Political Crossfire Forums

[Harbinger]

Free Thinkr wrote:
Let's imagine that rent was 10% of sale value. You have a piece of land worth $100,000. The LVT is instituted, and set at a rate of [10%]. Your yearly rent on that land would then be $10,000. Now, if you aren't actually using the land, it will cost you $10,000 per year. If you try to sell the piece of land, a buyer, knowing that the land is worth $100,000 and will be taxed $10,000 per year, will not pay you the full market value but only the 10% that isn't taxed. You will sell the land, then, for $10,000; the other $90,000 of the land's value will in effect go to the government, because the buyer knows that he will have a tax obligation on the land in advance.

The sale price is ALWAYS the full market value. According to your scenario, person A owes $10,000 a year because he paid $100,000 for the land. If person B buys the same land from person A for $10,000, he/she should only owe $1,000 a year, not $10,000 a year. There is a $90,000 difference between what person A and person B paid but, it only represents a decrease in the market value of the land. It would be irrelevant to an LVT collector. At $1,000 a year, it would take person B ninety years to pay the differnce anyway.

Now that you've clarified that the LVT rate would be directly proportonal to the sale prices of land and not based on some arbitrary speculation of land values by crooked government officials, I can see how a 100% annual LVT wouldn't really kill the real estate market, it would just lower market prices down to what buyers are willing to pay the state each month. I like this better than my flat tax per acre idea because it still involves the free market.

The LVT wouldn't necessarily decrease rent rates though. Competition would still be in charge of that department. Lower market values for land would make competition easier but, wherever competition fails, controls would still be needed. Rent caps to the rescue! :P

[Free Thinkr]

Harbinger wrote: Free Thinkr wrote:
Let's imagine that rent was 10% of sale value. You have a piece of land worth $100,000. The LVT is instituted, and set at a rate of [10%]. Your yearly rent on that land would then be $10,000. Now, if you aren't actually using the land, it will cost you $10,000 per year. If you try to sell the piece of land, a buyer, knowing that the land is worth $100,000 and will be taxed $10,000 per year, will not pay you the full market value but only the 10% that isn't taxed. You will sell the land, then, for $10,000; the other $90,000 of the land's value will in effect go to the government, because the buyer knows that he will have a tax obligation on the land in advance.

The sale price is ALWAYS the full market value.
Thank you, Captain Obvious! ;) What you're missing here is that the value is what it is; if the government taxes a piece of land an amount X, the market value will be what it was minus that amount X.

Quote: According to your scenario, person A owes $10,000 a year because he paid $100,000 for the land.
He owes $10,000 a year, because that is it's rental value. The full market value, as you said above.

Quote: If person B buys the same land from person A for $10,000, he/she should only owe $1,000 a year, not $10,000 a year. There is a $90,000 difference between what person A and person B paid but, it only represents a decrease in the market value of the land. It would be irrelevant to an LVT collector. At $1,000 a year, it would take person B ninety years to pay the differnce anyway.
No, wrong. The LVT wouldn't be figured as 10% of the sale price, it would be figured as 90% of the rental value. This fact makes the sale value 10% of the rental value.

Quote: Now that you've clarified that the LVT rate would be directly proportonal to the sale prices of land and not based on some arbitrary speculation of land values by crooked government officials, I can see how a 100% annual LVT wouldn't really kill the real estate market, it would just lower market prices down to what buyers are willing to pay the state each month. I like this better than my flat tax per acre idea because it still involves the free market.
No, a 100% tax would actually kill the real estate market. If you taxed 100% of the value, there would be no sale value; no one would pay you for land when it would be taxed at its full market value.

Quote: The LVT wouldn't necessarily decrease rent rates though. Competition would still be in charge of that department. Lower market values for land would make competition easier but, wherever competition fails, controls would still be needed. Rent caps to the rescue! :P
It would make a lot more land available for use, because anyone holding land idle would be compelled to use it or sell it to someone who would; the same goes for people who are under-utilizing land. This bias removed, values (not just apartment rents) would tend to the theoretical equilibrium anarcho-capitalists are always talking about: fair market value.

[zero18]

MajorWoody wrote: My point is that if you take something from nature you are taking away others right to use it. Another on here is arguing that since trees are not scarce there is no need for you to pay society a tax for using it.

I was just trying to show you how something other than land could be considered a commodity. I agree it may not happen very often but this is one of those unintended consequences because some people may do that just for spite, or just to be obstinate. :twisted:

Well there are certainly places where trees are a rare commodity but I see your argument. Lets say there's a tribe that relies on fruit-bearing trees as a staple food. If there are enough fruit-bearing trees for everyone then there would be little reason for a rent/tax since no one's common right is being denied (unless, of course, someone decides to horde it all which is sometimes the case). Once there is a scarcity then the tax argument becomes much more valid. Keep in mind also that I still don't believe one can actually claim something in its natural state theirs, even if there is a limitless supply of it. Only whatever is used becomes private property.



