The Single Tax - Land Value Tax (LVT)

[heavenlyboy34]

Stop lying about what I have plainly written.

I didn't lie. You wrote:

Landownership tilts the land market away from users and in favor of rent seekers and speculators, raising the cost of acquiring land. That's why working people in states with low property taxes have to sell themselves into permanent debt slavery in order to buy a house.

Not to mention:

Landownership tilts the land market away from users and in favor of rent seekers and speculators, raising the cost of acquiring land. That's why working people in states with low property taxes have to sell themselves into permanent debt slavery in order to buy a house.

After all these pages, you keep confusing "is" and "ought".

[Roy L]

I didn't lie.

Yes, of course you did, and now you have lied again to cover up your previous lie. That is the usual pattern.

You wrote:
Not to mention:

After all these pages, you keep confusing "is" and "ought".

And where does that say, "everyone is perfectly suited for homeownership," hmmm?

You lied, hb. Pants on fire.

[Roy L]

Which historical civilization had the strongest private land ownership regime:

China
Persia
Mayan
India
Middle-ages Europep

Pretty meaningless without the period specified. I'm not familiar with Mayan institutions, but certainly China, Persia and India all had periods when private landowning was very firmly established. For example, one of the most effective ways Islam was spread through Persia in the 7th and 8th centuries was by taxing the land owned by non-Muslims: to avoid the tax, landowners converted to Islam.

Which one was where productive people became wealthiest, since it was the first civilization in history to experience sustained long-term per-capita economic growth?

Well, in large areas of Middle-Ages Europe, productive people did quite well because they had rights of access to common land: the "village commons." But where land was all privately owned, the productive were normally forcibly kept at starvation level by the landowners.

[Zippyjuan]

I don't recall who might have said that, but it's certainly not true. It's paid out of the value the landholder takes from society.

He is getting -- AND FORCIBLY DEPRIVING OTHERS OF -- the benefit of the economic advantage that makes the land more valuable, including being able to get a higher rent for it. If he doesn't want to take advantage of the value he is taking from others, that's his problem. When you take a loaf of bread home from the grocery store, you have to pay the market price for it, not the amount you think you should have to pay just to let it go moldy.

LVT stops such speculative boom-bust cycles, and even if land rents declined for some reason, they'd still be positive.

Land rent is the most stable and reliable form of revenue government could have. That is why the rich buy land.

The tax is on the value, not the increase in value.

Nope. Flat wrong. By increasing the cost of land OWNERSHIP, it equivalently reduces the cost of land ACQUISITION. As LVT stops the rich from getting something for nothing just by owning land, they lose all interest in owning it. LVT is by far the most effective way to make homeownership more affordable for ordinary people. You'd be able to buy a perfectly good house in a decent neighborhood for a typical month's wages (which would not be taxed).

What value is the landowner getting from society? Say I bought a property for $100k. The value of that property goes up to $200k based on what my neighbors may have done (I didn't have to do anything to my property necessarily). Am I taking $100k from society? If so, where is that money? It is only a paper gain- I have directly received NOTHING from society. Can I take those gains and go to the store and buy a bunch of bread to take home and let get moldy? No- I can't. I can't buy anything with it. Of course if I was to SELL my land at $200k, then I have realized a profit but I don't have any gains until the day I sell it.

If the price of gold goes from $1000 an ounce to $1500 an ounce and I purchased it at $1000, have I made $500? Absolutely not. I only make that $500 if I sell my gold at that price. As long as I hold my gold or land any apreciation in the value others are willing to pay is a benefit I do not get.

What am I "forcibly denying" society by not selling my property and instead continuing to live on it (as I have pointed out repeatedly I don't get any society benefit as long as I continue to own the property and use it for myself).

If the value of my land does not change, then the question of what benefit I got from society becomes even more important. There I have zero benefit from society- either in reality or on paper. And if the value of my land was to go down then it is theoretically possible that society imposed a cost on me (assuming that I receive some sort of benefit when values go up) and you said that the tax is "paid out of the value the landholder takes from society".

Then later on you say that the tax is on the value- not the increase in value. This conflicts with the statement that "It is paid out of the value the landholder takes from society". This second statement seems to me to say that they are only taking from the increase in value- the "benefit" I allegedly receive. It seems that it is the society which is taking from me- not the other way around.

