both. Land is valuable because people want to live and work there, and because the land is valuable it makes sense to build up, and as more people live there more culture and services become available, attracting more people. It's a virtuous cycle.
If the rental value of the land is taxed away, the only income a property can generate is based on the rental of the buildings on it. The first order effect is that the stream of rental income is diminished, lowering its value as an asset. Landowners would try to pass the taxes along to their tenants, but the taxes are not evenly distributed on all landowners, so doing so would only drive people renting houses into more land-efficient options and would skew the rental vs ownership decision wildly in favour of ownership.
Because development becomes the only means of generating income from a property, undeveloped property becomes a tax liability instead of being a speculative asset that appreciates over time. Land that had been held out of use enters the market, lowering prices further. This surface-level parking lot in SF's financial district [1] and the thousands like it across North America become something more useful. Because the speculative value of land is being taxed away, land appreciates as its potential for productive use increases, not merely because everyone is buying land because land goes up in value because everyone is buying land.
[1] - https://maps.app.goo.gl/Wtfts56A72BCkmvP8
The more developed a piece of land is, the lower its effective tax rate becomes because the taxable value of the land does not include improvements. This incentivizes development, and disincentivizes sprawl.
gets on soapbox
If you want a small house and a big yard, nobody is telling you that you can't do that, but that's land that other people can't use, and I think that society has more right to tax you for holding a fixed and finite resource for your own use (land value taxes) than it does to tax the the products of your hard work and enterprise (taxes on income, commerce, and property). We want people to use the land wisely so that is some of it for everyone, and we want people to work hard and invest their resources, so why do we tax things exactly the other way around?
It's a multivariate differential field equation. I've summarized it as briefly as I can.
The article adresses this. The value of land you tax is not the sale value, but the productive value of the land.
So the sale value drops, but the assesed value doesn't, and the raised taxes also remain fixed.
So the sale value drops, but the assesed value doesn't, and the raised taxes also remain fixed.
That pushes towards the most profitable use of the land. Not sure why that would generally be desirable.
Because the most profitable use of private land is, almost by definition, the most desirable.
Not quite. There is information that's not part of the price system.
National defense isn't going to be priced in by markets. And food security is national security, even if it's "more efficient" to ship food in from your geopolitical rivals.
National defense isn't going to be priced in by markets. And food security is national security, even if it's "more efficient" to ship food in from your geopolitical rivals.
Fair, but none of that has anything to do with the most efficient and desirable use of a particular plot of land for 99.9% of a town/state/country.
Sarcasm?
Why would it be? Price is simply the best information we have about the interaction millions of various desires, distilled into one number.
Things having a price isn't same as profit maximizing on everything. People don't purely profit maximize.
Are you maximizing profit in your primary residence? You might derive pleasure from having a large garden instead of building an industrial plant of same sort there, for example, or not rent out rooms, or have more shirts than you need instead of investing those monies into a business.
Are you maximizing profit in your primary residence? You might derive pleasure from having a large garden instead of building an industrial plant of same sort there, for example, or not rent out rooms, or have more shirts than you need instead of investing those monies into a business.
When you said generally desirable, I assumed you meant to the general public and society at large. Absent some other very convincing information, the price of a plot of land is going to be the best analogue for how much society values that land.
Obviously the private land owner (in general) would prefer that the cost of owning land was as near zero as possible so that they could use it how they saw fit, regardless of the opportunity cost to society. And that's how it spirals into the mess we have today.
Obviously the private land owner (in general) would prefer that the cost of owning land was as near zero as possible so that they could use it how they saw fit, regardless of the opportunity cost to society. And that's how it spirals into the mess we have today.
Why would it be most desirable for society if the only thing done with land was to maximize profit? Society also values museums, parks, etc. - but those are not a profit maximization things.
You keep bringing up price, but price and use of the land are not the same. A price (if transacted on) also only really speaks towards the parties involved, not society as a whole.
The mess we have today is not because we don't maximize profits from landownership enough.
You keep bringing up price, but price and use of the land are not the same. A price (if transacted on) also only really speaks towards the parties involved, not society as a whole.
The mess we have today is not because we don't maximize profits from landownership enough.
The mess we have is because landowners can squeeze the users of the land for all of their profit. Really what should be maximized is the productivity (in a broad sense) of the land.
Profit is a pretty good stand in for productivity, especially if you can't trivially extract rent.
Profit is a pretty good stand in for productivity, especially if you can't trivially extract rent.
If landowners already maximize profit, why would you expect any change if you tax landowners in a way that encourages profit maximization from land?
Or do you mean things like more industry and less housing? Smaller, high density and expensive housing instead of larger housing?
Landowners can now maximize profits by renting it out and speculating on land value increase. They are getting value for free, at the expense of the renters and people who can't find land. They are nothing but a drag on society if they take this approach.
Note that a landlord who builds and maintains a nice house isn't freeloading and not part of the problem.
The problem to solve here is vacant lots, land speculation, and, slumlords. Anyone who makes their money off their land from it just being there, rather than by working on improving or using the land. Put differently, anyone who makes their money purely by virtue of people who have no other way to access land.
Note that a landlord who builds and maintains a nice house isn't freeloading and not part of the problem.
The problem to solve here is vacant lots, land speculation, and, slumlords. Anyone who makes their money off their land from it just being there, rather than by working on improving or using the land. Put differently, anyone who makes their money purely by virtue of people who have no other way to access land.
The earlier invisible hand of the market is obviously the worst guiding principles for an economy, except for all the other ones.
Really, the point is to push the land to be used deliberately. And for acess to land no longer being a differentiating factor between people.
That does mean you get some side effects.
Really, the point is to push the land to be used deliberately. And for acess to land no longer being a differentiating factor between people.
That does mean you get some side effects.
Deliberate forcing of high profit land use will be bad for all but the few landowners.
It will be bad for the landowners who don't actually use the land. Landowners who make their money either renting out the land to others who actually use it well, or who just leave it vacant for 10 years until the value spiked.
Those landowners are nothing but a drag. All the other landowners will have some more tax, but the more they invested in improving the land, the lower the taxes will proportionately be.
Those landowners are nothing but a drag. All the other landowners will have some more tax, but the more they invested in improving the land, the lower the taxes will proportionately be.
Not having any lots vacant is unlikely to be optimal overall.
An LVT won't prevent vacant lots. It will just make it unprofitable, where currently it can easily be profitable to leave a lot vacant.
If it is always and with certainty unprofitable, why would there be vacant lots?
I wonder if this could be solved with a local maxima. Let the established landowners keep a (much smaller) benefit to align incentives.
Spitballing...
I wonder if it could be balanced to give an LVT discount for holding on to land for 5+ years or some such thing. In this system, we still have reduced land prices because of LVT but there's still a benefit that old money has over the default and can clutch tightly to. Suddenly, long term owners have an incentive to keep such a system else they be set at the same level as new owners.
Spitballing...
I wonder if it could be balanced to give an LVT discount for holding on to land for 5+ years or some such thing. In this system, we still have reduced land prices because of LVT but there's still a benefit that old money has over the default and can clutch tightly to. Suddenly, long term owners have an incentive to keep such a system else they be set at the same level as new owners.
That would be a disincentive to land ever being sold and I don't think we want that. It's gameable too: you just have one entity own the land, and then rather than buying and selling the land, you just buy and sell the entity.
That's all fine because we're still in a world where LVT is above zero even while gaming it.
Under a full LVT system the price of the land itself should be 0.
As Tony Benn said: "There is no final victory, as there is no final defeat. There is just the same battle. To be fought, over and over again."
Tying ownership to a market determined LVT has been my goto. That is, when “buying” land you don’t bid on the one time transaction, instead you directly bid on the rent.
In practice it could perhaps be implemented such that it would still look like the current market where a private bank loan determines the rent, only you shift the loan to a central bank like institution for collecting on it as rent.
In practice it could perhaps be implemented such that it would still look like the current market where a private bank loan determines the rent, only you shift the loan to a central bank like institution for collecting on it as rent.
there's a middle ground: LVT could be progressive, like income taxes. In that way owning a small/not valuable piece of land would generate little or no taxes, while wealthy landowners, with large very valuable assets, would be required to contribute back much more.
This is what happened in NZ.
Unearned rents? Do you consider the salary you work for an unearned social benefit?
I inherited three properties. I pay a property management company to do everything on them, all I get is a regular check in the mail. Please explain how I have earned this?
Life is uneven like that. Try to make the best of it.
I am completely healthy while some are born into wheelchairs. I did not earn any of it.
I am completely healthy while some are born into wheelchairs. I did not earn any of it.
Your health isn't a limited, shared resource
No, but this matters how? It’s just an example of life being unfair.
> Please explain how I have earned this?
You didn't answer the question.
You didn't answer the question.
Just saying that’s life. Earning is a useless question.
"Earning" something is not a useless question. As someone who's had things stolen from me before, a large part of the anger comes from feeling like someone took something that you earned through hard work. It's a big reason we criminalise and punish things the way we do as a society.
I know the feeling, yet you did not earn shit. You were on the right side of lucky and we tell ourselves stories of justice.
I didn’t feel lucky when I walked out the college doors and saw my bike was fucking gone.
I think it is important not to take a moralistic lens to these topics but rather a more systemic approach.
Sure, but when people propose a land value tax it's because morally, they've come to the conclusion that the current system is unjust. Systemic changes need to originate somewhere, right?
> Systemic changes need to originate somewhere, right?
Yes, but that does not need to be morals, values, ethics or ideology.
Instead I prefer Kant´s idea of the categorical imperative whereby the question only is if a society following specific rules would satisfy its members long term. It is more pragmatic as it shifts the question from should/shouldn't to does it work out.
Yes, but that does not need to be morals, values, ethics or ideology.
Instead I prefer Kant´s idea of the categorical imperative whereby the question only is if a society following specific rules would satisfy its members long term. It is more pragmatic as it shifts the question from should/shouldn't to does it work out.
LVT satisfies the categorical imperative. If I didn't know whether I'd be born as a landless serf (very high chance) or born to inherit wealth (low chance), then I should prefer to be born into a society with an LVT, since the LVT distributes the land rent to everyone.
I am not going to speak for others, but one can argue for LVT as a more functional system
https://www.astralcodexten.com/p/does-georgism-work-is-land-...
https://www.astralcodexten.com/p/does-georgism-work-is-land-...
> they've come to the conclusion that the current system is unjust
you want a dictatorship? that's how you get a dictatorship.
you want a dictatorship? that's how you get a dictatorship.
then live to your own standards and give it away. This all just virtue signaling until you actually so something with your (not very strongly held) values.
Luck is part of part -- in economics we call it risk. And without risk there is no economic development.
Somebody in your past took a risk and passed profits from that risk down to you. Trying to take the ability to pass that down is both immoral and bad economics.
Luck is part of part -- in economics we call it risk. And without risk there is no economic development.
Somebody in your past took a risk and passed profits from that risk down to you. Trying to take the ability to pass that down is both immoral and bad economics.
Didn't the previous owners want you to to inherit their properties? As long as they did, you must have done something to have earned this inheritance, with or without you being aware (e.g. being born to or adopted by them).
If they didn't want you to inherit them, presumably they would have done something about that.
If they didn't want you to inherit them, presumably they would have done something about that.
>you must have done something to have earned this inheritance
Just admit that the world isn't fair and that some people are lucky and you don't live in a meritocracy, please.
Just admit that the world isn't fair and that some people are lucky and you don't live in a meritocracy, please.
how did you get the cash to pay said property manager? How did your ancestor get to own the property in the first place?
Nothing is unearned, except perhaps gov't welfare.
Nothing is unearned, except perhaps gov't welfare.
> how did you get the cash to pay said property manager?
He said he'd give them a cut of the rent.
> How did your ancestor get to own the property in the first place?
So his parents earned it, not him.
He said he'd give them a cut of the rent.
> How did your ancestor get to own the property in the first place?
So his parents earned it, not him.
Or they took it by force, or stole it.
Doing genealogy, one of the most interesting ancestors I have actually got mentioned in a discussion in parliament for his real estate shenanigans. His wife had inherited some small but vaguely defined land from her first husband. He then became mayor and land assessor, and drew up ridiculously generous borders (and low tax assessments) for that land. No one thought to stop him. At one point during a sale, some officials had commented that they couldn't find that he had title to this land, but they didn't follow up. By the time they complained about it in parliament, it was two generations and many land transfers ago so they didn't think it was worth it to try to unwind it.
Doing genealogy, one of the most interesting ancestors I have actually got mentioned in a discussion in parliament for his real estate shenanigans. His wife had inherited some small but vaguely defined land from her first husband. He then became mayor and land assessor, and drew up ridiculously generous borders (and low tax assessments) for that land. No one thought to stop him. At one point during a sale, some officials had commented that they couldn't find that he had title to this land, but they didn't follow up. By the time they complained about it in parliament, it was two generations and many land transfers ago so they didn't think it was worth it to try to unwind it.
>So his parents earned it, not him.
Doesn't this mean that the problem is inheritance, not (only) land ownership? But I imagine taximg inheritance is very unpopular with everyone.
Doesn't this mean that the problem is inheritance, not (only) land ownership? But I imagine taximg inheritance is very unpopular with everyone.
His parents worked hard and earned it so they could do with it what they like - such as benefiting their children. Nothing wrong with that.
The trouble with this is it's a playbook for huge inequality. If there is very little cost to holding onto land, then as soon as someone accrues some, it never leaves their family tree. For example, do you believe that the Duke of Westminster should be the beneficiary of his aristocratic ancestors? He is literally living off of land accrued hundreds of years ago.
