
Georgism - timurlenk
https://en.wikipedia.org/wiki/Georgism
======
NumberWangMan
A lot of people focus on the fairness of the Land Value Tax, but the
consequences of using one are just as interesting if not more. This tax has
been put into practice in some cities in Pennsylvania, and there's evidence
that it has a whole bunch of positive effects on the city, due to the way that
it incentivises improving your property and making the most of your land
(since you're going to be taxed on it pretty much the same either way).

[https://www.strongtowns.org/journal/2019/3/6/non-
glamorous-g...](https://www.strongtowns.org/journal/2019/3/6/non-glamorous-
gains-the-pennsylvania-land-tax-experiment)

I think we should be replacing property taxes with land value taxes pretty
much everywhere. Aside from the benefits mentioned in the Strong Towns article
linked above, putting the right incentives in place to build more densely in
high-demand (aka high land value) areas would be a boon to making cities and
towns more walkable and more amenable to public transit, and therefore
reducing sprawl and pollution. It wouldn't get us all of the way, but it would
help.

~~~
naravara
You would probably want to include some tax advantaged incentives to maintain
a bit of public space, public art, parks, or just green spaces. Giving over
some portion of your land for public benefit, even if limited use, should be
encouraged rather than penalized. It would also encourage more interesting
usage patterns and development than pure land-use maximization would do. The
latter might have you end up with block after block of square high rises,
which might glide us past the point of diminishing returns to density.

~~~
LVTfan
Frederick Law Olmsted realized early on that even a huge project like Central
Park could be funded from the increase in land value it created in the
neighborhoods surrounding it.

~~~
brudgers
The risk when extrapolating from Manhattan is when extrapolating to places
significantly unlike Manhattan. When Central Park was started, Manhattan
already had a population density in excess of 10,000 people per km^2. Even
Boston today is little more than half that. Munich, less than half. San Jose
little more than one fifth.

Central Park worked because the existing density was already high and there
was no way for Manhattan to grow outward (dredging excepted).

~~~
IIAOPSW
>Central Park worked because the existing density was already high and there
was no way for Manhattan to grow outward

Central Park was built before the first subway and before the bridges
connecting Brooklyn, Queens and Jersey. The dirt dug from the tunnels _was_
added to lower Manhattan. Prior to elevators buildings rarely went higher than
5 stories. There was in fact ways for Manhattan to grow outwards
(effectively).

------
rikroots
Back in a different life, I worked on the Lyons Inquiry which looked at
English Local Government finances. Final report was issued in 2007[1]. As part
of the work we had to look into Land Value Taxes as a supplement/alternative
to Council Tax and Business Rates.

There's nothing wrong with the idea. The big issues were mainly around
introducing a new tax system and the massive upheavals and uncertainties
businesses and people would face as part of the change. Winners and losers,
etc. Given the uproar surrounding the later introduction of Universal Credit
I'm glad Sir Michael chose not to recommend LVT in his report.

Anyway - anecdote time. One of the big questions we asked at the start of the
Inquiry was: "Why tax property?" After long consultations with the most senior
Experts and Gurus across Government and Academia the answer came back:
"Because it's there."

[1]
[https://www.webarchive.org.uk/wayback/en/archive/20070411120...](https://www.webarchive.org.uk/wayback/en/archive/20070411120000/http://www.lyonsinquiry.org.uk/index8a20.html)

(I'm mainly commenting because it's an opportunity to show off the Inquiry's
website. I built that! I had to do it in my "spare time" because we didn't
have a budget for the work. This version is from 2007, but the original code
was written in 2004 in PHP and after that most of the work was adapting the
site to add events, display responses received, etc. Simpler times!)

~~~
perilunar
> "Why tax property?"

Because its appreciation in value is largely unearned wealth, _especially_ in
a country like England with a long history of aristocracy and landed gentry.

~~~
LVTfan
And as Adam Smith pointed out, it is there, and visible. It can't be hidden,
can't be spirited out of town or offshore during the dark of night. You don't
even need to know who it is that owns it; as long as they pay their land value
tax, they can remain anonymous.

