What are your thoughts on Georgism? Could a single land value tax actually work? Start building your ideal daily routine! The first 100 people who click on the link will get 25% OFF Fabulous Premium: thefab.co/mrbeat
I think wealth is the new land in that you need wealth to make economic progress so we should only have a (flat?) wealth tax used for redistribution programs. Other taxes should just be used to penalize bad behavior and incentivize good behavior.
Well that's probably what people in 1910's were saying about Communism and Socialism(both sounded extremely good and were equally unlikely to happen) so you never know
@@wildfire9280 maybe that's a good thing, most of the time revolutions only make things worse than they were, just look at Russia, Iran, Afghanistan etc, and even examples more distant in time - French revolution only made things worse and brought decades of wars to Europe in wich hundreds of thousands of people died and France permanently lost it's leading role in Europe in the process
@@johnny_thunder_3024 I can say with 100% certainty that the ideas unleashed by the French Revolution have shaped the country that you live in "Only made things worse" is the fool's game; there are tradeoffs in everything
@@johnny_thunder_3024I think it's unfair to say that the French revolution only killed people and weakened France. I believe that any successful revolution (like the French one imo) causes short-term loss and suffering for a better future over the long term. Things like human rights (laid out in writing), standardization of technology and modern legal codes rose from the ashes of revolution
Shout out to the guy who gave Henry George that 5 bucks. 5 bucks in the 1860s would be like giving someone nearly 200 bucks today. That probably helped him and his family out quite a bit.
Fun fact: the game Monopoly (originally called the Landlord's Game) was created to promote Georgism. Apparently Parker Brothers removed the Georgist rules, leaving only the set of rules intended to show how bad monopolies are, which is why no one has fun playing Monopoly.
"As soon as the land of any country has become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce." - Adam Smith
@Blaire Sovereign ok… that makes total sense 🙄 You might try educating yourself on how you get Lyme disease and how ticks transmit it. I pick 100s of ticks off my clothes each spring, sometimes 100 in a day… I’ve had 4 of them find my skin and attach, but it takes 24 hours for them to transmit… and they don’t really live in grass, they absolutely don’t live in mowed grass, by late spring most of them are on another critter and their population drops off like a rock. There’s also Chems that will repel them, the most effective is permathrin, which is literally on almost all your food already. Knowledge really is power.
@Blaire Sovereign It's such a stupid phrase. There is nothing inherently beneficial to the human body about touching grass. The benefit would be in getting vitamin D from sunlight, getting exercise from walking around, breathing fresh air, or socializing with people outside of the home. I could grow a small patch of grass in a box a la Rysn from Stormlight Archive, and touch that every 10 minutes while I spend all my time inside. This would satisfy the "touch grass" snarkists while entirely avoiding what their favorite catchphrase is supposed to be promoting.
My instructor at the Henry George School of Chicago said it best: "Whatever you tax you will get less of--unless it's land." When I proposed taxing consumption he said: "Taxing consumption taxes the result of investment, which taxes investment."
I agree. It's unfortunate most people aren't going to understand this. Trying to explain second order thinking to them is like telling the dog to go start the car.
@@TheBigdog868 The term “return on investment” seems well understood, and I’m sure it applies here to what consumption taxes lower. Better yet, ask them why we would ever tax sales of negative externality-producing goods. The purpose should be more obvious.
Does your instructor make the distinction between the productive economy and the financial economy? Because if he doesn't, then he might want to do some more thinking about his definition of investment.
@@bramvanduijn8086 You say that like they aren't intrinsically connected. The financial economy injects massive amounts of money into the productive economy, and the successes of the productive economy creates ROI for financial institutions, money that is then reinvested into the productive economy.
I once read somewhere that wasn't Reddit that mentions someone once saw a Resturaunt shutdown, they were a kid in like 1997 or something, and they revisit the area in 2019, the place is still shutdown, imagine how many areas in this country that are for rent, lease yet are not being sold or used, just sitting there rotting. A few years back, I heard of problems such as "no place to build homes or houses" yet there are ghost towns all over the US. Humorously someone tried to pass a construction site that has been under construction for over 7 decades, saying the site is in Europe, but a local of the site said "dude this is in chicago"
How much of this do you think is due to the population collapse that we are in? With each generation after the boomers being smaller and smaller, there is less and less need for the things that were built for an expectation of a growing population. Think I heard that there are more adult dipers sold than infant dipers now.... but check that for yourself because I dont remember the info right now. Another issue of this is that social security, when started, had 34 or so payers for every recipient... it is now down to 4:1 and about to, if not already, fall to 3:1.
I live in a community whose largest industry is a university with decently popular sports. This means a ton of renters and visitors. We have implemented a "hospitality tax" on restaurant meals to keep property taxes low. I've long thought that while we were attempting to gouge the visitors, what we've really done is put a huge burden on the students and other renters. I've been wanting to reverse the situation and am glad to find that there is a name for it and thought that has been put in to it.
So, the solution they came up with so that the rich weren't taxed "too much" was to tax poor people more? I'd be surprised but I've been around too long at this point for this to be anything but the status quo.
In Canada, the biggest land owners are the provincial and federal governments. Canada is a very barren, empty country, and the governments control much of this "unused" territory. So how would Georgism apply here?
I wanna say that I’m a huge fan of your channel Barren and unproductive land, will get taxed the lowest because it has the least useful potential and value to be extracted from it. Now that could change if the glaciers and ice on there melts. It could become more habitable, cities and settlements will form there, I’m sure there is oil and other valuable resources, and the land will get taxed accordingly
It actually sounds like a pretty good system, I doubt it would work as the only tax, but it definitely could replace a good chunk of the ones hurting the middle and lower classes.
This system would pretty much only tax middle and lower classes, who pay the tax with their rent and the things they buy, while the wealthy would pay almost no tax compared to what they own. Unless the tax is so high only the super rich can even afford to own land. Either way, it's a hypercapitalist dystopia
@@argh523 Rents are already the highest that the market can bear, same with house prices - people pay the most they can possibly afford. LVT will come out of the landlords pocket that is guaranteed. (RIcardo's Law of Rents). LVT will benefit working people and the middle classes and hard working businesses, instead of a large portion of the nations wealth going straight into the pockets of land owners who haven't even lifted a finger or broken a sweat.
@@argh523 Not really their is allot of land in the US and everybody owns something. There are 2.43 billion acres of land in the US 72% approximately is owned by private citizens. Current US federal tax revenue is 5.4 trillion. With about 1.75 billion acres of private land it would only take 30 dollars per acre of land to fund current spending. Given the reduced taxes on regular people this helps renters and discourages large financial holding companies holding on to billions of acres of land and doing nothing with it other than speculation.
@@argh523 no lmao, middle and lower classes dont hold land to speculatative purposes, they use it to LIVE in there. Rich landlords hold the land just to speculate,wait to gain value because improvement others made around their area and then sell it 10 times more, instead they would hurt their own pockets paying more taxes if they don't use the land efficiently either to live in there or to work there, so more of those landlords will be forced to sell land otherwise they would bleed money 💰, and thus making someone that wants to buy land to have more options making buying land cheaper for people who would actually use it(for his home or business). Tl,dr: They wouldn't have to pay rent to landlords, that money would go to government for public services and buying a land, house or work place would be cheaper.
Interesting. My family owns around 150 acres that I grew up on. We recieve a tax exemption on the property as part of a conservation initiative, since we leave it undeveloped. Something like this might need to factor into Georgism. Otherwise, it might see the total destruction of natural habitats.
Right... so instead of taxing undeveloped land we classify undeveloped land and developed land on a flat rate. Each classification can be at different levels but it then gives us the ability to tax high income land an appropriate level.
@@kylegonewild An interesting problem to consider is that private individuals often take better care of land than the government does. Apparently it's a problem in drier climates where forest fires are an issue, since the government owned lands are overrun with vegetation that easily catches fire, while the private land (even if undeveloped) is maintained and doesn't spread forest fires as easily. Private individuals find ways or reasons to take care of the land they own, whereas for the government it's just a nuisance they can't afford to do anything with. So, perhaps land for conservation should *only* be held by private citizens, and *not* the government ;)
I think this is a great idea. The explanation of normal taxes slowing the economy down vs single land tax encouraging it is rock solid! But playing devil's advocate at 11:31: not all land should be build on. We also need nature, and that is not protitable.
It would have been so funny to just see Mr. Beat running around in that field, with no context to what he is doing. The final product is amazing and full of context. As always, wonderful video Mr. Beat.
@@iammrbeat someone made a supercut of moments out of context for Atun-Shei, i hope i see one of yours too. As long as it isnt defamatory, they are hilarious. I loved your cameo in his recent checkmate Lincolnite video.