Nothing is earned, except perhaps the fruits of one's labor.
You haven't earned it, your ancestors did. But your inheritance of this property is only a small fraction of your unearned benefits. Ask a dung beetle how fair life is.
Someone earns a salary by working. By when land appreciates in value, it's not usually because of the work _you_ put in, but the work others did.
Like, if I found a tech startup that grows big in a small town, homes in that town will increase in value because people want to work at my company. The landowners did nothing for that value.
Like, if I found a tech startup that grows big in a small town, homes in that town will increase in value because people want to work at my company. The landowners did nothing for that value.
The value of land is the result of the productivity of society and the bounty of nature. Would you consider the massive growth in property values over the last 30 years an earned benefit? What have landowners done to deserve this bounty besides owning an irreproducible asset? An empty lot held out of productive use will appreciate just as much as the same land put to productive use as the city around it grows and technology advances.
>Do you consider the salary you work for an unearned social benefit?
On the contrary, I consider the wages of labour and the return on capital to be the actual earned benefits. Yet these are the things we tax. So the wealthy claim no income, hold their assets, and never realize capital gains, and multinationals play accounting games and pretend that all of their profits happen in the lowest international tax jurisdiction. Sales taxes and personal income taxes end up being the majority of government revenue.
Land value taxes are much harder to avoid, they reward investment by not taxing it, and they promote efficient use of the land, which is the one thing that you need to do anything and the only thing that we can't get any more of.
>Do you consider the salary you work for an unearned social benefit?
On the contrary, I consider the wages of labour and the return on capital to be the actual earned benefits. Yet these are the things we tax. So the wealthy claim no income, hold their assets, and never realize capital gains, and multinationals play accounting games and pretend that all of their profits happen in the lowest international tax jurisdiction. Sales taxes and personal income taxes end up being the majority of government revenue.
Land value taxes are much harder to avoid, they reward investment by not taxing it, and they promote efficient use of the land, which is the one thing that you need to do anything and the only thing that we can't get any more of.
"David Ricardo [1772-1823] introduced the term 'rent' in economics. It means the payment to a factor of production in excess of what is required to keep that factor in its present use."
After additional economic theory development, "People are said to seek rents when they try to obtain benefits for themselves through the political arena."
"But why do economists use the term “rent” [for a market benefit that is being sought outside the market mechanism]? Unfortunately, there is no good reason."
[all] https://www.econlib.org/library/Enc/RentSeeking.html
Once those two terms are understandably conflated, and a commenter showed you their example of inheriting the right to some rental real estate, the terminological clarity in the discussion is more or less gone.
After additional economic theory development, "People are said to seek rents when they try to obtain benefits for themselves through the political arena."
"But why do economists use the term “rent” [for a market benefit that is being sought outside the market mechanism]? Unfortunately, there is no good reason."
[all] https://www.econlib.org/library/Enc/RentSeeking.html
Once those two terms are understandably conflated, and a commenter showed you their example of inheriting the right to some rental real estate, the terminological clarity in the discussion is more or less gone.
The way I see land value tax and taxes in general is different.
Tax is someone taking money by force. Supposedly this tax is then used to protect the land / assets from being seized. Over time every country seemingly has increased taxes as stability increased (not the other way around), so in reality — it’s extortion. Give us money or we take your stuff, your “protector” takes more because you don’t have other options.
Back to the land value tax, why bother? It’s the same fundamental issue; why are we paying these taxes?
And before we get into “but the services”. I moved somewhere that has approximately zero taxes and zero services. It’s great - safer, cheaper, better run. A lot of community stuff is ran by parents or churches, people tend to just “figure it out”.
The idea of a land value tax is insane because it robs you of assets faster the more valuable it is. We had this in the past, feudal Europe, it sucked. What it will end up being is just like Europe some random person will dictate what you owe and if you don’t pay it, then someone else is granted it at a discount. Probably the bureaucrats cousin.
Tax is someone taking money by force. Supposedly this tax is then used to protect the land / assets from being seized. Over time every country seemingly has increased taxes as stability increased (not the other way around), so in reality — it’s extortion. Give us money or we take your stuff, your “protector” takes more because you don’t have other options.
Back to the land value tax, why bother? It’s the same fundamental issue; why are we paying these taxes?
And before we get into “but the services”. I moved somewhere that has approximately zero taxes and zero services. It’s great - safer, cheaper, better run. A lot of community stuff is ran by parents or churches, people tend to just “figure it out”.
The idea of a land value tax is insane because it robs you of assets faster the more valuable it is. We had this in the past, feudal Europe, it sucked. What it will end up being is just like Europe some random person will dictate what you owe and if you don’t pay it, then someone else is granted it at a discount. Probably the bureaucrats cousin.
"Tax is someone taking money by force" <--False, the entire ownership regime of land is an exercise in force. Land rent is either publicly collected or privately captured. When one has the (correct) philosophical position that everyone has an equal right to use land, it simply becomes a matter of 'who' receives the rent. As a matter of justice, the value of a free gift of nature should be shared. To believe otherwise is to believe that some people have less of a right to live, as land is required for all life and economic activity.
"Robs you of assets faster the more valuable it is" <--False, it collects the advantages that accrue to land (a free gift of nature) in exact proportion to the benefit that the land provides. Land value is a social surplus, not a charge.
"random person will dictate what you owe" <--False, assessments are made by observing the market according to well-established principles. See: https://www.iaao.org/ and just like today, you can establish multiple levels of oversight and include the option to appeal.
"Robs you of assets faster the more valuable it is" <--False, it collects the advantages that accrue to land (a free gift of nature) in exact proportion to the benefit that the land provides. Land value is a social surplus, not a charge.
"random person will dictate what you owe" <--False, assessments are made by observing the market according to well-established principles. See: https://www.iaao.org/ and just like today, you can establish multiple levels of oversight and include the option to appeal.
[deleted]
> why are we paying these taxes?
you can always try to build your own country in your own land and see how it goes.
you can always try to build your own country in your own land and see how it goes.
https://en.wikipedia.org/wiki/The_Land_(song)
It is inherently immoral to own land. Land belongs to the people of the society that controls it. No one in that society ever had the right to give it away. I agree that land owners should be reimbursed if we enter an LVT, but the idea that private ownership of land, an asset that can not be created and is inherently limited, should be allowed is frankly nonsensical. Land belongs to society, and thats why LVT is the best tax. Funding the government with the profit of the land makes the most sense.
It is inherently immoral to own land. Land belongs to the people of the society that controls it. No one in that society ever had the right to give it away. I agree that land owners should be reimbursed if we enter an LVT, but the idea that private ownership of land, an asset that can not be created and is inherently limited, should be allowed is frankly nonsensical. Land belongs to society, and thats why LVT is the best tax. Funding the government with the profit of the land makes the most sense.
On the Indian reservations in the US, the land isn't wholly owned by the individuals. It is kept in a tribal trust where a lot of people own slivers of the land (called land shares), and it cannot be used for things like securing loans and economic development if often redistributed through various means. There has been a lot of write ups on this over the years.
It is also the poorest and most corrupt parts of the country. Shit happens on the reservations that would even make Congress blush. If you want to see what happens when land is devalued and not ownable, look at the reservations.
It is also the poorest and most corrupt parts of the country. Shit happens on the reservations that would even make Congress blush. If you want to see what happens when land is devalued and not ownable, look at the reservations.
I’m not buying the causation you seem to be selling with this correlation.
The libertarian notion that taxes are extortion is frankly childish in how overly simplistic it is.
You get all sorts of benefits in return for your taxes. You can't realistically opt out of them. You can't live without using roads or being defended by the military. You can't tell society at large that when you get hit by lightning that you want they to leave you to die and not call an ambulance
Since you can't opt out, a nontaxpayer ends up being a freeloader and social parasite. The only just option is to have to contribute to the imperfect system
The whole idea of extortion is premises that people can exist somehow outside of society which is disconnected from reality.. No man is an island
You get all sorts of benefits in return for your taxes. You can't realistically opt out of them. You can't live without using roads or being defended by the military. You can't tell society at large that when you get hit by lightning that you want they to leave you to die and not call an ambulance
Since you can't opt out, a nontaxpayer ends up being a freeloader and social parasite. The only just option is to have to contribute to the imperfect system
The whole idea of extortion is premises that people can exist somehow outside of society which is disconnected from reality.. No man is an island
I agree libertarianism is a tad silly, but really are those "benefits" you list not paid for by inflation rather than taxes.
> paid for by inflation rather than taxes
How does inflation pay for services and infrastructure?
How does inflation pay for services and infrastructure?
Modern Monetary Theory, with the way it works it feels dishonest to claim taxes are paying for those things.
The alternative to the current model is not to have no services at all, as that makes no sense, agreed.
> The libertarian notion that taxes are extortion is frankly childish in how overly simplistic it is.
The argument is weak because you constructed a straw man. The libertarian notion is not to live without any of the services provided by a state, but to have different providers which are in competition. The issue is that the state / gov has a monopoly but is exempt from antitrust laws.
The implementation is tricky though because in reality, when functions of the state are privatized there is often a huge amount of lobbying and corruption involved and these functions are given to a small group of big companies which effectively form a cartel once again. Then they extract all the economic value left in the infrastructure, the privatization is declared failed and undone, effectively another channel of syphoning tax money into the hands of big companies.
> The libertarian notion that taxes are extortion is frankly childish in how overly simplistic it is.
The argument is weak because you constructed a straw man. The libertarian notion is not to live without any of the services provided by a state, but to have different providers which are in competition. The issue is that the state / gov has a monopoly but is exempt from antitrust laws.
The implementation is tricky though because in reality, when functions of the state are privatized there is often a huge amount of lobbying and corruption involved and these functions are given to a small group of big companies which effectively form a cartel once again. Then they extract all the economic value left in the infrastructure, the privatization is declared failed and undone, effectively another channel of syphoning tax money into the hands of big companies.
> but to have different providers which are in competition
it never worked in practice though.
> has a monopoly but is exempt from antitrust laws
because it does a mediocre job at many things, making it quite easy to compete against it when and if it's worth it, but provides those things no private entity would, because it's anti-economical.
like, for example, the proverbial roads to nowhere.
it never worked in practice though.
> has a monopoly but is exempt from antitrust laws
because it does a mediocre job at many things, making it quite easy to compete against it when and if it's worth it, but provides those things no private entity would, because it's anti-economical.
like, for example, the proverbial roads to nowhere.
> The whole idea of extortion is premises that people can exist somehow outside of society which is disconnected from reality.
Or people can agree to collaborate (like a church or workers union) without extortion of citizens. There’s plenty of examples where extortion isn’t necessary.
I’m also not suggesting taxes shouldn’t be levied at all, I’m saying land and income taxes are particularly gross, as they misalign incentives. Like I said, the more civilized a civilization is, presumably the less protection people need, so we should pay less taxes. Similarly, the more civilized a civilization the more services can be provided by the private sector. The reverse trend is true for taxes, they charge more for less.
Or people can agree to collaborate (like a church or workers union) without extortion of citizens. There’s plenty of examples where extortion isn’t necessary.
I’m also not suggesting taxes shouldn’t be levied at all, I’m saying land and income taxes are particularly gross, as they misalign incentives. Like I said, the more civilized a civilization is, presumably the less protection people need, so we should pay less taxes. Similarly, the more civilized a civilization the more services can be provided by the private sector. The reverse trend is true for taxes, they charge more for less.
Interesting, I’m trying to apply this to domains and it seems a decent fit or at least a lot of overlap.
Domains are sort of the digital land for the internet, and the websites hosted on them are the value add.
Domains are practically infinite, though like some of the land examples some domains are far more desirable than others. Individually domains can be divided into practically infinite subdomains and/or subpages.
The ~1500 TLDs all have their own rules and fees (taxes). They fall under a central governing authority, ICANN pursuant to ToS/EULA/rules/policies, as well as intellectual property laws which vary from jurisdiction to jurisdiction and may also fall under one or more international treaties. Nevertheless, speculation proliferated and domaining is an entire industry driving prices up, but in practice I don’t think prohibits “new players.”
There is enough difference between land/virtual worlds and domains, I don’t think a LVT or harberger tax would be well suited for domains, but it’s interesting to think about.
I always hoped that somehow the Internet would find its way back to personal websites in lieu of the social media sandboxes that dominate, or at least adopt the Bluesky approach where users can bring their own username/handle/identity via a custom domain.
Domains are sort of the digital land for the internet, and the websites hosted on them are the value add.
Domains are practically infinite, though like some of the land examples some domains are far more desirable than others. Individually domains can be divided into practically infinite subdomains and/or subpages.
The ~1500 TLDs all have their own rules and fees (taxes). They fall under a central governing authority, ICANN pursuant to ToS/EULA/rules/policies, as well as intellectual property laws which vary from jurisdiction to jurisdiction and may also fall under one or more international treaties. Nevertheless, speculation proliferated and domaining is an entire industry driving prices up, but in practice I don’t think prohibits “new players.”
There is enough difference between land/virtual worlds and domains, I don’t think a LVT or harberger tax would be well suited for domains, but it’s interesting to think about.
I always hoped that somehow the Internet would find its way back to personal websites in lieu of the social media sandboxes that dominate, or at least adopt the Bluesky approach where users can bring their own username/handle/identity via a custom domain.
I'm not entirely sure how this makes much sense if one can't generate any revenue from land and lots are limited to a single tenant - which seems to be the norm.
If the land can't really be used any more efficiently, outside of repossessing unused plots owned by absentee players, then all this does is ensure the wealthiest players are the only ones who can afford the most in-demand lots (assuming the valuation varies).
