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Re: UK Taxes

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  • John
    ... Jock it was from memory, but the gist was there. But to one of my main two points... ... Jock, the figures given were what was collected. The fact is that
    Message 1 of 30 , Dec 1, 2011
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      --- In LandCafe@yahoogroups.com, Jock Coats <jock.coats@...> wrote:
      >
      > On 30 Nov 2011, at 22:08, John wrote:
      >
      > > TAXES
      > >
      > > Just saw on TV…
      >
      > > Only 1% of the population earn over £100,000 per ann.
      > > 0.6% of pop earn less than £10,000 per ann.
      >
      > That wasn't what it said on the program.
      > It was that people on around 10k, the lowest
      > decile, paid around 0.6% of tax.

      Jock it was from memory, but the gist was there. But to one of my main two points...

      > BUT! the rich tend to avoid taxes, while
      > PAYE cannot dodge tax. This makes the
      > figures untrue.
      >
      > No, it doesn't. These figures are what is
      > paid from what I understand, not what is
      > liable but uncollected because of avoidance.

      Jock, the figures given were what was collected. The fact is that if the current tax laws were tighter and collection more efficient far more tax would be collected from the wealthy. So the figures given are unrepresentative of what HMG should be taking in.

      The second and prime point was that "property tax" was dismissed as suicide. The point by Laws stunned me for a LibDem where LVT is very strong and always has been. He seemed to lack understanding of "property tax" or in effect taxing land. I can only assume he is towing the Tory line in the coalition.

      The small bit at the end re: property tax, was the only part that homed in on taxing wealth.

      It never once emphasized taxing wealth rather than income.

      Well it was made by the BBC, who these days look more like the mouthpiece of HMG.
    • John
      ... He just hasn t done anything worthy of note, just holding the fort. The US public are still infuriated (as are those in other countries) by the big bonuses
      Message 2 of 30 , Dec 1, 2011
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        --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:

        > Obama has been a poor President

        He just hasn't done anything worthy of note, just holding the fort. The US public are still infuriated (as are those in other countries) by the big bonuses and profits of the people and financial organizations who screwed up big time in the first place. As in all western countries, public money was poured into these organizations, who continued to keep doing the same old greedy tricks. There were few conditions on what they did after bail outs. That was madness by all govmts. Michael Hudson was right - wipe out the debts of those in negative equity, do not bail out banks. We did it the wrong way around. That way we can stop the suffering of those hurt the most - those who create the economic growth and do the work.

        The day after Obama was elected, my female Iranian dentist could not hold her elation at his election. I said "lets see if he can do it". So far nothing of note, except be good at PR abroad with his wife. They come across as class act at functions - the common touch.

        > I don't know whether you have a
        > 'capital gains' tax in the UK, but we
        > do and Buffet pays capital gains.

        We do have capital gains. You do not pay when selling the house you are living in, but on a second house you do. We have stamp duty. A tax on selling a house that os over £250,000. It is a way of taxing increased land values at sale.

        > The very rich make their money with
        > "capital gains" and enjoy the low tax
        > rate. However, there is more to it than that.
        >
        > When Georgists talk of Capital they mean
        > material goods in the process of
        > production. Fred Foldvary prefers to
        > use 'Capital Goods' and I think he's
        > right.
        >
        > Now, except for very rare price mechanism
        > increases, capital goods don't
        > gain. On the contrary, capital depreciates
        > as it's used. There is no such
        > thing as a Capital gain.

        There are exceptions. Vintage cars is one example where a car (capital goods) increases in value, but these are rare.

        > So, what does a capital gains tax hit?
        > The answer, of course, is land value
        > increases. The assets of the rich grow
        > in value and suffer little taxation.
        > Mase Gaffney, who is a full six weeks
        > older than me and is obviously an
        > elder statesman, thinks that these
        > increases should be treated as income.

        I hope you are not defending capital gains as a form of LVT. The gains are windfalls - although income they are. It usually the sale of an asset which has value locked in it.

        > Both parties are well into the pockets
        > of corporations and unions.

        There is not much difference here.

        > As an example, a great advantage of the
        > NHS is that it can buy drugs for next
        > to nothing by virtue of its enormous
        > buying power.

        The drug companies still rip the NHS off in some products - look at their profits. But overall you are right. They do drive down prices of drugs, especially the run of the mill products that are commonly used. If you are working you still pay for drugs prescribed by the GP, although not that much. The old, children and unemployed do not pay anything for drugs. To my knowledge no one abuses it. No one wants to be sick.

        Was the cost of drugs a major point in not adopting a full USA HNS?

        For those who believed the US propaganda of a few years ago that the HNS is a second rate system, I received a letter yesterday from my GP asking me to attend a check up.

        I did enjoy Michael Moore's Sicko. :-)
      • Edward Dodson
        Harry Pollard wrote: Taxing the very rich over here is Obama s trump card. The Republicans are dead set against it and that will kill them next year. Most
        Message 3 of 30 , Dec 1, 2011
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          Harry Pollard wrote:
          Taxing the very rich over here is Obama's trump card. The Republicans are
          dead set against it and that will kill them next year. Most Americans think
          it would be fair to tax those who are doing well during the depression.
          Obama has been a poor President but the tax policy and the constant
          reiteration that the Republicans are holding up attempts to improve things
          could win for him.

          Ed Dodson here:
          And now we have the additional choice of voting for the Justice Party
          candidate, the former Mayor of Salt Lake City, Utah. What I wish we would
          hear from the Democrats is a call for a return to a progressive structure
          for the income tax that shifts the burden of taxation to unearned (i.e.,
          rent-derived) income flows AND elimination of the distinction in rates on
          so-called "capital gains" from the sale of assets.

          I pulled together a set of PowerPoint slides on the economic proposals of
          each of the Republican candidates running for the presidency, along with
          their economic advisers (if they have one). This proved to stimulate a
          vigorous discussion this week with my students. If anyone would like a copy
          get back to me.
        • jdk_maryland_atty
          ... The problem is that paper increases in land or capital value aren t income . Per the definition that the US Sup. Ct. has held for decades. Nor did
          Message 4 of 30 , Dec 1, 2011
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            > gain. On the contrary, capital depreciates as it's used. There is no such thing as a Capital gain.
            >
            > So, what does a capital gains tax hit? The answer, of course, is land value increases. The assets of the rich grow in value and suffer little taxation. Mase Gaffney, who is a full six weeks older than me and is obviously an elder statesman, thinks that these increases should be treated as income.
            >

            The problem is that "paper" increases in land or capital value aren't "income". Per the definition that the US Sup. Ct. has held for decades. Nor did "income" include unrealized market fluctuations in 1913. You must have a "realized" "gain" over which the would be taxpayer has "complete control." Market fluctuations are neither income, nor real losses, until you sell the asset. There have been some seriously flawed arguments based upon equivocal use of a particular word (which I'll not repeat here) and an attempt to use alimony/divorce law ideas inappropriately in the well-settled tax law area. There is also an erroneous argument about mark to maket taxation of certain year straddling futures contracts. That is simple a rule about "timing" - do you pay the tax (or take the loss) in this year or next year.

            Harry's notion that there is no such as a "capital" gain really makes no sense. Prices for capital goods go up and down because of supply and demand. If you buy low and sell high, you have a capital gain. While stock prices reflect some of the ownership of land assets, it is really not clear to me how much is due to value of owned land.

            There certainly though is Income from land for example when you sell high and have a gain (remember the "capital gains" tax is part of the Income tax.) But there are sadly exemptions, the promote the climb up the property ladder (with increasing debt). There is also income from Land whenever you lease real estate. Part of the "income" that the landlord gets is from renting the land/location and part is from leasing the structure (if there is one). It would not be complicated to separate the two components out and have different income tax rates for land income and capital income, just like we have different rates for wage income and "capital and land" income. When bank receives a mortgage payment some of that could be attributed to land income.


            But in the US if you really want a national LVT, you have to do it as an ad valorem direct tax, which consequently must be apportioned among the States (meaning that each state has it's own rate to raise its per capita share.
          • Harry Pollard
            John, This has become a Letter from America though without the excellence brought to it by Alistair Cooke. Obama is clearly spending his time campaigning for
            Message 5 of 30 , Dec 1, 2011
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              John,

              This has become a "Letter from America" though without the excellence brought to it by Alistair Cooke.

              Obama is clearly spending his time campaigning for a second term to the exclusion of hands on activity. We have just had a "Super Committee" (equally Demo and GOP) whose job was to come up with significant cuts in spending, They failed of course, but noticeable was the complete lack of action by Obama. Presidential power can be used effectively to move things along. He did nothing.

