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J LouLand value tax would solve this when combined with a UBI from the revenue it generates
Fried_out_KombiOk, yeah I can see you’re filling this community with fire content
inflation: exists
if the revenue from the tax is used for the UBI, there is no change in the money supply compared to the current situation. So, can you explain where the inflation you’re predicting is coming from?
Rent seeking
That’s the benefit of a land value tax. It captures all the economic rent, without penalizing investment in improvements.
If you’re an anarchist, then the economics work the same way in a geoanarchist society.
LVT doesn’t really address the fundamental class antagonism between landlords and tenants.
Let’s say landlords pay more taxes because of LVT, and that goes to UBI. Landlords can just jack up the prices to make their money back.
I agree that LVT doesn’t address the fundamental class antagonism. It only addresses economic rent.
Landlords can’t just jack up prices. LVT doesn’t distort prices because the supply of land is perfectly inelastic - the revenue comes entirely out of landlord surplus. UBIs so far haven’t caused significant inflation, which makes sense if the total amount distributed equals the total amount taxed.
Okay, imagine a hypothetical. You’re a landlord with 90 percent occupancy rate across 100 apartments. For simplicity let’s say they all pay you 1000 dollars a month. With the lvt tax you pay 100 dollars a month per apartment. Your renters simultaneously get 90 dollars a month(let us assume that renters make up 50 percent of the population and slightly more than half of the tax comes from residential land, giving us 90 dollars)
You’re going to raise rent by 90 dollars, at least. Maybe 111 dollars, to compensate for the empty apartments.
If I jack up my prices, then my tenants would move to other apartments because overall market prices have not been distorted.
As a hypothetical landlord, i do want to continue making the same amount. Heck, I’d make more if I could! But I don’t want to lose it all on empty rental units.
What determines tax incidence - “I make less” or “you pay more” - is elasticity. The supply of land is inelastic, so the supplier (not the consumer) bears the burden of the tax.
Okay, no, youre operating off of faulty logic. Everyone is going to be jacking up their prices the same amount.
There’s two things at play here: the LVT and the UBI.
LVT does not distort prices. It doesn’t matter if they want to maintain income any more than they currently want to increase income. Their income has always been based on the chart above; it’s not a conspiracy.
The UBI doesn’t significantly increase demand for housing in practice. We hear this same argument about minimum wage increases or anything else that puts more money in the hands of the working class. People having more money doesn’t make them spend it all on more housing.
I’m trying to explain the logic behind the underlying economics, but these have both been tested in practice too.
I think you’re getting the logic wrong, and the basic logic also isn’t rooted in empirical studies.
Can you please cite empirical studies that make your case?
I could be wrong of course, but when if LVT plus UBI work it would still be better to just do what the CPC did and stop enforcing the right to own other people’s homes.
I’m not sure which part about this you’re not getting and I don’t want to explain what elasticity is. LVT and UBI not distorting prices isn’t contentious outside of internet arguments like these. No offense but have you taken econ 101?
You make a fair point about the adversarial relationship. I can see how you might be right about that. I’m only disputing the claim about LVT leaving economic rent, and that it would cause inflation. Since that’s the initial claim, I would like you to cite studies for that first.
I’ve taken econ 101. It seems like you’ve only taken econ 101.
What economics education do you have? I’ve spent years studying neoclassical, Keynesian, and Marxist economics. I am confident in saying that the assumptions you are relying on in faulty on theoretical bounds within neoclassical economics (which is where your argument is coming from) as well as within Marxist economics. But theory only goes so far, and if you have empirical evidence to the contrary I’d love to see it.
if all landlords’ costs go up, ALL monthly rent goes up? you’ve gotta follow the bouncing ball
Nope, see diagram
source?
Supply and demand diagrams are covered in introductory economics classes worldwide. Hint hint.
how does supply and demand relate to……land value taxes…….
You are arguing about a subject for which you have chosen to not educate yourself whatsoever.
hmmmmmm
Don’t sweat it to much, you are arguing against someone with an anti-education on how economics actually works to the point you can intuit how they’re wrong without knowing any of the theory behind their argument.
someone with an anti-education
This is anti-intellectualism. Please either take a single econ class or stop spreading misinformation.
You’re literally doing anti-intellectualism by trying to argue from a half remembered econ 101 class against someone who has spent more than a decade studying economics inside and outside of academia.
Literally read the first few chapters of capital and stop trying to explain to explain geocentricism to someone who understands heliocentrism.
The diagram shows how price goes up and less consumers are able to access goods when you raise taxes within a market economy.