And if the whole goal is simply to repossess undeveloped/unused lots, there are simpler ways of going about it.
If the land can't really be used any more efficiently, outside of repossessing unused plots owned by absentee players, then all this does is ensure the wealthiest players are the only ones who can afford the most in-demand lots (assuming the valuation varies).
And if the whole goal is simply to repossess undeveloped/unused lots, there are simpler ways of going about it.
Simpler ways of going about it are indeed possible and are discussed in detail in the article; a simple regular leasing of land accomplishes all the benefits of an LVT without any of the more complicated bits.
Also -- you can just make a game where land isn't fundamentally scarce, that's an even simpler option too.
> I'm not entirely sure how this makes much sense if one can't generate any revenue from land and lots are limited to a single tenant - which seems to be the norm.
It's important to remember that just because something doesn't generate "monetary" income, doesn't mean it isn't providing value, and players will pay for value -- either in "hard" currencies like real money or in-game gold, or "soft" currencies like time, effort, and putting up with pain-in-the-butt. Housing in MMOs is typically a vanity item, but consider that social status, vanity, and the like are real genuine utility for human beings.
> If the land can't really be used any more efficiently, outside of repossessing unused plots owned by absentee players, then all this does is ensure the wealthiest players are the only ones who can afford the most in-demand lots (assuming the valuation varies).
If something can't be used any more efficiently (which suggests that it either is already being put to its highest and best use already, or that its potential use is severely restricted, akin to real-world municipal zoning restrictions), then there are several ways to look at that:
1. This is fine, actually; the asset is actually being used for its intended purpose and not simply hoarded 2. The developers could remove restrictions on the use of the thing so that there is a higher and better use for it than currently exists 3. The developers might reconsider their underlying assumptions for making the asset scarce in the first place
Did you have a concrete example of this scenario? That might make it easier to discuss if you provided an illustration from a particular game (or one you could imagine).
Also -- you can just make a game where land isn't fundamentally scarce, that's an even simpler option too.
> I'm not entirely sure how this makes much sense if one can't generate any revenue from land and lots are limited to a single tenant - which seems to be the norm.
It's important to remember that just because something doesn't generate "monetary" income, doesn't mean it isn't providing value, and players will pay for value -- either in "hard" currencies like real money or in-game gold, or "soft" currencies like time, effort, and putting up with pain-in-the-butt. Housing in MMOs is typically a vanity item, but consider that social status, vanity, and the like are real genuine utility for human beings.
> If the land can't really be used any more efficiently, outside of repossessing unused plots owned by absentee players, then all this does is ensure the wealthiest players are the only ones who can afford the most in-demand lots (assuming the valuation varies).
If something can't be used any more efficiently (which suggests that it either is already being put to its highest and best use already, or that its potential use is severely restricted, akin to real-world municipal zoning restrictions), then there are several ways to look at that:
1. This is fine, actually; the asset is actually being used for its intended purpose and not simply hoarded 2. The developers could remove restrictions on the use of the thing so that there is a higher and better use for it than currently exists 3. The developers might reconsider their underlying assumptions for making the asset scarce in the first place
Did you have a concrete example of this scenario? That might make it easier to discuss if you provided an illustration from a particular game (or one you could imagine).
A nuclear power plant owned by a private company.
If the owner cannot generate any revenue from owning the plot, then it is not a "land-like asset" and it just doesn't factor into this discussion. A "land" in LVT is not necessarily literally land, although the way most virtual worlds are programmed, the "land" in the game often has functions similar to real-world land, which makes it LVT "land".
Revenue is a representation of utility.
Utility hoarding has similar problems and solutions ad revenue hoarding.
Utility hoarding has similar problems and solutions ad revenue hoarding.
> one can't generate any revenue from land and lots are limited to a single tenant - which seems to be the norm.
Just because a system is at equilibrium does not mean that a better equilibrium is impossible. There are significant advantages beyond unused plots. Incentives in general will change.
The goal is not simply to repossess unused lots. Although you are correct that as a side effect, it does make for a much more efficient resource allocation. The other massive advantage is that because the supply of land is fixed, a land value tax has a unique property of having zero deadweight loss. This makes it the most efficient tax possible. Milton Friedman was in favor of it for this reason.
Just because a system is at equilibrium does not mean that a better equilibrium is impossible. There are significant advantages beyond unused plots. Incentives in general will change.
The goal is not simply to repossess unused lots. Although you are correct that as a side effect, it does make for a much more efficient resource allocation. The other massive advantage is that because the supply of land is fixed, a land value tax has a unique property of having zero deadweight loss. This makes it the most efficient tax possible. Milton Friedman was in favor of it for this reason.
[deleted]
Having a sweet hangout to display your cool shit in was probably the second Morrowind mod I ever installed.
The first may have been boob related, I was 14. It is what it is.
But yeah, there's a real value to players in having a sweet pad brah, I mean, people still pay real money for people to build them sweet houses on land they bought in Second Life for real money also.
The first may have been boob related, I was 14. It is what it is.
But yeah, there's a real value to players in having a sweet pad brah, I mean, people still pay real money for people to build them sweet houses on land they bought in Second Life for real money also.
Ah, the single taxers.
The author mentions Decentraland. The whole point of Decentraland, which is a crypto metaverse, was to make land prices go up. They didn't. Decentraland is boring and nobody goes there. But it does work, and it's up and running all the time. There are other crypto metaverses. Most of them never got beyond the hand-waving stage or the occasional demo of a small virtual world, but that didn't stop them from trying to sell overpriced land. Despite all the noise from the metaverse crowd, few of them got very far on implementation.
There's Second Life, which is a single-tax system. You pay Linden Lab a fixed fee per square meter, regardless of what you're doing with the land. Land prices vary widely. Waterfront land is usually expensive; land on rocky plateaus far from roads is cheap. The supply of land is not limited; for a standard monthly fee, you can get another server provisioned with more land for you. You can buy land and rent it as raw land or build on it and rent houses or apartments, so it works economically like real land. Despite doing things the way this author likes, Second Life has overpriced desirable land held off the market to keep prices up.
Virtual economy theory is interesting. It's discussed in various game dev books. But this paper is too much "_ is the answer. What was the question?"
There are a few real-world cities in the US which tried a single land tax. Here's how that worked out.[1]
[1] https://slate.com/news-and-politics/2015/05/the-land-tax-wha...
The author mentions Decentraland. The whole point of Decentraland, which is a crypto metaverse, was to make land prices go up. They didn't. Decentraland is boring and nobody goes there. But it does work, and it's up and running all the time. There are other crypto metaverses. Most of them never got beyond the hand-waving stage or the occasional demo of a small virtual world, but that didn't stop them from trying to sell overpriced land. Despite all the noise from the metaverse crowd, few of them got very far on implementation.
There's Second Life, which is a single-tax system. You pay Linden Lab a fixed fee per square meter, regardless of what you're doing with the land. Land prices vary widely. Waterfront land is usually expensive; land on rocky plateaus far from roads is cheap. The supply of land is not limited; for a standard monthly fee, you can get another server provisioned with more land for you. You can buy land and rent it as raw land or build on it and rent houses or apartments, so it works economically like real land. Despite doing things the way this author likes, Second Life has overpriced desirable land held off the market to keep prices up.
Virtual economy theory is interesting. It's discussed in various game dev books. But this paper is too much "_ is the answer. What was the question?"
There are a few real-world cities in the US which tried a single land tax. Here's how that worked out.[1]
[1] https://slate.com/news-and-politics/2015/05/the-land-tax-wha...
I'm actually not a single-taxer, for the record.
> The author mentions Decentraland. The whole point of Decentraland, which is a crypto metaverse, was to make land prices go up. They didn't. Decentraland is boring and nobody goes there. But it does work, and it's up and running all the time. There are other crypto metaverses. Most of them never got beyond the hand-waving stage or the occasional demo of a small virtual world, but that didn't stop them from trying to sell overpriced land. Despite all the noise from the metaverse crowd, few of them got very far on implementation.
We are in agreement. I thought the crypto metaverses were stupid and said so loudly at the time and predicted they would fail for many reasons; the point about land speculation with crypto games is that charging for the right to upload UGC is literally the dumbest idea in the world.
The difference between a crypto metaverse and the real world is you can opt out of existing in any individual virtual world. This is all mentioned in the article.
> The supply of land is not limited [in Second Life].
This is mentioned in the article.
> Despite doing things the way this author likes
> You pay Linden Lab a fixed fee per square meter, regardless of what you're doing with the land
A fixed fee per square meter without regard to land use or location is literally the opposite of the system I have described.
As for evidence real-world cities, you might observe from evidence real world cities that have done the opposite of an LVT -- proposition 13 in California for instance. And you might notice states with very high property taxes (an imperfect tax to be sure, but one that definitely puts a higher holding cost on land, despite the inefficient tax on buildings).
Tell me, is housing more affordable in states with high property taxes, or in states with very low property taxes?
> The author mentions Decentraland. The whole point of Decentraland, which is a crypto metaverse, was to make land prices go up. They didn't. Decentraland is boring and nobody goes there. But it does work, and it's up and running all the time. There are other crypto metaverses. Most of them never got beyond the hand-waving stage or the occasional demo of a small virtual world, but that didn't stop them from trying to sell overpriced land. Despite all the noise from the metaverse crowd, few of them got very far on implementation.
We are in agreement. I thought the crypto metaverses were stupid and said so loudly at the time and predicted they would fail for many reasons; the point about land speculation with crypto games is that charging for the right to upload UGC is literally the dumbest idea in the world.
The difference between a crypto metaverse and the real world is you can opt out of existing in any individual virtual world. This is all mentioned in the article.
> The supply of land is not limited [in Second Life].
This is mentioned in the article.
> Despite doing things the way this author likes
> You pay Linden Lab a fixed fee per square meter, regardless of what you're doing with the land
A fixed fee per square meter without regard to land use or location is literally the opposite of the system I have described.
As for evidence real-world cities, you might observe from evidence real world cities that have done the opposite of an LVT -- proposition 13 in California for instance. And you might notice states with very high property taxes (an imperfect tax to be sure, but one that definitely puts a higher holding cost on land, despite the inefficient tax on buildings).
Tell me, is housing more affordable in states with high property taxes, or in states with very low property taxes?
To answer your last question: it depends!
Cranking up property tax or land tax still sucks. Sure, maybe you can buy land now, but what if you want to live on it? Your house doesn't earn you income (i.e. what you build on your land is not "productive"), so you're stuck paying taxes on something that doesn't give you any fiscal value.
In practice, this doesn't help housing crises very much, but it _does_ increase wealth disparity! People who could previously afford a home now have to sell their property and either rent from somewhere, or buy a cheaper, presumably worse property.
The increased property taxes also get passed from landlord to renter, up to what the market will bear. This is also bad, because it significantly increases the cost of living.
Overall, there's no direct relationship between more expensive/less expensive housing and whether land/property is taxed. It's usually a challenge of efficient zoning etc.
Now, one alternative that I'm interested in would be an "surplus land tax", i.e., if you own a property for the purposes of living on it, there is minimal or no taxation. Then if you buy more property for some reason, the tax is significantly higher (why do you, as an individual, need more land?). This discourages people from owning a surplus of land, while (hopefully) avoiding the increase in wealth disparity. If you want land for the purpose of a business, the revenue from the business should ideally cover any applicable land taxes.
Cranking up property tax or land tax still sucks. Sure, maybe you can buy land now, but what if you want to live on it? Your house doesn't earn you income (i.e. what you build on your land is not "productive"), so you're stuck paying taxes on something that doesn't give you any fiscal value.
In practice, this doesn't help housing crises very much, but it _does_ increase wealth disparity! People who could previously afford a home now have to sell their property and either rent from somewhere, or buy a cheaper, presumably worse property.
The increased property taxes also get passed from landlord to renter, up to what the market will bear. This is also bad, because it significantly increases the cost of living.
Overall, there's no direct relationship between more expensive/less expensive housing and whether land/property is taxed. It's usually a challenge of efficient zoning etc.
Now, one alternative that I'm interested in would be an "surplus land tax", i.e., if you own a property for the purposes of living on it, there is minimal or no taxation. Then if you buy more property for some reason, the tax is significantly higher (why do you, as an individual, need more land?). This discourages people from owning a surplus of land, while (hopefully) avoiding the increase in wealth disparity. If you want land for the purpose of a business, the revenue from the business should ideally cover any applicable land taxes.
> In practice, this doesn't help housing crises very much, but it _does_ increase wealth disparity!
Is your claim that LVT increases wealth disparity? Would it be accurate to assert the flip side of that, that laws like Prop 13 in CA help with wealth disparity? Because, uh, that doesn't seem to be how it's worked out, in practice.
Is your claim that LVT increases wealth disparity? Would it be accurate to assert the flip side of that, that laws like Prop 13 in CA help with wealth disparity? Because, uh, that doesn't seem to be how it's worked out, in practice.
Yes that is my claim, no I don't think Prop 13 would fix wealth disparity.
The tax doesn't really increase wealth disparity, as your example with no tax requires someone being able to buy the land in the first place. If the land is still very desirable, the person that owns a very well located plot is extremely wealthy by investing when it was cheap, or having a lot of money. The wealth disparity is still there, just with a different winner.
Your surplus idea has significant problems: First, good luck if you aren't owning a single family home, as then you aren't tax free. Second, that you can still massively speculate by buying the highest valued land you can, in the largest plot possible, and then have the best leverage. So prices of land don't go down, but way up! And that's while the land is also less useful to neighbors, as a large plot with a house in it is far worse than, say, a corner store, a park, or an office. So you are rewarding the land use that is the lowest value to neighbors, while theoretically calling that affordability.
