Originally Posted by
Francesca R
Well I think you've expressed the view that private ownership of land (in the absence of--say--a 100% tax on rent) is unjustifiable/exploitative. Therefore you would set up a system where, effectively, all land is nationalised.
Private Ownership of land is unjustifiable. Including government ownership. Private tenure is of course beneficial, if not absolutely necessary, so I believe there is a moral requirement that those granted the privilege of exclusive use of some area of land compensate those who are thereby deprived use of that area of land.
Your premises are false, and therefore the conclusion you reached is faulty.
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If land tax is 100% of land rent, then private land value drops to zero and private land rent drops to zero.
False. Land
price drops to 0, but the value still exists and is expressed via the tax burden. By the way, in practice, I do not believe it is possible to tax land value at 100%; it's not advisable to attempt to tax at a rate above the rate which allows your margin of error (ie, if your appraisals show a 2% margin of error vs. actual sale prices, you shouldn't try to tax above 98%). Any attempt to go beyond that rate is likely to result in decreased revenue.
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It amounts to state appropriation of all land, not tax. And that removes all market mechanisms for allocating land to use, or leaving it idle. And there is nothing necessarily wrong with leaving some land idle. Using it for "tax" reasons when market price mechanisms would not justify this is wasteful.
?? Run that last sentence by me again.
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Evidently you don't. But that doesn't make it wrong...
True enough. But then, I proved your reasoning to be wrong above, so it seems likely the error rests with you.
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And usage rights and ownership rights are quite separable and transferable--except that there is no non-arbitrary way to separately assess site value from the value of internal and external site improvements if you abolish the market.
True, but then nowhere have I advocated abolishing the market.
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People might want to use land; nobody would want to own land.
Without the rent, there's precious little different between using land and owning it. Land titles that are currently viewed as titles of ownership would effectively be titles to exclusive use, even though they'd technically still be titles to ownership.
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Thus, again, this is not "tax", it is non-market state appropriation of land capital.
"Land capital?" What's the use of having independent factors of production if you can't even keep them separate? I suppose if the government issued licenses to steal, you'd refer to them as "theft capital."
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Sure governments may be able to get rich indeed via monopoly ownership of land and the ability to charge usage fees as they liked. If they did it sensibly they might even not distort/kill economic efficiency. But it is a step backwards, away from a market mechanism.
Really? Hong Kong seems like a solid step forward, when compared with most the world. Further, have you considered that a scheme where government revenue is based on land rents aligns the best interest of society and government? Under such a scheme, a government maximizes revenue by allocating land as effectively as possible, and by spending revenue on infrastructure and services with maximum utility.
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Not from LVT they don't, since nobody owns the LV.
Right. In Hong Kong, the government owns the land, and leases it out. This isn't the scheme I advocate, but its nature is essentially similar to a LVT, in that it is a scheme for collecting land rents via market mechanisms.
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Oh sure real estate bubbles and crashes can arise from private land ownership.
In Japan's case, there's simply no doubt that an LVT would have spared incalculable suffering.
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But state ownership is no magic bullet for efficiency. It is laughable that you regard it as the curer of all ills from economic meltdown to real estate bubbles to a sore finger and a runny nose. Your posts have a "one trick pony" characteristic in that regard.
Each year, trillions of dollars are stolen from the hands of producers, and given to idle landowners. I don't claim that the LVT will fix everything, but private collection of land rent is indisputably the largest existing bastion of privilege which distorts modern economies. Other numerous distortions are trifling by comparison.
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As for "exempting" retired and near retired in Japan from your desired "tax"--that's probably more than a quarter of the population. So at a stroke you impose a huge cost on the shrinking labour force which is struggling enough as it is. That is not exactly the first thing Japan needs, suggesting you don't exactly know the first thing about it.
Please. There's no need to switch from one tax scheme to another overnight. You can do it slowly over the course of 20 years. But each year, production gets that much greater a reward, and privilege gets that much less. Immediately upon enactment of such a scheme (if not before), speculators would flee the market to protect their savings; just serious talk of a major increase in taxes on land rents would have beneficial results by moving money away from rent-seeking and into productive investment.
11th November 2009, 06:33 AM