              I doubt that even with the incumbent power of the Presidency Obama will be re-elected, though the way the Republicans keep shooting themselves in the foot, who knows? Interesting is the ascent of Gingrich in the Republican battles. During the primary debates, he has been very good - in fact excellent. He doesn't have the money the others have but if he continues to shine the campaign money will come rolling in.

              Obama and the Demos have an enormous sack of money which could trump anybody.

              Gingrich - if he gets the nod from the GOP - wants Lincoln-Douglas debates. There were seven of them - each three hours long - an unlikely occurrence when debates must be fitted in outside prime-time TV - but fun to think about.

              Capital gains does capture land-value appreciation which is OK but not what we want.

              As I've said often, full economic rent collection is what is needed. The economic effects far out way in importance any revenue that night be collected. 

              You may have seen my "Better to collect rent and throw it in the sea, than not collect it at all." That shakes a few Georgists, but I fear we spend too much time on revenue and not enough time on the heavy benefits in economic prosperity collecting rent will bring.

              There are good and bads in every health system. My family doctor did some tests and told me he was sending me to a Nephrologist ( I think you call our specialists 'consultants').

              They called me up and I fixed an appointment a few days later. They reminded me of the appointment several times by E-Mail and telephone. They want to make sure the patient will be there!

              It cost me $5 as I am a private patient. Had I been a member of a union contract, it would have cost me nothing. He spent an hour with me in which he gave me much information about the kidneys, then prescribed some medicine changes. I should say that everything is computerized so my complete medical record is there for him to see.

              That's the good, I'm sure there are plenty of bads.

              The husband of my Welsh niece has been in terrible agony for 3 years. They have been dosing him with pain pills during this time but he has been getting worse - sweating on one half of the body only, his jaw drooping. Finally about a month ago he was sent to a consultant. He ordered up scans and they found a tumor on his spine (that was now probably inoperable). We expect him to get radiation treatment. A friend sent to my niece "What does the Pain Centre say?" My niece said, "What's the Pain Centre?"

              She asked the nurse, who replied "Who told you about that?"

              My niece is absolutely furious and so am I. Bryn was a happy soul except when Thatcher was mentioned. His deterioration is terrible.

              That wouldn't happen to me, I'm in a good HMO. I'm sure similar things happen elsewhere in the US, in part because of the great distances often involved. Also, this is a violent country, with many murders  and gang deaths to bring down our life expectancies, though in my 49 years here, I have never seen a shootout or anyone openly carrying a gun.

              Not that you would know this if you watch many Hollywood movies.

              Harry
              \\\\\\\\\\\\\\\\\\\

              On Thu, Dec 1, 2011 at 2:42 AM, John <burns-john@...> wrote:
               

              --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:

              > Obama has been a poor President

              He just hasn't done anything worthy of note, just holding the fort. The US public are still infuriated (as are those in other countries) by the big bonuses and profits of the people and financial organizations who screwed up big time in the first place. As in all western countries, public money was poured into these organizations, who continued to keep doing the same old greedy tricks. There were few conditions on what they did after bail outs. That was madness by all govmts. Michael Hudson was right - wipe out the debts of those in negative equity, do not bail out banks. We did it the wrong way around. That way we can stop the suffering of those hurt the most - those who create the economic growth and do the work.

              The day after Obama was elected, my female Iranian dentist could not hold her elation at his election. I said "lets see if he can do it". So far nothing of note, except be good at PR abroad with his wife. They come across as class act at functions - the common touch.

              > I don't know whether you have a
              > 'capital gains' tax in the UK, but we
              > do and Buffet pays capital gains.

              We do have capital gains. You do not pay when selling the house you are living in, but on a second house you do. We have stamp duty. A tax on selling a house that os over £250,000. It is a way of taxing increased land values at sale.

              > The very rich make their money with
              > "capital gains" and enjoy the low tax
              > rate. However, there is more to it than that.
              >
              > When Georgists talk of Capital they mean
              > material goods in the process of
              > production. Fred Foldvary prefers to
              > use 'Capital Goods' and I think he's
              > right.
              >
              > Now, except for very rare price mechanism
              > increases, capital goods don't
              > gain. On the contrary, capital depreciates
              > as it's used. There is no such
              > thing as a Capital gain.

              There are exceptions. Vintage cars is one example where a car (capital goods) increases in value, but these are rare.

              > So, what does a capital gains tax hit?
              > The answer, of course, is land value
              > increases. The assets of the rich grow
              > in value and suffer little taxation.
              > Mase Gaffney, who is a full six weeks
              > older than me and is obviously an
              > elder statesman, thinks that these
              > increases should be treated as income.

              I hope you are not defending capital gains as a form of LVT. The gains are windfalls - although income they are. It usually the sale of an asset which has value locked in it.

              > Both parties are well into the pockets
              > of corporations and unions.

              There is not much difference here.

              > As an example, a great advantage of the
              > NHS is that it can buy drugs for next
              > to nothing by virtue of its enormous
              > buying power.

              The drug companies still rip the NHS off in some products - look at their profits. But overall you are right. They do drive down prices of drugs, especially the run of the mill products that are commonly used. If you are working you still pay for drugs prescribed by the GP, although not that much. The old, children and unemployed do not pay anything for drugs. To my knowledge no one abuses it. No one wants to be sick.

              Was the cost of drugs a major point in not adopting a full USA HNS?

              For those who believed the US propaganda of a few years ago that the HNS is a second rate system, I received a letter yesterday from my GP asking me to attend a check up.

              I did enjoy Michael Moore's Sicko. :-)




              --
              ******************
              Henry George School
              of Social Science
              of Los Angeles
              Tujunga   CA   90243
              ******************

            • Harry Pollard
              I would love a copy! Harry ... -- ******************** *Henry George School* *of Social Science* *of Los Angeles* *Tujunga CA 90243*
              Message 6 of 30 , Dec 1, 2011
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                I would love a copy!

                Harry
                \\\\\\\\\\\\\\\\\\\\\

                On Thu, Dec 1, 2011 at 5:56 AM, Edward Dodson <ejdodson@...> wrote:
                 

                Harry Pollard wrote:
                Taxing the very rich over here is Obama's trump card. The Republicans are
                dead set against it and that will kill them next year. Most Americans think
                it would be fair to tax those who are doing well during the depression.
                Obama has been a poor President but the tax policy and the constant
                reiteration that the Republicans are holding up attempts to improve things
                could win for him.

                Ed Dodson here:
                And now we have the additional choice of voting for the Justice Party
                candidate, the former Mayor of Salt Lake City, Utah. What I wish we would
                hear from the Democrats is a call for a return to a progressive structure
                for the income tax that shifts the burden of taxation to unearned (i.e.,
                rent-derived) income flows AND elimination of the distinction in rates on
                so-called "capital gains" from the sale of assets.

                I pulled together a set of PowerPoint slides on the economic proposals of
                each of the Republican candidates running for the presidency, along with
                their economic advisers (if they have one). This proved to stimulate a
                vigorous discussion this week with my students. If anyone would like a copy
                get back to me.




                --
                ******************
                Henry George School
                of Social Science
                of Los Angeles
                Tujunga   CA   90243
                (818) 352-4141
                ******************

              • Harry Pollard
                You said, John: Harry s notion that there is no such as a capital gain really makes no sense. Prices for capital goods go up and down because of supply and
                Message 7 of 30 , Dec 1, 2011
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                  You said, John:

                  'Harry's notion that there is no such as a "capital" gain really makes no sense. Prices for capital goods go up and down because of supply and demand.'

                  Capital is, among other material products involved in production, the lathes, the hammers and saws involved in production. They wear out. After a days production, Capital in a factory is worth less than it was at the beginning of the day  by simple wear and tear.

                  Eventually it must be replaced. Part of production must be set aside for maintenance and replacement of worn-out Capital. As the Capital reduces in value by (say) $10,000, so $10,000 must be set aside for eventual replacement.

                  This leads to one of our (many) problems. Pressed by rack-rent, private factories and government agencies find the easiest way to make ends meet is not to set aside money for replacement. Hence, inadequate machines (as John mentioned in the UK) and poor roads and bridges in the government sector. (I think American engineers gave our infrastructure a "D". They were probably being kind.)

                  All this comes home to roost as we have discovered. It's almost unbelievable, but to get your potholes fixed in LA you enter a raffle. Whoever is drawn will get his pothole problems fixed. The rest are unlucky until perhaps the next drawing.

