Re: [LandCafe] Re: transport planning - time savings and land value increases arise
Re: [LandCafe] Re: transport planning - time savings and land value increases arise
THE introduction of a homestead allowance is recommended by the Labour Land Campaign for the UK because we face huge opposition from householders to the idea of LVT.
We see the Homestead Allowance as being similar to the personal allowance given as a tax-free relief on the first £5k of income for UK income tax purposes.
THE allowance would only apply to one home worth less than £2m pounds.
It might be say £1k per property.
If it is not increased over the years then inflation would reduce it so that eventually it would whither on the vine.
Tel: 020 7126 4200
From: LandCafe@yahoogroups.com <LandCafe@yahoogroups.com>
To: Harry Pollard <henrygeorgeschool@...>; LandCafe@yahoogroups.com <LandCafe@yahoogroups.com>
Sent: Wed Aug 08 01:54:33 2007
Subject: RE: [LandCafe] Re: transport planning - time savings and land value increases arise
Sorry this response is so late.
Harry Pollard <henrygeorgeschool@...> wrote:
On June 25, Harry Pollard wrote:
>>>>Perhaps Harry can explain what qualifies him to dismiss as
>>>>"nonsense" a proposal that he has not been able
>>>>successfully to rebut.
>>>I've been teaching economics for almost 60 years.
>>That would perhaps qualify one to collect a pension, but not, I
>>believe, to dismiss others' contributions as nonsense.
>I do not dismiss others’ contributions as nonsense.
"Denial is not just a river in Africa." -- Mark Twain
>I dismiss the proposal of land value tax exemptions for everyone
The equal rights of everyone to use land combined with the
self-evident and indisputable fact that everyone DOES use land
proves that an equal LVT exemption for everyone is not nonsense
at all, but a very sensible solution to the problems of land access
>What's your excuse for delivering nonsense?
Please see above re dismissing others' contributions as nonsense.
>>>I also haven't rebutted "there are fairies at the bottom of
>>>my garden". Exemptions are in the same category as fairies.
>>I guess you must have missed Dave Wetzel's quote from Brian
>>Hodgson in the previous edition of the LandCafe Digest (#845),
>>which explained that the Labour Land Campaign and ALTER
>>both believe in "exemption fairies" too:
>>"Note: both the Labour Land Campaign and The Liberal
>>Democrats´ pro-LVT group ALTER favour a Homestead
>>Allowance for all householders, which would, of course, be a
>>"progressive" move to ensure that those with the lowest incomes
>>could afford to pay LVT. Both groups also state that this
>>Allowance would NOT be given in the case of second or third
>The economic effects of collecting Rent are weakened by any
They would not measurably be weakened by the proposed
exemption, and any derisory weakening would be far overbalanced
by the economic and societal benefits obtained by recognizing the
equal individual rights of all to use land.
>and the economic effects are far more important than any
No, I have already proved that claim false multiple times. The
economic effects of recovering land rent for public purposes will be
that a minority of economic activities moves to slightly better
locations, production increases, and unemployment declines. These benefits
are certainly significant, but because almost all private landowners are already collecting almost all the rent of their landholdings, the economic effects of recovering the remainder of the land rent will certainly be far less important than the effects of relieving productive activity of the burden of taxation.
>Community Rent collection will pay city expenses and maybe a
You have made this claim dozens of times, but have never provided
any evidence for it other than additional unsupported claims about
an idiosyncratically defined "rack-rent."
>However, political practicalities sometimes require amendments
>that are not perhaps economically the best.
I see. So, you are now prudently recanting your peculiar claim that
universal personal land tax exemptions are "nonsense" on a par
with garden fairies, in favor of a claim that at least shows some
respect for your readers' intelligence: that they "are not perhaps
economically the best." Very good!
In the same spirit, then, I will refrain from observing that opposing all
conceivable LVT exemptions a priori smacks of anti-scientific and
politically suicidal religious dogmatism, and instead state that it is
not perhaps pragmatically the best.
>It would be better if first VAT and suchlike exactions that harm
>poorer people were diminished or ended.
Indeed. Which makes your minimization of the benefits of shifting
the tax burden off production all the more puzzling.
>>>>>Your land title gives you the right to use the land,
>>>>Really? Well, I guess that puts it as plainly as can be: if
>>>>I don't have a land title, I have no right to use any land,
>>>>and am effectively the slave of those who do, just as under
>>>>the current system. Thanks for clarifying that point for me.
>>>You have funny ideas. The land title is simply proof of
>>>ownership. It gives you security of tenure.
>>And lack of one gives you security of NOT having tenure -- nor,
>>perhaps, a place to sleep. Right.
>Are you suggesting that if you have no proof of ownership you may
>still claim you own something?
??? I cannot see any honest way of construing my statement thusly.
