It might be helpful to explain that rent exists whether land is owned privately, owned publicly or is not claimed by anyone. Rent can be described as that portion of whatever tangible wealth is capable of being produced at a given location attributable to the characteristics of the location and not by the quality of labor or capital goods employed. In general, people tend to claim the potentially most productive locations first; then, when all such locations are claimed will (again, generally) begin to claim the next potentially most productive locations. [Ed Dodson]
Unfortunately the land owners will never see the ethics nor agree to the ethics associated with the fact that land is a gift of nature to which we should all benefit and that the rent that is taken from site users (and implied when these are also land owners) is retained instead of being shared. Indeed the concept of the taxation of land values is one that they can never agree to--its the nature of people who posess territory to want to hold on to it, even when it is not being used. They see it as an investment instead of as the means for benefit that is taken from the non-land owning remainder of our society. How then should we manage to convince these speculators that they can share in a more generally beneficant way what they wrongfully own?
Henry George tried, but his simple idea was called a tax (which nobody ever wishes to pay) and it reduced the income of some of the land owners (which as investors they found to be unfair).
The answer is not to appy a new tax, but that when a site with or without some building (real estate) becomes necessary to be sold, that the site itself is automatically bought by the government whilst the buildings are sold as before to a regular kind of investor (or capitalist) who plans to make good use of both the site and the buildings.
The site would then become leased to this investor, who would pay a regular lease-fee. Meanwhile the past land-lord, having become free of the need to collect any rent but having received the fair price for his/her site of land, (and for any buildings thereon) would be free to invest this money and gain interest on it in a more reliable (but probably less speculative) way that when it was being rented.
Thus a tax is replaced by a lease-fee, and an investment in a site is replaced by an investment in more durable capitalist goods, which can be traded and used to build a better business rather than by merely exploiting the rest of the non-land owning community.
Intriguing idea. With a monopsony on sites, how are they to be priced? How is the seller to be satisfied that they got a fair price for "their" land, when the government's offer allows no alternative or bidding? I can see this leading to mispricings either causing sellers to hold or the government to overpay.
> investment in a site is replaced by an investment in more durable capitalist goods, which can be traded and used to build a better business rather than by merely exploiting the rest of the non-land owning community.
This makes it obvious that those with the option will choose to hold on to their rent generating land. The beauty of LVT is forcing landowners to shit or get off the pot, as they'll be paying for the land whether it's utilized or not. Your proposal incentivizes current landlords to never sell.
The price of anything depends on what purchasers are willing to pay for it. In the case of suitable sites of land, the same thing applies and it is the prices of competing sites and the need for some of their owners to sell, that causes these prices to become stabilized and fair. Although the beneficial effect of competition is often lost due to monopolization, there is still a degree of competition remaining, and it is only due to what in effect is national corruption that spoils the opportunities that fair competition offers.
Land value evaluation may be needed to make this proposal work and great care in how assesors can honestly derive the fair price is a must for any true government. The work of these assesors is based on previous (private) land sales. Since the proposal requires many years to be completed along with the rising land values where the infrastructure has been improved, etc, a proper set of records to allow for the rise in values due to this effect and for the cost of living indices etc, must be included.
Because land is inherited as well as sold, and because inheritance tax still applies, the inheritors will often find it necessary to sell their real-estate including the sites on which it stands. Certain buildings become obsolete and their need for costly repairs or replacement will encourage the sales of the sites and these structures too. This implies that my proposal will gradually take hold and it will need at least 40 years to become significant and other kinds of taxation to be slowly lowered and eliminated. As a Georgist of more than 50 years standing, I can see the need for patience! In P and P a quotation beginng "there must be refuge..." illustrates how such significant changes take really long times to beome effective.
It might be helpful to explain that rent exists whether land is owned privately, owned publicly or is not claimed by anyone. Rent can be described as that portion of whatever tangible wealth is capable of being produced at a given location attributable to the characteristics of the location and not by the quality of labor or capital goods employed. In general, people tend to claim the potentially most productive locations first; then, when all such locations are claimed will (again, generally) begin to claim the next potentially most productive locations. [Ed Dodson]
Unfortunately the land owners will never see the ethics nor agree to the ethics associated with the fact that land is a gift of nature to which we should all benefit and that the rent that is taken from site users (and implied when these are also land owners) is retained instead of being shared. Indeed the concept of the taxation of land values is one that they can never agree to--its the nature of people who posess territory to want to hold on to it, even when it is not being used. They see it as an investment instead of as the means for benefit that is taken from the non-land owning remainder of our society. How then should we manage to convince these speculators that they can share in a more generally beneficant way what they wrongfully own?
Henry George tried, but his simple idea was called a tax (which nobody ever wishes to pay) and it reduced the income of some of the land owners (which as investors they found to be unfair).
The answer is not to appy a new tax, but that when a site with or without some building (real estate) becomes necessary to be sold, that the site itself is automatically bought by the government whilst the buildings are sold as before to a regular kind of investor (or capitalist) who plans to make good use of both the site and the buildings.
The site would then become leased to this investor, who would pay a regular lease-fee. Meanwhile the past land-lord, having become free of the need to collect any rent but having received the fair price for his/her site of land, (and for any buildings thereon) would be free to invest this money and gain interest on it in a more reliable (but probably less speculative) way that when it was being rented.
Thus a tax is replaced by a lease-fee, and an investment in a site is replaced by an investment in more durable capitalist goods, which can be traded and used to build a better business rather than by merely exploiting the rest of the non-land owning community.
Intriguing idea. With a monopsony on sites, how are they to be priced? How is the seller to be satisfied that they got a fair price for "their" land, when the government's offer allows no alternative or bidding? I can see this leading to mispricings either causing sellers to hold or the government to overpay.
> investment in a site is replaced by an investment in more durable capitalist goods, which can be traded and used to build a better business rather than by merely exploiting the rest of the non-land owning community.
This makes it obvious that those with the option will choose to hold on to their rent generating land. The beauty of LVT is forcing landowners to shit or get off the pot, as they'll be paying for the land whether it's utilized or not. Your proposal incentivizes current landlords to never sell.
The price of anything depends on what purchasers are willing to pay for it. In the case of suitable sites of land, the same thing applies and it is the prices of competing sites and the need for some of their owners to sell, that causes these prices to become stabilized and fair. Although the beneficial effect of competition is often lost due to monopolization, there is still a degree of competition remaining, and it is only due to what in effect is national corruption that spoils the opportunities that fair competition offers.
Land value evaluation may be needed to make this proposal work and great care in how assesors can honestly derive the fair price is a must for any true government. The work of these assesors is based on previous (private) land sales. Since the proposal requires many years to be completed along with the rising land values where the infrastructure has been improved, etc, a proper set of records to allow for the rise in values due to this effect and for the cost of living indices etc, must be included.
Because land is inherited as well as sold, and because inheritance tax still applies, the inheritors will often find it necessary to sell their real-estate including the sites on which it stands. Certain buildings become obsolete and their need for costly repairs or replacement will encourage the sales of the sites and these structures too. This implies that my proposal will gradually take hold and it will need at least 40 years to become significant and other kinds of taxation to be slowly lowered and eliminated. As a Georgist of more than 50 years standing, I can see the need for patience! In P and P a quotation beginng "there must be refuge..." illustrates how such significant changes take really long times to beome effective.