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RE: [LandCafe] [diggers350] LVT - 100%?

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  • Fred Foldvary
    ... ownership will ... First of all, if 100% is collected, it is only the economic land rent, not the total rental paid by a tenant. The rental includes
    Message 1 of 20 , Sep 11, 2004
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      --- John Havercroft <john.havercroft@...> wrote:
      > if LVT is set at 100% of
      > current rental value and is updated every year there ceases to be any
      > market for land at all as ownership confers no financial benefit and
      ownership will
      > incur considerable risks as even a short void will give rise to loss.

      First of all, if 100% is collected, it is only the economic land rent, not
      the total rental paid by a tenant. The rental includes compensation for
      labor services and a payment for capital goods.o

      There would still be a market for land, since the capital goods (buildings
      and other improvements) would have a market price. One would buy the real
      estate in order to use it, just as one rents land to use it.

      But there is no need to set the rate at 100%; 90% would do fine, as this
      would leave a margin for error and leave a small land price for raw land.
      This would also enable a finite rate based on the price of land:

      f = t/(i+t) where f is the fraction of rent taxed, i the real interest
      rate, and t the tax rate based on the price of land.
      If i=.05 and t=.45, then f=.45/.50=.9
      A tax rate of 45% of land value with interest at 5% takes 90% of the land
      rent. If we set f at 1, then t has to be infinite.

      I have heard that the Danes regarded a two percent appeal rate as an
      indication that the assessments were about right.
      A higher appeal rate implies the assessments are too high;
      a lower appeal rate that they are too low.

      Fred Foldvary
    • Paul Metz
      ... Labor is the means to feed ourselves. Land rent is a pure surplus; if it goes to the title holder, and it feeds him, this just relieves him of engaging in
      Message 2 of 20 , Sep 12, 2004
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        --- Tony Gosling <tony@...> wrote:
        > For me LVT is a non-starter as it involves taxing the only means we have
        > to feed ourselves

        Labor is the means to feed ourselves.
        Land rent is a pure surplus; if it goes to the title holder, and it feeds
        him, this just relieves him of engaging in labor.
        If rent be not taxed, then labor is, and that truly taxes the means to feed
        ourselves.

        Fred Foldvary

        Paul Metz - www.integerconsult.org - adds:

        This takes us back to the production factors and how they can/should be
        taxed.
        Rent/land and labour are just two, the other factors can also be taxed.

        And back to the principles of taxation: it should as little as possible
        punish
        desired behaviour (of individuals, companies and public organisations) and
        as
        much as possible reward (societally) desired behaviour, i.e. stimulate more
        efficient use of the scarcest factors.

        Land rent tax can be extended to broader ecological taxation and in
        countries
        where labour is not a scarce factor its taxation has probably gone too high.


        The factor financial capital goes most untaxed of all factors. Is that
        optimal ?


        Please think twice before posting to the group as a whole
        (It might be that your note is best sent to one person?)
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      • Fred Foldvary
        ... The other factor is capital goods, but these are in turn produced from land, labour, and capital goods, so land and labour are the ultimate factors. When
        Message 3 of 20 , Sep 12, 2004
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          > Paul Metz - www.integerconsult.org - adds:
          > Rent/land and labour are just two, the other factors can also be taxed.

          The other factor is capital goods, but these are in turn produced from
          land, labour, and capital goods, so land and labour are the ultimate
          factors. When capital goods are taxed, ultimately it falls on land and
          labour.

          > The factor financial capital goes most untaxed of all factors. Is that
          > optimal ?

          Financial assets, such as money and bonds, are not factors of production,
          but they either are means to purchase them or loans that are paid from the
          factors. In the U.S., interest is indeed taxed, and at ordinary tax rates,
          hence at the highest marginal tax rates. Even worse, the tax is on the
          nominal interest, which includes the inflation component, so interest gets
          overtaxed. Inflation itself is also a tax on financial capital.

          Fred Foldvary
        • e15lineman
          Fred, I have a question regarding your formula for calculating the portion of land rent collected. It seems to me that there would be a linear relationship
          Message 4 of 20 , Sep 12, 2004
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            Fred, I have a question regarding your formula for calculating the
            portion of land rent collected. It seems to me that there would be a
            linear relationship between fraction of rent collected and the tax
            rate on land value? If this is not so, is it because of decreased
            land prices at higher rates of collection? All else being equal,
            could we expect 80% collection of land rent to collect twice as much
            revenue as a 40% rate?

            Is it possible to calculate the highest rate of taxation that would
            not depreciate landvalues, if given a rate of appreciation?

            Is it possible to calculate the depreciating affect on LVT?

            Wouldn't it be easier to assess rental values directly, once
            conventional land-value property taxes reach a certain point?

            I ask, because while I recognize that it may be done, I have an
            ethical aversion to taking value that was purchased in good faith,
            even if we consider the rightness of taxing land rent. Am I correct
            in thinking that the maximum non-depreciating LVT rate would increase
            over time to approach 100% collection?


            Fred Folvary wrote:

            This would also enable a finite rate based on the price of land:
            f = t/(i+t) where f is the fraction of rent taxed, i the real
            interest rate, and t the tax rate based on the price of land. If
            i=.05 and t=.45, then f=.45/.50=.9 A tax rate of 45% of land value
            with interest at 5% takes 90% of the land rent. If we set f at 1,
            then t has to be infinite.
          • Wetzel Dave
            Sean writes: I have an ethical aversion to taking value that was purchased in good faith, So if steal your bike Sean, and then sell it to Fred, you ll pay
            Message 5 of 20 , Sep 14, 2004
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              Sean writes:
              " I have an ethical aversion to taking value that was purchased in good
              faith, "

              So if steal your bike Sean, and then sell it to Fred, you'll pay him for
              its return to you - the rightful owner.

              Somebody has stolen our planet - why should we pay for its return to the
              community?

              Land Value Tax will share the rent of land between landowners and the
              community.
              Introduced gradually, (maybe 10% of annual rental value and rising over
              years) it will gradually make a major impact on the economy - benefiting
              everybody, including recent purchasers.


              Dave
              Dave Wetzel


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            • Paul Metz
              Sean writes: I have an ethical aversion to taking value that was purchased in good faith, Dave Wetzel replies: So if steal your bike Sean, and then sell
              Message 6 of 20 , Sep 14, 2004
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                Sean writes:
                " I have an ethical aversion to taking value that was purchased in good
                faith, "

                Dave Wetzel replies:

                So if steal your bike Sean, and then sell it to Fred, you'll pay him for
                its return to you - the rightful owner.

                Somebody has stolen our planet - why should we pay for its return to the
                community?

                Land Value Tax will share the rent of land between landowners and the
                community.
                Introduced gradually, (maybe 10% of annual rental value and rising over
                years) it will gradually make a major impact on the economy - benefiting
                everybody, including recent purchasers.


                Paul Metz adds:

                We should be aware here that the planet has not completely been 'stolen',
                and that it has to a large extent 'been given away' or sold by competent
                governments. It does not matter if land was given away by a king to a
                citizen or sold by a government 'in good faith' or not.
                The interesting aspect for our discussion is that LVT is NOT RELATED
                with the question of property rights.

                Anything can be taxed: it ban be a free good, public or private property.
                Land can fall in each category and be subjected to taxation in all cases.




                Please think twice before posting to the group as a whole
                (It might be that your note is best sent to one person?)
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              • Dan Sullivan
                ... That is not a valid analogy, for the person who stole the bike violated law and custom, and the person purchasing the bike did not purchase a socially
                Message 7 of 20 , Sep 15, 2004
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                  On 14 Sep 2004 at 16:00, Paul Metz wrote:

                  > Sean writes:
                  > " I have an ethical aversion to taking value that was purchased in
                  > good faith, "
                  >
                  > Dave Wetzel replies:
                  >
                  > So if steal your bike Sean, and then sell it to Fred, you'll pay him
                  > for its return to you - the rightful owner.

