Vanishing Middle Class
rbbomber
Middle class vanishing species in U.S.
Thursday, April 10, 2003 -
By PAUL HEISE
When the Democrats complain of the unequal effect of the Bush tax
cuts, they are dismissed with the claim that it is just the Democrats
fomenting class warfare. Everyone should know by now that more than 50
percent of the proposed $300 billion to $700 billion tax cut is going
to the richest 2 percent of the population.
Class is a tricky concept, especially here in America. Most Americans
don't think of themselves as rich nobles telling others what to do.
Nor do we think of ourselves as destined to be poor and told what to
do. Most Americans consider themselves to be in the middle. A middle
class, as we understand it, can only exist where there is economic
security and political independence. Otherwise, you have to have
someone taking care of you and telling you what to do.
The middle class is now in danger because it is being squeezed
between a stagnant economy with its falling standard of living and
corporate power over their political choices.
The idea of middle class was born with American democracy. Thomas
Jefferson envisioned the idea of a great American middle class made up
of independent farmers. Farming would guarantee economic independence,
while ownership of the farm property would guarantee political
independence. Jefferson bought the Louisiana Territory because he
wanted enough land for every American for many generations.
America achieved Jefferson's dream of that economic and political
independence in the 19th century when we were a nation of farmers
plowing up ever more of the frontier. Then railroads opened distant
markets, and the farm produce flowed to the world.
The success and sheer size of this economy, however, demanded larger
units, and the family farm began its long decline. Dust bowls and
depression finally doomed the farming middle class. Now only about 2.5
percent of the people actually work on farms. In a recent 25-year
period the number of family farms declined by another 29 percent.
The rebuilding of the middle class after World War II came from the
ideals, the hard work and the no-nonsense attitude of "The Greatest
Generation" in "The Best Years of Our Lives." In the heyday of the
1950s and '60s, we could rebuild the middle class because these people
were secure in an economy that rewarded productivity, loyalty and
stability.
Individual workers had the security of a union job and a wage tied to
their productivity. Industry had the guarantee of stable demand, as
the Cold War could be invoked as an excuse to prop up the economy
whenever it faltered. The interstate highway system got past
anti-government attitudes as "The Defense Highway Act."
The number and percentage of people who felt that they could realize
the middle-class dream -- a nice house and a good school outside the
crowded city and security in a health plan and retirement -- included
the largest portion of
America. A secure job replaced the farm as the base for economic
security and political independence.
Unfortunately, the prosperity and growth did not last, and the
volatility of the 1970s and '80s undermined both the political and
economic independence on which it all rested.
Now the middle class is dividing into two groups. One group easily
spends $20,000 extra for a prestige auto or SUV, and the other group
buys and drives a used car. In one group, the women work because they
have careers and nannies. In the other, the women work to make ends
meet, and they can't really afford the baby-sitter.
The division is clear, pervasive and widening. Hourly wages have not
grown since the 1970s, even as salaries have exploded upward. When all
taxes are considered, the poorest 20 percent pay the same percent of
their income in
taxes as the richest 20 percent. The minimum wage has fallen relative
to other wages. While $400,000 housing developments are spreading
across the farmland, trailer parks are mushrooming along the back
roads. Practically the entire increase in output recorded since 1980
has gone to the richest 20 percent of the population.
The recognition of this separation of Americans into two groups is
what the Republicans dismiss as class warfare. That epithet does not
make the facts go away.
When the Social Security tax on wages was nearly doubled in the
1980s, it was done to hide the deficit caused by the income-tax cuts
for the rich. The Reagan, and now Bush, tax cuts damage the middle
class economically, but they are not the whole story. The political
aspects are related and as serious.
The political independence of the middle class is a victim of the
corporate agenda that the tax cuts support: Free trade, mobile
investment, down-sizing, out-sourcing to low wage countries, deceptive
profit accounting, energy-cost
manipulation and the investment analysts' touting of worthless stocks.
The CEOs and large stockholders took theirs up front; the hoped-for
independence you saw in a 401(k) and pension or mutual funds took the
hit.
The relative declines in income diminish economic independence. The
corporate agenda diminishes political independence. The tax cut now
moving through the Congress is not structured to act as a stimulus,
nor will it act as a supply-side incentive for the rich to invest. It
will be paid for with the security and independence of those who are
slipping downward out of the middle class.
------------
A Mt. Gretna resident, Heise holds a Ph.D. in economics and is
professor of economics at Lebanon Valley College.
Bud Keith
"rbbomber" <rbbo...@netzero.com> wrote in message
news:7e483417.03041...@posting.google.com...
> Lebanon (PA) Daily News
>
> Middle class vanishing species in U.S.
One of the reasons for the vanishing middle class is, the high end are
moving into the upper class. Its the same old story some people see the
glass as half empty while others see it as half full.
>
> Thursday, April 10, 2003 -
>
> By PAUL HEISE
>
> When the Democrats complain of the unequal effect of the Bush tax
> cuts, they are dismissed with the claim that it is just the Democrats
> fomenting class warfare. Everyone should know by now that more than 50
> percent of the proposed $300 billion to $700 billion tax cut is going
> to the richest 2 percent of the population.
Will the poster please submit the data which substantiates this statement.
>
> Class is a tricky concept, especially here in America. Most Americans
> don't think of themselves as rich nobles telling others what to do.
> Nor do we think of ourselves as destined to be poor and told what to
> do. Most Americans consider themselves to be in the middle. A middle
> class, as we understand it, can only exist where there is economic
> security and political independence. Otherwise, you have to have
> someone taking care of you and telling you what to do.
Well at least he gpt this part right.
>
> The middle class is now in danger because it is being squeezed
> between a stagnant economy with its falling standard of living and
> corporate power over their political choices.
Substantiate please
>
> The idea of middle class was born with American democracy. Thomas
> Jefferson envisioned the idea of a great American middle class made up
> of independent farmers. Farming would guarantee economic independence,
> while ownership of the farm property would guarantee political
> independence. Jefferson bought the Louisiana Territory because he
> wanted enough land for every American for many generations.
>
> America achieved Jefferson's dream of that economic and political
> independence in the 19th century when we were a nation of farmers
> plowing up ever more of the frontier. Then railroads opened distant
> markets, and the farm produce flowed to the world.
>
> The success and sheer size of this economy, however, demanded larger
> units, and the family farm began its long decline. Dust bowls and
> depression finally doomed the farming middle class. Now only about 2.5
This is as wrong heade as you can get, it became impossible to operate a
small family farm at a profit. Some farmers sold their land and others
bought it. They then incorporated and ran the farm as a business. Now what
we have are any number of family corporations. Because corportations equate
with bad in the liberal minds therefore corporate farms must be bad
> percent of the people actually work on farms. In a recent 25-year
> period the number of family farms declined by another 29 percent
When farms business canot produce a living for the owners the are closed,
much the same as buggy whip manufactures closed.
The marvelous part of this issue is that in this country there is
opprotunity to go on to somthing bigger and better, that is if you dont sit
around whining about your problem,oh poor me me
>
> The rebuilding of the middle class after World War II came from the
> ideals, the hard work and the no-nonsense attitude of "The Greatest
> Generation" in "The Best Years of Our Lives." In the heyday of the
> 1950s and '60s, we could rebuild the middle class because these people
> were secure in an economy that rewarded productivity, loyalty and
> stability.
>
> Individual workers had the security of a union job and a wage tied to
> their productivity. Industry had the guarantee of stable demand, as
> the Cold War could be invoked as an excuse to prop up the economy
All nonsense, the only security that anyone has or will have is, the company
becomes and remains a viable intity. No union in the world can guarantee a
job in a company that is going broke. A perfect example of this are the give
backs that unions agreed to, to save United Airlines
Many years ago I attended a union meetimg in which the main speaker said"
you cannot kill the goose that lays the golden eggs"
Their is no such thing as a stable demand even more so today because of
advances in trsxhnology. If you do not create the demand you are doomed to
failure.
.
whenever it faltered. The interstate highway system got past
> anti-government attitudes as "The Defense Highway Act."
Sure it did.
>
> The number and percentage of people who felt that they could realize
> the middle-class dream -- a nice house and a good school outside the
> crowded city and security in a health plan and retirement -- included
> the largest portion of
> America. A secure job replaced the farm as the base for economic
> security and political independence.
>
> Unfortunately, the prosperity and growth did not last, and the
> volatility of the 1970s and '80s undermined both the political and
> economic independence on which it all rested.
Which was true during the late 1970s do to the ineptness of the Carter
administration. However the numbers put a lie to the assertion that the 80's
undermined the econmomic independence.
>
> Now the middle class is dividing into two groups. One group easily
> spends $20,000 extra for a prestige auto or SUV, and the other group
> buys and drives a used car. In one group, the women work because they
> have careers and nannies. In the other, the women work to make ends
> meet, and they can't really afford the baby-sitter.
>
> The division is clear, pervasive and widening. Hourly wages have not
> grown since the 1970s, even as salaries have exploded upward. When all
> taxes are considered, the poorest 20 percent pay the same percent of
> their income in
> taxes as the richest 20 percent. The minimum wage has fallen relative
> to other wages. While $400,000 housing developments are spreading
> across the farmland, trailer parks are mushrooming along the back
> roads. Practically the entire increase in output recorded since 1980
> has gone to the richest 20 percent of the population.
The author has got to be insane, or he just loves to spread socialist
propaganda
As stated above, those in the upper middle class have moved into the lower
upper class. Its called opprotunity Paul.
>
> The recognition of this separation of Americans into two groups is
> what the Republicans dismiss as class warfare. That epithet does not
> make the facts go away.
>
> When the Social Security tax on wages was nearly doubled in the
> 1980s, it was done to hide the deficit caused by the income-tax cuts
> for the rich.
What party was it that moved SS into the General fund to hide deicits it was
incurring in its guns and butter programs. You got it Jonhson and the
democrats who invented that game.
A futher trurh is that the SS fund was going broke and required additional
funds, as decided by a democratic congress and signed by Reagan.
The Reagan, and now Bush, tax cuts damage the middle
> class economically, but they are not the whole story. The political
> aspects are related and as serious.
Please explain to me in 25 thousand words or less why it is more advantages
to me to give my money to the government to be redistributed then it it is
to keep and spend it myself.
>
> The political independence of the middle class is a victim of the
> corporate agenda that the tax cuts support: Free trade, mobile
> investment, down-sizing, out-sourcing to low wage countries, deceptive
> profit accounting, energy-cost
> manipulation and the investment analysts' touting of worthless stocks.
Spoken like a true socialist, this economic system has its flaws just as aby
other system has. However it is so much better then all the rest that the
this arguement becomes moot.
> The CEOs and large stockholders took theirs up front; the hoped-for
> independence you saw in a 401(k) and pension or mutual funds took the
> hit.
Perhaps CEO,s as employees got there salary abd bonus up front. Stock
hilders on the otherhand got the same amounts that the 404k holders got.
Care to tell us why you think they took a bigger hit then the stockhokders
did.
>
> The relative declines in income diminish economic independence. The
> corporate agenda diminishes political independence. The tax cut now
> moving through the Congress is not structured to act as a stimulus,
> nor will it act as a supply-side incentive for the rich to invest. It
> will be paid for with the security and independence of those who are
> slipping downward out of the middle class.
It would be nice if this guy were able to prove this, its really nothing
more then his opinion tainted by his socialist thinking.
WIlliam G. Moore
Students with graduate degrees in the sciences or engineering step out of school into
$60,000 jobs. Housing sales continue to rise. The American Dream remains strong: get a
relevant education, develop a marketable skill and work hard. Wealth abounds in the US
and opportunities are unlimited.
On 11 Apr 2003 14:22:41 -0700, rbbo...@netzero.com (rbbomber) wrote:
=> Lebanon (PA) Daily News
=>
=> Middle class vanishing species in U.S.
=>
=> Thursday, April 10, 2003 -
=>
=> By PAUL HEISE
=>
=> When the Democrats complain of the unequal effect of the Bush tax
=> cuts, they are dismissed with the claim that it is just the Democrats
=> fomenting class warfare. Everyone should know by now that more than 50
=> percent of the proposed $300 billion to $700 billion tax cut is going
=> to the richest 2 percent of the population.
=>
=> Class is a tricky concept, especially here in America. Most Americans
=> don't think of themselves as rich nobles telling others what to do.
=> Nor do we think of ourselves as destined to be poor and told what to
=> do. Most Americans consider themselves to be in the middle. A middle
=> class, as we understand it, can only exist where there is economic
=> security and political independence. Otherwise, you have to have
=> someone taking care of you and telling you what to do.
=>
=> The middle class is now in danger because it is being squeezed
=> between a stagnant economy with its falling standard of living and
=> corporate power over their political choices.
=>
=> The idea of middle class was born with American democracy. Thomas
=> Jefferson envisioned the idea of a great American middle class made up
=> of independent farmers. Farming would guarantee economic independence,
=> while ownership of the farm property would guarantee political
=> independence. Jefferson bought the Louisiana Territory because he
=> wanted enough land for every American for many generations.
=>
=> America achieved Jefferson's dream of that economic and political
=> independence in the 19th century when we were a nation of farmers
=> plowing up ever more of the frontier. Then railroads opened distant
=> markets, and the farm produce flowed to the world.
=>
=> The success and sheer size of this economy, however, demanded larger
=> units, and the family farm began its long decline. Dust bowls and
=> depression finally doomed the farming middle class. Now only about 2.5
=> percent of the people actually work on farms. In a recent 25-year
=> period the number of family farms declined by another 29 percent.
=>
=> The rebuilding of the middle class after World War II came from the
=> ideals, the hard work and the no-nonsense attitude of "The Greatest
=> Generation" in "The Best Years of Our Lives." In the heyday of the
=> 1950s and '60s, we could rebuild the middle class because these people
=> were secure in an economy that rewarded productivity, loyalty and
=> stability.
=>
=> Individual workers had the security of a union job and a wage tied to
=> their productivity. Industry had the guarantee of stable demand, as
=> the Cold War could be invoked as an excuse to prop up the economy
=> whenever it faltered. The interstate highway system got past
=> anti-government attitudes as "The Defense Highway Act."
=>
=> The number and percentage of people who felt that they could realize
=> the middle-class dream -- a nice house and a good school outside the
=> crowded city and security in a health plan and retirement -- included
=> the largest portion of
=> America. A secure job replaced the farm as the base for economic
=> security and political independence.
=>
=> Unfortunately, the prosperity and growth did not last, and the
=> volatility of the 1970s and '80s undermined both the political and
=> economic independence on which it all rested.
=>
=> Now the middle class is dividing into two groups. One group easily
=> spends $20,000 extra for a prestige auto or SUV, and the other group
=> buys and drives a used car. In one group, the women work because they
=> have careers and nannies. In the other, the women work to make ends
=> meet, and they can't really afford the baby-sitter.
=>
=> The division is clear, pervasive and widening. Hourly wages have not
=> grown since the 1970s, even as salaries have exploded upward. When all
=> taxes are considered, the poorest 20 percent pay the same percent of
=> their income in
=> taxes as the richest 20 percent. The minimum wage has fallen relative
=> to other wages. While $400,000 housing developments are spreading
=> across the farmland, trailer parks are mushrooming along the back
=> roads. Practically the entire increase in output recorded since 1980
=> has gone to the richest 20 percent of the population.
=>
=> The recognition of this separation of Americans into two groups is
=> what the Republicans dismiss as class warfare. That epithet does not
=> make the facts go away.
=>
=> When the Social Security tax on wages was nearly doubled in the
=> 1980s, it was done to hide the deficit caused by the income-tax cuts
=> for the rich. The Reagan, and now Bush, tax cuts damage the middle
=> class economically, but they are not the whole story. The political
=> aspects are related and as serious.
=>
=> The political independence of the middle class is a victim of the
=> corporate agenda that the tax cuts support: Free trade, mobile
=> investment, down-sizing, out-sourcing to low wage countries, deceptive
=> profit accounting, energy-cost
=> manipulation and the investment analysts' touting of worthless stocks.
=> The CEOs and large stockholders took theirs up front; the hoped-for
=> independence you saw in a 401(k) and pension or mutual funds took the
=> hit.
=>
=> The relative declines in income diminish economic independence. The
=> corporate agenda diminishes political independence. The tax cut now
=> moving through the Congress is not structured to act as a stimulus,
=> nor will it act as a supply-side incentive for the rich to invest. It
=> will be paid for with the security and independence of those who are
=> slipping downward out of the middle class.
=>
=> ------------
=>
=> A Mt. Gretna resident, Heise holds a Ph.D. in economics and is
=> professor of economics at Lebanon Valley College.
-- Bill
Authorized User
WIlliam G. Moore <willia...@cox.net> wrote in message
news:tahe9v0j4ev168rb0...@4ax.com...
| This post ignores reality. Median income in the United States is over
$50,000 a year.
|
| Students with graduate degrees in the sciences or engineering step out of
school into
| $60,000 jobs.
Where did you get these absurd figures? There are 550,000 engineers out of
work in the US at this writing. I am one of those engineers. I have 25 years
experience in many fields. I have been laid off for 9 months now with still
no jobs in sight. The biggest problem we face is the 600,000 foreign
engineers who are encouraged to migrate to the US with the H1-B Visa program
that both political parties have endorsed. They plan to increase these
figures this year and create even more unemployment for Americans. Our
politicians have sold us out to big business. This is nothing more than a
ploy to drive wages down. Check out these sites:
http://www.zazona.com/H1BPetition/p/index.html
http://www.hireamericancitizens.org
Hanging Chad
>between a stagnant economy with its falling standard of living and
>corporate power over their political choices.
Sentence is gibberish.
> Unfortunately, the prosperity and growth did not last, and the
>volatility of the 1970s and '80s undermined both the political and
>economic independence on which it all rested.
Technology and globalization are both factors, too.
> The division is clear, pervasive and widening. Hourly wages have not
>grown since the 1970s, even as salaries have exploded upward. When all
>taxes are considered, the poorest 20 percent pay the same percent of
>their income in taxes as the richest 20 percent.
Highly doubtful.
> The minimum wage has fallen relative
>to other wages. While $400,000 housing developments are spreading
>across the farmland, trailer parks are mushrooming along the back
>roads. Practically the entire increase in output recorded since 1980
>has gone to the richest 20 percent of the population.
That's what, households over $80k?
> The recognition of this separation of Americans into two groups is
>what the Republicans dismiss as class warfare. That epithet does not
>make the facts go away.
No, the separation is not class warfare. Some of the proposals based
on the fact, however, are.
> When the Social Security tax on wages was nearly doubled in the
>1980s, it was done to hide the deficit caused by the income-tax cuts
>for the rich.
Absolutely wrong. Social security was always supposed to be a
separate fund, and demographics were always going to kill it. If you
want to argue it should never have been a separate fund, or that it
should now be merged with the general fund, well, say so, but don't
misstate history.
>The Reagan, and now Bush, tax cuts damage the middle
>class economically, but they are not the whole story. The political
>aspects are related and as serious.
Tax policy is unlikely to fix the income distribution problem.
> The political independence of the middle class is a victim of the
>corporate agenda that the tax cuts support: Free trade, mobile
>investment, down-sizing, out-sourcing to low wage countries, deceptive
>profit accounting, energy-cost
>manipulation and the investment analysts' touting of worthless stocks.
>The CEOs and large stockholders took theirs up front; the hoped-for
>independence you saw in a 401(k) and pension or mutual funds took the
>hit.
This is about half true and half raving.
> The relative declines in income diminish economic independence. The
>corporate agenda diminishes political independence. The tax cut now
>moving through the Congress is not structured to act as a stimulus,
>nor will it act as a supply-side incentive for the rich to invest. It
>will be paid for with the security and independence of those who are
>slipping downward out of the middle class.
Please suggest some sort of alternative.
> ------------
>
> A Mt. Gretna resident, Heise holds a Ph.D. in economics and is
>professor of economics at Lebanon Valley College.
HC
Weasel Buster
save me about $130 a month. Which is a lot more than I ever got from
anything that Clinton ever passed.
David L. Moffitt
"Authorized User" <it...@hotmail.com> wrote in message
news:QZKla.12667$g27.2...@twister.rdc-kc.rr.com...
:
: WIlliam G. Moore <willia...@cox.net> wrote in message
: news:tahe9v0j4ev168rb0...@4ax.com...
: | This post ignores reality. Median income in the United States is over
: $50,000 a year.
: |
: | Students with graduate degrees in the sciences or engineering step out
of
: school into
: | $60,000 jobs.
:
: Where did you get these absurd figures? There are 550,000 engineers out of
: work in the US at this writing. I am one of those engineers. I have 25
years
: experience in many fields. I have been laid off for 9 months now with
still
: no jobs in sight.
%%%% Are you waiting for another high paying engineering job or is it the
only thing you know how to do? How are you supporting your family?
:
:
:
Gary Forbis
> On 11 Apr 2003 14:22:41 -0700, rbbo...@netzero.com (rbbomber) wrote:
> > The middle class is now in danger because it is being squeezed
> >between a stagnant economy with its falling standard of living and
> >corporate power over their political choices.
>
> Sentence is gibberish.
>
> > Unfortunately, the prosperity and growth did not last, and the
> >volatility of the 1970s and '80s undermined both the political and
> >economic independence on which it all rested.
>
> Technology and globalization are both factors, too.
And morality. When the output is valued separate from its means of
creation free labor competes with slave labor.
> > The division is clear, pervasive and widening. Hourly wages have not
> >grown since the 1970s, even as salaries have exploded upward. When all
> >taxes are considered, the poorest 20 percent pay the same percent of
> >their income in taxes as the richest 20 percent.
>
> Highly doubtful.
It depends upon how "income" and "tax" are defined.
> > The minimum wage has fallen relative
> >to other wages. While $400,000 housing developments are spreading
> >across the farmland, trailer parks are mushrooming along the back
> >roads. Practically the entire increase in output recorded since 1980
> >has gone to the richest 20 percent of the population.
>
> That's what, households over $80k?
>
> > The recognition of this separation of Americans into two groups is
> >what the Republicans dismiss as class warfare. That epithet does not
> >make the facts go away.
>
> No, the separation is not class warfare. Some of the proposals based
> on the fact, however, are.
>
> > When the Social Security tax on wages was nearly doubled in the
> >1980s, it was done to hide the deficit caused by the income-tax cuts
> >for the rich.
>
> Absolutely wrong. Social security was always supposed to be a
> separate fund, and demographics were always going to kill it.
Absolutely wrong. It could and still can be saved provided we
direct the funds wisely. Rather than put it into the general fund,
SS should be redirected towards automation so as to offset the
shifting needs of an elderly society with reduced human production
capacity.
> If you
> want to argue it should never have been a separate fund, or that it
> should now be merged with the general fund, well, say so, but don't
> misstate history.
Some of the SS killers say the funds have already been spent, that
the government can't borrow from itself. I think the funds should be
invested in a way consistent with American worker values since the
funds come from the workers rather than the elite. The American worker
would own the factories by now if the proceeds had been invested
wisely. The ruling class would have none of it, branding it
"socalism".
> >The Reagan, and now Bush, tax cuts damage the middle
> >class economically, but they are not the whole story. The political
> >aspects are related and as serious.
>
> Tax policy is unlikely to fix the income distribution problem.
It could go a long way while improving production. We should quit
taxing production and transfer and start taxing real assets, meaning
land.
> > The political independence of the middle class is a victim of the
> >corporate agenda that the tax cuts support: Free trade, mobile
> >investment, down-sizing, out-sourcing to low wage countries, deceptive
> >profit accounting, energy-cost
> >manipulation and the investment analysts' touting of worthless stocks.
> >The CEOs and large stockholders took theirs up front; the hoped-for
> >independence you saw in a 401(k) and pension or mutual funds took the
> >hit.
>
> This is about half true and half raving.
>
> > The relative declines in income diminish economic independence. The
> >corporate agenda diminishes political independence. The tax cut now
> >moving through the Congress is not structured to act as a stimulus,
> >nor will it act as a supply-side incentive for the rich to invest. It
> >will be paid for with the security and independence of those who are
> >slipping downward out of the middle class.
>
> Please suggest some sort of alternative.
Tax land value.
Authorized User
David L. Moffitt <moff...@prodigy.net> wrote in message
news:Z9Ula.1185$KW3...@newssvr19.news.prodigy.com...
| %%%% Are you waiting for another high paying engineering job or is it the
| only thing you know how to do? How are you supporting your family?
They are no longer high paying. It's the only thing I can do due to health.
We're living on unemployment and my wife's $9 hr. job. It's not nearly
enough. We are getting threatening letters from collection agencies. We have
our home of 13 years for sale. I don't know what we will do or where we will
go from here. Meantime the foreigners are still working in our jobs.
Hanging Chad
wrote:
>> Technology and globalization are both factors, too.
>
>And morality. When the output is valued separate from its means of
>creation free labor competes with slave labor.
I'm not sure if that's morality, or new wave macroeconomics.
>> > When the Social Security tax on wages was nearly doubled in the
>> >1980s, it was done to hide the deficit caused by the income-tax cuts
>> >for the rich.
>>
>> Absolutely wrong. Social security was always supposed to be a
>> separate fund, and demographics were always going to kill it.
>
>Absolutely wrong. It could and still can be saved provided we
>direct the funds wisely. Rather than put it into the general fund,
>SS should be redirected towards automation so as to offset the
>shifting needs of an elderly society with reduced human production
>capacity.
Could be, perhaps, it's a "different" idea, anyway, but it surely
wasn't written that way in 1930-whatever, nor in 1980-whatever.
>> If you
>> want to argue it should never have been a separate fund, or that it
>> should now be merged with the general fund, well, say so, but don't
>> misstate history.
>
>Some of the SS killers say the funds have already been spent, that
>the government can't borrow from itself. I think the funds should be
>invested in a way consistent with American worker values since the
>funds come from the workers rather than the elite. The American worker
>would own the factories by now if the proceeds had been invested
>wisely. The ruling class would have none of it, branding it
>"socalism".
If the workers owned the factories, it would *be* socialism.
And just who is it you think says the government can't borrow from
itself?
>> >The Reagan, and now Bush, tax cuts damage the middle
>> >class economically, but they are not the whole story. The political
>> >aspects are related and as serious.
>>
>> Tax policy is unlikely to fix the income distribution problem.
>
>It could go a long way while improving production. We should quit
>taxing production and transfer and start taxing real assets, meaning
>land.
...
>> Please suggest some sort of alternative.
>
>Tax land value.
This is the Scarlet O'Hara theory of economics?
If you want to tax capital generally, you might have an argument. It
gets beyond my economic knowledge, has this been used (successfully)
anywhere on the planet, in the last one hundred, five hundred, or
three thousand years?
HC
ro...@telus.net
wrote:
>On 12 Apr 2003 08:43:31 -0700, forbi...@msn.com (Gary Forbis)
>wrote:
>
>>> Please suggest some sort of alternative.
>>
>>Tax land value.
>
>This is the Scarlet O'Hara theory of economics?
?? No, it is a well-known (though not to you) fact of economics:
"Pure ground rent is in the nature of a 'surplus,' which can be taxed
heavily without distorting production incentives or reducing
efficiency."
-- Paul Samuelson, Nobel laureate in Economics
"In my opinion the least bad tax is the property tax on the unimproved
value of land, the Henry George argument of many, many years ago."
-- Milton Friedman, Nobel laureate in Economics
"It is important that the rent of land be retained as a source of
government revenue."
-- Franco Modigliani, Nobel laureate in Economics
"For efficiency, for adequate revenue, and for justice, every user of
land should be required to make an annual payment to the local
government equal to the current rental value of the land he or she
prevents others from using."
-- Robert Solow, Nobel laureate in Economics
"While the governments of developed nations with market economies
collect some of the rent of land, they do not collect nearly as much
as they could, and they therefore make unnecessarily great use of
taxes that impede their economies -- taxes on such things as incomes,
sales, and the value of capital goods."
-- William Vickrey, Nobel laureate in Economics and past
president of the American Economics Association
>If you want to tax capital generally, you might have an argument.
No, that claim is false. Taxing capital reduces the amount of
capital. Taxing land does not reduce the amount of land. This is not
rocket science.
>It gets beyond my economic knowledge,
<g> All too evidently...
>has this been used (successfully)
>anywhere on the planet, in the last one hundred, five hundred, or
>three thousand years?
Taxation of land value has been used successfully for at least the
last four thousand years. Great civilizations -- from Egypt, Athens,
and Rome to France, England, and Japan -- typically use taxes that
bear on land value when they are rising, then shift to other taxes and
fall.
-- Roy L
Gary Forbis
> I don't care if some rich guy saves $50,000 a day. I do know that it will
> save me about $130 a month. Which is a lot more than I ever got from
> anything that Clinton ever passed.
What does "it" refer to? I can't think of anything linking Bush to save.
Hanging Chad
>>>> Please suggest some sort of alternative.
>>>
>>>Tax land value.
>>
>>This is the Scarlet O'Hara theory of economics?
>
>?? No, it is a well-known (though not to you) fact of economics:
>
>"Pure ground rent is in the nature of a 'surplus,' which can be taxed
>heavily without distorting production incentives or reducing
>efficiency."
>-- Paul Samuelson, Nobel laureate in Economics
So, this should be the *only* tax, or do you have other especially
"good" ones?
>>If you want to tax capital generally, you might have an argument.
>
>No, that claim is false. Taxing capital reduces the amount of
>capital. Taxing land does not reduce the amount of land. This is not
>rocket science.
This is balderdash. Taxing anything reduces its economic value to the
owner, capital, income, land, automobiles, labor, etc.
>>It gets beyond my economic knowledge,
>
><g> All too evidently...
Something we have in common, apparently.
>>has this been used (successfully)
>>anywhere on the planet, in the last one hundred, five hundred, or
>>three thousand years?
>
>Taxation of land value has been used successfully for at least the
>last four thousand years. Great civilizations -- from Egypt, Athens,
>and Rome to France, England, and Japan -- typically use taxes that
>bear on land value when they are rising, then shift to other taxes and
>fall.
Have they used it as a large component of their systems? Most every
government, great or small, simply taxes everything in sight. Even a
blind squirrel gets something right, according to one economist or
another.
HC
Gary Forbis
> On Sun, 13 Apr 2003 17:06:08 GMT, ro...@telus.net wrote:
> >>>> Please suggest some sort of alternative.
> >>>
> >>>Tax land value.
> >>
> >>This is the Scarlet O'Hara theory of economics?
> >
> >?? No, it is a well-known (though not to you) fact of economics:
> >
> >"Pure ground rent is in the nature of a 'surplus,' which can be taxed
> >heavily without distorting production incentives or reducing
> >efficiency."
> >-- Paul Samuelson, Nobel laureate in Economics
> ...
>
> So, this should be the *only* tax, or do you have other especially
> "good" ones?
>
> >>If you want to tax capital generally, you might have an argument.
> >
> >No, that claim is false. Taxing capital reduces the amount of
> >capital. Taxing land does not reduce the amount of land. This is not
> >rocket science.
>
> This is balderdash. Taxing anything reduces its economic value to the
> owner, capital, income, land, automobiles, labor, etc.
Umm... Economic value? What is capital? What is land?
Here's something to think about. Suppose we were about to use an
assets tax scheme rather than an income tax scheme and you had two
equally valued assets, one income producing and one not income
producing. How do you suppose the change in taxation would change
their relative value and why?
Tracy Coyle
Gary Forbis wrote in message ...
>
>Here's something to think about. Suppose we were about to use an
>assets tax scheme rather than an income tax scheme and you had two
>equally valued assets, one income producing and one not income
>producing. How do you suppose the change in taxation would change
>their relative value and why?
The value of the one not producing income would decrease in value as the
cost of ownership has gone up. The income producing one may or may not
change in value depending on the possibility of increasing the income to
compensate for the tax loss. As anyone that has ever purchased land will
tell you, all other things being equal, the property with the lower tax
burden is preferrable.
>> >Taxation of land value has been used successfully for at least the
>> >last four thousand years. Great civilizations -- from Egypt, Athens,
>> >and Rome to France, England, and Japan -- typically use taxes that
>> >bear on land value when they are rising, then shift to other taxes and
>> >fall.
And tell me, which of those 'great civilizations' had a land owning middle
class? The answer is NONE.
Tracy
"Some day, humanity will be mature enough to step into the future without
the security blanket of religion to protect it from the unknown."
Rule #1: Always act in your own best interest.
ro...@telus.net
wrote:
>On Sun, 13 Apr 2003 17:06:08 GMT, ro...@telus.net wrote:
>>>>> Please suggest some sort of alternative.
>>>>
>>>>Tax land value.
>>>
>>>This is the Scarlet O'Hara theory of economics?
>>
>>?? No, it is a well-known (though not to you) fact of economics:
>>
>>"Pure ground rent is in the nature of a 'surplus,' which can be taxed
>>heavily without distorting production incentives or reducing
>>efficiency."
>>-- Paul Samuelson, Nobel laureate in Economics
>
>So, this should be the *only* tax, or do you have other especially
>"good" ones?
Any tax that bears on economic rent rather than production of goods
and services is better than a tax that bears on production rather than
economic rent. And in most economies, most of the economic rent is
land rent.
>>>If you want to tax capital generally, you might have an argument.
>>
>>No, that claim is false. Taxing capital reduces the amount of
>>capital. Taxing land does not reduce the amount of land. This is not
>>rocket science.
>
>This is balderdash.
It is simply a fact. The fact that you choose to call a plain fact
"balderdash" is a particularly revealing fact about you.
>Taxing anything reduces its economic value to the
>owner, capital, income, land, automobiles, labor, etc.
True, but irrelevant. It is no part of government's business to
subsidize property owners at the expense of society by making property
more economically valuable to its owners, if that entails making the
property less valuable to society.
The difference between taxing production and taxing economic rent is
that production is beneficial to society, while rent is beneficial
only to its recipient, and represents a cost to society.
>>>It gets beyond my economic knowledge,
>>
>><g> All too evidently...
>
>Something we have in common, apparently.
Wrong. I have read millions of words on general economic theory and
history, and millions more on the theory and history of taxation.
Can you say the same?
The answer is obvious.
>>>has this been used (successfully)
>>>anywhere on the planet, in the last one hundred, five hundred, or
>>>three thousand years?
>>
>>Taxation of land value has been used successfully for at least the
>>last four thousand years. Great civilizations -- from Egypt, Athens,
>>and Rome to France, England, and Japan -- typically use taxes that
>>bear on land value when they are rising, then shift to other taxes and
>>fall.
>
>Have they used it as a large component of their systems?
Yes. As one example, almost _all_ of England's government revenue was
from land taxes for hundreds of years. More examples: Singapore and
HK have obtained a large fraction of their total government revenue
from land rent for many decades.
>Most every
>government, great or small, simply taxes everything in sight.
That is of course false. It's just a way of refusing to think about
taxation, and attempting to discourage others from doing so, as well.
-- Roy L
Tracy Coyle
ro...@telus.net wrote in message ...
>Hanging Chad <Han...@chad.bogus> wrote:
>
>>ro...@telus.net wrote:
>>>>>> Please suggest some sort of alternative.
>>>>>
>>>>>Tax land value.
>>>>
>>>>This is the Scarlet O'Hara theory of economics?
>>>
>>>?? No, it is a well-known (though not to you) fact of economics:
>>>
>>>"Pure ground rent is in the nature of a 'surplus,' which can be taxed
>>>heavily without distorting production incentives or reducing
>>>efficiency."
>>>-- Paul Samuelson, Nobel laureate in Economics
>>
>>So, this should be the *only* tax, or do you have other especially
>>"good" ones?
>
>Any tax that bears on economic rent rather than production of goods
>and services is better than a tax that bears on production rather than
>economic rent. And in most economies, most of the economic rent is
>land rent.
>
>>>>If you want to tax capital generally, you might have an argument.
>>>
>>>No, that claim is false. Taxing capital reduces the amount of
>>>capital. Taxing land does not reduce the amount of land. This is not
>>>rocket science.
When you tax capital you prevent it from multiple potential uses, when you
tax land, you prevent it from its best ( or only ) use. Capital can move to
take advantage of the best opportunities, land doesn't move.
You can not compare capital and land as to how taxes impact them....though
thousands of economists try...
>>This is balderdash.
>
>It is simply a fact. The fact that you choose to call a plain fact
>"balderdash" is a particularly revealing fact about you.
Let me use a different word, it is ivy tower economic analysis. When you
tax land, the owners will find its least taxable use....most likely, vacant.
>>Taxing anything reduces its economic value to the
>>owner, capital, income, land, automobiles, labor, etc.
>
>True, but irrelevant. It is no part of government's business to
>subsidize property owners at the expense of society by making property
>more economically valuable to its owners, if that entails making the
>property less valuable to society.
It is not governments business to subsidize anyone one, however, if taxes
are to be levied, they should be spread as equally as possible, and as land
values are based on the desireablity of the land, anything that reduces that
desireability reduces its value. Taxes when levied always result in less
of the thing levied against....while you make the statement that land is not
diminished by taxes, it's use would be diminished by taxes.
>The difference between taxing production and taxing economic rent is
>that production is beneficial to society, while rent is beneficial
>only to its recipient, and represents a cost to society.