If you want more desirable land to be available to more people, the only sensible alternative is to make more people be able to use it at a time: Anything else is just picking a different favorite way to decide who gets to use it/buy it. It also makes the land more useful in general: The bay area would be much lower balue than it is now if it was occupied by a sole proprietor who is the only one traversing its current streets and buildings.
Your surplus idea has significant problems: First, good luck if you aren't owning a single family home, as then you aren't tax free. Second, that you can still massively speculate by buying the highest valued land you can, in the largest plot possible, and then have the best leverage. So prices of land don't go down, but way up! And that's while the land is also less useful to neighbors, as a large plot with a house in it is far worse than, say, a corner store, a park, or an office. So you are rewarding the land use that is the lowest value to neighbors, while theoretically calling that affordability.
If you want more desirable land to be available to more people, the only sensible alternative is to make more people be able to use it at a time: Anything else is just picking a different favorite way to decide who gets to use it/buy it. It also makes the land more useful in general: The bay area would be much lower balue than it is now if it was occupied by a sole proprietor who is the only one traversing its current streets and buildings.
> The tax doesn't really increase wealth disparity[...]
Counterpoint:
Where I live the land values have, at minimum, 4x'ed in the last couple of decades. This used to be a sleepy little retirement town, where retirees lived far away from the city, where nobody was interested in living except for those retirees -- hence why it was so inexpensive.
Those retirees are now being driven out en masse because they can no longer afford their property taxes.
These people retired on salaries and retirement packages (if they were lucky) from twenty and thirty years ago. They do not have an income beyond that. They are not millionaires, or anywhere close. Often, they're retired blue collar workers, barely getting by. They cannot actually purchase an equivalent property if they sell their own even at the higher rates--
--because they can no longer afford the taxes on it, and all the other properties around them have gone up just as much in value. They were driven up by the vastly wealthier tech types. These people have nowhere reasonable to move.
Bear in mind, we're not necessarily talking about multi-acre properties here, btw; we're talking modest homes that these people have been living in for fifty or more years.
They're being driven out because the much richer folk value their property. And to make matters worse? If they do sell the property, they instantly lose what little tax cap protection they had, so they'll be paying even more in taxes.
How is that not wealth disparity? If the tax hadn't gone up, they'd still be happily living there. They're only being pushed out because the younger, richer folk want their land.
If that's not increasing wealth disparity, then I don't know what is.
Counterpoint:
Where I live the land values have, at minimum, 4x'ed in the last couple of decades. This used to be a sleepy little retirement town, where retirees lived far away from the city, where nobody was interested in living except for those retirees -- hence why it was so inexpensive.
Those retirees are now being driven out en masse because they can no longer afford their property taxes.
These people retired on salaries and retirement packages (if they were lucky) from twenty and thirty years ago. They do not have an income beyond that. They are not millionaires, or anywhere close. Often, they're retired blue collar workers, barely getting by. They cannot actually purchase an equivalent property if they sell their own even at the higher rates--
--because they can no longer afford the taxes on it, and all the other properties around them have gone up just as much in value. They were driven up by the vastly wealthier tech types. These people have nowhere reasonable to move.
Bear in mind, we're not necessarily talking about multi-acre properties here, btw; we're talking modest homes that these people have been living in for fifty or more years.
They're being driven out because the much richer folk value their property. And to make matters worse? If they do sell the property, they instantly lose what little tax cap protection they had, so they'll be paying even more in taxes.
How is that not wealth disparity? If the tax hadn't gone up, they'd still be happily living there. They're only being pushed out because the younger, richer folk want their land.
If that's not increasing wealth disparity, then I don't know what is.
That's not a problem with land taxes, that's a problem with the pensioners declaring that they should stop working at what turned out to be an economically unfeasibly low age after we extended life expectancy. Often with crazy stuff like final salary pensions that they obviously never paid anywhere near enough for. That no generation, before, and probably after, will be able to afford to be economically inactive for 20-30 years + the 15(+) years from childhood in unskilled or low skilled jobs.
At least until we (hopefully) make a post-scarcity economy.
Young people used to be able to afford a home at 25. Old people used to be able to afford property taxes in their retirement for their family sized home. The old people are in the same boat as everyone else. It's just manifesting differently for them. And the root cause is having to pay for an aging population, which is them!
On top of that, that home might have been modest when they had a family and a job, now it's extravagant. Now they should downsize out of the family sized home they're occupying with 1-2 people. And they'll still make a ton of money out of it.
Again, this is the first generation that can live like that. On previous generations the family home would have had the next generation living in it by now, instead 1 or 2 people are taking up a huge amount of land and rooms when they could be living in a flat.
At least until we (hopefully) make a post-scarcity economy.
Young people used to be able to afford a home at 25. Old people used to be able to afford property taxes in their retirement for their family sized home. The old people are in the same boat as everyone else. It's just manifesting differently for them. And the root cause is having to pay for an aging population, which is them!
On top of that, that home might have been modest when they had a family and a job, now it's extravagant. Now they should downsize out of the family sized home they're occupying with 1-2 people. And they'll still make a ton of money out of it.
Again, this is the first generation that can live like that. On previous generations the family home would have had the next generation living in it by now, instead 1 or 2 people are taking up a huge amount of land and rooms when they could be living in a flat.
LVT is not property tax.
By its intrinsic structure LVT discourages speculation.
Georgian proponents would say that this should not happen that pensioners are being driven out because land values don't rise as much because there is no land speculation, and they pay the LVT instead of rent, mortgage and/or property tax.
I personally am afraid LVT is unimplementable, as for why, see top comment (LVT being self-defeating): https://news.ycombinator.com/item?id=40677483
By its intrinsic structure LVT discourages speculation.
Georgian proponents would say that this should not happen that pensioners are being driven out because land values don't rise as much because there is no land speculation, and they pay the LVT instead of rent, mortgage and/or property tax.
I personally am afraid LVT is unimplementable, as for why, see top comment (LVT being self-defeating): https://news.ycombinator.com/item?id=40677483
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I think you'll find that even as land values have increased, your local city or county has been slashing tax rates, such that taxes paid have not gone up for these people at all, or only slightly. Heck, if you're in California they're probably paying about $10 in property taxes due to Prop. 13.
No, I really won't. This is a well known issue in my area. Considering that I haven't said where I live, you shouldn't make assumptions.
To be fair, anyone that wants to know where you live can go to your website (that you put not only in your bio, but even in your nickname) and visit the "about" section. But I doubt parent did that.
True. Though I've not been that specific, and there's a lot of variability even in the general area. Texas is odd that way.
Should give an idea how much values have shot up, though, and how fast. A $75k home in 2010 can easily be over $500k now. It's crazy.
Should give an idea how much values have shot up, though, and how fast. A $75k home in 2010 can easily be over $500k now. It's crazy.
Since higher demand results in higher prices, you could rephrase that line as: is housing (and land) more desirable in states with higher or lower property taxes? I think it's mainly unrelated. Other things like available jobs, climate, amenities, and so on seem more important?
I've never quite understood whether the land value tax advocates wanted taxes to be higher or lower on average, or how they expect economic activity to vary with tax rates. They seem to expect tax policy to have large effects all on its own, though, and I'm more skeptical that it will make much difference.
I've never quite understood whether the land value tax advocates wanted taxes to be higher or lower on average, or how they expect economic activity to vary with tax rates. They seem to expect tax policy to have large effects all on its own, though, and I'm more skeptical that it will make much difference.
> There are a few real-world cities in the US which tried a single land tax. Here's how that worked out.
It sounds like it kinda sorta worked but not if you have external interference (other governments still levying other taxes, especially property tax on buildings), and not if you implement it poorly enough that people vote you out.
The "problem" I see with it is that governments don't want it to work, because governments are always trying to maximize tax revenue.
Suppose you have an area zoned so you can't build more than 1-story buildings, but to meet local demand you'd need an average of 1.2-story buildings. Institute LVT without changing the zoning and you're still screwed, because a financial incentive to build more housing does nothing when actually building it is still prohibited by law.
Suppose you institute the LVT and get rid of the building height restrictions. Now people are going to build a bunch of 5 and 10-story buildings and quickly solve the housing shortage -- great. It actually works. Now the area needs an average building height of 1.2 stories and the average becomes 2.5 stories. Nobody even wants the 1-story buildings because you have to pay 5 times as much LVT per square foot as the 5-story buildings. Local land is no longer scarce because it's being used so much more efficiently.
So its value goes down, and with it the tax revenue -- the sole source of tax revenue. Then the government has a few options. Option 1, raise the mil rate. But that doesn't work; if you do that people just build 50-story buildings to minimize the tax and the rest of the land becomes abandoned because no one without a 50-story building could afford the tax on it. Option 2, reintroduce artificial scarcity, e.g. ban tall buildings so land becomes artificially scarce again. But now you're back to inefficient land use and thwarting the ostensible benefit of the tax.
Or Option 3, fund the government some other way. Which removes the government's perverse incentive to create artificial scarcity of land to maximize their tax revenue. But then why not just start there? Get rid of the existing perverse incentive (property tax), and the zoning regulations, let housing become affordable as people build until rents fall to construction costs, and fund the government some other way.
It sounds like it kinda sorta worked but not if you have external interference (other governments still levying other taxes, especially property tax on buildings), and not if you implement it poorly enough that people vote you out.
The "problem" I see with it is that governments don't want it to work, because governments are always trying to maximize tax revenue.
Suppose you have an area zoned so you can't build more than 1-story buildings, but to meet local demand you'd need an average of 1.2-story buildings. Institute LVT without changing the zoning and you're still screwed, because a financial incentive to build more housing does nothing when actually building it is still prohibited by law.
Suppose you institute the LVT and get rid of the building height restrictions. Now people are going to build a bunch of 5 and 10-story buildings and quickly solve the housing shortage -- great. It actually works. Now the area needs an average building height of 1.2 stories and the average becomes 2.5 stories. Nobody even wants the 1-story buildings because you have to pay 5 times as much LVT per square foot as the 5-story buildings. Local land is no longer scarce because it's being used so much more efficiently.
So its value goes down, and with it the tax revenue -- the sole source of tax revenue. Then the government has a few options. Option 1, raise the mil rate. But that doesn't work; if you do that people just build 50-story buildings to minimize the tax and the rest of the land becomes abandoned because no one without a 50-story building could afford the tax on it. Option 2, reintroduce artificial scarcity, e.g. ban tall buildings so land becomes artificially scarce again. But now you're back to inefficient land use and thwarting the ostensible benefit of the tax.
Or Option 3, fund the government some other way. Which removes the government's perverse incentive to create artificial scarcity of land to maximize their tax revenue. But then why not just start there? Get rid of the existing perverse incentive (property tax), and the zoning regulations, let housing become affordable as people build until rents fall to construction costs, and fund the government some other way.
> So its value goes down, and with it the tax revenue
The value of the buildings might go down, but I don't see why the value of the unimproved land (which LVT is determined by) would go down.
The value of the buildings might go down, but I don't see why the value of the unimproved land (which LVT is determined by) would go down.
Because the primary reason people want the land is to build buildings on it. If you need one acre of land to build one housing unit because of zoning, there will be more demand for parcels of land than if you can build 50 housing units on one acre of land, because in the first case you need 50 times as much land for the same number of housing units.
That doesn't sound right. In the limit, where you're forbidden from building anything on the land at all, the price will tend to zero. I'm not certain the relationship is linear, but if it is then it must be the opposite to what you claim.
> In the limit, where you're forbidden from building anything on the land at all, the price will tend to zero.
That's the divide by zero case. 1/very_small_number is very large, 1/0 is undefined.
That's the divide by zero case. 1/very_small_number is very large, 1/0 is undefined.
> Nobody even wants the 1-story buildings because you have to pay 5 times as much LVT per square foot as the 5-story buildings. Local land is no longer scarce because it's being used so much more efficiently.
Pushing a bunch of people that want to live in houses into apartments is an odd sort of efficiency.
Pushing a bunch of people that want to live in houses into apartments is an odd sort of efficiency.
Nobody is required to live in an apartment. All you're doing is not prohibiting apartments and condos from being built.
Also notice the extent to which this is almost irrelevant to the number of single family homes you can have. Suppose you eliminate density restrictions and then 95% of the land area remains single-family homes, but the other 5% has an average of a 5-story building with four house-sized units per floor on it. You have just doubled the amount of housing available, but there are still 95% as many single-family homes as there were before.
In theory this means that 5% of the people who would have had a single family home would now have a condo. But you also only had enough housing for 50% of the people who need it, so in the alternative where you only allow single family homes, 50% of people are homeless. Or, in practice, live with their parents -- and would much rather a condo than that.
Also notice the extent to which this is almost irrelevant to the number of single family homes you can have. Suppose you eliminate density restrictions and then 95% of the land area remains single-family homes, but the other 5% has an average of a 5-story building with four house-sized units per floor on it. You have just doubled the amount of housing available, but there are still 95% as many single-family homes as there were before.
In theory this means that 5% of the people who would have had a single family home would now have a condo. But you also only had enough housing for 50% of the people who need it, so in the alternative where you only allow single family homes, 50% of people are homeless. Or, in practice, live with their parents -- and would much rather a condo than that.
