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Re: [LandCafe] Re: LVT to be debated in Parliament?

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  • JDKromkowski
    Part of the issue of lack of lvt talk at federal level in the US is our constitution requires that a land tax must be apportioned among the states . This is
    Message 1 of 28 , Nov 12, 2012
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      Part of the issue of lack of lvt talk at federal level in the US is our constitution requires that a land tax must be "apportioned among the states".  This is really not that complicated BUT there is no institutional memory of exactly how to do this, because it hasn't been done in like 175 years.  

      The last lvt bill was introduced in 1935 by a PA rep from Pittsburgh, moritz.  His bill was a tax on all land valued more than 3000. Never made it out of committee. It is pretty clear from the language that even he didn't understand how to write an apportioned tax bill.  He was already a generation beyond George's son who was in congress and did probably understand how an apportioned land tax would work, but he along with progressives thought the 16th amendment would broaden the income tax (which prior thereto only applied to wages - not interest, divdends, and rent because those were considered incidences of property ownership and thus need to be apportioned) sufficient to get at unearned rent and the wealthy.

      The second is problem is that in the 60s with guys like romney's father and culminating in prop 13  created this whole anti property tax mantra that it hurt the middle class home owner and was not progressive.  And dems bought into this idea and didn't want to be seen as pro any form of property tax.  The history is longer and more nuanced but - in a nutshell.

      Jdk

      Sent from my iPad

      On Nov 11, 2012, at 7:29 PM, "walto" <calhorn@...> wrote:

       



      --- In LandCafe@yahoogroups.com, "derekrss" <derekrss@...> wrote:
      >
      > --- In LandCafe@yahoogroups.com, "walto" <calhorn@> wrote:
      > >
      > > I'm impressed that LVT seems to get occasional serious hearings in the UK. As I've said before, the U.S. is a wasteland.
      > >
      >
      > I think that LVT gets the occasional serious hearing in the UK because we have heavyweight journalists such as Martin Wolf, Philip Inman, Samuel Brittan, and others, supporting it in the mainstream press; we have LVT lobbying groups in the form of the LLC and ALTER, within two of the three main political parties; and one of the minor parties, the Greens, have LVT as part of their manifesto. So a lot of people are doing their best to keep it to the forefront of public debate.
      >
      > But even with all that support, it's still an uphill struggle. All I can say is, "Well done, Caroline Lucas, for devoting your Private Member's Bill slot to it! Thank you".
      >
      > I suppose that if you want similar results in the US, you'll need a similar strategy. My impression with the US effort is that there's a lot of low-level effort aimed at changing things at a local level but not much at the Federal level. Hence the small successes but lack of national debate.
      >
      > But I'm not that familiar with the US situation, so I could be totally out to lunch on that. What do the USians think?
      >

      Yes, I think that's basically right. But more importantly, it is states that generally impose of real estate taxes of any kind, not the Federal government.

      W

    • Scott Bergeson
      Quoting JDKromkowski on Mon, 12 Nov 2012 18:52:55 -0500: ___Jdk___ PA rep from Pittsburgh, moritz, along with progressives thought the 16th amendment would
      Message 2 of 28 , Nov 12, 2012
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        Quoting JDKromkowski on Mon, 12 Nov 2012 18:52:55 -0500:

        ___Jdk___
        PA rep from Pittsburgh, moritz, along with progressives thought the
        16th amendment would broaden the income tax (which prior thereto only
        applied to wages - not interest, divdends, and rent because those
        were considered incidences of property ownership and thus need to
        be apportioned) sufficient to get at unearned rent and the wealthy.
        -----

        Not wages until the Public Employees Tax Act and FICA. It
        applies to the profits of federally chartered corporations.
        Perhaps you're thinking of lawyers fees, which may have
        been considered federal income as some sort of privilege?
      • derekrss
        ... It depends on how high the LVT rate is and on what the revenue is used for. Assuming no CD or UIE, if the rate is set low and the revenue is used to pay
        Message 3 of 28 , Nov 12, 2012
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          --- In LandCafe@yahoogroups.com, John David Kromkowski <jdkromkowski@...> wrote:
          >
          > Derrekrss: "Now granted, it wasn't all roses. The absence of a citizen's
          > dividend (or universal base exemption) meant that poverty and inequality
          > was rampant. However as far as economic growth is concerned, land taxation
          > was a great success. And although it wasn't LVT in theory, it wasn't too
          > far off in practice because the tax was based on valuations from 1672,
          > which were unimproved by the standards of the 18th century, let alone the
          > 19th.
          >
          > So, agreed that there are zero modern examples. But there is a huge
          > historical example."
          >
          > JDK: Well, if in fact this is a "huge historical example", then land value
          > taxation is a huge historical failure. Because the theory is that rentier
          > behavior is THE CAUSE for poverty and inequality. So if there really was
          > LVT, then there shouldn't have been "rampant poverty and inequality". I'd
          > have to say that LVT as a funding source for imperialism - the taking of
          > land by force - is a peculiar juxtaposition.
          >
          > The idea that a CD is required to do anything for poverty and inequality is
          > really not sound. At most a CD reduces the amount of time required for
          > work to sustain and thus in theory would free up time for leisure and
          > education. But CD is not a necessary thing to do that. Progress
          > unencumbered from supporting a parasitic rentierist class would do that
          > too. Even work week hour laws will do that.
          >