                  Capital may cost more in dollars because the dollar is sagging. There may be price mechanism hunting to satisfy supply and demand, but capital in the course of production - George's definition and mine, loses value as it is used. It doesn't gain.

                  Harry
                  \\\\\\\\\\\\\\\\

                  On Thu, Dec 1, 2011 at 7:31 AM, jdk_maryland_atty <jdkromkowski@...> wrote:
                   


                  > gain. On the contrary, capital depreciates as it's used. There is no such thing as a Capital gain.
                  >
                  > So, what does a capital gains tax hit? The answer, of course, is land value increases. The assets of the rich grow in value and suffer little taxation. Mase Gaffney, who is a full six weeks older than me and is obviously an elder statesman, thinks that these increases should be treated as income.
                  >

                  The problem is that "paper" increases in land or capital value aren't "income". Per the definition that the US Sup. Ct. has held for decades. Nor did "income" include unrealized market fluctuations in 1913. You must have a "realized" "gain" over which the would be taxpayer has "complete control." Market fluctuations are neither income, nor real losses, until you sell the asset. There have been some seriously flawed arguments based upon equivocal use of a particular word (which I'll not repeat here) and an attempt to use alimony/divorce law ideas inappropriately in the well-settled tax law area. There is also an erroneous argument about mark to maket taxation of certain year straddling futures contracts. That is simple a rule about "timing" - do you pay the tax (or take the loss) in this year or next year.

                  Harry's notion that there is no such as a "capital" gain really makes no sense. Prices for capital goods go up and down because of supply and demand. If you buy low and sell high, you have a capital gain. While stock prices reflect some of the ownership of land assets, it is really not clear to me how much is due to value of owned land.

                  There certainly though is Income from land for example when you sell high and have a gain (remember the "capital gains" tax is part of the Income tax.) But there are sadly exemptions, the promote the climb up the property ladder (with increasing debt). There is also income from Land whenever you lease real estate. Part of the "income" that the landlord gets is from renting the land/location and part is from leasing the structure (if there is one). It would not be complicated to separate the two components out and have different income tax rates for land income and capital income, just like we have different rates for wage income and "capital and land" income. When bank receives a mortgage payment some of that could be attributed to land income.

                  But in the US if you really want a national LVT, you have to do it as an ad valorem direct tax, which consequently must be apportioned among the States (meaning that each state has it's own rate to raise its per capita share.




                  --
                  ******************
                  Henry George School
                  of Social Science
                  of Los Angeles
                  Tujunga   CA   90243
                  ******************

                • jdk_maryland_atty
                  ... Fine rust never sleeps. But really - Hammers. I ve got about dozen of them, none of which I think I even bought. Whether 75 years old or 10 years old they
                  Message 8 of 30 , Dec 1, 2011
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                    --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:
                    >
                    > You said, John:
                    >
                    > 'Harry's notion that there is no such as a "capital" gain really makes no
                    > sense. Prices for capital goods go up and down because of supply and
                    > demand.'
                    >
                    > Capital is, among other material products involved in production, the
                    > lathes, the hammers and saws involved in production. They wear out.

                    Fine rust never sleeps. But really - Hammers. I've got about dozen of them, none of which I think I even bought. Whether 75 years old or 10 years old they all work about the same and are worth about the same.

                    But if for some reason, china stopped making hammers, the value of hammers would go up, whether they are 75 years old or 5 years old.

                    >
                    After a days production, Capital in a factory is worth less than it was at the beginning of the day by simple wear and tear.
                    >

                    My house built in 1929 is not worth less than the one across the street built in 1965. There are things like Home Depot and Lowes. I've only been married 23 years - the Mrs asks me to fix and paint and maintain stuff. Lathes seldom wear out, although the cutting tools do get dull and then they get sharpened. It's not a static system it's dynamic.

                    A lot of machines don't wear out they just get replaced because there is something faster that comes along.

                    How about a herd of cattle? (The origin of the word capital.) Certainly worth more at the end of the season than the beginning.

                    Seed. A single kernel of corn ends up being 600 kernels. Why is that not a "capital gain".

                    When we buy stock, we are buying ownership stake in the capital as well as the land owned by the company. Over time, there may be more stuff and/or more valuable stuff that makes up the company, even as some stuff wears out, new stuff gets bought. Stock prices over long term are not only the result of the rising value of the land that the company owns. Of course that can be part of it, sometimes even a big part, sometimes not.

                    But don't overstate the case because you feel bound by some crazy extension of the law of entropy.

                    There are also just lucky market timing windfalls of buying low and selling high. That is at least in part a capital gain.

                    I'm also tired of the the sagging dollar cry-baby stuff. I don't want to live in 1913. On the verge of WWI. Nor do I want my son to live in the 1960s. I got measles, mumps and rubella. He got vaccines, instead, with that sagging dollar.

                    How many of the sturdy bucks would it take in 1913 to buy your Internet connection. Nearly an infinite amount because in 1913 you'd have to invent and build the Internet before you could buy a connection.

                    > Capital may cost more in dollars because the dollar is sagging.
                  • Harry Pollard
                    When I put in hammer I wondered if you would remark on long life. However, I suppose industrial hammers would be heavily used and probably the handles would
                    Message 9 of 30 , Dec 2, 2011
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                      When I put in 'hammer' I wondered if you would remark on long life. However, I suppose industrial hammers would be heavily used and probably the handles would break. Anyway, it doesn't matter. I wonder if, ceteris paribus, people would pay as much for used hammer as they would for an identical new one.

                      Your house isn't capital - it's wealth. It depreciates over time as well, no matter how assiduously you work on it. You should know enough about value to know estimates of house-value don't mean a lot. Only a sale confirms a house value.

                      In the UK, I've worked lathes for a living as a tool and die maker and they do wear. Industrial use is very different from a lathe in your basement.

                      I remember in one factory, they had a newish lathe made in South Bend. The toolmakers practically queued up to use it rather than the older machines which were worn. In wartime you couldn't go down to the corner hardware store and get another. (Keeping machines working was a major task.)

                      Whether  the set aside is used to replace an old machine or get a faster one it has to come from production.

                      A herd of cattle is increasing in value as part of production. You presumably fatten them up, take care of them, bring in a veterinarian, and suchlike. Mason used ripening cheese and wine to indicate appreciation. Instead this too is simply production.

                      I remember that one spring in Canada eggs became short, but on the market came oil preserved eggs at a higher price but we could have a nice breakfast. Only problem was he (or they) didn't preserve enough and we ran short again. He stored them from a time when he couldn't sell them, to a time when he could. It's all part of production.

                      The three kinds of capital we teach in InterStudent are "production capital" (material products changing by direct labor as they move through the production process); "tool capital" (products, from lathes to buildings, that aid labor in working the production capital); and "stored capital" (products that will gain in value mostly by time rather than direct labor, such as wine or cheese).

                      But as for asset appreciation, it doesn't happen with Capital. I mentioned the sagging dollar to point out that this years capital may be valued at more dollars than last year but have no greater value. There was no need for you to rant about rubella and the rest.

                      Harry
                      \\\\\\\\\\\\\\\\ 



                      On Thu, Dec 1, 2011 at 1:30 PM, jdk_maryland_atty <jdkromkowski@...> wrote:
                       



                      --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:
                      >
                      > You said, John:
                      >
                      > 'Harry's notion that there is no such as a "capital" gain really makes no
                      > sense. Prices for capital goods go up and down because of supply and
                      > demand.'
                      >
                      > Capital is, among other material products involved in production, the
                      > lathes, the hammers and saws involved in production. They wear out.

                      Fine rust never sleeps. But really - Hammers. I've got about dozen of them, none of which I think I even bought. Whether 75 years old or 10 years old they all work about the same and are worth about the same.

                      But if for some reason, china stopped making hammers, the value of hammers would go up, whether they are 75 years old or 5 years old.

                      >
                      After a days production, Capital in a factory is worth less than it was at the beginning of the day by simple wear and tear.
                      >

                      My house built in 1929 is not worth less than the one across the street built in 1965. There are things like Home Depot and Lowes. I've only been married 23 years - the Mrs asks me to fix and paint and maintain stuff. Lathes seldom wear out, although the cutting tools do get dull and then they get sharpened. It's not a static system it's dynamic.

                      A lot of machines don't wear out they just get replaced because there is something faster that comes along.

                      How about a herd of cattle? (The origin of the word capital.) Certainly worth more at the end of the season than the beginning.

                      Seed. A single kernel of corn ends up being 600 kernels. Why is that not a "capital gain".