It is also an econ 101 level oversimplification, but it is arguing against your claims.
No it doesn’t. As you can see, market price is where the supply line meets the demand line. Since supply is perfectly inelastic (vertical), a higher tax rate cuts into producer surplus without changing where supply and demand meet.
That isnt true, housing supply isn’t inelastic. Houses decay, new homes are built, and landlords remove homes from the market to artificially constrain supply.
Also that isnt what the graph illustrates.
LVT taxes the unimproved value of land, so we are talking about land itself not what is built on top of it such as housing. Since land is a product of nature, the supply of it is perfectly inelastic
People live in housing though, which is distinct from land, and the thing they’re claiming is static
wtf is that source lol
Don’t you have something better to do than troll?
yeah, years of economic science dating back to post WW2. not just an emotional comment on lemmy.
They asked a fair question. And economics was more a branch of philosophy than a science at that time.
lol mfw
Ok thanks for your contribution Dr. Science.
u too mr hypothetical
philosophy is a science mr smartypants
Land value tax is the stupidest idea I’ve ever heard of. “Unimproved” value? So basically when rich people get together and build mansions, next to them we build affordable housing. Both pay the same tax because the unimproved land is worth the same? Or maybe you’d argue that because the other mansions were built that the land is now worth more because it’s more desirable. That logic applies to the affordable housing next door though, so the rich can kick the poor out of house and home just by being nearby.
No, all taxes need to be extremely progressive because the wealthy simply consume more from society than the poor. A poor person can be poor anywhere. A rich person can only accumulate and hoard vast wealth if the society they parasite provides them with a steady source of healthy and intelligent workers and vast access to energy and natural resources to consume. The rich take more from society and need to pay more.
Taxes also need to apply to every possible economic transaction because unlike the poor, the rich can afford to do weird things to escape taxation. If we tax only one thing you can bet your ass the rich will find a way to avoid it and only the poor and working class will pay, allowing the rich to hoard wealth unimpeded leading to the tremendous inflation we see now.
Land value tax is progressive. Due to land's inelastic supply, this tax cannot be passed on to others. People that own lots of land bear the entire burden of the tax. Charging for unimproved land value encourages building denser on more valuable land. This increases housing supply thus making housing more affordable
LVT is 1 policy. It can be combined with other policies. LVT is not an avoidable tax
It’s not progressive.
How much land does Musk or Bezos own? How much land does an average farmer own?
Amazon warehouses are built on the unimproved equivalent of farmland or worse. The Amazon warehouse generates millions in annual profit. The same parcel of land gets a farmer a meager income and we should tax BOTH THE SAME???
If you come up with a tax that has any chance of taxing an old farmer more than it taxes Musk or Bezos, don’t come tell me it’s progressive.
Also I’m sick of hearing that somehow this tax “can’t be passed down to the consumer”. If every plot of land nearby is taxed the same, all the owners will shrug and say “sorry that’s just what it costs”. It’s the very definition of things that will be passed down to the consumer. Take your libertarian BS out of here.
It meets the definition of a progressive tax.
The broader Georgist program involves aggressive taxation of government-granted monopolies like IP, which both Musk and Bezos are indirectly beneficiaries of.
LVT is 1 policy meant to solve 1 problem. It can be combined with other policies that address other problems.
The labor theory of property, a negative application of which provides a moral rationale for LVT, also provides a justification for an inalienable right to worker democracy
I’m sorry, I just have a hard time agreeing with you on the definition of progressive taxation here. Sure SOME rich people will pay more than SOME poor people. But even that statement is tenable at best. Certainly MOST rich people will pay less than an average family farm. Most rich people will pay less than an average person who owns a self sufficient rural homestead lot.
It’s not as bad as the libertarian “15/15/15 flat tax” that was making the rounds a few years ago, but that’s the best that can be said about it.
I like a lot of consequences of the LVT, like that if famously solves the downtown parking lot problem. But I’d never call it progressive. A progressive tax should tax people who own more wealth more than those who own less. If you tax someone who owns a multi million dollar hotel the same as someone who owns an empty lot next door all you’re doing is making it so that only the rich can afford lots. Then when they improve the lot to make more money you reward them by effectively taking a smaller percentage of their new found wealth.
LVT taxing the empty lot next door at the same rate as a multimillion dollar hotel is exactly what makes it so efficiency enhancing because it give land owners economic incentives to use their land productively rather than just holding it and waiting for it to appreciate in value. With LVT, prices would exclude the value of the land.
LVT can be combined with other policies and taxes. You have to look at the whole package of policies to determine progressivity. LVT+UBI is progressive