Obviously you have never owned land next to a dump or a mansion. Taxes are
never beneficial except to the taxing authority. Before you suggest that
families benefit when property taxes are used for education, remember that
the majority of land owners in virtually EVERY district, do not have
children.
>>>>It gets beyond my economic knowledge,
>>>
>>><g> All too evidently...
>>
>>Something we have in common, apparently.
>
>Wrong. I have read millions of words on general economic theory and
>history, and millions more on the theory and history of taxation.
Oh, great.....no...OH GREAT! You give substance to my previous comment
regarding ivy tower analysis....
Here is what is wrong with economic analysis: You have 290 million
independent sources of data, that data is related to, but not necessarily
influenced by, 180 million Japanese and 350 million Europeans, both groups
having different, in some cases divergant economic systems. While you will
be able to make generalizations about segments of the populations, and
therefore, the production systems supporting them, any attempt at applying
those generalizations specifically results in error.
No matter how complicated the system you devise to evaluate the information
provided, it will not have sufficient sensitivity to take into consideration
those 820 million sources of data....
Your millions of words of theory only makes you an expert on theory. Your
millions of words of history probably do not take into consideration
technology except to tell you that it often had a profound impact.
Economic theory can not prepare policy makers for the 9/11's, the cell
phone, the PC, the impact of war (or lack of it).
Just an example: a supply shock is infinite, Nobel prize says yes. If
a system is chaotic, in the mathematical sense, a shock is not infinite.
Is the economy of the United States chaotic?
>Can you say the same?
>The answer is obvious.
It is obvious that you spend more time reading about history or theory than
understanding how ONE of those 290 million data sources will respond to your
proposal and how IT MIGHT relate to the other 289,999,999.
>>>>has this been used (successfully)
>>>>anywhere on the planet, in the last one hundred, five hundred, or
>>>>three thousand years?
>>>
>>>Taxation of land value has been used successfully for at least the
>>>last four thousand years. Great civilizations -- from Egypt, Athens,
>>>and Rome to France, England, and Japan -- typically use taxes that
>>>bear on land value when they are rising, then shift to other taxes and
>>>fall.
>>
>>Have they used it as a large component of their systems?
>
>Yes. As one example, almost _all_ of England's government revenue was
>from land taxes for hundreds of years. More examples: Singapore and
>HK have obtained a large fraction of their total government revenue
>from land rent for many decades.
And can you tell me the size, in any previous or current country using your
suggested system, of the land owning middle class?
>>Most every
>>government, great or small, simply taxes everything in sight.
>
>That is of course false. It's just a way of refusing to think about
>taxation, and attempting to discourage others from doing so, as well.
You are right, but the point made is valid. Taxes, when used in this
country, decrease the use of the item or service taxed. Any other purpose,
as far as I am aware, has had unintended consequences.
Gary Forbis
> Gary Forbis wrote in message ...
> >
> >Here's something to think about. Suppose we were about to use an
> >assets tax scheme rather than an income tax scheme and you had two
> >equally valued assets, one income producing and one not income
> >producing. How do you suppose the change in taxation would change
> >their relative value and why?
>
> The value of the one not producing income would decrease in value as the
> cost of ownership has gone up. The income producing one may or may not
> change in value depending on the possibility of increasing the income to
> compensate for the tax loss.
That's my take on it too.
Now, do you believe people can produce income without land? I don't.
Not only don't I believe income can be produced without land, I don't
believe the government would be any less able to collect the same
revenues from land than it is already able to collect from income. Since
the same income can be produced from the same land now producing it,
and the land not producing income would also be taxed, the direct tax on
production would be decreased and taxes on land holders not producing
income from their land would see a loss in value, equalizing the value
of land to its most productive use, making land more affordable to
the productive.
> As anyone that has ever purchased land will
> tell you, all other things being equal, the property with the lower tax
> burden is preferrable.
or rather, with the greatest profitablilty or lowest effective cost.
property with a large tax burden but even greater income production
is preferrable to one with a lower tax burden but even lower income
production.
Gary Forbis
> When you tax capital you prevent it from multiple potential uses, when you
> tax land, you prevent it from its best ( or only ) use. Capital can move to
> take advantage of the best opportunities, land doesn't move.
...
> Let me use a different word, it is ivy tower economic analysis. When you
> tax land, the owners will find its least taxable use....most likely, vacant.
That's just goofy.
If you have to pay the same tax on the land independent of use then
the owner will find it advantagous to produce income. Leaving the land
vacant doesn't reduce it's value.
ro...@telus.net
wrote:
>ro...@telus.net wrote in message ...
>
>>Hanging Chad <Han...@chad.bogus> wrote:
>>
>>>ro...@telus.net wrote:
>>>>>>> Please suggest some sort of alternative.
>>>>>>
>>>>>>Tax land value.
>>>>>
>>>>>If you want to tax capital generally, you might have an argument.
>>>>
>>>>No, that claim is false. Taxing capital reduces the amount of
>>>>capital. Taxing land does not reduce the amount of land. This is not
>>>>rocket science.
>
>When you tax capital you prevent it from multiple potential uses,
?? No, you just increase the cost of holding it, increasing the
intensity of use but reducing the supply.
>when you
>tax land, you prevent it from its best ( or only ) use.
Of course, the truth is the exact opposite of your claim. Taxing land
stimulates _more_ productive use, because owners have to either start
using the land more productively to pay the tax, or sell it to someone
who will.
You don't seem to have twigged that Nobel laureates in economics know
what they are talking about, and you don't.
>Capital can move to
>take advantage of the best opportunities, land doesn't move.
Exactly. Tax capital, it leaves. Tax land, it's still there.
>You can not compare capital and land as to how taxes impact them.
Yes, I can. And have.
>...though
>thousands of economists try...
Of which it is easy to see you are not one....
>>>This is balderdash.
>>
>>It is simply a fact. The fact that you choose to call a plain fact
>>"balderdash" is a particularly revealing fact about you.
>
>Let me use a different word, it is ivy tower economic analysis.
It is factually correct analysis. The term "ivory tower" is simply a
code word used to denote a subject the speaker does not understand.
>When you
>tax land, the owners will find its least taxable use....most likely, vacant.
?? Wrong. When you tax land, the tax is exactly the same no matter
how the land is used. That is why the tax stimulates more productive
use.
You see? You are just simply and risibly wrong as a matter of
objective fact.
I predict that you will now ignore that fact, and continue to refuse
to consider that Nobel laureates in economics might be right about
economics, and you wrong.
>>>Taxing anything reduces its economic value to the
>>>owner, capital, income, land, automobiles, labor, etc.
>>
>>True, but irrelevant. It is no part of government's business to
>>subsidize property owners at the expense of society by making property
>>more economically valuable to its owners, if that entails making the
>>property less valuable to society.
>
>It is not governments business to subsidize anyone one, however, if taxes
>are to be levied, they should be spread as equally as possible,
"The expense of government to the individuals of a great nation is
like the expense of management to the joint tenants of a great estate,
who are all obliged to contribute in proportion to their respective
interests in the estate. In the observation or neglect of this maxim
consists what is called the equality or inequality of taxation."
-- Adam Smith, The wealth of Nations, 1776
>and as land
>values are based on the desireablity of the land, anything that reduces that
>desireability reduces its value.
It has been known for nearly 200 years that while a tax on land may
reduce the land's value, it does not reduce (or increase) its
"desirability" (rent).
>Taxes when levied always result in less
>of the thing levied against...
Let's see... Less land value -> more affordable land. Sounds good to
me. Maybe you can explain to me how land being more costly is good
for anyone but its owner....?
>while you make the statement that land is not
>diminished by taxes, it's use would be diminished by taxes.
History proves that use of land is not diminished but _increased_ by
taxes on land. The only exceptions are where the tax is not levied on
the land's value, and exceeds the land rent. This result follows
inevitably from land's zero elasticity of supply.
You are, again, simply and indisputably wrong as a matter of objective
fact.
>>The difference between taxing production and taxing economic rent is
>>that production is beneficial to society, while rent is beneficial
>>only to its recipient, and represents a cost to society.
>
>Obviously you have never owned land next to a dump or a mansion.
My personal financial interests do not affect the laws of economics,
and _neither_do_yours_.
>Taxes are
>never beneficial except to the taxing authority.
That is false, and indeed nothing but some sort of anarchist
silliness. Taxes are the price we pay for civilization. If you think
taxes are not beneficial to you, try living where there are none.
>Before you suggest that
>families benefit when property taxes are used for education, remember that
>the majority of land owners in virtually EVERY district, do not have
>children.
ROTFL!! It would be difficult to construct a more superficial and
wrong-headed argument than that one. Congratulations.
Did it ever occur to you that good schools increase the value of the
land nearby, whether or not the owners of that land have any children?
Take a couple of months off work to think about it. It seems you'll
need them.
>>>>>It gets beyond my economic knowledge,
>>>>
>>>><g> All too evidently...
>>>
>>>Something we have in common, apparently.
>>
>>Wrong. I have read millions of words on general economic theory and
>>history, and millions more on the theory and history of taxation.
>
>Oh, great.....no...OH GREAT! You give substance to my previous comment
>regarding ivy tower analysis....
<yawn> Code word received and understood...
>Here is what is wrong with economic analysis: You have 290 million
>independent sources of data, that data is related to, but not necessarily
>influenced by, 180 million Japanese and 350 million Europeans, both groups
>having different, in some cases divergant economic systems. While you will
>be able to make generalizations about segments of the populations, and
>therefore, the production systems supporting them, any attempt at applying
>those generalizations specifically results in error.
<snicker> What was that word again? "Balderdash"?
>No matter how complicated the system you devise to evaluate the information
>provided, it will not have sufficient sensitivity to take into consideration
>those 820 million sources of data....
Silliness.
>Your millions of words of theory only makes you an expert on theory.
Better than being an expert on fallacy...
>Your
>millions of words of history probably do not take into consideration
>technology except to tell you that it often had a profound impact.
Wrong. Hilariously.
>Economic theory can not prepare policy makers for the 9/11's, the cell
>phone, the PC, the impact of war (or lack of it).
It can treat such events as the economic policy irrelevancies they
are.
>Just an example: a supply shock is infinite, Nobel prize says yes. If
>a system is chaotic, in the mathematical sense, a shock is not infinite.
>Is the economy of the United States chaotic?
Not in the mathematical sense.
>>Can you say the same?
>>The answer is obvious.
>
>It is obvious that you spend more time reading about history or theory than
>understanding how ONE of those 290 million data sources will respond to your
>proposal and how IT MIGHT relate to the other 289,999,999.
??? Are you trying to invoke public choice theory, or something?
>>>>>has this been used (successfully)
>>>>>anywhere on the planet, in the last one hundred, five hundred, or
>>>>>three thousand years?
>>>>
>>>>Taxation of land value has been used successfully for at least the
>>>>last four thousand years. Great civilizations -- from Egypt, Athens,
>>>>and Rome to France, England, and Japan -- typically use taxes that
>>>>bear on land value when they are rising, then shift to other taxes and
>>>>fall.
>>>
>>>Have they used it as a large component of their systems?
>>
>>Yes. As one example, almost _all_ of England's government revenue was
>>from land taxes for hundreds of years. More examples: Singapore and
>>HK have obtained a large fraction of their total government revenue
>>from land rent for many decades.
>
>And can you tell me the size, in any previous or current country using your
>suggested system, of the land owning middle class?
Both Singapore and HK have large middle classes. But the idea is that
the system renders landowning no longer a certificate of entitlement
to subsidies paid for by taxes on the productive, so the size of the
landowning class is irrelevant.
>>>Most every
>>>government, great or small, simply taxes everything in sight.
>>
>>That is of course false. It's just a way of refusing to think about
>>taxation, and attempting to discourage others from doing so, as well.
>
>You are right, but the point made is valid.
??? ROTFL!! Nope.
>Taxes, when used in this
>country, decrease the use of the item or service taxed.
Except land taxes, which is why the US states with the highest
property tax rates -- like New Hampshire, Connecticut and Wisconsin --
tend to have the best economies, while the states with the lowest
property tax rates -- like Alabama, Arkansas and Wyoming -- tend to
have the worst. It is also why the economies of states like
california that reduce their property tax rates get worse.
Prediction: you will now refuse to think about the implications of
this fact of objective reality.
>Any other purpose,
>as far as I am aware, has had unintended consequences.
You are not aware. Simple.
-- Roy L
Tracy Coyle
Gary Forbis wrote in message
>"Tracy Coyle" <tcc...@chorus.net> wrote in message
>> When you tax capital you prevent it from multiple potential uses, when
you
>> tax land, you prevent it from its best ( or only ) use. Capital can move
to
>> take advantage of the best opportunities, land doesn't move.
>
>> Let me use a different word, it is ivy tower economic analysis. When you
>> tax land, the owners will find its least taxable use....most likely,
vacant.
>
>That's just goofy.
>
>If you have to pay the same tax on the land independent of use then
>the owner will find it advantagous to produce income. Leaving the land
>vacant doesn't reduce it's value.
So, you would tax 20,000 sq ft if it were a hillside, a swamp, a forest or
prairie land at the same rate you would tax 20,000 sq ft in Manhattan?
Because if YOU DON'T, then you are saying that some land is more valuable
than other land, and then you are taxing not the land, but its USE. If you
do tax the land, regardless of its current or best use, then you will have
to find some median point, and that will make the Manhattan land so much
more valuable (and you will not recover that value) and you will force land
that is used for farming and grazing so much more expensive as to make it
too expensive for all but richest owners.
Land has value NOT BECAUSE IT EXISTS, but because of its use. Location,
location, location...that is the value in land. Where land exists
determines it's ability to produce income. Any land with minimal income
producing value will be left vacant regardless of the tax, and if the tax is
high enough, it will be abandoned rather than held privately.
Vacant land is vacant for two reasons, it is either not economically
feasible to do anything with the land, ie, it is more costly to use it than
to leave it empty (imagine land that is in the path of development but still
too far away), or it is never going to be economically feasible to do
anything with it....ie, the swamp. If my piece of land is taxed at $1 per
sq ft, and it will take me $1000 to make it produce income of $150 per sq ft
per year, then the tax is irrelevant. But if you tax me $150 per sq ft,
then the land would need to produce $300 per year for the same return...if
its best use can only produce $200 per sq ft per year, it is not worth the
expenditure, and if owning the land is otherwise not useful, it will be
eventually abandoned.
Authorized User
<ro...@telus.net> wrote in message news:3e9df557...@news.telus.net...
| On Wed, 16 Apr 2003 03:48:45 GMT, "Tracy Coyle" <tcc...@chorus.net>
| wrote:
|
| Of course, the truth is the exact opposite of your claim. Taxing land
| stimulates _more_ productive use, because owners have to either start
| using the land more productively to pay the tax, or sell it to someone
| who will.
In Evergreen Colorado, just upslope from Denver, at least one elderly couple
who retired there years ago with their home paid for, is forced to move out
because property taxes are now more than they paid for the property. They
cannot possibly pay them.
Tracy Coyle
ro...@telus.net wrote in message ...
>"Tracy Coyle" <tcc...@chorus.net> wrote:
>
>>ro...@telus.net wrote in message ...
>>
>>>Hanging Chad <Han...@chad.bogus> wrote:
>>>
>>>>ro...@telus.net wrote:
>>>>>>>> Please suggest some sort of alternative.
>>>>>>>
>>>>>>>Tax land value.
>>>>>>
>>>>>>If you want to tax capital generally, you might have an argument.
>>>>>
>>>>>No, that claim is false. Taxing capital reduces the amount of
>>>>>capital. Taxing land does not reduce the amount of land. This is not
>>>>>rocket science.
>>
>>When you tax capital you prevent it from multiple potential uses,
>
>?? No, you just increase the cost of holding it, increasing the
>intensity of use but reducing the supply.
...but reducing the supply...when there is less capital, the potential uses
decrease.
>>when you tax land, you prevent it from its best ( or only ) use.
>
>Of course, the truth is the exact opposite of your claim. Taxing land
>stimulates _more_ productive use, because owners have to either start
>using the land more productively to pay the tax, or sell it to someone
>who will.
From: David Ricardo, Esq.
On the Principles of Political Economy and Taxation
http://www.econlib.org/library/Ricardo/ricP1a.html#Ch.2,%20On%20Rent
A tax on rent, as rent is constituted, would discourage cultivation, because
it would be a tax on the profits of the landlord.
>You don't seem to have twigged that Nobel laureates in economics know
>what they are talking about, and you don't.
hmmmm...
>>Capital can move to
>>take advantage of the best opportunities, land doesn't move.
>
>Exactly. Tax capital, it leaves. Tax land, it's still there.
Tax land and its use changes.....unless you want to tax just the thing we
call the dirt....just the sq ft regardless of use....
>>You can not compare capital and land as to how taxes impact them.
>
>Yes, I can. And have.
Wrongly...
>>...though thousands of economists try...
>
>Of which it is easy to see you are not one....
Because, after studying economics at the university level, I learned two
important facts. First, economic theory is often divorced from the real
world events it purports to model, and second, theory based on observations
in economics is a study of history...and as the markets will tell you,
results of the past are not an indicator of future performance....
>>>>This is balderdash.
>>>
>>>It is simply a fact. The fact that you choose to call a plain fact
>>>"balderdash" is a particularly revealing fact about you.
>>
>>Let me use a different word, it is ivy tower economic analysis.
>
>It is factually correct analysis. The term "ivory tower" is simply a
>code word used to denote a subject the speaker does not understand.
Oh, I understand. I understand that economic theory does not have a great
track record in the real world.
>>When you
>>tax land, the owners will find its least taxable use....most likely,
vacant.
>
>?? Wrong. When you tax land, the tax is exactly the same no matter
>how the land is used. That is why the tax stimulates more productive
>use.
If you are just taxing the land, regardless of its use (therefore tax does
not increase when the land is put to increasingly profitable uses) then you
are correct - as long as the land meets other criteria, such as suitability
and location. The Everglades are in a highly desireable location....but
the use of that land is significantly limited .....if you charge tax on the
Everglades at the same rate you charge Disney World for its' land....you are
correct.....
>You see? You are just simply and risibly wrong as a matter of
>objective fact.
...but my bet is that is not what you are seeking to base the tax rate on...
From:
http://www.earthrights.net/docs/fin4devt.html
Taxing land sites according to land value promotes urban and rural land
reform, providing affordable access to land for homes, businesses and
farming.
Land value....could that be....
again from: David Ricardo, Esq.
On the Principles of Political Economy and Taxation
stock. In taxing rent, as no distinction would be made between that part
paid for the use of the land, and that paid for the use of the landlord's
stock, a portion of the tax would fall on the landlord's profits, and would,
therefore, discourage cultivation, unless the price of raw produce rose. On
that land, for the use of which no rent was paid, a compensation under that
name might be given to the landlord for the use of his buildings. These
buildings would not be erected, nor would raw produce be grown on such land,
till the price at which it sold would not only pay for all the usual
outgoings, but also this additional one of the tax. This part of the tax
does not fall on the landlord, nor on the farmer, but on the consumer of raw
produce.
>I predict that you will now ignore that fact, and continue to refuse
>to consider that Nobel laureates in economics might be right about
>economics, and you wrong.
No need to ignore it. As long as land rent is based on the value of the
land, and just the dirt, fine, but the land rent promoted by many is based
on the land VALUE and that value is not separated from the dirt and the
structures of production (the application of capital to prepare land for
productive use). that means that the 20,000 sq ft of Manhattan would be
taxed more than 20,000 sq ft of Wyoming grazing land...and Ricardo was
specfic about that....
"A tax on rent, as rent is constituted, would discourage cultivation,
because it would be a tax on the profits of the landlord. "
>>>>Taxing anything reduces its economic value to the
>>>>owner, capital, income, land, automobiles, labor, etc.
>>>
>>>True, but irrelevant. It is no part of government's business to
>>>subsidize property owners at the expense of society by making property
>>>more economically valuable to its owners, if that entails making the
>>>property less valuable to society.
>>
>>It is not governments business to subsidize anyone one, however, if taxes
>>are to be levied, they should be spread as equally as possible,
>
>"The expense of government to the individuals of a great nation is
>like the expense of management to the joint tenants of a great estate,
>who are all obliged to contribute in proportion to their respective
>interests in the estate. In the observation or neglect of this maxim
>consists what is called the equality or inequality of taxation."
> -- Adam Smith, The wealth of Nations, 1776
That would be fine if all the tenants of the estate were obligated to
contribute to their interests in the estate to the extent they benefited
from the production of the estate....if the estate benefits others than
those contributing to the operation of the estate, then the payors would be
deprived of benefits otherwise due them.
>>and as land
>>values are based on the desireablity of the land, anything that reduces
that
>>desireability reduces its value.
>
>It has been known for nearly 200 years that while a tax on land may
>reduce the land's value, it does not reduce (or increase) its
>"desirability" (rent).
But a tax on that rent would reduce the value...
If a tax were laid on rent, and no means of separating the remuneration now
paid by the tenant to the landlord under the name of rent were adopted, the
tax, as far as it regarded the rent on the buildings and other fixtures,
would never fall for any length of time on the landlord, but on the
consumer. The capital expended on these buildings, must afford the usual
profit of stock; but it would cease to afford this profit on the land last
cultivated, if the expenses of those buildings, did not fall on the tenant;
and if they did, the tenant would then cease to make his usual profits of
stock, unless he could charge them on the consumer.
>>Taxes when levied always result in less of the thing levied against...
>
>Let's see... Less land value -> more affordable land. Sounds good to
>me. Maybe you can explain to me how land being more costly is good
>for anyone but its owner....?
If the cost of land increases, we call it value...this is good for the
owner. If the cost to hold the land increases (especially at a rate
greater than the rate of value increase) then it is not good to the owner,
nor will it be to any other potential owner...unless a new owner could put
the land to a use that increases its' value in relationship to the cost.
Unfortuantely, most land in the US is restricted in its use....and changing
that use is usually expensive and often impossible.
>>while you make the statement that land is not
>>diminished by taxes, it's use would be diminished by taxes.
>
>History proves that use of land is not diminished but _increased_ by
>taxes on land. The only exceptions are where the tax is not levied on
>the land's value, and exceeds the land rent. This result follows
>inevitably from land's zero elasticity of supply.
IF those taxes are used in such a way as to benefit the land owner...such as
infrastructure improvements....and you can not say that land value increased
when we raised taxes in a vacuum.
I dare say you can not provide an example when X parcel of land was worth Y
dollars but as soon as taxes were levied against it, the parcel increased in
value. On the other hand, you can probably show an increase in value of
land when a tax levy was earmarked for improvements...say, the building of a
school in the neighborhood.....
>You are, again, simply and indisputably wrong as a matter of objective
fact.
I dispute your assertion...
>>>The difference between taxing production and taxing economic rent is
>>>that production is beneficial to society, while rent is beneficial
>>>only to its recipient, and represents a cost to society.
>>
>>Obviously you have never owned land next to a dump or a mansion.
>
>My personal financial interests do not affect the laws of economics,
>and _neither_do_yours_.
Those 'laws' must apply to the real world where you and I live. If they do
not apply, they are no more than words and theories, useless except as an
exercise. If you would base tax theory on reality, it must take into
consideration how individuals would react to such a tax.
>>Taxes are never beneficial except to the taxing authority.
>
>That is false, and indeed nothing but some sort of anarchist
>silliness. Taxes are the price we pay for civilization. If you think
>taxes are not beneficial to you, try living where there are none.
Conceded, my hyperbole was excessive....
>>Before you suggest that
>>families benefit when property taxes are used for education, remember that
>>the majority of land owners in virtually EVERY district, do not have
>>children.
>
>ROTFL!! It would be difficult to construct a more superficial and
>wrong-headed argument than that one. Congratulations.
>Did it ever occur to you that good schools increase the value of the
>land nearby, whether or not the owners of that land have any children?
>Take a couple of months off work to think about it. It seems you'll
>need them.
Your mirth is noted. As I just recently purchased a home, it's location
specifically desired because it is across from a planned school, I can
assure you that a school was an important characteristic of the home we
purchased. However, you made an important point...."GOOD" schools are
important. A neighborhood near us has a school and it is not a valuable
neighborhood, in part because the school children have a negative impact on
the home owners land surrounding it.
So, while in general you can state a school can have a positive impact on
land values, it depends on the key 'good' school. The difference between
theory and reality.
>>>>>>It gets beyond my economic knowledge,
>>>>>
>>>>><g> All too evidently...
>>>>
>>>>Something we have in common, apparently.
>>>
>>>Wrong. I have read millions of words on general economic theory and
>>>history, and millions more on the theory and history of taxation.
>>
>>Oh, great.....no...OH GREAT! You give substance to my previous comment
>>regarding ivy tower analysis....
>
><yawn> Code word received and understood...
<sigh>
>>Here is what is wrong with economic analysis: You have 290 million
>>independent sources of data, that data is related to, but not necessarily
>>influenced by, 180 million Japanese and 350 million Europeans, both groups
>>having different, in some cases divergant economic systems. While you
will
>>be able to make generalizations about segments of the populations, and
>>therefore, the production systems supporting them, any attempt at applying
>>those generalizations specifically results in error.
>
><snicker> What was that word again? "Balderdash"?
>
>>No matter how complicated the system you devise to evaluate the
information
>>provided, it will not have sufficient sensitivity to take into
consideration
>>those 820 million sources of data....
>
>Silliness.
>
>>Your millions of words of theory only makes you an expert on theory.
>
>Better than being an expert on fallacy...
Economic theory is based on human behaviour....dismiss it at the cost of
usefulness of your theories..
>>Your
>>millions of words of history probably do not take into consideration
>>technology except to tell you that it often had a profound impact.
>
>Wrong. Hilariously.
>
>>Economic theory can not prepare policy makers for the 9/11's, the cell
>>phone, the PC, the impact of war (or lack of it).
>
>It can treat such events as the economic policy irrelevancies they are.
You are saying that war has no impact on economic policy? Are you saying
that the costs associated with increased security and fear have no impact on
economic outcomes? Yes, you are.....
>>>Can you say the same?
>>>The answer is obvious.
>>
>>It is obvious that you spend more time reading about history or theory
than
>>understanding how ONE of those 290 million data sources will respond to
your
>>proposal and how IT MIGHT relate to the other 289,999,999.
>
>??? Are you trying to invoke public choice theory, or something?
I am trying to invoke the concept that economic behaviour starts with the
behaviour of individuals...
>>>>>>has this been used (successfully)
>>>>>>anywhere on the planet, in the last one hundred, five hundred, or
>>>>>>three thousand years?
>>>>>
>>>>>Taxation of land value has been used successfully for at least the
>>>>>last four thousand years. Great civilizations -- from Egypt, Athens,
>>>>>and Rome to France, England, and Japan -- typically use taxes that
>>>>>bear on land value when they are rising, then shift to other taxes and
>>>>>fall.
>>>>
>>>>Have they used it as a large component of their systems?
>>>
>>>Yes. As one example, almost _all_ of England's government revenue was
>>>from land taxes for hundreds of years. More examples: Singapore and
>>>HK have obtained a large fraction of their total government revenue
>>>from land rent for many decades.
>>
>>And can you tell me the size, in any previous or current country using
your
>>suggested system, of the land owning middle class?
>
>Both Singapore and HK have large middle classes. But the idea is that
>the system renders landowning no longer a certificate of entitlement
>to subsidies paid for by taxes on the productive, so the size of the
>landowning class is irrelevant.
Landowning has been shown to be the largest source of personal wealth,
wealth being used for everything from education and investment... Further,
home ownership, landowning, is a significant predictor for both health and
future wealth...in this country, the percentage of homeownership hovers
around 66%....Singapore and Honk Kong are poor examples as both are more
city/states that are not capable of self-sufficiency or even of significant
production - of goods...
>>>>Most every
>>>>government, great or small, simply taxes everything in sight.
>>>
>>>That is of course false. It's just a way of refusing to think about
>>>taxation, and attempting to discourage others from doing so, as well.
>>
>>You are right, but the point made is valid.
>??? ROTFL!! Nope.
Yep...I can not purchase anything without paying a tax....nothing is
produced in this country without it being subject to a tax....in many cases,
multiple taxes....but that doesn't mean we shouldn't discuss taxation...
>>Taxes, when used in this
>>country, decrease the use of the item or service taxed.
>
>Except land taxes, which is why the US states with the highest
>property tax rates -- like New Hampshire, Connecticut and Wisconsin --
>tend to have the best economies, while the states with the lowest
>property tax rates -- like Alabama, Arkansas and Wyoming -- tend to
>have the worst. It is also why the economies of states like
>california that reduce their property tax rates get worse.
Funny you should use Wisconsin as an example....I am paying 2.4/100 in
property taxes and our state is facing a huge crisis....$4 billion in budge
deficits.... Further, Wyoming, with, I believe, the second smallest
population, is not a hot bed of production....
Why am I discussing this...you are suggesting that states with good
economies are the ones with the highest property tax rates....? So, you
would suggest that everyone start paying huge property taxes (the 66% of us
that own property), so that we would have booming economies?
I do not have an knowledge of the economic condition of any state but mine,
and let me tell you, it is not that great...
>Prediction: you will now refuse to think about the implications of
>this fact of objective reality.
You seek to correlate property tax rates and economic growth rates.....I'm
sure you can point to some cite that would 'enlighten' me....
>>Any other purpose, as far as I am aware, has had unintended consequences.
>
>You are not aware. Simple.
Dismiss if you will, but convince you have not..
From:
http://www.earthrights.net/docs/fin4devt.html
Taxing land sites according to land value promotes urban and rural land
reform, providing affordable access to land for homes, businesses and
farming. Sufficiently high resource rental fees, captured for public sector
benefits, promote more careful and efficient use of natural resources by the
private sector. Conversely, the undertaxation of natural resources leads to
their over-exploitation. A high access cost for nonrenewable resources can
also stimulate investment in renewable energy and other sustainable
technologies, as less profit can be made on extracting irreplaceable
resources.
Several UN bodies have recommended this approach or urged its consideration.
A highly dubious recommendation...
From: David Ricardo, Esq.
On the Principles of Political Economy and Taxation
http://www.econlib.org/library/Ricardo/ricP1a.html#Ch.2,%20On%20Rent
Adam Smith sometimes speaks of rent, in the strict sense to which I am
desirous of confining it, but more often in the popular sense, in which the
term is usually employed. He tells us, that the demand for timber, and its
consequent high price, in the more southern countries of Europe, caused a
rent to be paid for forests in Norway, which could before afford no rent. Is
it not, however, evident, that the person who paid what he thus calls rent,
paid it in consideration of the valuable commodity which was then standing
on the land, and that he actually repaid himself with a profit, by the sale
of the timber? If, indeed, after the timber was removed, any compensation
were paid to the landlord for the use of the land, for the purpose of
growing timber or any other produce, with a view to future demand, such
compensation might justly be called rent, because it would be paid for the
productive powers of the land; but in the case stated by Adam Smith, the
compensation was paid for the liberty of removing and selling the timber,
and not for the liberty of growing it. He speaks also of the rent of coal
mines, and of stone quarries, to which the same observation applies葉hat the
compensation given for the mine or quarry, is paid for the value of the coal
or stone which can be removed from them, and has no connection with the
original and indestructible powers of the land. This is a distinction of
great importance, in an enquiry concerning rent and profits; for it is
found, that the laws which regulate the progress of rent, are widely
different from those which regulate the progress of profits, and seldom
operate in the same direction. In all improved countries, that which is
annually paid to the landlord, partaking of both characters, rent and
profit, is sometimes kept stationary by the effects of opposing causes; at
other times advances or recedes, as one or the other of these causes
preponderates. In the future pages of this work, then, whenever I speak of
the rent of land, I wish to be understood as speaking of that compensation,
which is paid to the owner of land for the use of its original and
indestructible powers.
Adam Smith, therefore, cannot be correct in supposing that the original rule
which regulated the exchangeable value of commodities, namely, the
comparative quantity of labour by which they were
produced, can be at all altered by the appropriation of land and the payment
of rent.
A tax on rent, as rent is constituted, would discourage cultivation, because
it would be a tax on the profits of the landlord. The term rent of land, as
I have elsewhere observed, is applied to the whole amount of the value paid
by the farmer to his landlord, a part only of which is strictly rent. The
buildings and fixtures, and other expenses paid for by the landlord, form
strictly a part of the stock of the farm, and must have been furnished by
the tenant, if not provided by the landlord. Rent is the sum paid to the
landlord for the use of the land, and for the use of the land only. The
further sum that is paid to him under the name of rent, is for the use of
the buildings, &c., and is really the profits of the landlord's stock. In
taxing rent, as no distinction would be made between that part paid for the
use of the land, and that paid for the use of the landlord's stock, a
portion of the tax would fall on the landlord's profits, and would,
therefore, discourage cultivation, unless the price of raw produce rose. On
that land, for the use of which no rent was paid, a compensation under that
name might be given to the landlord for the use of his buildings. These
buildings would not be erected, nor would raw produce be grown on such land,
till the price at which it sold would not only pay for all the usual
outgoings, but also this additional one of the tax. This part of the tax
does not fall on the landlord, nor on the farmer, but on the consumer of raw
produce.
10.2
There can be little doubt but that if a tax were laid on rent, landlords
would soon find a way to discriminate between that which is paid to them for
the use of the land, and that which is paid for the use of the buildings,
and the improvements which are made by the landlord's stock. The latter
would either be called the rent of house and buildings, or on all new land
taken into cultivation, such buildings would be erected, and improvements
would be made by the tenant, and not by the landlord. The landlord's capital
might indeed be really employed for that purpose; it might be nominally
expended by the tenant, the landlord furnishing him with the means, either
in the shape of a loan, or in the purchase of an annuity for the duration of
the lease. Whether distinguished or not, there is a real difference between
the nature of the compensations which the landlord receives for these
different objects; and it is quite certain, that a tax on the real rent of
land falls wholly on the landlord, but that a tax on that remuneration which
the landlord receives for the use of his stock expended on the farm, falls,
in a progressive country, on the consumer of raw produce. If a tax were laid
on rent, and no means of separating the remuneration now paid by the tenant
to the landlord under the name of rent were adopted, the tax, as far as it
regarded the rent on the buildings and other fixtures, would never fall for
any length of time on the landlord, but on the consumer. The capital
expended on these buildings, must afford the usual profit of stock; but it
would cease to afford this profit on the land last cultivated, if the
expenses of those buildings, did not fall on the tenant; and if they did,
the tenant would then cease to make his usual profits of stock, unless he
could charge them on the consumer.
10.3
Tracy Coyle
Gary Forbis wrote in message ...
>"Tracy Coyle" <tcc...@chorus.net> wrote in message ...
>> When you tax capital you prevent it from multiple potential uses, when
you
>> tax land, you prevent it from its best ( or only ) use. Capital can move
to
>> take advantage of the best opportunities, land doesn't move.
>
>> Let me use a different word, it is ivy tower economic analysis. When you
>> tax land, the owners will find its least taxable use....most likely,
vacant.
>
>That's just goofy.
>
>If you have to pay the same tax on the land independent of use then
>the owner will find it advantagous to produce income. Leaving the land
>vacant doesn't reduce it's value.
If it fact, the tax is on the sq ft of dirt, you are right, but if it is on
the value, then you are not, but the land tax movement considers land value
to be more than the dirt...and that is not mickey mouse...
Gary Forbis
> Gary Forbis wrote in message ...
>
> >"Tracy Coyle" <tcc...@chorus.net> wrote in message ...
>
> >> When you tax capital you prevent it from multiple potential uses,
> >> Capital can move totake advantage of the best opportunities,
>
> >> Let me use a different word, it is ivy tower economic analysis. When you
> >> tax land, the owners will find its least taxable use....most likely,
> vacant.
> >
> >That's just goofy.
> >
> >If you have to pay the same tax on the land independent of use then
> >the owner will find it advantagous to produce income. Leaving the land
> >vacant doesn't reduce it's value.
>
> If it fact, the tax is on the sq ft of dirt, you are right, but if it is on
> the value, then you are not,
Please explain. Suppose I have a plot of land worth $100,000 and a plot
of land worth $50,000. Either could be used for my purposes and would
generate the same income but I don't have a need for both. What should
I do? Remember, we are talking about a land value tax.
> but the land tax movement considers land value
> to be more than the dirt...and that is not mickey mouse...
Don't try to slip improvements in here. I'm not talking about a property
tax. I'm talking about a land value tax. Now while certain improvements
increase your land's value these improvements are typically not the one's
you make to your land but rather the improvements made by others to their
land.
Gary Forbis
without giving time to reply.
"Tracy Coyle" <tcc...@chorus.net> wrote in message news:<wLnna.982$zN4.1...@kent.svc.tds.net>...
> So, you would tax 20,000 sq ft if it were a hillside, a swamp, a forest or
> prairie land at the same rate you would tax 20,000 sq ft in Manhattan?
No, I'm talking about a land value tax.
> Because if YOU DON'T, then you are saying that some land is more valuable
> than other land, and then you are taxing not the land, but its USE.
No, it's potential use as determined by market value.
> If you
> do tax the land, regardless of its current or best use, then you will have
> to find some median point, and that will make the Manhattan land so much
> more valuable (and you will not recover that value) and you will force land
> that is used for farming and grazing so much more expensive as to make it
> too expensive for all but richest owners.