                      When we buy stock, we are buying ownership stake in the capital as well as the land owned by the company. Over time, there may be more stuff and/or more valuable stuff that makes up the company, even as some stuff wears out, new stuff gets bought. Stock prices over long term are not only the result of the rising value of the land that the company owns. Of course that can be part of it, sometimes even a big part, sometimes not.

                      But don't overstate the case because you feel bound by some crazy extension of the law of entropy.

                      There are also just lucky market timing windfalls of buying low and selling high. That is at least in part a capital gain.

                      I'm also tired of the the sagging dollar cry-baby stuff. I don't want to live in 1913. On the verge of WWI. Nor do I want my son to live in the 1960s. I got measles, mumps and rubella. He got vaccines, instead, with that sagging dollar.

                      How many of the sturdy bucks would it take in 1913 to buy your Internet connection. Nearly an infinite amount because in 1913 you'd have to invent and build the Internet before you could buy a connection.

                      > Capital may cost more in dollars because the dollar is sagging.




                      --
                      ******************
                      Henry George School
                      of Social Science
                      of Los Angeles
                      Tujunga   CA   90243
                      (818) 352-4141
                      ******************

                    • John
                      ... I tend to agree with Harry. Few CAPITAL items gain in value. Old Aston Martins do, but these are few and far between. Also an old Aston Martin is regarded
                      Message 10 of 30 , Dec 2, 2011
                      • 0 Attachment
                        --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:
                        >
                        > You said, John:
                        >
                        > 'Harry's notion that there is no such as a
                        > "capital" gain really makes no sense.
                        > Prices for capital goods go up and down
                        > because of supply and demand.'
                        >
                        > Capital is, among other material products
                        > involved in production, the
                        > lathes, the hammers and saws involved in
                        > production. They wear out.

                        I tend to agree with Harry. Few CAPITAL items gain in value. Old Aston Martins do, but these are few and far between. Also an old Aston Martin is regarded as piece of art by many. Park a silver DB5 on the road and crowd gathers around it.

                        Products of production:
                        1. LAND
                        2. CAPITAL
                        3. LABOUR

                        To charge CAPITAL GAINS on LAND is ludicrous from an economics point of view. It is LAND GAINS. "Capital Gains" is a misnomer.

                        In the UK if you have a second home, when it is sold it subject to Capital Gains. As the bricks on the land depreciate in value it is a Land Tax. As few have second homes the tax intake on this land tax is minimal. Most get around it somehow.

                        All this is indicative of the merging of LAND with CAPITAL when classical economics was played about with for vested interest reasons and neo-classical was created. I agree with the theory that neo-classical was created to snuff out the then popular movement by Henry George.
                      • jdk_maryland_atty
                        ... Ok my TV might not be capital, but having a place to live makes me a more productive worker. So I m going to call my house capital. The distinction
                        Message 11 of 30 , Dec 2, 2011
                        • 0 Attachment
                          > Your house isn't capital - it's wealth. It depreciates over time as well, no matter how assiduously you work on it. You should know enough about value to know estimates of house-value don't mean a lot.
                          >

                          Ok my TV might not be capital, but having a place to live makes me a more productive worker. So I'm going to call my house capital.

                          The distinction between wealth and capital is pretty arbitrary.

                          The important issue is to remember the difference between
                          labor (human exertion) which yields wages,
                          capital (man-made stuff) which yields interest, and
                          land (raw natural resources the chief of which is location on the earth) which yields rent.

                          Sometimes the wages for my exertion are zero (like last night when I was playing the bass at bar - especially when nobody but the drummer and I knew we were actually playing Miles Davis' All Blues - whole lot a labor for no wages.)

                          Sometimes the interest is zero (like using my computer to post to Land-Cafe)

                          >Only a sale confirms a house value.
                          >

                          Our house sold for double what we paid. Considering that I did not OWN the land (only owned a leasehold) and that I fixed stuff and had an air-conditioner and new heater put in, I'd say that my house appreciated. The assessors agreed over the years, too, They raise both the assessed improvement value and the assessed land value.

                          > In the UK, I've worked lathes for a living as a tool and die maker and they do wear. Industrial use is very different from a lathe in your basement.
                          I remember in one factory, they had a newish lathe made in South Bend. The toolmakers practically queued up to use it rather than the older machines which were worn. In wartime you couldn't go down to the corner hardware store and get another. (Keeping machines working was a major task.)
                          >

                          I didn't say that there was no wear and tear. (I presume you knew that I was born and raised in South Bend. My father worked summers as a machinist while getting his PhD, I remember my mom picking out the metal from his hair.) But to say that for example as the tax code purports that it completely depreciates in 7 years is ridiculous. And during the war (I am guessing) that even old machine went up in value because of high demand and low supply. I'd also say that the old machines were likely not "worn as much you think" but were never as precise as the newer machine built in South Bend.

                          > A herd of cattle is increasing in value as part of production. You
                          > presumably fatten them up, take care of them, bring in a
                          > veterinarian, and
                          > suchlike. Mason used ripening cheese and wine to indicate
                          > appreciation.
                          > Instead this too is simply production.

                          Part of production? For the vast majority of homeowners its all part of production, or at least feels that way. By the time I've finished painting every single room, my wife is ready for me to start all over.

                          I'll admit that all man-made things eventually wear out. Poor old, Ozymandias.

                          But you're just taking the concept of entropy too far. With no real necessary purpose.
                        • Harry Pollard
                          John, Your Aston Martin example struck a chord. The car is a collectible in an entirely different market from the normal car market. Umpteen years ago, I was
                          Message 12 of 30 , Dec 2, 2011
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                            John,

                            Your Aston Martin example struck a chord. The car is a collectible in an entirely different market from the normal car market. 

                            Umpteen years ago, I was having dinner with David Friedman  - Milton's son. We got into an argument about value and he destroyed me.

                            I decided I had better go back to the drawing board.

                            Then I saw a report of a collectible auction that stunned me.

                            A bidder bought a mint Rosalie beer can for $4,000. ( I think there are only six in existence.)

                            Before he left the room with his prize, someone offered him $10,000 for it. He refused.

                            What sort of market is this, I thought. It's going against all my ideas of sensible market values. From this incident, I developed a theory of the collectible market, and importantly, how the market for land becomes a collectible market.

                            People look at their collectible and attach to it an anticipated future value. Each time there is a value increase in the market, they look ahead to its anticipated value next month, or next year. So, they won't sell at the going market rate. They also try to keep their collectible in mint condition, perhaps wrapping it in plastic in the bedroom - or in other context - blacktopping a space for a car park rather than investing in something substantial that might reduce a prospective price.

                            So we can look at present land prices as they are generally calculated by economists. First they are not capitalized rent, but capitalized rack-rent - a value based on the monopoly value of land.

                            Then, this monopoly value is raised by the collector to his anticipated future value. If it changes hands to another speculator, the same procedure takes place. Again the value is pushed up above 'market' with no intention if using it.

                            (I'm reminded of the old joke of a lorry load of canned tuna that passed from hand to hand. The latest owner decided he fancied a bite of tuna and opened a can. The smell was awful, Another the same - and another, He called the previous owner telling him the tuna was bad. The reply "Those tuna aren't for eating, they are for buying and selling.")

                            In the same way a lot of land is not for using but for buying and selling as speculators calculate how much it will be worth next year. This is why I argue that calculation of economic rent are suspect. They are based on capitalized rack-rent (that would disappear with community rent collection) and collectible priced transfers.  

                            Incidentally, I checked the price of a Rosalie beer can a decade or two ago. It was $10,250. That bidder should have taken the $10,000!

                            Harry
                            \\\\\\\\\\\\\\\\\\\\\\\

                            On Fri, Dec 2, 2011 at 8:49 AM, John <burns-john@...> wrote:
                             

                            --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:
                            >
                            > You said, John:
                            >
                            > 'Harry's notion that there is no such as a
                            > "capital" gain really makes no sense.
                            > Prices for capital goods go up and down
                            > because of supply and demand.'
                            >
                            > Capital is, among other material products
                            > involved in production, the
                            > lathes, the hammers and saws involved in
                            > production. They wear out.

                            I tend to agree with Harry. Few CAPITAL items gain in value. Old Aston Martins do, but these are few and far between. Also an old Aston Martin is regarded as piece of art by many. Park a silver DB5 on the road and crowd gathers around it.

                            Products of production:
                            1. LAND
                            2. CAPITAL
                            3. LABOUR

                            To charge CAPITAL GAINS on LAND is ludicrous from an economics point of view. It is LAND GAINS. "Capital Gains" is a misnomer.