Quote: Because the structures I was talking about would be able to be moved very easily and if the market priced me out of that land I would be forced to sell it, at someone else's "fair" price.

Improvements on land are not taken into account when it comes to assessing land value. In the real estate business they tend to assess the natural land separately from buildings, paved areas, etc. No one can claim ownership of what you create with your own hands, even if you can't pay the rent. Now there may be cases where the person may have no other choice but to sell what they create, but remember that the tax burden on a citizen in a Georgist society wouldn't be even close to as heavy as it is today and the government wouldn't be stealing from the fruits of your labor like they do through the income tax and sales tax.

[zero18]

Free Thinkr wrote: Have you read The Science of Political Economy? There's no reason this can't be treated in a scientific manner; well, no reason other than defending land ownership, that is.

No, I haven't. But I will now. :-D

A lot of my reading on this issue has taken place on this site: http://www.wealthandwant.com/

^Tons of articles.

[Free Thinkr]

zero18 wrote: Free Thinkr wrote: Have you read The Science of Political Economy? There's no reason this can't be treated in a scientific manner; well, no reason other than defending land ownership, that is.

No, I haven't. But I will now. :-D
You'll like it. Entertaining and fascinating.

Quote: A lot of my reading on this issue has taken place on this site: http://www.wealthandwant.com/

^Tons of articles.
Yeah, I've read quite a few articles there. Good stuff.

[zero18]

thintheherd wrote: I didn't say own, I said control. And in the context of an LVT this is entirely accurate.

What does society "control" when it comes to land. The value? If that is what you're saying then you might as well say that society controls the price of goods becuase on demand.

Quote: So? Who said I was a Libertarian or even cared?

Well libertarians are arguably some of the biggest supporters of capitalism and I can tell by your sigs and posts that you like capitalism. I'm guessing, as a supporter of the free market, you hold Adam Smith's ideas in regard. He too believed in ground rent as did almost all free market philosophers throughout the 18th century and up through much of the 20th century. What do you think of Milton Friedman? He also believes that a single tax on natural land is the best tax policy. I think more capitalists need to take a look at the words of some of capitalism's biggest supporters and not just view land value tax as just another tax that hinders productivity, like the national sales tax. :wink:

[zero18]

thintheherd wrote: Isn't having to pay a fee to society, that society determines, for the right to 'hold' land a form of permission? If I cannot pay the fee I am not allowed to occupy that space (or deny the rights of others to as geo's would say).

As FT defines land, that would indeed include the 'elements' of that land.

Sounds like the two have a great deal in common to me.

As I said in the previous post, "society" does not determine the fee to pay, the market does. Elements of the land are also included as part of the natural land. And governments, groups, etc. do not have a right to exclusive ownership anymore than an individual.

[Harbinger]

Free Thinkr wrote:
Harbinger wrote:
Free Thinkr wrote:
Let's imagine the LVT was 10% of sale value. You have a piece of land worth $100,000. The LVT is instituted, and set at a rate of [10%]. Your yearly rent on that land would then be $10,000. Now, if you aren't actually using the land, it will cost you $10,000 per year. If you try to sell the piece of land, a buyer, knowing that the land is worth $100,000 and will be taxed $10,000 per year, will not pay you the full market value but only the 10% that isn't taxed. You will sell the land, then, for $10,000; the other $90,000 of the land's value will in effect go to the government, because the buyer knows that he will have a tax obligation on the land in advance.

The sale price is ALWAYS the full market value.

Thank you, Captain Obvious! ;) What you're missing here is that the market value will be the sale value minus the tax.

If the LVT is 10% of the sale value and the full market value of the land is the sale value minus the tax, then the LVT is actually 11.111% of the full market value. If the land is worth $100,000 then the sale value should be $111,111, not $100,000. And, the tax rate should be $11,111.

Free Thinkr wrote:
Harbinger wrote:
According to your scenario, person A owes $10,000 a year because he paid $100,000 for the land.

He owes $10,000 a year, because that is it's rental value. The full market value, as you said above.

No, he owes $11,111 a year. 10% of the sale price, not 10% the full market value.

Free Thinkr wrote:
No, wrong. The LVT wouldn't be figured as 10% of the sale price, it would be figured as 90% of the rental value. This fact makes the sale value 10% of the rental value.

But you said the tax was 10% of the sale value! What does "rental value" mean? If the sale value is 10% of the "rental value", that would make the "rental value" 1000% of (or 10 times) the sale value. If the LVT is 90% of this "rental value", that would make the LVT 900% of the sale value! None of this is making any sense. :?

Free Thinkr wrote:
No, a 100% tax would actually kill the real estate market.

Naa, it would just kill a lot of peoples real estate investments. :lol:

Free Thinkr wrote:
If you taxed 100% of the value, there would be no sale value; no one would pay you for land when it would be taxed at its full market value.

Sure they would. If one can afford to pay a tax of $12,000 a year for a peice of land, they just wouldn't bid more than $12,000 to buy it.

