What do you think of Land Value Tax (LVT)

[Sola_Fide]

No, it does not. It means control.

No, it doesn't, and it isn't.

At least I use English words correctly.

Garbage. The prohibition is on unilaterally violating a tenure right.

Wrong. Boundary stones were used to mark field boundaries on common land, too. There is absolutely no implication that the land consequently had to be private property.

Of a tenure right. Appropriation of land as private property is theft from all who would otherwise be at liberty to use it.

Wrong. Boundary stones were also routinely used to demarcate fields and pastures on land held in common. A land tenure right is not property in the land. You are making claims that are not supported by scripture.

Roy, this may be news to you, but the Old Testament was written in Hebrew, not English. The Hebrew word for dominion is "radah", which literally means "to rule over with authority".

The Scripture says God has given man this temporal rule:

Psalm 8:4-6

"What is man, that you are mindful of him? and the son of man, that you visit him? For you have made him (man) a little lower than the angels, and have crowned him with glory and honor. You made him (man) to have dominion over the works of your hands; you have put all things under his feet:"

The earth is under man's temporal ownership. Temporal, because the eternal and final owner of land is the Creator. But He has titled man with this temporal ownership by "putting all things under" man's feet.

You should listen to the mp3's and read the article I posted. You aren't afraid of reading an alternative view of things, are you?

[Sola_Fide]

It was explicitly stated to be a product of God's labor, and therefore rightly in His power to give.

Thank you. If you are saying that land ownership is in God's power to give, then you have just refuted yourself.

<yawn> Landowner is a legal, not a moral designation. The Bible also makes frequent mention of slave owners. Does that make slavery rightful?

EXACTLY. Which is why it is so ridiculous that you appeal to the jubilee laws in Leviticus 25, because the same chapter deals with slavery laws. If the jubilee laws are still in effect, are slavery laws still in effect?

No, Jesus annulled them in Luke 4. Even going back Genesis, God gave man dominion over the earth, not over other men.

[helmuth_hubener]

In my system, we do not rent land from the govt or lease it. There's none of this going to the govt. every year and applying for a leasehold. No. We own the land and we trade it. The Govt. always taxes land based on the price at which it last changed hands, there are no govt. appraisers of the land value pining about to raise your LVT. If you want to own someone's land than you go to the owner and propose to buy it. If a prospective buyer wants the land and the owner refuses to sell except at a significant premium, there is a judicial mechanism available to force a sale. The buyer must post to bond equal to the next years anticipated higher tax amount. He must be willing to pay more above the current level than just a bare scintilla, otherwise the judicial mechanism would become subject to abuse. Of course the owner can offer to pay the higher tax and then keep the land, but that is the only way he can keep it once the judicial proceeding is initiated. Buyer pays all proceeding fees and court costs.

If land falls in value should we allow the owner to pay less tax even if he does not sell it or engage in transaction? Yes. The owner may initiate a judicial proceeding, and upon proper showing that the value has in fact fallen, he may be taxed at the lower rate.

So there is two ways land may be assessed a higher value (either free exchange or judicial procedure). And two ways it may be assessed lower (either free exchange or judicial procedure.)

No administrators. No assessors. We need a filing office to keep track of when land changes hands and at what price and who owns it. Everything else follows.

Your system sounds like nothing but a simple property tax, plus the ability to force land sales by bribing the government (paying outrageously high property tax).

Hold the horses here, Helmuth, you say! It's a land tax, not a property tax! Ahh, but the market is far ahead of you. Your land tax is determined solely by tracking land transactions, no gov't assessment. How often does land get sold without the improvements being sold along with it? Not often. It happens more often in urban areas where the lot and the building can be more easily separated, but even there such a land-only sale is generally rare. So when I sell my house and its lot for $40,000, how does the gov't know how much the lot is worth? It doesn't! It knows it's worth less than $40,000, at least to the person to whom I sold it, but other than that it knows nothing.

Perhaps you realize this is a property tax including improvements and are fine with that. But I assume you are not, otherwise in what sense are you geoist, right?