                  That is not a valid analogy, for the person who stole the bike violated law
                  and custom, and the person purchasing the bike did not purchase a socially
                  sanctioned title.

                  Although land titles originated in either conquest or usurpation, they have
                  been so incorporated into social custom that society is generally complicit in
                  having sanctioned the transfer of land for fee-simple payment. George gets
                  around this by making the return to a rent-sharing system quite gradual, but
                  he righteously overstates the case against the landowners, especially in
                  P&P, his most righteous book.

                  He makes an analogy to the abolition of chattel slavery in the United States,
                  noting that slave owners were not compensated. Yet slavery was abolished
                  in many countries, and most of those countries did compensate slave
                  owners. The United States is unique in that it abolished slavery in the
                  aftermath of a horrendously violent upheaval, in which the people of the
                  vanquished states were not only stripped of their slaves, but saw their crops
                  and some of their cities destroyed and their money declared illegal, and
                  were made to contribute to the war debts of their conquerors, from whom
                  they had purchased the slaves in the first place. (The primary centers for the
                  sale of imported slaves had been Boston, New York and Philadelphia.)

                  > Paul Metz adds:
                  >
                  > We should be aware here that the planet has not completely been
                  > 'stolen', and that it has to a large extent 'been given away' or sold
                  > by competent governments. It does not matter if land was given away by
                  > a king to a citizen or sold by a government 'in good faith' or not.
                  > The interesting aspect for our discussion is that LVT is NOT RELATED
                  > with the question of property rights.
                  >
                  > Anything can be taxed: it ban be a free good, public or private
                  > property. Land can fall in each category and be subjected to taxation
                  > in all cases.

                  I think there is valid ground between the righteous argument and the amoral
                  argument. That is, I think the relationship between tax policy and property
                  rights is a legitimate one, and that it argues for an expeditions move toward
                  land value taxation.

                  My concern with Henry George's righteous overstatement of the moral case
                  against compensation is that it closes the door to more pragmatic questions.
                  Suppose some landlords were willing to sell their land into a system that
                  would collect 100% of the rent, but would shield tenants of that land from
                  productivity taxation?

                  Such a system would attract the most dynamic people, and land rent within
                  that system would be dramatically increased. Henry George likened it to
                  "removing a huge weight from a powerful spring." However, if it is done in
                  one particular locality, it would be more like removing the weight from a
                  pressure-cooker.

                  Consider Hong Kong, which gets more of its revenue from charges against
                  land than any other country in the world. The residual rent returns to title
                  holders are much higher there than in other countries, because productivity
                  itself is much higher.

                  Whether government or a consortium of investors were to purchase
                  underused land and create communities based on displacing productivity
                  taxes with rent charges, those communities would prosper, and so would
                  title holders to those communities. The landholders who would suffer would
                  be those whose communities *failed* to make the change, for migration into
                  rent-funded communities is necessarily migration out of tax-funded
                  communities.

                  Who, then, ultimately compensates the landowners who have sold out to an
                  LVT system? The landowners who haven't. I see no injustice in that.
                • Paul Metz
                  Reply from Paul Metz below: ... The other factor is capital goods, but these are in turn produced from land, labour, and capital goods, so land and labour are
                  Message 8 of 20 , Sep 19, 2004
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                    Reply from Paul Metz below:
                    _____________________________________________

                    > Paul Metz - www.integerconsult.org - adds:
                    > Rent/land and labour are just two, the other factors can also be taxed.

                    The other factor is capital goods, but these are in turn produced from
                    land, labour, and capital goods, so land and labour are the ultimate
                    factors. When capital goods are taxed, ultimately it falls on land and
                    labour.

                    Fred Foldvary

                    I prefer the textbook, which names the 3 production factors:
                    nature, humans and financial capital. Clearly, humans are a product of
                    nature and financial capital a product of nature and humans, but it is
                    simply very practical to use the 3P. (Intellectual property, like books
                    and patents, and capital goods are intermediates and indeed produced
                    from the 3 as well. ) Many economists and the UN have adopted Planet,
                    People and Profits as "the 3P".

                    Other misunderstanding is that taxes 'fall on land and labour'. Taxes can
                    be designed to fall on anything, and thus indirectly fall on those humans
                    who use them. When land is taxed, its owner is considered the user and
                    taxed. He can or cannot charge another user of his land for this cost.

                    Ultimately all taxes fall on human endusers, and along the chain of
                    production and consumption all taxes change prices and influence choices
                    of producers and consumers.
                    Therefore we should tax our sins, not our virtues.

                    Paul Metz
                  • Mason Gaffney
                    Fred is totally right about the overtaxation of interest, and the effects of inflation - w.r.t. the income tax. Of all kinds of property income, the income
                    Message 9 of 20 , Sep 20, 2004
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                      Fred is totally right about the overtaxation of interest, and the effects of
                      inflation - w.r.t. the income tax. Of all kinds of property income, the
                      income tax is hardest on interest, and easiest on land rents and unearned
                      increments.

                      OTOH, the property tax exempts interest. This may be one reason why the
                      public has been attracted to substitute income taxes for property taxes over
                      the last 80 years or so. So there may be a big political advantage in
                      including mortgages in the land tax base. Much of the tax would be shifted
                      to landowner-borrowers in the form of higher interest rates. Some marginal
                      borrowing would be aborted, but there are many reasons (not discussed here)
                      why that would be a good thing.

                      Fred is also right that financial assets are not factors of production, but
                      that point can be overstated. Land titles are not factors of production
                      either, but just pieces of paper, like bonds and notes. It's what the paper
                      does that is important. What a mortgage (or "deed of trust" in many
                      jurisdictions) does is to make the lender the legal landowner until the note
                      is paid off.

                      Mason Gaffney

                      ----- Original Message -----
                      From: "Tish Gaffney" <tish@...>
                      To: "Mase" <m.gaffney@...>
                      Sent: Sunday, September 19, 2004 11:07 AM
                      Subject: Fw: *****SPAM***** RE: [LandCafe] LVT tax money or tax land?


                      >
                      > ----- Original Message -----
                      > From: "Fred Foldvary" <ffoldvary@...>
                      > To: <landcafe@yahoogroups.com>
                      > Sent: Sunday, September 12, 2004 9:30 AM
                      > Subject: *****SPAM***** RE: [LandCafe] LVT tax money or tax land?
                      >
                      >
                      > > > Paul Metz - www.integerconsult.org - adds:
                      > > > Rent/land and labour are just two, the other factors can also be
                      taxed.
                      > >
                      > > The other factor is capital goods, but these are in turn produced from
                      > > land, labour, and capital goods, so land and labour are the ultimate
                      > > factors. When capital goods are taxed, ultimately it falls on land and
                      > > labour.
                      > >
                      > > > The factor financial capital goes most untaxed of all factors. Is that
                      > > > optimal ?
                      > >
                      > > Financial assets, such as money and bonds, are not factors of
                      production,
                      > > but they either are means to purchase them or loans that are paid from
                      the
                      > > factors. In the U.S., interest is indeed taxed, and at ordinary tax
                      > rates,
                      > > hence at the highest marginal tax rates. Even worse, the tax is on the
                      > > nominal interest, which includes the inflation component, so interest
                      gets
                      > > overtaxed. Inflation itself is also a tax on financial capital.
                      > >
                      > > Fred Foldvary
                      > >
                      > >
                      > >
                      > >
                      > >
                      > > Please think twice before posting to the group as a whole
                      > > (It might be that your note is best sent to one person?)
                      > > To post message to group: LandCafe@yahoogroups.com
                      > > To unsubscribe: LandCafe-unsubscribe@yahoogroups.com
                      > > Consult Value Capture Initiative at: http://ecoplan.org
                      > > Yahoo! Groups Links
                      > >
                      > >
                      > >
                      > >
                      > >
                      >
                      >
                    • Harry Pollard
                      John, A land-value tax is not so much a tax as a charge. The location gives you (say) $100 a week advantage - you pay $100. The $100 a week that attaches to a
                      Message 10 of 20 , Sep 26, 2004
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                        John,

                        A land-value tax is not so much a tax as a charge. The
                        location gives you (say) $100 a week advantage - you pay
                        $100. The $100 a week that attaches to a location measures
                        community access to it.