You might search for the term "unearned increment." It was a common expression
to point out what people who reaped but did not sow receive due to our failure
to collect the economic rent.

One person's unearned increment is another's — and likely many others' — lost
birthright. Who is entitled to it? All of us! How do we implement this? Land
value taxation.

------
JSavageOne
I've yet to see a single valid objection as to why LVT (Land Value Tax) should
not be the primary tax, yet it's nowhere to be found in the political
dialogue. Such a shame that the majority of the tax burden instead falls on
the working class while the landowners get a free ride.

~~~
CydeWeys
What tax should tech companies pay then, given that the only land they really
need is cheap rural land for data centers?

This taxation system does make sense for land, but there's way more economic
activity happening that isn't associated with land than there is that is.

~~~
snidane
Tech companies should pay for what they use.

They are efficient at not consuming too many resources while producing a lot
of value? Probably shouldn't pay much then.

But this applies not only to big tech companies but to individuals too - they
shouldn't pay much if they don't consume or extract from others.

Taxes are only a last-resort mechanism to raise money in absence of proper
funding model.

If you can price government provided services appropriately then you don't
need taxes.

Eg. to build infrastructure (roads, networks) you can predict that it'll
benefit owners of nearby properties. They will benefit by landfall increase to
the value of their property because the land on which it stands becomes more
valuable.

So you collect the money for the infrastructure project by land "tax" before
you begin with construction.

("tax" because it's not a tax but payment for exclusive land ownership rights)

~~~
AnimalMuppet
I'd like to see your "proper funding model" for the military.

Or you'd have to say that the military is part of your "last resort". But then
you need to raise enough money to pay for all your last resorts. If LTV is
your method, the numbers may not work (as others have said here).

Or, instead of raising all that money, you could say that we don't need that
big of a military. That's not an insane position. But using desire for an LVT
as the basis for deciding on the size of your military seems to me to be
putting the cart before the horse.

~~~
snidane
Military is actually a great example for LVT.

If you mean defence part of it. Invading other countries is likely profitable
for select groups so who else should pay for it if it gets approved.

But let's focus on defence. It's not that much individual people, who need
protection, because they can flee to another country in case of war.

What actually needs protection is property which you cannot take with you. And
voila that happens to be real estate (locational value).

So who should be footing the bill for defence more than owners of land who are
desperate for its protection when shit hits the fan?

Similar argument can be used to justify LVT for funding of other protective
services such as police and firefighters.

~~~
AnimalMuppet
First: "They can flee to another country in case of war" is _terrible_
reasoning. You expect the other country to let them in? _All_ of them? Yeah,
that's not the way things actually happen in this flawed world. _Most_ of them
will not have the opportunity to flee. So... they should just die?

No, the military is there to protect the _people_ , not just the wealth. So
your post seems like it's trying to rationalize a not-up-for-debate position,
rather than actually reasoning based on reality. Georgism claims to be
motivated by compassion for those who are at the mercy of rentiers, but your
position shows an immense lack of compassion. "Let them flee to a different
country" is the most cold-hearted thing I've heard in a _long_ time.

Second: that wasn't my point. My point was, let's see the plan where you
actually produce $800 billion (or whatever the military budget is) _just_ from
a land tax. Let's see what the actual rates would have to be, and what the
effects of those rates would be.

~~~
snidane
Look. You only seem to want to make it complicated.

If your military is too expensive and not covered by LVT, just go ahead and
add a specific tax to fund your military. If you can justify that it'll
protect everybody then people will be fine with it.

Idea of LVT as a single or zero tax is a political move to get you thinking
about better government funding schemes. You should think of "paying for
specific services" instead of "pooling money and allocating them according to
wishes of select few" as is the case of current tax systems.

~~~
AnimalMuppet
> Idea of LVT as a single or zero tax is a political move to get you thinking
> about better government funding schemes.

You know, if you had said that up front, we could have had a more productive
discussion. But everybody's been saying "This is The Right Way(TM) to do
taxes!" When non-true-believers point out all the problems, _then_ we get
"it's just a talking point".

In fact, I suspect that a number of LVT supporters on this thread don't agree
with you. I suspect that several of them believe that it's _the_ answer.

------
yufeng66
The founding father of the Republic of China, Dr. Sun Yat-sen, was heavily
influenced by Georgism. He believed all income derived from land, including
appreciation of the land, should be heavily taxed. He incorporated it into
three principle of the people, which is the cornerstone Kuomintang ideology.

But nobody would argue Taiwan is a Georgism heaven right now. Why? Rich and
political powerful people own the land. Georgism as a practical matter is very
difficult to push through.