> Suppose you institute the LVT and get rid of the building height restrictions. Now people are going to build a bunch of 5 and 10-story buildings and quickly solve the housing shortage -- great. It actually works. Now the area needs an average building height of 1.2 stories and the average becomes 2.5 stories. Nobody even wants the 1-story buildings because you have to pay 5 times as much LVT per square foot as the 5-story buildings. Local land is no longer scarce because it's being used so much more efficiently.
There would be an equilibrium. If the need is an average of 1.2 stories, why would developers build until there is 2.5 stories? Yes, with a 10 story building you pay less LVT per apartment, but if nobody buys or rents those apartments, it's still cheaper to build a, say, 3 story building. Or whatever the developer thinks they can sell/rent.
> So its value goes down, and with it the tax revenue -- the sole source of tax revenue. Then the government has a few options. Option 1, raise the mil rate. But that doesn't work; if you do that people just build 50-story buildings to minimize the tax and the rest of the land becomes abandoned because no one without a 50-story building could afford the tax on it.
The way I understand it, the LVT is 'automatically' set by the land values, hence the LVT name. Of course the government can play with what percentage of the land value the tax is set to, but presumably it would be very unproductive to set it higher than the rate of return of that land in the first place. So even a 'maximal' LVT would be capped (assuming basic economic saneness on the behalf of the government).
So if somebody builds a 50-story building, then there is suddenly an oversupply of housing, and as result land values drop, and thus the LVT a land owner needs to pay drops as well. So you'll find an equilibrium point where somebody maybe wants to pay a higher LVT in order to live in a single-family home on their own lot, somebody else prefers a bit roomier apartments in a 4-story building instead of shoebox apartments in that 50-story building etc.
And likely the developer of the 50-story building will then make a huge loss, because building such an extremely tall building is very expensive, and tends to make sense only where land prices and demand are huge, not in a place where the requirement is an average 1.2 stories.
> Or Option 3, fund the government some other way. Which removes the government's perverse incentive to create artificial scarcity of land to maximize their tax revenue. But then why not just start there? Get rid of the existing perverse incentive (property tax), and the zoning regulations, let housing become affordable as people build until rents fall to construction costs, and fund the government some other way.
Well, that's the crux isn't it: What is 'some other way'? (Almost) all taxes cause economic inefficiency in some way. LVT, proponents claim, is almost unique in not causing any deadweight loss because the supply of land is fixed. So from an economic efficiency point of view, it seems LVT is the (or at least, among the) least bad tax.
There would be an equilibrium. If the need is an average of 1.2 stories, why would developers build until there is 2.5 stories? Yes, with a 10 story building you pay less LVT per apartment, but if nobody buys or rents those apartments, it's still cheaper to build a, say, 3 story building. Or whatever the developer thinks they can sell/rent.
> So its value goes down, and with it the tax revenue -- the sole source of tax revenue. Then the government has a few options. Option 1, raise the mil rate. But that doesn't work; if you do that people just build 50-story buildings to minimize the tax and the rest of the land becomes abandoned because no one without a 50-story building could afford the tax on it.
The way I understand it, the LVT is 'automatically' set by the land values, hence the LVT name. Of course the government can play with what percentage of the land value the tax is set to, but presumably it would be very unproductive to set it higher than the rate of return of that land in the first place. So even a 'maximal' LVT would be capped (assuming basic economic saneness on the behalf of the government).
So if somebody builds a 50-story building, then there is suddenly an oversupply of housing, and as result land values drop, and thus the LVT a land owner needs to pay drops as well. So you'll find an equilibrium point where somebody maybe wants to pay a higher LVT in order to live in a single-family home on their own lot, somebody else prefers a bit roomier apartments in a 4-story building instead of shoebox apartments in that 50-story building etc.
And likely the developer of the 50-story building will then make a huge loss, because building such an extremely tall building is very expensive, and tends to make sense only where land prices and demand are huge, not in a place where the requirement is an average 1.2 stories.
> Or Option 3, fund the government some other way. Which removes the government's perverse incentive to create artificial scarcity of land to maximize their tax revenue. But then why not just start there? Get rid of the existing perverse incentive (property tax), and the zoning regulations, let housing become affordable as people build until rents fall to construction costs, and fund the government some other way.
Well, that's the crux isn't it: What is 'some other way'? (Almost) all taxes cause economic inefficiency in some way. LVT, proponents claim, is almost unique in not causing any deadweight loss because the supply of land is fixed. So from an economic efficiency point of view, it seems LVT is the (or at least, among the) least bad tax.
> There would be an equilibrium. If the need is an average of 1.2 stories, why would developers build until there is 2.5 stories?
Because LVT doesn't scale with buildings.
Suppose you already have enough housing. More than enough, even. There is a 25% vacancy rate. Units are renting for $2000/month, half what they were before LVT. Of that, $1000 is the amortized construction cost and other upkeep. For a 1-story building, there is also another $1000/unit/month in LVT. They're already losing money because 25% of their units are vacant and they'd need a 0% vacancy rate just to break even. But they also lose money by renting for any less than $2000/month, so they're resistant to lowering rents below that because a large proportion of the units are the existing single-story housing stock.
But the same LVT is only $200/unit/month for a 5-story building and $100 for a 10-story building. The landlord with a 10-story building is still turning a decent profit even with 25% of the units empty. So landlords with a 1-story building start putting up 10-story buildings even though there is already oversupply because they go from losing money to making some, and the vacancy rate increases even more.
There will be an equilibrium where they stop, but by then the vacancy rate could be arbitrarily high depending on how high the LVT is relative to construction costs.
> The way I understand it, the LVT is 'automatically' set by the land values, hence the LVT name. Of course the government can play with what percentage of the land value the tax is set to, but presumably it would be very unproductive to set it higher than the rate of return of that land in the first place. So even a 'maximal' LVT would be capped (assuming basic economic saneness on the behalf of the government).
This is the issue. Land values become quite meager without artificial scarcity in housing, and then the government doesn't receive much revenue from the tax. Since the government wants tax revenue, they now have a perverse incentive to bring about artificial scarcity in housing. Which is the same incentive they have now with property tax, but the premise of LVT is that they're not going to act on it.
> So if somebody builds a 50-story building, then there is suddenly an oversupply of housing, and as result land values drop, and thus the LVT a land owner needs to pay drops as well.
For which the endgame is that land values fall to be level with the ground, and the government either charges more than the land value in tax, or enacts policies to bring about artificial scarcity to increase the land value, or has negligible tax revenue.
> And likely the developer of the 50-story building will then make a huge loss, because building such an extremely tall building is very expensive, and tends to make sense only where land prices and demand are huge, not in a place where the requirement is an average 1.2 stories.
Very tall buildings are very expensive (but also contain a very large number of units to rent out). Medium buildings aren't all that expensive per unit. If you only need 1.2 stories on average and then fill half the city with 5-story buildings, you'd have no scarcity of housing without anybody ever building a 50-story building.
If you're in a place like NYC the developer of the 50-story building is making a lot more money than the developer of a 10-story building notwithstanding the higher construction costs because they're paying five times less LVT.
> Well, that's the crux isn't it: What is 'some other way'? (Almost) all taxes cause economic inefficiency in some way.
In general a broad-based tax so that the rate can be lower and minimize the distortionary effect, e.g. VAT.
> LVT, proponents claim, is almost unique in not causing any deadweight loss because the supply of land is fixed. So from an economic efficiency point of view, it seems LVT is the (or at least, among the) least bad tax.
A head tax also has no deadweight loss but that's not the only criteria. Moreover, if LVT causes land values to go down and then generates negligible revenue, this is a problem unless you find it convenient for the government to have negligible revenue.
Because LVT doesn't scale with buildings.
Suppose you already have enough housing. More than enough, even. There is a 25% vacancy rate. Units are renting for $2000/month, half what they were before LVT. Of that, $1000 is the amortized construction cost and other upkeep. For a 1-story building, there is also another $1000/unit/month in LVT. They're already losing money because 25% of their units are vacant and they'd need a 0% vacancy rate just to break even. But they also lose money by renting for any less than $2000/month, so they're resistant to lowering rents below that because a large proportion of the units are the existing single-story housing stock.
But the same LVT is only $200/unit/month for a 5-story building and $100 for a 10-story building. The landlord with a 10-story building is still turning a decent profit even with 25% of the units empty. So landlords with a 1-story building start putting up 10-story buildings even though there is already oversupply because they go from losing money to making some, and the vacancy rate increases even more.
There will be an equilibrium where they stop, but by then the vacancy rate could be arbitrarily high depending on how high the LVT is relative to construction costs.
> The way I understand it, the LVT is 'automatically' set by the land values, hence the LVT name. Of course the government can play with what percentage of the land value the tax is set to, but presumably it would be very unproductive to set it higher than the rate of return of that land in the first place. So even a 'maximal' LVT would be capped (assuming basic economic saneness on the behalf of the government).
This is the issue. Land values become quite meager without artificial scarcity in housing, and then the government doesn't receive much revenue from the tax. Since the government wants tax revenue, they now have a perverse incentive to bring about artificial scarcity in housing. Which is the same incentive they have now with property tax, but the premise of LVT is that they're not going to act on it.
> So if somebody builds a 50-story building, then there is suddenly an oversupply of housing, and as result land values drop, and thus the LVT a land owner needs to pay drops as well.
For which the endgame is that land values fall to be level with the ground, and the government either charges more than the land value in tax, or enacts policies to bring about artificial scarcity to increase the land value, or has negligible tax revenue.
> And likely the developer of the 50-story building will then make a huge loss, because building such an extremely tall building is very expensive, and tends to make sense only where land prices and demand are huge, not in a place where the requirement is an average 1.2 stories.
Very tall buildings are very expensive (but also contain a very large number of units to rent out). Medium buildings aren't all that expensive per unit. If you only need 1.2 stories on average and then fill half the city with 5-story buildings, you'd have no scarcity of housing without anybody ever building a 50-story building.
If you're in a place like NYC the developer of the 50-story building is making a lot more money than the developer of a 10-story building notwithstanding the higher construction costs because they're paying five times less LVT.
> Well, that's the crux isn't it: What is 'some other way'? (Almost) all taxes cause economic inefficiency in some way.
In general a broad-based tax so that the rate can be lower and minimize the distortionary effect, e.g. VAT.
> LVT, proponents claim, is almost unique in not causing any deadweight loss because the supply of land is fixed. So from an economic efficiency point of view, it seems LVT is the (or at least, among the) least bad tax.
A head tax also has no deadweight loss but that's not the only criteria. Moreover, if LVT causes land values to go down and then generates negligible revenue, this is a problem unless you find it convenient for the government to have negligible revenue.
> > There would be an equilibrium. If the need is an average of 1.2 stories, why would developers build until there is 2.5 stories?
> Because LVT doesn't scale with buildings.
This has nothing to do with LVT. Unless you're claiming that somehow a LVT would magically cause developers to collectively throw any economic sanity to the wind and build a massive oversupply.
> Suppose you already have enough housing. More than enough, even. There is a 25% vacancy rate. Units are renting for $2000/month, half what they were before LVT. Of that, $1000 is the amortized construction cost and other upkeep. For a 1-story building, there is also another $1000/unit/month in LVT. They're already losing money because 25% of their units are vacant and they'd need a 0% vacancy rate just to break even. But they also lose money by renting for any less than $2000/month, so they're resistant to lowering rents below that because a large proportion of the units are the existing single-story housing stock.
So what this means is that there's enough demand in the area to keep land values at that level, and it's profitable to demolish small buildings and replace them with taller ones. OTOH if there's already an oversupply of housing then the land values would decrease. Eventually you have some kind of equilibrium.
> If you're in a place like NYC the developer of the 50-story building is making a lot more money than the developer of a 10-story building notwithstanding the higher construction costs
Well that's the point yes. In highly desirable places like the center of a big city like NYC, land values are huge and thus an LVT would be very high as well. Out in the boonies land values are low, and so would the LVT be. So people and businesses can choose from a range of options, between cheap land/LVT in the middle of nowhere and expensive land/LVT in the center of the city. Just like they do now without a LVT.
> In general a broad-based tax so that the rate can be lower and minimize the distortionary effect, e.g. VAT.
Unfortunately VAT is highly regressive, so while a modest VAT has a place in a broad based tax regime, it's a very bad idea as the sole tax.
> Moreover, if LVT causes land values to go down and then generates negligible revenue, this is a problem unless you find it convenient for the government to have negligible revenue.
An LVT is unlikely to make cities unattractive for people and businesses, so desirable places would remain desirable despite being saddled with a high LVT. I'd be more worried about small municipalities out in the boonies, they might not get very much revenue from a LVT. Not zero though, there's still value in, say, farmland, or a plot that is located besides a road, and has electrical cabling etc.
> Because LVT doesn't scale with buildings.
This has nothing to do with LVT. Unless you're claiming that somehow a LVT would magically cause developers to collectively throw any economic sanity to the wind and build a massive oversupply.
> Suppose you already have enough housing. More than enough, even. There is a 25% vacancy rate. Units are renting for $2000/month, half what they were before LVT. Of that, $1000 is the amortized construction cost and other upkeep. For a 1-story building, there is also another $1000/unit/month in LVT. They're already losing money because 25% of their units are vacant and they'd need a 0% vacancy rate just to break even. But they also lose money by renting for any less than $2000/month, so they're resistant to lowering rents below that because a large proportion of the units are the existing single-story housing stock.
So what this means is that there's enough demand in the area to keep land values at that level, and it's profitable to demolish small buildings and replace them with taller ones. OTOH if there's already an oversupply of housing then the land values would decrease. Eventually you have some kind of equilibrium.