The thing is nowadays value isn't only produced through large operations that are on land like factories or farming. We have tech conpanies that need a relatively small amount of land to generate huge amounts of revenue
You might be underestimating the amount of space that those companies use for server farms, and we could even add the space required for the power plants that make them run
@@thonktank1239 bro, tech companies doesn't necessarily mean crypto farms. All I'd need is like an office and a bunch of PCs and I got a great software development business that earns a ton of money. No massive servers, no huge power usage.
@@thonktank1239 the average Amazon warehouse is 800,000 square feet. apple has 8 data centers in America ranging from 300,000 - 600,000 square feet. Amazon total square foot usage is over 300 million in America alone, apple is closer to 8-10 million. apple made 115 billon in profit Amazon lost 2.7 billon in 2023. this idea is ridiculously outdated and would do nothing but bankrupt companies that use larger facilities while making tech companies multi trillion dollar companies.
An income tax is a worker tax. A sales tax is a consumption tax. A sin tax is an addiction tax. A land tax is...a land tax. Note that South Korea in their 2022 election had a politician named Lee Jae-myung who supported a LVT and UBI. He lost, but it was very close.
@@tanker00v25 A capital gains tax is an investment tax. It's also just a horrible tax. When you tax realization of gains people just don't... realize gains... Like imagine you have $1,000,000 in gains on a piece of land. The rent you could charge for it probably went up a lot too. Now, suppose you tax those gains away. Do you ever sell the piece of land or do you just rent it out for eternity? So you still end up with land consolidation. The landowners get richer from the rents and buy more land and so on and so on. It's way better to just have an annual land value tax.
@@ihave3heads a very interesting perspective I must say, thank you for presenting it. Though there are still a lot of different taxes that I would like to hear more about like a second home ownership tax. Seems like it would have an impact and mostly on the rich
@@tanker00v25 Both mansion taxes and capital gains taxes largely fall on land value, but much less efficiently. The Mansion tax proposal in the UK was spearheaded by Lib dem Vince Cable who is a land value tax supporter, the problem with LVT is getting it passed and this was an attempt for a thin end of the wedge version to begin the process. When LVT is proposed, even though it is much better, boomers cry about lost equity and the typical scaremongering about old widows being pushed out of their homes, and the press makes up other nonsense about it being a tax on gardens but a mansion tax being so obviously aimed at the very rich it's much easier to persuade the electorate. Kind of depressing but not everyone is a tax nerd.
I would have mentioned China as a country which experimented with Georgism. Sun Yat-sen was a Georgist and that’s why the Republic of China (Taiwan) has the land tax. Singapore also has it as many of its founders were Chinese…
@@swickens930 well, maybe it proves Georgism isn’t as effective as it seems to be. Also, Singapore is expensive but it does offer government programs to save for homes and 90% of dwellings in Singapore are owner-occupied.
@@mihailmilev9909 Its more difficult to implement because it relies on the consent of the very people who's power it seeks to limit. Georgist reforms will never be passed in a bourgeois democracy because the state is made up of, and serves the interests of the land owning class. As a result, any ideology that seeks to substantially limit the power of the land owning class by means of reform enacted by that very same state, is doomed to fail. By contrast, the more radical ideas of socialism or communism, don't rely on the support of the state in curtailing the powers of the ruling class at all, but rather rely on the revolutionary potential of the working class.
That's literally where the game of monopoly comes from. One female professor sometime around the 1890's developed it and it was intended to be played once without land a value tax and once with land value tax by students to show them what happens without land value tax (this version is the modern Monopoly game).
Whats funny is for monopoly to be a "game" in which someone wins and someone loses you need to remove the LVT. The losers go bankrupt under the opressive extraction of wealth by the land owners. And guess what correlates really well to our modern economy...
I wrote my law school essay on this tax! George wasn’t the first to implement it- but probably the first to write about it in an academic way. As far back as the Yongzheng period in Qing China (and later Meiji Japan), a 3% flat tax on unimproved land was levied and used to pay for education!! I got into law school btw
@@rafaelrondon1813the idea is to incentivize the development of those large corporations that optimize efficiency with little real resource use, so LVT is really good for developing and industrializing economies. In Meiji Japan, the government wanted to incentivize large landowners to develop and more efficiently use their land and facilitate industrialization, or else make huge aristocratic estates held by Daimyo untenable. Perhaps a value added tax today may be better able to capture surplus if corporations are already very land and resource efficient
@@kyewong6595 exactly though. It can be a good tool for an 18th/19th century economy which is still based on rural production and industrializing with large factories. It does nothing to address accumulation of capital in a financial economy where land ownership is not where most of the wealth is concentrated. It is a tool with a lot of potential, but only in the right circunstances
Albert Einstein was a syndicalist socialist. I am also a socialist as well and I too find Georgism very fascinating. It's nice to know I am not alone in that opinion.
@@nana00037 the next part of the quote is "... The Henry George argument from many many years ago" Friedman meant precisely what Henry George meant. A tax on land values. Property value = land value + improvements. You just want to tax the land value part of property value, even if the property is improved.
There is one large problem: the land must be "improved" to pay for the tax. From an ecological viewpoint that's terrible. Being forced to turn a biodiverse wood or grassland into houses, monoculture farmland etc. might be good from an economic viewpoint but it will destroy nature.
No, the land does not have to be improved to pay the tax since the owner can simply abandon it. And since nobody will want to buy it either, it will go back to nature, back to wilderness, the frontier.
@@adamjonmonroe7188 it's more likely they would clear-cut the land and sell the lumber, paying off the tax at the cost of destroying the ecology. This is what currently happens across America. Lumber companies buy untouched land, chop down the whole forest, then either replant with non-native fast-growing pine or they resell the barren land. With a Georgist tax it would make this problem even worse, as land owners who want to keep the forests untouched couldn't afford to do so.
It's an interesting idea. I'd like to know more about a couple things: 1) How does this account for the fact that vacant land can have value to society without being "productive" (a forest is valuable simply as a forest)? 2) Would a perfect Georgist utopia have zero green space in cities?
IMHO Forests, like rivers and oceans, and deserts, jungles, etc. should have owners. That's the best way to prevent the property from being completely destroyed. An owner can have insurance to prevent real damage from being done. Now, to my humble opinions of how to answer your question: 1) Things can have value without being productive. My classical concert guitar is a great example at hand - it's board is certainly gaining in value since it was built. Thankfully, I don't have to pay taxes on it - or else I'd probably have to sell it to do it. One of georgism's possible replies is: then it (my guitar, the forest, the trees, the rivers, etc) certainly should be sold to someone that can produce things for it while also increasing in value with time. The problem is, of course, that I don't need a tax to see it as a good option: I can immmediatelly enter in contact with Siccas Guitar and solve this problem quickly. I shouldn't be forced to do something someone else think is right - just as I don't force others to do my bidding. 2) I don't think that to be the case. Trees, parks, forests, rivers, etc have value. The metropolitan pak, in NY, for instance, is privatel owned - as many other parks around the world. Private property means that you do what you want with your property - even if you want to build up a large park instead of building an industrial district. The tax on land, then, would make it much harder to maintain speculation on land, but also, non-profitable enterprises as well - like a community park, or maybe a meeting hall to play checkers. As with any other tax, it is theft and prevents people from doing what they wanted to do with what they own. That said, it is also important to consider other aspects of the land tax. How much of it should be taxed? The land would be valued by who? Should there be a cap or a minimum to how much is taxed, and why? Do some businesses - like residential buildings - be excluded from this, or receive a smaller tax? Who should charge it - federal, state, municipal government? Once we accept that we are going to have a land tax, many other questions arrive. For instance: Brazil has a land tax, it is called IPTU; it is charged by municipalities, it is a percentage over the value the building was last sold plus an inflation metric over every year it wasn't sold, regardless of the actual gained or lost market value of the property, every municipality has a different percentage that fluctuates around 3%. But Brazil has also every other form of taxation, its taxes are burdensome (it has the highest corporate tax in the world, sometimes going over 100% of profits), so it is not the perfect Georgist utopia - a country can simply say, "well, georgism is the least bad tax, so we will charge it too, and drop none of the other taxes". That's another reason why all taxes have to be combatted.
You could fix that by making them productive. Lets take the environmental benefits forests have by absorbing carbon: with the right carbon credit system you could make carbon consumers profitable, and people would buy the land just to inherit it's carbon credits generated by the forest
As I said alsewhere, georgism does not account for externalities that affect common goods, such as climate, air quality, water quality, biodiversity (the societal value of any pre-existing forest for exemple), and all those goods that cannot be owned privately (by nature). Pollution and other detrimental activities DEMAND a tax that equates the marginal value of what has been lost. It is the only way under capitalism to ensure all public goods are not lost in the long term to the individual incentive to create value out of private property. In other words, yes, someone acquiring a forest could pay a tax on land value, but should also pay if the carbon storage capacity of his land is lost to some real estate project. Only this way, the project would be carried out if the value created is greater than the one destroyed (from society's perspective). Hope this helped!