~~~
zozbot234
Doesn't Taiwan (in common with other Asian countries) mostly allocate land to
the private sector via long-term leases, as opposed to ownership of
indeterminate duration? That would be enough to regard it as quite Georgist.

~~~
sudosysgen
Leasehold land is mostly a thing in communist countries that claim to
temporarily implement capitalism.

~~~
neilparikh
One example (maybe the only example?) of a capitalist country with leasehold
land is Singapore. The land policy there seems to have worked relatively well.

------
alexmingoia
The problem with georgism is that “unimproved value” is a non-market price.
It’s just made up by whoever is appointed assessor.

Georgism conflates made up “value” with market “value”. Ultimately some person
has to assess the value of the unimproved land, meaning someone anointed to
write down whatever number they want.

Value is subjective. There is no such thing as “unimproved land value”, unless
you’re talking about the last sale price of a particular unimproved lot.
Property taxes in general have this problem, but it’s very acute with
unimproved land. Unimproved land is one of the most non-fungible goods there
is.

~~~
nabla9
There is brilliant way to solve it so that value and market-value meet. Keep
the land always in market.

It's called Common Ownership Self-Assessed Tax (COST).

Land owner would self-assess the value of assets they possess, pay a tax on
that value. The owner would be required to sell the asset to anyone willing to
purchase them at this self-assessed price.

If you value the land high for any reason and want to keep it, you must self-
assess the value higher than anyone is willing to pay for it and pay tax for
it. If value it too low, someone might buy it.

~~~
CydeWeys
This seems to be directly in conflict with the idea that once you own land,
it's yours. I don't see this flying at all, at least not with the current
expectations of most people.

Any sizable company could easily bully any number of people out of their homes
to acquire the land. It's hard to overstate how much people would hate this.

~~~
nabla9
> once you own land, it's yours.

Idea that you can buy a monopoly is generally a bad idea.

~~~
CydeWeys
Clearly people don't think so, as the vast majority do agree with private
property exclusive ownership.

~~~
em500
Ownership of land by individuals within any national border is always subject
to local government power (taxation, eminent domain, police power, escheat).
True exclusive land ownership is prohibitively expensive for individuals,
since it would require military defense.

------
acd
I think commons like fish in the ocean and air quality in cities should be
priced. If of you fish its not free you pay to the country whos fish you fish.
If the fish is extinct or heavily MSC on the red list the price is sky high in
the millions this is to protest the species and our eco system so future
generations can enjoy that fish.

By pricing eco systems and sustainable common resources. We avoid tragedy of
the commons where few extract all value from common resources for free.

Ie such a new economic system would price the rain forest at its true value to
humans and earth eco systems.

Carbo emissions would also be priced differently.

Tradegy of the commons
[https://en.m.wikipedia.org/wiki/Tragedy_of_the_commons](https://en.m.wikipedia.org/wiki/Tragedy_of_the_commons)

~~~
spangry
Sounds like you're describing Pigovian taxes:
[https://en.wikipedia.org/wiki/Pigovian_tax](https://en.wikipedia.org/wiki/Pigovian_tax)

~~~
acd
Thanks for point out Pigovian taxes!

It seems to be a field of Environmental Economics.

~~~
wnavarre
The land value tax is a Pigovian tax. The idea is that your exclusive use of
the land denies others access and they deserve compensation.

------
EGreg
There was a time - for over half a century - when Progress and Poverty was the
best known economics book in the world. If you buy one, it has a who’s who of
people endorsing it, from famous economists to writers to presidents.

