I am definitely skeptical of arguments that universities intrinsically serve the public good in such a way that they require massive subsidies. In fact, I think it's very likely that universities- and the entire employment and education ecosystem- would be far better off if they didn't have functionally infinite subsidies to blow on endless bureaucratic expansion and shiny new buildings and amenities.
In practice, I think, shiny new buildings and amenities in the education sector are associated with tuition fees: shiny facilities to attract students who can afford to pay the fees.
Yes, and that is only a viable practice because colleges know students will be able to pay endlessly rising tuition by soaking up the always-expanding federal grants and loans.
When the government occupies land in SF or DC, productively or not, there is clearly an economic cost to the country because that land is denied to other productive uses. While it doesn't make much sense to collect an LVT since the funds would just be used to pay the LVT, it is still valuable to assess the land rent (what the LVT would be) and account that as an economic cost of our government's land use. This would give us insight into how we can achieve our governance objectives while balancing the land use costs.
The statement "Universities are clearly working for the public interest" is politically controversial. The counter-claim is that they are dedicated to maintaining an elite class, and when you look at who goes to university it's certainly not evenly distributed across the income quartiles or any reasonable notion of "class". For British universities, though perhaps slightly less for Cambridge than say York, there's also the problem that they rely on income from overseas student fees (mostly Chinese) as the government has already cut their funding when the UK moved to a fee system. There are arguments to be had whether this is equitable, or even efficient.
We publish a diversity of views here on the PnPSubstack! Benedicts position is probably more politically palatable than my own “no-exemptions” view haha.
If a charitable organization rents commercial office space, it will indirectly pay LVT as part of the location value component of its "rent".
But if they own their own building (and land!), should they still pay LVT?
As a libertarian, I think that even a charity needs to be held accountable by the market - that is, it needs to do a good enough job (at doing "good") to attract enough donations to cover its operating expenses. Those expenses should rightly include paying for the burden its facilities impose on government - police and fire protection, roads, etc. Therefore, the organization should pay the same LVT as any non-charitable organization in that location.
A simpler criterion is that LVT should apply to land that is alienable, can be sold. Here in Aotearoa/NZ there is a class of Māori land that is held in common for the descendants of particular tribes and clans (to use British terms) and administered through the Māori Land Court. This land cannot be sold, and it seems to me that it would therefore be inappropriate to tax it. It's maybe 0.1% of the total.
Land that CAN be sold should be taxed to ensure efficient and equitable use. The risk of losing the land is an incentive to make it productive, the very incentive that HG wanted to promote. Value judgements about purposes (such as the National Trust's) are inappropriate in a broad policy such as this. If the National Trust's values are shared sufficiently widely, it will have the funds it needs to pay the tax. Universities are in the business of increasing the stock of knowledge, not land ownership.
I think your point about how privately-owned and operated institution can work for the public good and thus need to be exempt. Non-profits and for-benefit institutions (such as churches, private charities, etc) would be absolutely crushed if they were forced to be profitable in the same way that a business is. Any Georgist policies will need to take this into account if they are going to be successful.
Interesting. Y'all must have a secret ingredient to public-private partnerships which us Americans don't. Ours always ends up benefitting the private side much more than the public side over time.
The UK public-private partnership to build the "High Speed 2" new railway line is notably missing that secret ingredient, or indeed any signs of competence.
Yeah, rather than an endowment exemption as such it'd be better to calculate the tax value normally for consistency's sake, then defend the university's claim on particular portions with procedural constraints on state budget shenanigans. Or simply charge higher tuition - which people will still be able to afford thanks to a citizen's dividend and increased overall GDP.
I am definitely skeptical of arguments that universities intrinsically serve the public good in such a way that they require massive subsidies. In fact, I think it's very likely that universities- and the entire employment and education ecosystem- would be far better off if they didn't have functionally infinite subsidies to blow on endless bureaucratic expansion and shiny new buildings and amenities.
In practice, I think, shiny new buildings and amenities in the education sector are associated with tuition fees: shiny facilities to attract students who can afford to pay the fees.
Yes, and that is only a viable practice because colleges know students will be able to pay endlessly rising tuition by soaking up the always-expanding federal grants and loans.
When the government occupies land in SF or DC, productively or not, there is clearly an economic cost to the country because that land is denied to other productive uses. While it doesn't make much sense to collect an LVT since the funds would just be used to pay the LVT, it is still valuable to assess the land rent (what the LVT would be) and account that as an economic cost of our government's land use. This would give us insight into how we can achieve our governance objectives while balancing the land use costs.
The statement "Universities are clearly working for the public interest" is politically controversial. The counter-claim is that they are dedicated to maintaining an elite class, and when you look at who goes to university it's certainly not evenly distributed across the income quartiles or any reasonable notion of "class". For British universities, though perhaps slightly less for Cambridge than say York, there's also the problem that they rely on income from overseas student fees (mostly Chinese) as the government has already cut their funding when the UK moved to a fee system. There are arguments to be had whether this is equitable, or even efficient.
Ouf... tying land value tax to strong views around taxation of nonprofits, and particularly university endowments, seems constraining.
We publish a diversity of views here on the PnPSubstack! Benedicts position is probably more politically palatable than my own “no-exemptions” view haha.
Yeah, thanks, I appreciate the diversity and like the publication
If a charitable organization rents commercial office space, it will indirectly pay LVT as part of the location value component of its "rent".
But if they own their own building (and land!), should they still pay LVT?
As a libertarian, I think that even a charity needs to be held accountable by the market - that is, it needs to do a good enough job (at doing "good") to attract enough donations to cover its operating expenses. Those expenses should rightly include paying for the burden its facilities impose on government - police and fire protection, roads, etc. Therefore, the organization should pay the same LVT as any non-charitable organization in that location.
A simpler criterion is that LVT should apply to land that is alienable, can be sold. Here in Aotearoa/NZ there is a class of Māori land that is held in common for the descendants of particular tribes and clans (to use British terms) and administered through the Māori Land Court. This land cannot be sold, and it seems to me that it would therefore be inappropriate to tax it. It's maybe 0.1% of the total.
Land that CAN be sold should be taxed to ensure efficient and equitable use. The risk of losing the land is an incentive to make it productive, the very incentive that HG wanted to promote. Value judgements about purposes (such as the National Trust's) are inappropriate in a broad policy such as this. If the National Trust's values are shared sufficiently widely, it will have the funds it needs to pay the tax. Universities are in the business of increasing the stock of knowledge, not land ownership.
I think your point about how privately-owned and operated institution can work for the public good and thus need to be exempt. Non-profits and for-benefit institutions (such as churches, private charities, etc) would be absolutely crushed if they were forced to be profitable in the same way that a business is. Any Georgist policies will need to take this into account if they are going to be successful.
Interesting. Y'all must have a secret ingredient to public-private partnerships which us Americans don't. Ours always ends up benefitting the private side much more than the public side over time.
The UK public-private partnership to build the "High Speed 2" new railway line is notably missing that secret ingredient, or indeed any signs of competence.
Yeah, rather than an endowment exemption as such it'd be better to calculate the tax value normally for consistency's sake, then defend the university's claim on particular portions with procedural constraints on state budget shenanigans. Or simply charge higher tuition - which people will still be able to afford thanks to a citizen's dividend and increased overall GDP.