                        Vic Blundell used to manage a chain of shoe stores before he
                        became HGS Director in London. To determine whether the Rent
                        asked for a new store location was worthwhile, they would
                        send a couple of people down to count how many people passed
                        by each hour. They knew from experience, that a certain
                        percentage would stop, look, and perhaps buy shoes.

                        They were measuring Rent.

                        Now, if the Rent was recaptured by the community, it would
                        make no difference to the user. Some locations would be
                        worth $100 a week and he would pay $100, other locations
                        would be worth perhaps $1,000 a week, and he would pay
                        $1,000.

                        From the user's point of view it makes no difference whether
                        the Rent is paid to the landholder, or to the community.
                        (Actually, he would pay less to the community, for the
                        landholder would certainly be demanding rack-rent - which is
                        another discussion).

                        As the landholder would get nothing from the land, it is
                        likely he would simply sell, or transfer (for a price) the
                        land to the user - or use it himself.

                        This extra "price" above Rent comes from the efficiencies of
                        the user. If a particular site offers him a special
                        advantage he will pay for it. I would expect a brisk market
                        in land even with a 100% Rent recapture.

                        This is why I don't agree with using the market to determine
                        Rent. A market price includes the abilities of the user of
                        the land - not the business of the community. Rent is a
                        creation of the community. They have a right to recapture
                        it. What the user earns is no-one's business.

                        In fact, the appraisal of Rent requires no knowledge about
                        what is built on the site.

                        I would say that land nationalization is not a good idea.
                        Mainly because it isn't necessary. I don't want the
                        Government to be in charge of our basic resource,
                        particularly as collecting Rent does everything that's
                        needed.

                        Harry

                        ****************************************
                        The Henry George School of Social Science
                        of Los Angeles
                        Box 655 Tujunga CA 91042
                        Tel: 818 352-4141 *** Fax: 818 353-2242
                        ****************************************



                        _____

                        From: John Havercroft [mailto:john.havercroft@...]

                        Sent: Thursday, September 09, 2004 4:13 AM
                        To: Wetzel Dave; 'Land Café ( lc1) '
                        Cc: 'Joseph Casey'
                        Subject: RE: [LandCafe] [diggers350] LVT - universally
                        applied nonsen se


                        Well I agree with all this. My difficulty is that if LVT is
                        set at 100% of
                        current rental value and is updated every year there ceases
                        to be any market
                        for land at all as ownership confers no financial benefit
                        and ownership will
                        incur considerable risks as even a short void will give rise
                        to loss.

                        Having removed any market for land there ceases to be any
                        competitive
                        pricing mechanism as there will be a monopoly supplier – the
                        valuation
                        office who will determine the rent.

                        How would this be different in effect from land
                        nationalisation; or is this where you came in Dave?

                        John
                        such as bonds, money,
                        and derivatives. In a perfect market, land speculation
                        would be not be
                        practiced, because all rent would be paid as LVT. Because
                        land markets are
                        not perfect there will always be speculative winners and
                        losers, let them
                        pay LVT, otherwise speculative gains go untaxed as long as
                        they are held,
                        thus encouraging longer holdings.

                        Joe Casey




                        [Non-text portions of this message have been removed]
                      • Terence Bendixson
                        Harry Thank you for a clear exposition on the distinction between what the community and the individual contributes to the value of land. But as you must know,
                        Message 11 of 20 , Sep 27, 2004
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                          Harry

                          Thank you for a clear exposition on the distinction between what the
                          community and the individual contributes to the value of land.

                          But as you must know, what the Atlee Labour government nationalised in the
                          1940s was the use of land. They enabled government to determine whether or
                          not, for instance, a house could be converted into a shop or vice versa.
                          Would LVT make such control obsolete? What if, under LVT, I wanted to build
                          a fifty story block of flats next to a row of Georgian houses in Chelsea?
                          Could I just get on with it?

                          Regards

                          Terence Bendixson, Secretary
                          Independent Transport Commission
                          University of Southampton
                          c/o 39 Elm Park Gardens, London SW10 9QF
                          Tel 020 7352 3885

                          ----- Original Message -----
                          From: "Harry Pollard" <henrygeorgeschool@...>
                          To: "'Land Café ( lc1) '" <LandCafe@yahoogroups.com>
                          Sent: Monday, September 27, 2004 4:17 AM
                          Subject: RE: [LandCafe] [diggers350] LVT - universally applied nonsen se


                          John,

                          A land-value tax is not so much a tax as a charge. The
                          location gives you (say) $100 a week advantage - you pay
                          $100. The $100 a week that attaches to a location measures
                          community access to it.

                          Vic Blundell used to manage a chain of shoe stores before he
                          became HGS Director in London. To determine whether the Rent
                          asked for a new store location was worthwhile, they would
                          send a couple of people down to count how many people passed
                          by each hour. They knew from experience, that a certain
                          percentage would stop, look, and perhaps buy shoes.

                          They were measuring Rent.

                          Now, if the Rent was recaptured by the community, it would
                          make no difference to the user. Some locations would be
                          worth $100 a week and he would pay $100, other locations
                          would be worth perhaps $1,000 a week, and he would pay
                          $1,000.

                          From the user's point of view it makes no difference whether
                          the Rent is paid to the landholder, or to the community.
                          (Actually, he would pay less to the community, for the
                          landholder would certainly be demanding rack-rent - which is
                          another discussion).

                          As the landholder would get nothing from the land, it is
                          likely he would simply sell, or transfer (for a price) the
                          land to the user - or use it himself.

                          This extra "price" above Rent comes from the efficiencies of
                          the user. If a particular site offers him a special
                          advantage he will pay for it. I would expect a brisk market
                          in land even with a 100% Rent recapture.

                          This is why I don't agree with using the market to determine
                          Rent. A market price includes the abilities of the user of
                          the land - not the business of the community. Rent is a
                          creation of the community. They have a right to recapture
                          it. What the user earns is no-one's business.

                          In fact, the appraisal of Rent requires no knowledge about
                          what is built on the site.

                          I would say that land nationalization is not a good idea.
                          Mainly because it isn't necessary. I don't want the
                          Government to be in charge of our basic resource,
                          particularly as collecting Rent does everything that's
                          needed.

                          Harry

                          ****************************************
                          The Henry George School of Social Science
                          of Los Angeles
                          Box 655 Tujunga CA 91042
                          Tel: 818 352-4141 *** Fax: 818 353-2242
                          ****************************************



                          _____

                          From: John Havercroft [mailto:john.havercroft@...]

                          Sent: Thursday, September 09, 2004 4:13 AM
                          To: Wetzel Dave; 'Land Café ( lc1) '
                          Cc: 'Joseph Casey'
                          Subject: RE: [LandCafe] [diggers350] LVT - universally
                          applied nonsen se


                          Well I agree with all this. My difficulty is that if LVT is
                          set at 100% of
                          current rental value and is updated every year there ceases
                          to be any market
                          for land at all as ownership confers no financial benefit
                          and ownership will
                          incur considerable risks as even a short void will give rise
                          to loss.