I don't know about Manhattan land. Here in Seattle, some investors
tear down highrises to build even new and bigger highrises. I doubt
they would do this if they didn't intend to make a profit in the
process. The existing "improvements" weren't very valuable in these
cases since they are being destroyed and the rubble carried off.
Now why do you suppose investors would build in the center of town
rather than out in the farmland? Further, what happens to the price
of food when land use is diverted away from its production?
> Land has value NOT BECAUSE IT EXISTS, but because of its use. Location,
> location, location...that is the value in land. Where land exists
> determines it's ability to produce income. Any land with minimal income
> producing value will be left vacant regardless of the tax, and if the tax is
> high enough, it will be abandoned rather than held privately.
Why would one pay the tax and leave the land vacant rather than sell the
land? Who would buy the land just to leave it vacant when the tax has
to be paid even on the vacant land? What happens is the land's value
is baed upon the market which takes the operational expenses into account.
> Vacant land is vacant for two reasons, it is either not economically
> feasible to do anything with the land, ie, it is more costly to use it than
> to leave it empty (imagine land that is in the path of development but still
> too far away), or it is never going to be economically feasible to do
> anything with it....ie, the swamp.
Or someone wants to speculate on the future value of the land based upon
improvements made by others in the surrounding area.
The land doesn't disappear when it isn't in use. If the land has no
use its value will reflect this fact and there will be no (or rather
little) tax.
> If my piece of land is taxed at $1 per
> sq ft, and it will take me $1000 to make it produce income of $150 per sq ft
> per year, then the tax is irrelevant. But if you tax me $150 per sq ft,
> then the land would need to produce $300 per year for the same return...if
> its best use can only produce $200 per sq ft per year, it is not worth the
> expenditure, and if owning the land is otherwise not useful, it will be
> eventually abandoned.
And the value will drop until some one finds it advantageous to own it
and use it.
It doesn't make any sense for you to own the land if your best use is
$200 per sq ft per year but the market indicates $300 per sq ft per year
is reasonable (or possibly that they are willing to accept the lower
return on investemnt.)
Gary Forbis
Two points.
1. Roy is talking about a land value tax not a property tax.
2. If they can't pay the tax how can they own the property free and clear?
Surely the tax isn't 100% or more.
OK, a third point.
3. Why should the elderly have special rights? Should the working class
be forced to live further from the city, commuting on a daily basis,
having to pay the extra transportation costs, and losing more time
just so some elderly can avoid paing the tax?
Hanging Chad
wrote:
>Now, do you believe people can produce income without land? I don't.
You ever hear of the Internet?
Or the stock market?
Patents, trademarks, copyrights, and other intellectual property?
Services?
Interest?
Yeah, everyone needs a place to sit, but it's a terribly minor factor
for a terribly significant number of aspects of modernity.
HC
ro...@telus.net
<it...@hotmail.com> wrote:
><ro...@telus.net> wrote in message news:3e9df557...@news.telus.net...
>|
>| Of course, the truth is the exact opposite of your claim. Taxing land
>| stimulates _more_ productive use, because owners have to either start
>| using the land more productively to pay the tax, or sell it to someone
>| who will.
>
>In Evergreen Colorado, just upslope from Denver, at least one elderly couple
>who retired there years ago with their home paid for, is forced to move out
>because property taxes are now more than they paid for the property. They
>cannot possibly pay them.
Excellent! So the elderly couple will pocket a vast amount of
unearned and untaxed money, and the land will be used
_more_productively_.
Thank you for providing the proof that I was 100% correct.
-- Roy L
ro...@telus.net
wrote:
>Gary Forbis wrote in message
><5a1238fe.03041...@posting.google.com>...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote in message
>
>>> When you tax capital you prevent it from multiple potential uses, when
>you
>>> tax land, you prevent it from its best ( or only ) use. Capital can move
>to
>>> take advantage of the best opportunities, land doesn't move.
>>
>>> Let me use a different word, it is ivy tower economic analysis. When you
>>> tax land, the owners will find its least taxable use....most likely,
>vacant.
>>
>>That's just goofy.
>>
>>If you have to pay the same tax on the land independent of use then
>>the owner will find it advantagous to produce income. Leaving the land
>>vacant doesn't reduce it's value.
>
>So, you would tax 20,000 sq ft if it were a hillside, a swamp, a forest or
>prairie land at the same rate you would tax 20,000 sq ft in Manhattan?
No. Don't you ever tire of demonstrating that you are an ignoramus?
Land taxes are levied by value, not area.
>Because if YOU DON'T, then you are saying that some land is more valuable
>than other land, and then you are taxing not the land, but its USE.
No, you are not. You seem not to understand the difference between
value and use. This is not surprising, as you seem to understand
almost nothing whatever.
>If you
>do tax the land, regardless of its current or best use, then you will have
>to find some median point, and that will make the Manhattan land so much
>more valuable (and you will not recover that value) and you will force land
>that is used for farming and grazing so much more expensive as to make it
>too expensive for all but richest owners.
Complete nonsense. Each parcel would simply be taxed in proportion to
its value.
>Land has value NOT BECAUSE IT EXISTS, but because of its use.
Now you claim a vacant lot has no value?
>Location,
>location, location...that is the value in land.
So, now you cannot tell the difference between use and location.
At least you're consistent....
>Where land exists
>determines it's ability to produce income. Any land with minimal income
>producing value will be left vacant regardless of the tax,
That is false. Only sub-marginal land -- i.e., land which cannot
produce _any_ income -- will be left vacant. It is true that a land
tax, by stimulating more intensive use of valuable land, will normally
result in more of the least valuable land being left vacant. But that
is a _good_ thing, because it means capital and labor are being
applied where they will be most productive.
>and if the tax is
>high enough, it will be abandoned rather than held privately.
No, its value will simply decline to the point where a user can pay
the tax. Really, your orotund pronouncements of patently false
nonsense are starting to convince people you are secretly a supporter
of land taxation.
>If my piece of land is taxed at $1 per
>sq ft, and it will take me $1000
?? You mean $1K/sq.ft.?
>to make it produce income of $150 per sq ft
>per year, then the tax is irrelevant.
You mean, because you would be losing $850/yr? Or because the land is
yielding $150 after expenses?
>But if you tax me $150 per sq ft,
>then the land would need to produce $300 per year for the same return...if
>its best use can only produce $200 per sq ft per year,
If it can yield $200/yr, why are you only using it to yield $150?
>it is not worth the
>expenditure, and if owning the land is otherwise not useful, it will be
>eventually abandoned.
That is hopelessly confused.
If a parcel of land can yield at most $200/yr after capital and labor
are paid for, then that is its rent. Any tax that recovers part of
that rent just reduces the payment to the landowner. It doesn't
affect the use. If the tax is high enough to recover the full $200,
then the land value is zero, but the use remains exactly the same:
it's the only way the owner can avoid losing money. A tax on land
value cannot recover more than the rent, because that would make the
value negative, and the tax would then become negative, too.
-- Roy L
ro...@telus.net
wrote:
>Gary Forbis wrote in message ...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote in message ...
>
>>> When you tax capital you prevent it from multiple potential uses, when
>you
>>> tax land, you prevent it from its best ( or only ) use. Capital can move
>to
>>> take advantage of the best opportunities, land doesn't move.
>>
>>> Let me use a different word, it is ivy tower economic analysis. When you
>>> tax land, the owners will find its least taxable use....most likely,
>vacant.
>>
>>That's just goofy.
>>
>>If you have to pay the same tax on the land independent of use then
>>the owner will find it advantagous to produce income. Leaving the land
>>vacant doesn't reduce it's value.
>
>If it fact, the tax is on the sq ft of dirt, you are right, but if it is on
>the value, then you are not,
It is on the value, and he is right.
-- Roy L
ro...@telus.net
wrote:
>ro...@telus.net wrote in message ...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>
>>>ro...@telus.net wrote in message ...
>>>
>>>>Hanging Chad <Han...@chad.bogus> wrote:
>>>>
>>>>>ro...@telus.net wrote:
>>>>>>>>> Please suggest some sort of alternative.
>>>>>>>>
>>>>>>>>Tax land value.
>>>>>>>
>>>>>>>If you want to tax capital generally, you might have an argument.
>>>>>>
>>>>>>No, that claim is false. Taxing capital reduces the amount of
>>>>>>capital. Taxing land does not reduce the amount of land. This is not
>>>>>>rocket science.
>>>
>>>When you tax capital you prevent it from multiple potential uses,
>>
>>?? No, you just increase the cost of holding it, increasing the
>>intensity of use but reducing the supply.
>
>...but reducing the supply...when there is less capital, the potential uses
>decrease.
?? No, the _actual_ uses decrease. Taxing capital cuts off the least
productive of its potential uses.
>From: David Ricardo, Esq.
>On the Principles of Political Economy and Taxation
>http://www.econlib.org/library/Ricardo/ricP1a.html#Ch.2,%20On%20Rent
>
>A tax on rent, as rent is constituted, would discourage cultivation, because
>it would be a tax on the profits of the landlord.
That sentence does not appear at the above URL, as paste and find will
confirm. Where is it from? In any case, it makes no economic sense.
The landlord is not the one doing the cultivation, so his profit on
idle ownership is irrelevant.
>>>Capital can move to
>>>take advantage of the best opportunities, land doesn't move.
>>
>>Exactly. Tax capital, it leaves. Tax land, it's still there.
>
>Tax land and its use changes.....unless you want to tax just the thing we
>call the dirt....just the sq ft regardless of use....
Just the value regardless of use.
Or are you unaware that property taxes are the same whether anyone is
using the property or not?
>>>You can not compare capital and land as to how taxes impact them.
>>
>>Yes, I can. And have.
>
>Wrongly...
Accurately.
>>>...though thousands of economists try...
>>
>>Of which it is easy to see you are not one....
>
>Because, after studying economics at the university level, I learned two
>important facts. First, economic theory is often divorced from the real
>world events it purports to model,
True. But often it isn't.
>and second, theory based on observations
>in economics is a study of history...and as the markets will tell you,
>results of the past are not an indicator of future performance....
Any science is a study of "history."
Next?
>>>>>This is balderdash.
>>>>
>>>>It is simply a fact. The fact that you choose to call a plain fact
>>>>"balderdash" is a particularly revealing fact about you.
>>>
>>>Let me use a different word, it is ivy tower economic analysis.
>>
>>It is factually correct analysis. The term "ivory tower" is simply a
>>code word used to denote a subject the speaker does not understand.
>
>Oh, I understand. I understand that economic theory does not have a great
>track record in the real world.
False economic theories have a poor track record, but true ones have
an excellent record.
>>>When you
>>>tax land, the owners will find its least taxable use....most likely,
>vacant.
>>
>>?? Wrong. When you tax land, the tax is exactly the same no matter
>>how the land is used. That is why the tax stimulates more productive
>>use.
>
>If you are just taxing the land, regardless of its use (therefore tax does
>not increase when the land is put to increasingly profitable uses) then you
>are correct - as long as the land meets other criteria, such as suitability
>and location.
That is where the value comes from.
>The Everglades are in a highly desireable location....but
>the use of that land is significantly limited .....if you charge tax on the
>Everglades at the same rate you charge Disney World for its' land....you are
>correct.....
The tax is on the value. Not the climate or latitude.
>>You see? You are just simply and risibly wrong as a matter of
>>objective fact.
>
>...but my bet is that is not what you are seeking to base the tax rate on...
You are wrong again, then.
>From:
>
>http://www.earthrights.net/docs/fin4devt.html
>
>Taxing land sites according to land value promotes urban and rural land
>reform, providing affordable access to land for homes, businesses and
>farming.
>
>Land value....could that be....
What we are talking about. Yes.
>again from: David Ricardo, Esq.
>On the Principles of Political Economy and Taxation
>
>stock. In taxing rent, as no distinction would be made between that part
>paid for the use of the land, and that paid for the use of the landlord's
>stock,
He is conflating land rent with interest on capital. Land value by
definition excludes improvements ("the landlord's stock").
>a portion of the tax would fall on the landlord's profits, and would,
>therefore, discourage cultivation, unless the price of raw produce rose. On
>that land, for the use of which no rent was paid, a compensation under that
>name
Here Ricardo is telling us explicitly that he is equivocating: it is
not land rent that he is talking about, but "a compensation under that
name."
>might be given to the landlord for the use of his buildings. These
>buildings would not be erected, nor would raw produce be grown on such land,
>till the price at which it sold would not only pay for all the usual
>outgoings, but also this additional one of the tax. This part of the tax
>does not fall on the landlord, nor on the farmer, but on the consumer of raw
>produce.
Ricardo was not aware of how the burden of such a tax on capital (not
land) would be shifted according to elasticities.
>>I predict that you will now ignore that fact, and continue to refuse
>>to consider that Nobel laureates in economics might be right about
>>economics, and you wrong.
>
>No need to ignore it. As long as land rent is based on the value of the
>land, and just the dirt, fine, but the land rent promoted by many is based
>on the land VALUE and that value is not separated from the dirt and the
>structures of production (the application of capital to prepare land for
>productive use).
You do not seem to know what you are talking about, here. Please
reread Ricardo, on "the original and indestructible powers of the
land." The dirt is part of that. The structures are not.
>that means that the 20,000 sq ft of Manhattan would be
>taxed more than 20,000 sq ft of Wyoming grazing land...
Correct.
>and Ricardo was
>specfic about that....
>
>"A tax on rent, as rent is constituted, would discourage cultivation,
>because it would be a tax on the profits of the landlord. "
Well, we have seen, above, that Ricardo _knows_ he is referring here
to rent in the layman's sense of a periodic payment for use of
another's property, _not_ the economic rent of the land alone.
>>>It is not governments business to subsidize anyone one, however, if taxes
>>>are to be levied, they should be spread as equally as possible,
>>
>>"The expense of government to the individuals of a great nation is
>>like the expense of management to the joint tenants of a great estate,
>>who are all obliged to contribute in proportion to their respective
>>interests in the estate. In the observation or neglect of this maxim
>>consists what is called the equality or inequality of taxation."
>> -- Adam Smith, The wealth of Nations, 1776
>
>That would be fine if all the tenants of the estate were obligated to
>contribute to their interests in the estate to the extent they benefited
>from the production of the estate....
They benefit from its production in proportion to their ownership
interests.
>if the estate benefits others than
>those contributing to the operation of the estate, then the payors would be
>deprived of benefits otherwise due them.
Not necessarily. One cannot always internalize externalities,
positive or negative.
>>>and as land
>>>values are based on the desireablity of the land, anything that reduces
>that
>>>desireability reduces its value.
>>
>>It has been known for nearly 200 years that while a tax on land may
>>reduce the land's value, it does not reduce (or increase) its
>>"desirability" (rent).
>
>But a tax on that rent would reduce the value...
Correct.
>If a tax were laid on rent, and no means of separating the remuneration now
>paid by the tenant to the landlord under the name of rent were adopted, the
>tax, as far as it regarded the rent on the buildings and other fixtures,
>would never fall for any length of time on the landlord, but on the
>consumer. The capital expended on these buildings, must afford the usual
>profit of stock; but it would cease to afford this profit on the land last
>cultivated, if the expenses of those buildings, did not fall on the tenant;
>and if they did, the tenant would then cease to make his usual profits of
>stock, unless he could charge them on the consumer.
Again, Ricardo is referring here to a tax on the periodic payment, not
on the _economic_ rent of the land.
>>>Taxes when levied always result in less of the thing levied against...
>>
>>Let's see... Less land value -> more affordable land. Sounds good to
>>me. Maybe you can explain to me how land being more costly is good
>>for anyone but its owner....?
>
>If the cost of land increases, we call it value...this is good for the
>owner. If the cost to hold the land increases (especially at a rate
>greater than the rate of value increase) then it is not good to the owner,
>nor will it be to any other potential owner...
But it will be good for users, and for society.
>unless a new owner could put
>the land to a use that increases its' value in relationship to the cost.
But the owner qua landowner is contributing nothing, anyway. Who
(except him) cares if he receives less unearned income?
>>>while you make the statement that land is not
>>>diminished by taxes, it's use would be diminished by taxes.
>>
>>History proves that use of land is not diminished but _increased_ by
>>taxes on land. The only exceptions are where the tax is not levied on
>>the land's value, and exceeds the land rent. This result follows
>>inevitably from land's zero elasticity of supply.
>
>IF those taxes are used in such a way as to benefit the land owner...such as
>infrastructure improvements....
As they typically are...
>and you can not say that land value increased
>when we raised taxes in a vacuum.
?? Do you know what has happened to land value as government's share
of GDP has increased?
>I dare say you can not provide an example when X parcel of land was worth Y
>dollars but as soon as taxes were levied against it, the parcel increased in
>value.
I am the one arguing that more costly land is not a good thing for
anyone but its owners -- and only them to the extent that they are not
also workers and consumers.
>On the other hand, you can probably show an increase in value of
>land when a tax levy was earmarked for improvements...say, the building of a
>school in the neighborhood.....
>
>>You are, again, simply and indisputably wrong as a matter of objective
>fact.
>
>I dispute your assertion...
And I have proved you wrong.
>>>>The difference between taxing production and taxing economic rent is
>>>>that production is beneficial to society, while rent is beneficial
>>>>only to its recipient, and represents a cost to society.
>>>
>>>Obviously you have never owned land next to a dump or a mansion.
>>
>>My personal financial interests do not affect the laws of economics,
>>and _neither_do_yours_.
>
>Those 'laws' must apply to the real world where you and I live. If they do
>not apply, they are no more than words and theories, useless except as an
>exercise. If you would base tax theory on reality, it must take into
>consideration how individuals would react to such a tax.
And land value taxation does exactly that.
>>>Before you suggest that
>>>families benefit when property taxes are used for education, remember that
>>>the majority of land owners in virtually EVERY district, do not have
>>>children.
>>
>>ROTFL!! It would be difficult to construct a more superficial and
>>wrong-headed argument than that one. Congratulations.
>
>>Did it ever occur to you that good schools increase the value of the
>>land nearby, whether or not the owners of that land have any children?
>>Take a couple of months off work to think about it. It seems you'll
>>need them.
>
>Your mirth is noted. As I just recently purchased a home, it's location
>specifically desired because it is across from a planned school, I can
>assure you that a school was an important characteristic of the home we
>purchased.
Then you paid the previous owner of your home for the school your
taxes are going to pay for. Do you like making that sort of deal?
>So, while in general you can state a school can have a positive impact on
>land values, it depends on the key 'good' school. The difference between
>theory and reality.
Check out the land values where there are no schools.
>>>Your millions of words of theory only makes you an expert on theory.
>>
>>Better than being an expert on fallacy...
>
>Economic theory is based on human behaviour....dismiss it at the cost of
>usefulness of your theories..
My theories have proved extremely useful everywhere they have been
applied.
>>>Economic theory can not prepare policy makers for the 9/11's, the cell
>>>phone, the PC, the impact of war (or lack of it).
>>
>>It can treat such events as the economic policy irrelevancies they are.
>
>You are saying that war has no impact on economic policy?
I'm saying it _should_ have none.
>Are you saying
>that the costs associated with increased security and fear have no impact on
>economic outcomes? Yes, you are.....
No, I am not. Please get a good dictionary and look up "policy" and
"outcome."
>>>>>>>has this been used (successfully)
>>>>>>>anywhere on the planet, in the last one hundred, five hundred, or
>>>>>>>three thousand years?
>>>>>>
>>>>>>Taxation of land value has been used successfully for at least the
>>>>>>last four thousand years. Great civilizations -- from Egypt, Athens,
>>>>>>and Rome to France, England, and Japan -- typically use taxes that
>>>>>>bear on land value when they are rising, then shift to other taxes and
>>>>>>fall.
>>>>>
>>>>>Have they used it as a large component of their systems?
>>>>
>>>>Yes. As one example, almost _all_ of England's government revenue was
>>>>from land taxes for hundreds of years. More examples: Singapore and
>>>>HK have obtained a large fraction of their total government revenue
>>>>from land rent for many decades.
>>>
>>>And can you tell me the size, in any previous or current country using
>your
>>>suggested system, of the land owning middle class?
>>
>>Both Singapore and HK have large middle classes. But the idea is that
>>the system renders landowning no longer a certificate of entitlement
>>to subsidies paid for by taxes on the productive, so the size of the
>>landowning class is irrelevant.
>
>Landowning has been shown to be the largest source of personal wealth,
>wealth being used for everything from education and investment...
??? Of course. If people with red hair were given a million dollars
a year each by government, red hair would be the largest source of
personal wealth.
>Further,
>home ownership, landowning, is a significant predictor for both health and
>future wealth...
Of course. If you own land, you are on the escalator. If you don't,
you are in the stairwell. Pointing out that the beneficiaries of an
injustice do indeed benefit from it hardly argues that it is not an
injustice. I daresay owning slaves was a good predictor of future
health and wealth, too.
>in this country, the percentage of homeownership hovers
>around 66%....Singapore and Honk Kong are poor examples
Any example that proves you wrong must be a poor one, obviously...
>as both are more
>city/states that are not capable of self-sufficiency or even of significant
>production - of goods...
That is most definitely false.
>>>>>Most every
>>>>>government, great or small, simply taxes everything in sight.
>>>>
>>>>That is of course false. It's just a way of refusing to think about
>>>>taxation, and attempting to discourage others from doing so, as well.
>>>
>>>You are right, but the point made is valid.
>
>>??? ROTFL!! Nope.
>
>Yep...I can not purchase anything without paying a tax....nothing is
>produced in this country without it being subject to a tax....in many cases,
>multiple taxes....but that doesn't mean we shouldn't discuss taxation...
The shifting and spreading of tax burdens is not the same as
government "taxing everything in sight."
>>>Taxes, when used in this
>>>country, decrease the use of the item or service taxed.
>>
>>Except land taxes, which is why the US states with the highest
>>property tax rates -- like New Hampshire, Connecticut and Wisconsin --
>>tend to have the best economies, while the states with the lowest
>>property tax rates -- like Alabama, Arkansas and Wyoming -- tend to
>>have the worst. It is also why the economies of states like
>>california that reduce their property tax rates get worse.
>
>Funny you should use Wisconsin as an example....I am paying 2.4/100 in
>property taxes and our state is facing a huge crisis....$4 billion in budge
>deficits....
Many states are in financial trouble. You might want to check the
fraction of WI state revenue accounted for by property taxes now,
compared to 30 or 40 years ago.
>Further, Wyoming, with, I believe, the second smallest
>population, is not a hot bed of production....
Now you know why.
>Why am I discussing this...you are suggesting that states with good
>economies are the ones with the highest property tax rates....?
I am stating that fact.
>So, you
>would suggest that everyone start paying huge property taxes (the 66% of us
>that own property), so that we would have booming economies?
That is exactly what I would suggest, except that it would be better
to tax just the land value. A property tax that also falls on
improvement value begins to have very negative effects when the rate
exceeds the sum of the discount rate and the depreciation rate.
>I do not have an knowledge of the economic condition of any state but mine,
>and let me tell you, it is not that great...
It is actually pretty good: low unemployment, high personal and
disposable incomes, low welfare utilization rate, good schools, etc.
>>Prediction: you will now refuse to think about the implications of
>>this fact of objective reality.
>
>You seek to correlate property tax rates and economic growth rates.....I'm
>sure you can point to some cite that would 'enlighten' me....
I can point to cites. There is considerable doubt that they would
enlighten you.
>From:
>
>http://www.earthrights.net/docs/fin4devt.html
>
>Taxing land sites according to land value promotes urban and rural land
>reform, providing affordable access to land for homes, businesses and
>farming. Sufficiently high resource rental fees, captured for public sector
>benefits, promote more careful and efficient use of natural resources by the
>private sector. Conversely, the undertaxation of natural resources leads to
>their over-exploitation. A high access cost for nonrenewable resources can
>also stimulate investment in renewable energy and other sustainable
>technologies, as less profit can be made on extracting irreplaceable
>resources.
>
>Several UN bodies have recommended this approach or urged its consideration.
>
>A highly dubious recommendation...
Didn't the five Nobel laureates in economics whom I quoted convince
you?
>From: David Ricardo, Esq.
>On the Principles of Political Economy and Taxation
>
>http://www.econlib.org/library/Ricardo/ricP1a.html#Ch.2,%20On%20Rent
>
>Adam Smith sometimes speaks of rent, in the strict sense to which I am
>desirous of confining it, but more often in the popular sense, in which the
>term is usually employed. He tells us, that the demand for timber, and its
>consequent high price, in the more southern countries of Europe, caused a
>rent to be paid for forests in Norway, which could before afford no rent. Is
>it not, however, evident, that the person who paid what he thus calls rent,
>paid it in consideration of the valuable commodity which was then standing
>on the land, and that he actually repaid himself with a profit, by the sale
>of the timber? If, indeed, after the timber was removed, any compensation
>were paid to the landlord for the use of the land, for the purpose of
>growing timber or any other produce, with a view to future demand, such
>compensation might justly be called rent, because it would be paid for the
>productive powers of the land; but in the case stated by Adam Smith, the
>compensation was paid for the liberty of removing and selling the timber,
>and not for the liberty of growing it.
Here Ricardo has allowed himself to become confused by the long growth
period of the timber, and the fact that the rent is only paid at long
intervals, when the timber is mature.
>He speaks also of the rent of coal
>mines, and of stone quarries, to which the same observation applies葉hat the
>compensation given for the mine or quarry, is paid for the value of the coal
>or stone which can be removed from them, and has no connection with the
>original and indestructible powers of the land.
Ricardo clearly did not understand the economic rents of non-renewable
resources.
Please reread the following passage, and try to understand it, this
time:
>Whether distinguished or not, there is a real difference between
>the nature of the compensations which the landlord receives for these
>different objects; and it is quite certain, that a tax on the real rent of
>land falls wholly on the landlord, but that a tax on that remuneration which
>the landlord receives for the use of his stock expended on the farm, falls,
>in a progressive country, on the consumer of raw produce. If a tax were laid
>on rent, and no means of separating the remuneration now paid by the tenant
>to the landlord under the name of rent were adopted, the tax, as far as it
>regarded the rent on the buildings and other fixtures, would never fall for
>any length of time on the landlord, but on the consumer.
Get it now?
-- Roy L
Authorized User
<ro...@telus.net> wrote in message news:3e9f5d98...@news.telus.net...
I disagree. Money is not everything. Why should they have to give up the
home they bought and paid for? Who knows what all they have done to the
place and what all they have accumulated there. It is their home.They will
have to suffer the expense of a move and they will have to move into
something much less desirable. It is very similar to imminent domain. In
Idaho recently, the state condemned private property and gave it to a
corporation to expand parking for a shopping center! I sure don't want my
home taken from me like that. Out of control property taxes do the same
thing.
Government has no other end but the preservation of Property.
ATTRIBUTION: John Locke (1632-1704), British philosopher.
The rights of persons, and the rights of property, are the objects, for the
protection of which Government was instituted.
ATTRIBUTION: James Madison (1751-1836), U.S. president.
Next to the right of liberty, the right of property is the most important
individual right guaranteed by the Constitution and the one which, united
with that of personal liberty, has contributed more to the growth of
civilization than any other institution established by the human race.
ATTRIBUTION: William Howard Taft (1857-1930), U.S. Republican politician,
president.
The diversity in the faculties of men, from which the rights of property
originate, is not less an insuperable obstacle to a uniformity of interests.
The protection of these faculties is the first object of government.
ATTRIBUTION: James Madison (1751-1836), U.S. Democratic-Republican
politician, president.
The reason why men enter into society, is the preservation of their
property; and the end why they choose and authorize a legislative, is, that
there may be laws made, and rules set, as guards and fences to the
properties of all the members of the society: to limit the power, and
moderate the dominion, of every part and member of the society.
ATTRIBUTION: John Locke (1632-1704), British philosopher.
No one can doubt, that the convention for the distinction of property, and
for the stability of possession, is of all circumstances the most necessary
to the establishment of human society, and that after the agreement for the
fixing and observing of this rule, there remains little or nothing to be
done towards settling a perfect harmony and concord.
ATTRIBUTION: David Hume (1711-1776), Scottish philosopher, historian,
embassy secretary.
Whenever the legislators endeavour to take away and destroy the property of
the people, or to reduce them to slavery under arbitrary power, they put
themselves into a state of war with the people, who are thereupon absolved
from any farther obedience, and are left to the common refuge, which God
hath provided for all men, against force and violence.
ATTRIBUTION: John Locke (1632-1704), British philosopher.
ro...@telus.net
wrote:
>On 15 Apr 2003 21:20:47 -0700, forbi...@msn.com (Gary Forbis)
Then why do all the H1-Bs actually have to be in the USA, paying rent
to US landlords, to do their jobs...?
-- Roy L
Steve
> Excellent! So the elderly couple will pocket a vast amount of
> unearned and untaxed money, and the land will be used
> _more_productively_.
But....it proves they don't own their own land.
All any municipilty has to do to steal it and give it to wealthier people is
raise their taxes until they can't pay them any more......
--
Steve
--
President Bush's legitimate power ends at the US territorial 12 mile limit.
Beyond that point, he is just another unelected dictator imposing his will,
through force of arms, on people who didn't - and can't - vote for him. If
he wants to lead the world, he must also be accountable to it.
Gary Forbis
> Out of control property taxes do the same thing.
Land value tax isn't the same as a property tax as implemented in most
localities.
> Government has no other end but the preservation of Property.
> ATTRIBUTION: John Locke (1632-1704), British philosopher.
This doesn't mention who should pay for the goverment expenses.
I'm pretty sure John Locke didn't say we should rob Peter to pay
for the protection of Paul's property. Further, land is a special
case.
> The rights of persons, and the rights of property, are the objects, for the
> protection of which Government was instituted.
> ATTRIBUTION: James Madison (1751-1836), U.S. president.
Ditto.
> Next to the right of liberty, the right of property is the most important
> individual right guaranteed by the Constitution and the one which, united
> with that of personal liberty, has contributed more to the growth of
> civilization than any other institution established by the human race.
> ATTRIBUTION: William Howard Taft (1857-1930), U.S. Republican politician,
> president.
Ditto.
> The diversity in the faculties of men, from which the rights of property
> originate, is not less an insuperable obstacle to a uniformity of interests.
> The protection of these faculties is the first object of government.
> ATTRIBUTION: James Madison (1751-1836), U.S. Democratic-Republican
> politician, president.
Ditto.
> The reason why men enter into society, is the preservation of their
> property; and the end why they choose and authorize a legislative, is, that
> there may be laws made, and rules set, as guards and fences to the
> properties of all the members of the society: to limit the power, and
> moderate the dominion, of every part and member of the society.
> ATTRIBUTION: John Locke (1632-1704), British philosopher.
I'll even go further here. "Guards and fenses" is being used
metaphorically here. It isn't the protection of land alone. John
Locke doesn't propose the taxation of Peter's property, obtained
in the form of income this year, to pay for Paul's property, held
for years. Also, there is no call for the taking of the commons
and calling it property otherwise I would ask you to stop breathing
my property without paying me rent.
> No one can doubt, that the convention for the distinction of property, and
> for the stability of possession, is of all circumstances the most necessary
> to the establishment of human society, and that after the agreement for the
> fixing and observing of this rule, there remains little or nothing to be
> done towards settling a perfect harmony and concord.
> ATTRIBUTION: David Hume (1711-1776), Scottish philosopher, historian,
> embassy secretary.
There is no harmony when some take the commons and charge for access
to it. A bow owes its value to its form not its land. The form of
the bow is produced by human labor and it is in this way property is
generated.
There is labor involved in clearing land for farming. To the extent
the clearing has value separate from the land the clearing is property
even as the land remains commons. When land was in such abundance
in relationship to the population of the nation it made sense to grant
homestead rights to the land because the value was mostly in the labor
but now that is not true and the recovery of the value in the commons
is needed to pay the expenses for the owner's protected rights and
for the loss of equal rights of access to the commons that cannot
be granted to others based upon our current structural norms.
> Whenever the legislators endeavour to take away and destroy the property of
> the people, or to reduce them to slavery under arbitrary power, they put
> themselves into a state of war with the people, who are thereupon absolved
> from any farther obedience, and are left to the common refuge, which God
> hath provided for all men, against force and violence.
> ATTRIBUTION: John Locke (1632-1704), British philosopher.
Land isn't property even though in common usage it is referred to as such.
ro...@telus.net
<it...@hotmail.com> wrote:
><ro...@telus.net> wrote in message news:3e9f5d98...@news.telus.net...
>| On Wed, 16 Apr 2003 22:47:50 -0500, "Authorized User"
>| <it...@hotmail.com> wrote:
>|
>| ><ro...@telus.net> wrote in message
>news:3e9df557...@news.telus.net...
>| >|
>| >| Of course, the truth is the exact opposite of your claim. Taxing land
>| >| stimulates _more_ productive use, because owners have to either start
>| >| using the land more productively to pay the tax, or sell it to someone
>| >| who will.
>| >
>| >In Evergreen Colorado, just upslope from Denver, at least one elderly
>couple
>| >who retired there years ago with their home paid for, is forced to move
>out
>| >because property taxes are now more than they paid for the property. They
>| >cannot possibly pay them.
>|
>| Excellent! So the elderly couple will pocket a vast amount of
>| unearned and untaxed money, and the land will be used
>| _more_productively_.
>|
>| Thank you for providing the proof that I was 100% correct.
>
>I disagree.
Of course. You disagree because I am right, and you insist on being
wrong.
>Money is not everything.
Indeed. But try telling that to the rich....
>Why should they have to give up the
>home they bought and paid for?
They don't "have" to give it up, though, do they? They merely have to
_choose_ between paying the tax out of their assets (e.g., by a
reverse mortgage), giving the property up, and using it more
productively -- by taking in a boarder, say. Part of the function of
a free market is to give people an incentive to either use their
resources as productively as they can, or sell them to someone who
will.
Now, it may well be that none of the choices available to them give
them all the benefits they desire, at a cost they want to pay. But
IIRC Mick Jagger had an answer for that conundrum...
>Who knows what all they have done to the
>place and what all they have accumulated there. It is their home.
?? So what? Would you advance the same stupid argument if they were
tenants who couldn't afford a rent increase?
You seem to be trying to imply that when they sell their home for an
immense unearned and untaxed profit, they will somehow be out on the
street, pushing shopping carts heaped with empty pop cans.
What nonsense. When they sell their home, they will just buy another
one -- almost certainly with lots of money left over -- and then that
will be their home. They will not become homeless.
Capisci?
>They will
>have to suffer the expense of a move and they will have to move into
>something much less desirable.
Actually, the reverse is far more likely. Although nobody likes to
move, it is virtually certain that they will, with the immense
unearned profits on the sale of their property jingling in their
pockets, be able to buy a place that is _more_ suitable to their needs
-- and certainly to their means.
>It is very similar to imminent domain.
Nonsense. It is much more similar to a tenant deciding to move
because he can't afford a rent increase. The owners have known all
along that they would have to either pay the property taxes or sell,
and there was never any guarantee that the taxes would not rise.
Government only ever grants a land title on the condition that the
taxes are kept current. How is it that landholders somehow have the
right to unilaterally change the conditions of their tenure, but
tenants to not?
You know, your eagerness to exclude the relevant facts from your
thinking is not surprising to me. It is an invariable characteristic
of the defenders of privilege and injustice.
>In
>Idaho recently, the state condemned private property and gave it to a
>corporation to expand parking for a shopping center!
To take from A and give to B is quite a different process from levying
a tax that stimulates A to sell to B at a large unearned profit.
>I sure don't want my
>home taken from me like that. Out of control property taxes do the same
>thing.
That is of course false. If you can't afford your property taxes, you
just sell, pocket the immense wad of unearned and untaxed money, and
buy a better place somewhere else.
>Government has no other end but the preservation of Property.
>ATTRIBUTION: John Locke (1632-1704), British philosopher.
Well then, we know who should be paying for government, don't we?
>Next to the right of liberty, the right of property is the most important
>individual right guaranteed by the Constitution and the one which, united
>with that of personal liberty, has contributed more to the growth of
>civilization than any other institution established by the human race.
>ATTRIBUTION: William Howard Taft (1857-1930), U.S. Republican politician,
>president.
There is no way to pay for government other than by transfers of
property from private to public hands. That is just a fact. The only
questions revolve around whose property is to be transferred, and how
the transfers are to be effected. Invoking "property rights" in
opposition to a tax on property to pay for the institution that
defends property rights for the benefit of property owners is a
singularly self-refuting argument.
>The reason why men enter into society, is the preservation of their
>property; and the end why they choose and authorize a legislative, is, that
>there may be laws made, and rules set, as guards and fences to the
>properties of all the members of the society: to limit the power, and
>moderate the dominion, of every part and member of the society.
>ATTRIBUTION: John Locke (1632-1704), British philosopher.
So, government exists for the benefit of property owners, but somebody
else should be forced to pay for it?
Somehow, I kinda figured it'd be something like that....
-- Roy L
ro...@telus.net
>ro...@telus.net allegedly said:
>
>> Excellent! So the elderly couple will pocket a vast amount of
>> unearned and untaxed money, and the land will be used
>> _more_productively_.
>
>But....it proves they don't own their own land.