So what's the solution? Forcing buyers and sellers to separate the land component from the improvement component would be the best solution I can think of, if I were forced to administer your system and try to make it work. So there would be two separate title transfers, one for the lot, and one for the house.

But would this be likely to give the gov't all the information it needs? Not hardly! In states where the sales tax or license plate tax on cars is determined by what the amount says on the bill of sale, what do people do? They agree to sell the car for $50. And the buyer gives the seller a $1950 "gift" in gratitude. So if the lot sale is getting taxed, but the improvement sale isn't, want to guess how much the lot is going to sell for?

Furthermore, there's a thing called an "open title". The seller gets the deed signed away and notarized, but doesn't fill in the buyer. This title may then change hands ten times before years later some strange buyer decides they hate themselves and want to pay the state for the privilege of having a new, crisp title with their name printed on it. This same thing could happen under your property tax system. Why report the sale if it just will result in higher taxes for the buyer? Everyone keeps their mouth shut, and everybody wins -- except for the state, or if you believe the mythology "the people", who of course are not getting their cut.

America was built on smuggling, and we are experienced tax-dodgers. If a heavy land tax is the big tax supporting the state apparatus, you'd better believe that it's going to be dodged. Your system, as explained so far, would make it trivially easy to dodge. Not only will most sales just not be reported at all, of the ones that are reported many will under-report the total, and those that for some reason must report the real total will all drastically under-value the land and over-value of the improvements. Why wouldn't they? Roy's system of assessors and miraculous computer programs is much more realistic as far as making it difficult to dodge and being able to clamp down on dodgers (dodgers without pull at the assessment bureau, that is).

[Roy L]

OK, so one distinction between government and a cartel of thieves, as you see it, are the uses for the money they take as "value in return". So if the same organized thieves use part of the funds to improve their own roads, establish their own concessions and created other infrastructure and services that make it easier for people traveling through the pass, that would take them off the hook, as no longer thieves?

They would be acting more like a government, though they might not have any legitimate (i.e., popular) authority to do so. I certainly don't support rights of secession for indefinitely small groups claiming indefinitely small territories, for reasons this hypothetical makes pretty clear: the merchants would otherwise be at liberty to use the pass. By what right do the bandits stop them? If the bandits were acting like a legitimate government, and otherwise securing and reconciling the merchants' rights under democratic institutions, then they would no longer be thieves.

Assuming, of course, that no ownership titles were given to others, but were retained only by "the state" (the same gang of thieves that organized, gained acknowledgment and recognition of sovereignty by surrounding countries).

Recognition by surrounding countries can confer legitimacy under international law, but that's not the same as the genuine legitimacy conferred by fulfilling the legitimate functions of government under democratic control.

You mentioned that each government has "degrees of legitimacy" based on their "commitment to their legitimate function of securing and reconciling the equal rights of all to life, liberty, and property in the fruits of their labor", but how that actually translates to a reliable "rule of law", one that is not based on subjective or prejudicial interpretations is still very unclear to me.

It's one of the eternal questions.

For example, in all cases, whether a democracy, a sheikdom, or a totalitarian dictatorship, a government could, in theory, satisfy all of your requirements of "improvements and a return of value for value taken". Furthermore, in all cases, title will be held by a "sovereign owner", noting that even in a democracy, the "sovereign owner" is, by strict definition, "the majority" - whomever that might be, even if it is mislabeled (falsely, evilly, wickedly, yada yada) as "The People". That, to me, is "private ownership" by any other label.

But in fact, the effective public ownership you describe is self-evidently and indisputably not private ownership.

The only difference, in the case of a democracy, for example, is that title transfer can occur by political, rather than economic means.

Title transfer to land by "economic means" is a sham, because the title is always based on force, not production or voluntary exchange.

In all cases, where is the reliable rule of law, given that everyone might describe terms like "legitimacy", "equal", "rights", "liberty", "property", etc., quite differently?