And somehow, in the last 50 years, we have all forgotten it, and some people
only remember the land tax. Not only that, but the same debates rage today,
about why there is still so much poverty even while there has been so much
progress. Libertarian people know Ayn Rand and Murray Rothbard before they
know Henri George, about whom Milton Friedman had a lot of good things to say.

~~~
chii
> why there is still so much poverty even while there has been so much
> progress

there's been an objective improvement to the % of people in poverty over the
past few centuries.

It's just that there's an even larger improvement to those who were rich,
relative to the improvements to the poor.

If you had a choice, you would choose to be poor today, than to be poor a
century or two ago.

~~~
EGreg
I upvoted you, to counteract the downvotes.

You are correct... obviously science and technology have improved the lot of
the ordinary person, and made us all much, much richer.

The main issue is that automation tends to hurt workers while it helps
consumers. And since most people are both — they have to work harder and
harder just to stay in place. Until we put in place a UBI and universal health
insurance, pass overtime laws to shorten the workweek etc. we will have
technology creating demand shocks for human labor, as happened before the
Great Depression on farms, and has gradually happened in manufacturing, and is
about to happen to white collar jobs and menial jobs.

In the 50s, a single man could support an entire household on one paycheck.
Women didn’t compete with men for those jobs, but rather did jobs that now are
not valued by the market. Automation didn’t make employers not need their
employees, so they would retain them for decades as they built experience.

Today, we have two year stint— wait that was 20 years ago, today we have temp
jo— ait no, that was last decade, now it’s the gig economy with no
protections. You see where I’m going with this? Automation and outsourcing is
once again putting people in a race to the bottom.

Yes, electronics are cheaper than ever. But some things like rent / land just
go up in price, they need a UBI. Paid for by land taxes maybe.

 _Edit: funny, I am getting downvoted also, for agreeing with you_

~~~
MiroF
> Edit: funny, I am getting downvoted also, for agreeing with you

If the parent was being downvoted for a certain view, why is this at all
surprising?

~~~
EGreg
Because downvotes are not supposed to be for disagreement. This is HN. The
standard is to downvote low quality comments only.

~~~
roenxi
Downvotes are explicitly a tool for when people disagree.

>
> [https://news.ycombinator.com/item?id=117171](https://news.ycombinator.com/item?id=117171)

Although in a practical sense that is bowing to the inevitable.

~~~
EGreg
Not according to the HN rules

~~~
roenxi
You might like to include a quote for that, because I've read the rules and I
didn't see anything to suggest pg changed his stance.

------
firloop
A great essay on Georgism:

“Georgism is an accelerationism, as it attempts to unchain capital—not from
the restraints of humanity, but those of land, which eats cake in the stands
as it watches capital and labor fight over crumbs.”

[https://gravitylobby.club/trashcan.html](https://gravitylobby.club/trashcan.html)

------
revnode
> The main Georgist policy recommendation is a tax assessed on land value.
> Georgists argue that revenues from a land value tax (LVT) can be used to
> reduce or eliminate existing taxes (for example, on income, trade, or
> purchases) that are unfair and inefficient.

Fine in theory, the reality is that you get nailed for property taxes AND
income taxes AND sales taxes AND everything else. If a government CAN tax it,
it will and will not restrain itself.