                            In the UK if you have a second home, when it is sold it subject to Capital Gains. As the bricks on the land depreciate in value it is a Land Tax. As few have second homes the tax intake on this land tax is minimal. Most get around it somehow.

                            All this is indicative of the merging of LAND with CAPITAL when classical economics was played about with for vested interest reasons and neo-classical was created. I agree with the theory that neo-classical was created to snuff out the then popular movement by Henry George.




                            --
                            ******************
                            Henry George School
                            of Social Science
                            of Los Angeles
                            Tujunga   CA   90243
                            (818) 352-4141
                            ******************

                          • Jock Coats
                            It seems to me that collectibles are attracting scarcity rent, rather than a consumer price . In that sense they are similar to land. In the sense that they
                            Message 13 of 30 , Dec 2, 2011
                            • 0 Attachment
                              It seems to me that collectibles are attracting scarcity rent, rather than a consumer "price".  In that sense they are similar to land.  In the sense that they are not necessary for life itself, unlike land, why should we worry?

                              Churchill did deal with paintings etc in his various People's Budget speeches so it has obviously been a long standing objection, a little like his poor widow who is still dragged out, old hag that she must now be, even by people who think they like the idea of LVT.

                              On 2 Dec 2011, at 23:30, Harry Pollard wrote:

                               

                              John,

                              Your Aston Martin example struck a chord. The car is a collectible in an entirely different market from the normal car market. 

                              Umpteen years ago, I was having dinner with David Friedman  - Milton's son. We got into an argument about value and he destroyed me.

                              I decided I had better go back to the drawing board.

                              Then I saw a report of a collectible auction that stunned me.

                              A bidder bought a mint Rosalie beer can for $4,000. ( I think there are only six in existence.)

                              Before he left the room with his prize, someone offered him $10,000 for it. He refused.

                              What sort of market is this, I thought. It's going against all my ideas of sensible market values. From this incident, I developed a theory of the collectible market, and importantly, how the market for land becomes a collectible market.

                              People look at their collectible and attach to it an anticipated future value. Each time there is a value increase in the market, they look ahead to its anticipated value next month, or next year. So, they won't sell at the going market rate. They also try to keep their collectible in mint condition, perhaps wrapping it in plastic in the bedroom - or in other context - blacktopping a space for a car park rather than investing in something substantial that might reduce a prospective price.

                              So we can look at present land prices as they are generally calculated by economists. First they are not capitalized rent, but capitalized rack-rent - a value based on the monopoly value of land.

                              Then, this monopoly value is raised by the collector to his anticipated future value. If it changes hands to another speculator, the same procedure takes place. Again the value is pushed up above 'market' with no intention if using it.

                              (I'm reminded of the old joke of a lorry load of canned tuna that passed from hand to hand. The latest owner decided he fancied a bite of tuna and opened a can. The smell was awful, Another the same - and another, He called the previous owner telling him the tuna was bad. The reply "Those tuna aren't for eating, they are for buying and selling.")

                              In the same way a lot of land is not for using but for buying and selling as speculators calculate how much it will be worth next year. This is why I argue that calculation of economic rent are suspect. They are based on capitalized rack-rent (that would disappear with community rent collection) and collectible priced transfers.  

                              Incidentally, I checked the price of a Rosalie beer can a decade or two ago. It was $10,250. That bidder should have taken the $10,000!

                              Harry
                              \\\\\\\\\\\\\\\\\\\\\\\

                              On Fri, Dec 2, 2011 at 8:49 AM, John <burns-john@...> wrote:
                               

                              --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:
                              >
                              > You said, John:
                              >
                              > 'Harry's notion that there is no such as a
                              > "capital" gain really makes no sense.
                              > Prices for capital goods go up and down
                              > because of supply and demand.'
                              >
                              > Capital is, among other material products
                              > involved in production, the
                              > lathes, the hammers and saws involved in
                              > production. They wear out.

                              I tend to agree with Harry. Few CAPITAL items gain in value. Old Aston Martins do, but these are few and far between. Also an old Aston Martin is regarded as piece of art by many. Park a silver DB5 on the road and crowd gathers around it.

                              Products of production:
                              1. LAND
                              2. CAPITAL
                              3. LABOUR

                              To charge CAPITAL GAINS on LAND is ludicrous from an economics point of view. It is LAND GAINS. "Capital Gains" is a misnomer.

                              In the UK if you have a second home, when it is sold it subject to Capital Gains. As the bricks on the land depreciate in value it is a Land Tax. As few have second homes the tax intake on this land tax is minimal. Most get around it somehow.

                              All this is indicative of the merging of LAND with CAPITAL when classical economics was played about with for vested interest reasons and neo-classical was created. I agree with the theory that neo-classical was created to snuff out the then popular movement by Henry George.




                              --
                              ******************
                              Henry George School
                              of Social Science
                              of Los Angeles
                              Tujunga   CA   90243
                              (818) 352-4141
                              ******************



                              --
                              Jock Coats
                              Warden's Flat 1e, J Block Morrell Hall, OXFORD, OX3 0FF
                              m: 07769 695767 skype:jock.coats?call 







                            • John
                              ... Jock, we should not be concerned, in except that people will use this scarcity collectable value to beat LVT with.
                              Message 14 of 30 , Dec 2, 2011
                              • 0 Attachment
                                --- In LandCafe@yahoogroups.com, Jock Coats <jock.coats@...> wrote:
                                >
                                > It seems to me that collectibles are
                                > attracting scarcity rent, rather than
                                > a consumer "price". In that sense they
                                > are similar to land. In the sense that
                                > they are not necessary for life itself,
                                > unlike land, why should we worry?

                                Jock, we should not be concerned, in except that people will use this scarcity collectable value to beat LVT with.
                              • Harry Pollard
                                No-one is worrying, Jock. Its just that land often acts like a collectible so we should understand the situation. Rent is a return to land - not to scarcity .
                                Message 15 of 30 , Dec 2, 2011
                                • 0 Attachment
                                  No-one is worrying, Jock.

                                  Its just that land often acts like a collectible so we should understand the situation.

                                  Rent is a return to land - not to 'scarcity'. The amount demanded by a collector is a speculative price I would think. It is the amount he wants for his collectible and is likely to be somewhat more than an existing sale of a similar collectible.

                                  Harry
                                  \\\\\\\

                                  On Fri, Dec 2, 2011 at 3:44 PM, Jock Coats <jock.coats@...> wrote:
                                   

                                  It seems to me that collectibles are attracting scarcity rent, rather than a consumer "price".  In that sense they are similar to land.  In the sense that they are not necessary for life itself, unlike land, why should we worry?


                                  Churchill did deal with paintings etc in his various People's Budget speeches so it has obviously been a long standing objection, a little like his poor widow who is still dragged out, old hag that she must now be, even by people who think they like the idea of LVT.

                                  On 2 Dec 2011, at 23:30, Harry Pollard wrote:

                                   

                                  John,

                                  Your Aston Martin example struck a chord. The car is a collectible in an entirely different market from the normal car market. 

                                  Umpteen years ago, I was having dinner with David Friedman  - Milton's son. We got into an argument about value and he destroyed me.

                                  I decided I had better go back to the drawing board.

                                  Then I saw a report of a collectible auction that stunned me.

                                  A bidder bought a mint Rosalie beer can for $4,000. ( I think there are only six in existence.)

                                  Before he left the room with his prize, someone offered him $10,000 for it. He refused.

                                  What sort of market is this, I thought. It's going against all my ideas of sensible market values. From this incident, I developed a theory of the collectible market, and importantly, how the market for land becomes a collectible market.

                                  People look at their collectible and attach to it an anticipated future value. Each time there is a value increase in the market, they look ahead to its anticipated value next month, or next year. So, they won't sell at the going market rate. They also try to keep their collectible in mint condition, perhaps wrapping it in plastic in the bedroom - or in other context - blacktopping a space for a car park rather than investing in something substantial that might reduce a prospective price.

                                  So we can look at present land prices as they are generally calculated by economists. First they are not capitalized rent, but capitalized rack-rent - a value based on the monopoly value of land.

                                  Then, this monopoly value is raised by the collector to his anticipated future value. If it changes hands to another speculator, the same procedure takes place. Again the value is pushed up above 'market' with no intention if using it.

                                  (I'm reminded of the old joke of a lorry load of canned tuna that passed from hand to hand. The latest owner decided he fancied a bite of tuna and opened a can. The smell was awful, Another the same - and another, He called the previous owner telling him the tuna was bad. The reply "Those tuna aren't for eating, they are for buying and selling.")