What makes it their "own" land? They didn't produce it, and neither
did any former owner they might have bought it from. Property in land
can only originate with a government grant of title in the first
place. The title is granted only on condition the taxes are kept
current, and there is no guarantee they will not rise.
>All any municipilty has to do to steal it and give it to wealthier people is
>raise their taxes until they can't pay them any more......
Assuming the government is honest, the wealthier people would also be
paying more tax. A lot more.
You won't find a lot of wealthy people advocating higher property
taxes. They much prefer income and sales taxes, which are paid by
working people.
-- Roy L
Matt Nichols
wrote:
>Hanging Chad <Han...@chad.bogus> wrote in message news:<5s2f9vo0t8u142naq...@4ax.com>...
>> On 11 Apr 2003 14:22:41 -0700, rbbo...@netzero.com (rbbomber) wrote:
>>
>>
>> Absolutely wrong. Social security was always supposed to be a
>> separate fund, and demographics were always going to kill it.
>
>Absolutely wrong. It could and still can be saved provided we
>direct the funds wisely.
At 1 tax payer for every 2 or 3 social security benificiaries?????
That's the ratio we are rapidly approching, sometime within the next
couple of decades.
There should *never* have been any such term as "entitlements" in US
economics. We are *entitled* NOTHING except. *Everything* that we get
is either by the sweat of our own brows or the charity (which by
definition is merely a *luxury* that the charity-givers can afford,
*if they so choose*) of others.
We are owed nothing, and should never expect anything. To expect some
sort of "entitlement" is nonsense at best, since such "entitlement"
must be payed for at the expense of others. To *require* (as opposed
to request, and allow people to reject) others expend themselves for
strangers is evil in it's purest form.
-Matt
Miguel O'Pastel
"Matt Nichols" <kf6...@earthlink.net> wrote in message
news:3e9e37cc...@news.earthlink.net...
M
ro...@telus.net
wrote:
>There should *never* have been any such term as "entitlements" in US
>economics. We are *entitled* NOTHING except. *Everything* that we get
>is either by the sweat of our own brows or the charity (which by
>definition is merely a *luxury* that the charity-givers can afford,
>*if they so choose*) of others.
Ah, but that's where you're wrong. Some people are privileged to
collect economic rents: payments exacted in return for no
contribution. Until your theory accounts fully for that fact, it is
garbage from beginning to end.
>We are owed nothing, and should never expect anything.
But landowners expect to be paid for access to the services and
infrastructure government provides, the opportunities and amenities
the community provides, and the resources nature provides.
>To expect some
>sort of "entitlement" is nonsense at best, since such "entitlement"
>must be payed for at the expense of others.
Like the land rent landowners are "entitled" to. Right.
Percent of GDP given to welfare recipients for doing nothing: ~2%.
Percent of GDP given to landowners for doing nothing: ~20%.
>To *require* (as opposed
>to request, and allow people to reject) others expend themselves for
>strangers is evil in it's purest form.
Right. Taxing producers for the unearned benefit of idle landowners
is evil in its purest form.
-- Roy L
Tracy Coyle
ro...@telus.net wrote in message...
>Steve wrote:
>
>>ro...@telus.net allegedly said:
>>
>>> Excellent! So the elderly couple will pocket a vast amount of
>>> unearned and untaxed money, and the land will be used
>>> _more_productively_.
>>
>>But....it proves they don't own their own land.
>
>What makes it their "own" land? They didn't produce it, and neither
>did any former owner they might have bought it from. Property in land
>can only originate with a government grant of title in the first
>place. The title is granted only on condition the taxes are kept
>current, and there is no guarantee they will not rise.
But where did the government obtain title to the land? Purchased from the
Indians?
>>All any municipilty has to do to steal it and give it to wealthier people
is
>>raise their taxes until they can't pay them any more......
>
>Assuming the government is honest, the wealthier people would also be
>paying more tax. A lot more.
Why? If two identical parcels of land with two identical homes are side by
side, and the owners of one make $40,000 per year and the owners of the
other make $400,000....wouldn't they be paying the same taxes in your plan?
>You won't find a lot of wealthy people advocating higher property
>taxes. They much prefer income and sales taxes, which are paid by
>working people.
Let me see: a 20 something couple earns $35,000 a year and rents...they
pay about $7,000 in taxes. A 50 something couple earns $100,000 a year and
owns a 200k home with a 170k mortgage and pays 4k in property taxes and $20k
in income taxes....
Which tax do you think these people would be asking to be cut....???? And
as the younger couple doesn't PAY property taxes, what do they care if it
keeps going up....
Tracy Coyle
ro...@telus.net wrote in message
>>>>>>>>
>>>>>>>>If you want to tax capital generally, you might have an argument.
>>>>>>>
>>>>>>>No, that claim is false. Taxing capital reduces the amount of
>>>>>>>capital. Taxing land does not reduce the amount of land. This is
not
>>>>>>>rocket science.
>>>>
>>>>When you tax capital you prevent it from multiple potential uses,
>>>
>>>?? No, you just increase the cost of holding it, increasing the
>>>intensity of use but reducing the supply.
>>
>>...but reducing the supply...when there is less capital, the potential
uses
>>decrease.
>
>?? No, the _actual_ uses decrease. Taxing capital cuts off the least
>productive of its potential uses.
Even if the use is considered beneficial? Sometimes people and businesses
do not act efficiently, on purpose....
>>From: David Ricardo, Esq.
>>On the Principles of Political Economy and Taxation
>>http://www.econlib.org/library/Ricardo/ricP1a.html#Ch.2,%20On%20Rent
>>
>>A tax on rent, as rent is constituted, would discourage cultivation,
because
>>it would be a tax on the profits of the landlord.
>
>That sentence does not appear at the above URL, as paste and find will
>confirm. Where is it from? In any case, it makes no economic sense.
>The landlord is not the one doing the cultivation, so his profit on
>idle ownership is irrelevant.
You are correct about the URL....please accept my apology for sloppy
pasting...
http://www.econlib.org/library/Ricardo/ricP.html
Chapter 10, paragraph 2, of David Ricardo's On the Principles of Political
Economy and Taxation
Reproduced here:
A tax on rent, as rent is constituted, would discourage cultivation, because
it would
be a tax on the profits of the landlord. The term rent of land, as I
have elsewhere
observed, is applied to the whole amount of the value paid by the
farmer to his
landlord, a part only of which is strictly rent. The buildings and
fixtures, and other
expenses paid for by the landlord, form strictly a part of the stock
of the farm, and
must have been furnished by the tenant, if not provided by the
landlord. Rent is the
sum paid to the landlord for the use of the land, and for the use of
the land only.
The further sum that is paid to him under the name of rent, is for
the use of the
buildings, &c., and is really the profits of the landlord's stock. In
taxing rent, as no
distinction would be made between that part paid for the use of the
land, and that
paid for the use of the landlord's stock, a portion of the tax would
fall on the
landlord's profits, and would, therefore, discourage cultivation,
unless the price of
raw produce rose. On that land, for the use of which no rent was
paid, a
compensation under that name might be given to the landlord for the
use of his
buildings. These buildings would not be erected, nor would raw
produce be grown
on such land, till the price at which it sold would not only pay for
all the usual
outgoings, but also this additional one of the tax. This part of the
tax does not fall on
the landlord, nor on the farmer, but on the consumer of raw produce.
>>>>Capital can move to
>>>>take advantage of the best opportunities, land doesn't move.
>>>
>>>Exactly. Tax capital, it leaves. Tax land, it's still there.
>>
>>Tax land and its use changes.....unless you want to tax just the thing we
>>call the dirt....just the sq ft regardless of use....
>
>Just the value regardless of use.
>Or are you unaware that property taxes are the same whether anyone is
>using the property or not?
???? Are you aware? My land taxes were less than $1000 last year, this
year they will be over $5000....the difference? Welll...the land is still
the same....didn't move....no new infrastructure....of course a HOUSE now
sits on the land....BUT THE LAND IS STILL THE SAME. The difference is that
I am using it ....we build a structure on it....the County feels that we
have increased the value of the land and therefore, more taxes are due.. We
have put it to a more productive use...housing....
You will suggest, I assume, that the County is not using your plan....but
using your plan....would my tax increase or not, vs last year?
>>>>...though thousands of economists try...
>>>
>>>Of which it is easy to see you are not one....
>>
>>Because, after studying economics at the university level, I learned two
>>important facts. First, economic theory is often divorced from the real
>>world events it purports to model,
>
>True. But often it isn't.
>>and second, theory based on observations
>>in economics is a study of history...and as the markets will tell you,
>>results of the past are not an indicator of future performance....
>
>Any science is a study of "history."
>Next?
Do you know what the definition of is, is? Imagine a volcanologist
studying the effects of lava flows, but ignoring the volcano that caused
them.... That is what an economist does, he studies how money is spent
without understanding the motivations, not because he could if he wanted,
but because to do so he would have to know every spender of money...so, when
two people with the same income, in the same residential block spend their
money differently, we don't know WHY they did, only what they did....and
that means we can NEVER know what they will do next week...
Other sciences can learn from 'history' that mixing two chemicals caused an
explosion, and if they do it again next week, it will do it again...
>>>>>>This is balderdash.
>>>>>
>>>>>It is simply a fact. The fact that you choose to call a plain fact
>>>>>"balderdash" is a particularly revealing fact about you.
>>>>
>>>>Let me use a different word, it is ivy tower economic analysis.
>>>
>>>It is factually correct analysis. The term "ivory tower" is simply a
>>>code word used to denote a subject the speaker does not understand.
>>
>>Oh, I understand. I understand that economic theory does not have a great
>>track record in the real world.
>
>False economic theories have a poor track record, but true ones have
>an excellent record.
Possibly, in explaining the past, but as predictive models....
And how is this value determined? By what method? Who sets the value?
How will it change?
Damn Nobels didn't know everything...if he had only known that tax burdens
would be shifted to the end users...oh, wait, he knew that....
>>>I predict that you will now ignore that fact, and continue to refuse
>>>to consider that Nobel laureates in economics might be right about
>>>economics, and you wrong.
>>
>>No need to ignore it. As long as land rent is based on the value of the
>>land, and just the dirt, fine, but the land rent promoted by many is based
>>on the land VALUE and that value is not separated from the dirt and the
>>structures of production (the application of capital to prepare land for
>>productive use).
>
>You do not seem to know what you are talking about, here. Please
>reread Ricardo, on "the original and indestructible powers of the
>land." The dirt is part of that. The structures are not.
He seems quite content to state that rent is for the dirt. And I accept
that. If you want to tax all the dirt in the US EQUALLY, fine....tell me
your method for determining it's value, and as long as it is consistent, I
will not have a problem... Because USE and STRUCTURES can not be used as
part of the determining factors, my land will be taxed at no greater a rate
than anyone else with the same quantity of land.
>>that means that the 20,000 sq ft of Manhattan would be
>>taxed more than 20,000 sq ft of Wyoming grazing land...
>
>Correct.
Why? Are you valuing the land because of it's use, or location? I seemed
to be confused....you want to tax land value, just the lands value,
irrespective of use, but because Manhattan land is more useful, it is more
valuable.....then....
>>and Ricardo was specfic about that....
>>
>>"A tax on rent, as rent is constituted, would discourage cultivation,
>>because it would be a tax on the profits of the landlord. "
>
>Well, we have seen, above, that Ricardo _knows_ he is referring here
>to rent in the layman's sense of a periodic payment for use of
>another's property, _not_ the economic rent of the land alone.
Ricardo says..
In taxing rent, as no
distinction would be made between that part paid for the use of the
land, and that
paid for the use of the landlord's stock, a portion of the tax would
fall on the
landlord's profits, and would, therefore, discourage cultivation,
If land is valuable because of it's potential use, then you can not separate
the use from the value and you are not taxing the LAND, but its potential
use.
You suggest that a land owner in Manhattan, faced with a huge tax bill for
his property there, will be forced to use the land for it's most productive
purpose or face a liability he will be unable to afford....what if he puts
it to use only to the extent that it means that liability? How will the
'value' be deterimined in such a way PRIOR to use? There are many buildings
in Manhattan, but only two of them were built 100 stories tall...
But he suggests that there is no way to distingush between the two once the
two exist.
>>>>Taxes when levied always result in less of the thing levied against...
>>>
>>>Let's see... Less land value -> more affordable land. Sounds good to
>>>me. Maybe you can explain to me how land being more costly is good
>>>for anyone but its owner....?
>>
>>If the cost of land increases, we call it value...this is good for the
>>owner. If the cost to hold the land increases (especially at a rate
>>greater than the rate of value increase) then it is not good to the owner,
>>nor will it be to any other potential owner...
>
>But it will be good for users, and for society.
You DO KNOW that a large percentage of land owners are the
users....homeowners? And that if you increase the cost for these
homeowners, you will end up with many empty homes because fewer and fewer
people will be able to afford it....it will concentrate land ownership....
>>unless a new owner could put
>>the land to a use that increases its' value in relationship to the cost.
>
>But the owner qua landowner is contributing nothing, anyway. Who
>(except him) cares if he receives less unearned income?
You miss the facts that a) the owner maintains the land as it becomes more
desirable - ie, increases in value, and b) that as owners, we face tax on
the difference between the cost of our land and it's selling price - the
'unearned income' you speak of...they call it capital gains....
>>>>while you make the statement that land is not
>>>>diminished by taxes, it's use would be diminished by taxes.
>>>
>>>History proves that use of land is not diminished but _increased_ by
>>>taxes on land. The only exceptions are where the tax is not levied on
>>>the land's value, and exceeds the land rent. This result follows
>>>inevitably from land's zero elasticity of supply.
>>
>>IF those taxes are used in such a way as to benefit the land owner...such
as
>>infrastructure improvements....
>
>As they typically are...
Conceded...to a degree...
>>and you can not say that land value increased
>>when we raised taxes in a vacuum.
>
>?? Do you know what has happened to land value as government's share
>of GDP has increased?
I would suggest that the two are not correlated....
>>I dare say you can not provide an example when X parcel of land was worth
Y
>>dollars but as soon as taxes were levied against it, the parcel increased
in
>>value.
>
>I am the one arguing that more costly land is not a good thing for
>anyone but its owners -- and only them to the extent that they are not
>also workers and consumers.
If I were a landlord, and I rented a 4 unit apartment building and you
increased my taxes on that property, you can bet I will raise the rent to
compensate...and I will continue to do so as long as there are tenents
willing and able to pay the rent I charge. There is no cost I will be
unable to pass along, until it reaches a point where the only viable option
is to tear down the 4 unit, and put in a 12 unit....your ideal....but the
infrastructure will be stressed if every landlord does that, so we raise
taxes to compensate and the loop starts again...until...what, we either all
build 100 story structures, or let our 12 unit deteriorate because no one
can afford to tear it down or live in it at the cost structure...
>>On the other hand, you can probably show an increase in value of
>>land when a tax levy was earmarked for improvements...say, the building of
a
>>school in the neighborhood.....
>>
>>>You are, again, simply and indisputably wrong as a matter of objective
>>fact.
>>
>>I dispute your assertion...
>
>And I have proved you wrong.
No, you haven't, you made a statement, I disagree with it, just because you
claim it is truth (fact) does not make it so.
>>>>>The difference between taxing production and taxing economic rent is
>>>>>that production is beneficial to society, while rent is beneficial
>>>>>only to its recipient, and represents a cost to society.
>>>>
>>>>Obviously you have never owned land next to a dump or a mansion.
>>>
>>>My personal financial interests do not affect the laws of economics,
>>>and _neither_do_yours_.
>>
>>Those 'laws' must apply to the real world where you and I live. If they
do
>>not apply, they are no more than words and theories, useless except as an
>>exercise. If you would base tax theory on reality, it must take into
>>consideration how individuals would react to such a tax.
>
>And land value taxation does exactly that.
By taking into consideration the USE of a piece of land....and the setting
of a tax rate based on a perceived, or potential use to insure the
compliance of an owner to commit capital to improve the land or face a
liability otherwise unpayable...
>>>>Before you suggest that
>>>>families benefit when property taxes are used for education, remember
that
>>>>the majority of land owners in virtually EVERY district, do not have
>>>>children.
>>>
>>>ROTFL!! It would be difficult to construct a more superficial and
>>>wrong-headed argument than that one. Congratulations.
>>
>>>Did it ever occur to you that good schools increase the value of the
>>>land nearby, whether or not the owners of that land have any children?
>>>Take a couple of months off work to think about it. It seems you'll
>>>need them.
>>
>>Your mirth is noted. As I just recently purchased a home, it's location
>>specifically desired because it is across from a planned school, I can
>>assure you that a school was an important characteristic of the home we
>>purchased.
>
>Then you paid the previous owner of your home for the school your
>taxes are going to pay for. Do you like making that sort of deal?
We are the first owners of that home, it was previously vacant land....
>>So, while in general you can state a school can have a positive impact on
>>land values, it depends on the key 'good' school. The difference between
>>theory and reality.
>
>Check out the land values where there are no schools.
You mean....like Manhattan, downtown Chicago....??
>>>>Your millions of words of theory only makes you an expert on theory.
>>>
>>>Better than being an expert on fallacy...
>>
>>Economic theory is based on human behaviour....dismiss it at the cost of
>>usefulness of your theories..
>
>My theories have proved extremely useful everywhere they have been applied.
Useful to whom? A middle class?
>>>>Economic theory can not prepare policy makers for the 9/11's, the cell
>>>>phone, the PC, the impact of war (or lack of it).
>>>
>>>It can treat such events as the economic policy irrelevancies they are.
>>
>>You are saying that war has no impact on economic policy?
>
>I'm saying it _should_ have none.
BUT IT DOES! That is the problem with theory...you can not account for
reality!
>>Are you saying
>>that the costs associated with increased security and fear have no impact
on
>>economic outcomes? Yes, you are.....
>
>No, I am not. Please get a good dictionary and look up "policy" and
>"outcome."
Yea, I will see ghettos.....
Non-sequitur....the government does not 'give' money to landowners....no
matter how you characterize the increase in value of my property...
>>Further,
>>home ownership, landowning, is a significant predictor for both health and
>>future wealth...
>
>Of course. If you own land, you are on the escalator. If you don't,
>you are in the stairwell. Pointing out that the beneficiaries of an
>injustice do indeed benefit from it hardly argues that it is not an
>injustice. I daresay owning slaves was a good predictor of future
>health and wealth, too.
Another....your plan will concentrate land into fewer and fewer
hands....those with the capital to improve land to the productive level YOU
seek....
>>in this country, the percentage of homeownership hovers
>>around 66%....Singapore and Honk Kong are poor examples
>
>Any example that proves you wrong must be a poor one, obviously...
>
>>as both are more
>>city/states that are not capable of self-sufficiency or even of
significant
>>production - of goods...
>
>That is most definitely false.
Oh? And where is the wealth in HK and Singapore? In the land holders?
>>>>>>Most every
>>>>>>government, great or small, simply taxes everything in sight.
>>>>>
>>>>>That is of course false. It's just a way of refusing to think about
>>>>>taxation, and attempting to discourage others from doing so, as well.
>>>>
>>>>You are right, but the point made is valid.
>>
>>>??? ROTFL!! Nope.
>>
>>Yep...I can not purchase anything without paying a tax....nothing is
>>produced in this country without it being subject to a tax....in many
cases,
>>multiple taxes....but that doesn't mean we shouldn't discuss taxation...
>
>The shifting and spreading of tax burdens is not the same as
>government "taxing everything in sight."
It is two different issues. There are taxes on everything, and those taxes
are shifted to the end users, always...
>>>>Taxes, when used in this
>>>>country, decrease the use of the item or service taxed.
>>>
>>>Except land taxes, which is why the US states with the highest
>>>property tax rates -- like New Hampshire, Connecticut and Wisconsin --
>>>tend to have the best economies, while the states with the lowest
>>>property tax rates -- like Alabama, Arkansas and Wyoming -- tend to
>>>have the worst. It is also why the economies of states like
>>>california that reduce their property tax rates get worse.
>>
>>Funny you should use Wisconsin as an example....I am paying 2.4/100 in
>>property taxes and our state is facing a huge crisis....$4 billion in
budge
>>deficits....
>
>Many states are in financial trouble. You might want to check the
>fraction of WI state revenue accounted for by property taxes now,
>compared to 30 or 40 years ago.
>>Further, Wyoming, with, I believe, the second smallest
>>population, is not a hot bed of production....
>
>Now you know why.
You are stating because you see blue, it must be the sky....
>>Why am I discussing this...you are suggesting that states with good
>>economies are the ones with the highest property tax rates....?
>
>I am stating that fact.
>>So, you
>>would suggest that everyone start paying huge property taxes (the 66% of
us
>>that own property), so that we would have booming economies?
>
>That is exactly what I would suggest, except that it would be better
>to tax just the land value. A property tax that also falls on
>improvement value begins to have very negative effects when the rate
>exceeds the sum of the discount rate and the depreciation rate.
There is an additional requirement to get the result you are looking
for....the elimination of taxes on income and production....without one, the
other is impossible...
No.
I got it before, but the problem lies in separating the renumeration a
landlord receives for the stock and on the real rent. You claim to be able
to separate them, I say you can not....nothing here has changed my opinion
in that regard. Your plan requires you (or your bureaucrats) to determine
the most productive use for a piece of land, tax it accordingly, so that the
owner has no choice but to conform to that productive use....he MUST THEN
apply his capital (if he has it) in the manner you see fit, or risk his
land, and of course, YOU SEE NO PROBLEM WITH THIS.
Gary Forbis
> http://www.econlib.org/library/Ricardo/ricP.html
>
> Chapter 10, paragraph 2, of David Ricardo's On the Principles of Political
> Economy and Taxation
>
> Reproduced here:
>
> A tax on rent, as rent is constituted,
Ricardo isn't talking about land rent.
> would discourage cultivation, because it would be a tax on the profits
> of the landlord.
> The term rent of land, as I have elsewhere observed, is applied to the
> whole amount of the value paid by the farmer to his landlord, a part
> only of which is strictly rent.
See. Ricardo is coflating rent with land rent. He proceeds with:
> The buildings and fixtures, and other expenses paid for by the
> landlord, form strictly a part of the stock of the farm, and
> must have been furnished by the tenant, if not provided by the
> landlord.
which doesn't make any sense at all. Surely if the landlord paid for
the buildings and fixtures then rent is rent for the capital not the
land. But if the buildings and fixtures are furnished by the tenant
then why does Ricardo say they were paid for by the landlord?
> Rent is the sum paid to the landlord for the use of the land, and
> for the use of the land only.
Not if the tenent is using buildings and fixtures provided by the
landlord. Land rent is as Ricardo says here but not as he uses it
earlier.
> The further sum that is paid to him under the name of rent, is for
> the use of the buildings, &c., and is really the profits of the
> landlord's stock.
OK, here we can talk about land rent and rent, where land rent is for
the land only and rent is for the land and improvements.
> In taxing rent, as no distinction would be made between that part
> paid for the use of the land, and that paid for the use of the
> landlord's stock, a portion of the tax would fall on the landlord's
> profits, and would, therefore, discourage cultivation, unless the
> price of raw produce rose.
Now I'm beginning to like this Ricardo guy. He's telling it as it is
as long as one reads him correctly. A land rent tax doesn't tax as
Ricardo indicates and is usually constituted but rather taxes only
the land rent and not the rent of the landlord's stock.
> On that land, for the use of which no rent was paid, a
> compensation under that name might be given to the landlord for the
> use of his buildings.
This is well and good. If the holder of the land actually has to use
the land so as to pay the rent then the landlord will make improvements
so as to make a profit. The renter can just as well pay the rent to
the government and obtain the same profit from his or her labor.
> These buildings would not be erected, nor would raw produce be grown
> on such land, till the price at which it sold would not only pay for
> all the usual outgoings, but also this additional one of the tax.
That is why taxes on production are bad (except to the extent they are
use to pay for goods and services pay for by production but in such cases
it's hardly a tax and it more like an exchange.)
> This part of the tax does not fall on the landlord, nor on the farmer,
> but on the consumer of raw produce.
Income taxes and transfer taxes are bad because they hinder economic
efficiency. Land value/rent taxes aid production by making land available
at market rates set based upon use in produciton. To the extent there
is mobility in market rates risk is involved and high value improvments
will not be made. Ot the extent the mobility is knowable the risk is
reduced and will not hinder high value improvements.
I think it's nice to know a neighbor can't camp on land, speculating
on increased future value but must obtain value today to pay today's
rent. This make the land available for value added improvements based
upon my improvments to my land and thereby returns some portion of it
to me in increased value of my improvements while such value still
exists.
ro...@telus.net
wrote:
>ro...@telus.net wrote in message...
>
>>Steve wrote:
>>
>>>ro...@telus.net allegedly said:
>>>
>>>> Excellent! So the elderly couple will pocket a vast amount of
>>>> unearned and untaxed money, and the land will be used
>>>> _more_productively_.
>>>
>>>But....it proves they don't own their own land.
>>
>>What makes it their "own" land? They didn't produce it, and neither
>>did any former owner they might have bought it from. Property in land
>>can only originate with a government grant of title in the first
>>place. The title is granted only on condition the taxes are kept
>>current, and there is no guarantee they will not rise.
>
>But where did the government obtain title to the land?
Governments _create_ title to the land. Government's most fundamental
responsibility is to administer possession and use of the land within
its borders. A government that doesn't do that is not a government.
>Purchased from the
>Indians?
The same action underlies all land titles: appropriation. Even when
the USA bought land from other governments, those other governments
ultimately got it by nothing more legitimate than forcible
dispossession of the previous occupants -- and sometimes by nothing
more than the symbolic planting of a flag, or the drawing of a line on
a map.
>>>All any municipilty has to do to steal it and give it to wealthier people
>is
>>>raise their taxes until they can't pay them any more......
>>
>>Assuming the government is honest, the wealthier people would also be
>>paying more tax. A lot more.
>
>Why? If two identical parcels of land with two identical homes are side by
>side, and the owners of one make $40,000 per year and the owners of the
>other make $400,000....wouldn't they be paying the same taxes in your plan?
Yes, because wealth is measured by wealth, not income (duh). If those
two owners own _only_ the properties they live on, they are equally
wealthy, and would pay equal amounts of property tax. But obviously,
the wealthy tend to own more property than other people -- a _lot_
more -- and would thus _tend_ to be paying a lot more property tax.
>>You won't find a lot of wealthy people advocating higher property
>>taxes. They much prefer income and sales taxes, which are paid by
>>working people.
>
>Let me see: a 20 something couple earns $35,000 a year and rents...they
>pay about $7,000 in taxes. A 50 something couple earns $100,000 a year and
>owns a 200k home with a 170k mortgage and pays 4k in property taxes and $20k
>in income taxes....
??? _That's_ not "wealthy." Wealth is measured by wealth, not
income. A _wealthy_ couple would more likely be in their 60s,
retired, and have $1M in property (with _no_ mortgage) that yields
$70K in rent -- on which they would pay $5K in income tax, after
depreciation, etc. Their property tax bill would be more like $10K.
>Which tax do you think these people would be asking to be cut....????
See above for a more accurate description of an actual wealthy
couple's situation, and why they would prefer to see property taxes
cut. Property ownership is far more unequally distributed than
income, so the rich pay more property tax compared to their total
taxes than do the rest of the population. Which is why they prefer
other taxes to property taxes.
>And
>as the younger couple doesn't PAY property taxes, what do they care if it
>keeps going up....
The young couple pays a (usually small) portion of their landlord's
property taxes. The exact amount depends on the relevant elasticities
and the fraction of the property's value that is in improvements.
-- Roy L
ro...@telus.net
wrote:
>ro...@telus.net wrote in message
>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>
>>>ro...@telus.net wrote in message ...
>>>
>>>>>>>>No, that claim is false. Taxing capital reduces the amount of
>>>>>>>>capital. Taxing land does not reduce the amount of land. This is
>not
>>>>>>>>rocket science.
>>>>>
>>>>>When you tax capital you prevent it from multiple potential uses,
>>>>
>>>>?? No, you just increase the cost of holding it, increasing the
>>>>intensity of use but reducing the supply.
>>>
>>>...but reducing the supply...when there is less capital, the potential
>uses
>>>decrease.
>>
>>?? No, the _actual_ uses decrease. Taxing capital cuts off the least
>>productive of its potential uses.
>
>Even if the use is considered beneficial?
By whom?
>Sometimes people and businesses
>do not act efficiently, on purpose....
And the market is there to punish them for it.
>Chapter 10, paragraph 2, of David Ricardo's On the Principles of Political
>Economy and Taxation
[snip]
>In
>taxing rent, as no
> distinction would be made between that part paid for the use of the
>land, and that
> paid for the use of the landlord's stock,
A land value (or land rent) tax explicitly _does_ make that
distinction. The rest of Ricardo's argument thus fails immediately.
>>>>>Capital can move to
>>>>>take advantage of the best opportunities, land doesn't move.
>>>>
>>>>Exactly. Tax capital, it leaves. Tax land, it's still there.
>>>
>>>Tax land and its use changes.....unless you want to tax just the thing we
>>>call the dirt....just the sq ft regardless of use....
>>
>>Just the value regardless of use.
>
>>Or are you unaware that property taxes are the same whether anyone is
>>using the property or not?
>
>???? Are you aware? My land taxes were less than $1000 last year, this
>year they will be over $5000....the difference? Welll...the land is still
>the same....didn't move....no new infrastructure....of course a HOUSE now
>sits on the land....BUT THE LAND IS STILL THE SAME. The difference is that
>I am using it
It doesn't matter if you are using it. The tax is levied on the
value, and does not change based on whether the property is occupied
or not.
>....we build a structure on it....the County feels that we
>have increased the value of the land
No. You increased the value of the _property_. The county levies a
_property_ tax.
>and therefore, more taxes are due.. We
>have put it to a more productive use...housing....
No. The tax would be the same whether or not the property was
actually _providing_ anyone with housing.
>You will suggest, I assume, that the County is not using your plan
Correct.
>....but
>using your plan....would my tax increase or not, vs last year?
Not as a result of the improvements.
>>>and second, theory based on observations
>>>in economics is a study of history...and as the markets will tell you,
>>>results of the past are not an indicator of future performance....
>>
>>Any science is a study of "history."
>>Next?
>
>Do you know what the definition of is, is? Imagine a volcanologist
>studying the effects of lava flows, but ignoring the volcano that caused
>them....
Sciences do treat some things as givens. Where does gravity "come
from"? Nobody knows, but that doesn't stop physicists from
understanding pretty well how it works.
>That is what an economist does, he studies how money is spent
>without understanding the motivations, not because he could if he wanted,
>but because to do so he would have to know every spender of money...so, when
>two people with the same income, in the same residential block spend their
>money differently, we don't know WHY they did, only what they did....and
>that means we can NEVER know what they will do next week...
We can be pretty sure of the _kinds_ of things they will do, as
successful businesses prove every day.
>Other sciences can learn from 'history' that mixing two chemicals caused an
>explosion, and if they do it again next week, it will do it again...
Compare economics with meteorology. In both cases, we have limited
ability to conduct controlled experiments, to influence future events,
or even to predict them based on past events, because we have limited
knowledge and computing ability.
>>>>>Let me use a different word, it is ivy tower economic analysis.
>>>>
>>>>It is factually correct analysis. The term "ivory tower" is simply a
>>>>code word used to denote a subject the speaker does not understand.
>>>
>>>Oh, I understand. I understand that economic theory does not have a great
>>>track record in the real world.
>>
>>False economic theories have a poor track record, but true ones have
>>an excellent record.
>
>Possibly, in explaining the past, but as predictive models....
Quite reliable.
>>>From:
>>>
>>>http://www.earthrights.net/docs/fin4devt.html
>>>
>>>Taxing land sites according to land value promotes urban and rural land
>>>reform, providing affordable access to land for homes, businesses and
>>>farming.
>>>
>>>Land value....could that be....
>>
>>What we are talking about. Yes.
>
>And how is this value determined? By what method? Who sets the value?
>How will it change?
Assessment is a well developed technology with a low standard error.
Assessors' estimates of the sales prices of unimproved properties are
more accurate than their estimates for improved ones, showing that it
is easier to estimate land value than improvement value.
>>>might be given to the landlord for the use of his buildings. These
>>>buildings would not be erected, nor would raw produce be grown on such
>land,
>>>till the price at which it sold would not only pay for all the usual
>>>outgoings, but also this additional one of the tax. This part of the tax
>>>does not fall on the landlord, nor on the farmer, but on the consumer of
>raw
>>>produce.
>>
>>Ricardo was not aware of how the burden of such a tax on capital (not
>>land) would be shifted according to elasticities.
>
>Damn Nobels didn't know everything...if he had only known that tax burdens
>would be shifted to the end users...oh, wait, he knew that....
They are not shifted _entirely_ to end users. Ricardo _didn't_ know
_that_. And it seems you don't, either.
>>>>I predict that you will now ignore that fact, and continue to refuse
>>>>to consider that Nobel laureates in economics might be right about
>>>>economics, and you wrong.
>>>
>>>No need to ignore it. As long as land rent is based on the value of the
>>>land, and just the dirt, fine, but the land rent promoted by many is based
>>>on the land VALUE and that value is not separated from the dirt and the
>>>structures of production (the application of capital to prepare land for
>>>productive use).
>>
>>You do not seem to know what you are talking about, here. Please
>>reread Ricardo, on "the original and indestructible powers of the
>>land." The dirt is part of that. The structures are not.
>
>He seems quite content to state that rent is for the dirt. And I accept
>that. If you want to tax all the dirt in the US EQUALLY, fine....tell me
>your method for determining it's value, and as long as it is consistent, I
>will not have a problem...
The basic methods can be learned in a community college course on real
estate appraisal. On a larger scale, computer models can use actual
sales data to make continuous adjustments over large areas.
>Because USE and STRUCTURES can not be used as
>part of the determining factors, my land will be taxed at no greater a rate
>than anyone else with the same quantity of land.
No, same _value_.
>>>that means that the 20,000 sq ft of Manhattan would be
>>>taxed more than 20,000 sq ft of Wyoming grazing land...
>>
>>Correct.
>
>Why? Are you valuing the land because of it's use, or location?
Location.
>I seemed
>to be confused....you want to tax land value, just the lands value,
>irrespective of use, but because Manhattan land is more useful, it is more
>valuable.....then....
It is more valuable _even_if_unused_.
Get it?
>>>and Ricardo was specfic about that....
>>>
>>>"A tax on rent, as rent is constituted, would discourage cultivation,
>>>because it would be a tax on the profits of the landlord. "
>>
>>Well, we have seen, above, that Ricardo _knows_ he is referring here
>>to rent in the layman's sense of a periodic payment for use of
>>another's property, _not_ the economic rent of the land alone.
>
>Ricardo says..
>
> In taxing rent, as no
> distinction would be made between that part paid for the use of the
>land, and that
> paid for the use of the landlord's stock, a portion of the tax would
>fall on the
> landlord's profits, and would, therefore, discourage cultivation,
>
>If land is valuable because of it's potential use, then you can not separate
>the use from the value and you are not taxing the LAND, but its potential
>use.
??? Land is valued _for_ its potential use.
_But_not_its_actual_use_.
>You suggest that a land owner in Manhattan, faced with a huge tax bill for
>his property there, will be forced to use the land for it's most productive
>purpose or face a liability he will be unable to afford....what if he puts
>it to use only to the extent that it means that liability?
It's unfortunate when people choose not to respond to incentives, but
it's a free country. He can squander the profit opportunity if he
wants. He can even take a loss if he wants. But he can't hang onto
the land and not pay the taxes.
>How will the
>'value' be deterimined in such a way PRIOR to use?
Auction it off. The highest bid is the deemed value, whether or not
the landholder chooses to accept it.
>>>If a tax were laid on rent, and no means of separating the remuneration
>now
>>>paid by the tenant to the landlord under the name of rent were adopted,
>the
>>>tax, as far as it regarded the rent on the buildings and other fixtures,
>>>would never fall for any length of time on the landlord, but on the
>>>consumer. The capital expended on these buildings, must afford the usual
>>>profit of stock; but it would cease to afford this profit on the land last
>>>cultivated, if the expenses of those buildings, did not fall on the
>tenant;
>>>and if they did, the tenant would then cease to make his usual profits of
>>>stock, unless he could charge them on the consumer.
>>
>>Again, Ricardo is referring here to a tax on the periodic payment, not
>>on the _economic_ rent of the land.
>
>But he suggests that there is no way to distingush between the two once the
>two exist.
He is wrong. Of course, the techniques we have now were not available
in his day.
>>>>>Taxes when levied always result in less of the thing levied against...
>>>>
>>>>Let's see... Less land value -> more affordable land. Sounds good to
>>>>me. Maybe you can explain to me how land being more costly is good
>>>>for anyone but its owner....?
>>>
>>>If the cost of land increases, we call it value...this is good for the
>>>owner. If the cost to hold the land increases (especially at a rate
>>>greater than the rate of value increase) then it is not good to the owner,
>>>nor will it be to any other potential owner...
>>
>>But it will be good for users, and for society.
>
>You DO KNOW that a large percentage of land owners are the
>users....homeowners?
Of course. Would they rather pay $10K/yr in taxes to government,
$10K/yr in land rent to (the former) landowners, and $10K/yr in
interest to mortgage lenders, or just pay $10K/yr in land rent to
government? That's their choice.