@@danielafonso9050 ok, sure, the money used to buy the land may be rightfully earned, but is the value gained from simply owning the land for an extended period of time truly “earned?” LVT would fix this. It’s not a tax in what you earn, it’s a tax on exploiting land as it’s a limited resource. Put short, if LVT is just as much theft as any other tax, is gaining value from people around you doing all the hard work while you sit back and let the land gain value from such hard work not also theft? Quite frankly, gaining value off of the people around you sounds like communism.
When I still lived in France as a child, my mother and grandparents told me a story about how after WWII my great grandfather had planted trees in his field, which is now a beautiful forest, in order to avoid such a government tax on unused, unimproved land (as you can imagine this was because the government wanted to ramp up agricultural output). Neat!
Worth noting that under a "proper" LVT, planting trees would actually have had no effect on what he paid in tax. The point is, in part, to avoid any kind of influence on the market, so the tax is constant, based on the land value, regardless of how you develop it. The reason to plant trees, or otherwise develope the land, is to produce an income that offsets the tax. People who can't find a productive use that offsets the tax are either going to sell to someone who can, or on net many land sales might suppress property values woth higher supply, and as such lower the tax rate, until and equilibrium is reached where people make the same average rate of profit regradless of location.
It has worked well in the Pennsylvania metros that adopted it - Pittsburgh dramatically outperformed peer cities on construction when the tax was adopted, the Philadelphia tax abatement (a sort of psuedo LVT) led to the construction of tens of thousands of new homes, and it has helped some PA municipalities on the edge of bankruptcy stabilize their finances. Pennsylvania is the most pro-land value tax state in the US. Basically every municipality in the state is allowed to use such a tax, which is not the case in other states.
You might be intrigued to learn that there was a generation of city mayors in the US that were "students" of George (they read P&P and wanted to apply the principles). Tom Johnson of Cleveland, Ohio and Hayzen Pingree of Detroit, Michigan are two notable examples. But so much of urban land was held by "old money estates" that dominate local politics TO THIS DAY, it was impossible to implement a tax that literally targets their wealth and reduces taxes on the lower classes who continuously worked to earn wages.
I agree. This should be a tax applied to cities, but a single land value tax would really ruin the small farm based economy the US agriculture industry is built on.
The tax code seems overly complex, making it difficult to identify the most tax-efficient strategies for my income and investments. Are there resources available to help me understand relevant deductions and credits that could maximize my after-tax returns?
You're right, the code can be a beast. There are definitely resources available to help you understand deductions and credits. The IRS website has a wealth of information, but for a more personalized approach, consider consulting with a tax advisor who specializes in investments. They can help you identify strategies that maximize your after-tax returns.
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Fun fact: the popular board game *Monopoly* has its roots in Georgism. Elizabeth Magie wanted to promote the single tax and created "The landlords game" which had two sets of rules (designed to illustrate how land value tax made everyone rich). Well some other company came along and turned the game into the monopoly we know (getting rid of the land value tax part) and it eventually grew to popularity.
@@abarbar06 I believe he is referring to rainbow capitalism month? where the corporations like to drum up a bunch of ad revenue and traffic by Having rainbow products in north America but not most of the rest of the world. Like check out the middle east twitters of companies like bethesda. It was a meme in 2020 and they still do it. I believe Russian, turkey, and other asian wings of the company also don't go rainbow, because it's not a regionally safe business move. It's always money. MONEY MONEY MONEY. Follow the money
I am Estonian and the entire time I was thinking "don't we have that?". It is not the same of course but it seems weird not having to pay tax for land that in reality doesn't belong go you, still it belongs to the country.
Australia also has it but only: - Small rates for councils - Small rates for investment properties over a certain threshold - Transitioning over 20 years for one territory - Currently a massive fight in another state - Ruled out in other states despite very popular leaders because it was super controversial when mentioned
In the USA, we already have property taxes, so if you own land, you pay tax on it. What seems weird is not being able to actually own land, and therefore being able to get kicked out of your house on the whim of whoever is in charge of the country.
The more I learn about the structure of our system and it's potential improvements/replacements, the more I fall into the perspective that we already have the answers to live in an efficient and equitable society and the people who benefit from the current system don't want that.
We do have the a answer's to live in AN efficient and equitable society. The problem is that it isn't the best society depending on who you ask. Everyone's perfect society is different.
The fact that Adam Smith and those that followed him (like Jefferson) were against monopolies and landlordism and passive wealth accumulation and politicians on the so-called left and right claim to be followers of Smith and call themselves liberal, shows everyone that they merely use the word „liberal“ is a manipulative propaganda to make their politics sound legitimate.
@@eewweeppkkthe problem isn't establishing a perfect society - that's impossible. the problem is that all potential improvements to the current system are being ignored because it doesn't benefit the elite
@wiger_ No, they are being ignored because your "improvements" are subjective and require resources. As I said, there is no "right" answer or "perfect" society, because the society we all want to see is subjective and varies from person to person.
I like thinking, but I don't like learning much. And in my thinking I often think "there's no way I'm the first human ever to think of this, I probably just didn't learn about it". And here I am, learning about how good ol' Henry was thinking what I was thinking way before I thought of it.
Biggest concern is that it doesn’t incentivize conservation, only persistent development Also, most (if not all) localities already implement property taxes
It does, however, encourage the efficient use of land. If owning giant swathes of land is inefficient then people will individually buy less land to develop. In a way, I reckon it does help with conservation.
If you paired it with a state park system which manages conservation, it could. It incentivises persistent development *on a limited amount of land*, not just "grab up all the land and put whatever on it". That's more what we have now. Georgism would encourage a lot of taller buildings, rather than our sprawls.
Hockey Bro, single value tax. Only one tax. We first replace property tax with land tax (tax land only, not the stuff built on top of it), then we gradually increase land taxes, and simultaneously reduce all other taxes ... sales tax, income tax, corporate tax ... everything. In the end, after about 10 - 20 years, the entire government budget is supported by land tax alone. Every year, to figure out how much next year's land tax is, we take the whole government budget, and divide it by the total value of all land that would be taxed (ie those not owned by the government itself). Add a few percentages to account for people who don't pay.
Forgive me if I'm misunderstanding, but isn't there still the risk that landowners would simply increase the "economic rent" of the land they own to offset the cost of the land tax? I understand a land tax would encourage the owners of, say, an empty lot in New York City to either develop or sell the land rather than just wait for the value of the land to increase thanks to other nearby developments, but for the landowners of, say, an apartment complex or a shopping center, couldn't they simply pass the cost of the land tax onto their renters, thus making the renters the ones actually paying the tax? Obviously land owners hate Georgism so maybe I'm missing something.
Couple things in response. First, a major principle of Georgism is the curbing or complete elimination of zoning restrictions. That coupled with a LVT would result in increased residential building, and the increased housing supply would counteract the increase in rent charged due to the tax. Second, yes, landlords would presumably increase rents to compensate for the tax, but there would be far less appreciation of land passively, so landlords would be less incentivized to hold on to extra land and rent it out. Say you have an extra house right now. You could either sell it, or you could rent it out to cover the mortgage/other costs and hold it long-term as an investment. Georgism would dramatically reduce the value of land as a passive investment, so landlords would be far less incentivized to rent out surplus land as opposed to selling it. Add the increased sale of land to the increased supply and housing prices and rent prices would drop.
@@David-hi8ci Thanks for your response, Georgism seems like a good remedy for the plague of "house flippers" who simply buy houses to sell for a profit rather than for living. Is it fair to say that loosened zoning restrictions along with a LVT would theoretically encourage people/companies to build more multi-family housing rather than single-family housing since they would be able to extract more rent from multiple tenants to cover the LVT? And to your point, dramatic rent-increases would be less likely since other nearby land-owners would be doing the same and thus increasing the housing supply, correct?
@@David-hi8ci that still doesn’t answer the question. Like Apartment buildings that have alot of tenants but are very dense and low in land use (Think old city of Sana’a type beat.) Another example could be vertical greenhouses that run on solar, their output is much larger than normal farms and they use very minimal land. It seems that this policy would work better in less developed nations that rely on little technology in agriculture.
The answer to this is generally considered to be no. A land lord, in thier position to collect economic rent, charges the maximum of income possible. When you try to rent a house, you compete with other potential renters, and the land lord will (generally) settle on the person willing to pay the highest amount. The renter doesn't care about the landlords cost structure, you don't offer to pay more because your landlord got a higher bill. They pay the most literally anyone is willing to pay. In practice, rental controls, long term contracts that protect tenants for eviction, and the like might suppress land rent to a degree, so a change to an LVT might cause an increase rents short term. But generally demand and supply of housing is fixed in the short-term, so price fluctuations based on increased costs are difficult to pass on.