But even though it is a strawman, it is certainly true, as a
nanosecond's honest thought on the matter will confirm. Proof: I
have lent books to friends with no proof of ownership, but I still own
The normal form of a strawman argument is first falsely to ascribe
self-evidently false claims to the opposition, and then question those claims. You might want to consider how much less convincing it is first to ascribe self-evidently TRUE claims to the opposition, and then question them...
>What a bonanza for the bandits!
Are you suggesting that bandits are free to make off with others'
cash just because once it is in the bandits' possession, there is no
proof that the rightful owner owns it?
>Security of tenure is necessary if anything useful is to be done on
>a site. You won’t build a home, or sow a crop, if anyone can
>trespass on your property whenever he wishes.
Are you suggesting that because tenants do not possess title
deeds, they do not have secure tenure, and consequently cannot do
anything useful on a site?
>Security of tenure is what a title-deed provides (or should).
A title deed provides nothing of the sort. It only identifies whose
_claim_ to ownership the authorities will attempt to enforce.
>In a Georgist economy it is not at all necessary to own land. You
>might live in an apartment, or with your family. You don’t need a
>title-deed to have a place to sleep.
Allow me to draw your attention to your own words, above: "Your
land title gives you the right to use the land." I therefore repeat my
question yet again: if you have no right to use land unless you have
a land title, and you DON'T HAVE a land title, do you then have no
right to use land? How is it that others' land titles somehow
extinguish your right to use the land without your consent?
>This rests on the belief that justice requires every person to have a
>piece of land.
Another strawman. I am not the one who is claiming a title deed is
needed to have secure tenure, or even a right to use land. You are.
>Nothing could be further from the truth. One can understand this
>being important back when fewer than 2,600 landholders had a
>firm grip on most of Britain. Having a piece for oneself became an
>objective for the landless.
?? Are you suggesting that having a piece of land for oneself is not still
an objective for the landless (indeed, their most reliable way out of
penury) now that land is held by millions?
>But, 100% Rent collection handles this in elegant fashion.
You still have not explained how making everyone pay to use land
is the way to secure everyone's rights to use land, although you
presumably understand that making everyone pay to breathe air is
not the way to secure everyone's right to breathe air.
>Perhaps you don’t realize that a Georgist economy without
>rack-rent and ‘collectible’ land prices will make movement easy
>and certainly attractive.
Having moved a number of times as a tenant, I doubt that moving
will ever be easy or attractive. But at least rent recovery will make
moving a less daunting financial risk for those who prefer to own.
>And when you move, your new proof of ownership will be your new
I'm not sure what I can say to persuade you that the matter in dispute is not the extent of the privilege attested by the title deeds of those who own land, but the land-use rights of those who do not.
>>>In Mexico, land that generations of peasants have worked is
>>>being stolen from because they have no title deeds.
>>Whereas the title deeds held by Mexico's rich landowners,
>>covering almost all the useful land in Mexico, somehow do not
>>represent land stolen from the generations of peasants who have
>>worked it for the unearned profit of said landowners...? Sorry, but
>>picking some land titles as rightf! ul and others as not rightful is
>>not going to fly.
>Non sequitur. Try not to tell everyone what I didn’t say - even
>though you are good at it.
?? It is not a non sequitur at all. You claimed, absurdly, that some
fraction of the small amount of usable land in Mexico that is not
owned by large landowners was being "stolen" from the peasants
who work it because they have no title deeds. I refuted your claim
by identifying the fact that those peasants are dependent on that
land precisely because all the rest of the land was stolen from their
ancestors precisely by means of earlier title deeds. What on earth makes you think that granting today's peasants title deeds to the land they work would not similarly dispossess future peasants who lack title deeds?
>>>How do you become a slave of people who have land titles?
>>>As I say, you have funny ideas.
>>Yes, well, Henry George seems to have shared some of those
[snip quote from Henry George]
>Before slavery was ended, in places like West Virginia, white
>‘free’ men were cheaper to employ than slaves.
>The power of slavery lay in the Rents the slave-owner could enjoy.
?? Why did you ask how one becomes a slave of those who have
land titles, calling it a funny idea, and then proceed to explain
exactly how landless whites effectively became little better than
slaves of those who had land titles in the antebellum South?
>>>>>Once 100% of the Rent is paid, the title holder has
>>>>>fulfilled his obligation to the community. Leave him
>>>>And the community's obligation to secure the equal rights
>>>>of all to use land....?
>>>That's what collection of Rent does. I see you need a lot
>>?? How does requiring people to pay rent for use of land secure
>>their rights to use it? Do you also think that your right to breathe
>>would be secured by having to pay for air instead of getting it for
>Non sequitur. All one owes to the community for the land they are
>using is the Rent. Once this Grundskyld (ground debt) is paid, they
>owe nothing more to the community (except perhaps to be a good
>Their right to use it is proven by their title deed.