~~~
tanzbaer
Depends on the state. Several state have no income tax. New Hampshire lacks
income and sales tax.

~~~
revnode
All states have federal income taxes and all states have federal sales taxes
(by way of tariffs).

------
heymartinadams
[https://www.progress.org/articles/a-more-prosperous-
vancouve...](https://www.progress.org/articles/a-more-prosperous-vancouver)

------
JadeNB
Monopoly was based on, or one might say perverted from, a game created to
inculcate Georgist ideas in children:
[https://en.wikipedia.org/wiki/The_Landlord%27s_Game](https://en.wikipedia.org/wiki/The_Landlord%27s_Game)
.

------
snidane
This part about Georgist economics is quite startling.

You have an economical theory following in the footsteps of classical
economists at the beginning of industrial revolution like Adam Smith and David
Ricardo. It becomes incredibly popular with massive amount of followers. You
were not an intellectual back then unless you knew about this school.

Somehow it offered a way out of the societal mess, but costing great fortunes
to the economical parazites - monopolies (neo-aristocracy).

Some people in the school argue it was strategically removed from the society
by funding a competing economical theory which removed land from the 3 factors
of production and kept only 2 - labor and capital. Thus divert the attention
from the real parazite (monopolist, rentier and landlord - someone who
monopolizes land) to the conflict between employer and employee as depicted in
the Marxist view on societal problems - which actually never existed.

So the new aristocracy (Rockefellers, Carneggies and others) decided to fund
and found universities with the main purpose of destroying Georgism and
promoting red herring economical theories instead - such as Marxism and
neoclassical economics, both of which remove the parasitic monopolist and
landlord out of the picture.

By not fighting with their enemy directly and thus making the georgist theory
indirectly more popular it was a smart move for them to silence it down by
promoting other theories instead, which is exactly what happened - from the
most popular theory of economics to nonexistent to this day. No mention of it
in economics curricula around the world - which suggests economics as taught
in universities today is a fraudulent wannabe science or form of propaganda or
both.

[http://dollarsandsense.org/blog/2017/04/the-dissing-of-
henry...](http://dollarsandsense.org/blog/2017/04/the-dissing-of-henry-
george.html)

Mason Gaffney (famous Georgist) wrote a lengthy piece on this topic -
Neoclassical Economics As a Stratagem against Henry George

[http://masongaffney.org/publications/K1Neo-
classical_Stratag...](http://masongaffney.org/publications/K1Neo-
classical_Stratagem.CV.pdf)

------
LVTfan
May I suggest that if you've not read Henry George's thought yourself yet, you
take some time with them? There are two sections of the Schalkenbach site
devoted to them -- first, the books, articles and speeches themselves, and
then an introduction to HG's thought, with perspectives from a number of
writers, mostly recent. With the latter group is a short version of Progress
and Poverty entitled "Significant Paragraphs."

His vision and clarity are remarkable and inspiring. 120 years ago, his ideas
were widely understood throughout the English speaking world. (There were also
a lot of hilarious misinterpretations by people who hadn't read, as is often
the case.)

And if you explore a bit, you'll find some good websites and blogs devoted to
his thought.

~~~
wnavarre
One of the most superficial ways that Georgism obviously beats Marxism is that
Georgists will tell someone interested exactly what to read, will acknowledge
very explicitly the few parts that are incorrect or misguided.

Marxists meanwhile hem and haw about what an aspiring Marxist should read and
will hand-wave away any contradictions.

------
watertom
All income should be taxed the same.

We should move to a a progressive tax system with zero deductions, eliminate
capital gains, and inheritance taxes. Make the top tax rate of over $5M be
54%.

We already know the effective tax rate for each bracket. Once we factor in the
additional tax revenue from the top bracket we can adjust the other rates.

I would consider a true capital gain exception. For the investment in new and
private busines investment that generates revenue. This horseshit of buying
stock and holding it for a period of time is NOT capital investment. The
company does not benefit from the purchase of stock once they go public. It’s
a scam to allow the rich to avoid taxes.

~~~
perilunar
> All income should be taxed the same.

Why?

There's a big difference morally between earned and unearned income.

------
emilfihlman
Why should only bigger communities together own something? If I want to fuck
out in the middle of nowhere and do my own thing, why should others be allowed
to harass me there?

Additionally the government printing money, giving it to us and then requiring
us to give it back does not create value, it creates a loop that causes work
for nothing.

~~~
neilparikh
Under Georgism, in practical terms, you would still be able to do that. The
value of land in the middle of nowhere would be essentially 0, so you wouldn't
need to pay much LVT. You may still need to pay some LVT, to reflect that the
state is still providing you some services (in particular, enforcing your
claim to the land).

------
pharke
So this seems all well and good for urban areas but what about rural land
ownership? Or is that not a concern here?

~~~
LVTfan
Rural areas don't need the kinds of infrastructure that urban areas need, but
they need some. They need schools, they need roads and maintenance. They'd
love to have broadband. They may need drainage or water systems that serve
undense communities. They need emergency services, courts, and a variety of
other things that civilized people who live in communities find valuable. (My
use of "civilized" is in no way a criticism.) We are social beings, and there
are things that are more efficiently done by the community as a whole.

Earlier, someone referred to the Henry George Theorem. I think it holds in
rural places, too. And unimproved land value seems to me to be the reasonable
"tax base."