@@ShehuStebe And yet it works very well in some of the denses, most developed countries, like Singapore and Taiwan, and is even credited in part with the rapid development. The fact that the appartment or vertical farm uses less land would be a benefit under an LVT. Traditional urban sprawl or farming techniques would face higher tax rates, and so the market would have a greatwr incentive to move to the denser, more efficient, development pattern. Alternatively, with out the LVT, the suburban home owner or farmer sees the large amount of land they use as a long term appreciating asset, and factor that into thier long term returns, making the less efficient approach the higher returning one, and disincentivizing capital creation.
There is a building in Providence, RI called the Superman building because it looks like the headquarters of the Daily Planet. It is the most prominent build in Providence's skyline. It was also built as a refueling station for blimps, which were competing with planes for air travel at the time. In any event, the property was vacant for over a decade because the owners just sat on it when their prior tenant left. It isn't the only building in Providence that is empty either. You also have areas in towns that are dominated by slum lords. So, don't just tax undeveloped land, but tax the crap out of unused and undeveloped commercial property as well.
The per-acre LVT in the center of Providence, RI would certainly be quite high. And it would hopefully encourage property sales. But at the end of the day, an unused parking lot in the same area is as much of a drain on the local land market as a large building. And taxing buildings by size, as we do now, discourages efficient land use. Even taxing specifically unoccupied office /residential space would discourage new construction because of the risk of not selling.
Explain why. Stop making superficial statements. You're trying to sound smarter than you are. Do you actually understand this tax system as much as you think you do? I wish we could give real time quizzes to viewers of these types of 'educational' videos.
Why we don't hear of him is because his ideas implemented would threaten the accumulation of extreme wealth. The present system allows this and Politicians are paid to maintain it
A couple of statements I find a bit abstract: 1) "" when we tax cigarettes, people smoke less", what is the evidence? If people are dependent on smoking they might probably be more prone to spend more than quitting. 2) "Taxing other things that we actually want will decrease their production and consumption", seems too general, first necessity goods are probably less affected. For instance: recently in Italy taxes on tampons and diapers were raised again after a period in which they were decreased. It's quite unreasonable that these goods will be less produced and consumed. The same goes for energetic goods (car gas, home electricity), no matter the taxation overall consumption will hardly be affected
Here a brief study - with bibliography - about how taxing tobacco helps lowering comsumptions: tobacconomics.org/files/research/415/effectiveness-of-tobacco-taxes_brief.pdf
Elastic goods and inelastic goods. Not discussing this oversimplifies. E.e. taxes destroyed the luxury yacht industry, but as you say it just makes poor people poorer because the "sin taxes" are often on vices poor people use to get by with the drudgery of daily life.
When you tax cigarettes more, some people just pay more tax, but most people will want to avoid the tax by not smoking. If cigarettes cost $5 each then far fewer people are going to want to take up the habit, and even the people who do still smoke will do it much more sparingly than if they are $0.05 each
@krombopulos_michael taxes literally destroyed the entire American luxury yacht industry. "But rich people don't need more boats hur dur". A lot of skilled craftsmen lost their jobs. Plus they still bought boats, just not American made boats.
just a note: I am really appreciative on how you respond to all the comments on this video. It makes the channel very involved and I am happy you talk to us fans a lot so thank you :DD
Neat idea. It definitely has to have some nasty bugs that would cause issues, the biggest being land evaluation. I imagine if people intentionally overvalue land they want, they could potentially force excessive tax on the current owner. This may have worked in the past where land was significantly more tied to productivity, but today? A billion dollar company like Google doesn't need much space and would probably just move to cheaper land if the evaluation changed too much. Wealth would be able to disproportionately move to people with intangible goods like media. The only tax those products would see is on the less than a square foot where the data drives would be located.
Ok, so if they use less land they don’t pay as much. What’s wrong with that? Is your purpose to find a good way to raise revenue or to be punitive against certain kinds of businesses?
The fact that Google with it's small footprint would be incentivised to move it's head quarters to an area with lower land values is actually one of the benefits of LVT. It drives productive use of the available land. There may be a company that would benefit more from that higher land value location and Google would boost the economy in the lower land value area, so it's a win/win.
@@1080lights this is mostly a problem because the companies with the most money at the moment are tech companies. With this system, they would pay way less money per income then an average farmer would. Meaning that this system doesnt distribute money from rich people to society, but from society to rich people. Essentially... if the goal is to distribute money more equally, this isnt the solution.
@@thijskroft785 but there wouldn’t be any other tax and whose to say Google wouldn’t get into the business of farming or manufacturing? If they had the money to own land and pay the tax they could profit on other types of industry
I've seen a very similar tax float around a few municipalities that I've lived or worked in, where vacant buildings would be taxed more than occupied buildings. Particularly to prevent or reduce the amount of vacant businesses since many places simply choose to build on undeveloped land
I don’t oppose this; mostly because Milton Freedman is a fan. However, I have questions. Lots of questions. 1) What constitutes unimproved land? A) Does farmland count? B) Does my backyard count? C) Does an empty building count? D) What about a building that is half occupied? E) What about vacation homes? F) Or is just all land taxed? 2) If farmland does not count, how do you handle people like Bruce Springsteen who puts goats on the grounds of his mansion to avoid paying taxes? 3) Assuming this is a federal tax is all land taxed at the same rate? Do you tax an acre of land in Manhattan NY the same as an acre in Manhattan KS? If it is based on the value of the land who decides and what is it based on? 4) There is currently about 1.4 billion acres of land privately held. What percentage of that is “unimproved”? Assuming all 1.4 billion acres are taxed; $4300 per acre would balance the budget. This sounds great for the average person but would devastate the farm industry. What happens land no one wants because owning it leads to a loss of income? If only unimproved land is taxed this will push people to develop all land. What toll will that have on the environment? What stops non-landowners from voting for more and more handouts because they are not paying any tax?
Tax discounts on food can be implemented. IE, farmers pay full tax for the land, and produce can be helped to discount the tax. Just buying farmland not to farm on it would increase the tax on that. 1a) see my first point 1b) yes, backyards are a luxery you should pay tax on 1c) yes, empty buildings are a waste of land, taxes should discourage that 1d) full taxes, it forces market value to be responsive, which is desirable 1e) full taxes, vacation homes are homes, and should be paid for as such 2) See my first point 3) Market value, with zoning 4) Back in the time it was written, it were different times, untouched land still existed Implementations can differ, you could still use zoning. It could also force the farm industry to use space more vertically, and use technologies such as daylight time extions like they already do in the netherlands and Belgium. Honestly what stops people voting on more and more handouts? Nothing really, but i see that as a problem with democracy more than anything else. In our current system we have the same issue.
He was quite ahead of his time and the reactions he got from the robber barons says it all and oh look, the modern day is what he predicted how curious that anarchy loving socialist commie, all the buzzwords still around today what a odd completely unrelated set of coincidences.
In theory, this sounds amazing and is very Roman by nature. Issue is, this would disproportionately affect farmers more who have less ideal profit margins. Unless we had a multi-tier or graduated system for this type of taxation based on how it fulfills societal needs based on the tier 1 thru 5 production. Like, tier 1 - natural goods harvest - could have the lowest tax rate and things like tier 3 and up which is all value-added productivity would be taxed more.
It’s based on the value of the land owned, not the amount of land owned. If a farmer owns a lot of land, he still wouldn’t be taxed as much as person who owns a lot of land in a city, because the city land is more valuable.
@@louisnall3102that’s why he said “disproportionate”. Even the most expansive Silicon Valley properties are ‘only’ 30-50 times as expensive as farmland in rural areas. But a farmer needs thousands of acres to make a living, let alone a revenue comparable to a tech company, that needs virtually no space at all or even shares the land in a high rise.
It's had strong advocates, many of them well known intellectuals and activists, on the left and the right as well as among libertarians. A major blow to Georgism in the economics field was a poorly argued, convenient rejection of classical economics' treatment of land and capital as separate factors of production due to their different economic properties. Neoclassical economists, along with Austrian school, decided that the earth and man's improvements to the earth through labor should be lumped together into a single concept--"real estate"--and treated as an indivisible unit. The "housing" crises that continually plague our economy aren't fundamentally about housing. They're driven by low-interest loans handed out like candy to land speculators.
