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Re: Legitimate LVT criticism

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  • roy_langston
    ... We ve been through this many times. It depends on the relationship between the tax rate, the discount rate, and the rent growth rate. At modest
    Message 1 of 199 , Feb 27, 2013
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      --- In LandCafe@yahoogroups.com, "John" <burns-john@...> wrote:

      > --- In LandCafe@yahoogroups.com, "roy_langston" <roy_langston@> wrote:
      > > > > Politically, you're just not going to pass a tax
      > > > > that will utterly destroy the value of a major asset
      > > > > for millions of regular citizens.
      > > >
      > > > How will LVT destroy the value of a major asset?
      > >
      > > By removing the after-tax return to its ownership.
      > Roy, it will not drop. It may stay the same and the economy overtake it. In Denmark after introducing LVT land prices rose to their surprise as money was instead in enterprise not land, but land was needed for the new enterprises.

      We've been through this many times. It depends on the relationship between the tax rate, the discount rate, and the rent growth rate. At modest single-digit rates, LVT can stimulate so much economic growth that land prices rise. But at the high double-digit rates needed to recover effectively all the rent, it becomes impossible for economic growth to be so great that it exceeds the tax rate. At that point, land prices must fall. I can demonstrate this relationship mathematically if you like.

      > > > Henry George never thought hard enough
      > > > about the old widow bogey.
      > >
      > > I agree. And we haven't, either.
      > The detractors always immediately come up with the the old widow bogey. A stock answer is needed to suppress it immediately.

      That would be nice. I've found that a few different approaches are needed. One is to ask why there is so much concern for LANDOWNING widows who might decide to move to accommodation better suited to their needs and means under LVT, but none for the TENANT widows who are CURRENTLY being kicked into the gutter because they can't pay the rising rents charged by their PRIVATE landlords. Another is to point out that they will get the UIE. Another is to propose free consulting on how they can use their land more productively to pay the LVT, such as by taking in boarders or letting rooms, renting out garden or parking space, or renting out space for a house-based business such as a daycare, afterschool, etc. And in the last resort, there is compassionate deferral. Other ideas are encouraged.

      > As I wrote, get them look at it today. and LVT will be no different. In fact it would be better as Denmark does in deferring LVT payments to sale of property or death.

      Sorry, I can't parse this.

      > > > LVT does not propose replacing landlords with
      > > > the state. It is better the state stays out of land
      > > > as we see in HK with the warped land leasing
      > > > system, which is open to corruption.
      > >
      > > But the argument is made that LVT is like the corrupt
      > > and wasteful HK leasing system. It would make life a
      > > lot easier for us if they would just smarten up and
      > > charge the market rent.
      > That I agree with . Singapore also leases land like HK. The systems the Brits left behind. But the point was land would be state owned for LVT to operate. To operate properly it is best land mainly privately owned. The state is out of the way, with corrupt politician's mitts away from land. The state only collects the levy.

      IMO it depends on the local situation. In some places, leasing public land might be better. In others, taxation of privately held land might be better.

      > > > The greatest argument for Geonomics, not LVT as such,
      > > > is reclaiming "economic rent" which is simply reclaiming
      > > > "economic freeloading", to pay for our essential public
      > > > services, leaving free of income taxes. "economic rent"
      > > > does not only come from land. I am no Georgist. Henry
      > > > got it wrong on a few counts. The Single Tax was a loser
      > > > and concentrating 100% on land another.
      > > But in all fairness, landowning was at that time by far the
      > > dominant rent seeking privilege. Bank debt money creation
      > > was at far lower levels relative to government currency
      > > issuance, and intellectual property monopolies were a
      > > minor sideshow compared to their role in the modern economy.
      > That us why Georgism, the hero worshipping of Henry George is outdated,

      Right. We need to stop calling ourselves "Georgists" and worshipping Henry George. It's political suicide as well as intellectual stagnation.

      > it has morphed into Geoism, of which the prime point is reclaiming "economic rent" and "unearned income", not just LVT. Carping on about LVT gets you nowhere as Fred Harrison found out after 40 years of banging his head against a brick wall. Most people find it difficult to understand LVT, thinking its is communism or just another daft tax.

      Agreed. LVT is not easy for ordinary people to understand, and never will be. In fact, plenty of otherwise competent economists (<cough> Murray Rothbard <cough>) have proved they can't understand it.

      > Geoism has also an eco tag in its name. Reclaiming economic rent comes in many forms and even into CAPITAL, not just LAND. LVT focused purely on LAND, which was perceived as victimizing landowners. A loser as the past 130 years have shown.

      Well, land is different in important ways, but we do need to be clear that correcting the injustice of private landowning won't fix the economy or society if rentiers can just replace it with equivalent privileges for themselves in the form of bank debt money issuance, intellectual property monopolies, etc.

      -- Roy Langston
    • walto
      ... Right. Both almost surely true. ... And the truths find there way in there too! W
      Message 199 of 199 , Mar 5, 2013
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        --- In LandCafe@yahoogroups.com, "roy_langston" <roy_langston@...> wrote:
        > --- In LandCafe@yahoogroups.com, "walto" <calhorn@> wrote:
        > >
        > > --- In LandCafe@yahoogroups.com, "roy_langston" <roy_langston@> wrote:
        > > >
        > > > So you are saying that the existence of the Flat Earth Society DOES make the spheroidal shape of the earth disputable?
        > >
        > > My degree of confidence is roughly the same as that in my above judgment regarding your personality. Put it this way: is it possible I'm wrong about either the shape of the earth or your arrogance? Sure, I could be wrong about pretty much every proposition that seems obvious to me--that is the nature of human fallibility. But it's really, really doubtful in both cases.
        > So you claim the earth's spheroidal shape is not only disputable, but about as disputable as your opinion of my personality?

        Right. Both almost surely true.

        > "A sick man dreams nothing so dreadful that some philosopher isn't saying it." -- Marcus Terentius Varro
        > -- Roy Langston

        And the truths find there way in there too!

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