> If you're in a place like NYC the developer of the 50-story building is making a lot more money than the developer of a 10-story building notwithstanding the higher construction costs
Well that's the point yes. In highly desirable places like the center of a big city like NYC, land values are huge and thus an LVT would be very high as well. Out in the boonies land values are low, and so would the LVT be. So people and businesses can choose from a range of options, between cheap land/LVT in the middle of nowhere and expensive land/LVT in the center of the city. Just like they do now without a LVT.
> In general a broad-based tax so that the rate can be lower and minimize the distortionary effect, e.g. VAT.
Unfortunately VAT is highly regressive, so while a modest VAT has a place in a broad based tax regime, it's a very bad idea as the sole tax.
> Moreover, if LVT causes land values to go down and then generates negligible revenue, this is a problem unless you find it convenient for the government to have negligible revenue.
An LVT is unlikely to make cities unattractive for people and businesses, so desirable places would remain desirable despite being saddled with a high LVT. I'd be more worried about small municipalities out in the boonies, they might not get very much revenue from a LVT. Not zero though, there's still value in, say, farmland, or a plot that is located besides a road, and has electrical cabling etc.
> This has nothing to do with LVT.
It's how LVT operates. You don't pay more if you build a taller building, but you pay a certain amount for the land on a continuous basis, providing an incentive to increase density beyond what would otherwise be rational, i.e. continue building until there are a significant number of empty units
> In highly desirable places like the center of a big city like NYC, land values are huge and thus an LVT would be very high as well.
Under the existing zoning regime it would be high. If people were allowed to keep building then it would just end up full of skyscrapers -- not just Manhattan but also the other boroughs -- until the cost of land fell to the cost of construction.
> Unfortunately VAT is highly regressive, so while a modest VAT has a place in a broad based tax regime, it's a very bad idea as the sole tax.
This is what corporate PR tells you when they don't want a tax they would actually have to pay.
VAT uses a flat rate, but you can achieve a progressive effective rate curve simply by combining it with a UBI.
> An LVT is unlikely to make cities unattractive for people and businesses, so desirable places would remain desirable despite being saddled with a high LVT.
But how does the LVT remain high unless you artificially constrain construction? There is nowhere that replacing every building within 100 miles with a skyscraper wouldn't result in oversupply, so land is never the limiting factor and its price would be capped by the cost of building tall buildings.
You would also have a notable problem in places like NYC: Suppose it costs more to build a tall building, so the land value is e.g. five times higher than it is in a suburban area. But the buildings also have 20 times more units, so you'd have 25% as much government revenue per resident because there are 20 times more of them per unit land.
It's how LVT operates. You don't pay more if you build a taller building, but you pay a certain amount for the land on a continuous basis, providing an incentive to increase density beyond what would otherwise be rational, i.e. continue building until there are a significant number of empty units
> In highly desirable places like the center of a big city like NYC, land values are huge and thus an LVT would be very high as well.
Under the existing zoning regime it would be high. If people were allowed to keep building then it would just end up full of skyscrapers -- not just Manhattan but also the other boroughs -- until the cost of land fell to the cost of construction.
> Unfortunately VAT is highly regressive, so while a modest VAT has a place in a broad based tax regime, it's a very bad idea as the sole tax.
This is what corporate PR tells you when they don't want a tax they would actually have to pay.
VAT uses a flat rate, but you can achieve a progressive effective rate curve simply by combining it with a UBI.
> An LVT is unlikely to make cities unattractive for people and businesses, so desirable places would remain desirable despite being saddled with a high LVT.
But how does the LVT remain high unless you artificially constrain construction? There is nowhere that replacing every building within 100 miles with a skyscraper wouldn't result in oversupply, so land is never the limiting factor and its price would be capped by the cost of building tall buildings.
You would also have a notable problem in places like NYC: Suppose it costs more to build a tall building, so the land value is e.g. five times higher than it is in a suburban area. But the buildings also have 20 times more units, so you'd have 25% as much government revenue per resident because there are 20 times more of them per unit land.
Canberra, ACT has it, too: https://www.revenue.act.gov.au/land-tax
Actually all Australian states and the ACT have land taxes in lieu of property taxes
https://business.gov.au/finance/taxation/taxes-on-your-prope....
I think ACT has no thresholds, whereas NSW for example you could own a $5m primary residence and rent it out and maybe 4 $1m appartments (whose land value will be low) and rent those out and pay no land tax. So you can be rich from property and pay no land tax.
It would kick in for larger landlords though but they could avoid it somewhat by having a property in every state.
It would kick in for larger landlords though but they could avoid it somewhat by having a property in every state.
This makes me wonder if it's possible to create a real-life simulation video game where you can study the economic effects of policies and make better decisions in real life.
no its not possible, and that is the great hubris of many economic planners. They wind up creating simulations that just enforce their bias (because they write code that assumes their biases).
you would literally be trying to model every individual's decisions.
here's simple test: try to predict the stock market -- this is essentially what you are asking (the stock markets can be rigged and it wouldn't matter for this test to be useful because that is actually part of the prediction).
nobody even comes close.
you would literally be trying to model every individual's decisions.
here's simple test: try to predict the stock market -- this is essentially what you are asking (the stock markets can be rigged and it wouldn't matter for this test to be useful because that is actually part of the prediction).
nobody even comes close.
> They wind up creating simulations that just enforce their bias (because they write code that assumes their biases).
Agreed, such simulations can not be used to answer specific questions. Same thing also goes for weather / climate models, not just human economy.
> try to predict the stock market -- this is essentially what you are asking
No, it is not what they are asking. Mistake here is confusing what is called microstate and macrostate [0] in statistical mechanics.
E.g. yes you can not predict the path an individual gas molecule will take around a driving vehicle because it is a highly chaotic system [1]. And the same goes for individual stocks at a specific time. However, that does not mean that air flow simulations are not possible or useless, quite the opposite.
[0]: https://en.wikipedia.org/wiki/Microstate_(statistical_mechan... [1]: https://en.wikipedia.org/wiki/Chaos_theory
Agreed, such simulations can not be used to answer specific questions. Same thing also goes for weather / climate models, not just human economy.
> try to predict the stock market -- this is essentially what you are asking
No, it is not what they are asking. Mistake here is confusing what is called microstate and macrostate [0] in statistical mechanics.
E.g. yes you can not predict the path an individual gas molecule will take around a driving vehicle because it is a highly chaotic system [1]. And the same goes for individual stocks at a specific time. However, that does not mean that air flow simulations are not possible or useless, quite the opposite.
[0]: https://en.wikipedia.org/wiki/Microstate_(statistical_mechan... [1]: https://en.wikipedia.org/wiki/Chaos_theory
I assume he's talking about an agent model from his description, in which case it is exactly trying to derive the macro economy from the micro decisions.
This is a very classical approach. The idea that macro economy follows different models than the micro is somewhat modern. For example this caused a huge crisis in Keynesian economics in the 1970s where inflation models and the Phillips curve were drastically different than predictions and was a factor in the development of New Keynesian theories.
The examples you give aren't about individual micro prediction not agreeing with the macro, but that's the case you can come across in various economic theories where is there is a literal disconnect the two and correct micro equations disagree with the macro equations.
This is a very classical approach. The idea that macro economy follows different models than the micro is somewhat modern. For example this caused a huge crisis in Keynesian economics in the 1970s where inflation models and the Phillips curve were drastically different than predictions and was a factor in the development of New Keynesian theories.
The examples you give aren't about individual micro prediction not agreeing with the macro, but that's the case you can come across in various economic theories where is there is a literal disconnect the two and correct micro equations disagree with the macro equations.
I sometimes play with this thought as well, and I think we will see more of it as AI technologies allow for more realistic behavior of virtual agents.
The reason why I think having virtual agents instead of real players is important is because real players are not invested enough. They can always switch to a different reality whereas virtual agents are stuck and have to live with the consequences of their actions. That does change the dynamics a lot.
The reason why I think having virtual agents instead of real players is important is because real players are not invested enough. They can always switch to a different reality whereas virtual agents are stuck and have to live with the consequences of their actions. That does change the dynamics a lot.
> if it's possible to create a real-life simulation video game where you can study the economic effects of policies
i think every engineer wishes they could distill the human condition into a series of lines of code
as a human, i should hope it can't
i think every engineer wishes they could distill the human condition into a series of lines of code
as a human, i should hope it can't
"men still are men and not the keys of a piano, which the laws of nature threaten to control so completely that soon one will be able to desire nothing but" - Fyodor Dostoevsky
Depends on what “possible” means. A simulation can never faithfully recreate what it simulates. Can it simulate 1% or 0.01 of reality?
Maybe it simulates 2% of reality but the programmers (being natural reductionists) think that it is 80%. Now the the decision makers can wreck havoc with the pseudo-learnings from the simulation.
Maybe it simulates 2% of reality but the programmers (being natural reductionists) think that it is 80%. Now the the decision makers can wreck havoc with the pseudo-learnings from the simulation.
I know someone trying to do this as a side project actually! It's extremely difficult though because this emulation will never quite reached the fidelity of the real world. It always needs to be a game first - used to explore rather than prescribe.
It's always possible to model a system on a computer, the question is what assumptions you take. We don't have a perfect model of human behavior or even much consensus on how humans behave, so your assumptions are going to drive your results
Economics is not a hard science.
Obvious evidence of this can be seen by the Fed actions the past few years and the disastrous consequences. Some of the smartest economists in the world work for the Fed and still made huge errors.
Obvious evidence of this can be seen by the Fed actions the past few years and the disastrous consequences. Some of the smartest economists in the world work for the Fed and still made huge errors.
I have for the longest time dreamed of an economic simulator on par with dwarf fortress in it's level of detail.
Unfortunately I have neither the skill or dedication to carry out such an immense task.
Unfortunately I have neither the skill or dedication to carry out such an immense task.
Don't know about that, but you can study the true human nature, in an anonymous environment without serious law enforcement. It's not pretty.
Saying that human nature in the absence of societal pressures is the true human nature is questionable
We are social animals, taking us out of an environment where we're part of and accountable to a community is our true nature is like taking a fish out of water to study its true behavior
We are social animals, taking us out of an environment where we're part of and accountable to a community is our true nature is like taking a fish out of water to study its true behavior
Sure , if you want to study cavemen, but even they were social creatures, not anonymous.
I was talking about the MMO games.
It’s totally possible that *we* are “living” in such a simulation.
While I don't think we live inside a simulation or that there is an outside,
you might enjoy the book Simulacron-3 [0] or its movie adaptation Welt am Draht [1]. It is about the protagonist realizing that they are an agent in an economic computer simulation.
[0]: https://en.wikipedia.org/wiki/Simulacron-3 [1]: https://en.wikipedia.org/wiki/World_on_a_Wire
[0]: https://en.wikipedia.org/wiki/Simulacron-3 [1]: https://en.wikipedia.org/wiki/World_on_a_Wire
> Economist Ramin Shokrizade, with no formal knowledge of Georgist theory, fixed EVE Online’s land recession simply by directing CCP Games to assess a “high enough” holding fee to land-like spaceship factories, which had the effect of dissuading speculators.
How is it that EVE Online (not even that large of an MMORPG) is notorious for having an actual economist on staff (Eyjolfur “Eyjo” Guðmundsson), while actual claimed-to-be publicly relevant projects ("metaverse") seem to be spitballing this? Some of them are going as far as claiming "everyone" will {need,want} a "parcel of land" there. Where are their economy papers?
How is it that EVE Online (not even that large of an MMORPG) is notorious for having an actual economist on staff (Eyjolfur “Eyjo” Guðmundsson), while actual claimed-to-be publicly relevant projects ("metaverse") seem to be spitballing this? Some of them are going as far as claiming "everyone" will {need,want} a "parcel of land" there. Where are their economy papers?
EVE online had to exist and deliver value to generate revenue. Metaverse and friends is under no such obligation, hence the vaporware attitude to any rigor.
I'm pretty sure CCP's economist has been gone for a while. And the economy reflects that.
I wouldn't know, I've won EVE years ago ;). But this kinda drives the point home even harder, if that economy deteriorated after the departure of the economist. Assuming you infer that an economist is necessary¹ for a well-working MMORPG economy, I'm quite loathe to accept a monetized "metaverse" built without consulting economists.
¹ well, CCP could also just be bad at managing the EVE economy without an economist. But that loops us back to the head article's discussion; other MMORPGs don't seem better off.
¹ well, CCP could also just be bad at managing the EVE economy without an economist. But that loops us back to the head article's discussion; other MMORPGs don't seem better off.
Where are the useful economics papers to help the metaverse projects?
Why are you expecting economists to publish such papers for free? All metaverse projects I've seen so far are proprietary commercial ventures.
Because economists are often academics that get public funding.
That's exactly the point. It is not appropriate to use public funds to research aspects specific to private commercial enterprises.
I tried to find some research on repeated auctions, couldn't find any.
At the end of the day, economics is still a social science, and tech cannot abide the social sciences. If Meta didn’t hire anyone after they facilitated genocide, if Twitter never bothered to hire any of the people who wrote books about the problems Twitter would face years before they faced them, if Google never bothered to hire anyone after their seven hundredth social network failed, they sure weren’t going to hire anyone with any real expertise when they decided to build an economy - after all, they’re very smart, and how hard could it be?
The quote in the image at the top of the page made me curious. Henry George was quite the personality.
In favour of land tax but also free trade. His ideas have were very popular, but have now fallen out of memory.
https://en.wikipedia.org/wiki/Henry_George
In favour of land tax but also free trade. His ideas have were very popular, but have now fallen out of memory.
https://en.wikipedia.org/wiki/Henry_George
LVT is such an obvious slam dunk. I would easily vote for a single issue party looking to implement one. Might even volunteer for it at some point!