The main issue with Georgism is that it would likely kill incentives to build. Imagine the average Joe who rents a piece of land and builds a home on it. His improvements increase the land's value, which then raises his rent. He also has to keep up with taxes to avoid losing his invested capital. In this system, Joe would heavily prefer to find land where someone has already built a house and simply outbid them for the land’s lease-or look for someone who has recently lost their job and their home. This disincentive extends to any factory, shop, or hotel. Even if we were to standardize land rent without accounting for location differences, new issues would arise. Without land taxes reflecting real value, we’d essentially be reintroducing a form of land ownership. A plot in the city is worth thousands of times more than one in a remote rural area. If we set rents high enough to cover city land values, rural residents will struggle to afford it. But if we set rents too low, people could rent valuable city plots just to hold onto them, creating a new "ownership" system where they negotiate compensation to release the land for someone else to use. This is exactly how allotment gardens work in Poland. While technically rented, these plots are treated as property, with trading happening as though they were owned. On the flip side, Georgism could incentivize heavy exploitation of natural resources. For example, if someone leases a forest, the land holds inherent value in its natural resources, like timber. By cutting down the trees for quick profit, the lessee not only gains revenue from selling the lumber but also lowers the land's value, potentially reducing future lease costs. With no personal stake in the long-term health of the land, the lessee has little reason to preserve or restore it, leaving behind a degraded plot for the state or community to manage. Overall, the idea is fundamentally flawed, as is often the case with "simple" solutions.
As a vancouverite this sounds like a phenomenal idea to be honest. This sounds like it could solve several issues that are big problems everywhere, but are only accelerated by factors specific to vancouver
As many here have pointed out it seems this idea doesn't favor conservation. I live in a rural area and most people out here own forested land. This system would force people into farming or selling off their land to farms since it would be too expensive. Hunting as a past time and a way of life would cease to exist because no one could afford to own hunting land. And to clarify, these aren't speculators or corporations owning this land, it's regular people. I would also like to address that hunting is not an upper class activity like it is in other countries, it's mostly lower to middle class. This would make hunting a privilege to the most wealthy who can afford hunting land, and damage wildlife populations that live across rural private properties as they would be forced out by development.
I think one thing to consider here is that George's proposition was for LVT to be the ONLY type of tax. If that were the case, it could still be a very real possibility that such landowners would be paying a lesser amount in taxes based purely on LVT than the slew of other forms of taxes they must pay as a result of income, consumption, etc. As well as considering what the value of said land would be. I do agree that it doesn't favor conservation in the sense that there is always going to be an impulse to develop land, but the question is whether the cost/benefit would ALWAYS come out that way. If it's a cheap enough expense to keep land as is because the owner wants to use it for such purposes as hunting or conservation, if the land itself isn't worth too much, it could be doable. Plus, another possibility is that a simplified tax system could have controls built in to prevent harm to those uses of land that are non-economic but still valuable.
Dear. Mr. Beat. On Tuesday I began teaching a once a week class on American History. I taught from the aftermath of the French and Indian War to the First Continental Congress. When I taught about the taxes Britain wanted to impose the parents were supposed when i taught that both sides had a legitimate point. They loved that I was teaching it that way and the kids are excited for the next class.i am hoping that they will love History as much as I do and will start to study it on their own.
The issue with a land value tax is it violated the right to property. If you don't pay it and the government will take it from you and kick you out, it in effect means you can't actually own land, but only rent it from the government
That is exactly the point. It's a feature, not a bug. How can anyone 'own' land? It already existed before humans did, so at some point someone just came along and took it.
Georgism argues that land 'cant' be owned to begin with. Because of happenstance. You 'happened' to find the land and buy it. You did not create the land. Therefore, no profit should be generated unless it's being used to 'create'. Georgism basically, with very little mincing of words, rejects the literal idea of the right to land ownership.
Another possible reason for the decline of georgism is zoning laws. Unless we enact some form of zoning reform, the value of land can be directly controlled by local governments who can heavily influence the value of land simply by changing a city's zoning code. For example: imagine you're running for mayor of a city and you narrowly win, despite facing strong opposition from communities in the east of your area, what would stop you from changing the zoning code in those places to artificially drive up the value of land there and break up those communities by placing a tax burden on them that they cannot deal with? It would be a horrifying possibility for our democracy. I'm not saying this to discredit georgism, as I believe that we should heavily weaken, if not outright abolish, zoning laws regardless of what tax system we use; but it's especially important if the value of your land can heavily impact your financial stability.
Zoning/planning laws can massively effect the value of the individual parcel of land, for example if your land is rezoned from agricultural to residential here in the UK the value per m2 can rise to 1000x per m2. As well as the potential for corruption this creates (bung local government $$ to change zoning on your land and get the massive uplift) I do agree excessive zoning and NIMBYism creates sub optimal outcomes but the effect on a macro level is actually more limited, studies have shown land price booms and busts were just as bad before modern zoning. Even without any zoning, speculation that land may soon become much more valuable perhaps due to a growing city, means land prices can be pushed up, that's fine for current owners, but a farmer trying to buy land get their own farm up and running can be priced out. Basically LVT pushes towards best use of land within the limits set by zoning/planning laws. The corruption incentive for rezoning is greatly reduced as the LVT jumps up along with the rezoning. The flip side is does this push people out of their land? Well yes but so does gentrification if you are a tenant If we have farmland currently it should be taxed AS farmland for as long as that is the best use, but if there is a growing city and some of that farmland would really have a better use then it is fair to raise the tax so that the landowner either pays for the privilege of keeping land at a sub optimal use, redevelops or sells up. This type of thing already occurs via eminent domain laws, it might be reasonable if the LVT rate is high removing the speculative value uplift from rezoning to have a similar element of compensation for the disruption, but ultimaltely there is always an element of planning and decisions taken for the many that conflict with the desires of the individual. LVT doesn't solve that, but the positives still greatly outweigh the potential negatives, LVT and some degree of upzoning would go a long way, beyond that, as much democratic oversight into decisions as possible.
Zoning laws are necessary for quality of life. Near where I live is a town that had no zoning laws. So a developer came in and built a quarry right next to housing units. Overnight people had to deal with loud excavation noises and clouds of dust, and there were no laws to prevent it. You can imagine other scenarios: add a stinking rubber tire factory or a slaughterhouse next to your house, and you will see the wisdom of good zoning laws.
Being a Brazilian where Zoning laws aren't as strict, I cannot fathom Americans have to drive a car to walmart to buy groceries and bread, especially given the absurd prices of gas( Here gas was always expensive unlike in the US) because mom and pops cannot open a little market or a bakery in the suburbs. WTF? America would kill urban sprawl in a single strike by allowing mixed zoning and going away with laws enforcing single-family housing, giant lawns and in some places, Gagages that must fit two cars in. Maybe some neighborhoods could keep being sprawling suburbia, but it shouldn't be obligatory for everybody.
@@Bronze_Age_Sea_Person Most towns have a variety of zoning districts, some of which allow small business and houses to co-exist. In fact, every town has to provide zoning for every conceivable use, so there are also places that are for "single-family residential" only, where I live. I suppose it might be convenient for some things if a market was built right next door to my house, but I'm glad to not have the constant traffic of people going into shop until late at night or the stink of the dumpster wafting over the fence into my back yard. I do drive to the market, but it's less then a mile away, so I'm not too worried about gas costs for that. So yes, I have a garage and a large back yard with apple trees and black berry vines, and I wouldn't trade it to live on a smaller lot in a commercial zone. Again, without zoning laws you might find yourself living next to a chemical factory and your only solution would be to put up with it or move. To each their own, I guess.
Georgist here! AMA I just wanted to pop in to say that the "single tax" is considered by most Georgists that I know to be an poor platform in modern times. Of course a land value tax is still considered to be the *best* option but not the *only* option. Most of us support income taxes (with a high exemption like anything below median income), carbon taxes, severance taxes, and extreme wealth taxes (because, let's face it, you can't get extremely wealthy without capturing a lot of economic rents). My cabal of Georgists in California are extra frustrated by the fact that a land value tax is effectively ILLEGAL here! So we look for alternative forms of land value capture for public good: real estate transfer taxes, mixed income social housing (rent is the tax that high income households are very willing to pay!), land value increment taxes, special assessment districts to fund public services and transit, no free parking (see Donald Shoup), municipal land trusts, and others. And of course a universal basic income. Most of us are YIMBYs that also support land use reform to allow more housing - it increases land value but also creates much needed housing which is a social good! There are some other Georgists that have a more NIMBY perspective and think it's better to *reduce* land value for some reason. We consider them to be heretics. LOL. There are all sorts of "natural opportunities" that can be sources of public revenue that you might not have considered, like electromagnetic spectrum (key to modern wireless telecommunications) and orbits around the earth (as close to a "parcel" of land as you can get in outer space) which is quickly becoming privatized. There are also some cool things that this video didn't touch on like the ATCOR principle (All Taxes Come Out of Rent) which theorizes that all other types of taxes have the effect of reducing land value and that removing them makes land value increase which creates more revenue from land value tax. There's also the idea that public investments in infrastructure increases land value - this is why urban land in big cities is so valuable - lots of high frequency transit, hospitals, schools, and other services. Lastly, Mr. Beat talked about the impact that the automobile had on the 20th century and rightly concluded that it allowed people to access land that was further away. The California Georgist Mark Mollineaux (host of the podcast "The Henry George Program") talks about this *a lot*. Basically this new form of personal transportation made more land more accessible to more people in less time! It increased the potential productivity of marginal land where there were more land owners who could compete on price and this came in the form of decades of suburban sprawl! But now in the 21st century we are beginning to see the limits of this: even land in the distant suburbs are becoming unaffordable to most people and you then need to spend hours commuting each day, not to mention housing in inner suburbs and central cities where shorter commute times and more amenities comes at a higher price (a price that more people are willing to pay, I might add!). Like the creator mentioned, this is the reason why we think Georgism has become more popular among young people over the past several years.
