Opinion of Georgism

[Governor Scott]

http://en.wikipedia.org/wiki/Georgism

For those who don't want to read the long article-
https://www.youtube.com/watch?v=itO7OoKtNUc&feature=player_embedded#! (sort of an introduction video)

Yes, I'd like to see debate about this.

[So rightwing that I broke the Political Compass!]

Favourable. I think it's fairly beyond dispute that a land value tax would be less economically harmful(ceteris parabus) then the presently predominant income and sales tax systems. It also seems to be clear that it would be more progressive and philosophically justifiable.

The only thing to be said against Georgism is that it's supporters often seem a little autistic in their obsession with the "land value tax", and having it as the only source of revenue may be less then pragmatic.

[So rightwing that I broke the Political Compass!]

Video is retarded though. Youtube political videos almost always are.

[Californian Tony]

The problem is that I guess it's at least theoretically possible to be very wealthy and not own much land. So, while such a tax might be more progressive than a sales tax or a poorly designed income tax, it is still far from perfect.

The underlying idea behind it seems to be that land is the only real common good, meaning that everything else ought to be left to private initiatives. Instead, I think there are much more goods and services which should be equally distributed between citizens regardless of economic capabilities or personal merit (health, education, etc). Therefore, other forms of taxes (on income or anything else) can easily be seen as a price to pay to the collectivity in exchange for the provision of such public good (just as land tax is seen as a way to pay for the occupation of public land).

[So rightwing that I broke the Political Compass!]

The problem is that I guess it's at least theoretically possible to be very wealthy and not own much land. So, while such a tax might be more progressive than a sales tax or a poorly designed income tax, it is still far from perfect.

The underlying idea behind it seems to be that land is the only real common good, meaning that everything else ought to be left to private initiatives. Instead, I think there are much more goods and services which should be equally distributed between citizens regardless of economic capabilities or personal merit (health, education, etc). Therefore, other forms of taxes (on income or anything else) can easily be seen as a price to pay to the collectivity in exchange for the provision of such public good (just as land tax is seen as a way to pay for the occupation of public land).

Certainly it's not the be all and end all, and we're not realistically going to see it completely displacing other taxes . I'm a little puzzled by your first statement though... it looks like missing the forest for the trees. I'd also point out that individual wealthy who that aren't directly affected by the tax would be indirectly affected by the the reduced cost of living and increased employment rate among the lower and middle class(courtesy of reduced sales and income taxes).

Also progressiveness isn't the only argument in it's favour. For one it's a lot harder to evade then income taxes or sales taxes(you can't really a hide a plot of land).  This is a particularly compelling justification for countries like Greece which suffer from endemic tax evasion.

Then theirs the simple fact that it's more economically efficient then income or sales taxes, as noted by economists as far back as Adam Smith himself. If you give a toss then I'd suggest looking up professional economic discourse on the subject- the simplified version is that while income and sales taxes punish economic activity(labour and consumption), a land value tax punishes economic inactivity(under-utilization of land).

[Californian Tony]

I'm not saying such a tax system would be particularly bad or would be less preferable than the current one. I certainly agree that heavily taxing land is fair and I think I understand why it would be more economically effective. I just don't think that, as a Social-Democrat, this would be enough to achieve the kind of society I would like. Even if it's a progressive form of taxation, I don't think it would be sufficient to reduce and durably contain inequalities as I think taxation should. Wealth in general, and not only land, should be significantly taxed so that those who are rich through immaterial belongings also pay their fair share. And income taxation, despite its flaws, ought to be preserved for the sake of preventing its accumulation.

[So rightwing that I broke the Political Compass!]

I'm not saying such a tax system would be particularly bad or would be less preferable than the current one. I certainly agree that heavily taxing land is fair and I think I understand why it would be more economically effective. I just don't think that, as a Social-Democrat, this would be enough to achieve the kind of society I would like. Even if it's a progressive form of taxation, I don't think it would be sufficient to reduce and durably contain inequalities as I think taxation should. Wealth in general, and not only land, should be significantly taxed so that those who are rich through immaterial belongings also pay their fair share. And income taxation, despite its flaws, ought to be preserved for the sake of preventing its accumulation.

