Hello all,

I have a question that I imagine has been asked elsewhere, so sorry (and please link me) if so.

One of the usual claims that advocates of LVT make is that it focuses tax on wealth rather than income. But does this hold if a house is majority owned via mortgage?

It seems to me applying a LVT to a house that's 80% owned by the bank is a very different kettle of fish to one that owned outright.

I'll put my hand up here to confess an interest. In income terms I'm within the top 10% of earners but slightly below the median in wealth terms. I'm comfortable but heavily mortgaged and almost all of the equity I've built up is the result of savings/payments rather than untaxed market gains. E.g The BtL landlord who owned my property for ten years before me and did nothing made 100% return whereas I'm in the process of doing a high quality green deep retrofit and expect to roughly break even.

The TLDR is that politically I'm grumpy about intergenerational wealth inequality and think that the Boomers have left subsequent generations a high income tax shit show whilst benefiting from a lot of unearned wealth boons themselves. I'm supportive of policies that help to redress that but am not sure that LVT does.

Thinking of Alberta for this question. Seeing as property taxes are levied by municipal governments, it seems like it would be difficult to have them make the shift. It seems like properties are massively overvalued, but as a consequence of that, it would anathema to voters to switch to a system which would force the values to correct (if I'm wrong about the LVT doing that I would like to know how I'm a little bit confused). I get that it would work to frame it as a change from the current taxation system, fully replacing what people pay for property taxes, and that hopefully some of the taxes like provincial income tax would be replaced, but who would levy the tax? It seems like it would be difficult if it were the municipalities, as a high rate wouldn't be accepted by voters, so would the municipalities have to transfer money to the province (not sure how much would be taken from the cities in this case), or would the provincial government then be responsible to transfer money to municipalities so they can be funded (I'm in favour of this in principle but the UCP isn't even paying Edmonton the taxes they owe, and it's really hurting the city's budget). I don't really trust the UCP to fund municipalities properly, and I am worried they would gut the cities budgets. I really like the idea, but with so many people having their retirement plan tied up in their housing value, it seems like it just wouldn't work out politically. Do we just need to wait for the real estate bubble to pop and take action then? Is there any way that a province could balance the funding of municipalities and of services, while not placing a massive burden on people, and without completely screwing people over for following in the predatory system of home investment they've been brought up in?

Not a new paper (2018) but I find the idea of 'tax capitalization' interesting, and this paper suggests that sales taxes (at least partially) come out of rents. Couldn't find an open version so not sure the degree of capitalization that they find, but per the abstract in https://www.jstor.org/stable/48537237

"Local governments are under pressure to look for alternatives to property taxes as their main revenue source. One response has been to adopt local sales taxes. Prior studies offer little guidance on whether and how much local governments enhance their revenue capacity with local sales taxes. This article unveils the underlying mechanisms by exploring the capitalization of sales taxes into housing prices as a property tax base measure. The empirical analysis reveals a capitalization of local sales taxes into housing prices, indicating the reduction of property tax bases in higher sales tax areas from the long-term perspective. The findings suggest that a sales tax rate increase might not raise local revenue capacity as much as policymakers intend."

In my city there are neighborhoods where many single family lots have "view" covenants attached to them.  These covenants were put in place when the neighborhood was developed to restrict building height such that the view from lots behind them will never be obstructed.

These seem terribly problematic to me for many reasons.  The city is currently up zoning all SFH lots to multi-plexes.  How can these be viewed as anything other than private individuals directly subverting the will of the city?  It is weird to me that such deals are allowed to take place between private land owners in a city.

What is the proper way of accounting for something like this under a land value tax regime?  How would the system dis-incentivize land owners from putting covenants on each other to artificially depress their land value and subvert the tax?  Perhaps an assessment system can allocate the depressed value of the covenanted land as increased land value of the land who’s view is being preserved.  This would incentivize those landowners to release the covenant in order to lower their tax.

I was reading Fred Harrison's Ricardo's Law and came across this passage about the People's Budget:

"The landed elite fought a running battle through the courts, and key clauses in the Finance Act—on the valuation of land—were not implemented. Without valuations, there could be no taxation."