More on Social Housing: we're big fans of the style of social housing in Singapore, Austria, and Finland. We support the California Social Housing act which is making its way through the state legislature right now! Call your state senator and tell them to support Assembly Bill 2053!
"Most of us support income taxes" You couldn't be more wrong about this and I would thank you not to speak for all Georgists, most would really only support pigovian taxes that target negative externalities, not taxes that harm labor and investment.
I’m a social Democrat, but the more I learn about it the more I’m interested in it. Are there any resources to learn more about the policies you’ve talked about?
@@ASMacman Excuse me, I'm very curious as to how Georgist will choose what land to tax. As more of an Distributist myself with the view that government revenue should only be off the basis of charitable donations or with certain functions just straight up replaced by charitable initiatives the huge problem I have with Georgism is that it is essentially taxing the idea of wealth, money that does not actually exist, a flat tax of sorts. Like yes according to the theory of rent land value rises but Goerge himself says that just because the land appreciates does not mean it is productive or useful. But I am also aware he said that land being productive will make it more valuable. My question to you is will you only tax productive land because if so that is basically just a corporate tax and if you will tax all land how will you avoid taxing smallholders who just want to do nothing with their own land? Will this only stop at land or will this expand to investment vehicles like stocks and precious metals? What if the government over relies on this tax like how Texas does with it's property taxes? If you only plan to tax when the land is sold what if no one sells their land? Will that really be enough money to conduct the business of state with? Why not tax regular margin trades? That money is also unearned
They WAY you calculate the tax is really important. I worked at the tax agency in Denmark where we developed a system, to calculate it the taxable value using sooo many different variable's, statistical models etc etc. It sounds lovely but it is a flawed approach in my opinion, because it is only trying to theorize the value. I feel strongly, that the Swedish model for taxing land ownership is way better. It goes like this: "Just tax the revenue generated from selling land. Thereby let the market decide the taxable value." This is how the Swedish stabilized the property values, and in many ways reduced land value speculation to a minimum. I loved the video though, and thank you for your contribution to help inform us all. ❤
In a void, with no consideration to how the world currently works, this seems wonderful. Here's how I see this developing if it were implemented: Gov: Alright. We're going to do this Georgism thing. *creates new tax on undeveloped land* People: Okay. Now you get rid of the other taxes. Gov: *crickets*
We would do it in steps. With the land tax going up every year, and other taxes going down simultaneously. Pass a law to cap the total tax collected at whatever it is now. For the next 3 decades, we would only be shifting the taxes around, from other taxes to this land tax. We know how much taxable land there is and their values, and for the first year, we set the rate at 0%. Every year, this will go up by 2%, and by law, income tax would be reduced proportionately to *at least* match this amount. For example, say the total value of taxable land (all land owned by somebody that isn't the government) is $10 trillion, and 2% of that is $200b. So we would reduce income tax by $200b. Say the total income tax collected $1.5t. So we know that next year, we would reduce the income tax by 13.3%. Whatever your income tax band, the percentage is reduced slightly to get this $200b target. After just 7 years, income tax is nearly zero. We would reduce it to zero on year #8. Then we get started on corporate taxes. That would go to zero in a year or two. Next we start on sales tax. In about 15-20 years, there are no other tax, except for this land tax. At the end of it, we would have to pay about 40% - 50% tax on land. But remember, the tax is on the land, not on the house you have on it. And this would light a fire on everybody's behind to work harder on increasing government efficiency and reducing expenditure. Something for the left ... rich people would pay far more tax. Something for the right ... small government.
@@danielch6662 And when has the government ever gotten rid of any tax? All they want to do is to increase it, while still spending 10 times as much more.
Originally born Henry George Ramsbottom, he endured extreme poverty and had to sell his surname. He only got a nickel for it. By comparison the Smith family had made a fortune selling their surname many times over. Embittered by seeing the amount of land owned by the 'family formally known as Smith' Henry George wrote his magnum opus under his remaining two first names.
This video does not take into consideration that while the US was a developing nation, land was literally given away for free. All that was needed was for an individual or family to claim a parcel of land and do some development on it and they were then granted ownership. What has happened since then is most accurately described as crony capitalism.
My high school social studies teacher will show your videos during lessons and I'm now hooked on your contact as I'm interested in history, government, economics and all that.
I think you've made the best video on Georgism, hopefully this sparks a trend. I stumbled on it last year and the lack of content or awareness of it in general is wild...and definitely intentional.
This was a really fascinating video! I had one potential problem with Georgism that came to mind: It would most likely accelerate environmental degradation to an unprecedented degree. Any forest that is included on a property becomes deadweight, and the landowner would have even more of an incentive to replace the forest with something that generates profit as soon as possible. Or would decentivizing land ownership with the land value tax lead to less environmental degradation? I'd be curious to know Mr. Beat's or anyone else's thoughts on this.
You could either give a tax break for environmental preservation, or decrease the value of preserved land. Both to the same effect. Alternately, you can just... not do anything with it, and leave that land as a devoted Commons for people to non-exclusively use. Like a state park, basically.
Possibly, but then again, going from young timber to aged timber could be considered an "improvement" Plant a couple of trees and then bingo bango, no tax.
@@jarrettguthrie1670 not quite, though the terminology “unimproved land tax” is definitely misleading. Georgism promotes a tax on unimproved land, meaning you still pay tax on the land regardless of the improvement. It basically means that adding a building or amenity to land won’t directly affect the tax. Natural resources are taxed higher, but the tools to extract them (EG a mineshaft or lumber yard or farm) aren’t taxed at all. The value of the land is determined by some function of what you can do with it, how accessible it is, and how many people live nearby. Building an insanely popular amenity like Disneyworld may indirectly increase the land value by increasing the number of people nearby and general traffic (leading to more visitors and thus more local commerce), but the plot of land directly before and after the construction of Disneyworld would have the same land value. Accurately evaluating the land’s value in order to tax it is probably the biggest obstacle to georgism as the market value of the land is NOT the taxable value, in fact they’re expected to diverge radically, with land prices dropping below the taxable value in many cases due to supply flooding the market.
First thing I thought at the beginning of the video was what about farmers? They produce a relatively low value product that requires a lot of land. If the only tax is land tax, then a factory in Silicon Valley is paying a small tax and making a bunch of money, while farmers pay higher taxes based on land area. This would cause the price of groceries to skyrocket. I don’t think this was addressed anywhere in the video.
Here in Brasil we have a land value tax (two actually, but one for urban and one for rural properties), too. The problem with the rural one is that the value of the land is self reported, which means the owner vastly underestimate the value of their land so that they won't pay lot's of taxes.
The only way self assessment can work is if the government or others are able to buy out the land at a figure based on the self reported assessment. That was the method Sun Yat Sen in China proposed, but personally I see it is as too disruptive to property rights and not needed when properly funded assessment processes can do the job, though the concept could work well on things like Intellectual property, these are called Harberger taxes.
@@schumanhuman that sounds terrible. If you could be involuntarily forced to sell your property to whoever had the money, you wouldn't own anything at all.
@@lukasg4807 I agree it's not workable. l I think if the government threatened to buy you out you would have the option to match their bid rent and pay the higher tax, and if they did buy you out you would get the money for the building value which could then purchase another property. Though that leaves the problem of whether the building assessment process is accurate, in fact it's usually harder to assess than land value so it's not really a sensible system all round, for housing at least, but has potential for IP. It's better to just get good land asssesments and tax away most of the excess rent, having a decent rate of land tax actually would limit price volatility and in turn create tax stability, currently because house prices are spiking eveyone in the US's property taxes are too, creating demands for it to be lowered which would in turn raise property values and make the instability and bubble worse.
Well the most immediate problem I see with a land value tax is it would seem to incentivize developing every inch of undeveloped land. There is value in having open spaces and undeveloped land. And nothing says that it would wind up with many more people being land owners. Indeed, it still wouldn't stop supply and demand from increasing the value of undeveloped land as it became more and more scarce, likely pricing out all but the most wealthy from obtaining unscarred, virgin land. Its hard to say, though. The dynamic are many and varied. Perhaps some game theory modeling might help answer some of these questions, find stable equilibrium points and find loopholes or obvious exploits that would need to be discouraged (through regulation). And of course, that would not account for the interplay of dynamics we didn't think to write rules for.