>And that if you increase the cost for these
>homeowners, you will end up with many empty homes because fewer and fewer
>people will be able to afford it.
No. _More_ people will be able to afford it, because they will not
have to pay taxes and mortgage interest in addition to land rent.
>...it will concentrate land ownership....
Nope. It will disperse land ownership, and always has.
>>>unless a new owner could put
>>>the land to a use that increases its' value in relationship to the cost.
>>
>>But the owner qua landowner is contributing nothing, anyway. Who
>>(except him) cares if he receives less unearned income?
>
>You miss the facts that a) the owner maintains the land as it becomes more
>desirable - ie, increases in value,
??? He does _what_? Tell me, do you think the land would somehow
disappear if the owner were not around to keep an eye on it?
The landowner contributes _nothing_. Repeat, _nothing_. The land
would still be there, just the same, even had he never existed. All
the landowner does is charge others a fee for access to the services
and infrastructure government provides, the opportunities and
amenities the community povides, and the resources nature provides.
>and b) that as owners, we face tax on
>the difference between the cost of our land and it's selling price - the
>'unearned income' you speak of...they call it capital gains....
??? There is no capital gain until the land is _sold_. And even then
it is almost entirely untaxed, because any that is reinvested that
year is exempt. And in any case, taxing the capital gain instead of
the underlying value decreases liquidity and efficiency.
>>>and you can not say that land value increased
>>>when we raised taxes in a vacuum.
>>
>>?? Do you know what has happened to land value as government's share
>>of GDP has increased?
>
>I would suggest that the two are not correlated....
You would be very, very wrong.
>>>I dare say you can not provide an example when X parcel of land was worth
>Y
>>>dollars but as soon as taxes were levied against it, the parcel increased
>in
>>>value.
>>
>>I am the one arguing that more costly land is not a good thing for
>>anyone but its owners -- and only them to the extent that they are not
>>also workers and consumers.
>
>If I were a landlord, and I rented a 4 unit apartment building and you
>increased my taxes on that property, you can bet I will raise the rent to
>compensate...
I can bet you jolly well _won't_. If you could, you would already
have done it, for the extra income.
>and I will continue to do so as long as there are tenents
>willing and able to pay the rent I charge.
Bingo. The tax _cannot_ affect what people are willing to pay, except
to the extent that it decreases supply (the fraction that falls on
improvements does that, but slowly). If you could just raise the
rent, why don't you do it now, and pocket the extra income, hmmmm?
>There is no cost I will be
>unable to pass along,
??? <yawn> How many times do I have to refute this ridiculous
nonsense? Do you think you can gild the roof and just raise rents to
pay for it? Put security guards in front of every door?
_The_tenants_won't_pay_.
Time to stop typing and start thinking, pal.
>until it reaches a point where the only viable option
>is to tear down the 4 unit, and put in a 12 unit....your ideal....but the
>infrastructure will be stressed if every landlord does that,
Infrastructure is more stressed by sprawl than by high density
development.
> so we raise
>taxes to compensate and the loop starts again...until...what, we either all
>build 100 story structures, or let our 12 unit deteriorate because no one
>can afford to tear it down or live in it at the cost structure...
Utter rubbish. You seem to think people are unable to behave
reasonably, and find efficient, cost-effective uses for each parcel.
The jurisdictions where land rent recovery is actually used -- like
Arden, Delaware and Fairhope, Alabama -- prove you wrong.
But I realize that being proved wrong as a matter of objective fact
will have no effect on your beliefs.
>>>On the other hand, you can probably show an increase in value of
>>>land when a tax levy was earmarked for improvements...say, the building of
>a
>>>school in the neighborhood.....
>>>
>>>>You are, again, simply and indisputably wrong as a matter of objective
>>>fact.
>>>
>>>I dispute your assertion...
>>
>>And I have proved you wrong.
>
>No, you haven't,
Yes, I have.
>you made a statement, I disagree with it, just because you
>claim it is truth (fact) does not make it so.
Your statement was wrong because it was contrary to fact, not because
I pointed out that it was.
>>>>>>The difference between taxing production and taxing economic rent is
>>>>>>that production is beneficial to society, while rent is beneficial
>>>>>>only to its recipient, and represents a cost to society.
>>>>>
>>>>>Obviously you have never owned land next to a dump or a mansion.
>>>>
>>>>My personal financial interests do not affect the laws of economics,
>>>>and _neither_do_yours_.
>>>
>>>Those 'laws' must apply to the real world where you and I live. If they
>do
>>>not apply, they are no more than words and theories, useless except as an
>>>exercise. If you would base tax theory on reality, it must take into
>>>consideration how individuals would react to such a tax.
>>
>>And land value taxation does exactly that.
>
>By taking into consideration the USE of a piece of land....
Potential uses. Or rather, their value.
>and the setting
>of a tax rate based on a perceived, or potential use to insure the
>compliance of an owner to commit capital to improve the land or face a
>liability otherwise unpayable...
More or less. The rate (fraction of land value) would be the same for
all parcels.
>>>>>Before you suggest that
>>>>>families benefit when property taxes are used for education, remember
>that
>>>>>the majority of land owners in virtually EVERY district, do not have
>>>>>children.
>>>>
>>>>ROTFL!! It would be difficult to construct a more superficial and
>>>>wrong-headed argument than that one. Congratulations.
>>>
>>>>Did it ever occur to you that good schools increase the value of the
>>>>land nearby, whether or not the owners of that land have any children?
>>>>Take a couple of months off work to think about it. It seems you'll
>>>>need them.
>>>
>>>Your mirth is noted. As I just recently purchased a home, it's location
>>>specifically desired because it is across from a planned school, I can
>>>assure you that a school was an important characteristic of the home we
>>>purchased.
>>
>>Then you paid the previous owner of your home for the school your
>>taxes are going to pay for. Do you like making that sort of deal?
>
>We are the first owners of that home, it was previously vacant land....
Then you paid the landowner for the school your taxes are going to
build. I repeat: do you like making that sort of deal?
>>>So, while in general you can state a school can have a positive impact on
>>>land values, it depends on the key 'good' school. The difference between
>>>theory and reality.
>>
>>Check out the land values where there are no schools.
>
>You mean....like Manhattan, downtown Chicago....??
??? There are schools there. Didn't you know? Everywhere lots of
people live, there are schools.
>>>>>Your millions of words of theory only makes you an expert on theory.
>>>>
>>>>Better than being an expert on fallacy...
>>>
>>>Economic theory is based on human behaviour....dismiss it at the cost of
>>>usefulness of your theories..
>>
>>My theories have proved extremely useful everywhere they have been applied.
>
>Useful to whom? A middle class?
Oh, yes. Very much so.
>>>>>Economic theory can not prepare policy makers for the 9/11's, the cell
>>>>>phone, the PC, the impact of war (or lack of it).
>>>>
>>>>It can treat such events as the economic policy irrelevancies they are.
>>>
>>>You are saying that war has no impact on economic policy?
>>
>>I'm saying it _should_ have none.
>
>BUT IT DOES! That is the problem with theory...you can not account for
>reality!
Nonsense. If people choose to ignore a theory, and then suffer the
consequences, that is not a failure of the theory.
>>>>>And can you tell me the size, in any previous or current country using
>>>your
>>>>>suggested system, of the land owning middle class?
>>>>
>>>>Both Singapore and HK have large middle classes. But the idea is that
>>>>the system renders landowning no longer a certificate of entitlement
>>>>to subsidies paid for by taxes on the productive, so the size of the
>>>>landowning class is irrelevant.
>>>
>>>Landowning has been shown to be the largest source of personal wealth,
>>>wealth being used for everything from education and investment...
>>
>>??? Of course. If people with red hair were given a million dollars
>>a year each by government, red hair would be the largest source of
>>personal wealth.
>
>Non-sequitur
No, it is a fully valid analogy. The logic is the same.
>....the government does not 'give' money to landowners
Yes, in point of fact, it _does_. About 20% of GDP, in fact.
>....no
>matter how you characterize the increase in value of my property...
I am identifying the facts of reality for you. It is up to you if you
choose to keep them out of your brain.
>>>Further,
>>>home ownership, landowning, is a significant predictor for both health and
>>>future wealth...
>>
>>Of course. If you own land, you are on the escalator. If you don't,
>>you are in the stairwell. Pointing out that the beneficiaries of an
>>injustice do indeed benefit from it hardly argues that it is not an
>>injustice. I daresay owning slaves was a good predictor of future
>>health and wealth, too.
>
>Another....your plan will concentrate land into fewer and fewer
>hands
Except that it has always done the exact opposite, just as economic
theory _predicts_, while low land taxes have produced concentration.
>....those with the capital to improve land to the productive level YOU
>seek....
It's nothing to do with what I seek. The market determines what the
most productive use is.
And do you somehow imagine it is easier to pay for taxes, land rent
and capital than just to pay for land rent and capital?
>>>as both are more
>>>city/states that are not capable of self-sufficiency or even of
>significant
>>>production - of goods...
>>
>>That is most definitely false.
>
>Oh? And where is the wealth in HK and Singapore? In the land holders?
Partly, of course. But both produce significant manufactured goods,
contrary to your claim.
>>>>>>>Most every
>>>>>>>government, great or small, simply taxes everything in sight.
>>>>>>
>>>>>>That is of course false. It's just a way of refusing to think about
>>>>>>taxation, and attempting to discourage others from doing so, as well.
>>>>>
>>>>>You are right, but the point made is valid.
>>>
>>>>??? ROTFL!! Nope.
>>>
>>>Yep...I can not purchase anything without paying a tax....nothing is
>>>produced in this country without it being subject to a tax....in many
>cases,
>>>multiple taxes....but that doesn't mean we shouldn't discuss taxation...
>>
>>The shifting and spreading of tax burdens is not the same as
>>government "taxing everything in sight."
>
>It is two different issues. There are taxes on everything,
False.
>and those taxes
>are shifted to the end users, always...
Also false. Why do you insist on making these orotund pronouncements
on matters of which you are clearly ignorant?
>>>Further, Wyoming, with, I believe, the second smallest
>>>population, is not a hot bed of production....
>>
>>Now you know why.
>
>You are stating because you see blue, it must be the sky....
<sigh> No matter how much evidence piles up, somehow it never
"counts"...
>>>So, you
>>>would suggest that everyone start paying huge property taxes (the 66% of
>us
>>>that own property), so that we would have booming economies?
>>
>>That is exactly what I would suggest, except that it would be better
>>to tax just the land value. A property tax that also falls on
>>improvement value begins to have very negative effects when the rate
>>exceeds the sum of the discount rate and the depreciation rate.
>
>There is an additional requirement to get the result you are looking
>for....the elimination of taxes on income and production....without one, the
>other is impossible...
Of course. We're not talking about just tacking on a tax. We're
talking about _replacing_ bad taxes with good ones.
>>Please reread the following passage, and try to understand it, this
>>time:
>>
>>>Whether distinguished or not, there is a real difference between
>>>the nature of the compensations which the landlord receives for these
>>>different objects; and it is quite certain, that a tax on the real rent of
>>>land falls wholly on the landlord, but that a tax on that remuneration
>which
>>>the landlord receives for the use of his stock expended on the farm,
>falls,
>>>in a progressive country, on the consumer of raw produce. If a tax were
>laid
>>>on rent, and no means of separating the remuneration now paid by the
>tenant
>>>to the landlord under the name of rent were adopted, the tax, as far as it
>>>regarded the rent on the buildings and other fixtures, would never fall
>for
>>>any length of time on the landlord, but on the consumer.
>>
>>Get it now?
>
>I got it before, but the problem lies in separating the renumeration a
>landlord receives for the stock and on the real rent. You claim to be able
>to separate them, I say you can not.
Because you know nothing about it.
>...nothing here has changed my opinion
>in that regard.
Because you know nothing of the matter, and are not willing to learn.
Simple.
>Your plan requires you (or your bureaucrats) to determine
>the most productive use for a piece of land,
Nope. The market does that.
>tax it accordingly, so that the
>owner has no choice but to conform to that productive use.
False. He can do what he likes, as long as he pays the tax.
>...he MUST THEN
>apply his capital (if he has it) in the manner you see fit,
Why do you feel you have to lie about what I have written?
>or risk his land,
?? What makes it "his" land? He has known all along he would have to
pay the tax or give it up, and there was never any guarantee the tax
would not rise.
>and of course, YOU SEE NO PROBLEM WITH THIS.
The problem is overcoming the greed, ignorance, and dishonesty of
those who think they benefit by injustice.
-- Roy L
Lone Haranguer
The same thing happened to those who are now homeless on the street.
Are you glad that happened too?
LZ
Gary Forbis
Liar. No one who had their own home free and clear are now homeless
because of taxes. If people are homeless after owning their own home
free and clear it is because they are living beyond their means. If
they can't rent the place for sufficient income to pay the rent on
a more modest place and pay the taxes I'd be very surprised. Please
give an example.
tully
No way. If the house was paid off and they simply could no longer
afford the property tax, it means the value of the property had soared
during the time they held the property, so that asset wise they are
now quite wealthy. They couldn't go homeless unless they had no sense
at all and some con man came in and stole their money thru hoodwinking
them. Unless they are that stupid, they could sell, buy a smaller
place (which means less property tax), and if they are over age 55 and
haven't yet taken the one time exclusion for capital gain, they can
put all the leftover gain in the bank, not pay one penny of tax on it,
and live happily off the new bankroll that wasn't previously there.
If they have already taken the one time exclusion or are under age 55,
the capital gain is taxed at a lower rate than the same amount of
earned income and I think it can be spread over 2 years. The worse
that could happen (barring the con man) is that the property would be
auctioned and they'd still get the proceeds to put in the bank and
reinvest in another more affordable property. You simply can't lose
if property values go up.
All those crazy covenants people sign into in those fancy gated
exclusive communities are for the sole purpose of increasing property
values, to obtain the gift of unearned income on one's property in the
form of capital gain. Its the American dream.
rbbomber
The only persons I've known who had the idea they were "entitled" to
live as they wished at the expense of others were "legacy babies."
--Russ
ro...@telus.net
<lin...@direcway.com> wrote:
>ro...@telus.net wrote:
>> On Wed, 16 Apr 2003 22:47:50 -0500, "Authorized User"
>> <it...@hotmail.com> wrote:
>>
>>><ro...@telus.net> wrote in message news:3e9df557...@news.telus.net...
>>>|
>>>| Of course, the truth is the exact opposite of your claim. Taxing land
>>>| stimulates _more_ productive use, because owners have to either start
>>>| using the land more productively to pay the tax, or sell it to someone
>>>| who will.
>>>
>>>In Evergreen Colorado, just upslope from Denver, at least one elderly couple
>>>who retired there years ago with their home paid for, is forced to move out
>>>because property taxes are now more than they paid for the property. They
>>>cannot possibly pay them.
>>
>> Excellent! So the elderly couple will pocket a vast amount of
>> unearned and untaxed money, and the land will be used
>> _more_productively_.
>>
>> Thank you for providing the proof that I was 100% correct.
>
>The same thing happened to those who are now homeless on the street.
Why do you feel you have to lie? Everyone knows the homeless were
renters, not owners. People whose property taxes rise to the point
where they have to sell pocket huge unearned gains when they do. They
don't end up homeless.
>Are you glad that happened too?
Fact of reality: homelessness is highest where land taxes are lowest,
and lowest where land taxes are highest.
-- Roy L
Tracy Coyle
ro...@telus.net wrote in message ...
Using the above example and your take on it, wouldn't your plan encourage
the "income rich" to use their income on non-land investments? They would
take the hit on their home, but limit any other real estate oriented
investments....let's say...Treasurys. The return is not as good - but given
the tax liability of owning land, it might improve greatly. As demand for
non-land investments increased, we would get....overseas investments?
Investment in businesses that are not land intensive?
To the ones left holding the land at the time this tax plan kicks in, I am
sure there would be some phasing in....in which people will dump the land
and it's value will move accordingly, rather than be caught with the
liability.
Tracy Coyle
Gary Forbis wrote in message ...
>Liar. No one who had their own home free and clear are now homeless
>because of taxes. If people are homeless after owning their own home
>free and clear it is because they are living beyond their means. If
>they can't rent the place for sufficient income to pay the rent on
>a more modest place and pay the taxes I'd be very surprised. Please
>give an example.
Client couple (my partner is a bankruptcy attorney): Own their $68k home
free and clear, taxes about 2.2k a year. They own a second home they rent
to their son. Home is worth 75k, has 45k mortgage, pay about 3.4k in
taxes. The son's rent pays the cost of the rental home. Their income
is about 15k a year on SS and another 6k a year on a small pension. Wife
never worked.
Son loses job and can't keep making rent, the parents rent their home and
move in with son. The rent on the original home makes cost on rental.
Then the renters stop paying, trash the place and it takes 5 months to get
them out. By the time it is done, the original house is in such bad
condition - no heat over the winter resulted in water and structural damage,
that the house is condemned. They come see us because the mortgage company
is now foreclosing on the rental house they all live in.
I bet we could find a hundred such examples - if we asked other bankruptcy
attorneys. Another ivy tower assessment that such terrible things don't
happen to logical, capable people....if they would just behave rationally.
Of course, you will comment that they are not homeless, and you would be
right....they do have a home...that they rent from someone....their rental
home was eventually foreclosed on and sold to someone else. At 71 and 67,
they neither have the time nor money to rebuild what had taken them a
lifetime to acquire.....
tully
wrote:
>Client couple (my partner is a bankruptcy attorney): Own their $68k home
>free and clear, taxes about 2.2k a year. They own a second home they rent
>to their son. Home is worth 75k, has 45k mortgage, pay about 3.4k in
>taxes.
I have to question if that is the current appraised value of either
property or if that is just what they might have paid for it many
years ago, since the taxes seem high for such low value properties. I
live in North Carolina and my county appraised property value has
tripled during the 22 years I've lived here. Now my 7 acres and
1920's vintage home is appraised at $98K and I'm paying $550 tax a
year, which is more than I'm willing to pay. In about 3 years when my
son is finished college and on his own, I will sell this place and
find some other fairly remote place where I can get taxes back down to
$250 per year. Should have no problem paying cash for the new
property and should end up with some nice extra in the bank. And if
taxes get too high again, I'll just move again and make more money for
doing nothing.
Tracy Coyle
ro...@telus.net wrote in message <3ea47cb8...@news.telus.net>...
>"Tracy Coyle" <tcc...@chorus.net> wrote:
>> so we raise
>>taxes to compensate and the loop starts again...until...what, we either
all
>>build 100 story structures, or let our 12 unit deteriorate because no one
>>can afford to tear it down or live in it at the cost structure...
>
>Utter rubbish. You seem to think people are unable to behave
>reasonably, and find efficient, cost-effective uses for each parcel.
>The jurisdictions where land rent recovery is actually used -- like
>Arden, Delaware and Fairhope, Alabama -- prove you wrong.
I think you need to revisit Arden Delaware...
http://www.henrygeorge.org/mikerent.htm
Let me quote:
"As time went on, the mortgage was paid, the roads were complete, water,
gas, electric and, much later, sewers became available, the rest of the
county increased in population and development, and the value of Arden's
land increased. The value of Arden's land increased at a much faster rate
than its expenses, a trend that continues today. Unfortunately, no provision
was made for buying more land or any other external expenditure.
Arden could issue a cash dividend, encouraging a denser population, or it
could still further improve its public spaces. However, not only would the
right of a cash dividend increase the rental value of land, but so would the
improved streets and park land. There is not only no need to collect the
full rental value of the land, but if it were, there would be no reasonable
way to spend it.
As it is, the elected Assessors have simply redefined the words "full rental
value" when used in regard to assessments, to mean an amount equal to the
needs and wants of the Village. There is testimony as early as 1912 that
this practice had already begun. Because all the rent is not collected, the
leaseholders enjoy what Georgists call an Unearned Income (Money collected
or saved). This Unearned Income is calculated in a speculative projection
and capitalized into a selling price. The net result is that land in Arden
sells for just as much, given its advantages and disadvantages, as land
sells for anywhere else in the county. The leaseholders enjoy the Unearned
Income and the Unearned Increment (the increase in the selling price), and
those who want to live in Arden have to pay the speculative selling price of
the land, in spite of the fact that they only get a lease.
This failure, perhaps an oversight of the founders, was caused by not having
an outside entity entitled to the surplus rent. There is no doubt it was a
monumental undertaking to establish the trust and the village, and it may
well have been impossible to find lessees under provisions that part of the
rent would be spent for the purchase of more land or education. However, the
absence of an outside entity entitled to the surplus rent, ensured this
ultimate failure.
Development Restrictions
Arden's founder, Frank Stephens, had in his house a hand-carved quotation of
Themistocles. It read "I cannot play upon any stringed instrument; but I can
tell you how of a little village to make a great and glorious city". Today,
Arden's residents have another idea. Arden's land continues to increase in
value, but the town restricts additional dwelling units and therefore a
greater density of population. This restriction lowers land values and often
requires people to hold more land then they want to, the antithesis of the
Single Tax incentive."
Here is another example for you....Free Acres New Jersey
http://bernard.pitzer.edu/~lyamane/free.htm
Over the years Free Acres has wandered from its roots in Henry George. The
single tax in Free Acres could not work within a larger community which does
not have a single tax. It worked for a while in Free Acres, as long as the
houses were generally of uniform size, all small, simple and unpretentious,
and the township assessors did not evaluate houses individually but Free
Acres as a whole. But when these changed, the single tax had little chance.
It forced families in small houses to subsidize the tax payments of families
in larger houses.
Fairhope seems to be an enigma....there is some indication that oil revenues
have replaced land rents....and large areas are not in the Single Tax
area....
So, your local examples, are not good....from your point of view....the fact
that they may have worked initially but not in the long run, lends less
credibility to your position....
Tracy Coyle
tully wrote in message <6i6cavsod81i9ue1a...@4ax.com>...
The two properties are in different areas, but are consistent with other
properties. The primary home was in a smaller community, the rental in a
city.
Tracy
ro...@telus.net
wrote:
>ro...@telus.net wrote in message ...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>
>>>And
>>>as the younger couple doesn't PAY property taxes, what do they care if it
>>>keeps going up....
>>
>>The young couple pays a (usually small) portion of their landlord's
>>property taxes. The exact amount depends on the relevant elasticities
>>and the fraction of the property's value that is in improvements.
>
>Using the above example and your take on it, wouldn't your plan encourage
>the "income rich" to use their income on non-land investments?
Yes.
>They would
>take the hit on their home, but limit any other real estate oriented
>investments....let's say...Treasurys. The return is not as good - but given
>the tax liability of owning land, it might improve greatly.
That is part of the benefit of taxing land value: capital moves out of
rent seeking and speculation and into the productive investments that
actually benefit the economy and society (Treasury securities are not
relevant, here, because they are created in response not to investor
demand but to government fiscal conditions). Interest rates decline,
making more investments economically viable.
>As demand for
>non-land investments increased, we would get....overseas investments?
>Investment in businesses that are not land intensive?
Mostly the latter. Moving money offshore is of course a possibility,
but there is always a counter-balancing transaction, and the reduction
of non-land taxes would make domestic investment much more attractive.
>To the ones left holding the land at the time this tax plan kicks in, I am
>sure there would be some phasing in....in which people will dump the land
>and it's value will move accordingly, rather than be caught with the
>liability.
Cheap land. An outcome devoutly to be wished...
-- Roy L
Tracy Coyle
Gary Forbis wrote in message ...
>There's no need to write two articles in response to a single artile
>without giving time to reply.
My apologies....
>
>"Tracy Coyle" <tcc...@chorus.net> wrote ...
>> So, you would tax 20,000 sq ft if it were a hillside, a swamp, a forest
or
>> prairie land at the same rate you would tax 20,000 sq ft in Manhattan?
>
>No, I'm talking about a land value tax.
>
>> Because if YOU DON'T, then you are saying that some land is more valuable
>> than other land, and then you are taxing not the land, but its USE.
>
>No, it's potential use as determined by market value.
So, market value is determined by the potential use, location being a
component of that, correct?
>> If you
>> do tax the land, regardless of its current or best use, then you will
have
>> to find some median point, and that will make the Manhattan land so much
>> more valuable (and you will not recover that value) and you will force
land
>> that is used for farming and grazing so much more expensive as to make it
>> too expensive for all but richest owners.
>
>Now why do you suppose investors would build in the center of town
>rather than out in the farmland? Further, what happens to the price
>of food when land use is diverted away from its production?
The need is greater in town for building space? A profit can be made? If
farm land is converted to...say office space, isn't that what you are
interested in? The land is being used in such a way as to maximize income.
If food production becomes more efficient, less land is needed for it.
>> Land has value NOT BECAUSE IT EXISTS, but because of its use. Location,
>> location, location...that is the value in land. Where land exists
>> determines it's ability to produce income. Any land with minimal income
>> producing value will be left vacant regardless of the tax, and if the tax
is
>> high enough, it will be abandoned rather than held privately.
>
>Why would one pay the tax and leave the land vacant rather than sell the
>land? Who would buy the land just to leave it vacant when the tax has
>to be paid even on the vacant land? What happens is the land's value
>is baed upon the market which takes the operational expenses into account.
Some people want land in its natural state.....your question would seem to
indicate that anyone with more land than is needed for their use (such as a
house foundation and access) should sell it as it increases the tax due.
Unfortunately, land USE rules in many areas do not permit that. You will
suggest no doubt that such rules would be inconsistent with your overall
plan....however, in Arden New Jersey the 'trust' has restricted density
levels.
>> Vacant land is vacant for two reasons, it is either not economically
>> feasible to do anything with the land, ie, it is more costly to use it
than
>> to leave it empty (imagine land that is in the path of development but
still
>> too far away), or it is never going to be economically feasible to do
>> anything with it....ie, the swamp.
>
>Or someone wants to speculate on the future value of the land based upon
>improvements made by others in the surrounding area.
>The land doesn't disappear when it isn't in use. If the land has no
>use its value will reflect this fact and there will be no (or rather
>little) tax.
>> If my piece of land is taxed at $1 per
>> sq ft, and it will take me $1000 to make it produce income of $150 per sq
ft
>> per year, then the tax is irrelevant. But if you tax me $150 per sq ft,
>> then the land would need to produce $300 per year for the same
return...if
>> its best use can only produce $200 per sq ft per year, it is not worth
the
>> expenditure, and if owning the land is otherwise not useful, it will be
>> eventually abandoned.
>
>And the value will drop until some one finds it advantageous to own it
>and use it.
Or not.
>It doesn't make any sense for you to own the land if your best use is
>$200 per sq ft per year but the market indicates $300 per sq ft per year
>is reasonable (or possibly that they are willing to accept the lower
>return on investemnt.)
Land is not the only cost involved in producing income. The capital
investment required to produce $300 may not be available.....your suggestion
would be to sell the property to someone that can provide the capital
investment for the production of $300....but if $200 is a good investment
and a good living...what is wrong with that? It doesn't use the land most
efficiently, right?
ro...@telus.net
wrote:
>Gary Forbis wrote in message ...
>
>>Liar. No one who had their own home free and clear are now homeless
>>because of taxes. If people are homeless after owning their own home
>>free and clear it is because they are living beyond their means. If
>>they can't rent the place for sufficient income to pay the rent on
>>a more modest place and pay the taxes I'd be very surprised. Please
>>give an example.
>
>Client couple (my partner is a bankruptcy attorney): Own their $68k home
>free and clear, taxes about 2.2k a year. They own a second home they rent
>to their son. Home is worth 75k, has 45k mortgage, pay about 3.4k in
>taxes. The son's rent pays the cost of the rental home. Their income
>is about 15k a year on SS and another 6k a year on a small pension. Wife
>never worked.
>
>Son loses job and can't keep making rent, the parents rent their home and
>move in with son. The rent on the original home makes cost on rental.
What does that mean? I thought they owned it free and clear.
>Then the renters stop paying, trash the place and it takes 5 months to get
>them out.
This may be an issue with tenancy laws, but not property taxes.
>By the time it is done, the original house is in such bad
>condition - no heat over the winter resulted in water and structural damage,
>that the house is condemned. They come see us because the mortgage company
>is now foreclosing on the rental house they all live in.
And your claim is that the tenants who paid no rent and destroyed the
house were actually a property tax in diguise...?
>I bet we could find a hundred such examples - if we asked other bankruptcy
>attorneys. Another ivy tower assessment that such terrible things don't
>happen to logical, capable people....if they would just behave rationally.
It had nothing whatever to do with the taxes. Zip.
And what stopped them from just selling the first house as soon as the
tenants stopped paying the rent? what stops them from selling it
_now_ to pay off the mortgage on the second place?
>Of course, you will comment that they are not homeless, and you would be
>right....they do have a home...that they rent from someone....their rental
>home was eventually foreclosed on and sold to someone else.
??? You've got three people living in the place, two of them pulling
in $21K/yr, and between the three of them they can't make the payments
on a _$45K_ mortgage?
Uh-huh....
>At 71 and 67,
>they neither have the time nor money to rebuild what had taken them a
>lifetime to acquire.....
And a few months to blow by renting to the wrong tenants and making a
bunch of other stupid decisions (like why didn't the son move into the
clear title house?).
Nothing to do with the property taxes, though, was it?
Liar.
-- Roy L
ro...@telus.net
wrote:
I still don't buy the story. In what US city can you buy a house for
$75K?
-- Roy L
ro...@telus.net
wrote:
>ro...@telus.net wrote in message <3ea47cb8...@news.telus.net>...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>
>>> so we raise
>>>taxes to compensate and the loop starts again...until...what, we either
>all
>>>build 100 story structures, or let our 12 unit deteriorate because no one
>>>can afford to tear it down or live in it at the cost structure...
>>
>>Utter rubbish. You seem to think people are unable to behave
>>reasonably, and find efficient, cost-effective uses for each parcel.
>>The jurisdictions where land rent recovery is actually used -- like
>>Arden, Delaware and Fairhope, Alabama -- prove you wrong.
>
>I think you need to revisit Arden Delaware...
>
>http://www.henrygeorge.org/mikerent.htm
Thanks for this. I was not aware Arden had gone so far off the rails.
A real shame.
>Arden could issue a cash dividend, encouraging a denser population, or it
>could still further improve its public spaces. However, not only would the
>right of a cash dividend increase the rental value of land, but so would the
>improved streets and park land. There is not only no need to collect the
>full rental value of the land, but if it were, there would be no reasonable
>way to spend it.
Of course: Arden benefits from the spending of senior governments that
don't recover the land rent they create.
>Fairhope seems to be an enigma....
IOW, its success is inexplicable as long as you refuse to understand
the facts of economics.
>there is some indication that oil revenues
>have replaced land rents.
Oil revenue is a land rent.
>...and large areas are not in the Single Tax
>area....
They just want to be near it...
>So, your local examples, are not good....
Wrong. Fairhope is a perfectly good example.
>from your point of view....the fact
>that they may have worked initially but not in the long run, lends less
>credibility to your position....
Nonsense. It's just more proof that you have to keep doing the right
thing if you want to keep getting the right results.
-- Roy L
Tracy Coyle
ro...@telus.net wrote in message>>>If you have to pay the same tax on the land independent of use then
>>>the owner will find it advantagous to produce income. Leaving the land
>>>vacant doesn't reduce it's value.
>>
>>So, you would tax 20,000 sq ft if it were a hillside, a swamp, a forest or
>>prairie land at the same rate you would tax 20,000 sq ft in Manhattan?
>
>Land taxes are levied by value, not area.
Your words: pay the same tax on land independent of use.
Two parcels of land in Manhattan, both 1 acre. Both are taxed at the rate
of 15% of value, both are valued the same, 1 million dollars. Tax is $150k
each. Existing on one parcel is a 40 story building generating 15 million
per year. The other parcel is a 20 story building generating 4.5 millon per
year.
The first parcel has a mortgage, the second does not, both properties net
$800k for their owners. In 15 years, the 40 story building mortgage will be
paid off and the owner will net $2.1k...At that time, would the value of the
property change?
The owner of the 20 story building could tear it down and build a 40 story
building, if he can do it for 10 million, the result would be approximately
the same. If he has the capital to do it....if not...
How does your plan change the dynamics of this?
>>Because if YOU DON'T, then you are saying that some land is more valuable
>>than other land, and then you are taxing not the land, but its USE.
>
>No, you are not. You seem not to understand the difference between
>value and use. This is not surprising, as you seem to understand
>almost nothing whatever.
You are saying that it's potential use, or potential income, determines its
value.
>>If you
>>do tax the land, regardless of its current or best use, then you will have
>>to find some median point, and that will make the Manhattan land so much
>>more valuable (and you will not recover that value) and you will force
land
>>that is used for farming and grazing so much more expensive as to make it
>>too expensive for all but richest owners.
>
>Complete nonsense. Each parcel would simply be taxed in proportion to
>its value.
It's value is based in part on the cost of capital needed to produce income.
If it costs a great deal to make it produce, the value will be lower and
therefore the tax would be lower....further reducing the cost to someone
that wants to use it to produce income....making it more useful...or
accessible, but only to those with the capital to do it...
>>Land has value NOT BECAUSE IT EXISTS, but because of its use.
>
>Now you claim a vacant lot has no value?
Vacant land CAN have no value, if there is no USE for it. It is the use
that determines the value. If the land is useful for grazing, it will
remain vacant, but have some value, though very minimal. If the land is
desert and of no use, then yes, it has no value.
>>Location, location, location...that is the value in land.
>
>So, now you cannot tell the difference between use and location.
>You seem not to understand the difference between value and use.
Location often determines the use of land, and therefore it's value.
>>Where land exists
>>determines it's ability to produce income. Any land with minimal income
>>producing value will be left vacant regardless of the tax,
>
>That is false. Only sub-marginal land -- i.e., land which cannot
>produce _any_ income -- will be left vacant. It is true that a land
>Now you claim a vacant lot has no value?
So, it seems, do you.
>tax, by stimulating more intensive use of valuable land, will normally
>result in more of the least valuable land being left vacant. But that
>is a _good_ thing, because it means capital and labor are being
>applied where they will be most productive.
Your words: "will normally result in more of the least valuable land being
left vacant"
>>and if the tax is
>>high enough, it will be abandoned rather than held privately.
>
>No, its value will simply decline to the point where a user can pay
>the tax. Really, your orotund pronouncements of patently false
>nonsense are starting to convince people you are secretly a supporter
>of land taxation.
But a user will only pay the tax if there is a potential income, if there is
no way to produce income via the land, then it will become valuless.
Your opinion is that all land has value, and if it were affordable enough
(no speculation involved) that it would be put to productive use. I don't
disagree with the second part, but do with the first.
>>If my piece of land is taxed at $1 per sq ft, and it will take me $1000
>
>?? You mean $1K/sq.ft.?
No, I mean $1 per sq ft. That means that the average home lot of 7,000 sq
ft would have a tax of $7k...that is very expensive. $1k per sq ft means
that the same lot would be $7 MILLION...
>>to make it produce income of $150 per sq ft per year, then the tax is
irrelevant.
>You mean, because you would be losing $850/yr? Or because the land is
>yielding $150 after expenses?
Sorry, not being clear. If I need to invest $1000 per sq ft (one time) to
produce $150 per sq net annually...the $1/sq ft is irrelevant...a minor cost
>>But if you tax me $150 per sq ft,
>>then the land would need to produce $300 per year for the same return...if
>>its best use can only produce $200 per sq ft per year,
>If it can yield $200/yr, why are you only using it to yield $150?
Because it might take $2000 per sq ft investment to do so, and I don't have
that much to start with.
>>it is not worth the
>>expenditure, and if owning the land is otherwise not useful, it will be
>>eventually abandoned.
>
>That is hopelessly confused.
If the tax on the land makes it cost prohibitive to use it, I won't use it.
You suggest that the value (and hence the tax) would fall until it becomes
viable to use. Ok, if there is no lag between the value changing and the
tax liability... But if the owner doesn't sell it....can he change the
value of the land. Remember, every piece of land in the US currently has an
owner, that will be faced with your plan (if it were implemented)....
>If a parcel of land can yield at most $200/yr after capital and labor
>are paid for, then that is its rent. Any tax that recovers part of
>that rent just reduces the payment to the landowner. It doesn't
>affect the use. If the tax is high enough to recover the full $200,
>then the land value is zero, but the use remains exactly the same:
>it's the only way the owner can avoid losing money. A tax on land
>value cannot recover more than the rent, because that would make the
>value negative, and the tax would then become negative, too.
Now you confused me....if the tax is high enough to recover the rent...how
can the land value be zero? If the land value were zero, the tax would be
zero....
Tracy Coyle
Gary Forbis wrote in message ...
>"Tracy Coyle" <tcc...@chorus.net> wrote ...
>>
>> >> When you tax capital you prevent it from multiple potential uses,
>> >> when youtax land, you prevent it from its best ( or only ) use.
>> >> Capital can move totake advantage of the best opportunities,
>> >> land doesn't move.
>>
>> >> Let me use a different word, it is ivy tower economic analysis. When
you
>> >> tax land, the owners will find its least taxable use....most likely,
vacant.
>> >
>> >That's just goofy.
