Is land value tax > income and all other taxes?
I've been reading about Georgism and Geolibertarianism, and it seems like taxing land value instead of income has a great number of advantage to people of all socioecnomic and income levels 1. Completely eliminate tax returns, deductions, tax brackets, loopholes, tax credits, tax shelters, tax-derred investment vehicles, and all the other things people do to artificially manipulate their tax levels. Every parcel of land would have an independent tax assessment based on rents of comparable parcels, and landowners would be taxes on a monthly basis; Tax optimization would be as simple as knowing how much tax is assessed for a given parcel of land you might own. 2. Land is a scarce resource, and taxing it would discourage speculation, profligate spending on land, and other activity that creates suboptimal economic use of private land for society at large. 3. Substantial control over how much tax you owe. Want to pay a lot less taxes? Move out of your suburban ranch house and live in a space-efficient condo or apartment (it's more ecological anyway) or live somewhere where real estate is in lower demand. Double your income and pay no extra tax. Invest in anything and everything, owe nothing. Keep 100% of your salary, no withholdings, no filings, nothing. 4. Progressive tax: the vast majority of people will pay less taxes, even accounting for indirect taxes to renters. Land value is concentrated with the ultra-rich and corporations even more than income, so the tax burden will be distributed upward 5. At the same time, large companies benefit the most as they'll no longer need to do fancy tax accounting, expatriate their money, find double dutch loopholes, etc. Corporations are affected by dozens of different taxes beside income tax that all accumulate to reduce their margins, and the economic benefit of removing these plus the expenses they currently incur for tax accounting and optimization will make up for their nominally added taxes many times over. I know it takes a lot of inertia to impose wholescale changes to national revenue collection but I'm surprised it isn't even talked about. Some of the states with no income tax like Washington and Texas are seeing some of the fastest economic growth as people are moving there from all over the country.
I understand that income is based on cost of living. However I don't expect that income would go down, because taxes wouldn't go down. It would just be redistributed to housing and commercial real estate costs., which I imagine would rise 20-30% or so across the board. Of course that scenario would still leave the vast majority of peopel with a surplus of income compared to what they currently pay.
We already have property taxes (and sales taxes) in WA with no income tax. It’s a good, fair system. Of course the far left hates it, so voters have been forced to keep passing referendums in order to maintain the status quo. Could it work for federal taxes too? I don’t see why it couldn’t work. It would certainly be more fair than the current discriminatory tax system which has 10% of the population funding 70% of tax collections while the bottom 50% pay $0 or negative tax. One downside of property taxes is how the values get assessed. It can be very arbitrary, with valuations continuing to rise even in the middle of a real estate downturn.
I agree - property tax considers improvements to the lad while land value tax doesn't - it's essentially just price per square foot or per acre for all land within a given geographic area. I don't know exactly how the logistics of assessing it would work but I'd imagine there's a way to do it that is at least moderately fair.
One problem I see with that is people will utilize their land in whatever way produces the least amount of taxes. This would likely be very high density shops or apartments. No one would ever provide community areas because they don’t want to get taxed on something that’s not generating income.
Yes, that is definitely an expected outcome. I don't know that it's a problem though. For example in the Bay Area it would help address the housing crisis by encouraging the conversion of subrban to urban housing which is more space-efficient and ecological. Most community areas are publicly owned anyway so they would not be subject to taxes to begin with.
Incorrect. Georgism advocates taxing land at whatever an alternative highest yielding use would be. That way it incentivizes always using land in the most efficient and most utilized way.
Yes, but before we do that let me buy some stock in Amazon, Shopify and Peloton because it will kill all brick and mortar businesses.
Could apply to internet domains as “land”
California passed Prop 13 explicitly to prevent this from happening lol
Texas does this and it works well
Another benefit I forgot to mention is it would vastly improve the political discourse between different socioecnomic groups since they wouldn't be pitted against each other by every new tax proposal that only raises or cuts taxes for certain groups.
Bro you sound like you just read a nice book and have no idea how the current system works and why what you're saying is dumb.
Nope, haven't read any books, only web content. But if you'd like to share some modern critiques of Georgism that elaborate on your point of view I'd be happy to consider them.
He’s at Microsoft, if he had a better argument and was smarter he wouldn’t be at Microsoft