                          Having removed any market for land there ceases to be any
                          competitive
                          pricing mechanism as there will be a monopoly supplier - the
                          valuation
                          office who will determine the rent.

                          How would this be different in effect from land
                          nationalisation; or is this where you came in Dave?

                          John
                          such as bonds, money,
                          and derivatives. In a perfect market, land speculation
                          would be not be
                          practiced, because all rent would be paid as LVT. Because
                          land markets are
                          not perfect there will always be speculative winners and
                          losers, let them
                          pay LVT, otherwise speculative gains go untaxed as long as
                          they are held,
                          thus encouraging longer holdings.

                          Joe Casey




                          [Non-text portions of this message have been removed]





                          Please think twice before posting to the group as a whole
                          (It might be that your note is best sent to one person?)
                          To post message to group: LandCafe@yahoogroups.com
                          To unsubscribe: LandCafe-unsubscribe@yahoogroups.com
                          Consult Value Capture Initiative at: http://ecoplan.org
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                        • John H Pipex
                          Harry, My problem remains one of arriving at the correct figure for the “Community Charge” by whatever name or definition. Too high and the land remains
                          Message 12 of 20 , Sep 27, 2004
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                            Harry,

                            My problem remains one of arriving at the correct figure for the “Community
                            Charge” by whatever name or definition. Too high and the land remains
                            unused – too low and the community loses out on its revenue. I know of no
                            mechanism that is likely to get this right other than a competitive market
                            in which the user able to extract the most value from the site is able to
                            bid a price he can afford to pay. I accept that in a busy high street there
                            is, from time to time a distorted market in which shoe shops or others are
                            willing to pay a premium for the right to pay a “market rental” as agreed by
                            rent review with a landlord. These cases are relatively rare and cases of
                            negative premiums replace them when the market turns down when substantial
                            premiums or rent subsidies are paid by companies to hand back or re-let
                            unwanted properties on which they have a forward commitment.

                            I am of course looking at this from a UK standpoint where most industrial
                            and commercial primary (investment grade) property is institutionally held
                            and property leases are long (typically 21year) with upward only rental
                            reviews which are adjusted at 3 or 5 year intervals to “market value”.
                            Perhaps in more free markets……………..

                            Sometimes I wonder if we are all talking about different things.

                            What I see a proposed LVT as trying to capture is a sensible proportion of
                            the annual rental value of land in recognition of the fact that almost all
                            of the value exists because the community has provided the amenities,
                            services and infrastructure which gives it any value over and above the
                            value of a plot on which subsistence farming could take place. The
                            community decides which particular plots have the greatest value (Compare
                            the value of your shoe shop with the adjacent public park which makes
                            shopping there so pleasant) and should reap the consequent rewards. I see
                            considerable merits in the owner retaining some privileges and a share in
                            the plot rental. I want him to care about his land and to have a stake in
                            its future and the future of the community that made it valuable. Does
                            anyone agree and if so how do we get it adopted as law without revolutionary
                            disruption to existing systems?

                            John



                            -----Original Message-----
                            From: Harry Pollard [mailto:henrygeorgeschool@...]
                            Sent: 27 September 2004 04:18
                            To: 'Land Café ( lc1) '
                            Subject: RE: [LandCafe] [diggers350] LVT - universally applied nonsen se

                            John,

                            A land-value tax is not so much a tax as a charge. The
                            location gives you (say) $100 a week advantage - you pay
                            $100. The $100 a week that attaches to a location measures
                            community access to it.

                            Vic Blundell used to manage a chain of shoe stores before he
                            became HGS Director in London. To determine whether the Rent
                            asked for a new store location was worthwhile, they would
                            send a couple of people down to count how many people passed
                            by each hour. They knew from experience, that a certain
                            percentage would stop, look, and perhaps buy shoes.

                            They were measuring Rent.

                            Now, if the Rent was recaptured by the community, it would
                            make no difference to the user. Some locations would be
                            worth $100 a week and he would pay $100, other locations
                            would be worth perhaps $1,000 a week, and he would pay
                            $1,000.

                            From the user's point of view it makes no difference whether
                            the Rent is paid to the landholder, or to the community.
                            (Actually, he would pay less to the community, for the
                            landholder would certainly be demanding rack-rent - which is
                            another discussion).

                            As the landholder would get nothing from the land, it is
                            likely he would simply sell, or transfer (for a price) the
                            land to the user - or use it himself.

                            This extra "price" above Rent comes from the efficiencies of
                            the user. If a particular site offers him a special
                            advantage he will pay for it. I would expect a brisk market
                            in land even with a 100% Rent recapture.

                            This is why I don't agree with using the market to determine
                            Rent. A market price includes the abilities of the user of
                            the land - not the business of the community. Rent is a
                            creation of the community. They have a right to recapture
                            it. What the user earns is no-one's business.

                            In fact, the appraisal of Rent requires no knowledge about
                            what is built on the site.

                            I would say that land nationalization is not a good idea.
                            Mainly because it isn't necessary. I don't want the
                            Government to be in charge of our basic resource,
                            particularly as collecting Rent does everything that's
                            needed.

                            Harry

                            ****************************************
                            The Henry George School of Social Science
                            of Los Angeles
                            Box 655 Tujunga CA 91042
                            Tel: 818 352-4141 *** Fax: 818 353-2242
                            ****************************************



                            _____

                            From: John Havercroft [mailto:john.havercroft@...]

                            Sent: Thursday, September 09, 2004 4:13 AM
                            To: Wetzel Dave; 'Land Café ( lc1) '
                            Cc: 'Joseph Casey'
                            Subject: RE: [LandCafe] [diggers350] LVT - universally
                            applied nonsen se


                            Well I agree with all this. My difficulty is that if LVT is
                            set at 100% of
                            current rental value and is updated every year there ceases
                            to be any market
                            for land at all as ownership confers no financial benefit
                            and ownership will
                            incur considerable risks as even a short void will give rise
                            to loss.

                            Having removed any market for land there ceases to be any
                            competitive
                            pricing mechanism as there will be a monopoly supplier – the
                            valuation
                            office who will determine the rent.

                            How would this be different in effect from land
                            nationalisation; or is this where you came in Dave?

                            John
                            such as bonds, money,
                            and derivatives. In a perfect market, land speculation
                            would be not be
                            practiced, because all rent would be paid as LVT. Because
                            land markets are
                            not perfect there will always be speculative winners and
                            losers, let them
                            pay LVT, otherwise speculative gains go untaxed as long as
                            they are held,
                            thus encouraging longer holdings.

                            Joe Casey




                            [Non-text portions of this message have been removed]




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                            [Non-text portions of this message have been removed]
                          • Harry Pollard
                            John, A number of good questions. I ll answer in blue below. But, first a couple of definitions. My description of Economic Rent is: Rent is the community
                            Message 13 of 20 , Sep 27, 2004
                            • 0 Attachment
                              John,

                              A number of good questions. I'll answer in blue below.

                              But, first a couple of definitions. My description of
                              Economic Rent is:

                              "Rent is the community created value that attaches to a
                              location."

                              However, when all land is taken up, the normal market price
                              mechanism doesn't work for it requires that when demand
                              raises the price of goods, more goods are produced and rush
                              to market - reducing the price.

                              When demand for land raises prices, more land cannot be
                              produced, nor can it rush to market. So, without the
                              discipline of the price mechanism, land prices rise until
                              they reach a natural limit.