                                  In the same way a lot of land is not for using but for buying and selling as speculators calculate how much it will be worth next year. This is why I argue that calculation of economic rent are suspect. They are based on capitalized rack-rent (that would disappear with community rent collection) and collectible priced transfers.  

                                  Incidentally, I checked the price of a Rosalie beer can a decade or two ago. It was $10,250. That bidder should have taken the $10,000!

                                  Harry
                                  \\\\\\\\\\\\\\\\\\\\\\\

                                  On Fri, Dec 2, 2011 at 8:49 AM, John <burns-john@...> wrote:
                                   

                                  --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:
                                  >
                                  > You said, John:
                                  >
                                  > 'Harry's notion that there is no such as a
                                  > "capital" gain really makes no sense.
                                  > Prices for capital goods go up and down
                                  > because of supply and demand.'
                                  >
                                  > Capital is, among other material products
                                  > involved in production, the
                                  > lathes, the hammers and saws involved in
                                  > production. They wear out.

                                  I tend to agree with Harry. Few CAPITAL items gain in value. Old Aston Martins do, but these are few and far between. Also an old Aston Martin is regarded as piece of art by many. Park a silver DB5 on the road and crowd gathers around it.

                                  Products of production:
                                  1. LAND
                                  2. CAPITAL
                                  3. LABOUR

                                  To charge CAPITAL GAINS on LAND is ludicrous from an economics point of view. It is LAND GAINS. "Capital Gains" is a misnomer.

                                  In the UK if you have a second home, when it is sold it subject to Capital Gains. As the bricks on the land depreciate in value it is a Land Tax. As few have second homes the tax intake on this land tax is minimal. Most get around it somehow.

                                  All this is indicative of the merging of LAND with CAPITAL when classical economics was played about with for vested interest reasons and neo-classical was created. I agree with the theory that neo-classical was created to snuff out the then popular movement by Henry George.




                                  --
                                  ******************
                                  Henry George School
                                  of Social Science
                                  of Los Angeles
                                  Tujunga   CA   90243
                                  ******************



                                  --
                                  Jock Coats
                                  Warden's Flat 1e, J Block Morrell Hall, OXFORD, OX3 0FF
                                  m: 07769 695767 skype:jock.coats?call 










                                  --
                                  ******************
                                  Henry George School
                                  of Social Science
                                  of Los Angeles
                                  Tujunga   CA   90243
                                  (818) 352-4141
                                  ******************

                                • David Reed
                                  @Harry Rent is a return to the scarcity of desirable land. We could dispense with the term economic rent and use scarcity value instead with no loss
                                  Message 16 of 30 , Dec 3, 2011
                                  • 0 Attachment
                                    @Harry
                                     
                                    Rent is a return to the scarcity of  desirable land.
                                     
                                    We could dispense with the term "economic rent" and use "scarcity value" instead with no loss whatsoever -and the gain would be that ordinary people would understand us.
                                     
                                    The UK is facing ten years of Conservative/Liberal imposed "austerity"(+ unaffordable house prices) and still the Georgists quibble on. 
                                  • John
                                    ... Harry, There are two vacant sites in Central London which are WW2 bomb sites. Never been rebuilt upon and used as surface car parking. In Googe St this
                                    Message 17 of 30 , Dec 3, 2011
                                    • 0 Attachment
                                      --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:
                                      >
                                      > No-one is worrying, Jock.
                                      >
                                      > Its just that land often acts like a
                                      > collectible so we should understand
                                      > the situation.
                                      >
                                      > Rent is a return to land - not to 'scarcity'.
                                      > The amount demanded by a collector is a
                                      > speculative price I would think. It is the
                                      > amount he wants for his collectible and is
                                      > likely to be somewhat more than an existing sale
                                      > of a similar collectible.

                                      Harry,

                                      There are two vacant sites in Central London which are WW2 bomb sites. Never been rebuilt upon and used as surface car parking.

                                      In Googe St this appears to be a WW2 site with only the ground floor used. The buildings are still shored up. The land must be worth well north of £1 million. Why doesn't the owner rebuild the top floors and get more rent?

                                      http://www.skyscrapercity.com/showthread.php?t=1452137

                                      I think it a disgrace that this is allowed to occur, even without any LVT. It is clear those buildings are not used to full potential. The land owners are sitting on the increased land values for sure. There are similar sites in Manhattan. Single floors with MacDonalds on them, who are now a land company.

                                      Much of these sites are surface car parking that brings in little revenue at all to the potential of the land.

                                      Near me two adjacent shops were left empty for 25-30 years. The community suffered as these retail outlet sites were taken from them.

                                      Many landowners must use these land sites as collateral to gain loans for other projects. The Land is kept as it is. The community suffers as these sites are not used to their full potential.
                                    • Harry Pollard
                                      Absolutely not. And the quibbles must continue while there is uncertainty about basic ideas. If we ever get to a point where we are beginning to make an
                                      Message 18 of 30 , Dec 3, 2011
                                      • 0 Attachment
                                        Absolutely not.

                                        And the "quibbles" must continue while there is uncertainty about basic ideas. If we ever get to a point where we are beginning to make an impression, we'll be shot down by opponents attacking our uncertainties. At the moment they don't care as we are relatively ineffectual.

                                        You'll notice this in the American Republican primary contest. As soon a someone becomes a creditable front-runner, he is torn to pieces - as happened with Cain. Now Gingrich is ahead the  vultures are pouncing (if vultures pounce).

                                        We had better get our act together for effectiveness when we succeed in becoming players.

                                        When Ed Dodson posts my piece on Rent on the School of Cooperative Individualism site, you'll see a description of different kinds of "rents" - and some that aren't. Incidentally, if anyone still doesn't know about Ed's superlative website, Google "School of Cooperative Individualism" and be prepared to enjoy a wealth of information about George and Georgists (and Rent).

                                        I should say that land should perhaps refer to a land location rather than to natural resources. Sooner or later in my courses I will change the economic meaning of land to location, or simply use location rather than land. 

                                        For this piece we'll stay with urban economic Rents.

                                        When people gather together rents happen. People don't intend to create these values, but they attach to locations. In a city with reasonable infrastructure that allows people to move freely, the easy access to locations will raise their rents.

                                        I'm sure you know that rent is a differential value based on locations on which there us no Rent. For example, the advantage that community presence and access may provide to a location is measured from locations that can be had for nothing - as it's defined 'from the best available rent-free land'. 

                                        That's the classical definition of Rent and that's what would be collected in a Georgist economy. 

                                        However reality intrudes.

                                        For all practical purposes there is no "best available rent-free land.". Pretty useless land is held in the hope it might become worthwhile some day.

                                        Classical Rent is predicated on free market values. These we don't have. Instead, we have a monopoly market in which price mechanism control can't occur. The price mechanism reacts to a price increase by stimulating production and movement to the market bringing down the price. Land cannot be produced and cannot be moved so when location Rents increase, the monopoly market cannot bring them down. So, they keep going up until they hit a ceiling. This ceiling, which I call rack-rent, is the highest amount that can be exacted from a tenant while maintaining production. This monopoly exaction comes from wages and the General Level - George's description of those wage-earners at the bottom of the heap - face subsistence level wages.

                                        This drain from production places an economy always on the edge of disaster. It can survive so long as the economy advances. Inflation can help to keep things going, other palliatives may help a little. But then comes the depression - beg pardon, recession. This occurs when something triggers this normally unstable economy into disaster.

                                        (This is why there are so many "causes of depression". These are triggers. The cause of the slump is economic instability caused by the rack-rent drain. Anything may send it over the edge.)
                                         
                                        However, this is not because of land scarcity. There is plenty of land. According to Lindy Davies, there are 33,142 vacant lots in the five boroughs of New York City. There may be hundreds of thousands of under-improved lots containing structures that are well past their best and should be replaced. However, they won't be while rack-rent (or its consequent price) remains high enough to create the hope of a killing land sale. 

                                        So, into this situation we legislate a full collection of Rent - not rack-rent.

                                        It immediately becomes difficult or impossible to hold vacant land out of use and difficult or impossible to maintain the slum you may have on valuable land. You build, improve, or you dump the unused land. With thousands of sites coming on the market, Rents and Prices will fall. In fact, it is likely that sale-prices will fall to nothing. If you want to build, you will only pay rent (not rack-rent). As rent is a measure of the advantage given a site by the surrounding community, you will pay no more than you get. It's a zero sum proposition.

                                        Lindy also described a property, a small block away from the Wall St. occupiers (133 Greenwich St.), which sold last year for $19.1 million or $3,208 a square foot. Lindy points out that nothing much has happened there for quite some time.