Land rent is the most stable and reliable form of revenue government could have. That is why the rich buy land.

The rich buy land to avoid paying rents for it. LVT is a rent on land- even if you do own it.

You'd be able to buy a perfectly good house in a decent neighborhood for a typical month's wages (which would not be taxed).

That is an amazing figure. It is not believable and shows that this is just a fantasy. Other than when it was offered for free via land grants, property has never been that low. Average income is about $42k a year before taxes http://www.worldsalaries.org/usa.shtml so one month's wages would be $3,500. That would mean a massive collapse in property values from where we are today which according to this link http://www.realestateabc.com/outlook/overall.htm is about $155,000 or a fall of nearly 98%. But you also said that the tax would mean stable land prices so it could not possibly go down by that much. Again contradicting yourself. If they are stable, they won't go up or down. Now if you are willing to sell me land at one months wages, I would definately like to talk with you about getting a couple of year's worth.

And if land was that cheap, how much would the government be able to raise via taxing it? Unless the rate was extremely high, the collections would be practically nothing. Total households in the US as of 2006 was 114 million. http://www.infoplease.com/ipa/A0880690.html Multiply that by an average of $3,500 for a home and its land (using your one week's pay figure) and you have total base of $400 billion. A ten percent tax would generate a mere $40 billion in revenue. Interest on the debt alone for 2010 was $164 billion (and it has gone up since then) http://en.wikipedia.org/wiki/2010_Un...federal_budget so you would need about a 50% tax on land if it was that price just to cover interest on the debt (I rounded up the interest on the debt to $200 billion) and nothing else.

But I do give you credit for your persistance in promoting the issue- even if it is flawed.

[Roy L]

What value is the landowner getting from society?

The value of his land is identically equal to the minimum value of what he expects to take from society and not repay in taxes. That's what land value IS.

Say I bought a property for $100k.

That proves you expected society to give you more than $100K worth of benefits, over and above whatever you expected to be paying in property taxes.

The value of that property goes up to $200k based on what my neighbors may have done (I didn't have to do anything to my property necessarily). Am I taking $100k from society?

No, $200K. But you paid the previous owner $100K for the privilege of taking the first $100K from society, so from your perspective that was a wash, while the previous owner got $100K and society had $100K stolen from it. Now you expect to take another $100K from society.

If so, where is that money?

It's value, not money. Same thing as if you take 600 oz of gold dust out of the police evidence warehouse. It's not money. You can't take it to a store and spend it. But it is value -- wealth -- that you have stolen.

It is only a paper gain- I have directly received NOTHING from society.

Flat false. You have received access to the economic advantages, PROVIDED BY GOVERNMENT AND THE COMMUNITY, that make the land worth $200K. If you don't make any use of those advantages, that doesn't mean you haven't taken them from society, just as your failure to use the gold dust for anything useful does not affect the fact that you have taken it.

Can I take those gains and go to the store and buy a bunch of bread to take home and let get moldy? No- I can't. I can't buy anything with it.

Just like the gold dust you stole. But you still stole it, and the value of what you took is still $100K.

Of course if I was to SELL my land at $200k, then I have realized a profit but I don't have any gains until the day I sell it.

Wrong again. You can start pocketing that money from Day 1 by renting the place out.

If the price of gold goes from $1000 an ounce to $1500 an ounce and I purchased it at $1000, have I made $500? Absolutely not. I only make that $500 if I sell my gold at that price.

Wrong AGAIN. By that "logic," anyone who dealt only by barter would never gain anything, even if they obtained ownership of billions of dollars worth of non-negotiable assets. Such claims are of course always false, absurd, stupid, and dishonest.

As long as I hold my gold or land any apreciation in the value others are willing to pay is a benefit I do not get.

False, as proved above. If you make that claim once more, you will be lying.

What am I "forcibly denying" society by not selling my property and instead continuing to live on it

You are depriving society of the economic advantage obtainable by using the land. You are depriving everyone who would like to use the land of the opportunity to use it, which is not rightly yours, as it would be just the same had you never existed

(as I have pointed out repeatedly I don't get any society benefit as long as I continue to own the property and use it for myself).

No, I have proved you are blatantly wrong about that, so kindly do not try to repeat it: if you do, you will simply be lying. That is of course what I expect you to do.