                              The only source from which this extra payment can come is
                              from wages. The natural limit is reached when Labor can pay
                              no more - his remaining wages are enough to allow him a bare
                              living.

                              Ricardo introduced this concept and it became the Iron Laws
                              of Rent and Wages.

                              The "natural limit" I referred to above is called rack-rent
                              - and has been collected throughout history by monopolistic
                              landholders.

                              It is not Rent for it is partly the wages of labor.

                              Harry
                              ****************************************
                              The Henry George School of Social Science
                              of Los Angeles
                              Box 655 Tujunga CA 91042
                              Tel: 818 352-4141 *** Fax: 818 353-2242
                              ****************************************



                              _____

                              From: John H Pipex [mailto:john.havercroft@...]
                              Sent: Monday, September 27, 2004 5:16 AM
                              To: henrygeorgeschool@...; 'Land Café ( lc1) '
                              Subject: RE: [LandCafe] [diggers350] LVT - universally
                              applied nonsen se


                              Harry,

                              My problem remains one of arriving at the correct figure for
                              the “Community Charge” by whatever name or definition. Too
                              high and the land remains unused – too low and the community
                              loses out on its revenue. I know of no mechanism that is
                              likely to get this right other than a competitive market in
                              which the user able to extract the most value from the site
                              is able to bid a price he can afford to pay.

                              Rent is determined by the surrounding community. The user
                              doesn't alter the Rent. The problem with using the market is
                              that it not only collects Rent but also Wages. Georgists
                              don't believe wages should be taxed.

                              I accept that in a busy high street there is, from time to
                              time a distorted market in which shoe shops or others are
                              willing to pay a premium for the right to pay a “market
                              rental” as agreed by rent review with a landlord. These
                              cases are relatively rare and cases of negative premiums
                              replace them when the market turns down when substantial
                              premiums or rent subsidies are paid by companies to hand
                              back or re-let unwanted properties on which they have a
                              forward commitment.

                              Now we've moved further along, we can say that Vic
                              Blundell's people were not really measuring Rent but
                              rack-rent. Certainly good economic conditions will allow a
                              higher rack-rent to be collected.

                              Of course, they often go to far in their demands, hence
                              empty shops and even in American central cities large empty
                              office buildings.

                              I am of course looking at this from a UK standpoint where
                              most industrial and commercial primary (investment grade)
                              property is institutionally held and property leases are
                              long (typically 21year) with upward only rental reviews
                              which are adjusted at 3 or 5 year intervals to “market
                              value”. Perhaps in more free markets……………..

                              Sometimes I wonder if we are all talking about different
                              things.

                              What I see a proposed LVT as trying to capture is a sensible
                              proportion of the annual rental value of land in recognition
                              of the fact that almost all of the value exists because the
                              community has provided the amenities, services and
                              infrastructure which gives it any value over and above the
                              value of a plot on which subsistence farming could take
                              place. The community decides which particular plots have
                              the greatest value (Compare the value of your shoe shop with
                              the adjacent public park which makes shopping there so
                              pleasant) and should reap the consequent rewards. I see
                              considerable merits in the owner retaining some privileges
                              and a share in the plot rental. I want him to care about
                              his land and to have a stake in its future and the future of
                              the community that made it valuable. Does anyone agree and
                              if so how do we get it adopted as law without revolutionary
                              disruption to existing systems?

                              If 100% of the Rent is created by the community, then 100%
                              of the Rent must justly be collected by the community.

                              I'm not sure how Brits assess property. About 100 years ago
                              when I lived in London, I seem to recall they based their
                              property assessments on the rental income of property. In
                              the US they assess the values of land and buildings -
                              usually separately. On the other hand, I'm not sure how your
                              Council Tax is calculated.

                              The bottom line is that land is easy to value. Assessor Ted
                              Gwartney tells us that there is one land appraiser to every
                              9 improvement appraisers. If the old Danish system is used,
                              all assessments are easily comparable and are published for
                              everyone to see - and argue with. True democracy!

                              John



                              -----Original Message-----
                              From: Harry Pollard [mailto:henrygeorgeschool@...]
                              Sent: 27 September 2004 04:18
                              To: 'Land Café ( lc1) '
                              Subject: RE: [LandCafe] [diggers350] LVT - universally
                              applied nonsen se

                              John,

                              A land-value tax is not so much a tax as a charge. The
                              location gives you (say) $100 a week advantage - you pay
                              $100. The $100 a week that attaches to a location measures
                              community access to it.

                              Vic Blundell used to manage a chain of shoe stores before he
                              became HGS Director in London. To determine whether the Rent
                              asked for a new store location was worthwhile, they would
                              send a couple of people down to count how many people passed
                              by each hour. They knew from experience, that a certain
                              percentage would stop, look, and perhaps buy shoes.

                              They were measuring Rent.

                              Now, if the Rent was recaptured by the community, it would
                              make no difference to the user. Some locations would be
                              worth $100 a week and he would pay $100, other locations
                              would be worth perhaps $1,000 a week, and he would pay
                              $1,000.

                              From the user's point of view it makes no difference whether
                              the Rent is paid to the landholder, or to the community.
                              (Actually, he would pay less to the community, for the
                              landholder would certainly be demanding rack-rent - which is
                              another discussion).

                              As the landholder would get nothing from the land, it is
                              likely he would simply sell, or transfer (for a price) the
                              land to the user - or use it himself.

                              This extra "price" above Rent comes from the efficiencies of
                              the user. If a particular site offers him a special
                              advantage he will pay for it. I would expect a brisk market
                              in land even with a 100% Rent recapture.

                              This is why I don't agree with using the market to determine
                              Rent. A market price includes the abilities of the user of
                              the land - not the business of the community. Rent is a
                              creation of the community. They have a right to recapture
                              it. What the user earns is no-one's business.

                              In fact, the appraisal of Rent requires no knowledge about
                              what is built on the site.

                              I would say that land nationalization is not a good idea.
                              Mainly because it isn't necessary. I don't want the
                              Government to be in charge of our basic resource,
                              particularly as collecting Rent does everything that's
                              needed.

                              Harry




                              [Non-text portions of this message have been removed]
                            • John H Pipex
                              Harry, It all seems a bit cut and dried this – sounds like an economics text book. I think I accept that for a city property there is a value (though without
                              Message 14 of 20 , Sep 28, 2004
                              • 0 Attachment
                                Harry,

                                It all seems a bit cut and dried this – sounds like an economics text book.
                                I think I accept that for a city property there is a value (though without
                                any market I don’t see how you ever arrive at it) and that there is good
                                theoretical reason to claim 100% of the rent for the community. I am much
                                less sure about farm land on which the encouragement of good husbandry is
                                vital to the community; and we all know what a success collective farming
                                was. As an observer of behaviour I believe that, in general, owners who
                                have a financial stake in the value of their property take better care of
                                it. Speaking for the community I, and I think a majority, would be happy to
                                share ownership and rent with someone who cares for our farm land.

                                I am also troubled by these simple definitions of rent, land, wages and
                                capital in a modern society. They don’t seem to me to take account of
                                pensions (deferred earnings), brands, vested interests, labour cartels, (of
                                stevedores or lawyers) goodwill or internet sites to name but a few of the
                                complicating factors which also command rents in different ways. Should we
                                the community perhaps be charging Amazon a substantial rent for the
                                ephemeral property from which they trade, which was community created?

                                You didn’t, and so far others haven’t, responded to how to achieve this LVT
                                charge without unacceptable revolutionary change out here in the real world
                                of England in 2004. My interest is a practical one of achieving a fairer
                                tax system not a search for the academic perfection of long dead
                                theoreticians of the dismal science.

