Right. More importantly, the farmer, along with everyone else, greatly benefits by living a society where land is allocated efficiently. The returns he gets to his labor, along with the returns everyone else gets to their labor, are much greater if land is allocated efficiently.The LVT advocates will claim that it is not the worst thing in the world to lose your land due to inability to pay your LVT. If you cannot pay, there is some very good reason for that. It will be due to taxes increasing but the profitability of your use of the land remaining stable, or perhaps even the profitibility of your land use going down, or any scenario wherin the tax of the land becomes more than the value you're getting from the land.
Let's take the example of a farmer on the edge of an expanding city. He's a hold-out, he wants to keep farming, but "society" would find it more valuable for his land to be converted to condos. Now under my own preferred system of freedom, he can just keep farming as long as he likes, forever, no one can stop him. They can offer him huge wads of money to change his mind, but they cannot use force. That's the best situation for him. But under LVT, if the tax is high that means there are a number of buyers lined up willing to pay a high price for the land, and so our recalcitrant farmer can take their money and use it to buy double the acreage somewhere else. Not too bad a deal, eh?
That's the whole point. I suggest you read Book IX, Chapter I of Progress and Poverty to get a fuller idea of just how true this is.
Right. Aside from considerations of utility, it's morally wrong. A man cannot satisfy his desires without the right to claim what he produces, just as he can't satisfy his desires without use of the earth.So I agree with LVT advocates that this wouldn't be the worst thing in the world. But neither would it be the worst thing if you had this same set-up for capital goods. You charge a CVT (capital value tax) on capital goods, determined based on assessors, market prices, and some sophisticated computer model Roy L. has. Just like LVT. The owners of injection molds and CNC lathes would then pay an annual tax. Normally, as long as they were putting them to reasonably good use they'd be able to afford the tax. If the tax is high and the factory can't afford the tax, there is some very good reason. We can assume there are many buyers waiting in line to pay the higher price of the machines. Perhaps society needs every available unit of a specialized machine the factory has, in order to produce the new iPhone which is in a desperate shortage. The owner is lucky to be in such a position! With the money, he can buy even better machines and twice as many, and manufacture to his heart's delight.
But if you believe in an absolute property right in capital goods, such a CVT would still be theft.
But you're about to undermine your argument:One other thing I wanted to respond to is the alleged metaphysical difference between a factory and land, that of the land already being there, while the factory, allegedly, isn't.
But it is. It's already there. It's already been built. The factory's existence is a fact of life. It's a done deal. The same efficiency argument applies to it as to the land: it's there anyway, so let's tax whoever owns it to force them into increased efficiency by lowering their profit margins. Taxing the factory doesn't make the factory disappear, any more than taxing land makes it disappear. It just gets run more efficiently. In fact, remember, if the factory were to be abandoned, it eventually would become philosophically land. In Will Smith's "I Am Legend" New York, (leaving aside the property rights of the zombies) all the skyscrapers, the cars, the gasoline, the canned food... these are all "land" for him. They are all just provided to him by nature as far as from an ethical or economic point of view. So why wait for it to be abandoned? Tax it now!
Half-right. From a utilitarian standpoint, your CVT fails as well, because it will indeed result in a diminution of the stock of capital. Taxing land, by value, will not.Now taxing factory owners does provide a disincentive going forward to build *more* factories, but so does taxing the Universe provide a disincentive going forward to open up more parts and resources of the Universe to productive use.
Taxing land at a rater higher than 100% of the rent would indeed cause people to abandon it, which is why no one would do that. It's literally in no one's interest to try.And while land and factories may be metaphysically unable to disappear, yet you tax them too much and even the existing land and factories will be abandoned, and crumble or go fallow. They will cease to exist in the economy. This goes back to what I keep saying: the amount of land in the economy can increase or decrease, and does all the time. It's not fixed at all!
I also believe this is wrong. There's two sides to the issue: a moral side, and a utilitarian side. If we agree that taxes must be collected, but that any tax is morally wrong, we should at least resort to taxes which are the least obstructive to the economy. LVT wins here, hands down, because it does not burden production, as other taxes do.So all our disagreements really just come down to the moral question: Is land a legitimate subject of ownership?
It's not that the government would own the land, it's that the government would manage the land in the best interests of society. Like a trustee does with an asset. It's the only way equal rights can be reconciled, because equal rights include the right to liberty, and exclusion from parts of the earth limits those rights. Compensation, then, is due.If it is, then the free land party is right. If it is not, then the proposals of the socialize land party, while they will cause economic destruction (land being abandoned and going fallow as mentioned above, among other problems) at least they have a moral basis of sorts: no human can justly own land, so we should have the government (a group of such humans) own the land. One can see the moral logic. Kind of.