14313Re: [LandCafe] Re:Total land rent?
- Nov 14 6:39 AMI respect prof. Gaffney; we had dinner together once and we've corresponded over the years. (Even where we might have nuance disagreements or different takes but that is temporal thing which leads to evolution of our mutual thinking and is probably useful to both of us)On the other hand, I don't know Hudson but everything I've read by him and heard about makes me think that he is just a retread commie trying to Coopt land taxation. So basically I'm skeptical on most of his assertions/ propaganda.Whatever happened in 1993 is so long ago that it is hardly worth thinking about.Data is important, so is critical thinking. They are not mutually exclusive. And literature review is important too because some point you have to preach to some one other than choir.There is a simple yet complex question at hand. What is the lv of the us? Provide your estimate and the data and the methodologies. Ed made a good start, but lets be scientific about this and come up with a better figure that will survive scrutiny. Many legislators have said to me, great idea but there isn't enough base. We have to be able to answer that in a reasonable way.Both Roy and Krj couched the market value as what someone was willing to pay. But that is not right there also must be a willing seller. A with a home sometimes you just don't want to sell because you like your neighbors or the kid(s) are still in school. The residential market is more complex to be reduced to math because those homeowners are voters. There is an emotional component to it to which attention must be paid. (I also know how to add up all the taxes,53 % of current assessed value land under our house is not a doable annual payment. Even with a good uie. i live in average value home with an above average household income.) and with an uie, commercial business land would have to pay what like 75 % a year. That don't seem right or sellable.As to the Baltimore figures I used the assessment data. Don't tell me it's a bunch of crap, because despite flaws it's not that bad and it's is we're things start. If you want to get Ted in on this go ahead. Get him to write in person about md assessments.Jdk
Sent from my iPad usual disclaimers
On Nov 14, 2012, at 3:25 AM, "roy_langston" <roy_langston@...> wrote:
--- In LandCafe@yahoogroups.com, John David Kromkowski <jdkromkowski@...> wrote:
> RL: "The Fed, remember, was the genius that totalled up the value of all corporate-owned land in the USA and found it was NEGATIVE."
> JDK I don't recall seeing that.
It happened in 1993, and the Fed, instead of getting a clue and revising their land value calculation to bring it out of Cloud-Cuckoo-Land, stopped publishing it (as they more recently stopped publishing M3). Prof. Michael Hudson has discussed this incident.
> the one paper only said that some land
> could have negative value. And it simply was suggesting
> that theoretical models should not have constraints that the value of any
> particular parcel must be positive. But maybe we are referring to different
> papers. give cite.
"For many years Federal Reserve Board in its Flow-of-Funds, Balance Sheet of the U.S. Economy, broke down its estimates of economy-wide real estate values between land and buildings. The problem arose when the Fed discovered that its methodology produced nonsensical results -- a negative value of $4 billion for all land owned by non-financial corporations in 1993."
> I thought Ed estimate of land value (not land rent value) might be low. So I tried to provide a survey of literature.
All of which Prof. Hudson refutes.
> All you did was say it's a low
> estimate and do a critique of what's out there but provided no actual data nor brought anything useful to the table.
OTC, I have brought something much more useful to the table than your literature survey: a capacity for critical thinking.
> Land value tax skeptics (even open minded ones are going to want to see
> some data and analysis - so any serious land tax promoter has got to know
> what is out there and provided support for some alternative analysis of what the "base" for taxation is.)
See Hudson, above, Gaffney 2008, etc.
> As to 6.4 trillion, the rent suggested by HGT for the US; yes HGT is a
> theory for the ideal, but it is a useful starting place. That you can show
> (or assert) that the 6.4 trillion spent by government at all levels
> annually in US last year is wasteful and corrupt spending does not mean
> that 6.4 trillion could not be spent usefully and non-corruptly.
True. I suspect a great deal of potential government spending that is currently not feasible would become feasible -- and economically efficient -- if the land value it created could be recovered to pay for it.
> So it seems to me that it is still a good starting figure. And is certainly a way
> to test any proposed figure like Ed's or anybody else;s figure.
IMO it's more an indication just how much waste and corruption there is in American government.
> If we use Ed's figure for land value (which I agree seems low but who
> knows) then all government (in aggregate would have to levy a lvt of 53%
> of value. That's the kind of number that makes people do a spit take with
> whatever they are drinking. We(my two wage earner family of 3) couldn't
> afford to pay that much of our assessed land value (which you say is too
> low) per year. We just wouldn't have the income to cover it. I'm not sure even a UIE is going to help me on that one.
But surely the point is that however much LVT turns out to be, it is affordable by definition: SOMEONE is WILLING to pay the full market rent for the land, because that's how market rent is DEFINED. LVT CAN'T be more than that. Just imagine what someone would pay to rent your place (assuming it is not in a location that has much more productive potential uses), then deduct the relevant portion for maintenance, interest, depreciation, insurance, etc. on the improvements. That's your LVT bill.
> As to assertion that most of the Total VALUE of land is in residential
> land, I am skeptical about that on a national basis. It isn't true in Baltimore City.
How do you know? The same sort of official figures that showed NEGATIVE aggregate value for all the land owned by non-financial corporations in the USA?
-- Roy Langston
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