@@gwentarinokripperinolkjdsf683 I was about to suggest the same thing, why would the local government (on city/county levels) be exempt from such system? They would need to invest money gained from taxes to keep up parks, maintain nature reserves or other significant locations, maintain squares and roads, it's all a delicate balance. Furthermore not every land is suitable for blind development, factories are usually built in strategic locations, where the balance in between proximity to workers, logistics needs of the materials coming in (e.g.: sources of raw materials, such as wood/water) and produce going out for distribution. It is of course a complex issue and some balancing would be required, yet it does seem to be the best approach yet.
a park is land development, as is a wildlife preserve, etc..some land development is simply leaving it open and protecting it for people to enjoy...IE conservation.
@@rjframe4410 following that logic couldn't any land speculator just claim their undeveloped land to be a nature reserve to circumvent the land value tax?
What's your opinion on how to calculate land value? Especially in a way that wouldn't be a vast and unjust tax on the rural producers by the urban consumers
@@doggo6517 Either independent boards to assess market value, with an appeals process, or some have proposed a self-assessment system. Georgists, being decentralists, in general prefer the rental value to be locally assessed and locally collected, but it scales exceptionally well. Localities tax landowners; states tax localities; the federal government taxes states, as it did under the Articles of Confederation. With self-assessment, the owner would periodically have to specify the amount at which they would be willing to sell the land (setting aside, of course, the value of structures or other improvements), and they would pay LVT derived from that value. Both have drawbacks. But it's important to note that land value is already assessed for property tax extortion, er, collection. It's usually a small percentage of the overall "real estate" value, with the value of improvements being a much larger share of the value used for tax purposes. While LVT is virtually unevadable, the assessment process is one area where corruption could sneak in, but unlike in George's day, we have access to open-source GIS software that can keep track of land values quite well, fairly, and objectively.
If your home is used for non-commercial purposes, it’s not real property, your home is personal property and not to be taxed; homestead exemption applies when one lives in a house that is also used for business that is taxable by the state and a return is filed by a taxpayer to establish what is called a situs; a situs is exclusive to any property involved in commerce that is taxable and helps the property appraiser decipher the difference between personal property that is not taxable and real property which is taxable.
In addition to a land value tax, I'm accepting of certain other taxes, such as taxes to pay for common/public spaces such as roads, parks, and government buildings (well, the land they're built on)
Fun fact, on twitter if you see someone with 🔰 in their username or description, chances are theyre a believer in Georgism. That emoji is actually a symbol of a student driver in Japan, but North Americans and Europeans have repurchased to be a sort of icon of Georgism
Green for land, yellow for liberty! Personally I kinda wanted the sunrise-over-the-mountains emoji but this works too. Terror among Japanese drivers is a small price to pay for an important economic movement.
I think we should tax land because it's finite. Otherwise taxes that either target the wealthy, such as luxury or capital gains, are avoidable, such as tariffs, or use taxes, such as road tolls, are perfectly fine.
@@iammrbeat, Do you see the one flaw in this idea with today's government zoning law? How they used their land back in 1880 is different from how we use it today. If we eliminate the single-family zoning law and let people have multi-use zoning, Henery George's concept will work and reduce traffic and climate change. People's quality of life will improve. Unfortunately, the government has placed too many restrictions on land owners and their rights.
@@iammrbeat If YT allowed the link above, it is a YT channel called Not Just Bikes. In this video, he talked about transit and multi-use zoning. Although he does not go into much detail, the main subject is there. With multi-use zoning, it should not just be residential but commercial also. If we can live, work, and play in one neighborhood, then we do not need cars as much as we use today.
@@iammrbeat It's not a sensible idea, as what "unimproved" land is up for debate. What some would see as "improved", such as building a factory producing cars, I would see as vandalism. As there's no agreement on what "improvement" is, the idea is a non-starter.
@@blahdelablah We know what unimproved means. There are economists whose sole job it is to value land. Its the bare value of land without improvement. It doesn't matter if you think a factory or other improvement is vandalism. Because that part wouldn't be taxed. The land it sits on is worth the same. Governments already do studies to identify what the land value is - either for research statistics or for land tax in those places that have it.
@@ThepoLarbear-le1yz "We all know what unimproved means", do we now. Here's a question for you, of the following two options, which is the most improved land... 1. Taking a bare field and turning it into a forest. 2. Tearing down a forest and creating a factory producing jewellery.
@@blahdelablah both of those are considered improved according to georgism. literally any major changes made by the owner of that land is an improvement. that being said, i think that the second scenario is more improved
This is an absolutely terrible idea. Back until the 1870s-1880s in my state, only improved land was taxed; i.e. you only paid tax on land you were using. In this portion of the state, given the topography, only a portion of most peoples' land could be farmed. Then along about the 1870s, they decided they needed 5 times the tax money they'd been getting, so they instituted the Wild Land Tax (unimproved land that wasn't being used). So what was the result, most people couldn't afford to pay the tax and most and in some cases all of their land sold for taxes. That land was promptly snatched up at auctions for pennies on the dollar by the area's wealthy folks. So the middle class and poor got poorer and the rich got richer...........and here we are 150 years later, and most of those poor families are still poor and most of the rich families are still rich. The more things change the more they stay the same.
They are going to implement this for the techno-feudalism we're entering. Then people will be pushed out of their own land because of jealous, lazy socialists who refuse to acknowledge migration has long term issues in an AI economy of which they perpetuated and didn't prepare UBI for. They'll push the problem onto landowners, shaming people for owning more land than you “need” because the tech gods will be untaxable. Over time the criteria of this tax will expand, pushing people out of their farms to build matchbox flats. The only way to win is to own a piece of the tech cog that will make the world spin, the only way is if you all learn to code and innovate and even then the tech gods will just ensure you must learn their abstractions continuously so you can never feasibly retire.
Im not not a fan but i have several concerns A: the inability to tax us owership abroad B: the development of natural land without checks to make sure we dont destroy all the nature C: modern markets will be largely untouched and therefore i dont think it will produce enough revenue to fund the government
Taxes, or failing to turn a profit? You can blame one, but the reality is its the other. Especially given the many subsidies available for farmers. Not saying farming is easy. It has lots of risks. I know, because I farm. But that’s the nature of it. There’s also lots of very profitable farmers. The reality, is that the biggest land ownership these days is by a corporation, not individuals. Breaking that up, or making more tax revenue off of it just makes sense.
@@davidposton3931 my answer to that is that while food would necessarily be more expensive, a “land tax only” system would leave a LOT more money in the hands of those who own or rent small properties. All my life I’ve been taxed anywhere from 20% all the way to 40% of my income and I live on a tiny plot of land. If I paid only 5% of my income for property taxes, and paid 50% more for food, I would probably be left with more money in the end. That wouldn’t be the case for large property owners. They might find it to be better financially to see their property, which would necessarily lower ALL property values, which is a good thing for young and poor seeking to buy their first property.
@@davidposton3931 Because food is already taxed, but in different stages. This won't eradicate taxes, not even necessarily reduce the amout of taxation, what Georgism WILL do is tax in a more efficient and intelligent manner, resulting, therefore, in an increase in the amount of capital available in the hand of investors and less profit for people that hold land for speculation, which increases the cost of rent and decreases land accessibility to the lower strata.
This sound really good to me, but does Georgism provide an answer for how to protect against over industrializing ever square inch of land, bulldozing forests because they don't provide much value to the land owner? Or would rural land tax be so low that you'd easily break even by just selling out hunting licenses? Or would the government have to step in and buy many more small patches of land just for the purpose of preserving it as the US government already does for national parks?
What prevents that from happening in the status quo? What makes you think a Land Value Tax would cause this to happen? Land Value Tax says nothing about zoning, which affects what is built much more directly. More speculatively, I would guess that Land Value Tax would reduce the amount of land being industrialized, as much land is used inefficiently because landowners prefer low density housing that artificially reduces the supply of housing, thus driving up the value of their "land assets".
@@TheGeemili It seems like with Georgism you would be punished for not chopping down all that nature and building SOMETHING on it, with the current system you aren't punished so the push to build something inefficient on it to avoid having to pay isn't there. With the current system you still earn money by not doing anything.