                                        The annual property tax bill is $189,839 which seems a lot , but the value of the site probably rises faster than that every year - even in today's economic mess. If say a Rent amount equal to 4%  was levied on that lot - that is $784,000 - would the owners leave it unused for long?

                                        With competition from vacant lots all over the city, would the owners dare to waste time getting a skyscraper, or some other improvement built?  

                                        With large amounts of vacant land available "best available rent-free land" wages would rise. With the obstacle of speculative land holdings removed production would soar.

                                        So now you know why I say "Better to collect Rent and throw it in the sea than not collect it at all!" 

                                        Harry
                                        \\\\\\\\\\\\\\\\\\

                                        On Sat, Dec 3, 2011 at 1:26 AM, David Reed <dbcreed@...> wrote:
                                         

                                        @Harry
                                         
                                        Rent is a return to the scarcity of  desirable land.
                                         
                                        We could dispense with the term "economic rent" and use "scarcity value" instead with no loss whatsoever -and the gain would be that ordinary people would understand us.
                                         
                                        The UK is facing ten years of Conservative/Liberal imposed "austerity"(+ unaffordable house prices) and still the Georgists quibble on. 




                                        --
                                        ******************
                                        Henry George School
                                        of Social Science
                                        of Los Angeles
                                        Tujunga   CA   90243
                                        ******************

                                      • roy_langston1
                                        ... I m not in the hamburger business. I m in the real estate business. -- McDonalds founder Ray Kroc -- Roy Langston
                                        Message 19 of 30 , Dec 3, 2011
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                                          --- In LandCafe@yahoogroups.com, "John"
                                          <burns-john@...> wrote:

                                          > The land owners are sitting on the increased
                                          > land values for sure. There are similar sites
                                          > in Manhattan. Single floors with MacDonalds
                                          > on them, who are now a land company.

                                          "I'm not in the hamburger business. I'm in the
                                          real estate business."
                                          -- McDonalds founder Ray Kroc

                                          -- Roy Langston
                                        • Harry Pollard
                                          John, The old name for these surface car parking sites is taxpayers . They bring in enough money to pay small tax levies and allow the site to be held from
                                          Message 20 of 30 , Dec 4, 2011
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                                            John,

                                            The old name for these "surface car parking" sites is 'taxpayers'.

                                            They bring in enough money to pay small tax levies and allow the site to be held from use for ever!

                                            Harry
                                            \\\\\\\\\\\\\\\\\\\\\\

                                            On Sat, Dec 3, 2011 at 1:31 AM, John <burns-john@...> wrote:
                                             


                                            --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:
                                            >
                                            > No-one is worrying, Jock.
                                            >
                                            > Its just that land often acts like a
                                            > collectible so we should understand
                                            > the situation.
                                            >
                                            > Rent is a return to land - not to 'scarcity'.
                                            > The amount demanded by a collector is a
                                            > speculative price I would think. It is the
                                            > amount he wants for his collectible and is
                                            > likely to be somewhat more than an existing sale
                                            > of a similar collectible.

                                            Harry,

                                            There are two vacant sites in Central London which are WW2 bomb sites. Never been rebuilt upon and used as surface car parking.

                                            In Googe St this appears to be a WW2 site with only the ground floor used. The buildings are still shored up. The land must be worth well north of £1 million. Why doesn't the owner rebuild the top floors and get more rent?

                                            http://www.skyscrapercity.com/showthread.php?t=1452137

                                            I think it a disgrace that this is allowed to occur, even without any LVT. It is clear those buildings are not used to full potential. The land owners are sitting on the increased land values for sure. There are similar sites in Manhattan. Single floors with MacDonalds on them, who are now a land company.

                                            Much of these sites are surface car parking that brings in little revenue at all to the potential of the land.

                                            Near me two adjacent shops were left empty for 25-30 years. The community suffered as these retail outlet sites were taken from them.

                                            Many landowners must use these land sites as collateral to gain loans for other projects. The Land is kept as it is. The community suffers as these sites are not used to their full potential.




                                            --
                                            ******************
                                            Henry George School
                                            of Social Science
                                            of Los Angeles
                                            Tujunga   CA   90243
                                            (818) 352-4141
                                            ******************

                                          • Scott Bergeson
                                            Quoting Harry Pollard on Sun, 4 Dec 2011 14:19:37 -0800: ___Harry___ John, The old name for these surface car parking sites is taxpayers . They bring in
                                            Message 21 of 30 , Dec 4, 2011
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                                              Quoting Harry Pollard on Sun, 4 Dec 2011 14:19:37 -0800:

                                              ___Harry___
                                              John,

                                              The old name for these "surface car parking" sites is 'taxpayers'.

                                              They bring in enough money to pay small tax levies
                                              and allow the site to be held from use for ever!
                                              -----

                                              Technically, "tax payers". A taxpayer files a tax
                                              return, signed under penalties of perjury. Somehow, I
                                              doubt a surface parking lot (the land parcel, nor the
                                              paving, paint, signage, tollbooth, chains and walls,
                                              etc.), nor even a parking structure, does that.
                                            • Harry Pollard
                                              So, Scott, old lad, it has more than one meaning. Harry ... -- ******************** *Henry George School* *of Social Science* *of Los
                                              Message 22 of 30 , Dec 5, 2011
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                                                So, Scott, old lad, it has more than one meaning.
                                                Harry
                                                \\\\\\\\\\\\\\\\\\\\\

                                                On Sun, Dec 4, 2011 at 2:35 PM, Scott Bergeson <scottb@...> wrote:
                                                 

                                                Quoting Harry Pollard on Sun, 4 Dec 2011 14:19:37 -0800:

                                                ___Harry___
                                                John,

                                                The old name for these "surface car parking" sites is 'taxpayers'.

                                                They bring in enough money to pay small tax levies
                                                and allow the site to be held from use for ever!
                                                -----

                                                Technically, "tax payers". A taxpayer files a tax
                                                return, signed under penalties of perjury. Somehow, I
                                                doubt a surface parking lot (the land parcel, nor the
                                                paving, paint, signage, tollbooth, chains and walls,
                                                etc.), nor even a parking structure, does that.




                                                --
                                                ******************
                                                Henry George School
                                                of Social Science
                                                of Los Angeles
                                                Tujunga   CA   90243
                                                (818) 352-4141
                                                ******************

                                              • Scott Bergeson
                                                Quoting Harry Pollard on Mon, 5 Dec 2011 10:09:31 -0800: ___Harry___ The old name for these surface car parking sites is taxpayers . They bring in enough
                                                Message 23 of 30 , Dec 5, 2011
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                                                  Quoting Harry Pollard on Mon, 5 Dec 2011 10:09:31 -0800:

                                                  ___Harry___
                                                  The old name for these "surface car parking" sites is 'taxpayers'.

                                                  They bring in enough money to pay small tax levies
                                                  and allow the site to be held from use for ever!

                                                  ___Scott___
                                                  Technically, "tax payers". A taxpayer files a tax
                                                  return, signed under penalties of perjury. Somehow, I
                                                  doubt a surface parking lot (the land parcel, nor the
                                                  paving, paint, signage, tollbooth, chains and walls,
                                                  etc.), nor even a parking structure, does that.

                                                  ___Harry___
                                                  So, Scott, old lad, it has more than one meaning.
                                                  -----

                                                  May differ elsewhere, but in the United States
                                                  (Inc.), the space makes the difference in meaning.
                                                • Harry Pollard
                                                  Finally got to this, John. The distinction between Wealth and Capital is not arbitrary. It is precise. Capital is the name given to man-made goods that are
                                                  Message 24 of 30 , Dec 15, 2011
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                                                    Finally got to this, John.

                                                    The distinction between Wealth and Capital is not arbitrary. It is precise. Capital is the name given to man-made goods that are part of the production process. Normally, they remain capital until they are in the hands of the consumer, whereupon production is finished and they are called Wealth.

                                                    This applies to the pound of flour you get at the supermarket or the house you live in. Each is wealth and is used/consumed.

                                                    You can call it anything you like but the exactly defined concepts labelled by George are the reason why his economics is so scientifically accurate and why it explains what's happening when the neo-classicals can't.

                                                    When it doesn't matter you can use words any way you like, but should it become an issue, it is wise to know exactly what you are talking about - even if you use colloquialisms to make your point.

                                                    Using the IRS as a source is pretty hopeless. Their purpose is to extract money and their definitions are slanted to that purpose.

                                                    If your exertion didn't produce anything you are not labor.

