Thought experiment: if all habitable land on the planet is surveyed and transferred to private ownership, all subsequent generations that are born from that point on, will be doomed to rent-based servitude. Forgetting all political theory, it seems that planet-bound species with a positive population growth rate must not rely on socioeconomic systems that exclusively (or heavily) favour private ownership of land.

Georgism stipulates that it doesn't matter who owns the land so long as they pay a tax on it that goes back to the people.

You could say that the people really own the land and call it "land rent" instead of "land tax" but mathematically its the same thing.

What I appreciate about Georgism is that it can neatly avoid the difficult issue of justifying exclusive use of land without resorting to ideas like 'First Occupation' or vindicating violent acquisition.

Essentially, you could say that all land starts out as - and remains - common property (because nobody created it) but a land value tax allows an individual to 'purchase' the exclusive rights to a natural resource by compensating the owners (i.e. everyone else) for their exclusion.

In George's terminology 'land' effectively includes all natural resources. This gives us a good analogy that most people might not consider when thinking about private ownership of land. The radio spectrum. We generally do not allow private ownership of a portion of the radio spectrum but instead ask for payment for exclusive use of the resource for a determined amount of time. To allow ownership in perpetuity based on a one-off payment seems simply wrong in this case. Land, water, etc are similar.

Totally! You have clearly understood George's most important insights.

> Give me the private ownership of all the land, and will I move the earth? No; but I will do more. I will undertake to make slaves of all the human beings on the face of it.

From "Archimedes", by Mark Twain, 1889

If the land is taxed then you must find a renter willing to pay more than your tax, otherwise you would sell. Meanwhile renters will search for the lowest rent, which is naturally found in high density areas. So cities would still form, and the vast tracts of unoccupied land would be money-losing assets that must be abandoned, at least until population growth makes some of those plots profitable. The market would fluctuate with supply and demand, just as it does today.

Abolish land "ownership", and limit leases to 99 years. Existing ownership relations can be grandfathered in, but they will of course eventually disappear, in much the same way as how scientific revolutions eventually succeed: via the biological demise of the preceding hegemony.

I don't think we're projected to have positive population growth for much longer. Also what does rent based servitude even mean? I own a house but still have to pay taxes and upkeep. It's really not much different from rent. The tax supposedly goes to pay for services that the govt provides back to the people. If I were to pay rent instead, at least the service I receive in return is provided back to me specifically, and the cost of switching if I don't like the deal being offered is much lower.

Rent, healthcare, and the price of eggs are very popular things to complain about for some reason...

Property is Theft!

I thought of a slightly milder version of the tax, which I call a land wealth tax. Fix a certain maximum value of land owned by a single person which would not be taxed. In theory this might be some quantile, like the 80th percentile of land value owned per person. (I'm pretty sure you would still be taxing the majority of land using this threshold! At least at first.) Then everything owned above that is taxed by value. This avoids a rebellion of the most vulnerable and sympathetic homeowners. Of course land owned through opaque ownership structures must be assumed to be above the limit. Corporations with transparent ownership structures might see their land divided up (a likely intractable math problem if you included publicly traded companies) or some approximation applied, or the land simply taxed.

One advantage of taxing land wealth versus wealth in general (a la Piketty) is that land — "real" property — is much harder to hide in offshore corporate holdings than general wealth. It is all documented by necessity.

I have no expectation, unlike George, that taxes on land could fully satisfy the general fund. But they could certainly play a significant part. A significant difficulty with land value taxes in general is the assessment of land value, which is a difficult problem and has caused controversy in the past due to fluctuations and apparent inconsistencies. My preferred approach in the United States would be a Constitutional Amendment, which would allow centralizing the necessary expertise with the resources of the federal government.

I like your creativity here but there have been actual calculations done around this and carving out provisions for tax exemptions is not necessary.

Pragmatically speaking, a land value tax would be rolled out first by replacing property taxes with land value taxes, and the majority of people come out far ahead at this stage because people live on lots that have been developed. It is underdeveloped lots that are losers in this phase.

A true georgist would not stop here though, and they would slowly continue to ramp up land value taxes, but rather than replacing property taxes, they would start lowering other taxes on productive activities such as sales taxes or income taxes. But this would be a slow transition.

Additionally, you would include provisions during this phase where tax payments could be deferred until the sale of the property in order to protect individuals who happened to purchase a home that has dramatically increased in value. This prevents situations where an older person might be forced out of their home due to higher taxes. The goal here would be to transition over the long term and protect people who invested significant amounts into their property. The rates would stay relatively low for quite some time. Having lower rates also solves issues that you mention around accuracy of assessments. If you only tax up to 33% of the rental potential of a property, then you can be off by literally a factor of 3 in an assessment and the land will still be profitable to utilize.

This is called means testing, and it's a poor way to design policy because it creates step functions and breakpoints, distorting the market.

The tax I described is not a step function. It is a ramp function. By your definition, the progressive income tax would also be "means testing".

What you described ("minimum value that is not taxed...") is the definition of a step function. But yes, binned income brackets is also a form of means testing, and a poor way to design taxes.

You seem to be getting downvoted but I agree that this is a good idea.

Developers already want to build. The problem is the law.

Correct. Zoning code prevents building density and building codes force building crappy multi-family housing with tons of parking everywhere. Sprawl and car-dependency are bankrupting America.

The Georgists agree!