Free Thinkr wrote:
It would make a lot more land available for use, because anyone holding land idle would be compelled to use it or sell it to someone who would; the same goes for people who are under-utilizing land. This bias removed, values (not just apartment rents) would tend to the theoretical equilibrium anarcho-capitalists are always talking about: fair market value.
Hmm... :?

[Free Thinkr]

Harbinger wrote: Free Thinkr wrote: Thank you, Captain Obvious! ;) What you're missing here is that the market value will be the sale value minus the tax.
If the tax is 10% of the sale value and the full market value of the land is 90% of the sale value,
You're lost. The tax is 90% of the market value, not the sale value. The sale value is reduced to 10% of the market value, because the tax accounts for 90% of the market value.

Harbinger wrote: Free Thinkr wrote: He owes $10,000 a year, because that is it's rental value. The full market value, as you said above.
No, he owes $11,111 a year. 10% of the sale price, not 10% the full market value.
No, dog, you're lost. Piece of land with a sale value of $100,000. That means it's yearly rent is ~10%, or $10,000. I did screw up earlier, though, as a 90% LVT would be 90% of the yearly rental value, or $9,000.

Harbinger wrote: Free Thinkr wrote: No, wrong. The LVT wouldn't be figured as 10% of the sale price, it would be figured as 90% of the rental value. This fact makes the sale value 10% of the rental value.
But you said the tax was 10% of the sale value! What does "rental value" mean?
The rental value is it's market value. The actual sale value is its rental value - the LVT.

Quote: If the sale value is 10% of the "rental value", that would make the "rental value" 1000% of (or 10 times) the sale value. If the LVT is 90% of this "rental value", that would make the LVT 900% of the sale value! None of this is making any sense. :?
Imagine a pie divided into 10 pieces. This pie will represent the market value of the land, or the rental value. 9 slices go to tax, leaving only one for sale value.

Harbinger wrote: Free Thinkr wrote: No, a 100% tax would actually kill the real estate market.
Naa, it would just kill a lot of peoples real estate investments. :lol:
Yeah, it would. Too bad for people that decided to "invest" in intentionally hindering production for personal gain.

Harbinger wrote: Free Thinkr wrote: If you taxed 100% of the value, there would be no sale value; no one would pay you for land when it would be taxed at its full market value.
Sure they would. If one can afford to pay a tax of $12,000 a year for a peice of land, they just wouldn't bid more than $12,000 to buy it.
They wouldn't bid anything to buy it if the tax were equal to the land's value. Doing so would necessitate a loss on their part.

Harbinger wrote: Free Thinkr wrote: It would make a lot more land available for use, because anyone holding land idle would be compelled to use it or sell it to someone who would; the same goes for people who are under-utilizing land. This bias removed, values (not just apartment rents) would tend to the theoretical equilibrium anarcho-capitalists are always talking about: fair market value.
Hmm... :?
Well, if you talk to anarcho-capitalists, they'll tell you how the market will naturally reach an equilibrium where all prices will be "fair," and people will generally get what they deserve. In practice, however, this doesn't happen, as was demonstrated in the 19th and early 20th centuries in the US. The prime reason for this failure, IMO, is that the private ownership of land tends to cause wealth to concentrate into the hands of landowners, throwing the entire equilibrium out of balance; it's a bias in the market, in other words. Or, to put it another way: it's a monopolistic force, which disrupts pricing.

[RueTheDay]

zero18 wrote: RueTheDay wrote: zero18 wrote: Free Thinkr wrote: zero18 wrote: =CNP= wrote: Because I think this way is why I'm constantly confused by Americans. Fearing your own government is like fearing yourself or your own shadow.

Ever taken a history class?
Hey zero, since when have you been a Georgist? Glad to see that userbar get some use. ;)

Been one for several months now. I've always been a interested in the ideology but it wasn't until I read some Foldvary when I actually started considering myself a Georgist/Geolibertarian. What I like most about the LVT is that a moral argument can made for its implementation while every other tax is generally viewed as a "necessary evil".

If you like Foldvary, have a look at stuff by Mason Gaffney, Nicolaus Tideman, Fred Harrison, and Michael Hudson.

The entire "Georgist Paradigm" series of books is well worth getting. They're out of print, but you can search on Amazon and many times used ones are up for sale through Amazon's partners. I especially recommend the following volumes: "Land and Taxation" by Tideman, "The Corruption of Economics" by Gaffney and Harrison, and "Philosophy For A Fair Society" by Hudson et al.

Thanks for the references Rue the Day. :)

So far I've read writings online by Nock, Foldvary, George, Churchill, and a few others I can't think of at this time. I'm definitely asking for some geolibertarian literature for christmas and I'll keep your suggestions in mind.

A veritable treasure trove of Georgist literature can be ordered from:

http://www.schalkenbach.org/store.php

If you haven't already, definitely pick up Rights Vs Privileges by Robert DeFremery and Libertarian Party At Sea On Land by Harold Kyriazi.