~~~
pharke
My question was more to do with how the improved value would scale for rural
land that had a lot of use but can't generate as much income. Many rural
businesses require a lot of land area but only produce a modest income which
is possible under the current setup because land prices and taxes are low.
There would have to be a lot of consideration given to the population density
and the types of improvements made.

~~~
LVTfan
Rural land values will remain low until there is significant economic activity
and particular demand for land IN THAT PLACE. To the extent that land, say, 10
or 20 miles away is just as suited for the user's purposes, the next piece of
land that comes on the market is quite adequate, and the rural business can
locate wherever, not pay a premium.

I am reminded of a famous passage from Henry George's book "Progress and
Poverty" (whose subtitle is "An inquiry into the cause of industrial
depressions and of increase of want with increase of wealth ... The Remedy")
known as The Savannah.
[http://progressandpoverty.org/files/george.henry/pp042.html](http://progressandpoverty.org/files/george.henry/pp042.html),
starting at the 10th paragraph (the paragraphs are numbered in this particular
file).

Incidentally, George dedicated P&P as follows:

"To those who, seeing the vice and misery that spring from the unequal
distribution of wealth and privilege, feel the possibility of a higher social
state and would strive for its attainment."

~~~
pharke
I'll admit that it is well written and makes for a compelling description of
the growth of an urban center but it doesn't answer the questions it poses. It
seems to say that the value of land and resources increases as the population
does, this is true to some extent in that as demand increases for limited
resources the value of those resources is driven higher. New goods and
services are needed to support larger populations and more of them. A coal
deposit may be worthless to a rancher since his concern is with the prairie
that lays over top of it and he has neither the need nor the means to make use
of it but if an urban center grows up beside that prairie then he may be
coaxed into selling his land rights for a greater reward than his herd can
provide. This is all perfectly sensible but doesn't say anything about how we
should assign a fundamental value to those resources. Nor does it describe
what should be done in a world in which that savannah is for the most part
already settled and exploited or how we would replace an extant system.

It is not always true that a resource based business can relocate. They are
often tied to the land they are on due to some local condition whether that is
suitability for farming, grazing, the presence of natural deposits or features
such as waterways. Only urban businesses that simply require square footage
are purely fungible when it comes to location (although that often isn't
entirely true since urban landscapes have their own happenstances that make
certain businesses viable).

A lot of this seems to have the flavour of a just-so story that ignores a
great deal of important ground truths.

------
axlee
Is it what Norway is doing with their Sovereign wealth fund financed by
nationalizing oil surplus?

------
yesbabyyes
Allegedly, Karl Marx called Georgism "capitalism's last ditch ". I can't find
a source, but this was an interesting collection of historical thoughts:
[https://merionwest.com/2019/06/02/through-letters-the-gap-
be...](https://merionwest.com/2019/06/02/through-letters-the-gap-between-
henry-george-and-karl-marx/)

~~~
LVTfan
Many people who were first influenced by Henry George's ideas became impatient
with the "organicness" of them, and moved to promoting socialism because they
thought it would achieve their objectives more quickly. But George was
convinced that it had to grow organically.

George's simple reform would provide the level playing field, and not involve
"command and control." George was very much the small-d democrat and very much
the capitalist -- but a purer capitalism, not land monopoly capitalism. And he
could accurately be called a mensch!

George Bernard Shaw was perhaps the most famous of them.

Henry George had public debates with several socialists (Serge Shevitch was
one - 1887; Henry Hyndman another). They're great reading.

------
wazoox
An interesting and derived point of view is geolibertarianism :
[http://geolib.com/essays/sullivan.dan/royallib.html](http://geolib.com/essays/sullivan.dan/royallib.html)

------
badrabbit
Ends justify means?

------
perilunar
For a libertarian take on Georgism, see Geolibertarianism:

[https://en.wikipedia.org/wiki/Geolibertarianism](https://en.wikipedia.org/wiki/Geolibertarianism)