Indeed, my state's constitution severely restricts how cities can tax themselves.

> What dense city with a thriving commercial and business/industrial base is cheaper to live in than a less-developed rural small town?

Wrong question; dense cities with thriving economies are more valuable, so they should be more expensive. The question is who collects the rent? Land title holders, or builders and value creators?

>What dense city with a thriving commercial and business/industrial base is cheaper to live in than a less-developed rural small town?

Um, any city whose residents want services? Does your rural small town need a plumber? That plumber can offer lower costs if there's a wider, more predictable userbase for him than in the small town.

This applies to any store selling specialist goods, too - if the small town only has a single store, which stocks something that's only bought once a decade, then the buyer pays the cost of the good plus an entire decade's worth of interest. If the city can have a specialist good that sells that stuff one a month, then it'll be cheaper.

If you aren’t buying something frequently, you drive to the big city when you need it, or you order it. Most specialist goods just aren’t available in a small town same day at any price.

Plumbers and other non niche service providers are also generally cheaper in small towns because cost of living is higher for the plumber too, all potential customers have less disposable income, and because the market isn’t perfectly efficient.

Housing and basic necessities like groceries are so much more expensive in thriving dense cities than in rural small towns, that they swamp out any costs for the vast majority of people.

Nope.

The law is sometimes a large barrier, but there are plenty of places in the world with high housing costs which have minimal regulations.

The problem is the cost of land.

Developers are severely capital constrained. They take massive loans from Banks. Most of those loans go to paying for the land.

Additionally, a large portion of their profits come from the increase in land value that they create from building. Land prices per unit area are higher in a new subdivision than they are in an undeveloped lot(Obviously the majority of the property price increase comes from the building, but the land also increases is my point). It doesn't cost anything to squat on the empty lots while building, so developers purchase multiple undeveloped lots near each other to capture this increase and minimize their purchase cost. Unfortunately, a side effect to this is that the developer basically becomes a monopoly on that area and no other developers or builders can compete with them. This lack of competition is one of the reasons that quality of new build construction has been on decline.

In a world with a land value tax, the acquisition cost of land is significantly lower, but holding it is significantly more expensive. This means that a builder is incentivized to purchase smaller tranches, and hold each lot for less time before starting construction. They will be able to invest more into larger teams because they did not need to loan as much to pay for the land. This will speed up development and also improve efficiency by allowing for more competition.

It’s called land use taxes. It’s probably one of the best ways to change the most negative behaviors that brought about this situation (if combined with less regulated zoning)

I don't have a great sense as to how this works across the world, but where I'm at (Seattle) your property tax is a factor of both the improved and unimproved aspects of your parcel. The improved ones being the value of the buildings and the unimproved being the value of the land itself.

If you had a massive plot in an urban area, undeveloped, presumably the unimproved portion of your property tax would be quite high! But, the issue is that restrictive zoning means that typically the unimproved value of your tax assessment are pretty low.

For example, if you live on 2 acres, but zoning says that you can only put 1 dwelling unit per 5 acres, then you can't really do much with the remaining acres. As a result, the remaining land has little value, and the tax on it is low. This is especially true in areas of little industry, where the same zoning regulations might also prohibit industrial or agriculture uses on that same plot of land!

This is all to say that the structure you're looking for may already exist, but the issue is still in zoning.

I don't think you disagree here... Zoning changes and land value tax are both beneficial. In some cases like the example you gave where you can only build one dwelling per 5 acres, zoning would be a more significant problem. That's an extreme hypothetical though. In other cases, taxation incentives are more significant.

We absolutely need to push for BOTH zoning reform and taxation reform. They will work really well together :)

how does that work with agriculture or other land uses that don't build? do those people get taxed higher because they don't build?

Agricultural land is far from large population centers, so the value is relatively constrained. The real losers on an LVT is not those owning rural land, but the operators of a surface lot near a stadium, or people living in mansions in the innermost suburb ring.

i.e., people for whom my violin is very tiny.

what about urban agriculture and public parks etc? buildings are not thing only valuable land use in an urban center.

I don't imagine the government is going to collect taxes from itself for public parks. There is the opportunity cost of lost revenue of course.

what about privately owned parks or nature centers? i lived in an urban area with a privately held non-profit nature center nearby and it was an important component in my quality of life.

They get taxed less, because instead of taxing their produce and income, their land is taxed, and agro land is very cheap. On a quick google, I can find a 140 acre alfalfa farm in Idaho for $1.4MM ($100k/acre), and a 0.07 acre empty residential dirt lot in NY for $4MM ($54MM/acre).

That Idaho farmland ($10,000/acre!!!) is still quite expensive... for farmland.

Family just bought 20+ acres, forested, for about $15,000/acre... within 15 minutes of a MSA500k+population's downtown area.

Land that is far away from developed land will tend to have lower land values, so farmland would not be so highly taxed under LVT. It's mostly land that benefits from being close to development that would be taxed higher.

Australia values every single lot of land for rates (aka council tax). So it is possible with some good stats nerds to figure it out.

But these values take into consideration zoning. So if you are ona residential block it is valued as such. But it would not be hard to figure out what it would be worth as high density. So the valuation problem is easily doable.

Also in Australia each state does it independently.

> Also in Australia each state does it independently.

In the US this is typically done at the county level (3000+ individual counties, all doing it independently)

No, but they're also not punished if they do build