                                John
                                -----Original Message-----
                                From: Harry Pollard [mailto:henrygeorgeschool@...]
                                Sent: 28 September 2004 07:41
                                To: john.havercroft@...; 'Land Café ( lc1) '
                                Subject: RE: [LandCafe] [diggers350] LVT - universally applied nonsen se

                                John,

                                A number of good questions. I'll answer in blue below.

                                But, first a couple of definitions. My description of Economic Rent is:

                                "Rent is the community created value that attaches to a location."

                                However, when all land is taken up, the normal market price mechanism
                                doesn't work for it requires that when demand raises the price of goods,
                                more goods are produced and rush to market - reducing the price.

                                When demand for land raises prices, more land cannot be produced, nor can it
                                rush to market. So, without the discipline of the price mechanism, land
                                prices rise until they reach a natural limit.

                                The only source from which this extra payment can come is from wages. The
                                natural limit is reached when Labor can pay no more - his remaining wages
                                are enough to allow him a bare living.

                                Ricardo introduced this concept and it became the Iron Laws of Rent and
                                Wages.

                                The "natural limit" I referred to above is called rack-rent - and has been
                                collected throughout history by monopolistic landholders.

                                It is not Rent for it is partly the wages of labor.

                                Harry
                                ****************************************
                                The Henry George School of Social Science
                                of Los Angeles
                                Box 655 Tujunga CA 91042
                                Tel: 818 352-4141 *** Fax: 818 353-2242
                                ****************************************


                                _____

                                From: John H Pipex [mailto:john.havercroft@...]
                                Sent: Monday, September 27, 2004 5:16 AM
                                To: henrygeorgeschool@...; 'Land Café ( lc1) '
                                Subject: RE: [LandCafe] [diggers350] LVT - universally applied nonsen se
                                Harry,

                                My problem remains one of arriving at the correct figure for the “Community
                                Charge” by whatever name or definition. Too high and the land remains
                                unused – too low and the community loses out on its revenue. I know of no
                                mechanism that is likely to get this right other than a competitive market
                                in which the user able to extract the most value from the site is able to
                                bid a price he can afford to pay.

                                Rent is determined by the surrounding community. The user doesn't alter the
                                Rent. The problem with using the market is that it not only collects Rent
                                but also Wages. Georgists don't believe wages should be taxed.

                                I accept that in a busy high street there is, from time to time a distorted
                                market in which shoe shops or others are willing to pay a premium for the
                                right to pay a “market rental” as agreed by rent review with a landlord.
                                These cases are relatively rare and cases of negative premiums replace them
                                when the market turns down when substantial premiums or rent subsidies are
                                paid by companies to hand back or re-let unwanted properties on which they
                                have a forward commitment.

                                Now we've moved further along, we can say that Vic Blundell's people were
                                not really measuring Rent but rack-rent. Certainly good economic conditions
                                will allow a higher rack-rent to be collected.

                                Of course, they often go to far in their demands, hence empty shops and even
                                in American central cities large empty office buildings.

                                I am of course looking at this from a UK standpoint where most industrial
                                and commercial primary (investment grade) property is institutionally held
                                and property leases are long (typically 21year) with upward only rental
                                reviews which are adjusted at 3 or 5 year intervals to “market value”.
                                Perhaps in more free markets……………..

                                Sometimes I wonder if we are all talking about different things.

                                What I see a proposed LVT as trying to capture is a sensible proportion of
                                the annual rental value of land in recognition of the fact that almost all
                                of the value exists because the community has provided the amenities,
                                services and infrastructure which gives it any value over and above the
                                value of a plot on which subsistence farming could take place. The
                                community decides which particular plots have the greatest value (Compare
                                the value of your shoe shop with the adjacent public park which makes
                                shopping there so pleasant) and should reap the consequent rewards. I see
                                considerable merits in the owner retaining some privileges and a share in
                                the plot rental. I want him to care about his land and to have a stake in
                                its future and the future of the community that made it valuable. Does
                                anyone agree and if so how do we get it adopted as law without revolutionary
                                disruption to existing systems?

                                If 100% of the Rent is created by the community, then 100% of the Rent must
                                justly be collected by the community.

                                I'm not sure how Brits assess property. About 100 years ago when I lived in
                                London, I seem to recall they based their property assessments on the rental
                                income of property. In the US they assess the values of land and buildings -
                                usually separately. On the other hand, I'm not sure how your Council Tax is
                                calculated.

                                The bottom line is that land is easy to value. Assessor Ted Gwartney tells
                                us that there is one land appraiser to every 9 improvement appraisers. If
                                the old Danish system is used, all assessments are easily comparable and are
                                published for everyone to see - and argue with. True democracy!

                                John



                                -----Original Message-----
                                From: Harry Pollard [mailto:henrygeorgeschool@...]
                                Sent: 27 September 2004 04:18
                                To: 'Land Café ( lc1) '
                                Subject: RE: [LandCafe] [diggers350] LVT - universally applied nonsen se

                                John,

                                A land-value tax is not so much a tax as a charge. The
                                location gives you (say) $100 a week advantage - you pay
                                $100. The $100 a week that attaches to a location measures
                                community access to it.

                                Vic Blundell used to manage a chain of shoe stores before he
                                became HGS Director in London. To determine whether the Rent
                                asked for a new store location was worthwhile, they would
                                send a couple of people down to count how many people passed
                                by each hour. They knew from experience, that a certain
                                percentage would stop, look, and perhaps buy shoes.

                                They were measuring Rent.

                                Now, if the Rent was recaptured by the community, it would
                                make no difference to the user. Some locations would be
                                worth $100 a week and he would pay $100, other locations
                                would be worth perhaps $1,000 a week, and he would pay
                                $1,000.

                                From the user's point of view it makes no difference whether
                                the Rent is paid to the landholder, or to the community.
                                (Actually, he would pay less to the community, for the
                                landholder would certainly be demanding rack-rent - which is
                                another discussion).

                                As the landholder would get nothing from the land, it is
                                likely he would simply sell, or transfer (for a price) the
                                land to the user - or use it himself.

                                This extra "price" above Rent comes from the efficiencies of
                                the user. If a particular site offers him a special
                                advantage he will pay for it. I would expect a brisk market
                                in land even with a 100% Rent recapture.

                                This is why I don't agree with using the market to determine
                                Rent. A market price includes the abilities of the user of
                                the land - not the business of the community. Rent is a
                                creation of the community. They have a right to recapture
                                it. What the user earns is no-one's business.

                                In fact, the appraisal of Rent requires no knowledge about
                                what is built on the site.

                                I would say that land nationalization is not a good idea.
                                Mainly because it isn't necessary. I don't want the
                                Government to be in charge of our basic resource,
                                particularly as collecting Rent does everything that's
                                needed.

                                Harry




                                [Non-text portions of this message have been removed]
                              • Harry Pollard
                                Thanks, Terry, I wrote of the Town and Country Planning Act to Paul. The item about it that has remained in my mind was that you could tear out all the floors,
                                Message 15 of 20 , Sep 28, 2004
                                • 0 Attachment
                                  Thanks, Terry,

                                  I wrote of the Town and Country Planning Act to Paul. The
                                  item about it that has remained in my mind was that you
                                  could tear out all the floors, knock down the walls inside a
                                  building without infringement. However, if you wanted to
                                  change the nameplate by your bell on the front door,
                                  permission was required.

                                  It was surely not that bad - but that's what I remember,
                                  probably because it's funny.

                                  Without land-value taxation, towns and cities grow
                                  higgledy-piggledy. A tall building is next to a two story
                                  walk-up, which is next to some black-top used for cars,
                                  which is next to a house, which is . . . . but you have
                                  seen the picture.