This post might have been inspired by another comment: https://news.ycombinator.com/item?id=40675965
At the very least, this other comment makes some related reading suggestions.
At the very least, this other comment makes some related reading suggestions.
cool read but this article misses pretty much the biggest factor in the whole history and is that no matter how much you think about this "problem", it will always be defeated by the players will to win or take advantage
lets remember after all, games and virtuals worlds, are that, games and virtuals worlds, so players have pretty much nothing to lose in trying to exploit whatever system you put in place
so if you are a gamemaster/game dev/etc, noone cares how much time or resources you invest in thinking how to solve the land crisis or housing crisis, you wont solve it and at the end if you put the most complex system or the most punisheable on you will most likely end up with your player base actually quitting or not interested in playing your game or following your rules.
so its actually just about to just accepting that there will be a land crisis or housing crisis and that you will just have to look the other way and let it be, cause at the end you might just end up killing your own game by going with the full try hard way.
theres actually silly solutions that have been proven to be good, like for example, adding new areas with the updates thus rendering the old areas useless and having people repeat the cycle of trying to be the new ones in those areas
or the favourite of all the game publishers, just tax with ingame credits that can only be purchased with $$$, so everyone is happy haha
btw, most of games end up failing trying to solve this land crisis or housing crisis cause while the focus so much on that, they have bigger problems that affect direct on it like currency inflation, RMT, gold farming and even more deep problems like cheating/botting
lets remember after all, games and virtuals worlds, are that, games and virtuals worlds, so players have pretty much nothing to lose in trying to exploit whatever system you put in place
so if you are a gamemaster/game dev/etc, noone cares how much time or resources you invest in thinking how to solve the land crisis or housing crisis, you wont solve it and at the end if you put the most complex system or the most punisheable on you will most likely end up with your player base actually quitting or not interested in playing your game or following your rules.
so its actually just about to just accepting that there will be a land crisis or housing crisis and that you will just have to look the other way and let it be, cause at the end you might just end up killing your own game by going with the full try hard way.
theres actually silly solutions that have been proven to be good, like for example, adding new areas with the updates thus rendering the old areas useless and having people repeat the cycle of trying to be the new ones in those areas
or the favourite of all the game publishers, just tax with ingame credits that can only be purchased with $$$, so everyone is happy haha
btw, most of games end up failing trying to solve this land crisis or housing crisis cause while the focus so much on that, they have bigger problems that affect direct on it like currency inflation, RMT, gold farming and even more deep problems like cheating/botting
One thing that doesn't seem to be explained in the article: Why do "we" (the policymakers) want to separate out the value of the land from the value of the improvements on it? Why not just use Harberger taxes (as described in the article) on the combined value of the property?
Because all taxes have the downside that they reduce the thing being taxed.
One example was the window tax. People started to build houses without taxes.
LVT is unique that it doesn't reduce the thing it taxes because land is constant.
If you would tax the combined value of the property then people would avoid to improve the land.
One example was the window tax. People started to build houses without taxes.
LVT is unique that it doesn't reduce the thing it taxes because land is constant.
If you would tax the combined value of the property then people would avoid to improve the land.
>LVT is unique that it doesn't reduce the thing it taxes because land is constant.
This may be technically true but the important thing is productive use of land. And that is as susceptible to tax influences as windows are.
This may be technically true but the important thing is productive use of land. And that is as susceptible to tax influences as windows are.
And that's the idea behind LVT: it tries to separate the use of land from its naked value. The corollary is that LVT shouldn't hinder the productive use of land.
>it tries to separate the use of land from its naked value
Which is effectively impossible to do because in modern times the value of land is almost entirely based on the use of that land.
Which is effectively impossible to do because in modern times the value of land is almost entirely based on the use of that land.
The surface level parking lots downtown are worth a lot more than their use indicates.
EDIT: ... build houses without WINDOWS.
> If you would tax the combined value of the property then people would avoid to improve the land.
But isn't it the case that currently, in most places (at least in the US), property taxes do tax the total value of the land? And yet people still build and improve houses; which would seem to contradict this thesis.
But isn't it the case that currently, in most places (at least in the US), property taxes do tax the total value of the land? And yet people still build and improve houses; which would seem to contradict this thesis.
They do it less than if it were not taxes.
One example are vacant lots which are held only for speculation.
One example are vacant lots which are held only for speculation.
> They do it less than if it were not taxes.
Do you have any evidence of that whatsoever? I've never heard anyone say, "Well, I would build an extension to my house, but that would raise my property taxes."
> One example are vacant lots which are held only for speculation.
Do you think that if there were no property taxes, all these speculators would suddenly decide to build things on the property? The whole point of speculation is to make money with a minimum of cost and effort, both up-front and ongoing. Building something on an empty property increases all of those.
Do you have any evidence of that whatsoever? I've never heard anyone say, "Well, I would build an extension to my house, but that would raise my property taxes."
> One example are vacant lots which are held only for speculation.
Do you think that if there were no property taxes, all these speculators would suddenly decide to build things on the property? The whole point of speculation is to make money with a minimum of cost and effort, both up-front and ongoing. Building something on an empty property increases all of those.
> "Well, I would build an extension to my house, but that would raise my property taxes."
Yep, I hear it all the time! Keep in mind that effects here will be related to property values and improvement values. One of the most common things people consider when renovating is how it will impact resale value. If taxes only impacted land then you would see a much better return on investment for every single renovation because your building/renovation is not taxed anymore, so the sale value of a property will increase by a larger amount than it currently does if you where to improve it.
Yep, I hear it all the time! Keep in mind that effects here will be related to property values and improvement values. One of the most common things people consider when renovating is how it will impact resale value. If taxes only impacted land then you would see a much better return on investment for every single renovation because your building/renovation is not taxed anymore, so the sale value of a property will increase by a larger amount than it currently does if you where to improve it.
> Do you think that if there were no property taxes, all these speculators would suddenly decide to build things on the property?
I'm a bit confused by this. Do you mean to say if there were land taxes instead of building taxes? Assuming that is what you meant, I think realistically an lvt would be implemented by slowly changing tax rates over time. Large landowners would likely sell part of their portfolio to get the capital required to improve the most profitable lots. So there would be a gradual mix of selling and building.
I'm a bit confused by this. Do you mean to say if there were land taxes instead of building taxes? Assuming that is what you meant, I think realistically an lvt would be implemented by slowly changing tax rates over time. Large landowners would likely sell part of their portfolio to get the capital required to improve the most profitable lots. So there would be a gradual mix of selling and building.
So we're comparing "property taxes", which are on the value of the empty land + any improvements, against "land value taxes", which are just on the value of the empty land.
_naply asserted that one reason to favor LVT over property taxes is that property taxes discourage people from building on it; and gave "speculators" as an example. We didn't flesh out exactly what that meant, but I took it to mean people who bought some area of land which right now is close to worthless, in the hopes that in the future might be worth a lot more.
(One alleged example of this is in Detroit city proper: allegedly, people bought broken-down old houses near the city center for a song, but didn't actually repair the property; they were just hoping that in a couple of decades things might turn around -- based on the efforts of other people to make Detroit better, naturally -- at which point they could sell the land at a massive profit without having to invest anything themselves.)
At any rate, the argument is that such speculators would otherwise build something useful there, but had decided not to because then they'd be paying more property taxes.
I don't buy it: As long as whatever they built brought in more money than the property taxes, there's more money to be had from building than from not building. The hypothetical speculators in Detroit could certainly build a single-family dwelling and rent it out for 30 years, and extra property taxes would almost certainly be outweighed by the additional rental income.
But the value of speculation is that it's low-cost and low-effort, and low-income rental is distinctly neither. Why bother dealing with contractors and repairs and tenants and whatever before selling it for 20x what you bought it for, when you can just do absolutely nothing and get almost the same return?
_naply asserted that one reason to favor LVT over property taxes is that property taxes discourage people from building on it; and gave "speculators" as an example. We didn't flesh out exactly what that meant, but I took it to mean people who bought some area of land which right now is close to worthless, in the hopes that in the future might be worth a lot more.
(One alleged example of this is in Detroit city proper: allegedly, people bought broken-down old houses near the city center for a song, but didn't actually repair the property; they were just hoping that in a couple of decades things might turn around -- based on the efforts of other people to make Detroit better, naturally -- at which point they could sell the land at a massive profit without having to invest anything themselves.)
At any rate, the argument is that such speculators would otherwise build something useful there, but had decided not to because then they'd be paying more property taxes.
I don't buy it: As long as whatever they built brought in more money than the property taxes, there's more money to be had from building than from not building. The hypothetical speculators in Detroit could certainly build a single-family dwelling and rent it out for 30 years, and extra property taxes would almost certainly be outweighed by the additional rental income.
But the value of speculation is that it's low-cost and low-effort, and low-income rental is distinctly neither. Why bother dealing with contractors and repairs and tenants and whatever before selling it for 20x what you bought it for, when you can just do absolutely nothing and get almost the same return?
Apologies if I'm not following entirely. I don't actually see where we disagree here. It sounds like we are both saying that speculation is undesirable, and that an LVT would decrease the reward and incentive of speculating. I suppose I do slightly disagree with the following though:
> At any rate, the argument is that such speculators would otherwise build something useful there, but had decided not to because then they'd be paying more property taxes....I don't buy it
Its very well researched that tax rates impact property values - so there are certainly marginal developers who are crunching the cost-benefit analyses here who would be swayed by the changes in the ROI(keep in mind, many of these developers are heavily loaded up with debt due to high land prices - meaning that banks need to manage their own risk and limit the amount of capital these developers can access). Even small changes in land/improvement tax rates have been shown to have an impact - a well-known change in boundaries in Denmark in 2007 provided excellent evidence of this[1]
[1] https://web.archive.org/web/20201108135554/https://dors.dk/f...
> At any rate, the argument is that such speculators would otherwise build something useful there, but had decided not to because then they'd be paying more property taxes....I don't buy it
Its very well researched that tax rates impact property values - so there are certainly marginal developers who are crunching the cost-benefit analyses here who would be swayed by the changes in the ROI(keep in mind, many of these developers are heavily loaded up with debt due to high land prices - meaning that banks need to manage their own risk and limit the amount of capital these developers can access). Even small changes in land/improvement tax rates have been shown to have an impact - a well-known change in boundaries in Denmark in 2007 provided excellent evidence of this[1]
[1] https://web.archive.org/web/20201108135554/https://dors.dk/f...
> I don't buy it: As long as whatever they built brought in more money than the property taxes, there's more money to be had from building than from not building.
The lower the property tax - the lower "money brought in" needs to be for building to happen.
The lower the property tax - the lower "money brought in" needs to be for building to happen.
The part about Final Fantasy XIV is outdated.
> There’s far more demand for housing plots in FFXIV than there is available land, and no formal market that allows land or houses to be bought or sold. Instead, when a plot is relinquished, a hidden timer starts counting down. At a random moment over the next 24 hours, the plot will silently become available for sale for a fixed price, and the first person to make an offer gets it.
It's a lottery system now. Also, the game is not as crowded as it was during the pandemic times so I'm starting to see plenty of empty plots on my EU server. If you spent too much time away from it it gets demolished and put up to sale again. The subscription is the tax.
> There’s far more demand for housing plots in FFXIV than there is available land, and no formal market that allows land or houses to be bought or sold. Instead, when a plot is relinquished, a hidden timer starts counting down. At a random moment over the next 24 hours, the plot will silently become available for sale for a fixed price, and the first person to make an offer gets it.
It's a lottery system now. Also, the game is not as crowded as it was during the pandemic times so I'm starting to see plenty of empty plots on my EU server. If you spent too much time away from it it gets demolished and put up to sale again. The subscription is the tax.
This is basically how land worked in Second Life. LindenLab charged a set price for a parcel (by size) or island (by compute), regardless of what was on it. They didn't calculate that by continually assessing the earnings of the land (which seems awfully close to charging for the improvements and not the land itself, and a staffing issue). The prices of islands changed over time, though I don't think parcel charges increased (haven't paid attention since I stopped working there).
Land owners had to pay the above price to LL monthly. They could then resell/rent to other residents.
Land owners had to pay the above price to LL monthly. They could then resell/rent to other residents.
In the real world, cities like Boston go for what's called Land Value Capture instead of LVT. Basically asking developers for bunch of benefits such as bike lanes, affordable units, etc. at the time of permitting process.
My thoughts are mixed about this approach. On one hand, it feels like extortion since it is tied to permitting. On the other hand, benefiting the community in general around the development site seems also right.
My thoughts are mixed about this approach. On one hand, it feels like extortion since it is tied to permitting. On the other hand, benefiting the community in general around the development site seems also right.
> The lack of a formal market for land has not made land any cheaper, it has simply shifted the price from being denominated in money-dollars, to time-dollars and pain-in-the-butt-dollars.
Vitalik writes about this too: https://vitalik.eth.limo/general/2021/08/22/prices.html
Vitalik writes about this too: https://vitalik.eth.limo/general/2021/08/22/prices.html
Related, ongoing HN thread with additional comments of interest,
https://news.ycombinator.com/item?id=40674208 ("Rent in Cities Skylines 2 was too high, so the devs removed landlords (arstechnica.com)"; 14 hours ago, 83 comments)
https://news.ycombinator.com/item?id=40674208 ("Rent in Cities Skylines 2 was too high, so the devs removed landlords (arstechnica.com)"; 14 hours ago, 83 comments)
> Furthermore, those that already own land often become “NIMBYs” who lobby for restrictive building and zoning policies that restrict other landowners from building, because more housing could help meet demand, in turn lowering the market value of the NIMBY’s existing properties.