??? And you accuse ME of non sequiturs?
I repeat: How does requiring people to pay rent for use of land
secure their rights to use it? And if the right to use land is only
proved by a title deed, how did people ever manage to survive and
use land for millions of years without any title deeds?
>>>For location Rent collection to work at optimum efficiency
>>>it must be fully collected. There must be 100% collection
>>Could you please estimate how much of the economic benefit of
>>LVT would be lost by only collecting 99%?
>You don’t know about such things,
Actually, I do know about them; and although you seem to enjoy
some sort of immunity from the normal constraints of civil discourse
on this list, I will thank you to restrain your enthusiasm for gratuitous
insult in future.
>but in practice, assessment of land-values is never precise. One
>year it might collect 99%, another year it might be 101%.
OK, then please estimate how much of the economic benefit of
LVT would be lost if one year 98% were collected, and another
>One of the peculiar ideas – like exemptions – is the idea
>sometimes bruited in Georgist circles that some amount –
>perhaps 20% - of the Rent should be left in the hands of the
One could perhaps argue for leaving an amount of rent comparable
to the standard error of impartial professional assessments (i.e.,
3%-5%) in landholders' hands. The cost of increasing rent recovery
from 99% to 100% could easily exceed 1% of the rent, and there
are sound political and marketing reasons not to levy an ad
valorem LVT rate greater than 100%.
>>>However - as you have said yourself - the market
>>>price mechanism doesn't work with land so landholders can
>>>drive up their demands until the wages of those at the
>>>bottom are forced down to subsistence.
>>?? I said that? When?
>>“The very fact that the elasticities of supply for labor and
>>capital are significantly positive and the elasticity of
>>supply for land is zero . . . . . . .”
>When I mildly chided you for this with:
>>“But does not your remark "the elasticity of supply for
>>land is zero" give you pause?”
>>No, because I know the difference between supply and demand.
>This is interesting because supply and demand are the same.
That is not interesting, because it is nonsensical. If those who have
been teaching Georgist economics for the last 60 years think
supply and demand are the same, one need hardly look further for
the explanation of that school's current marginal status in both
politics and economics
>>>Labor pays all above subsistence to the landholder. They
>>>are paying rack-rent.
>>Around here, at least, labor seems actually to get quite a bit
>>more than subsistence. Hence my skepticism regarding
>>rack-rent. It's also hard to see how rising rack-rent can possibly
>>be responsible for driving up residential land values in the USA
>>when the residential vacancy rate has hit 10%, and market rents
>>have been stagnant for years.
>People at the bottom of the wage pyramid are forced down to
>subsistence by rack-rent.
Again, there is an absolute lack of factual and logical support for
this claim, other than additional unsupported claims. People at the
bottom of the wage pyramid are generally not very productive, and
their wages would probably be well below subsistence if they were
working the marginal land they would be relegated to if 100% of
rent were being recovered and they were not granted either an
exemption or a CD.
>But then the welfare state kicks in and considerable amounts of
>wealth are transferred. When one notes that “labor productivity’
>has been rising every year for decades, one must wonder why
>welfare is necessary.
It is necessary because people without land titles are deprived of
their rights to use land without compensation -- which your
proposed system would continue to do.
>>>Not that we need worry. With 100% collection of Rent,
>>>rack-rent will disappear. The assessed value of land will
>>>equal the value given to it by the surrounding community.
>>IMO there is no useful -- or even discernible -- distinction to be
>>drawn between the economic advantage conferred on the land
>>user by the surrounding community (assuming there even is one)
>>and by the world at large.
>Well, you have a right to your own opinion.
Yes, and unlike many opinions that are offered, it is a reasoned and
>Perhaps you are unaware that land value drops significantly one
>block from a well frequented High Street. Two blocks away mean
>an even sharper drop.
Perhaps you are unaware that land values are significantly higher
around international air transport hubs and deep-water harbors that
serve ocean-going freighter traffic than in more populous
communities that lack such opportunities to conduct business in a
>This must be because of the activity of the people in Katmandu.
Though you are evidently very fond of them, I'm not sure what you
think such bizarre non sequiturs contribute to the discussion.
>>>I don't think that the proceeds of Rent collection will do
>>>much more than take care of local infrastructure and
>>>perhaps some other services such as police and fire.
>>Yet in Meiji Japan, a mere 2.5% LVT paid for not only a massive
>>infrastructure program, but establishment of a large public
>>education system and modernization of the military, plus almost
>>everything else the government was doing.
>Give me a source, not a general one, but the specific taxes levied
>during the Meiji period and the amount collected – or, at least, >point
>me to where I can find this. I know they had land taxes but I would
>like to know the source of your statement.