                                  Planners try to solve this problem (the latest US planning
                                  buzz-word is "infilling"). This means filling in the unused
                                  and underused holes in the city landscape that sprawls
                                  people towards the boondocks.

                                  It will fail - the money isn't available to buy the land. In
                                  any case, when deep-pockets hovers around - prices rise out
                                  of sight.

                                  Strangely enough, the land market is a collectible market.
                                  When demand causes prices to rise in a market controlled by
                                  the price mechanism, more goods are produced and rushed to
                                  market.

                                  When demand causes land prices to rise, no more can be
                                  produced and rushed to market, so prices continue to rise.
                                  When landholders see land prices rising, they are likely to
                                  keep it off the market - which further pushes prices up.
                                  From the engineering point of view this is positive
                                  feedback. (The free market is a case of negative feedback.)

                                  Hence the odd skylines of so many cities - a mixture of
                                  collectors refusing to put their locations to better use,
                                  and developers who must take second best - and cheaper -
                                  sites in a less appropriate area.

                                  If a hefty land-value tax is applied, collectors will be
                                  holding on to an expensive site rather than a piece of
                                  speculative land. They are likely to use it properly - or
                                  turn it over to someone who will. The landscape will change,
                                  as builders fill vacant lots and replace blighted
                                  properties.

                                  In such a situation, there will be plenty of opportunities
                                  for building away from the Georgians. There is a "Principle
                                  of Conformity" in assessment, where like uses group together
                                  and raise Rent. I think you'll probably build your 50
                                  stories near other 50 storied buildings. I call it
                                  "clustering".

                                  It's why TV shops, and suchlike, tend to cluster together.
                                  Business is better.

                                  The neighborhood around the 50 story buildings would develop
                                  to service people who live in 50 story flats. Your rentals
                                  will be easier to collect from your tenants if you build
                                  there.

                                  Currently, with market choices restricted, you build where
                                  you can - even if you tower over a row of Georgian houses.

                                  So, I think such problems are less likely to occur with LVT.


                                  I am in favor of general zoning, which means that planning
                                  experts generally suggest the best places for industry, or
                                  residential - based on the topography of an area.

                                  I am horrified when local zoning reaches down to the front
                                  door and forbids you to paint your doorstep red.

                                  Let's hear it for red, green, blue and puce doorsteps.

                                  Harry

                                  ****************************************
                                  The Henry George School of Social Science
                                  of Los Angeles
                                  Box 655 Tujunga CA 91042
                                  Tel: 818 352-4141 *** Fax: 818 353-2242
                                  ****************************************

                                  -----Original Message-----
                                  From: Terence Bendixson [mailto:t.bendixson@...]
                                  Sent: Monday, September 27, 2004 4:23 AM
                                  To: henrygeorgeschool@...; 'Land Caf� ( lc1) '
                                  Subject: Re: [LandCafe] [diggers350] LVT - universally
                                  applied nonsen se

                                  Harry

                                  Thank you for a clear exposition on the distinction between
                                  what the community and the individual contributes to the
                                  value of land.

                                  But as you must know, what the Atlee Labour government
                                  nationalised in the 1940s was the use of land. They enabled
                                  government to determine whether or not, for instance, a
                                  house could be converted into a shop or vice versa.
                                  Would LVT make such control obsolete? What if, under LVT, I
                                  wanted to build a fifty story block of flats next to a row
                                  of Georgian houses in Chelsea?
                                  Could I just get on with it?

                                  Regards

                                  Terence Bendixson, Secretary
                                  Independent Transport Commission
                                  University of Southampton
                                  c/o 39 Elm Park Gardens, London SW10 9QF Tel 020 7352
                                  3885attaches to a location measures community access to it.

                                  Vic Blundell used to manage a chain of shoe stores before he
                                  became HGS Director in London. To determine whether the Rent
                                  asked for a new store location was worthwhile, they would
                                  send a couple of people down to count how many people passed
                                  by each hour. They knew from experience, that a certain
                                  percentage would stop, look, and perhaps buy shoes.

                                  They were measuring Rent.

                                  Now, if the Rent was recaptured by the community, it would
                                  make no difference to the user. Some locations would be
                                  worth $100 a week and he would pay $100, other locations
                                  would be worth perhaps $1,000 a week, and he would pay
                                  $1,000.

                                  From the user's point of view it makes no difference whether
                                  the Rent is paid to the landholder, or to the community.
                                  (Actually, he would pay less to the community, for the
                                  landholder would certainly be demanding rack-rent - which is
                                  another discussion).

                                  As the landholder would get nothing from the land, it is
                                  likely he would simply sell, or transfer (for a price) the
                                  land to the user - or use it himself.

                                  This extra "price" above Rent comes from the efficiencies of
                                  the user. If a particular site offers him a special
                                  advantage he will pay for it. I would expect a brisk market
                                  in land even with a 100% Rent recapture.

                                  This is why I don't agree with using the market to determine
                                  Rent. A market price includes the abilities of the user of
                                  the land - not the business of the community. Rent is a
                                  creation of the community. They have a right to recapture
                                  it. What the user earns is no-one's business.

                                  In fact, the appraisal of Rent requires no knowledge about
                                  what is built on the site.

                                  I would say that land nationalization is not a good idea.
                                  Mainly because it isn't necessary. I don't want the
                                  Government to be in charge of our basic resource,
                                  particularly as collecting Rent does everything that's
                                  needed.

                                  Harry

                                  ****************************************
                                  The Henry George School of Social Science of Los Angeles Box
                                  655 Tujunga CA 91042
                                  Tel: 818 352-4141 *** Fax: 818 353-2242
                                  ****************************************



                                  _____

                                  From: John Havercroft [mailto:john.havercroft@...]

                                  Sent: Thursday, September 09, 2004 4:13 AM
                                  To: Wetzel Dave; 'Land Caf� ( lc1) '
                                  Cc: 'Joseph Casey'
                                  Subject: RE: [LandCafe] [diggers350] LVT - universally
                                  applied nonsen se


                                  Well I agree with all this. My difficulty is that if LVT is
                                  set at 100% of current rental value and is updated every
                                  year there ceases to be any market for land at all as
                                  ownership confers no financial benefit and ownership will
                                  incur considerable risks as even a short void will give rise
                                  to loss.

                                  Having removed any market for land there ceases to be any
                                  competitive pricing mechanism as there will be a monopoly
                                  supplier - the valuation office who will determine the rent.

                                  How would this be different in effect from land
                                  nationalisation; or is this where you came in Dave?

                                  John
                                  such as bonds, money,
                                  and derivatives. In a perfect market, land speculation
                                  would be not be practiced, because all rent would be paid as
                                  LVT. Because land markets are not perfect there will always
                                  be speculative winners and losers, let them pay LVT,
                                  otherwise speculative gains go untaxed as long as they are
                                  held, thus encouraging longer holdings.

                                  Joe Casey




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                                • Harry Pollard
                                  John, Sorry to inflict an economics textbook on you but I can t think of any other way to let you know how I think. I must also apologize for a double
                                  Message 16 of 20 , Sep 29, 2004
                                  • 0 Attachment
                                    John,

                                    Sorry to inflict an 'economics textbook' on you but I can't
                                    think of any other way to let you know how I think. I must
                                    also apologize for a double infliction - writing in blue
                                    when blue didn't show. I must thank Scott for telling me
                                    about that. Yet, your note is in red on my machine.

                                    It's a puzzlement.

                                    Anyway, you know that Rent is a community created value that
                                    attaches to your location. If you have a good location, your
                                    final production will be greater than the fellow down the
                                    road on a poor location - even though you both use the same
                                    exertion, have the same capital, are equally able and
                                    industrious.

