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Re: Proposal for a universal individual land tax exemption

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  • roy_langston1
    ... To me it is self-evident that equality of rights requires equal exemptions for every resident citizen of the jurisdiction that is levying the land tax. If
    Message 1 of 93 , Oct 17, 2011
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      --- In LandCafe@yahoogroups.com, "Edward Dodson"
      <ejdodson@...> wrote:

      > Roy Langston wrote:
      > [George] missed the need to restore the equal
      > individual human right to liberty through a uniform,
      > universal individual land tax exemption (or, second
      > best, an equivalent citizens' dividend).
      > Ed Dodson here:
      > I have two technical questions for consideration.
      > As location rental values differ greatly in every
      > community, what would be an equitable formula for
      > exemption? A flat amount does not seem workable
      > given the vast differences in values.

      To me it is self-evident that equality of rights
      requires equal exemptions for every resident citizen
      of the jurisdiction that is levying the land tax.
      If that is cities, then there might be significant
      differences in exemption amount between cities. If
      it is a country, then every resident citizen of the
      country would get an equal exemption. Each level of
      government could extend its own exemption, and each
      person would get the total for all the jurisdictions
      he lived in: local, state and national.

      > Second, assume for purposes of discussion that the
      > median location rent per square foot of
      > residentially-zoned land is $5. If the first $3 per
      > square foot is exempted from taxation,

      The exemption is not given per square foot. It is
      given as a total amount per PERSON. So for example,
      if it is calculated based on half the median land
      rent of $100/person-month, each resident citizen
      would be exempt from $50/month in land tax. I am
      leaning towards exempting the mode of per person land
      rent, as that is probably a good gauge of how much
      land a normal person needs to use to participate as
      an equal in society and the economy.

      > would market forces capitalize this increase
      > in net imputed rent to land owners into a higher
      > selling price for land, generally (all other things
      > being equal)?

      Assuming full rent recovery, the selling price will
      be near zero in any case. The more important issue
      is the extent to which the exemption would increase
      rents relative to a CD of equivalent value. I
      suspect it would, as the poor would likely opt to use
      a little more land rather than endure intense crowding
      or move to very poor land in order to increase their
      after-tax incomes. I don't consider this a problem,
      as a slight increase in rents would just mean
      slightly higher land taxes and a slightly higher
      exemption, while use of a bit more and/or better land
      would give the poor better access to opportunity than
      their own preferences might do if they just received
      undifferentiated purchasing power through a CD.

      -- Roy Langston
    • jdk_maryland_atty
      JDK: What some reasonable everyman would pay to have ... RL: It isn t, because there is no such man in actual markets. JDK: This comes back to the issue, that
      Message 93 of 93 , Nov 2, 2011
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        JDK:> What some reasonable everyman would pay to have
        > the exclusive right to pick or not pick should be
        > the rent.

        RL: It isn't, because there is no such man in actual

        JDK: This comes back to the issue, that there is "no true value" in these situations.

        Deming notes in a 1986 forward to Walter A. Shewhart's 1939 book Statistical Method from the Viewpoint of Quality Control (Dover Publications, 1986):

        "There is no true value of anything. There is instead a figure that is produced by application of a master or ideal method of counting or measurement .... There is no true value of the speed of light; no true value of the number of inhabitants within the boundaries of (e.g.) Detroit. A count of the number of inhabitants of Detroit is dependent upon the arbitrary rules for carrying out the count. Repetition of an experiment or of a count will exhibit variation. Change in the method of measuring the speed of light produces a new result."

        In his book, The New Economics, Deming puts it this way: "There is no true value of any characteristic, state, or condition that is defined it terms of measurement or observation."

        This important because for a few reasons. First, the use "mathematics" without a "statistical understanding" of reality must fail. This is the real danger of the math in economics debate.
        Second, there is no such thing as the best worker and the worst worker. If and only if, we are able to say that a "statistically stable system exists" (Shewhart's and Deming's concept of "statistical control"), then there will be a range within which values will lie. Within that range (upper and lower control limits) it makes no sense whatsoever to distinguish the values.

        > > If there is an auction, and Landlord is willing
        > > to take whatever the highest bidder bids. Then
        > > I think, the landlord takes 6 bid of Abel.
        > > And 6 is the rent. Right?
        > Right.
        > > If there are sealed bids, and the Landlord is
        > > willing to take whatever the highest bidder
        > > independently offers, then Abel's bid of 10 wins.
        > > And the rent is 10?
        > Unless we allow game theory, where Abel tries to
        > second-guess Herman's bid.
        > > It is also conceivable that the Landlord is really
        > > willing to accept 7. He puts a sign out "access
        > > for sale @ 7 crates". Abel agrees and says sold.
        > > The rent is 7.
        > The landowner qua landowner is willing to accept 1,
        > because the alternative is 0.

        This right here is the problem. This does not reflect human behavior, by and large. Take famous experiment. 2 subjects. A is told to split 20 buck between with B. If B agrees to proposed split both keep. If B disagrees, then neither gets. B you'd think should accept 1 for him and 19 for A. Because 1 > 0, but by and large, people don't. They rather take 0 than agree to something that they perceive as unjust or not fair.

        The greedy wasteful landlord will let those apples rot before he lets some immigrant on his land.

        The stupid lazy landlord will even pay to the state to let those apples rot rather than feel compelled to let some migrant worker pay him to be allowed to pick them.

        > > The landlord is a greedy bastard and is wasteful.
        > > "Access is 11 no negotiation", his sign says.
        > > Neither Abel nor Herman pays the Landlord his
        > > claimed rent and the landlord lets the apples rot.
        > > What is the rent?
        > Still 10. That is effectively the situation with a
        > great deal of vacant land now.

        Why 10, there is no actual market because that requires willing buyers AND willing sellers. So if the market cannot produce a price, why not 11?

        > > The landlord is just a stupid lazy sack and has
        > > never even contemplated that you can pick apples.
        > > In any case, he is NOT willing to sell for
        > > anything. He doesn't want migrants on his land.
        > > What is the rent?
        > Still 10. The landowner does not affect rent.

        But the landlord does affect rent because his unwillingness to sell at reasonable price is the same as a stupid prodigal buyer who is willing to extravagantly overpay.

        And do we not agree that idle landlords who take land out of the market create the conditions for the bubble -- (rising rents - all rents - without reason which lead to the cycle causing economic downturns when the Rent outpaces the Wages and poverty and unemployment must ensue.

        > > The state passes LVT and estimates the LVT is 20,
        > > the stupid Landlord says, "whatever here is 20".
        > > I don't care whether some fruit picker will give
        > > me 5 to 10, I don't want some migrant on my land.
        > > What is the rent?
        > Still 10. The assessor's job is to measure the
        > market rent, not specify a desired rent.

        But there is never a true value and when the landlords are idle and unwilling to sell there is no specific market for that land held out of production (only a general market affected by the landlord's selfishness) and by iteration affecting his own rent.

        > > If the state throws that rent into the sea,
        > > Herman and Abel are still without a job and in
        > > poverty.
        > They have the rest of the apples.

        No they don't because the stupid and greedy and wasteful landlord has let them rot. Valuing "mine" (rights) over "stewardship" (obligation).

        This is the classic unresolved dilemna does the land value tax force land necessarily into production (Schwab and Oates, LVT is neutral) or is it that its ability to lower other taxes on wages and capital encourage other economic activity. (Plassman & Tideman, LVT encourages economic activity).
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