Unlike many peculiar claims about such phantasms as rack-rent, my statements are provably true:
"The next year, in 1873, a thorough revision of the agricultural tax system was undertaken. All land was to be valued at an estimated price and the owner was to pay an annual tax of three per cent of its value in cash. Since the new monetary tax came close to half of the field’s productivity, the percentage was reduced to 2.5 per cent in 1876.
"The advantages of the land tax to the Meiji government were considerable. First, it continued to be the chief source of government income, amounting to 80% of the total revenue by 1880, and 60% by 1894."
Now, please give me a source, not a general one, but specific numerical data that support your claim that the total land rent recovered by LVT would be little if any more than enough to supply local services and infrastructure.
>However, if one uses land as a basis for taxation and raises the
>land tax until enough revenue is collected for (say) all government
>needs, it is likely that most of what is collected actually comes >from wages.
That depends on how much revenue you think government "needs" relative to how much rent the land base yields. There are obviously economies based on resource extraction where the rents of those resources well exceed all the government's needs
And as I proved to you above, a 2.5% tax on the value of _agricultural_ land supplied 80% of ! the Meiji government's considerable needs in 1880.
You should perhaps also be aware that an ad valorem land tax cannot recover revenue in excess of the land rent, as land value would become negative.
>>>>>I would not expect
>>>>>this to provide much more than enough to run local
>>>>Perhaps you could describe the methodology used to arrive
>>>>at this estimate.
>>> I'll be happy to explain
>>>some of the economic effects of collecting Rent that reduce
>>>land-values, if you want.
>>I'd be more interested in your explanation of why actual
>>implementation of LVT typically makes land values rise even
>>faster than before.
>This is another fallacy that makes the rounds.
It is not a fallacy. It is a fact. And you still have not provided even the outline of a methodology used to arrive at your estimate of rent.
>When a small LVT is
>levied, this is enough to stimulate movement in a relatively
>paralyzed part of the economy. Increased economic activity is
>likely to raise land sales prices. If a greater amount of LVT is
>taken, it bites into this increase and down it comes.
Please provide even one example where this has actually occurred.
>The more LVT that is
>taken - up to 100% of Rent - the lower the sales price of land until
>it disappears altogether.
In theory. But then, in any credible theory, rack rent disappears altogether...
>If land prices rise with the introduction of LVT it means that not
>enough is being collected.
But it also proves that your rack-rent claims are just false. Otherwise, rents would come down with the increased efficiency of use. And they don't.
>>>>>If there should be a surplus over expense and
>>>>>contingency, just give it back to the people who produced it.
>>>>The people who produce rent and the people who have a right
>>>>to use land are not identical sets.
>>>The people who produce Rent are the local community. Every
>>>member of the local community has a right to use land -
>>>actually, they can't avoid it.
>>>Seems to me to be pretty identical.
>>That's the Fallacy of Composition. The community produces the
>>next generation of kids, and everyone has BEEN a kid, but that
>>does not mean everyone HAS kids. Likewise, every member of
>>the community does have a right to use land, but not every
>>member contributes to the economic advantages enjoyed by the
>>land users (rent).
>Vic Blundell told us how his shoe store chain decided whether the
>rent demanded for a possible new store location was appropriate.
>A couple of employees went to the new location and counted the
>number of people who passed the store.
>They didn’t ask whether anyone would enter a shoe store, or
>would buy shoes, or whether anyone had any money. Or, even
>whether any of them had any children. They just counted the
>number who passed by and came to a determination.
Thank you for repeating that anecdote. I guess you must have missed my demolitions of it all the previous times you've hauled it out.
>When you understand this, you’ll probably begin to understand
When you understand that the market rent (what the landowner demanded) of the locations was not the same as the rent a shoe store entrepreneur was willing to pay for them, you'll perhaps begin to understand rent. But you will first have to let go of your false belief that Vic Blundell's method of finding suitable locations for shoe stores is the last word on it.
>>>>No, the amount of urban land currently held idle is
>>>>derisory compared to the amount of land that is already
>>>>"country." More efficient use of urban plots will therefore
>>>>affect the location of the margin -- and thus land rents --
>>>>hardly at all.
>>>American cities can spread 50 miles in every direction. I'm
>>>told that the London conurbation spreads out to Bristol.
>>>You'll recall the study of Metropolitan New York that
>>>concluded that 79% of its usable area was unimproved for
>>>urban use (86% of the gross area).
>>That is merely a measure of how broadly the "metropolitan" area
>>was defined. If you could give a URL for that study, I could
>>probably tell you more about why it does not mean what you think
>Read Mason Gaffney’s “Urban Expansion, will it ever stop?”.
I have. As I expected, it does not support your claims. Care to try again?
-- Roy Langston
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