Sorry, I know this is way outside the meat of this article, but I have a beef with the whole “NIMBYs are merely pulling the ladder up behind them” bullshit.
I don’t care if I sound like a NIMBY when I say this: it’s not always motivated by profit.
I have two kids and we live in a nice neighborhood where we can walk to school. A local homeless support group wants to put an ephemeral housing lot in the neighboring block.
Having lived in a place where I lived within that very proximity to people who were homeless and in recovery, I know what to expect from it. Yeah I’m a fucking NIMBY. I don’t want it here. I moved out of the city to be further away from that shit, and I want to continue feeling safe and comfortable walking my 2 and 7 year old to school. Take me out back and shoot me.
Sorry, I know this is way outside the meat of this article, but I have a beef with the whole “NIMBYs are merely pulling the ladder up behind them” bullshit.
I don’t care if I sound like a NIMBY when I say this: it’s not always motivated by profit.
I have two kids and we live in a nice neighborhood where we can walk to school. A local homeless support group wants to put an ephemeral housing lot in the neighboring block.
Having lived in a place where I lived within that very proximity to people who were homeless and in recovery, I know what to expect from it. Yeah I’m a fucking NIMBY. I don’t want it here. I moved out of the city to be further away from that shit, and I want to continue feeling safe and comfortable walking my 2 and 7 year old to school. Take me out back and shoot me.
Yup. I used to think I was a massive YIMBY, right up until learnt about plans to build student housing on a park and playground where I played with my kids every day. Rational me could make lots of arguments about why the city needs more student housing (big university town, with too little student housing) and why that would be a perfect place to build student housing (very close to one of the main campuses and existing student housing). Actual me didn't care about any of those arguments, and strongly opposed the plans. Nothing to do with property values, I just selfishly wanted a nice park and playground within walking distance of my apartment. Turns out I wasn't a YIMBY after all, just massive hypocrite and a YIYBY (Yes In Your Back Yard).
Out of curiosity, if you look at your area from satellite were there (in your opinion) valid places where the student housing could have been built? A derelict lot, a large car-park or low-density housing? Curious to where your line is. It's a sad fact that green-spaces are often sacrificed because of the lack of private ownership and therefore care over them.
We had the same in my old home, where we needed a new primary school. Logically a chunk of a park could be converted with many rational benefits. Yet still half the village came out to argue that it'd ruin their dog-walking route.
We had the same in my old home, where we needed a new primary school. Logically a chunk of a park could be converted with many rational benefits. Yet still half the village came out to argue that it'd ruin their dog-walking route.
> Having lived in a place where I lived within that very proximity to people who were homeless and in recovery, I know what to expect from it. Yeah I’m a fucking NIMBY. I don’t want it here. I moved out of the city to be further away from that shit, and I want to continue feeling safe and comfortable walking my 2 and 7 year old to school.
That isn't quite the usual idea of "Not In My BackYard". The observation there was that people opposed the development of beneficial things near themselves.
You're opposing the development of a detrimental thing near yourself. Sure, it's worse when it's closer to you, but an ephemeral housing lot for vagrants makes everyone worse off no matter where it gets built.
Unless you're saying you'd support it if it was built a few blocks over?
That isn't quite the usual idea of "Not In My BackYard". The observation there was that people opposed the development of beneficial things near themselves.
You're opposing the development of a detrimental thing near yourself. Sure, it's worse when it's closer to you, but an ephemeral housing lot for vagrants makes everyone worse off no matter where it gets built.
Unless you're saying you'd support it if it was built a few blocks over?
> makes everyone worse off no matter where it gets built
No? It's not like the vagrants will disappear if you don't build an housing lot. They'll just exist not in your backyard and continue to be an overall issue. That's the definition of NIMBY
No? It's not like the vagrants will disappear if you don't build an housing lot. They'll just exist not in your backyard and continue to be an overall issue. That's the definition of NIMBY
> It's not like the vagrants will disappear if you don't build an housing lot.
That's exactly what it's like. An issue that didn't exist in the past doesn't need to exist in the future, either. If you set up institutions specifically to make hanging out and harassing people in the neighborhood a viable lifestyle, you'll cause more people to engage in that lifestyle.
That's exactly what it's like. An issue that didn't exist in the past doesn't need to exist in the future, either. If you set up institutions specifically to make hanging out and harassing people in the neighborhood a viable lifestyle, you'll cause more people to engage in that lifestyle.
> An issue that didn't exist in the past doesn't need to exist in the future
Do you genuinely think homelessness is something of a new phenomenon?
Do you genuinely think homelessness is something of a new phenomenon?
We know it is; read literature from earlier periods and you'll find that phenomena related to homelessness present very differently. You can find no end of American hobo stories.
And hobos themselves, or as they were called elsewhere "tramps", are something that came into being because social institutions were developed to create them.
And hobos themselves, or as they were called elsewhere "tramps", are something that came into being because social institutions were developed to create them.
Beggars and the homeless have always existed in any relatively large settlement.
I'm fairly sure that if you got transported back to ancient mesopotamia you'd find homeless people
I'm fairly sure that if you got transported back to ancient mesopotamia you'd find homeless people
There would be beggars. It's less obvious that there would be homeless, assuming you exclude the Amorites, but it's possible.
But their numbers would be low. The number of homeless and beggars you get is a function of how much support exists for a homeless / beggar lifestyle. Establishing institutions to help them creates them in large numbers.
But their numbers would be low. The number of homeless and beggars you get is a function of how much support exists for a homeless / beggar lifestyle. Establishing institutions to help them creates them in large numbers.
Interesting, how children are a convenient excuse for so many evil things.
I think it's less a "convenient excuse" and more like sincere conviction that "I will do anything to help/protect them" for better or worse.
That's correct, it always fascinates me how a woman before and after child birth are like two completely different persons. Men, not always.
> I don’t care if I sound like a NIMBY when I say this: it’s not always motivated by profit.
100 agree. I think an LVT would probably not magically fix all incentives around development. What it would do though is create a better alignment between government zoning and infrastructure improvements + people's desires. For example, under an lvt, the government can significantly improve their tax revenues by improving the value of land. So having zoning for parks, public transit, and reducing crime will now directly impact the government's bottom line.
Lvt would help with picking the best backyard, but it doesn't change the fact that it would still be somebody's backyard, and that somebody might not like it. I will never want to live next to a landfill, and anyone gaslighting me into thinking I'm wrong about that is crazy... But the landfill has to go somewhere, and if I am the only person living in a really good spot for it then I probably get the short end of the stick.
100 agree. I think an LVT would probably not magically fix all incentives around development. What it would do though is create a better alignment between government zoning and infrastructure improvements + people's desires. For example, under an lvt, the government can significantly improve their tax revenues by improving the value of land. So having zoning for parks, public transit, and reducing crime will now directly impact the government's bottom line.
Lvt would help with picking the best backyard, but it doesn't change the fact that it would still be somebody's backyard, and that somebody might not like it. I will never want to live next to a landfill, and anyone gaslighting me into thinking I'm wrong about that is crazy... But the landfill has to go somewhere, and if I am the only person living in a really good spot for it then I probably get the short end of the stick.
I believe the Discworld MUD had (has?) a short term lease by auction system for player housing. Probably for 15-20 years now.
We don’t need simulations for this there are plenty of countries where housing is not a speculative asset
Ok you can't just say "plenty" and not name any examples. I would personally prefer examples from "1st world countries" group. I am not criticising, just trying to figure out where to move ;)
> If you want to see the extents to which this drives people, just check out this video (warning, language):
What video?
What video?
From the original post, it's https://www.youtube.com/watch?v=onrX5ZURtek
Since the post was written, FFXIV has fully switched to a lottery system[1], so at least one doesn't have to click a placard for hours, but land is still scarce on certain worlds.
[1] https://na.finalfantasyxiv.com/lodestone/playguide/contentsg... under "Lottery System" - all worlds currently use this method
Since the post was written, FFXIV has fully switched to a lottery system[1], so at least one doesn't have to click a placard for hours, but land is still scarce on certain worlds.
[1] https://na.finalfantasyxiv.com/lodestone/playguide/contentsg... under "Lottery System" - all worlds currently use this method
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Even a big fan of using games as datasets for research, I'm so tired of reading policy proposals based on literal fake economies meant for maximizing entertainment only after being buoyed up by some other real and unrelated cost behind the scenes. Why would we expect to learn anything useful in this flat potemkin setting?
One problem with the LVT is the logistics of actually levying the tax. You will have to collect a lot of payments from a lot of people. And have to deal with non-payment etc.. (virtual debt collectors?)
The IRS has a significantly more challenging task when assessing the complex tax codes surrounding income and capital gains.
Nobody can hide land in an offshore tax Haven. LVT is a slam dunk by comparison?.
Nobody can hide land in an offshore tax Haven. LVT is a slam dunk by comparison?.
> Land Crisis [on the internet, too]
Land Value Tax: https://en.wikipedia.org/wiki/Land_value_tax
Virtual economies: https://en.wikipedia.org/wiki/Virtual_economies
Category:Virtual economies: https://en.wikipedia.org/wiki/Category:Virtual_economies
Gold farming > Secondary effects on in-game economy; inflation,: https://en.wikipedia.org/wiki/Gold_farming#Secondary_effects...
WSE: World Stock Exchange (2007-2008) https://en.wikipedia.org/wiki/World_Stock_Exchange
The opportunity costs of spending GPU hours on various alternatives.
Economy of Second Life > Monetary policy: https://en.wikipedia.org/wiki/Economy_of_Second_Life
Circle, Centre > History: https://en.wikipedia.org/wiki/Circle_(company)
Stablecoin > Reserve-backed stablecoins: https://en.wikipedia.org/wiki/Stablecoin
Economic stability: https://en.wikipedia.org/wiki/Economic_stability
Stabilization policy > Crisis stabilization: https://en.wikipedia.org/wiki/Stabilization_policy#Crisis_st...
Macroeconomics > Macroeconomic policy; a "policy wonk" may also be a "quant" https://en.wikipedia.org/wiki/Macroeconomics#Macroeconomic_p...
Clearing house (finance) > https://en.wikipedia.org/wiki/Clearing_house_(finance) :
> Impact: A 2019 study in the Journal of Political Economy found that the establishment of the New York Stock Exchange (NYSE) clearinghouse in 1892 "substantially reduced volatility of NYSE returns caused by settlement risk and increased asset values", indicating "that a clearinghouse can improve market stability and value through a reduction in network contagion and counterparty risk."
From https://news.ycombinator.com/item?id=40649612 :
> Interledger > Peering, Clearing and Settling: https://interledger.org/developers/rfcs/peering-clearing-set...
But your problem's this land bubble and then unfortunately unrealized losses and how does that happen
Land Value Tax: https://en.wikipedia.org/wiki/Land_value_tax
Virtual economies: https://en.wikipedia.org/wiki/Virtual_economies
Category:Virtual economies: https://en.wikipedia.org/wiki/Category:Virtual_economies
Gold farming > Secondary effects on in-game economy; inflation,: https://en.wikipedia.org/wiki/Gold_farming#Secondary_effects...
WSE: World Stock Exchange (2007-2008) https://en.wikipedia.org/wiki/World_Stock_Exchange
The opportunity costs of spending GPU hours on various alternatives.
Economy of Second Life > Monetary policy: https://en.wikipedia.org/wiki/Economy_of_Second_Life
Circle, Centre > History: https://en.wikipedia.org/wiki/Circle_(company)
Stablecoin > Reserve-backed stablecoins: https://en.wikipedia.org/wiki/Stablecoin
Economic stability: https://en.wikipedia.org/wiki/Economic_stability
Stabilization policy > Crisis stabilization: https://en.wikipedia.org/wiki/Stabilization_policy#Crisis_st...
Macroeconomics > Macroeconomic policy; a "policy wonk" may also be a "quant" https://en.wikipedia.org/wiki/Macroeconomics#Macroeconomic_p...
Clearing house (finance) > https://en.wikipedia.org/wiki/Clearing_house_(finance) :
> Impact: A 2019 study in the Journal of Political Economy found that the establishment of the New York Stock Exchange (NYSE) clearinghouse in 1892 "substantially reduced volatility of NYSE returns caused by settlement risk and increased asset values", indicating "that a clearinghouse can improve market stability and value through a reduction in network contagion and counterparty risk."
From https://news.ycombinator.com/item?id=40649612 :
> Interledger > Peering, Clearing and Settling: https://interledger.org/developers/rfcs/peering-clearing-set...
But your problem's this land bubble and then unfortunately unrealized losses and how does that happen
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An upside and downside of LVT, depending on your perspective, is that the imposition of a LVT would seriously lower land values. The inverse is also true: removing an established LVT carries a significant upside for the affected landowners. Property that had been acquired for cheap under a LVT would be freed of its shackles and allowed to appreciate again. Some of this would be immediate, as thousands of dollars in taxes shift away from land and back onto labour, enterprise, and commerce, and some of it would be gradual as people resume buying land because land value always goes up (which causes land values to go up). This creates a powerful incentive to undo any progress that a LVT campaign might accomplish.
I doubt that anything short of a revolution would be able to overpower the wealthy landowning class who like their unearned rents and inflated asset values very much thank you, but you don't just need to beat them once, you need to be able to hold their political, economic, and intellectual influence at bay permanently or we end up right back where we started in a matter of years.