>> >
>> >If you have to pay the same tax on the land independent of use then
>> >the owner will find it advantagous to produce income. Leaving the land
>> >vacant doesn't reduce it's value.
>>
>> If it fact, the tax is on the sq ft of dirt, you are right, but if it is
on
>> the value, then you are not,
>
>Please explain. Suppose I have a plot of land worth $100,000 and a plot
>of land worth $50,000. Either could be used for my purposes and would
>generate the same income but I don't have a need for both. What should
>I do? Remember, we are talking about a land value tax.
Ok, the tax on the 100k plot is twice the 50k, and they would generate the
same income, why would the 100k plot be worth twice as much? There is
obviously something different about them.... If you have no need for both,
why do you have both? If you were trying to raise capital to generate
income, you might sell the more valuable one, but again, why is it worth
more? Did you speculate? Is the 100k plot twice the size of the other?
Is it in a more desireable location? If it is more valuable, is it so
because it could generate more income, and therefore, why would you only
generate as much income on that property as the 50k plot?
The simple question is that if both parcels can serve your purpose, you
would chose the property with the lowest tax...I said that in my first post
in this thread, there is no need to discuss how much the tax is or how it is
calculated, as long as both properties are treated the same...All things
being equal, you select the property with the lowest tax liability.
Both of you have suggested that the value associated with the property is
based on the potential income it can generate....ie, the more income
generated, the more valuable the land, the higher the tax. Why do you have
properties with different values....that you would use to generate the same
income on?
>> but the land tax movement considers land value
>> to be more than the dirt...and that is not mickey mouse...
>
>Don't try to slip improvements in here. I'm not talking about a property
>tax. I'm talking about a land value tax. Now while certain improvements
>increase your land's value these improvements are typically not the one's
>you make to your land but rather the improvements made by others to their
>land.
Why would anyone, in this situation, make improvements on their property
that you benefit from without compensation? After all, if the improvements
increase the value of the land - and we are speaking not of stock, or
personal improvements - and therefore increase the tax, wouldn't people
avoid making such improvements - unless they directly support income
generation....and if so, how would that increase your value?
Under this plan, I would avoid ALL improvements that affect the land value,
and try to impose restrictions on landowers around me from doing the same.
Anything that increased the value of my property - with all the improvements
designed to generate a specfic income - would affect my overall income
because the increased value (and therefore tax) would reduce my income.
Tracy Coyle
ro...@telus.net wrote ...
>"Tracy Coyle" <tcc...@chorus.net> wrote:
>
>>Gary Forbis wrote in message ...
>>
>>>"Tracy Coyle" <tcc...@chorus.net> wrote in message ...
>>
>>>> When you tax capital you prevent it from multiple potential uses, when
you
>>>> tax land, you prevent it from its best ( or only ) use. Capital can
move to
>>>> take advantage of the best opportunities, land doesn't move.
>>>
>>>> Let me use a different word, it is ivy tower economic analysis. When
you
>>>> tax land, the owners will find its least taxable use....most likely,
vacant.
>>>
>>>That's just goofy.
>>>
>>>If you have to pay the same tax on the land independent of use then
>>>the owner will find it advantagous to produce income. Leaving the land
>>>vacant doesn't reduce it's value.
>>
>>If it fact, the tax is on the sq ft of dirt, you are right, but if it is
on
>>the value, then you are not,
>
>It is on the value, and he is right.
If the cost of capital improvements to produce income exceeds the return
possible, the land will be sold to someone else either a) willing to accept
lower return, or b) at a value lower than my original acquistion cost
basis....therefore, the value of the land COULD go down. Property is not
sold overnight, so the land would remain vacant for some time...
Question: if I obtained land for $50k, and the tax were 10%, I would have a
tax liability of $5k. Is there any mechanism for the possibility that the
land decreases in value...say because my neighbor built a chemical
reprocessing plant next door and my plan for an outdoor cafe is down the
drain....the potential income is lessened, thereby lessening the
value....would the tax go down?
Tracy Coyle
ro...@telus.net wrote in message
> "Tracy Coyle" <tcc...@chorus.net> wrote:
>
>>ro...@telus.net wrote in message ...
>>
>>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>>
>>>>And as the younger couple doesn't PAY property taxes, what do they care
if it
>>>>keeps going up....
>>>
>>>The young couple pays a (usually small) portion of their landlord's
>>>property taxes. The exact amount depends on the relevant elasticities
>>>and the fraction of the property's value that is in improvements.
>>
>>Using the above example and your take on it, wouldn't your plan encourage
>>the "income rich" to use their income on non-land investments?
>
>Yes.
Can you give me an example of non-land investments you think would increase
in number?
>>They would
>>take the hit on their home, but limit any other real estate oriented
>>investments....let's say...Treasurys. The return is not as good - but
given
>>the tax liability of owning land, it might improve greatly.
>
>That is part of the benefit of taxing land value: capital moves out of
>rent seeking and speculation and into the productive investments that
>actually benefit the economy and society (Treasury securities are not
>relevant, here, because they are created in response not to investor
>demand but to government fiscal conditions). Interest rates decline,
>making more investments economically viable.
Again, can you give me an example of a productive investment that benefits
the economy and society that is non-land based...?
>>As demand for
>>non-land investments increased, we would get....overseas investments?
>>Investment in businesses that are not land intensive?
>
>Mostly the latter. Moving money offshore is of course a possibility,
>but there is always a counter-balancing transaction, and the reduction
>of non-land taxes would make domestic investment much more attractive.
What makes you think that overseas investments would be the least possible,
and what is an example of a counter-balancing transaction?
I apologize for asking for examples, but if I send 100k overseas to my
cousin that has a business in Britian and he returns 20% a year that I don't
pay taxes on...
And, all the domestic investment would probably be land based, and that
means that those businesses face significant land taxes...
I do agree that the lack of other taxes makes investment seem more
attractive...however....a question.
An approximate value of all the non-government land in the US is 300
trillion, the governments of the US (Federal, state and local) collected
approximately 2.56 trillion in taxes. A 10% land tax would generate 30
trillion in tax revenues. That is a shit load of money from GDP going to
government....so, if we are to be close, we are talking about a 1% land tax,
or 3 trillion....
If my particular piece of property was worth 35k, then my tax would be
$350...or 6% of my current property tax liability. With no sales or income
taxes, this looks great to me.
>>To the ones left holding the land at the time this tax plan kicks in, I am
>>sure there would be some phasing in....in which people will dump the land
>>and it's value will move accordingly, rather than be caught with the
>>liability.
>
>Cheap land. An outcome devoutly to be wished...
What would cause my land to go up in value if all the other property in my
neighborhood was similarly developed? Anything? If all land were in a
similar situation, then the tax receipts would grow very slowly if at
all.....but the cost of government continues to grow - pay raises, health
care costs, capital improvements.....
Here is the question: if the value of land is mostly static, but the cost
of government is increasing, how is the difference made up? An increase in
the tax rate? Doesn't that increase the cost to the land owners? That
would mean that overtime, the average land owner would face a tax liability
greater than the ability of the property to produce income, reducing the
value, reducing the tax, increasing the difference.....right?
Tracy Coyle
ro...@telus.net wrote in message <3ea71501...@news.telus.net>...
>>
>>The two properties are in different areas, but are consistent with other
>>properties. The primary home was in a smaller community, the rental in a
>>city.
>
>I still don't buy the story. In what US city can you buy a house for
>$75K?
I will not say specifically, but the properties were purchased more than 10
years ago, the rental in a town of 200k people, the other in a town of less
than 5k.
I can't imagine paying only $550 in property taxes, especially since I will
be paying almost 10 times that this year.
Tracy Coyle
ro...@telus.net wrote in message ...
>"Tracy Coyle" <tcc...@chorus.net> wrote:
>
>>Gary Forbis wrote in message ...
>>
>>>Liar. No one who had their own home free and clear are now homeless
>>>because of taxes. If people are homeless after owning their own home
>>>free and clear it is because they are living beyond their means. If
>>>they can't rent the place for sufficient income to pay the rent on
>>>a more modest place and pay the taxes I'd be very surprised. Please
>>>give an example.
>>
>>Client couple (my partner is a bankruptcy attorney): Own their $68k home
>>free and clear, taxes about 2.2k a year. They own a second home they rent
>>to their son. Home is worth 75k, has 45k mortgage, pay about 3.4k in
>>taxes. The son's rent pays the cost of the rental home. Their income
>>is about 15k a year on SS and another 6k a year on a small pension. Wife
>>never worked.
>>
>>Son loses job and can't keep making rent, the parents rent their home and
>>move in with son. The rent on the original home makes cost on rental.
>
>What does that mean? I thought they owned it free and clear.
The rent they receive on the house that was free and clear pays the mortage
on the house they were all in.
>>Then the renters stop paying, trash the place and it takes 5 months to get
>>them out. By the time it is done, the original house is in such bad
>>condition - no heat over the winter resulted in water and structural
damage,
>>that the house is condemned. They come see us because the mortgage
company
>>is now foreclosing on the rental house they all live in.
>
>>I bet we could find a hundred such examples - if we asked other bankruptcy
>>attorneys. Another ivy tower assessment that such terrible things don't
>>happen to logical, capable people....if they would just behave rationally.
>
>It had nothing whatever to do with the taxes. Zip.
The property taxes they were paying equalled almost 25% of their annual
income.
Gary said "If people are homeless after owning their own home free and clear
it is because they are living beyond their means. "
I was giving an example of a situation that was contrary to his position.
>And what stopped them from just selling the first house as soon as the
>tenants stopped paying the rent? what stops them from selling it
>_now_ to pay off the mortgage on the second place?
Because you can't sell a house with renters trashing the place. The
property was condemned....the land was worth about 12k, the condemnation
took 3k leaving them with 9k..insufficient to pay off the mortgage, but also
a year too late.
>>Of course, you will comment that they are not homeless, and you would be
>>right....they do have a home...that they rent from someone....their rental
>>home was eventually foreclosed on and sold to someone else.
>
>??? You've got three people living in the place, two of them pulling
>in $21K/yr, and between the three of them they can't make the payments
>on a _$45K_ mortgage?
Their bills totalled over 1500 a month.
>Uh-huh....
>
>>At 71 and 67,
>>they neither have the time nor money to rebuild what had taken them a
>>lifetime to acquire.....
>
>And a few months to blow by renting to the wrong tenants and making a
>bunch of other stupid decisions (like why didn't the son move into the
>clear title house?).
They got more rent for their house than they could get for the son's house.
It was a bad decision only in retrospect.
>Nothing to do with the property taxes, though, was it?
While the thread does, the point Gary was making opened a different
situation for discussion. Though, the property taxes were a problem, higher
taxes would have just hastened the end...
>Liar.
How nice....
Tracy Coyle
ro...@telus.net wrote ...
And wouldn't that further increase the value of the land...?
>>Fairhope seems to be an enigma....
>
>IOW, its success is inexplicable as long as you refuse to understand
>the facts of economics.
You like to put down those that don't agree with you don't you...
>>there is some indication that oil revenues
>>have replaced land rents.
>
>Oil revenue is a land rent.
Except it appears to be revenue derived from those lands not under the land
rent agreement, thereby reducing the need for land rent rates....
>>...and large areas are not in the Single Tax area....
>
>They just want to be near it...
But it increases the value of the land, increasing the tax, but there is no
indication that is happening...actually the opposite appears to be
happening....less land appears to be under the land agreement...from what I
could find, the land rent situation seems to be moving towards
abandonment...
>>So, your local examples, are not good....
>
>Wrong. Fairhope is a perfectly good example.
No, it is not working as originally planned. Land prices in the area
appear to be no different than the surrounding area (speculation?)...and oil
revenues are replacing tax revenues....
>>from your point of view....the fact
>>that they may have worked initially but not in the long run, lends less
>>credibility to your position....
>
>Nonsense. It's just more proof that you have to keep doing the right
>thing if you want to keep getting the right results.
"If only the people were true to their goals"
"If only the right people were behaving in the right way"
"if only the outsiders would stop..."
"if only...."
Good theory, lousy reality.
Gary Forbis
> While the thread does, the point Gary was making opened a different
> situation for discussion. Though, the property taxes were a problem, higher
> taxes would have just hastened the end...
But the taxes wouldn't have been higher, would they?
Further the people were living beyond their means and took no steps
to protect their assets. They didn't assess their renters and they didn't
have an agreement that would have allowed them to evect for cause if
the renters started trashing the place. They took no steps to recover
their losses by garnishing wages or putting leins on properties.
Roy and I differ about how the proceeds from a land value tax should be
used. I believe 100% of the land rent should be recovered and distributed
equally to all entitled citizens. Everyone should then pay for their
own governmental services and for insurance to cover the risks of less
frequent but more expensive services. If people aren't willing to pay
for a services, such as rights protection, then the government shouldn't
provide it. I don't mind land covenants that require the purchase of
certain services to utilize the land.
If a person can't make a living he or she will need to find a source
of income from charity. Assets that can't pay their own way aren't
very good assets.
Gary Forbis
> ro...@telus.net wrote ...
> >Of course: Arden benefits from the spending of senior governments that
> >don't recover the land rent they create.
>
> And wouldn't that further increase the value of the land...?
The senior governments collect other taxes, reducing disposable income.
It's hard to tell if this is a wash or not.
> >>Fairhope seems to be an enigma....
> >
> >IOW, its success is inexplicable as long as you refuse to understand
> >the facts of economics.
>
> You like to put down those that don't agree with you don't you...
>
> >>there is some indication that oil revenues
> >>have replaced land rents.
> >
> >Oil revenue is a land rent.
>
> Except it appears to be revenue derived from those lands not under the land
> rent agreement, thereby reducing the need for land rent rates....
You don't use our definition of land rent. If you're going to argue against
our position then do so, don't argue against a position we don't hold by
redefining the terms.
tully
wrote:
>I can't imagine paying only $550 in property taxes, especially since I will
>be paying almost 10 times that this year.
The property tax rate I'm paying in NC is 58 cents per $100 valuation.
I've been trying to find an area that charged in the $5 range and
apparently Oregon has such rates in the cities. But Oregon has no
state sales tax. We pay a 6% sales tax in NC and most food is taxed
at 4%.
ro...@telus.net
wrote:
>ro...@telus.net wrote in message ...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>
>>>Gary Forbis wrote in message ...
>>>
>>>>Liar. No one who had their own home free and clear are now homeless
>>>>because of taxes. If people are homeless after owning their own home
>>>>free and clear it is because they are living beyond their means. If
>>>>they can't rent the place for sufficient income to pay the rent on
>>>>a more modest place and pay the taxes I'd be very surprised. Please
>>>>give an example.
>>>
>>>Client couple (my partner is a bankruptcy attorney): Own their $68k home
>>>free and clear, taxes about 2.2k a year. They own a second home they rent
>>>to their son. Home is worth 75k, has 45k mortgage, pay about 3.4k in
>>>taxes. The son's rent pays the cost of the rental home. Their income
>>>is about 15k a year on SS and another 6k a year on a small pension. Wife
>>>never worked.
>>>
>>>Son loses job and can't keep making rent, the parents rent their home and
>>>move in with son. The rent on the original home makes cost on rental.
>>
>>What does that mean? I thought they owned it free and clear.
>
>The rent they receive on the house that was free and clear pays the mortage
>on the house they were all in.
Ah. So they were using the rent from the first place to _buy_ the
second, _not_ to rent it. Got it.
>>>Then the renters stop paying, trash the place and it takes 5 months to get
>>>them out. By the time it is done, the original house is in such bad
>>>condition - no heat over the winter resulted in water and structural
>damage,
>>>that the house is condemned. They come see us because the mortgage
>company
>>>is now foreclosing on the rental house they all live in.
>>
>>>I bet we could find a hundred such examples - if we asked other bankruptcy
>>>attorneys. Another ivy tower assessment that such terrible things don't
>>>happen to logical, capable people....if they would just behave rationally.
>>
>>It had nothing whatever to do with the taxes. Zip.
>
>The property taxes they were paying equalled almost 25% of their annual
>income.
Because they figured they could be real estate moguls on $21K/yr.
Right.
>Gary said "If people are homeless after owning their own home free and clear
>it is because they are living beyond their means. "
>
>I was giving an example of a situation that was contrary to his position.
??? Garbage. What on earth do you call it when people who obviously
know almost nothing about real estate try to buy a second house on a
combined income of $21K?
>>And what stopped them from just selling the first house as soon as the
>>tenants stopped paying the rent? what stops them from selling it
>>_now_ to pay off the mortgage on the second place?
>
>Because you can't sell a house with renters trashing the place.
Why not? Let someone who knows how to deal with lousy tenants deal
with them.
The plain, bald truth of the matter is that they didn't sell sooner
because they were hanging onto that dream of pocketing unearned wealth
by owning land.
>The
>property was condemned....the land was worth about 12k,
??? What? They were living in a house where the improvements were
worth more than _four_times_ as much as the land? On $21K/yr? That
_is_ living beyond your means. Residential improvement value fraction
is strongly related to income: the lower your income, the more of your
residence's value should be in the land, the less in improvements.
>the condemnation took 3k
For what?
>leaving them with 9k..insufficient to pay off the mortgage, but also
>a year too late.
What took them so long?
>>>Of course, you will comment that they are not homeless, and you would be
>>>right....they do have a home...that they rent from someone....their rental
>>>home was eventually foreclosed on and sold to someone else.
>>
>>??? You've got three people living in the place, two of them pulling
>>in $21K/yr, and between the three of them they can't make the payments
>>on a _$45K_ mortgage?
>
>Their bills totalled over 1500 a month.
For _what_?
>>>At 71 and 67,
>>>they neither have the time nor money to rebuild what had taken them a
>>>lifetime to acquire.....
>>
>>And a few months to blow by renting to the wrong tenants and making a
>>bunch of other stupid decisions (like why didn't the son move into the
>>clear title house?).
>
>They got more rent for their house than they could get for the son's house.
?? How so? I thought the son's place was in the city, the other
place in a small town.
>It was a bad decision only in retrospect.
Nope. It was bad from the start. The reason they did it was because
they were hanging onto that dream of pocketing unearned wealth by
owning more land than they were using.
>>Nothing to do with the property taxes, though, was it?
>
>While the thread does, the point Gary was making opened a different
>situation for discussion. Though, the property taxes were a problem, higher
>taxes would have just hastened the end...
Garbage. Intelligent, responsible (i.e., non-greedy) decisions would
have kept them in their home even if the property taxes _had_ been
higher. OTOH, even if the property taxes had been lower, their
foolishness and over-reaching were bound to put them out on the street
eventually.
>>Liar.
>
>How nice....
Then think about your claims before you post them.
-- Roy L
ro...@telus.net
>On Thu, 24 Apr 2003 04:50:59 GMT, "Tracy Coyle" <tcc...@chorus.net>
>wrote:
>>I can't imagine paying only $550 in property taxes, especially since I will
>>be paying almost 10 times that this year.
>
>The property tax rate I'm paying in NC is 58 cents per $100 valuation.
That is near the lowest in the USA, which is around $0.40.
>I've been trying to find an area that charged in the $5 range and
>apparently Oregon has such rates in the cities.
?? Oregon's property taxes are fairly high, but not that high. AFAIK
the highest property taxes in the USA are in New Hampshire, and they
peak at around $4/$100.
-- Roy L
ro...@telus.net
wrote:
>ro...@telus.net wrote in message <3ea71501...@news.telus.net>...
>>>
>>>The two properties are in different areas, but are consistent with other
>>>properties. The primary home was in a smaller community, the rental in a
>>>city.
>>
>>I still don't buy the story. In what US city can you buy a house for
>>$75K?
>
>I will not say specifically, but the properties were purchased more than 10
>years ago, the rental in a town of 200k people, the other in a town of less
>than 5k.
Wait a minute. Are you saying those houses were _bought_ for those
prices, or were _worth_ those prices? And on what basis were the
taxes calculated?
>I can't imagine paying only $550 in property taxes, especially since I will
>be paying almost 10 times that this year.
You should be grateful you are so wealthy, and/or that you live in an
area with such high property tax rates.
-- Roy L
ro...@telus.net
wrote:
>ro...@telus.net wrote ...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>
>>>Arden could issue a cash dividend, encouraging a denser population, or it
>>>could still further improve its public spaces. However, not only would the
>>>right of a cash dividend increase the rental value of land, but so would
>the
>>>improved streets and park land. There is not only no need to collect the
>>>full rental value of the land, but if it were, there would be no
>reasonable
>>>way to spend it.
>>
>>Of course: Arden benefits from the spending of senior governments that
>>don't recover the land rent they create.
>
>And wouldn't that further increase the value of the land...?
Normally. Of course.
>>>there is some indication that oil revenues
>>>have replaced land rents.
>>
>>Oil revenue is a land rent.
>
>Except it appears to be revenue derived from those lands not under the land
>rent agreement, thereby reducing the need for land rent rates....
You're not understanding the terms. "Land rent" refers to payment for
use of all natural resources.
>>>...and large areas are not in the Single Tax area....
>>
>>They just want to be near it...
>
>But it increases the value of the land, increasing the tax, but there is no
>indication that is happening.
That what is happening?
>..actually the opposite appears to be
>happening....less land appears to be under the land agreement.
That's ominous...
>..from what I
>could find, the land rent situation seems to be moving towards
>abandonment...
It's hard to resist the weight of greed, especially when the senior
governments are on greed's side.
>>>So, your local examples, are not good....
>>
>>Wrong. Fairhope is a perfectly good example.
>
>No, it is not working as originally planned. Land prices in the area
>appear to be no different than the surrounding area (speculation?)
The living is better, though. Fairhope consistently makes the lists
of most livable communities.
>...and oil
>revenues are replacing tax revenues....
?? Oil revenue _is_ a tax revenue.
>>>from your point of view....the fact
>>>that they may have worked initially but not in the long run, lends less
>>>credibility to your position....
>>
>>Nonsense. It's just more proof that you have to keep doing the right
>>thing if you want to keep getting the right results.
>
>"If only the people were true to their goals"
>"If only the right people were behaving in the right way"
>"if only the outsiders would stop..."
>"if only...."
>
>Good theory, lousy reality.
Do you claim the theory of diet and obesity is wrong, just because
most people won't stick to a diet that allows them to lose weight? Do
you claim that because people continue smoking even after getting lung
cancer, the theory that smoking causes cancer is wrong?
People find it hard to give up their yummies, even when those yummies
are killing them.
-- Roy L
ro...@telus.net
wrote:
>ro...@telus.net wrote in message
>...
>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>
>>>>If you have to pay the same tax on the land independent of use then
>>>>the owner will find it advantagous to produce income. Leaving the land
>>>>vacant doesn't reduce it's value.
>>>
>>>So, you would tax 20,000 sq ft if it were a hillside, a swamp, a forest or
>>>prairie land at the same rate you would tax 20,000 sq ft in Manhattan?
>>
>>No. Don't you ever tire of demonstrating that you are an ignoramus?
>>Land taxes are levied by value, not area.
>
>Your words: pay the same tax on land independent of use.
Right. No relationship to your claim of taxing land by area -- or
latitude, or elevation...
>Two parcels of land in Manhattan, both 1 acre. Both are taxed at the rate
>of 15% of value, both are valued the same, 1 million dollars. Tax is $150k
>each. Existing on one parcel is a 40 story building generating 15 million
>per year. The other parcel is a 20 story building generating 4.5 millon per
>year.
>The first parcel has a mortgage, the second does not, both properties net
>$800k for their owners. In 15 years, the 40 story building mortgage will be
>paid off and the owner will net $2.1k...At that time, would the value of the
>property change?
The land value would normally be increasing during that time, though
not monotonically.
>The owner of the 20 story building could tear it down and build a 40 story
>building, if he can do it for 10 million, the result would be approximately
>the same. If he has the capital to do it....if not...
>
>How does your plan change the dynamics of this?
A land value tax of 15% would already be so close to my plan that the
difference would not be worth disputing.
>>>Because if YOU DON'T, then you are saying that some land is more valuable
>>>than other land, and then you are taxing not the land, but its USE.
>>
>>No, you are not. You seem not to understand the difference between
>>value and use. This is not surprising, as you seem to understand
>>almost nothing whatever.
>
>You are saying that it's potential use, or potential income, determines its
>value.
Or rather the land rent. Right. Value is then related to rent by the
NPV equation.
>>>If you
>>>do tax the land, regardless of its current or best use, then you will have
>>>to find some median point, and that will make the Manhattan land so much
>>>more valuable (and you will not recover that value) and you will force
>land
>>>that is used for farming and grazing so much more expensive as to make it
>>>too expensive for all but richest owners.
>>
>>Complete nonsense. Each parcel would simply be taxed in proportion to
>>its value.
>
>It's value is based in part on the cost of capital needed to produce income.
Not really. The discount rate appears on both sides of the equation,
and thus cancels out.
>If it costs a great deal to make it produce, the value will be lower and
>therefore the tax would be lower....further reducing the cost to someone
>that wants to use it to produce income....making it more useful...or
>accessible, but only to those with the capital to do it...
I have no idea what you think this has to do with your false claim
above.
>>>Land has value NOT BECAUSE IT EXISTS, but because of its use.
>>
>>Now you claim a vacant lot has no value?
>
>Vacant land CAN have no value, if there is no USE for it.
But vacant land can also be of immense value, which disproves your
claim.
>It is the use
>that determines the value.
No. Land's value is determined by a number of factors, including the
tax rate, the discount rate, and its economic rent. Economic rent is
determined by the differential productivity of marginal and valuable
land used for the same purpose, given identical inputs.
>If the land is useful for grazing, it will
>remain vacant, but have some value, though very minimal. If the land is
>desert and of no use, then yes, it has no value.
Marginal land has no value even if it _does_ have a potential use.
You stand refuted.
>>>Location, location, location...that is the value in land.
>>
>>So, now you cannot tell the difference between use and location.
>>You seem not to understand the difference between value and use.
>
>Location often determines the use of land, and therefore it's value.
Use does not determine value.
>>>Where land exists
>>>determines it's ability to produce income. Any land with minimal income
>>>producing value will be left vacant regardless of the tax,
>>
>>That is false. Only sub-marginal land -- i.e., land which cannot
>>produce _any_ income -- will be left vacant. It is true that a land
>
>>Now you claim a vacant lot has no value?
>
>So, it seems, do you.
No. Where have I said any such thing? I have merely said land with
no value will normally be left vacant.
>>tax, by stimulating more intensive use of valuable land, will normally
>>result in more of the least valuable land being left vacant. But that
>>is a _good_ thing, because it means capital and labor are being
>>applied where they will be most productive.
>
>Your words: "will normally result in more of the least valuable land being
>left vacant"
Right. It will not _be_ used. That doesn't mean it _couldn't_ be
used. Indeed, in some cases it _will_have_been_ used.
>>>and if the tax is
>>>high enough, it will be abandoned rather than held privately.
>>
>>No, its value will simply decline to the point where a user can pay
>>the tax. Really, your orotund pronouncements of patently false
>>nonsense are starting to convince people you are secretly a supporter
>>of land taxation.
>
>But a user will only pay the tax if there is a potential income, if there is
>no way to produce income via the land, then it will become valuless.
Right. But if there is a way to produce income from it, it will have
value whether or not it is _actually_ producing income.
>Your opinion is that all land has value,
That is false. I have stated explicitly that sub-marginal land has no
value, _whatever_its_use_.
>and if it were affordable enough
>(no speculation involved) that it would be put to productive use.
I have stated explicitly that a land value tax would result in _less_
land being used (first-order effect only -- in the long run, the
resulting increased growth would result in sub-marginal land becoming
usable sooner).
>I don't
>disagree with the second part, but do with the first.
You have, to put it kindly, misunderstood my repeated and I think
clear statements.
>>>If my piece of land is taxed at $1 per sq ft, and it will take me $1000
>>
>>?? You mean $1K/sq.ft.?
>
>No, I mean $1 per sq ft. That means that the average home lot of 7,000 sq
>ft would have a tax of $7k...that is very expensive.
Not if the other taxes the owner is paying disappear.
>>>to make it produce income of $150 per sq ft per year, then the tax is
>irrelevant.
>
>>You mean, because you would be losing $850/yr? Or because the land is
>>yielding $150 after expenses?
>
>Sorry, not being clear. If I need to invest $1000 per sq ft (one time) to
>produce $150 per sq net annually...the $1/sq ft is irrelevant...a minor cost
OK, I understand that.
>>>But if you tax me $150 per sq ft,
>>>then the land would need to produce $300 per year for the same return...if
>>>its best use can only produce $200 per sq ft per year,
>
>>If it can yield $200/yr, why are you only using it to yield $150?
>
>Because it might take $2000 per sq ft investment to do so, and I don't have
>that much to start with.
You are confused. Yield is calculated based on a consistent cost of
capital, however much of it is employed.
>>>it is not worth the
>>>expenditure, and if owning the land is otherwise not useful, it will be
>>>eventually abandoned.
>>
>>That is hopelessly confused.
>
>If the tax on the land makes it cost prohibitive to use it, I won't use it.
It can't. The tax is independent of the use, and so cannot, I repeat,
_cannot_ increase the cost of use: the tax cost is the same whether
the land is used or not.
>You suggest that the value (and hence the tax) would fall until it becomes
>viable to use.
Or the value reaches zero, whichever comes first.
>Ok, if there is no lag between the value changing and the
>tax liability...
That's just a mechanical detail. Such a tax would of course have to
be phased in.
>But if the owner doesn't sell it....can he change the
>value of the land.
Depends on how the system is implemented. Normally not.
>Remember, every piece of land in the US currently has an
>owner, that will be faced with your plan (if it were implemented)....
The problem is getting them to understand the benefits as well as they
do the costs.
>>If a parcel of land can yield at most $200/yr after capital and labor
>>are paid for, then that is its rent. Any tax that recovers part of
>>that rent just reduces the payment to the landowner. It doesn't
>>affect the use. If the tax is high enough to recover the full $200,
>>then the land value is zero, but the use remains exactly the same:
>>it's the only way the owner can avoid losing money. A tax on land
>>value cannot recover more than the rent, because that would make the
>>value negative, and the tax would then become negative, too.
>
>Now you confused me....if the tax is high enough to recover the rent...how
>can the land value be zero?
How can it be more?
>If the land value were zero, the tax would be
>zero....
The tax amount in such a case is not calculated from the land value
but from e.g., bids for use. Funny things happen if you try to tax
land value at more than about 100%/yr, because transaction costs, etc.
start to have huge effects on both the land value and the tax rate.
All you can say is that the land value theoretically approaches zero
as the tax rate goes to infinity. In practice, extremely high rates
of tax based on land value are never used: the tax is just assessed on
some other basis.
-- Roy L
ro...@telus.net
wrote:
>Gary Forbis wrote in message ...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote ...
>>>
>>> >> When you tax capital you prevent it from multiple potential uses,
>>> >> when youtax land, you prevent it from its best ( or only ) use.
>>> >> Capital can move totake advantage of the best opportunities,
>>> >> land doesn't move.
>>>
>>> >> Let me use a different word, it is ivy tower economic analysis. When
>you
>>> >> tax land, the owners will find its least taxable use....most likely,
>vacant.
>>> >
>>> >That's just goofy.
>>> >
>>> >If you have to pay the same tax on the land independent of use then
>>> >the owner will find it advantagous to produce income. Leaving the land
>>> >vacant doesn't reduce it's value.
>>>
>>> If it fact, the tax is on the sq ft of dirt, you are right, but if it is
>on
>>> the value, then you are not,
>>
>>Please explain. Suppose I have a plot of land worth $100,000 and a plot
>>of land worth $50,000. Either could be used for my purposes and would
>>generate the same income but I don't have a need for both. What should
>>I do? Remember, we are talking about a land value tax.
>
>Ok, the tax on the 100k plot is twice the 50k, and they would generate the
>same income,
Remember, that only applies to _his_ purpose. Not all purposes.
> why would the 100k plot be worth twice as much? There is
>obviously something different about them.... If you have no need for both,
>why do you have both? If you were trying to raise capital to generate
>income, you might sell the more valuable one, but again, why is it worth
>more?
Somebody thinks they can make more from it.
>Did you speculate? Is the 100k plot twice the size of the other?
>Is it in a more desireable location? If it is more valuable, is it so
>because it could generate more income, and therefore, why would you only
>generate as much income on that property as the 50k plot?
Because he has a certain purpose in mind, and is not interested in
using the land for its best potential use.
>Both of you have suggested that the value associated with the property is
>based on the potential income it can generate....ie, the more income
>generated, the more valuable the land,
No, please try to keep your eye on the ball: the more _potential_
income that _could_ be generated, the more valuable the land.
>the higher the tax. Why do you have
>properties with different values....that you would use to generate the same
>income on?
Because he is not the most productive user that could use that land.
That is the point.
>>> but the land tax movement considers land value
>>> to be more than the dirt...and that is not mickey mouse...
>>
>>Don't try to slip improvements in here. I'm not talking about a property
>>tax. I'm talking about a land value tax. Now while certain improvements
>>increase your land's value these improvements are typically not the one's
>>you make to your land but rather the improvements made by others to their
>>land.
>
>Why would anyone, in this situation, make improvements on their property
>that you benefit from without compensation?
Because they also have the same incentive to use the land as
productively as possible. Usually, that means making improvements.
They would only be compensated indirectly, as consumers of public
services, for the additional value they created on your land.
>After all, if the improvements
>increase the value of the land - and we are speaking not of stock, or
>personal improvements - and therefore increase the tax, wouldn't people
>avoid making such improvements
No, because the increased land value would be on _neighboring_ land,
not their own land.
> - unless they directly support income
>generation.
Right. Land value taxation would direct capital into its most
productive avenues.
>...and if so, how would that increase your value?
?? Land surrounded by improved land is worth more than land
surrounded by unimproved land or derelict improvements.
>Under this plan, I would avoid ALL improvements that affect the land value,
Nope. You'd make exactly the impovements needed to use your land most
productively.
>and try to impose restrictions on landowers around me from doing the same.
You can't do that in a free country.
And you're not getting it: the increased land value resulting from
improvements on neighboring parcels denotes an increased benefit
_equal_ to the increased tax cost.
>Anything that increased the value of my property - with all the improvements
>designed to generate a specfic income - would affect my overall income
>because the increased value (and therefore tax) would reduce my income.
The increased value resulting from nearby improvements also increases
your income potential. If you can't use that potential, maybe it's
time to yield the land to someone who can.
-- Roy L
ro...@telus.net
wrote:
>ro...@telus.net wrote ...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>
>>>Gary Forbis wrote in message ...
>>>
>>>>"Tracy Coyle" <tcc...@chorus.net> wrote in message ...
>>>
>>>>> When you tax capital you prevent it from multiple potential uses, when
>you
>>>>> tax land, you prevent it from its best ( or only ) use. Capital can
>move to
>>>>> take advantage of the best opportunities, land doesn't move.
>>>>
>>>>> Let me use a different word, it is ivy tower economic analysis. When
>you
>>>>> tax land, the owners will find its least taxable use....most likely,
>vacant.
>>>>
>>>>That's just goofy.
>>>>
>>>>If you have to pay the same tax on the land independent of use then
>>>>the owner will find it advantagous to produce income. Leaving the land
>>>>vacant doesn't reduce it's value.
>>>
>>>If it fact, the tax is on the sq ft of dirt, you are right, but if it is
>on
>>>the value, then you are not,
>>
>>It is on the value, and he is right.
>
>If the cost of capital improvements to produce income exceeds the return
>possible,
That makes no sense. It's like saying, "If your legs don't grow long
enough to reach the ground..."
The use just changes to one that generates positive income, whatever
the cost of capital.
>the land will be sold to someone else either a) willing to accept
>lower return, or b) at a value lower than my original acquistion cost
>basis....therefore, the value of the land COULD go down.
It is _expected_ that the value would go down when the tax is
increased. Cheaper land is one of the benefits of land value
taxation.
>Property is not
>sold overnight, so the land would remain vacant for some time...
The higher the tax, the faster the owner will want to sell.
>Question: if I obtained land for $50k, and the tax were 10%, I would have a
>tax liability of $5k. Is there any mechanism for the possibility that the
>land decreases in value...say because my neighbor built a chemical
>reprocessing plant next door and my plan for an outdoor cafe is down the
>drain....the potential income is lessened, thereby lessening the
>value....would the tax go down?
Of course. But under the proposed system, government has a very
strong incentive not to allow activities that decrease neighboring
land values.
-- Roy L
tully
Whoops, I relooked at the site and see that the values I saw for Oregon were
per $1000 valuation... only one decimal point off! lol
I can see why New Hampshire might have high property tax. They have no
state income tax or sales tax. So I guess the idea is to work in New
Hampshire and retire in Oregon or NC.
tully
tully
ro...@telus.net
wrote:
>Gary Forbis wrote in message ...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote ...
>
>>> Because if YOU DON'T, then you are saying that some land is more valuable
>>> than other land, and then you are taxing not the land, but its USE.
>>
>>No, it's potential use as determined by market value.
>
>So, market value is determined by the potential use,
Among other things.
>location being a
>component of that, correct?
Right.
>>> If you
>>> do tax the land, regardless of its current or best use, then you will
>have
>>> to find some median point, and that will make the Manhattan land so much
>>> more valuable (and you will not recover that value) and you will force
>land
>>> that is used for farming and grazing so much more expensive as to make it
>>> too expensive for all but richest owners.
