The question is: How do we “sell” the Land Value Tax?
I would suggest two paths.
The first is the Monty Hall approach – “Let’s Make a Deal!” Abolish the hated income tax, sales tax, “property” tax, in exchange for what’s behind Door Number Two - a simple, efficient Land Value Tax. I think a legitimate, persuasive case can be made that most individuals, businesses and even big landowners would be better off taking that deal.
Secondly, I believe that LVT can have bipartisan political appeal. LVT would collect revenue in a progressive manner, placing the highest burden on wealthy landowners, while at the same time offering a ZERO marginal tax on productive (i.e. non-rent) income and investment – a win-win for liberals and conservatives.
I think a modest land tax applied at a state-level, where economic development and housing goals may be able to overcome small bore land owner objections (as we’re seeing with YIMBY) is possible. My modest approach is not to take all land rents as taxes—that approach is infeasible politically and as a matter of development finance—but simply rebalancing taxation on land vs improvements is feasible and will adjust incentives over time.
I'm a Georgist, so I believe that taxing economic rents alone is the only just method of taxation, but I also think a gradualist approach is the best way to go. Cities and states should start small, probably by turning property taxes into LVT, and work on careful and effective implementation. That allows us to discover the best methods for structuring the tax and doing assessments, and it will serve as evidence that the system works. If people are convinced, as I believe they will be, then we can proceed from there and continue to shift taxation off of labor and capital and onto various forms of economic land. If not, we're still better off than we were before.
I am curious how land will be developed for new buildings under the Georgist model. Like what will be the exchange price of land when it transfers to one party to another to build a building. A tax that captures 100% of the rents is equivalent to the land having a value of $0. (Development rights perhaps have some value?). Is there a Georgist with any experience of development who can explain how it’s supposed to work?
I don't understand why some Georgists see the YIMBY movement as complementary to Georgist interests.
Georgism is essentially about socialising the value of land use rights. YIMBYism by contrast seems to be focused on giving land use rights away for free. Georgists supporting YIMBY upzoning before getting in place instruments to socialise upzoning windfalls appear to be doing their best to ensure there's nothing left to capture, and no political likelihood of recapturing what was given away, rendering Georgism a redundant philosophy. Which it was doing very well by itself before they got involved.
But to the point, no amount of upzoning can reduce land rents. At best it can reduce returns on capital (buildings). Indeed, upzoning generally raises land rents.
Australia’s capital Canberra (ACT) is perhaps the most Georgist place around. It does value capture from zoning uplift plus a decent land value tax. But of course it doesn’t solve housing problems, just raises revenue very efficiently. What that revenue is spent on still matters for housing the poor
I often find Cowen's writing quite compelling, but this argument is very odd, considering how much overlap there is between self-identified YIMBYs and Georgists (including myself).
The question is: How do we “sell” the Land Value Tax?
I would suggest two paths.
The first is the Monty Hall approach – “Let’s Make a Deal!” Abolish the hated income tax, sales tax, “property” tax, in exchange for what’s behind Door Number Two - a simple, efficient Land Value Tax. I think a legitimate, persuasive case can be made that most individuals, businesses and even big landowners would be better off taking that deal.
Secondly, I believe that LVT can have bipartisan political appeal. LVT would collect revenue in a progressive manner, placing the highest burden on wealthy landowners, while at the same time offering a ZERO marginal tax on productive (i.e. non-rent) income and investment – a win-win for liberals and conservatives.
I think a modest land tax applied at a state-level, where economic development and housing goals may be able to overcome small bore land owner objections (as we’re seeing with YIMBY) is possible. My modest approach is not to take all land rents as taxes—that approach is infeasible politically and as a matter of development finance—but simply rebalancing taxation on land vs improvements is feasible and will adjust incentives over time.
I'm a Georgist, so I believe that taxing economic rents alone is the only just method of taxation, but I also think a gradualist approach is the best way to go. Cities and states should start small, probably by turning property taxes into LVT, and work on careful and effective implementation. That allows us to discover the best methods for structuring the tax and doing assessments, and it will serve as evidence that the system works. If people are convinced, as I believe they will be, then we can proceed from there and continue to shift taxation off of labor and capital and onto various forms of economic land. If not, we're still better off than we were before.
I am curious how land will be developed for new buildings under the Georgist model. Like what will be the exchange price of land when it transfers to one party to another to build a building. A tax that captures 100% of the rents is equivalent to the land having a value of $0. (Development rights perhaps have some value?). Is there a Georgist with any experience of development who can explain how it’s supposed to work?
I don't understand why some Georgists see the YIMBY movement as complementary to Georgist interests.
Georgism is essentially about socialising the value of land use rights. YIMBYism by contrast seems to be focused on giving land use rights away for free. Georgists supporting YIMBY upzoning before getting in place instruments to socialise upzoning windfalls appear to be doing their best to ensure there's nothing left to capture, and no political likelihood of recapturing what was given away, rendering Georgism a redundant philosophy. Which it was doing very well by itself before they got involved.
We've already got an article about that here: https://progressandpoverty.substack.com/p/land-and-the-liberty-to-build-on
But to the point, no amount of upzoning can reduce land rents. At best it can reduce returns on capital (buildings). Indeed, upzoning generally raises land rents.
Australia’s capital Canberra (ACT) is perhaps the most Georgist place around. It does value capture from zoning uplift plus a decent land value tax. But of course it doesn’t solve housing problems, just raises revenue very efficiently. What that revenue is spent on still matters for housing the poor
I often find Cowen's writing quite compelling, but this argument is very odd, considering how much overlap there is between self-identified YIMBYs and Georgists (including myself).