I'm broadly in agreement with your ideals, I think. The problem with wealth taxation though is that most forms of wealth can be easily shifted from one country to another, so it's an exercise in self-harm for a country to implement a meaningful wealth tax. By contrast land can't be moved.

As to income taxation- I'd sooner go back to the pre-WW2 situation where we only taxed the labour of the highest earners(the top 10 or 20%, I think). The lost revenue could be made up by increased land and sales taxes(both of which are less damaging economically then the income tax, and less of a drag on job creation). You might well point out the regressive nature of the sales tax, but remember that if its replacing middle and lower class income/payroll taxes(while higher income tax rates remain in place) then that would outweigh it's regressive nature.

[They Played The Wardrum Out Of Time]

Horrible philosophy. It's flawed to the nth degree. Essentially, it's like face-value socialism but without taxes. Awful video, too.

[Sibboleth]

Exactly the sort of thing that internet pseudointellectuals love.

[Frodo]

Didn't read the entire article, but wouldn't such a tax disproportionately affect farmers and ranchers, i.e. rural America?  And wouldn't this affect our food supply?  The United States is currently more or less self-sufficient as far as food is concerned.  I don't want to endanger that.  

[So rightwing that I broke the Political Compass!]

Didn't read the entire article, but wouldn't such a tax disproportionately affect farmers and ranchers, i.e. rural America?  And wouldn't this affect our food supply? 

To the contrary. It would hurt inefficient farmers that don't utilize their land well, but this would only prod them to either a)increase their efficiency or b)sell some/all of their land to more efficient operations.

The thing to understand is that, while income and sales taxes punish and therefore discourage economic activity, land taxes(and in particular land value taxes along the Georgist model) punish economic inactivity.

[opebo]

You can't take it seriously - they didn't mention cutting off Mr. Monopoly's head.

[Governor Scott]

Didn't read the entire article, but wouldn't such a tax disproportionately affect farmers and ranchers, i.e. rural America?  And wouldn't this affect our food supply?  

To the contrary. It would hurt inefficient farmers that don't utilize their land well, but this would only prod them to either a)increase their efficiency or b)sell some/all of their land to more efficient operations.

The thing to understand is that, while income and sales taxes punish and therefore discourage economic activity, land taxes(and in particular land value taxes along the Georgist model) punish economic inactivity.

Isn't it already pretty difficult for a small farmer to get by today, regardless of skill?  And if a farmer sells too much of their land, I don't see how they would be better off in the long run.

[Redalgo]

Wouldn't this drive land almost exclusively into the hands of large firms, which by their very nature tend to be more competitive and possess more capital than individual actors, families, and most small businesses?

With farms, for instance, I would imagine "big agribusinesses" could obtain the overwhelming majority of farmland and pass on the costs of taxes on property to consumers in the forms of increased food prices, lower pay for workers, and/or fewer benefits for employees. And even then they might be put under quite a bit of pressure competing with trans- or multinationals that could simply import into the country cheaper produce from parts of the world that boast lower property taxes.

Would it not be far more difficult for people to own the land on which they have their residence as well, perhaps shifting control of capital further away from the individual and concentrating it into the hands of private groups motivated first and foremost by their desires for profit? I'd think this approach would be more efficient, economically speaking, but also more corporatist and communal without necessarily being any more egalitarian or liberating to the typical individual than is the current arrangement.

Then again, as I've said in the past, economics is really not my thing so I'd be curious to see what else folks have to say about Georgism. :<

[Gustaf]

This is an amusing example of how economists sometimes don't get reality.

Rockingham is right on the money - this punishes inactivity, which is great from an economic perspective, but is also precisely why it can't work in reality.

[So rightwing that I broke the Political Compass!]

Didn't read the entire article, but wouldn't such a tax disproportionately affect farmers and ranchers, i.e. rural America?  And wouldn't this affect our food supply?  

To the contrary. It would hurt inefficient farmers that don't utilize their land well, but this would only prod them to either a)increase their efficiency or b)sell some/all of their land to more efficient operations.