          It depends on how high the LVT rate is and on what the revenue is used for. Assuming no CD or UIE, if the rate is set low and the revenue is used to pay large salaries to a few thousand politicians, civil servants and military officers, there is little difference in its effect from using rent to pay a few thousand landlords. If the revenue is set high and used to pay a low wage to an army of soldiers consisting of half the able-bodied population, there is little difference from LVT plus a CD, (except that it ties up half the A-B population in unproductive labour). The first option will encourage growth to some extent but won't do much to touch inequality. The second option will give near-equality but poverty will be widespread because of the lack of productive work being done.

          In the case of the 18th century United Kingdom, we can certainly point at the economic growth effects of the LVT-like land tax but the tax was never at a high enough level to change the income distribution much. Also no revaluation was done after the initial valuation of 1672. Moreover when UK government spending at the end of the Napoleonic wars approached a figure which could have justified a land tax level high enough to make a difference to inequality, the landowners in Parliament baulked at paying and so we got Peel's income tax when revaluation plus a higher land tax rate would have been the better solution to fix the revenue shortfall.
        • John David Kromkowski
          You are incorrect. The US federal government has ALWAYS been able to tax income from WAGES without apportionment and without the 16th amendment. There was
          Message 4 of 28 , Nov 13, 2012
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            You are incorrect.

            The US federal government has ALWAYS been able to tax "income" from WAGES without apportionment and without the 16th amendment.  There was an income tax on wages in the civil war. This is because taxing wages is an "indirect" tax because it is a tax on the transaction of getting paid for labor.

            For the non-US and may some of the US, an apportioned tax is required for "direct" taxes. Apportionment means that each state covers a portion of the revenue to be raised in proportion to its population. So a state with 10% of the population comes up with the 10% of the revenue.  

            There are basically only two types of taxes that are "direct" are a capitation (tax on being a person, a head tax) and a tax on Land (The SCt again noted this in dicta in the Health Care Act case.  A tax on land is a direct tax and must be apportioned.)

            If you are really interested in this topic.  I'd suggest reading these cases in this order

            Hylton v. United States, 3 U.S. 171 (1796) (also first case challenging constitutionality of a law.)
            Pollock v. Farmers' Loan & Trust Company, 157 U.S. 429 (1895), aff'd on reh'g, 158 U.S. 601 (1895)
            Brushaber v. Union Pacific Railroad, 240 U.S. 1 (1916)

            ___Jdk___

            PA rep from Pittsburgh, moritz, along with progressives thought the
            16th amendment would broaden the income tax (which prior thereto only
            applied to wages - not interest, divdends, and rent because those
            were considered incidences of property ownership and thus need to
            be apportioned) sufficient to get at unearned rent and the wealthy.
            -----
            SB:
            Not wages until the Public Employees Tax Act and FICA. It
            applies to the profits of federally chartered corporations.
            Perhaps you're thinking of lawyers fees, which may have
            been considered federal income as some sort of privilege?


            On Mon, Nov 12, 2012 at 8:01 PM, Scott Bergeson <scottb@...> wrote:
             

            Quoting JDKromkowski on Mon, 12 Nov 2012 18:52:55 -0500:

            ___Jdk___
            PA rep from Pittsburgh, moritz, along with progressives thought the
            16th amendment would broaden the income tax (which prior thereto only
            applied to wages - not interest, divdends, and rent because those
            were considered incidences of property ownership and thus need to
            be apportioned) sufficient to get at unearned rent and the wealthy.
            -----

            Not wages until the Public Employees Tax Act and FICA. It
            applies to the profits of federally chartered corporations.
            Perhaps you're thinking of lawyers fees, which may have
            been considered federal income as some sort of privilege?




            --
            Very truly yours

            John D. Kromkowski
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            Baltimore, MD 21212

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