>>
>>Now why do you suppose investors would build in the center of town
>>rather than out in the farmland? Further, what happens to the price
>>of food when land use is diverted away from its production?
>
>The need is greater in town for building space? A profit can be made? If
>farm land is converted to...say office space, isn't that what you are
>interested in? The land is being used in such a way as to maximize income.
Putting up office buildings in the middle of farmland is unlikely to
be an efficient use of capital.
>If food production becomes more efficient, less land is needed for it.
If density is increased in the city, less land is needed for office
buildings. And it's much easier to double the height of a building
than to double per-acre crop yields.
>>> Land has value NOT BECAUSE IT EXISTS, but because of its use. Location,
>>> location, location...that is the value in land. Where land exists
>>> determines it's ability to produce income. Any land with minimal income
>>> producing value will be left vacant regardless of the tax, and if the tax
>is
>>> high enough, it will be abandoned rather than held privately.
>>
>>Why would one pay the tax and leave the land vacant rather than sell the
>>land? Who would buy the land just to leave it vacant when the tax has
>>to be paid even on the vacant land? What happens is the land's value
>>is baed upon the market which takes the operational expenses into account.
>
>Some people want land in its natural state.
Then that is their favored use for it, and they can pay the tax
accordingly.
>....your question would seem to
>indicate that anyone with more land than is needed for their use (such as a
>house foundation and access) should sell it as it increases the tax due.
No. It's not a question of trying to sell off a square foot here and
a square foot there. People would simply choose parcel sizes and
values that matched their purposes.
>Unfortunately, land USE rules in many areas do not permit that. You will
>suggest no doubt that such rules would be inconsistent with your overall
>plan....however, in Arden New Jersey the 'trust' has restricted density
>levels.
Land use rules are a related but different issue.
>>> If my piece of land is taxed at $1 per
>>> sq ft, and it will take me $1000 to make it produce income of $150 per sq
>ft
>>> per year, then the tax is irrelevant. But if you tax me $150 per sq ft,
>>> then the land would need to produce $300 per year for the same
>return...if
>>> its best use can only produce $200 per sq ft per year, it is not worth
>the
>>> expenditure, and if owning the land is otherwise not useful, it will be
>>> eventually abandoned.
>>
>>And the value will drop until some one finds it advantageous to own it
>>and use it.
>
>Or not.
Wrong. There is no "or not" about it. The tax will be paid, or the
land will go to someone else. Period.
>>It doesn't make any sense for you to own the land if your best use is
>>$200 per sq ft per year but the market indicates $300 per sq ft per year
>>is reasonable (or possibly that they are willing to accept the lower
>>return on investemnt.)
>
>Land is not the only cost involved in producing income. The capital
>investment required to produce $300 may not be available.
Then the land should be in the hands of someone who can use it more
productively.
>....your suggestion
>would be to sell the property to someone that can provide the capital
>investment for the production of $300.
Right. That's how the whole society becomes wealthier.
>...but if $200 is a good investment
>and a good living...what is wrong with that?
It may be good for the landholder, but bad for others.
>It doesn't use the land most
>efficiently, right?
Right.
-- Roy L
ro...@telus.net
wrote:
>ro...@telus.net wrote in message
>
>> "Tracy Coyle" <tcc...@chorus.net> wrote:
>>
>>>ro...@telus.net wrote in message ...
>>>
>>>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>>>
>>>>>And as the younger couple doesn't PAY property taxes, what do they care
>if it
>>>>>keeps going up....
>>>>
>>>>The young couple pays a (usually small) portion of their landlord's
>>>>property taxes. The exact amount depends on the relevant elasticities
>>>>and the fraction of the property's value that is in improvements.
>>>
>>>Using the above example and your take on it, wouldn't your plan encourage
>>>the "income rich" to use their income on non-land investments?
>>
>>Yes.
>
>Can you give me an example of non-land investments you think would increase
>in number?
Production equipment.
>>>They would
>>>take the hit on their home, but limit any other real estate oriented
>>>investments....let's say...Treasurys. The return is not as good - but
>given
>>>the tax liability of owning land, it might improve greatly.
>>
>>That is part of the benefit of taxing land value: capital moves out of
>>rent seeking and speculation and into the productive investments that
>>actually benefit the economy and society (Treasury securities are not
>>relevant, here, because they are created in response not to investor
>>demand but to government fiscal conditions). Interest rates decline,
>>making more investments economically viable.
>
>Again, can you give me an example of a productive investment that benefits
>the economy and society that is non-land based...?
Capital goods generally, but also things like research, training, and
organizational investments.
>>>As demand for
>>>non-land investments increased, we would get....overseas investments?
>>>Investment in businesses that are not land intensive?
>>
>>Mostly the latter. Moving money offshore is of course a possibility,
>>but there is always a counter-balancing transaction, and the reduction
>>of non-land taxes would make domestic investment much more attractive.
>
>What makes you think that overseas investments would be the least possible,
High-land-tax jurisdictions have normally attracted a lot of inward
investment, not the other way around.
>and what is an example of a counter-balancing transaction?
When money moves between countries, the books have to be balanced.
That is what happens with the trade deficit: the other countries use
the money to buy US assets like real estate, stocks, and treasuries.
>I apologize for asking for examples, but if I send 100k overseas to my
>cousin that has a business in Britian and he returns 20% a year that I don't
>pay taxes on...
When you send the $100K over, he can't spend it. He has to change it
into local currency. The bank that exchanges the money then has
dollars that, one way or another, it sends back to the USA.
And if he is returning 20%/yr, doesn't he _deserve_ more capital?
>And, all the domestic investment would probably be land based, and that
>means that those businesses face significant land taxes...
But lower other taxes. You haven't understood that a land tax in many
ways has economic effects opposite to those of other taxes.
>An approximate value of all the non-government land in the US is 300
>trillion,
Obviously a huge over-estimate -- more than $1M for every man, woman
and child in the country! Where on earth did you get this figure?
$30T would be more like it, IMO.
>the governments of the US (Federal, state and local) collected
>approximately 2.56 trillion in taxes. A 10% land tax would generate 30
>trillion in tax revenues.
No. The land's value would just decline to a small fraction of its
former level, of course. It's not possible to calculate just how
much, because land values are not based on a naive application of the
NPV equation, but on the expected future relationship between the
growth and discount rates. At a minimum, increasing land tax rates to
10% would reduce total land value by 80%-90%.
>That is a shit load of money from GDP going to
>government....so, if we are to be close, we are talking about a 1% land tax,
>or 3 trillion....
A land value tax cannot recover more than the land rent, and land rent
is "only" about 20% of GDP.
>If my particular piece of property was worth 35k, then my tax would be
>$350...or 6% of my current property tax liability. With no sales or income
>taxes, this looks great to me.
Your numbers are just whacko. No basis in reality. You have to think
in terms of the total amount of land rent, relative to the amount of
land value you use. I.e., if you were using 1% of all the land value,
you would pay 1% of all the rent.
There are about 140M households in the USA. About half of all land
value is in residential land, and total land rent is around $2T. So
if you are using an "average" amount of land value for your dwelling,
you would pay 1/140M of $1T, or about $7K, and would have _no_ other
taxes to pay. Not as nice as $350, but probably still a substantial
improvement on your current tax situation.
>>>To the ones left holding the land at the time this tax plan kicks in, I am
>>>sure there would be some phasing in....in which people will dump the land
>>>and it's value will move accordingly, rather than be caught with the
>>>liability.
>>
>>Cheap land. An outcome devoutly to be wished...
>
>What would cause my land to go up in value if all the other property in my
>neighborhood was similarly developed? Anything?
Just general economic growth.
>If all land were in a
>similar situation, then the tax receipts would grow very slowly if at
>all.....but the cost of government continues to grow - pay raises, health
>care costs, capital improvements.....
The cost of government and the rent of land both track GDP very
closely.
>Here is the question: if the value of land is mostly static, but the cost
>of government is increasing, how is the difference made up?
On what planet is the value of land static? Land value has typically
increased faster than stock prices.
>An increase in
>the tax rate? Doesn't that increase the cost to the land owners?
It would.
>That
>would mean that overtime, the average land owner would face a tax liability
>greater than the ability of the property to produce income,
Cannot happen. A land value tax cannot recover more than the land
rent.
>reducing the
>value, reducing the tax, increasing the difference.....right?
No. Try to think it through. As the tax rate increases, the land
value falls. But the land value can't fall faster than the tax rate
increases. As the tax rate goes to infinity, the land value goes to
zero, and the tax amount goes to the land rent.
-- Roy L
Tracy Coyle
ro...@telus.net wrote...
>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>Your words: pay the same tax on land independent of use.
>
>Right. No relationship to your claim of taxing land by area -- or
>latitude, or elevation...
>>Two parcels of land in Manhattan, both 1 acre. Both are taxed at the rate
>>of 15% of value, both are valued the same, 1 million dollars. Tax is
$150k
>>each. Existing on one parcel is a 40 story building generating 15
million
>>per year. The other parcel is a 20 story building generating 4.5 millon
per
>>year.
>>The first parcel has a mortgage, the second does not, both properties net
>>$800k for their owners. In 15 years, the 40 story building mortgage will
be
>>paid off and the owner will net $2.1k...At that time, would the value of
the
>>property change?
>
>The land value would normally be increasing during that time, though
>not monotonically.
Why would it be increasing? There is no speculation and the owners will
work to minimize value changes not associated with increases in income
otherwise the tax would increase as value increased...
>>You are saying that it's potential use, or potential income, determines
its
>>value.
>
>Or rather the land rent. Right. Value is then related to rent by the
>NPV equation.
>
>>>>Land has value NOT BECAUSE IT EXISTS, but because of its use.
>>>
>>>Now you claim a vacant lot has no value?
>>
>>Vacant land CAN have no value, if there is no USE for it.
>
>But vacant land can also be of immense value, which disproves your
>claim.
But if vacant land has immense value (which is determined by its ability to
produce income) wouldn't it be in use?
>>It is the use that determines the value.
>
>No. Land's value is determined by a number of factors, including the
>tax rate, the discount rate, and its economic rent. Economic rent is
>determined by the differential productivity of marginal and valuable
>land used for the same purpose, given identical inputs.
If the tax liability is determined by a properties value, how can the tax
rate help to determine it's value?
>>If the land is useful for grazing, it will
>>remain vacant, but have some value, though very minimal. If the land is
>>desert and of no use, then yes, it has no value.
>
>Marginal land has no value even if it _does_ have a potential use.
>
>You stand refuted.
So, marginal land would be free for the taking? If it has no value, what
use could it have? Unless the value you speak of is in part separate from
the cost of purchasing the property...
>>>>Location, location, location...that is the value in land.
>>>
>>>So, now you cannot tell the difference between use and location.
>>>You seem not to understand the difference between value and use.
>>
>>Location often determines the use of land, and therefore it's value.
>
>Use does not determine value.
Can I not say that the ability to produce income is determined by the use?
>>>>Where land exists
>>>>determines it's ability to produce income. Any land with minimal income
>>>>producing value will be left vacant regardless of the tax,
>>>
>>>That is false. Only sub-marginal land -- i.e., land which cannot
>>>produce _any_ income -- will be left vacant. It is true that a land
>>
>>>Now you claim a vacant lot has no value?
>>
>>So, it seems, do you.
>
>No. Where have I said any such thing? I have merely said land with
>no value will normally be left vacant.
Here you say that land which cannot produce income will be left vacant,
but....
>Marginal land has no value even if it _does_ have a potential use.
>
>You stand refuted.
...doesn't a potential use have the capacity to produce income?
>>>tax, by stimulating more intensive use of valuable land, will normally
>>>result in more of the least valuable land being left vacant. But that
>>>is a _good_ thing, because it means capital and labor are being
>>>applied where they will be most productive.
>>
>>Your words: "will normally result in more of the least valuable land
being
>>left vacant"
>
>Right. It will not _be_ used. That doesn't mean it _couldn't_ be
>used. Indeed, in some cases it _will_have_been_ used.
So, the current owner would a) have worthless land? or just land without
value or b) be encouraged to abandon the land?
>>>>and if the tax is
>>>>high enough, it will be abandoned rather than held privately.
>>>
>>>No, its value will simply decline to the point where a user can pay
>>>the tax. Really, your orotund pronouncements of patently false
>>>nonsense are starting to convince people you are secretly a supporter
>>>of land taxation.
>>
>>But a user will only pay the tax if there is a potential income, if there
is
>>no way to produce income via the land, then it will become valuless.
>
>Right. But if there is a way to produce income from it, it will have
>value whether or not it is _actually_ producing income.
so...
>Marginal land has no value even if it _does_ have a potential use.
>
>You stand refuted.
...if it has a potential use, and therefore a way to produce income, it
would have value...
>>Your opinion is that all land has value,
>
>That is false. I have stated explicitly that sub-marginal land has no
>value, _whatever_its_use_.
....even if it can produce income....
>
>>and if it were affordable enough
>>(no speculation involved) that it would be put to productive use.
>
>I have stated explicitly that a land value tax would result in _less_
>land being used (first-order effect only -- in the long run, the
>resulting increased growth would result in sub-marginal land becoming
>usable sooner).
to reiterate...
>That is false. I have stated explicitly that sub-marginal land has no
>value, _whatever_its_use_.
...therefore, the sub-marginal land becoming useful, would still have no
value, and therefore, despite being used, no tax would be applied....
>>I don't disagree with the second part, but do with the first.
>
>You have, to put it kindly, misunderstood my repeated and I think
>clear statements.
When I studied land rent, I thought it was a great theory, but completely
unworkable in practice, the fact that you continue to believe it is workable
suggests that one of us is wrong.....
>>>>If my piece of land is taxed at $1 per sq ft, and it will take me $1000
>>>
>>>?? You mean $1K/sq.ft.?
>>
>>No, I mean $1 per sq ft. That means that the average home lot of 7,000
sq
>>ft would have a tax of $7k...that is very expensive.
>
>Not if the other taxes the owner is paying disappear.
>>>>to make it produce income of $150 per sq ft per year, then the tax is
>>irrelevant.
>>
>>>You mean, because you would be losing $850/yr? Or because the land is
>>>yielding $150 after expenses?
>>
>>Sorry, not being clear. If I need to invest $1000 per sq ft (one time) to
>>produce $150 per sq net annually...the $1/sq ft is irrelevant...a minor
cost
>
>OK, I understand that.
>
>>>>But if you tax me $150 per sq ft,
>>>>then the land would need to produce $300 per year for the same
return...if
>>>>its best use can only produce $200 per sq ft per year,
>>
>>>If it can yield $200/yr, why are you only using it to yield $150?
>>
>>Because it might take $2000 per sq ft investment to do so, and I don't
have
>>that much to start with.
>
>You are confused. Yield is calculated based on a consistent cost of
>capital, however much of it is employed.
I used the wrong term, instead of yield, use generate.
If my land can support a plant producing widgets that the sale of generates
$150 per sq ft of income for a capital outlay of $1000/sq ft or it can
support the same plant using equipment that adds to the capital outlay
another $1000/sq ft and the other equipment produces 33% more widgets but I
don't have the additional $1000/sq ft....I would have to be content with the
$150/sq ft of income.
You might suggest that I will have to figure a way to generate the
additional capital because the value is based on $200/sq ft income and the
tax would be higher...
>>>>it is not worth the
>>>>expenditure, and if owning the land is otherwise not useful, it will be
>>>>eventually abandoned.
>>>
>>>That is hopelessly confused.
>>
>>If the tax on the land makes it cost prohibitive to use it, I won't use
it.
>
>It can't. The tax is independent of the use, and so cannot, I repeat,
>_cannot_ increase the cost of use: the tax cost is the same whether
>the land is used or not.
>determined by the differential productivity of marginal and valuable
>land used for the same purpose, given identical inputs.
...........^^^^.........
If we both have same farms on 100 acres of land, and yours yields $1k per
acre and mine yields $500 per acre, the difference ($500 per acre), is what
YOU will pay a tax on because your 100 acres will be more valuable than mine
based on its ability to produce more income. (I want to be clear, that I
understand the tax is on the land value, not the actual $500 income
produced).
I have this correct?
>Marginal land has no value even if it _does_ have a potential use.
>
>You stand refuted.
>>You suggest that the value (and hence the tax) would fall until it becomes
>>viable to use.
>
>Or the value reaches zero, whichever comes first.
>
>>Ok, if there is no lag between the value changing and the
>>tax liability...
>
>That's just a mechanical detail. Such a tax would of course have to
>be phased in.
If we were all phased in...what happens to the property that is flooded and
is not usable for a year? Does the tax for that year go to zero?
>>But if the owner doesn't sell it....can he change the
>>value of the land.
>
>Depends on how the system is implemented. Normally not.
>>Remember, every piece of land in the US currently has an
>>owner, that will be faced with your plan (if it were implemented)....
>
>The problem is getting them to understand the benefits as well as they
>do the costs.
>>>If a parcel of land can yield at most $200/yr after capital and labor
>>>are paid for, then that is its rent. Any tax that recovers part of
>>>that rent just reduces the payment to the landowner. It doesn't
>>>affect the use. If the tax is high enough to recover the full $200,
>>>then the land value is zero, but the use remains exactly the same:
>>>it's the only way the owner can avoid losing money. A tax on land
>>>value cannot recover more than the rent, because that would make the
>>>value negative, and the tax would then become negative, too.
>>
>>Now you confused me....if the tax is high enough to recover the rent...how
>>can the land value be zero?
>
>How can it be more?
>
>>If the land value were zero, the tax would be
>>zero....
>
>The tax amount in such a case is not calculated from the land value
>but from e.g., bids for use. Funny things happen if you try to tax
WAIT A SEC....you said
>It can't. The tax is independent of the use, and so cannot, I repeat,
>Use does not determine value.
>land value at more than about 100%/yr, because transaction costs, etc.
>start to have huge effects on both the land value and the tax rate.
>All you can say is that the land value theoretically approaches zero
>as the tax rate goes to infinity. In practice, extremely high rates
>of tax based on land value are never used: the tax is just assessed on
>some other basis.
You mean, like it's use....the potential income....????
Tracy Coyle
tully wrote in message ...
> Now my 7 acres and 1920's vintage home is appraised at $98K and I'm
paying $550 tax a
> year, which is more than I'm willing to pay.
>The property tax rate I'm paying in NC is 58 cents per $100 valuation.
Because my property is valued higher, my comment that I will be paying 10
times your tax is based on dollar amounts, not tax rate....our rate is 2.49
per 100.
We also have an 11% income tax rate and 8.25% sales tax...
Tracy Coyle
ro...@telus.net wrote in message>...
> "Tracy Coyle" <tcc...@chorus.net> wrote:
>
>>ro...@telus.net wrote in message <3ea71501...@news.telus.net>...
>>>>
>>>>The two properties are in different areas, but are consistent with other
>>>>properties. The primary home was in a smaller community, the rental in
a
>>>>city.
>>>
>>>I still don't buy the story. In what US city can you buy a house for
>>>$75K?
>>
>>I will not say specifically, but the properties were purchased more than
10
>>years ago, the rental in a town of 200k people, the other in a town of
less
>>than 5k.
>
>Wait a minute. Are you saying those houses were _bought_ for those
>prices, or were _worth_ those prices? And on what basis were the
>taxes calculated?
The original purchase prices and the assessed values were almost the same
(about 5% difference)...this is a 100% value assessment district....but
property taxes 10 years ago were just under $1/100....now over $2 in most
areas...
>
>>I can't imagine paying only $550 in property taxes, especially since I
will
>>be paying almost 10 times that this year.
>
>You should be grateful you are so wealthy, and/or that you live in an
>area with such high property tax rates.
I am neither wealthy, nor happy that the property tax rates are so high....
Gary Forbis
> ro...@telus.net wrote...
>
> >"Tracy Coyle" <tcc...@chorus.net> wrote:
>
> >>Your words: pay the same tax on land independent of use.
> >
> >Right. No relationship to your claim of taxing land by area -- or
> >latitude, or elevation...
>
> >>Two parcels of land in Manhattan, both 1 acre. Both are taxed at
> >>the rate of 15% of value, both are valued the same, 1 million dollars.
> >>Tax is $150k each.
> >>Existing on one parcel is a 40 story building generating 15 million
> >>per year. The other parcel is a 20 story building generating 4.5
> >>millon per year.
> >>The first parcel has a mortgage, the second does not, both properties
> >>net $800k for their owners. In 15 years, the 40 story building mortgage
> >>will be paid off and the owner will net $2.1k...At that time, would
> >>the value of the property change?
> >
> >The land value would normally be increasing during that time, though
> >not monotonically.
>
> Why would it be increasing?
Because a land value tax makes it advatageous for one's neighbors to
put improvements on their land and this expands the economic possiblities
for your land.
> There is no speculation and the owners will
> work to minimize value changes not associated with increases in income
> otherwise the tax would increase as value increased...
The owner can't morally do anything about the improvements neighbors
put on their land. By increasing the income production from your land--
you're actually increasing the income from capital rather than the land,
but this is neither here nor there--you increase the economic possibilities
on your neighbor's land, makeing it more valuable.
> >>You are saying that it's potential use, or potential income, determines
> >>its value.
> >
> >Or rather the land rent. Right. Value is then related to rent by the
> >NPV equation.
> >
> >>>>Land has value NOT BECAUSE IT EXISTS, but because of its use.
> >>>
> >>>Now you claim a vacant lot has no value?
> >>
> >>Vacant land CAN have no value, if there is no USE for it.
> >
> >But vacant land can also be of immense value, which disproves your
> >claim.
>
> But if vacant land has immense value (which is determined by its ability to
> produce income) wouldn't it be in use?
Right now most of us work within a property tax system. This means people,
such as Seattle's Joe Diamond, can make money from a vacant lot by letting
people park on it. By taxing land value rather than property value these
vacant lots would not be economical. Parking lots would be multi-story
just like the other buildings since building up would be more economical
than building out.
There will always be cases where better use can be found for the land.
Sometimes a building is gutted by fire. Sometime a building is demolished.
There are ways to determine the land's value.
> >>It is the use that determines the value.
> >
> >No. Land's value is determined by a number of factors, including the
> >tax rate, the discount rate, and its economic rent. Economic rent is
> >determined by the differential productivity of marginal and valuable
> >land used for the same purpose, given identical inputs.
>
> If the tax liability is determined by a properties value, how can the tax
> rate help to determine it's value?
If one taxes the property it's economic value is decreased. If one taxes
the land it's economic value is decreased. If one stops taxing the
improvements their economic values increase.
> >>If the land is useful for grazing, it will
> >>remain vacant, but have some value, though very minimal. If the land is
> >>desert and of no use, then yes, it has no value.
> >
> >Marginal land has no value even if it _does_ have a potential use.
> >
> >You stand refuted.
>
> So, marginal land would be free for the taking? If it has no value, what
> use could it have? Unless the value you speak of is in part separate from
> the cost of purchasing the property...
If the costs to extract the use exceed the benefit the land will not used
even though the potential still exists. During the sixties several gold
mines were closed because gold was pegged at $35 per ounce and it would
cost $150 per ounce to extract it. The potential use still existed but
the owners had to wait for the price of gold to rise.
> >>>>Location, location, location...that is the value in land.
> >>>
> >>>So, now you cannot tell the difference between use and location.
> >>>You seem not to understand the difference between value and use.
> >>
> >>Location often determines the use of land, and therefore it's value.
> >
> >Use does not determine value.
>
> Can I not say that the ability to produce income is determined by the use?
You can but you would be wrong to say the potential ability to produce
income is determined by use. If you are conflating the two then you're
missing the point. For instance, given city wide occupancy rates and
rental rates, a 20,000sq ft office building has less ability to produce
income than a 40,000sq ft office building on the same land. Now there
comes a point were increased space just leads to decreased occupancy
and rental rates rather than increased ability to produce income.
> >>>>Where land exists
> >>>>determines it's ability to produce income. Any land with minimal income
> >>>>producing value will be left vacant regardless of the tax,
> >>>
> >>>That is false. Only sub-marginal land -- i.e., land which cannot
> >>>produce _any_ income -- will be left vacant. It is true that a land
>
> >>>Now you claim a vacant lot has no value?
> >>
> >>So, it seems, do you.
> >
> >No. Where have I said any such thing? I have merely said land with
> >no value will normally be left vacant.
>
> Here you say that land which cannot produce income will be left vacant,
> but....
>
> >Marginal land has no value even if it _does_ have a potential use.
> >
> >You stand refuted.
>
> ...doesn't a potential use have the capacity to produce income?
See my example above concerning gold mines.
> >>>tax, by stimulating more intensive use of valuable land, will normally
> >>>result in more of the least valuable land being left vacant. But that
> >>>is a _good_ thing, because it means capital and labor are being
> >>>applied where they will be most productive.
> >>
> >>Your words: "will normally result in more of the least valuable land
> >>being left vacant"
> >
> >Right. It will not _be_ used. That doesn't mean it _couldn't_ be
> >used. Indeed, in some cases it _will_have_been_ used.
>
> So, the current owner would a) have worthless land? or just land without
> value or b) be encouraged to abandon the land?
If the land has no value then it is effectivly abandoned. If it has
value but not to the current owner then the owner will sell it.
> >>>>and if the tax is
> >>>>high enough, it will be abandoned rather than held privately.
> >>>
> >>>No, its value will simply decline to the point where a user can pay
> >>>the tax. Really, your orotund pronouncements of patently false
> >>>nonsense are starting to convince people you are secretly a supporter
> >>>of land taxation.
> >>
> >>But a user will only pay the tax if there is a potential income,
> >>if there is no way to produce income via the land, then it will
> >>become valuless.
> >
> >Right. But if there is a way to produce income from it, it will have
> >value whether or not it is _actually_ producing income.
>
> so...
>
> >Marginal land has no value even if it _does_ have a potential use.
> >
> >You stand refuted.
>
> ...if it has a potential use, and therefore a way to produce income, it
> would have value...
Only if the cost to produce the income is less than the income produced.
> >>Your opinion is that all land has value,
> >
> >That is false. I have stated explicitly that sub-marginal land has no
> >value, _whatever_its_use_.
>
> ....even if it can produce income....
Absolutely.
> >>and if it were affordable enough
> >>(no speculation involved) that it would be put to productive use.
> >
> >I have stated explicitly that a land value tax would result in _less_
> >land being used (first-order effect only -- in the long run, the
> >resulting increased growth would result in sub-marginal land becoming
> >usable sooner).
>
> to reiterate...
>
> >That is false. I have stated explicitly that sub-marginal land has no
> >value, _whatever_its_use_.
>
> ...therefore, the sub-marginal land becoming useful, would still have no
> value, and therefore, despite being used, no tax would be applied....
If people actual use the land then it is not sub-marginal, except to the
extent people are irrational. Some will spend twenty to recover one
even though the net is negative nineteen.
> >>I don't disagree with the second part, but do with the first.
> >
> >You have, to put it kindly, misunderstood my repeated and I think
> >clear statements.
>
> When I studied land rent, I thought it was a great theory, but completely
> unworkable in practice, the fact that you continue to believe it is workable
> suggests that one of us is wrong.....
Yes. You even quoted Richardo without understanding what he wrote.
...
> If my land can support a plant producing widgets that the sale of generates
> $150 per sq ft of income for a capital outlay of $1000/sq ft or it can
> support the same plant using equipment that adds to the capital outlay
> another $1000/sq ft and the other equipment produces 33% more widgets but I
> don't have the additional $1000/sq ft....I would have to be content with the
> $150/sq ft of income.
>
> You might suggest that I will have to figure a way to generate the
> additional capital because the value is based on $200/sq ft income and the
> tax would be higher...
Yes. Why should society be content with your use of the commons when
others can increase its wealth by using the land more efficiently?
If the land truely has the potential to produce $200/sq ft income,
that is to say there is a market for 33% more widgets at the current
price, then investors can be found.
> >>>>it is not worth the
> >>>>expenditure, and if owning the land is otherwise not useful, it will be
> >>>>eventually abandoned.
> >>>
> >>>That is hopelessly confused.
> >>
> >>If the tax on the land makes it cost prohibitive to use it, I won't use
> >>it.
> >
> >It can't. The tax is independent of the use, and so cannot, I repeat,
> >_cannot_ increase the cost of use: the tax cost is the same whether
> >the land is used or not.
>
> >determined by the differential productivity of marginal and valuable
> >land used for the same purpose, given identical inputs.
> ...........^^^^.........
>
> If we both have same farms on 100 acres of land, and yours yields $1k per
> acre and mine yields $500 per acre, the difference ($500 per acre), is what
> YOU will pay a tax on because your 100 acres will be more valuable than mine
> based on its ability to produce more income. (I want to be clear, that I
> understand the tax is on the land value, not the actual $500 income
> produced).
>
> I have this correct?
Close. If others see the two farms as the same they will believe your
low yield was based upon your abilities to produce not the land's ability
to produce. If they see the farms as somehow different, for instance
your 100 acres lack water or are too rocky, then the difference will
yield different taxes. The problem is you say both have same farms
which leads me to believe the problem is your ability to produce.
> >Marginal land has no value even if it _does_ have a potential use.
> >
> >You stand refuted.
>
> >>You suggest that the value (and hence the tax) would fall until it becomes
> >>viable to use.
> >
> >Or the value reaches zero, whichever comes first.
> >
> >>Ok, if there is no lag between the value changing and the
> >>tax liability...
> >
> >That's just a mechanical detail. Such a tax would of course have to
> >be phased in.
>
> If we were all phased in...what happens to the property that is flooded and
> is not usable for a year? Does the tax for that year go to zero?
People have to cover their own risks. The value of the land looks forward
not backwards even though one looks at the past to look to the future.
Tracy Coyle
Gary Forbis wrote in message <>...
>"Tracy Coyle" <tcc...@chorus.net> wrote
>> ro...@telus.net wrote...
>>
>> >"Tracy Coyle" <tcc...@chorus.net> wrote:
>>
>> >>Your words: pay the same tax on land independent of use.
>> >
>> >Right. No relationship to your claim of taxing land by area -- or
>> >latitude, or elevation...
>>
>> >>Two parcels of land in Manhattan, both 1 acre. Both are taxed at
>> >>the rate of 15% of value, both are valued the same, 1 million dollars.
>> >>Tax is $150k each.
>> >>Existing on one parcel is a 40 story building generating 15 million
>> >>per year. The other parcel is a 20 story building generating 4.5
>> >>millon per year.
>> >>The first parcel has a mortgage, the second does not, both properties
>> >>net $800k for their owners. In 15 years, the 40 story building
mortgage
>> >>will be paid off and the owner will net $2.1k...At that time, would
>> >>the value of the property change?
>> >
>> >The land value would normally be increasing during that time, though
>> >not monotonically.
>>
>> Why would it be increasing?
>
>Because a land value tax makes it advatageous for one's neighbors to
>put improvements on their land and this expands the economic possiblities
>for your land.
So, my neighbor improves his property - uses it - and that increases my
property's value, thereby my tax? What economic benefit do I receive? I
can use his hot tub?
>> There is no speculation and the owners will
>> work to minimize value changes not associated with increases in income
>> otherwise the tax would increase as value increased...
>
>The owner can't morally do anything about the improvements neighbors
>put on their land. By increasing the income production from your land--
>you're actually increasing the income from capital rather than the land,
>but this is neither here nor there--you increase the economic possibilities
>on your neighbor's land, makeing it more valuable.
I beg to differ. I can lobby politicians, with the help of all my other
neighbors, to restrict the improvements on the land next door in such a way
as to minimize or even eliminate the possibility that anything done to the
property next door increase my tax....you know...zoning restrictions...
I want to do this because, under your plan, any increase in the value of my
property that does not directly increase the actual income it produces, is
detrimental to me...the owner....
>> >>You are saying that it's potential use, or potential income, determines
>> >>its value.
>> >
>> >Or rather the land rent. Right. Value is then related to rent by the
>> >NPV equation.
>> >
>> >>>>Land has value NOT BECAUSE IT EXISTS, but because of its use.
>> >>>
>> >>>Now you claim a vacant lot has no value?
>> >>
>> >>Vacant land CAN have no value, if there is no USE for it.
>> >
>> >But vacant land can also be of immense value, which disproves your
>> >claim.
>>
>> But if vacant land has immense value (which is determined by its ability
to
>> produce income) wouldn't it be in use?
>
>Right now most of us work within a property tax system. This means people,
>such as Seattle's Joe Diamond, can make money from a vacant lot by letting
>people park on it. By taxing land value rather than property value these
>vacant lots would not be economical. Parking lots would be multi-story
>just like the other buildings since building up would be more economical
>than building out.
You are implying that Joe Diamond is not paying any tax on that vacant lot
now....I would suggest he is...and by your plan...improvements would not
increase the tax because the tax is based on the land value, not the
improvements. Of course, if you imply that he could make much more income
from the land by making the capital investment in improvements and he would
have to do so to pay the increased tax on the land, then are you not saying
that it is the use - the potential income - that determines value....
Joe Diamond is using is vacant lot as a parking lot, he would still be using
it as a parking lot (in your example) but you are going to force him to
invest capital to make it produce more income...
>There will always be cases where better use can be found for the land.
>Sometimes a building is gutted by fire. Sometime a building is demolished.
Why? Isn't the idea of your plan to force landowners to find the best
use - as determined by potential income - of their land?
>There are ways to determine the land's value.
How? By it's potential uses?
>> >>It is the use that determines the value.
>> >
>> >No. Land's value is determined by a number of factors, including the
>> >tax rate, the discount rate, and its economic rent. Economic rent is
>> >determined by the differential productivity of marginal and valuable
>> >land used for the same purpose, given identical inputs.
>>
>> If the tax liability is determined by a properties value, how can the tax
>> rate help to determine it's value?
>
>If one taxes the property it's economic value is decreased. If one taxes
>the land it's economic value is decreased. If one stops taxing the
>improvements their economic values increase.
The improvements economic value increases.....but we are talking just about
the LAND....
I think you need to restate your last comment....I might be reading it wrong
but you said: if one taxes the land it's economic value is decreased....
In a previous post it was suggested that higher land taxes increased the
value of properties....was this wrong?
>> >>If the land is useful for grazing, it will
>> >>remain vacant, but have some value, though very minimal. If the land
is
>> >>desert and of no use, then yes, it has no value.
>> >
>> >Marginal land has no value even if it _does_ have a potential use.
>> >
>> >You stand refuted.
>>
>> So, marginal land would be free for the taking? If it has no value, what
>> use could it have? Unless the value you speak of is in part separate
from
>> the cost of purchasing the property...
>
>If the costs to extract the use exceed the benefit the land will not used
>even though the potential still exists. During the sixties several gold
>mines were closed because gold was pegged at $35 per ounce and it would
>cost $150 per ounce to extract it. The potential use still existed but
>the owners had to wait for the price of gold to rise.
But in this case, the tax on the land would be set based on the value of the
land and it would be based on....it's potential ability to produce
income...so the mine owners would be taxed, it would seem someway related to
the $35/ounce....
If the cost to extract the use exceeds the benefit, the land would be
vacant...abandoned...who would want the property if the only way to extract
the income costs more than income it produces...
>> >>>>Location, location, location...that is the value in land.
>> >>>
>> >>>So, now you cannot tell the difference between use and location.
>> >>>You seem not to understand the difference between value and use.
>> >>
>> >>Location often determines the use of land, and therefore it's value.
>> >
>> >Use does not determine value.
>>
>> Can I not say that the ability to produce income is determined by the
use?
>
>You can but you would be wrong to say the potential ability to produce
>income is determined by use. If you are conflating the two then you're
>missing the point. For instance, given city wide occupancy rates and
>rental rates, a 20,000sq ft office building has less ability to produce
>income than a 40,000sq ft office building on the same land. Now there
>comes a point were increased space just leads to decreased occupancy
>and rental rates rather than increased ability to produce income.
So, if I have a building that is producing sufficient income to pay taxes
and derive benefit, I would try to prevent my neighbor from building in such
a way as to reduce my occupancy rate....we are talking about land
restrictions....but it would NOT change the ability to produce income. The
land with the 20k sq ft would be taxed in such a way as to promote a 40k sq
ft building because it's value is determined on its potential to produce
income EVEN THOUGH it is detrimental in the long run...
>> >>>>Where land exists
>> >>>>determines it's ability to produce income. Any land with minimal
income
>> >>>>producing value will be left vacant regardless of the tax,
>> >>>
>> >>>That is false. Only sub-marginal land -- i.e., land which cannot
>> >>>produce _any_ income -- will be left vacant. It is true that a land
>>
>> >>>Now you claim a vacant lot has no value?
>> >>
>> >>So, it seems, do you.
>> >
>> >No. Where have I said any such thing? I have merely said land with
>> >no value will normally be left vacant.
>>
>> Here you say that land which cannot produce income will be left vacant,
>> but....
>>
>> >Marginal land has no value even if it _does_ have a potential use.
>> >
>> >You stand refuted.
>>
>> ...doesn't a potential use have the capacity to produce income?
>
>See my example above concerning gold mines.
The land tax would be based on the potential income produced, not on the
cost of the improvements to extract it...because the land has the potential
to produce income, it has value, therefore a tax would be applied...right?
