Re: Misc taxation Gesell & Johansen
- --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:
>Which is a good thing ofcourse. But you make an important point; that any political sign of imposing such a tax may work as the tax itself, and make prices take the hit immediately. So we are left with the puzzle of the underwater debt burden, both on the mortgagee and on the creditor, and I'm not sure I agree that the only ones who would be in such a situation would be gamblers. I'm all for some Jubilee action in principle, but the uncertainty in such an even isn't going to make it an easy sell.
> The assumption is that LVT would arrive suddenly, taking everyone by
> surprise. In fact, this is hardly likely to be the case.
> Let's assume a scenario in which we have a group of Georgists in the State
> Assembly (or perhaps in Parliament in Britain). They are active but not
> much of a political alternative and they make hardly a splash.
> Then, perhaps forced by economic circumstance, more legislators see the
> light and in the next election the 80 strong California Assembly contains
> 20 who favor appropriate legislation and would vote for it - perhaps
> replacing the Sales Tax which has reached 12%. California land investment
> companies take note but it doesn't make them change policies much - but
> they are concerned .
> Several more elections and there are now 38 Georgists in the Assembly. This
> is now getting serious and there is a movement among the land companies to
> begin a withdrawal from investment in California. Land prices sag in
> People who would have accepted a 30 year loan are now little interested as
> they await expected Georgist policies. Land prices are much reduced making
> start-ups easier and safer. The economy booms.
> Speculative land purchases have ended long before any Rent is collected.
So on the RPE (to RL): As far as I understand it it would be a declining exemption based on time before tax-shift the mortgage was taken up?
I discussed this with someone a while ago, and came up with a rough idea in similar terms: making the mortgage made pre-collapse a claim on the LVT itself, with a dollar for dollar credit from LVT on whatever interest and base payment made on the property until it's paid off. I'm sure there's a host of problems with it, off my head I immediately believe there will need to be an interest rate cap. Most likely the LVT would be smaller than the repayments in the start, and then LVT payments would go over repayments as assessments go up, this would mean that the tax-shift could not be done immediately for fiscal reasons. Maybe there could also be some kind of choice between a standard exemption (UIE or otherwise) and a mortgage exemption, whichever is higher, so the other guys without the mortgage would feel they were being treated nice as well.
- --- In LandCafe@yahoogroups.com, Scott Bergeson <scottb@...> wrote:
>Sorry for the late response. What do you mean by collateral then? Land/buildings can be handed over to the lender as well, can't it? Both loans secured on a physical object that can redeem the debt by reposession, and personal debts, should be entirely legal. I'm not sure if you mean that any specific institutional aspect of mortgage collateral should be abolished, or the idea, which is kind of the basis of risk-taking and economic growth IMO. If anything, the american model is better than what I know as mortgages. AFAIU you can hand over your property and "walk away". No such thing exists here. Even if you hand back the property, you are personally liable for the redemption of the debt, and a creditor sale of a property (moveable objects as well), can only be done through the courts.
> Quoting k_r_johansen on Thu, 25 Oct 2012 20:45:37 -0000:
> Interesting concept. In most cases, owners servicing mortgages would just
> use their UIEs as an offset to the LVT and continue making the payments.
> If we are talking about a straight swap from income tax to
> LVT, most people would theoretically still have the ability to
> pay. The problem is, and I admit I'm looking at this from the
> Bankster's side, that the collateral just isn't there any more
> (assuming capital values do fall, which I believe they will),
> and the change in risk has implications. Imagine that the country
> suddenly changed systems, and (by the figures I gave), a debt load
> of somewhere around 50% of GDP changed from being collateralized
> to more or less personal loans, but at an interest of 4%.
> Govt. would have to step in as a guarantee in either scheme.
> Abolish collateral. Even more than land privilege, that
> bankster concept keeps people enslaved. If it isn't
> outright security; i.e., something that can be handed over
> to the lender, thus entirely discharging the debt; the
> debt is unconscionable, and ought to be nullified outright.
> Obviously, this also requires concomitant abolition of
> Glass-Steagall (FDIC). Write down all deposits in any given
> institution proportionate to nullification of its assets.