If the value of my land does not change, then the question of what benefit I got from society becomes even more important.

You are getting the benefits you paid the previous owner for: the benefits that made you willing to pay the purchase price for the land. You just paid the wrong party.

There I have zero benefit from society- either in reality or on paper.

False and stupid, as proved above. What did you pay the previous owner for, if not the benefits you are taking from society?

And if the value of my land was to go down then it is theoretically possible that society imposed a cost on me (assuming that I receive some sort of benefit when values go up) and you said that the tax is "paid out of the value the landholder takes from society".

Nope. Flat wrong. Society won't have taken anything from you. It simply won't have given you all the value you expected to take when you paid the previous owner for the privilege of taking it.

Then later on you say that the tax is on the value- not the increase in value.

Correct.

This conflicts with the statement that "It is paid out of the value the landholder takes from society".

No, it does not, as proved above.

This second statement seems to me to say that they are only taking from the increase in value- the "benefit" I allegedly receive.

No, the landowner takes the ENTIRE land value from society. He just pays the previous landowner for the privilege of taking it.

It seems that it is the society which is taking from me- not the other way around.

Such claims are false, absurd, stupid, and dishonest.

The rich buy land to avoid paying rents for it.

No, dumpling, the rich buy land to COLLECT rents for it. That is very much the point.

LVT is a rent on land- even if you do own it.

It's the market value of what the landowner is taking from society, as proved above.

That is an amazing figure. It is not believable and shows that this is just a fantasy.

It is fact. LVT removes the exchange value of land, leaving the value of the improvements. THE SITE WOULD BE FREE TO BUY, the owner would only have to pay the periodic LVT on it. Improvements depreciate exponentially, so for much of their lifespan they are worth very little. A modest wood-frame house can be built for about $160K, and depreciates at about 4%/yr. So after 90 years it is worth about $5K. Most North American cities still have thousands of wood-frame houses built in the 1920s real estate boom, and many of them are still perfectly livable (if a bit dated), and under LVT could be purchased for a month's wages.

Other than when it was offered for free via land grants, property has never been that low.

Yes, it has, and is. You can find livable houses for sale at that kind of price in many cities like Detroit, Pittsburgh, Flint, Buffalo, etc. where land prices have crashed to near zero.

Average income is about $42k a year before taxes http://www.worldsalaries.org/usa.shtml so one month's wages would be $3,500.

Average income is averaged over a lot of people who are not working full time, or maybe at all.

That would mean a massive collapse in property values from where we are today which according to this link http://www.realestateabc.com/outlook/overall.htm is about $155,000 or a fall of nearly 98%.

Land value, which is the expected value of the welfare subsidy giveaway to the landowner, would fall to near zero. Improvement value would hardly be affected at all.

But you also said that the tax would mean stable land prices so it could not possibly go down by that much.

Land prices would be stable at near zero.

Again contradicting yourself. If they are stable, they won't go up or down.

They will be stable AFTER they go down, and don't come up again.

Now if you are willing to sell me land at one months wages, I would definately like to talk with you about getting a couple of year's worth.

If you had to pay for what you took from society by owning it, you would not want any more than you intended to use.

And if land was that cheap, how much would the government be able to raise via taxing it?

The revenue -- up to about 20% of GDP -- would be what MADE the land so cheap.

Unless the rate was extremely high, the collections would be practically nothing.

Think of the rate as 100%. This would reduce land value by about 95%. So the revenue would be around 5% of current land value. This is kind of hard for some people to wrap their heads around, but I can explain it in more detail if you like.

Total households in the US as of 2006 was 114 million. http://www.infoplease.com/ipa/A0880690.html Multiply that by an average of $3,500 for a home and its land (using your one week's pay figure) and you have total base of $400 billion.

?? No, my figure was for land value reduced to near zero by LVT, and it was for the cheapest livable houses in decent neighborhoods, not the average house, which is newer and much more valuable. The actual current value of residential real estate in the USA is about $20T. The great majority of that is land value.

A ten percent tax would generate a mere $40 billion in revenue. Interest on the debt alone for 2010 was $164 billion (and it has gone up since then) http://en.wikipedia.org/wiki/2010_Un...federal_budget so you would need about a 50% tax on land if it was that price just to cover interest on the debt (I rounded up the interest on the debt to $200 billion) and nothing else.