The thing to understand is that, while income and sales taxes punish and therefore discourage economic activity, land taxes(and in particular land value taxes along the Georgist model) punish economic inactivity.

Isn't it already pretty difficult for a small farmer to get by today, regardless of skill?  And if a farmer sells too much of their land, I don't see how they would be better off in the long run.

This depends on which proposal we're talking about.

 If we're simply talking about altering the present property taxes so that they don't cover improvements on the land, then this would probably be a net gain for small farmers(because the percentage of their land that they fail to utilize is lower then for most large farmers, or at least that's my impression). Let us call this proposal proposal A

If we're talking about not only doing that, but also substantially increasing the land tax rate to fund reduction of income and sales taxes(let us call this proposal B), then this would have a disproportional impact on land intensive industries such as agriculture. However the fact that the tax punishes failure to utilize land, coupled with the fact that demand for food is inelastic, means that a fall in output is unlikely. You might see some of the less efficient producers squeezed out of business(and they may disproportionately be small farmers)... but that, coupled with formerly un/under-utilized land being utilized, would surely mean an increase in output. OTOH we might see the market respond by importing more form overseas... given the protectionism for the agriculture industry that is presently in place, this might be seen as nothing more then unravelling an economic distortion.

Anyone concerned with protectionism for their national agriculture industry/small farmers would necessarily cast a highly skeptical eye on proposal B. But I don't think proposal A merits the same sort of skepticism.

[So rightwing that I broke the Political Compass!]

Wouldn't this drive land almost exclusively into the hands of large firms, which by their very nature tend to be more competitive and possess more capital than individual actors, families, and most small businesses?

With farms, for instance, I would imagine "big agribusinesses" could obtain the overwhelming majority of farmland and pass on the costs of taxes on property to consumers in the forms of increased food prices, lower pay for workers, and/or fewer benefits for employees. And even then they might be put under quite a bit of pressure competing with trans- or multinationals that could simply import into the country cheaper produce from parts of the world that boast lower property taxes.

You seem to be referring to proposal B. I'm not sure you're right about big agribusinesses... my  recollection is that "small farms" tend to be more efficient in terms of land use but less efficient in terms of capital and labour, whereas large farms are the opposite... which means proposal A would if anything benefit small farms, though you may be correct in claiming that proposal B(dependent on how high the increase in land taxes was) might wipe them out.

You contradict yourself in the latter part- if they're under intense competition with foreign imports, then they can't put the squeeze on domestic consumers(that requires an oligopoly, or at least a highly uncompetitive environment).

The present system already substantially subsidizes domestic agriculture, so a moderate increase in agricultural imports might be considered a mere reversal of that distortion. Remember also that the effect on the agriculture industry would benefit from lower income and sales taxes just like other economic sectors, though probably still being a net loser in aggregate under proposal B.

Would it not be far more difficult for people to own the land on which they have their residence as well, perhaps shifting control of capital further away from the individual and concentrating it into the hands of private groups motivated first and foremost by their desires for profit? I'd think this approach would be more efficient, economically speaking, but also more corporatist and communal without necessarily being any more egalitarian or liberating to the typical individual than is the current arrangement.

Under proposal A, most certainly not(so long as the elderly remain largely exempt from property taxes, as is presently the case). Middle class and lower class people don't normally own substantial quantities of underutilized or untapped land... indeed the tax would probably make private ownership by the middle and lower classes easier since more undeveloped land would be released for residential development. It would also trigger a greater emphasis on upwards development of buildings in urban areas which would probably lead to a slight decrease in price.

Under proposal B, it's depends on the structure of the income and sales tax reductions(and hypothetical increase in the safety net).  If the tax reductions are structured in a largely progressive fashion then I can't see this hurting land ownership(unless the incentive structure itself changes and people perceive other investments as preferable to land... in which case I don't see the problem as I'm not aware of any compelling public interest in having property as the preferred nest egg.

[So rightwing that I broke the Political Compass!]

This is an amusing example of how economists sometimes don't get reality.

Rockingham is right on the money - this punishes inactivity, which is great from an economic perspective, but is also precisely why it can't work in reality.

Care to explain your reasoning?