So, the value is based on potential NET INCOME, not potential gross
income....
so...if my 20k sq ft building produces exactly the same NET INCOME as the
property next door with a 40k sq ft building, our tax would be the same,
even if his building has higher costs....
>> >>Your opinion is that all land has value,
>> >
>> >That is false. I have stated explicitly that sub-marginal land has no
>> >value, _whatever_its_use_.
>>
>> ....even if it can produce income....
>
>Absolutely.
So, if I can extract net income, somehow, I don't have to worry about paying
taxes on land you consider (who makes the determination?) sub-marginal....
>> >>and if it were affordable enough
>> >>(no speculation involved) that it would be put to productive use.
>> >
>> >I have stated explicitly that a land value tax would result in _less_
>> >land being used (first-order effect only -- in the long run, the
>> >resulting increased growth would result in sub-marginal land becoming
>> >usable sooner).
>>
>> to reiterate...
>>
>> >That is false. I have stated explicitly that sub-marginal land has no
>> >value, _whatever_its_use_.
>>
>> ...therefore, the sub-marginal land becoming useful, would still have no
>> value, and therefore, despite being used, no tax would be applied....
>
>If people actual use the land then it is not sub-marginal, except to the
>extent people are irrational. Some will spend twenty to recover one
>even though the net is negative nineteen.
So whether or not it is sub-marginal or not is dependent on use?
>> >>I don't disagree with the second part, but do with the first.
>> >
>> >You have, to put it kindly, misunderstood my repeated and I think
>> >clear statements.
>>
>> When I studied land rent, I thought it was a great theory, but completely
>> unworkable in practice, the fact that you continue to believe it is
workable
>> suggests that one of us is wrong.....
>
>Yes. You even quoted Richardo without understanding what he wrote.
One of you suggested that Richardo was wrong...
>> If my land can support a plant producing widgets that the sale of
generates
>> $150 per sq ft of income for a capital outlay of $1000/sq ft or it can
>> support the same plant using equipment that adds to the capital outlay
>> another $1000/sq ft and the other equipment produces 33% more widgets but
I
>> don't have the additional $1000/sq ft....I would have to be content with
the
>> $150/sq ft of income.
>>
>> You might suggest that I will have to figure a way to generate the
>> additional capital because the value is based on $200/sq ft income and
the
>> tax would be higher...
>
>Yes. Why should society be content with your use of the commons when
>others can increase its wealth by using the land more efficiently?
>If the land truely has the potential to produce $200/sq ft income,
>that is to say there is a market for 33% more widgets at the current
>price, then investors can be found.
But the return on the second $1000 would be considerably less than the
initial $1000:
first $1000 earns $150
second $1000 earns $50
as an investor, I might buy into the first round, but definitely not the
second....
So, if your first observation is correct, I am a lousy farmer, my tax is the
same as the other farms, but if the second is correct, my land is less
productive, then my tax will be less... How is this determined? Neither
of us has, or ever will have, the desire to sell the farms (in the families
for generations).
>> >Marginal land has no value even if it _does_ have a potential use.
>> >
>> >You stand refuted.
>>
>> >>You suggest that the value (and hence the tax) would fall until it
becomes
>> >>viable to use.
>> >
>> >Or the value reaches zero, whichever comes first.
>> >
>> >>Ok, if there is no lag between the value changing and the
>> >>tax liability...
>> >
>> >That's just a mechanical detail. Such a tax would of course have to
>> >be phased in.
>>
>> If we were all phased in...what happens to the property that is flooded
and
>> is not usable for a year? Does the tax for that year go to zero?
>
>People have to cover their own risks. The value of the land looks forward
>not backwards even though one looks at the past to look to the future.
So, I need to have income protection insurance....the land may be able to be
used in the future, but all the improvements are gone, so I need more
capital to restock the land....if I don't, I have to sell or abandon the
land....
So, you would agree that there is no real mechanism for land to decrease in
value....
Tracy Coyle
ro...@telus.net wrote in message <...
>"Tracy Coyle" <tcc...@chorus.net> wrote:
>
>>Gary Forbis wrote in message ...
>>
>>>"Tracy Coyle" <tcc...@chorus.net> wrote ...
>>
>>>> Because if YOU DON'T, then you are saying that some land is more
valuable
>>>> than other land, and then you are taxing not the land, but its USE.
>>>
>>>No, it's potential use as determined by market value.
>>
>>So, market value is determined by the potential use,
>
>Among other things.
>
>>location being a component of that, correct?
>
>Right.
So location and potential use are factors in determining value.
>>>> If you
>>>> do tax the land, regardless of its current or best use, then you will
have
>>>> to find some median point, and that will make the Manhattan land so
much
>>>> more valuable (and you will not recover that value) and you will force
land
>>>> that is used for farming and grazing so much more expensive as to make
it
>>>> too expensive for all but richest owners.
>>>
>If density is increased in the city, less land is needed for office
>buildings. And it's much easier to double the height of a building
>than to double per-acre crop yields.
But current owners might object to increasing density as it will affect
their income, and if the potential income drops, doesn't the value of the
land?
A big issue I would say....I wouldn't want neighboring land owners to do
anything that a) increases the value of my property and/or b) decreases the
potential earnings of my property.
>>>> If my piece of land is taxed at $1 per
>>>> sq ft, and it will take me $1000 to make it produce income of $150 per
sq ft
>>>> per year, then the tax is irrelevant. But if you tax me $150 per sq
ft,
>>>> then the land would need to produce $300 per year for the same
return...if
>>>> its best use can only produce $200 per sq ft per year, it is not worth
the
>>>> expenditure, and if owning the land is otherwise not useful, it will be
>>>> eventually abandoned.
>>>
>>>And the value will drop until some one finds it advantageous to own it
>>>and use it.
>>
>>Or not.
>
>Wrong. There is no "or not" about it. The tax will be paid, or the
>land will go to someone else. Period.
If the land is marginal, if no one wants to spend the capital, the value
will continue to drop. The potential income is NET correct?
>>>It doesn't make any sense for you to own the land if your best use is
>>>$200 per sq ft per year but the market indicates $300 per sq ft per year
>>>is reasonable (or possibly that they are willing to accept the lower
>>>return on investemnt.)
>>
>>Land is not the only cost involved in producing income. The capital
>>investment required to produce $300 may not be available.
>
>Then the land should be in the hands of someone who can use it more
>productively.
It is not just being more productive, it is also the cost of capital. If
the return on a capital investment is good at $200, the return on additional
$100 capital must be at least as good...ever heard of diminishing returns?
Just because something can produce $300/sq ft, doesn't mean it is profitable
to do so...from an investment point of view.
>>....your suggestion
>>would be to sell the property to someone that can provide the capital
>>investment for the production of $300.
>
>Right. That's how the whole society becomes wealthier.
>
>>...but if $200 is a good investment and a good living...what is wrong with
that?
>
>It may be good for the landholder, but bad for others.
Explain how it could be bad for others...
>>It doesn't use the land most efficiently, right?
>
>Right.
By who's definition? The marketplace? How does the marketplace value the
land? By it's potential use, right?
Tracy Coyle
ro...@telus.net wrote
So, we are talking speculation, wouldn't I sell the property based on the
potential income thereby capturing the entire value of the land?
>>Both of you have suggested that the value associated with the property is
>>based on the potential income it can generate....ie, the more income
>>generated, the more valuable the land,
>
>No, please try to keep your eye on the ball: the more _potential_
>income that _could_ be generated, the more valuable the land.
My mistake, I left out the implied "potential' in the second part of that
statement.
>>the higher the tax. Why do you have
>>properties with different values....that you would use to generate the
same
>>income on?
>
>Because he is not the most productive user that could use that land.
>That is the point.
But the values would be the same because the potential income is the
same....you couldn't have a plot worth 100k and one worth 50k if the
potential income is the same for both...
>>>> but the land tax movement considers land value
>>>> to be more than the dirt...and that is not mickey mouse...
>>>
>>>Don't try to slip improvements in here. I'm not talking about a property
>>>tax. I'm talking about a land value tax. Now while certain improvements
>>>increase your land's value these improvements are typically not the one's
>>>you make to your land but rather the improvements made by others to their
>>>land.
>>
>>Why would anyone, in this situation, make improvements on their property
>>that you benefit from without compensation?
>
>Because they also have the same incentive to use the land as
>productively as possible. Usually, that means making improvements.
>They would only be compensated indirectly, as consumers of public
>services, for the additional value they created on your land.
How does a neighboring piece of land with a factory producing 100k income,
where the factory is demolished and replaced with one producing 150k income
add value to my land if I am using it most efficiently?
>>After all, if the improvements
>>increase the value of the land - and we are speaking not of stock, or
>>personal improvements - and therefore increase the tax, wouldn't people
>>avoid making such improvements
>
>No, because the increased land value would be on _neighboring_ land,
>not their own land.
But wouldn't I try to stop such development? I am not interested in
increasing the value of my land...
>> - unless they directly support income generation.
>
>Right. Land value taxation would direct capital into its most productive
avenues.
But improvements on my neighbors land do not increase my ability to produce
income...
>>...and if so, how would that increase your value?
>
>?? Land surrounded by improved land is worth more than land
>surrounded by unimproved land or derelict improvements.
Why, it doesn't change my ability to produce income if I have already
developed my land most efficiently...?
>>Under this plan, I would avoid ALL improvements that affect the land
value,
>
>Nope. You'd make exactly the impovements needed to use your land most
>productively.
And not one $ more....
>>and try to impose restrictions on landowers around me from doing the same.
>
>You can't do that in a free country.
But if all my neighbors join me, we can restrict the use of the neighbors
land to prevent any increase in our values...
>And you're not getting it: the increased land value resulting from
>improvements on neighboring parcels denotes an increased benefit
>_equal_ to the increased tax cost.
Says who!? I can't capture that increased land value unless I sell my
property, but if it is already being used efficiently, the increased value
is not based on potential income, but some other factor....and that means
the tax increase goes directly to my bottom line...
>>Anything that increased the value of my property - with all the
improvements
>>designed to generate a specfic income - would affect my overall income
>>because the increased value (and therefore tax) would reduce my income.
>
>The increased value resulting from nearby improvements also increases
>your income potential. If you can't use that potential, maybe it's
>time to yield the land to someone who can.
If I have made improvements to the most efficient use, any other nearby
improvements will not increase my income potential...but would my value?
Harry
> "rbbomber" <rbbo...@netzero.com> wrote in message
> news:7e483417.03041...@posting.google.com...
> > Lebanon (PA) Daily News
> >
> > Middle class vanishing species in U.S.
>
> One of the reasons for the vanishing middle class is, the high end are
> moving into the upper class. Its the same old story some people see the
> glass as half empty while others see it as half full.
Didn't bother reading the posting, did you? I know that Rush
encourages you guys to open your mouth totally unencumbered by any
knowledge or rational thought, but you look so....so....STUPID when
you respond to something you obviously haven't read.
But maybe Rush will read you the article next week if it appears in
the Weekly Standard (Rupert Murdoch), the NY Post (Rupert Murdoch),
the Washington Times (Reverend Moon and KCIA) or the Drudge Report. I
know you guys don't like to read.
Jim Austin
> Lebanon (PA) Daily News
> Middle class vanishing species in U.S.
> Thursday, April 10, 2003 -
> By PAUL HEISE
> When the Democrats complain of the unequal effect of the Bush tax
> cuts, they are dismissed with the claim that it is just the Democrats
> fomenting class warfare.
As indeed it is.
> Everyone should know by now that more than 50 percent of the proposed
> $300 billion to $700 billion tax cut is going to the richest 2 percent
> of the population.
Capitalism produces abundance through private capital in private
hands, specifically, a whole lot of capital in private hands. Those
who resent private capital in private hands resent abundance per se.
An alternate method has been tried involving capital in public hands.
If that were a working method, then the Soviet Union would have been a
great, prosperous nation rather than just a bad memory.
> Class is a tricky concept, especially here in America. Most Americans
> don't think of themselves as rich nobles telling others what to do.
> Nor do we think of ourselves as destined to be poor and told what to
> do. Most Americans consider themselves to be in the middle. A middle
> class, as we understand it, can only exist where there is economic
> security and political independence. Otherwise, you have to have
> someone taking care of you and telling you what to do.
Like a socialist dictator.
> The middle class is now in danger because it is being squeezed
> between a stagnant economy with its falling standard of living and
> corporate power over their political choices.
During the 1960s, "middle class" was a pejoritive term. Left wing
denunciations of the rich was expanded to include the middle class.
Impressionable students attending college during that period are now
in policy making positions throughout federal, state and local
governments. The squeezing of the middle class represents success of
policies having their intended effects.
> The idea of middle class was born with American democracy. Thomas
> Jefferson envisioned the idea of a great American middle class made up
> of independent farmers. Farming would guarantee economic independence,
> while ownership of the farm property would guarantee political
> independence. Jefferson bought the Louisiana Territory because he
> wanted enough land for every American for many generations.
Jefferson was more or less a believer of laissez faire, whether it was
his effort to keep government spending down or opposing a national
bank.
> America achieved Jefferson's dream of that economic and political
> independence in the 19th century when we were a nation of farmers
> plowing up ever more of the frontier. Then railroads opened distant
> markets, and the farm produce flowed to the world.
The 19th Century was also the period of the industrial revolution.
> The success and sheer size of this economy, however, demanded larger
> units, and the family farm began its long decline.
In this context, the decline was in the number of family members in
each family; that is, it want from an extended family to a nuclear
family. That means, when married couples had the option, they got away
from their parents, grandparents, aunts, uncles, etc.
> Dust bowls and depression finally doomed the farming middle class.
> Now only about 2.5 percent of the people actually work on farms. In a
> recent 25-year period the number of family farms declined by another
> 29 percent.
Most of the farmers were not middle class. They were poor. The working
class consisted largely of people who had left the farms to earn more
in the factories.
> The rebuilding of the middle class after World War II came from the
> ideals, the hard work and the no-nonsense attitude of "The Greatest
> Generation" in "The Best Years of Our Lives." In the heyday of the
> 1950s and '60s, we could rebuild the middle class because these people
> were secure in an economy that rewarded productivity, loyalty and
> stability.
Several thing were going on after World War II.
1. The New Dealers themselves became more friendly towards business
that had produced massive amounts of weaponry that allowed the Allies
to overwhelm the enemy through sheer numbers of boats, planes, tanks,
guns, etc. This led to a friendlier regulatory atmosphere.
2. The generation previous to "The Greatest Generation", the Lost
Generation, had gain political ascendancy during the 1940s. That was
the generation who had fought in World War I, raised hell during the
Roaring 20s, and were the isolationists of the 1930s. Being the
hardest hit by the Great Depression which caught them during their
peak earning years, they benefited least from New Deal programs,
largely because they didn't want it.
When the Lost Generation dominated the House of Representatives after
the 1936 election, there were no more new New Deal programs, not until
the mid 1960s. By the 1940s, FDR was forced to run up record number of
vetos to defend his New Deal. After World War II, the Lost-dominated
Congress forced budget surpluses over President Truman's objections.
Interestingly enough, Truman's appointees to the Federal Reserve Board
were tight-money men, one of whom, William McCheasney Martin,
dominated the Fed up until 1969, continually taking the heat from
Democratic congressmen as well as from JFK and LBJ for not inflating
the currency fast enough.
Thus after World War II, there were budget surpluses, friendly
regulatory environment, tight money and lower taxes. What followed was
the greatest economic expansion the world had ever seen, an expansion
that continued up to the late 1960s, early 1970s.
> Individual workers had the security of a union job and a wage tied to
> their productivity.
Actually, only about 25 percent of the workers had union jobs.
> Industry had the guarantee of stable demand, as the Cold War could be
> invoked as an excuse to prop up the economy whenever it faltered.
Industrialists had more freedom to make basic economic decisions and
could keep more of their profits than they do nowadays.
> The interstate highway system got past anti-government attitudes as
> "The Defense Highway Act."
The interstate highway system was Ike's pet project. While liberals
point to highways as among the benefits of big government, nowadays,
they tend to become grudging and stingy when it comes to spending for
more highway construction.
> The number and percentage of people who felt that they could realize
> the middle-class dream -- a nice house and a good school outside the
> crowded city and security in a health plan and retirement -- included
> the largest portion of America. A secure job replaced the farm as the
> base for economic security and political independence.
> Unfortunately, the prosperity and growth did not last, and the
> volatility of the 1970s and '80s undermined both the political and
> economic independence on which it all rested.
The Greatest Generation achieved numerical dominance in the Congress
after the 1958 election. They immediately set about passing New Deal
legislation that had languished the previous two decades. However,
committee chairs were still held by Lost Generation types who kept
such legislation bottle up until the mid 1960s.
Under Johnson and Nixon administrations, there was a huge expansion of
the federal government. State governments similarly expanded. The
cumulative effects of government expansion, more taxes, more
regulatory agencies, more regulations, more government workers, served
to eat up the capital needed to keep the economic expansion going.
The greatest economic expansion the world had ever known came to an
end.
> Now the middle class is dividing into two groups. One group easily
> spends $20,000 extra for a prestige auto or SUV, and the other group
> buys and drives a used car. In one group, the women work because they
> have careers and nannies. In the other, the women work to make ends
> meet, and they can't really afford the baby-sitter.
Notice the disapproval of "prestige auto or SUV" and "nannies". Policy
makers are driven by such disapprovals.
> The division is clear, pervasive and widening. Hourly wages have not
> grown since the 1970s, even as salaries have exploded upward. When all
> taxes are considered, the poorest 20 percent pay the same percent of
> their income in taxes as the richest 20 percent. The minimum wage has
> fallen relative to other wages.
When the economic crisis of the 1970s hit, the liberal contingent
could hardly contain their enthusiasm. "What America really needs is
more shortages," roared liberal columnist James Reston in 1974. "It's
not our shortages but our surpluses that are hurting us...Americans
have always been able to handle austerity and even adversity;
prosperity is what's doing us in."
Liberal politicians were more circumspect, but California Governor
Jerry Brown was telling us that we had to lower our expectations.
> While $400,000 housing developments are spreading across the farmland,
> trailer parks are mushrooming along the back roads.
There is political resistance to low cost housing developments. There
is resistance to housing developments in general as local government
have adopted no-growth or slow-growth policies.
> Practically the entire increase in output recorded since 1980
> has gone to the richest 20 percent of the population.
Output of what? Production? I don't think so. Recent new products like
cellular phones, PCs, CD players, DVD players, etc. have found their
way to a wide portion of the population.
> The recognition of this separation of Americans into two groups is
> what the Republicans dismiss as class warfare. That epithet does not
> make the facts go away.
Class warfare doesn't refer to class divisions per se. It refers to
the notion that one class can benefit at the expense of another, that
one class should benefit at the expense of another.
> When the Social Security tax on wages was nearly doubled in the
> 1980s, it was done to hide the deficit caused by the income-tax cuts
> for the rich.
Social Security was a pyramid scheme where each generation of retirees
require a larger generation of workers to pay into the system. The
Social Security tax hikes were passed to avoid projected shortfalls
resulting from the younger generation not being numerous enough to
support retirees at current Social Security tax rates.
However, it is true that much of the increased Social Security revenue
was diverted into federal discretionary spending, with federal IOUs
left in the place of the new funds, and that diversion does have the
effect of obscuring the true size of the federal deficit.
It doesn't mean there was some vast conspiracy. More likely, it was a
matter of political pragmatism, of going the way of least resistance,
of never looking beyong the impending split second.
> The Reagan, and now Bush, tax cuts damage the middle class economically,
> but they are not the whole story. The political aspects are related and
> as serious.
No. It's been the ever increasing taxes that have damaged the middle
class.
> The political independence of the middle class is a victim of the
> corporate agenda that the tax cuts support: Free trade, mobile
> investment, down-sizing, out-sourcing to low wage countries, deceptive
> profit accounting, energy-cost manipulation and the investment analysts'
> touting of worthless stocks. The CEOs and large stockholders took theirs
> up front; the hoped-for independence you saw in a 401(k) and pension or
> mutual funds took the hit.
Here, Heise attributes all that that has going wrong to a deliberate
agenda of the rich. But this is just something that left wingers
assert over and over again.
> The relative declines in income diminish economic independence. The
> corporate agenda diminishes political independence. The tax cut now
> moving through the Congress is not structured to act as a stimulus,
> nor will it act as a supply-side incentive for the rich to invest. It
> will be paid for with the security and independence of those who are
> slipping downward out of the middle class.
In terms of whose agenda is involved, one need only to look at the
political faction that regards prosperity and abundance as bad things,
who say they regard properity and abundance as bad, who activly wishes
to reduce people's standard of living.
One needn't look beyond the liberal contingent. As one their heros,
John Steinback, said, "We now face the danger which in the past has
been the most destructive to [nations]. Success, plenty, comfort and
ever-increasing leisure: no dynamic people have ever survived these
dangers."
Heise himself expressed his disapproval of SUVs, nannies and $400,000
homes. What we see is his disapproval being translated into policy.
Disdain for prosperity and abundance has always been an undercurrent
of liberal-left thought.
Since the time of Rousseau, left wing political thought has held that
science is bad, that technology is bad, that industrialization is bad,
that affluence and prosperity are bad, that innocence is to be found
in primitive existence.
This view often gets expressed in movies like "Jurassic Park" where
the character played by Jeff Goldblum refers to scientific discovery
as the "rape of the natural world."
The environmental movement is the current expression of this view.
Indeed, they've decided that humanity itself is bad for the planet.
"The ending of the human epoch on Earth would most likely be greeted
with a hearty 'Good riddance!'", said environmentalist Paul Taylor in
"Respect for Nature: A Theory of Environmental Ethics."
Liberals are not driven by compassion for the poor, and certainly not
the middle class. They are driven by resentment. Their resentment of
the rich is just a limited expression of a wider resentment toward
those not poor. Indeed, among environmental types, that resentment
extends to all humanity.
> ------------
> A Mt. Gretna resident, Heise holds a Ph.D. in economics and is
> professor of economics at Lebanon Valley College.
Figures.
???????
nice piece of writing, Jim. Thanks
"Jim Austin" <b...@ix.netcom.com> wrote in message
news:bc3dd28f.03042...@posting.google.com...
ro...@telus.net
>rbbomber wrote:
>
>> Lebanon (PA) Daily News
>
>> Middle class vanishing species in U.S.
>
>> Thursday, April 10, 2003 -
>
>> By PAUL HEISE
>
>> When the Democrats complain of the unequal effect of the Bush tax
>> cuts, they are dismissed with the claim that it is just the Democrats
>> fomenting class warfare.
>
>As indeed it is.
Right. The Republicans are too busy waging it...
>> Everyone should know by now that more than 50 percent of the proposed
>> $300 billion to $700 billion tax cut is going to the richest 2 percent
>> of the population.
>
>Capitalism produces abundance through private capital in private
>hands, specifically, a whole lot of capital in private hands. Those
>who resent private capital in private hands resent abundance per se.
Nonsense. A free economy produces abundance by rewarding competing
producers according to their productivity as measured by the market.
It is the freedom to produce and to keep or trade what one produces
that creates abundance, not private appropriation and ownership of
what was not privately produced.
>An alternate method has been tried involving capital in public hands.
That is the false dichotomy that must be extinguished before
understanding can occur. Private ownership of what is privately
produced creates abundance. Private ownership of what is publicly
produced creates injustice, increasing inequality, and eventually
stagnation or instability and collapse.
>If that were a working method, then the Soviet Union would have been a
>great, prosperous nation rather than just a bad memory.
One word, pal: China. They are getting rich stripping the USA's
industrial core, and they are not going to stop just because you say
what they are doing can't work.
>> The idea of middle class was born with American democracy. Thomas
>> Jefferson envisioned the idea of a great American middle class made up
>> of independent farmers. Farming would guarantee economic independence,
>> while ownership of the farm property would guarantee political
>> independence. Jefferson bought the Louisiana Territory because he
>> wanted enough land for every American for many generations.
>
>Jefferson was more or less a believer of laissez faire, whether it was
>his effort to keep government spending down or opposing a national
>bank.
He also opposed the Federalists, Madison and Hamilton, who favored
rule by a moneyed aristocracy.
>> Industry had the guarantee of stable demand, as the Cold War could be
>> invoked as an excuse to prop up the economy whenever it faltered.
>
>Industrialists had more freedom to make basic economic decisions and
>could keep more of their profits than they do nowadays.
The corporate share of government revenues has fallen by 2/3.
>> The recognition of this separation of Americans into two groups is
>> what the Republicans dismiss as class warfare. That epithet does not
>> make the facts go away.
>
>Class warfare doesn't refer to class divisions per se. It refers to
>the notion that one class can benefit at the expense of another, that
>one class should benefit at the expense of another.
Like the rich benefit at the expense of working people. Right.
>> The Reagan, and now Bush, tax cuts damage the middle class economically,
>> but they are not the whole story. The political aspects are related and
>> as serious.
>
>No. It's been the ever increasing taxes that have damaged the middle
>class.
No, the _shifting_ of the tax burden off of wealth and the associated
unearned income and onto working people's earnings.
>> The political independence of the middle class is a victim of the
>> corporate agenda that the tax cuts support: Free trade, mobile
>> investment, down-sizing, out-sourcing to low wage countries, deceptive
>> profit accounting, energy-cost manipulation and the investment analysts'
>> touting of worthless stocks. The CEOs and large stockholders took theirs
>> up front; the hoped-for independence you saw in a 401(k) and pension or
>> mutual funds took the hit.
>
>Here, Heise attributes all that that has going wrong to a deliberate
>agenda of the rich. But this is just something that left wingers
>assert over and over again.
It's easier to understand it as the natural working out of the rich's
preference for unearned over earned income.
>Disdain for prosperity and abundance has always been an undercurrent
>of liberal-left thought.
Probably a result of mistaking the direction of the relationship
between great wealth and exploitive, destructive, immoral behavior.
>Liberals are not driven by compassion for the poor, and certainly not
>the middle class. They are driven by resentment. Their resentment of
>the rich is just a limited expression of a wider resentment toward
>those not poor.
Garbage. The beneficiaries of injustice are always quick to label its
opponents as "resentful" or "jealous" or "envious."
It's a bit ripe when soi-disant American "patriots" wrap themselves in
the flag and then decry as "resentment" the very egalitarian impulse
that created the USA in the first place.
Time to re-read Thomas Paine, pal. If you ever read him in the first
place, that is.
-- Roy L
ro...@telus.net
wrote:
>tully wrote in message ...
>
>> Now my 7 acres and 1920's vintage home is appraised at $98K and I'm
>paying $550 tax a
>> year, which is more than I'm willing to pay.
>
>>The property tax rate I'm paying in NC is 58 cents per $100 valuation.
>
>Because my property is valued higher, my comment that I will be paying 10
>times your tax is based on dollar amounts, not tax rate....our rate is 2.49
>per 100.
>
>We also have an 11% income tax rate and 8.25% sales tax...
That's pretty odd. What do they do with all that money?
-- Roy L
ro...@telus.net
wrote:
>ro...@telus.net wrote in message <...
>
>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>
>>>Gary Forbis wrote in message ...
>>>
>>>>"Tracy Coyle" <tcc...@chorus.net> wrote ...
>>>
>>>>> Because if YOU DON'T, then you are saying that some land is more
>valuable
>>>>> than other land, and then you are taxing not the land, but its USE.
>>>>
>>>>No, it's potential use as determined by market value.
>>>
>>>location being a component of that, correct?
>>
>>Right.
>
>So location and potential use are factors in determining value.
Of course.
>>>>> If you
>>>>> do tax the land, regardless of its current or best use, then you will
>have
>>>>> to find some median point, and that will make the Manhattan land so
>much
>>>>> more valuable (and you will not recover that value) and you will force
>land
>>>>> that is used for farming and grazing so much more expensive as to make
>it
>>>>> too expensive for all but richest owners.
>>>>
>>If density is increased in the city, less land is needed for office
>>buildings. And it's much easier to double the height of a building
>>than to double per-acre crop yields.
>
>But current owners might object to increasing density as it will affect
>their income, and if the potential income drops, doesn't the value of the
>land?
Increased density nearby almost always increases income potential.
>>>Unfortunately, land USE rules in many areas do not permit that. You will
>>>suggest no doubt that such rules would be inconsistent with your overall
>>>plan....however, in Arden New Jersey the 'trust' has restricted density
>>>levels.
>>
>>Land use rules are a related but different issue.
>
>A big issue I would say....I wouldn't want neighboring land owners to do
>anything that a) increases the value of my property
Cutting off your nose to spite your face.
>and/or b) decreases the
>potential earnings of my property.
Government is with you there....
>>>>> If my piece of land is taxed at $1 per
>>>>> sq ft, and it will take me $1000 to make it produce income of $150 per
>sq ft
>>>>> per year, then the tax is irrelevant. But if you tax me $150 per sq
>ft,
>>>>> then the land would need to produce $300 per year for the same
>return...if
>>>>> its best use can only produce $200 per sq ft per year, it is not worth
>the
>>>>> expenditure, and if owning the land is otherwise not useful, it will be
>>>>> eventually abandoned.
>>>>
>>>>And the value will drop until some one finds it advantageous to own it
>>>>and use it.
>>>
>>>Or not.
>>
>>Wrong. There is no "or not" about it. The tax will be paid, or the
>>land will go to someone else. Period.
>
>If the land is marginal, if no one wants to spend the capital, the value
>will continue to drop.
If it is truly _marginal_, then the value is zero, and we don't
actually care if anyone uses it.
>The potential income is NET correct?
Yes.
>>>>It doesn't make any sense for you to own the land if your best use is
>>>>$200 per sq ft per year but the market indicates $300 per sq ft per year
>>>>is reasonable (or possibly that they are willing to accept the lower
>>>>return on investemnt.)
>>>
>>>Land is not the only cost involved in producing income. The capital
>>>investment required to produce $300 may not be available.
>>
>>Then the land should be in the hands of someone who can use it more
>>productively.
>
>It is not just being more productive, it is also the cost of capital.
You said "not available." Not "too costly." Make up your mind.
>If
>the return on a capital investment is good at $200, the return on additional
>$100 capital must be at least as good...ever heard of diminishing returns?
<yawn> Ever heard of consistent assumptions?
>Just because something can produce $300/sq ft, doesn't mean it is profitable
>to do so...from an investment point of view.
You're not making sense, because you are not assuming a consistent
cost of capital.
>>>....your suggestion
>>>would be to sell the property to someone that can provide the capital
>>>investment for the production of $300.
>>
>>Right. That's how the whole society becomes wealthier.
>>
>>>...but if $200 is a good investment and a good living...what is wrong with
>that?
>>
>>It may be good for the landholder, but bad for others.
>
>Explain how it could be bad for others...
If the land is used suboptimally, wealth is inefficiently going
uncreated. Everyone is poorer for that, including the landholder, but
he may prefer his leisure to productive effort and competition.
>>>It doesn't use the land most efficiently, right?
>>
>>Right.
>
>By who's definition? The marketplace?
Right.
>How does the marketplace value the
>land? By it's potential use, right?
No, it's potential income relative to marginal land.
-- Roy L
Tracy Coyle
ro...@telus.net wrote in message ...
>"Tracy Coyle" <tcc...@chorus.net> wrote:
Good question, especially with the politicians scrambling to fill a 2.8
billion budget deficit for this next cycle.
???????
as opposed to your own PERCEIVED best interest????? :)
>
>
>
>
>
>
guy tedesco
> > extends to all humanity.
> >
> > > ------------
>
> > >
generalization about people that want to preserve the beauty of nature
instead of seeing an endless urban-surburban sprawl
Tracy Coyle
ro...@telus.net wrote in message ...
>Tracy Coyle" <tcc...@chorus.net> wrote:
>
>>ro...@telus.net wrote in message <...
>>
>>>"Tracy Coyle" <tcc...@chorus.net> wrote:
>>>
>>>>>No, it's potential use as determined by market value.
>>>>
>>>>location being a component of that, correct?
>>>
>>>Right.
>>
>>So location and potential use are factors in determining value.
>
>Of course.
>
>>>If density is increased in the city, less land is needed for office
>>>buildings. And it's much easier to double the height of a building
>>>than to double per-acre crop yields.
>>
>>But current owners might object to increasing density as it will affect
>>their income, and if the potential income drops, doesn't the value of the
>>land?
>
>Increased density nearby almost always increases income potential.
A parcel of land can withstand a 40 story building, the landowner builds it,
and maximizes income. The parcel next door builds a 40 story building, and
maximizes his income....now how does that increase my income potential - as
I now have competition for my building?
>>>>Unfortunately, land USE rules in many areas do not permit that. You
will
>>>>suggest no doubt that such rules would be inconsistent with your overall
>>>>plan....however, in Arden New Jersey the 'trust' has restricted density
>>>>levels.
>>>
>>>Land use rules are a related but different issue.
>>
>>A big issue I would say....I wouldn't want neighboring land owners to do
>>anything that a) increases the value of my property
>
>Cutting off your nose to spite your face.
Why? Isn't your plan designed to prevent speculation? If value increases
my tax liability, wouldn't I be rational in preventing increases in value
that do not directly increase my ability to increase my income?
>>and/or b) decreases the potential earnings of my property.
>
>Government is with you there....
And you also? Are you not interested in things that increase the potential
earnings of my property and opposed to things that decrease the potential
earnings of my property?
>>>>>> If my piece of land is taxed at $1 per
>>>>>> sq ft, and it will take me $1000 to make it produce income of $150
per sq ft
>>>>>> per year, then the tax is irrelevant. But if you tax me $150 per sq
ft,
>>>>>> then the land would need to produce $300 per year for the same
return...if
>>>>>> its best use can only produce $200 per sq ft per year, it is not
worth the
>>>>>> expenditure, and if owning the land is otherwise not useful, it will
be
>>>>>> eventually abandoned.
>>>>>
>>>>>And the value will drop until some one finds it advantageous to own it
>>>>>and use it.
>>>>
>>>>Or not.
>>>
>>>Wrong. There is no "or not" about it. The tax will be paid, or the
>>>land will go to someone else. Period.
>>
>>If the land is marginal, if no one wants to spend the capital, the value
>>will continue to drop.
>
>If it is truly _marginal_, then the value is zero, and we don't
>actually care if anyone uses it.
Because marginal is defined by zero value, which is defined by the inability
to produce income....but any land that produces income (or has the potential
to earn income ) should have some value
>>>>>And the value will drop until some one finds it advantageous to own it
and use it.
So, if the land is not "truly marginal", but the cost of improvements to
generate the income are such that the owner is not interested in investing,
he would still face a tax liability that he would either have to pay or sell
his interest....okay...the liability would be minimal and probably less than
he is paying under most current systems...
>>The potential income is NET correct?
>
>Yes.
>
>>>>>It doesn't make any sense for you to own the land if your best use is
>>>>>$200 per sq ft per year but the market indicates $300 per sq ft per
year
>>>>>is reasonable (or possibly that they are willing to accept the lower
>>>>>return on investemnt.)
>>>>
>>>>Land is not the only cost involved in producing income. The capital
>>>>investment required to produce $300 may not be available.
>>>
>>>Then the land should be in the hands of someone who can use it more
>>>productively.
>>
>>It is not just being more productive, it is also the cost of capital.
>
>You said "not available." Not "too costly." Make up your mind.
If capital is too costly, it is not available. Investors don't give you
money when you promise a 20% return but can only show a 15% return...
>>If
>>the return on a capital investment is good at $200, the return on
additional
>>$100 capital must be at least as good...ever heard of diminishing returns?
>
><yawn> Ever heard of consistent assumptions?
>>Just because something can produce $300/sq ft, doesn't mean it is
profitable
>>to do so...from an investment point of view.
>
>You're not making sense, because you are not assuming a consistent
>cost of capital.
Cost of capital is not always consistent, but assuming it is, application of
capital requires a return on that capital....if I employ 20k of capital and
it returns 2k, I can employ another 20k and as long as it also returns 2k,
we are great. But if the second application of capital (in the same
investment...say of production equipment) only results in a total return of
3.5k, then the return is not consistent....if I obtained the capital from
outside sources, I have a cost of capital that might be consistent - bank
loans - or it might not, venture funding....
>>>>....your suggestion
>>>>would be to sell the property to someone that can provide the capital
>>>>investment for the production of $300.
>>>
>>>Right. That's how the whole society becomes wealthier.
>>>
>>>>...but if $200 is a good investment and a good living...what is wrong
with
>>that?
>>>
>>>It may be good for the landholder, but bad for others.
>>
>>Explain how it could be bad for others...
>
>If the land is used suboptimally, wealth is inefficiently going
>uncreated. Everyone is poorer for that, including the landholder, but
>he may prefer his leisure to productive effort and competition.
No one is POORER, they are less WEALTHIER...that is like saying that you got
a pay cut because your raise was only 4% instead of the 5% you were
expecting....
..but the concept that all land, in your plan, could or would be used most
efficiently, is plain wrong.
>>>>It doesn't use the land most efficiently, right?
>>>
>>>Right.
>>
>>By who's definition? The marketplace?
>
>Right.
>
>>How does the marketplace value the land? By it's potential use, right?
>
>No, it's potential income relative to marginal land.
And potential income is based on ....potential use?