You are making a lot of wildly wrong assumptions. To get a better idea of LVT's revenue capacity, think of the total rental value of all real estate. If you take 2/3 of that -- roughly the land value fraction -- it will be roughly LVT's potential revenue. So just to ballpark it, if there are 114M households, and the average rental value of their dwellings is $1000/month or $12K/yr (it's probably more), then the LVT revenue from residential land would be about $8K x 114M, or just under $1T. Add in non-residential land and it rises to perhaps $1.5T. Some economists estimate that eliminating other taxes would greatly increase land rents, even as much as doubling them as the economic advantage of using the land was no longer vitiated by confiscatory taxation of productive effort and investment. I'm not sure how much it would increase, as it depends on complex relationships of elasticities that are very hard to measure empirically.

[Zippyjuan]

Just like the gold dust you stole. But you still stole it, and the value of what you took is still $100K.

So basically owning anything is "stealing?" If I stole it, you can't tax me on it.

No, my figure was for land value reduced to near zero by LVT

So the value of land will be near zero which would mean that somebody who owns land is taking near zero from society and in turn society could "reclaim" a percent of that "near zero" from the owner in the form of Land Value Taxation which would be less than "near zero".

And I am still waiting for a better answer to just what benefits I am getting from society when the value of my land goes up.

Think of the rate as 100%. This would reduce land value by about 95%. So the revenue would be around 5% of current land value. This is kind of hard for some people to wrap their heads around, but I can explain it in more detail if you like.

This does not necesarily work that way. If we put a 100% tax on the price of something the price of it would fall to five percent of what it was. Does a higher tax on gasoline or cigarettes cause the price before the taxes are applied go down? No- the tax is added on to the price. The costs of producing one more gallon of gas or one pack of cigarettes don't go down and their profit margin is certainly not 95 or 100% which they can afford to give up.

[furface]

I think a prerequisite disclosure for this thread should be whether you own real estate or are getting angry cutting that check to your landlord every month.

Me? Home owner.

[eduardo89]

I think a prerequisite disclosure for this thread should be whether you own real estate or are getting angry cutting that check to your landlord every month.

Me? Home owner Evil, greedy parasite.

Fixed it for you before Roy sees it.

[furface]

Fixed it for you before Roy sees it.

LOL, that's funny. Thanks.

[Roy L]

So basically owning anything is "stealing?"

No. I said nothing of the sort. Please do not lie about what I have plainly written. It makes you look like you are trying to rationalize privilege and justify injustice.

If I stole it, you can't tax me on it.

Wrong.

So the value of land will be near zero which would mean that somebody who owns land is taking near zero from society and in turn society could "reclaim" a percent of that "near zero" from the owner in the form of Land Value Taxation which would be less than "near zero".

Right: the owner being obliged to repay what he takes from society is what makes the land value decline to near zero: he is no longer a net taker from society. Society can't get any more from him, as that is all he is willing to pay to use the land. As LVT is a voluntary, beneficiary-pay, market-based, value-for-value transaction, it is naturally self-limiting.

And I am still waiting for a better answer to just what benefits I am getting from society when the value of my land goes up.

I have already told you the facts: you are getting access to whatever increased advantages are making people willing to pay more for the land.

This does not necesarily work that way.

The numbers would of course not be exactly as in my example, but that's the general idea.

If we put a 100% tax on the price of something the price of it would fall to five percent of what it was.

Only when the price is for land (or something with similar economic characteristics), as land value is based on a perpetual future after-tax rent stream.

Does a higher tax on gasoline or cigarettes cause the price before the taxes are applied go down?

Yes, but not by much, as they do not get their value from expected future rents. The relationship is governed by elasticities. The demand for cigarettes, for example, is quite inelastic, so the tax does not cause the price to go down much. With land, the supply is very inelastic -- in fact it is fixed -- so the tax all comes out of the price.

No- the tax is added on to the price.

No. Any good introductory economics text can explain to you how taxes make before-tax prices go down.

The costs of producing one more gallon of gas or one pack of cigarettes don't go down and their profit margin is certainly not 95 or 100% which they can afford to give up.

The profit margin is reduced because quantity demanded is reduced.