                                                    Your computer is not capital. It's in the hands of the consumer and is wealth - with no interest.

                                                    I suggest you read Progress and Poverty.

                                                    Harry
                                                    \\\\\\\\\\\\\\\\\\

                                                    On Fri, Dec 2, 2011 at 9:35 AM, jdk_maryland_atty <jdkromkowski@...> wrote:
                                                     

                                                    > Your house isn't capital - it's wealth. It depreciates over time as well, no matter how assiduously you work on it. You should know enough about value to know estimates of house-value don't mean a lot.
                                                    >

                                                    Ok my TV might not be capital, but having a place to live makes me a more productive worker. So I'm going to call my house capital.

                                                    The distinction between wealth and capital is pretty arbitrary.

                                                    The important issue is to remember the difference between
                                                    labor (human exertion) which yields wages,
                                                    capital (man-made stuff) which yields interest, and
                                                    land (raw natural resources the chief of which is location on the earth) which yields rent.

                                                    Sometimes the wages for my exertion are zero (like last night when I was playing the bass at bar - especially when nobody but the drummer and I knew we were actually playing Miles Davis' All Blues - whole lot a labor for no wages.)

                                                    Sometimes the interest is zero (like using my computer to post to Land-Cafe)

                                                    >Only a sale confirms a house value.
                                                    >

                                                    Our house sold for double what we paid. Considering that I did not OWN the land (only owned a leasehold) and that I fixed stuff and had an air-conditioner and new heater put in, I'd say that my house appreciated. The assessors agreed over the years, too, They raise both the assessed improvement value and the assessed land value.

                                                    > In the UK, I've worked lathes for a living as a tool and die maker and they do wear. Industrial use is very different from a lathe in your basement.
                                                    I remember in one factory, they had a newish lathe made in South Bend. The toolmakers practically queued up to use it rather than the older machines which were worn. In wartime you couldn't go down to the corner hardware store and get another. (Keeping machines working was a major task.)
                                                    >

                                                    I didn't say that there was no wear and tear. (I presume you knew that I was born and raised in South Bend. My father worked summers as a machinist while getting his PhD, I remember my mom picking out the metal from his hair.) But to say that for example as the tax code purports that it completely depreciates in 7 years is ridiculous. And during the war (I am guessing) that even old machine went up in value because of high demand and low supply. I'd also say that the old machines were likely not "worn as much you think" but were never as precise as the newer machine built in South Bend.

                                                    > A herd of cattle is increasing in value as part of production. You
                                                    > presumably fatten them up, take care of them, bring in a
                                                    > veterinarian, and
                                                    > suchlike. Mason used ripening cheese and wine to indicate
                                                    > appreciation.
                                                    > Instead this too is simply production.

                                                    Part of production? For the vast majority of homeowners its all part of production, or at least feels that way. By the time I've finished painting every single room, my wife is ready for me to start all over.

                                                    I'll admit that all man-made things eventually wear out. Poor old, Ozymandias.

                                                    But you're just taking the concept of entropy too far. With no real necessary purpose.




                                                    --
                                                    ******************
                                                    Henry George School
                                                    of Social Science
                                                    of Los Angeles
                                                    Tujunga   CA   90243
                                                    ******************

                                                  • jdk_maryland_atty
                                                    You write that my computer(s) is (are) not capital. That is just ridiculous. Without it, running my law office would be much less efficient. Now, perhaps your
                                                    Message 25 of 30 , Dec 15, 2011
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                                                      You write that my computer(s) is (are) not capital. That is just ridiculous. Without it, running my law office would be much less efficient.

                                                      Now, perhaps your assertion is that my work as a attorney is not labor. But it is, even when I am not producing "paper with ink on it" but just arguing in court, and this would be true even if I were not representing manufacturers and thus part of the thing making chain.

                                                      The only distinction that matters is that we understand the difference between man-made things (capital), nature (the chief of which we call land - or location in spacetime) and human exertion (labor).

                                                      As to reading P&P, I quoted from it! in earlier posts. George's primary objective in the definitions was to avoid first error: that capital pays labor, and second error: that wealth includes land. That capital, by George, is wealth used to aid labor creates a gray area which is primarily a distraction, to the real purpose of the definitions.

                                                      JDK
                                                    • Harry Pollard
                                                      If your computers are engaged in the production of wealth (that is material products with an exchange value) then they are capital. If they are used to send
                                                      Message 26 of 30 , Dec 15, 2011
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                                                        If your computers are engaged in the production of wealth (that is material products with an exchange value) then they are capital. If they are used to send posts to LandCafe, they are not. If they do both, then they may be both wealth and capital depending on their use.

                                                        No problem and perfectly clear.

                                                        The definitions are precise. Whether something is in one or the other classification depends on the something not on the defined concepts.

                                                        Meantime the massive production facilities across the country producing wealth are capital and are not a "gray area" and are far more important to economics than a computer in a lawyers office.

                                                        You had better get capital straight, for a major attack against us is the contention that Land is Capital.

                                                        Harry
                                                        \\\\\\\\\\\\\\\\\

                                                        On Thu, Dec 15, 2011 at 11:19 AM, jdk_maryland_atty <jdkromkowski@...> wrote:
                                                         

                                                        You write that my computer(s) is (are) not capital. That is just ridiculous. Without it, running my law office would be much less efficient.

                                                        Now, perhaps your assertion is that my work as a attorney is not labor. But it is, even when I am not producing "paper with ink on it" but just arguing in court, and this would be true even if I were not representing manufacturers and thus part of the thing making chain.

                                                        The only distinction that matters is that we understand the difference between man-made things (capital), nature (the chief of which we call land - or location in spacetime) and human exertion (labor).

                                                        As to reading P&P, I quoted from it! in earlier posts. George's primary objective in the definitions was to avoid first error: that capital pays labor, and second error: that wealth includes land. That capital, by George, is wealth used to aid labor creates a gray area which is primarily a distraction, to the real purpose of the definitions.

                                                        JDK




                                                        --
                                                        ******************
                                                        Henry George School
                                                        of Social Science
                                                        of Los Angeles
                                                        Tujunga   CA   90243
                                                        (818) 352-4141
                                                        ******************

                                                      • John
                                                        ... Here is the part of TV show: http://www.youtube.com/watch?feature=endscreen&NR=1&v=Bj_F0JzUk9I
                                                        Message 27 of 30 , Dec 18, 2011
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                                                          --- In LandCafe@yahoogroups.com, "John" <burns-john@...> wrote:
                                                          >
                                                          > TAXES
                                                          >
                                                          > Just saw on TV...
                                                          > Taxes last year in the UK:
                                                          >
                                                          > Total raised by HMG - £549 bn
                                                          >
                                                          > These raised:
                                                          > Income Tax - 152 bn
                                                          > National Insurance - 97 bn
                                                          > VAT - 86 bn
                                                          > Corporation - Tax 43 bn
                                                          > Council Tax - 36 bn
                                                          >
                                                          > Income Tax was initially temporary for only the wealthy paying 10% of their earnings - for the Napoleonic wars, 1799. Most is raised via Income Tax.
                                                          >
                                                          > National Insurance does not pay exclusively for Health & pensions any longer. It is just tax for general use and goes into the same tax koffers as the rest.
                                                          >
                                                          > Thatcher in 1988 - top rates was slashed for the rich. The only budget speech where the Commons sitting suspended because of unruly behavior.
                                                          >
                                                          > Only 1% of the population earn over £100,000 per ann.
                                                          > 0.6% of pop earn less than £10,000 per ann.
                                                          > Top 10% of earners pay 90% of the tax.
                                                          > Richest 1% pay 27% of the tax.
                                                          >
                                                          > BUT! the rich tend to avoid taxes, while PAYE cannot dodge tax. This makes the figures untrue. Many of the rich complicate their affairs to avoid paying tax and pay less than average earners. Taxes are voluntary for the rich as they can easily avoid tax - operate from off-shore.
                                                          >
                                                          > ex Tory finance man Lawson, says their is an economic rationale for a "property tax", but political suicide. Well he is Tory. People do not like to pay tax on something they have already bought says David Laws of the LibDems. This was the nearest they came to LVT.
                                                          >
                                                          > "People do not like to pay tax on something they have already bought". LVT is reclaiming economic growth created community activity. Not mentioned. I expected the LibDem man to be better than that, but I suppose he never edited the TV programme.
                                                          >


                                                          Here is the part of TV show:
                                                          http://www.youtube.com/watch?feature=endscreen&NR=1&v=Bj_F0JzUk9I
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