"Reliable"? You are asking quite a lot of institutions designed and operated by imperfect human beings. The price of liberty is eternal vigilance. That's your reliability.

In short, and I am asking in earnest - since you give preference to and seem to be more trusting of democratic governments, what mechanism could be in place to prevent "the tyranny of the majority"?

Various safeguards can be used, but there is ultimately nothing but the quality of the people's discretion.

[helmuth_hubener]

So was it #699? And if it wasn't, which one was it, and from which of Rothbard's brainless and dishonest anti-LVT rants did you lift it?

No, not #699, but thank you. I am honored.

[helmuth_hubener]

Except for by "infinity" you mean "100%". Those are two different rates. A rate of infinity, of course, means that in order to occupy the space one must pay the state an infinite amount of wealth each lease period -- which is impossible unless you allow an installment plan . Even then I think it's impossible. Finite land value X times infinity equals infinity. So you mean 100%, and taxing over 100% of the value does indeed create the risk of land being abandoned.

You're confusing two different things: the ad valorem tax rate and the fraction of land rent recovered. The point is that however high the ad valorem rate, as long as it is applied to land value it can't exceed the land rent, because the higher the tax goes, the lower the land's value goes. You can tax it at 1000% or 1M%, and the land's value just gets smaller and smaller while the tax amount asymptotically approaches the rent. LVT is therefore inherently limited to the just recovery of publicly created value.

Remember the Net Present Value Equation:

V = f(R)

Where V is the land value, R is the real net rent. So value is a function of real net rent (gross rent minus taxes and whatever other external expenses). The function takes into account the valuer's time preference, which amortizes rent payments to be less and less valuable as they stretch further and further into the distant future. It also takes into account everyone else's time preference (aka the interest rate), the valuer's speculation as to future population, and other factors.

Yes, I realized this was probably what you meant after I typed my reply. Indeed, you are correct: the higher the tax rate, the lower the land's value, assuming rent doesn't increase and also holding all else equal.

But the equation only is accurate for a static situation. If something changes, things take time to re-equilibriate. If the gov't raises the land value tax rate one day, the land values on the market will not instantaneously reflect that. So you could thus increase the tax so that the land-manager owes more than he can get for rent, suddenly giving his land a negative value and driving him to abandon it.

On the other hand, how does your system get the land value numbers it bases its rates on? From an army of assessors, computers, and record keepers, armed with a killer algorithm. If the algorithm instantly and automatically adjusts the land value whenever the tax rate increases, this problem is solved. Doubtless this is exactly what your system would do. So that solves that.

On the other hand, that will be kind of annoying for the politicians when they need some extra money that they are mathematically prevented from doing so by an algorithm which makes it impossible. I'm sure, though, they will never be tempted to change the algorithm a bit, even temporarily, because, well, I'm sure that's just stipulated by your system. A system in which it's possible for politicians to tamper with algorithms is a system which is no longer Roy L.'s. Understood and granted.

You're right, if water were scarce, and they were consequently suffering a deprivation, that would be a problem. You would then have to stop drinking so much water and share. If they were in immediate mortal danger, about to die from lack of water, and you had just drank more than you needed to survive, the just thing to do would be to punch you in the gut until you vomited up the excess water for your fellows to share.

Thank you! That answers my question I had been having of where we should draw the line of deprivation. Obviously there are degrees of deprivation -- I might deprive a distant someone of some almost imperceptible increase in his standard of living by excluding him from my vacant field, to which he has a 1/7Billionth share, or I might deprive a more nearby someone in a much more measurable and real way by not letting him camp in a cardboard box on the same vacant field. The line of justice, I perceive, is immediate mortal danger. If there is this mortal danger, I must not monopolize natural resources which could alleviate the danger, just as we learned from Harry and his oasis. I must surrender the monopoly immediately. But otherwise, it is good enough to pay the severance tax or LVT and go on monopolizing and appropriating Earth's resources fro myself with perfect justice. Would you agree?