                                    The difference in your final result is Rent - the
                                    contribution of the community. That's why I like Georgism.
                                    Public revenue doesn't really come from a tax. The holder of
                                    a location just pays back what he gets. It's a user charge.
                                    (Obviously, politically one talks of a tax - something
                                    people know about.)

                                    Does ownership of locations change with Georgism. Not at all
                                    - the title deed remains, ownership remains - with the
                                    normal caveats that we have now. (There are four in the US:
                                    escheat, taxation, police power, and eminent domain - it is
                                    probably the same in Britain).

                                    So, to answer your final question first - although the
                                    concept is revolutionary in its change for the better, the
                                    application means that revenue is collected from a
                                    difference source.

                                    However, the people who have control of that different
                                    source are among the most powerful in the country. They will
                                    fight to keep taxation on the back of the workers - and they
                                    have always fought hard.

                                    The last major battle was won by the land-value taxers but
                                    the veto power of the House of Lords had to be destroyed
                                    first. It was.

                                    For most people they would get an immediate drop in their
                                    local taxes - a measurable drop. Those who would pay more
                                    are owners of vacant lots, slum properties, and those who
                                    use a lot of land unnecessarily. Smallholders and farmers
                                    would be better off. Large landholders who do a bit of a
                                    farming would be pressured to use their land more
                                    efficiently - or they would suffer.

                                    Britain would be completely changed, yet it could be a
                                    peaceful change, as taxation is shifted away from production
                                    on to land.

                                    Now to your specific comments. You said:

                                    " I am much less sure about farm land on which the
                                    encouragement of good husbandry is vital to the community;
                                    and we all know what a success collective farming was. As
                                    an observer of behaviour I believe that, in general, owners
                                    who have a financial stake in the value of their property
                                    take better care of it."

                                    Based on the philosophy of Sun Yat Sun, The Chinese generals
                                    ordered a land-value tax land reform. They distributed land
                                    to the peasants. Each farmer received 5 hectares (12.5 acres
                                    for US readers). They paid the land-value tax, but paid no
                                    taxes on their production. The land-value tax was based on
                                    "the expected yield of the main crop".

                                    Thus, a second or third crop meant no additional tax.
                                    Further, if you got a higher yield than "expected" no
                                    additional taxes were imposed.

                                    Taiwanese farmers produced as many as five crops from their
                                    5 hectares.

                                    A mushroom crop erupted from their basements, but my
                                    favorite extra crop was fish. They imported fish from
                                    Indonesia and bred them in the water filled paddy fields
                                    while waiting for the rice harvest.

                                    For any Malthusians on the list, it should be noted that at
                                    one point they were producing a net export of food with a
                                    population density greater than 1,300 to the square mile.

                                    As the Economist noted, the 'Miracle of Taiwan' was "based
                                    on a successful land reform". (That's now past. A Taiwanese
                                    farmer is likely to make his money in a factory while
                                    operating a farm part-time - a result, perhaps, of
                                    comparative advantage.)

                                    We agree, ownership is the path to best usage.

                                    Now to your trouble with simple definitions.

                                    There are three stages in definition. First comes a concept,
                                    a notion that seems to stand on its own. It may be fairly
                                    amorphous, so first it must be 'defined'. That means putting
                                    a fence around it so that everything to do with the concept
                                    is inside the fence - but not outside. Everything not part
                                    of the concept is outside the fence - but not inside.

                                    Defining is the difficult part of definition.

                                    Then comes the label you mean to put on the defined concept.
                                    Although some labels are better than others, you could use
                                    any name. The name is the least important part of the
                                    exercise, yet that gets the most attention.

                                    As C.E.M. Joad used to say "It all depends on what you mean
                                    by . . . . "

                                    Properly defined and named concepts are vital to reasoning.
                                    Perhaps a major reason for failed discussions is that all
                                    participants use the same words, but those words mean
                                    different things to each one.

                                    Don't knock simplicity. It's the best way to understanding.
                                    The way you get to straightforwardness and
                                    antidisestablishmentarianism is by using 26 simple letters.
                                    First learn and understand the letters and the dictionary is
                                    open to you. You ahrdly dismiss the letters as too simple to
                                    bother with.

                                    So, your examples, pensions (deferred earnings), brands,
                                    vested interests, labour cartels, (of stevedores or lawyers)
                                    goodwill or internet sites can be looked at:

                                    - pensions, I suppose, are your "wages" that are saved by
                                    you, by an employer, or by the government.

                                    - brands I'm not sure about. Do you mean the signature on a
                                    can or package that tells you what is inside?

                                    - vested interests, as I understand your meaning, are
                                    covered by the defined concept "privilege" that I have dealt
                                    with elsewhere. (I'm sure you don't mean tailors who make
                                    robes for churchmen.)

                                    - I assume by labour cartels, (of stevedores or lawyers),
                                    you mean coercive groups who by privilege get a better slice
                                    of the action. The free market would take care of that.
                                    However, the market can't be properly free until the land
                                    problem is dealt with. Modern unions are not to be compared
                                    with the early unions, where members fought desperately and
                                    sometimes died trying to get a better livelihood.

                                    - goodwill is wages.

                                    - internet sites seem to be free land without Rent. I am
                                    prepared to be convinced otherwise.

                                    Land valuation while not a sure thing, is pretty easy. It's
                                    done all the time. In a land-value taxation community, it is
                                    even easier if the Danish land value map system is used.

                                    I'll do something on Danish valuation methods if you like.
                                    Also on the "Peanut Sales" valuation carried out in Weston,
                                    Canada, by the local citizens. That one I particularly like.

                                    Harry

                                    ****************************************
                                    The Henry George School of Social Science
                                    of Los Angeles
                                    Box 655 Tujunga CA 91042
                                    Tel: 818 352-4141 *** Fax: 818 353-2242
                                    ****************************************

                                    _____

                                    From: John H Pipex [mailto:john.havercroft@...]
                                    Sent: Tuesday, September 28, 2004 10:53 AM
                                    To: henrygeorgeschool@...;
                                    john.havercroft@...; 'Land Café ( lc1) '
                                    Subject: RE: [LandCafe] [diggers350] LVT - universally
                                    applied nonsen se


                                    Harry,

                                    It all seems a bit cut and dried this – sounds like an
                                    economics text book. I think I accept that for a city
                                    property there is a value (though without any market I don’t
                                    see how you ever arrive at it) and that there is good
                                    theoretical reason to claim 100% of the rent for the
                                    community. I am much less sure about farm land on which the
                                    encouragement of good husbandry is vital to the community;
                                    and we all know what a success collective farming was. As
                                    an observer of behaviour I believe that, in general, owners
                                    who have a financial stake in the value of their property
                                    take better care of it. Speaking for the community I, and I
                                    think a majority, would be happy to share ownership and rent
                                    with someone who cares for our farm land.

                                    I am also troubled by these simple definitions of rent,
                                    land, wages and capital in a modern society. They don’t
                                    seem to me to take account of pensions (deferred earnings),
                                    brands, vested interests, labour cartels, (of stevedores or
                                    lawyers) goodwill or internet sites to name but a few of the
                                    complicating factors which also command rents in different
                                    ways. Should we the community perhaps be charging Amazon a
                                    substantial rent for the ephemeral property from which they
                                    trade, which was community created?

                                    You didn’t, and so far others haven’t, responded to how to
                                    achieve this LVT charge without unacceptable revolutionary
                                    change out here in the real world of England in 2004. My
                                    interest is a practical one of achieving a fairer tax system
                                    not a search for the academic perfection of long dead
                                    theoreticians of the dismal science.

                                    John




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