It struck me how the landed elite targeted the most critical part of the reform effort: land valuations.

But times have changed. Today, we could build a fully open-source, open-data land appraisal system without needing anyone's permission—a true case of permissionless innovation.

If such a tool were publicly available, even without a land value tax, what impact do you think it would have? Could it help stabilize the boom/bust cycles in the land market?

I was reading Fred Harrison's Ricardo's Law and came across this passage about the People's Budget:

"The landed elite fought a running battle through the courts, and key clauses in the Finance Act—on the valuation of land—were not implemented. Without valuations, there could be no taxation."

It struck me how the landed elite targeted the most critical part of the reform effort: land valuations.

But times have changed. Today, we could build a fully open-source, open-data land appraisal system without needing anyone's permission—a true case of permissionless innovation.

If such a tool were publicly available, even without a land value tax, what impact do you think it would have? Could it help stabilize the boom/bust cycles in the land market?

I heard someone said that the tenets of Ordo-Liberalism is against the principles of Georgism but They weren’t willing to explain how. I’m pretty much confused because Ordo-Liberalism is an economically liberal ideology that advocates for a social market economy and never mentions anything that is against any Georgists principles.

What Ordo-Liberalism is for those that don’t know what it is.

https://polcompballanarchy.miraheze.org/wiki/Freiburg_School

https://en.wikipedia.org/wiki/Ordoliberalism

Estimating land value without improvements is difficult and complicated.
How many of you have read the article by Lars Doucet and actually understood it all quickly?

Imagine you own a piece of land and on it a house where you live. Suddenly you get mail from the government, that your land has just increased in value and your new tax is significantly higher.
If you ask what happened, the answer will just be "our calculations determined this land value for you". The algorithm will be a black box and it will seem as if government employees just decided this for you.
Imagine how much worse it were, if a neighbour 3 houses down had no tax increase.

What i'm getting at is that even if the estimations are made fair and are good enough, they will still seem arbitrary and no one likes that.

No, I'm not on crack

So I'm somewhat familiar with georgists like gaffney and the fact he wrote a whole book about how neoclassical economics was shaped by land owners and their power.

A key part of modern neoclassical economics is the idea of marginalism and marginal productivity. This is a bit outside the traditional georgist focus on land and land use, but i wanted to hear your guys pov given gaffney's attack on neoclassical econ.

I'm somewhat skeptical of theories of marginal productivity, thought i don't necessarily throw out all of marginalist thought (I do think there's predictive power in the theory of marginal utility and particularly in diminishing marginal returns, I don't actually want to eat 40 slices of pizza and would probably be worse off the more pizza I ate).

That said, my issue with marginal productivity of capital in particular is rooted in the Cambridge capital controversy (CCC from here on out).

Basically, to what extent does "capital" as a concept even make sense? I mean what actually is "capital"? It is typically defined as like the machinery and raw materials of production. But like.... how do you aggregate that to allow for you to have a "marginal unit of capital"? Like, you could have a collection of trucks and a collection of laptops but you cannot aggregate the two cause that's meaningless. Perhaps it make sense to speak of the "marginal productivity of laptops or trucks or what have you" but not "capital" as a whole.

Sure, you could aggregate by using the dollar value, but as Sraffa demonstrated within the CCC, this dollar value itself is dependent on the rate of profit, and if that's the case then how can the profit of a capital goods equal the marginal product of capital since the value of capital is itself determined by the rate of profit?

See what I am getting at? To me it makes a lot more sense to explain profit and the rate of profit as the result of embedded rents in the economy. So stuff like patents, or restrictions on credit flows allowing for interest to be charged on loans, or various trademarks, or yes artificial land titles. I'm drawing from mutualist (particularly tuckerite) schools of thought here. I'm curious if y'all agree or if the georgists tend to align with marginal productivity theory despite the claims of gaffney?

What are your thoughts?

Thanks!

Context: 23yr old, civil engineering grad from states. Ambition: biggest goddamn real estate developer and great capitalist.

Before people come for me, I have already bought the book and have read the preface; I do not support public land ownership. Please don't comment if you want to just come after me, but I would love to have a conversation on why we should read this book