[Roy L]

The earth is under man's temporal ownership. Temporal, because the eternal and final owner of land is the Creator. But He has titled man with this temporal ownership by "putting all things under" man's feet.

No, that's just a fabrication on your part. Dominion is not ownership. At no point in the Bible is any mention made of God granting man a title of ownership to the earth.

You aren't afraid of reading an alternative view of things, are you?

Lots of people claim I have to waste my time reading or listening to their silly garbage. If you had an argument, you would have made it.

[Roy L]

No, not #699, but thank you. I am honored.

Then which one was it? Come on. Prove it wasn't #699.

[Roy L]

Thank you. If you are saying that land ownership is in God's power to give, then you have just refuted yourself.

Non sequitur fallacy.

EXACTLY. Which is why it is so ridiculous that you appeal to the jubilee laws in Leviticus 25, because the same chapter deals with slavery laws. If the jubilee laws are still in effect, are slavery laws still in effect?

I quoted Leviticus 25 to show that your claim that property taxation is "unbiblical" was unfounded.

No, Jesus annulled them in Luke 4. Even going back Genesis, God gave man dominion over the earth, not over other men.

And that meant man, not just those who happen to be landowners.

[Roy L]

Yes, I realized this was probably what you meant after I typed my reply. Indeed, you are correct: the higher the tax rate, the lower the land's value, assuming rent doesn't increase and also holding all else equal.

Couldn't resist changing what I wrote and claiming I wrote it, could you?

Disgraceful.

But the equation only is accurate for a static situation.

No, it is accurate for constant tax, discount and growth rates. But it is really just a simplified form of an infinite series of individual terms.

If something changes, things take time to re-equilibriate. If the gov't raises the land value tax rate one day, the land values on the market will not instantaneously reflect that. So you could thus increase the tax so that the land-manager owes more than he can get for rent, suddenly giving his land a negative value and driving him to abandon it.

The equation assumes a constant tax rate. If you raise or lower the rates quickly enough, market prices will lag. But then you are just creating a time lag problem in information flow, so you are not taxing genuine current land value but some value from the past.

On the other hand, how does your system get the land value numbers it bases its rates on?

Transaction prices.

From an army of assessors, computers, and record keepers, armed with a killer algorithm.

No army of assessors is needed, just the market price and private appraisal data.

If the algorithm instantly and automatically adjusts the land value whenever the tax rate increases, this problem is solved. Doubtless this is exactly what your system would do. So that solves that.

Yes, the algorithm would be designed to measure land rent based on transaction prices, as well as value.

On the other hand, that will be kind of annoying for the politicians when they need some extra money that they are mathematically prevented from doing so by an algorithm which makes it impossible. I'm sure, though, they will never be tempted to change the algorithm a bit, even temporarily, because, well, I'm sure that's just stipulated by your system. A system in which it's possible for politicians to tamper with algorithms is a system which is no longer Roy L.'s. Understood and granted.

There are other privileges politicians can tax if they need more dough.

That answers my question I had been having of where we should draw the line of deprivation.

You again drastically altered my statements and pretended you were quoting me.

Despicable.

Obviously there are degrees of deprivation -- I might deprive a distant someone of some almost imperceptible increase in his standard of living by excluding him from my vacant field, to which he has a 1/7Billionth share,

He has no such share, only a right to liberty, stop lying about what I have plainly written.

or I might deprive a more nearby someone in a much more measurable and real way by not letting him camp in a cardboard box on the same vacant field. The line of justice, I perceive, is immediate mortal danger.

It's true that immediate peril in an emergency imposes additional constraints. But that is not the line of justice, nor the defining characteristic of deprivation.

If there is this mortal danger, I must not monopolize natural resources which could alleviate the danger, just as we learned from Harry and his oasis. I must surrender the monopoly immediately. But otherwise, it is good enough to pay the severance tax or LVT and go on monopolizing and appropriating Earth's resources fro myself with perfect justice. Would you agree?

Sure. All we are saaaaaying, is "Repay what you take." We certainly wouldn't want to violate anyone's property rights.