I don't think it would cause all land to be occupied. Rather, land would either be left completely fallow, or used up as much as possible for a short term turnover to be abandoned. Really, if you think about it, it would be rough on homeowners because they would be penalized for non-productive use for their own benefit. There are few problems in the starting logic. One, George retains the medieval fallacy that only the seller of a transaction benefits. This is not true. Everyone benefits. Two, there is nothing about natural resources that is simply given. First, land has to be discovered and surveyed. Even if all you do is pick berries, discovering the berries takes work and adds value. Doubt me? Someone might be willing to trade you something for the location of those berry bushes. Secondly, it takes a capital investment to make use of natural resources. Berries don't pick themselves. They require a time and labor investment. Anything more sophisticated should be obvious. Cultivation, building, and tunneling are value added. Third, valuing land without an actual transaction is spurious. Guesses can be made, yes, but you don't actually know until the transaction is made. You might think a property is really valuable, until you actually try to sell it. Not to mention, it would eventually become impossible to price land, because land isn't actually bought or sold. This by itself kills Georgism outright. They would be forced to resort to the using foreign markets for their own pricing as the Soviets and Hitlerites had to. Fourth might be more contentious, but speculation can actually serve a purpose. Holding a land fallow might have a purpose over the course of years. Now, imagine one day you're sitting on your front porch and a plane flies over towing a big canister off a cable. Turns out, an oil exploration company just discovered evidence of oil under your house. Now you can no longer afford to live there.
@@JohnSmith-wx9wj oh wow thank you, this was very insightful as a I thought it couldn't be perfect by itself. But I don't think the whole concept is a goner, and see a lot of potential if it is combined with other laws and ideas.
"Which is why it will never happen." What a great and inspiring idea to be crushed by such a depressing and crippling message instead of offering ideas on how to bring it about. Truly is it any wonder it isn't more widespread.
Political nihilism may be self-defeating but you’d be doing a disservice to not point out the landowner lobby, 66% of which are homeowners. Although they’d only be disadvantaged for inefficiency and costing society, they’d trade for a system where they hold advantages they don’t earn and don’t deserve for one where they don’t hold any advantages.
@@wildfire9280 Corporate landed interests making a fortune in market-distorting real estate speculation would convince landowners that we're coming for their generational family farms and suburban homes with white picket fences. The truth is that the vast majority of residents in both categories would end up paying far less in taxes overall.
@@ElasticGiraffe Good luck convincing the average resident homeowner that a higher tax on their land would be offset by the removal of shit like income tax and sales tax. Honestly, sales tax might be the easiest to argue for if you approached it from the viewpoint of removing currency denominations that no longer have meaningful purchasing power and smoothing out the everyday experience of local commerce. If someone pitched LVT to me and the only thing they said to convince me was "imagine removing sales tax and now all purchases will always be divisible by 5" I would jump on board.
It sounds good until you own land. Then you really don't own land, you're essentially renting the land from the government. Same with local property tax. You're always renting your land from some government. Ideally, any property we own never gets taxed. We should only get taxed when money is exchanged for property, assets, or services... ie. Use Tax. This way the health of the economy is directly correlated with the health of the government which will incentivize the government to focus on promoting a free market rather than trying to suppress free markets with an excessive amount of regulations. So no, when I own land... it's mine, I don't want to pay the government a god damn thing for my own property to simply exist.
Mr Beat would be stuffed if there was a gun 💪 tax! In all seriousness, our local council rates and state land tax (in Qld Australia) are based on unimproved land value. Tax efficiency is a concept I wasn’t really aware of, other than to have heard the term. Thanks Mr Beat 🥁
@@iammrbeat A gun tax is an interesting idea. Though the debate should be who should take the burden of the tax, producers or consumers? I would argue it should be on consumers. Would love to hear your thoughts on this issue!
@@yubtubberoodle6044 Yeah I never really understand why people obsess over the dangers of guns when it's literally the ammo that does the killing and anyone with a decent workshop, some metal pipes and some skill with metalworking can make a functional approximation of a gun, whereas ammo requires a lot more work/materials.
Known as Council Rates, this unimproved land tax is how all local government in Australia fund themselves. State Governments also raise a Land Tax based on market value of the land and improvements.
I see one glaring issue with only a land tax that incentivizes development, this would cause massive deforestation and land normally used for agriculture to be developed into housing, and industry. We could put limits on this and different tax codes for farmland and foresting areas to solve this, but but people like the wealthy land owners in this video will hate it about as much as they hate the policy in this video
I always forget how ripped Mr. Beat is jc. Also, three factors of production exist in Economics: labor, land and capital. Their respective earnings are called wages, rent and profit. I don't know enough about the history of Economics to tell if the "rent" terminology already existed prior to George's works or if they became used in the science after them, but I thought it was a fun thing to mention.
Interesting video! I'm not an economist so I welcome comments from anyone with expertise, but to me a few things sound funny. Firstly the notion that deadweight loss is a bad thing. I mean sure it sounds bad, "dead" "weight" "loss", but I find it alarming how much people seem to promote growth and acceleration. Like was mentioned some products *should* be produced less, like cigarettes, but I'd argue there's many more things, like cars, airplanes, smartphones, junk food, clothing, cosmetics, anything disposable, meat, and there's probably more. I'd worry about taking away that deadweight loss from all the above, they should have *more* deadweight loss. Secondly it sounds like all the weight of paying taxes will fall on industries that use a lot of land. This is nice for producing more efficient crops, and less meat, but will also likely hinder the movement towards more ethical meat production, shifting back to cramped spaces and lots of diseases. Even if you don't care about that part it still probably means food will get far more expensive because now, instead of the most profitable industries sharing the tax burden, a disproportionate portion of it will fall on the food industry and will simply be charged through to the consumer I'd love to hear people's thoughts, because other points of Georgism sound great and I'd love to gain more understanding
Interesting concept that I haven't thought about before. As a Hoosier, our state uses property tax (I would classify it as a land value tax) to support the public schools. As a farmer and landowner I can see several pros and several cons with this idea that need thought out yet. Changing our method of taxing is complicated and our Federal Gov. (sadly) is hungry for more tax revenue with the amount of spending we have. I still think the tax burden would still fall to the consumer as no one will operate for a loss but its good to hear other ideas. Cheers
Currently a huge amount of revenue in the economy is payed for land usage, the land owners collect that revenue from homebuyers and businesses simply for owning the land and doing nothing else. That revenue would be the least harmful thing to tax compared to property, income or corporation tax.
Land in cities, per acre, is worth vastly more than farmland. The kinds of economic access there are much greater, driving land prices up. Farmland would remain profitable because the tax is on the unimproved value of land. So you keep all the profits from the sale of your crops since planting and harvesting crops counts as an improvement on the value of land, and the removal of property taxes would reduce the costs to making farming methods more efficient and profitable
Why is a piece of urban land worth something? The answer is mostly, "Because of what is nearby." The value of land is collectively, publicly created. But private landowners can appropriate this publicly-created value regardless of whether or not they put it to productive use. In other words, they don’t have to contribute to the good party going on around them. Speculation inflates land prices near existing infrastructure, thereby pushing development to cheaper (but more remote and less productive) sites. This destroys farmland, and it requires the wasteful duplication of expensive infrastructure, increasing tax burdens.” It sounds like LVT’s effect would be overwhelmingly helpful.
@@iammrbeat absolutely lol. They’re riding high right now with housing prices. If you own land in Florida right now you’re basically financially set for life
@@hs5312 Im actually very well aware of it as its quite common in South Germany (Im German), i like it a lot in Theory but in praxis it sadly often gets corrupted by Politicians
I think the issue with this is that amount of land you own correlates poorly with your income and wealth. A multimillionare running his company from a single office building might pay only ten times the tax of regular homeowner. Also farmer would pay a lot more which in turn would skyrocket food prices.
The Farmer situation really concerns me but as far as your multimillionaire question is concerned, remember he is paying that tax on all the land he owns. So the massive factories that he may have many of all get taxed for the land they take up.
The whole point of Georgian, it isn't taxing the worker or the capital holders. The millionaire owning a profitable business isn't taxed to reduce dead weight loss, in the same way the worker isn't taxed. Only.land is taxed
That is precisely what is occurring at this time. As the availability of land fit for agriculture is given over to developers. Asphalt, concrete, and more expressways to allow the wealthiest people to escape the last ring of suburban waste that they created, and are now trying to leave behind. As the acreage diminishes, and the need for higher yields to feed more people, in a climate that I have seen change dramatically in my seventy five years of living on a farm, and by listening to the struggles of my grandparents and their neighbors during the Depression and the Dust Bowl times, it concerns me about what the next great social upheaval will be, and how the majority of our population who would rush to the ER if they found a callus on their hand would react to three days without Gatorade and Twinkies. Hell is coming to Earth in search of residents. Congratulations to you for seeing the future problems before they become current events. Stay safe!
It seems this tax could help fight urban sprawl and incentivize higher density housing and mixed use development. Owners with valuable land in urban areas would want to make the best usage of their property.
George was not a capitalist, nor a communist, nor "something in between". He had a completely new framework of looking at the world. Marx stated that there is no capitalism if labor has access to land. I also want to add that I am super happy the ideas of George are getting popular again, thanks for spreading the message! (from a Belgian Georgist) Each one teach one!
@@robbedemeyDemey Your comment says that Marx said it. I quote from your comment, not knowing if you are right, because it sounds right. Also, my reply may make more sense if you see it as my reaction to the statement. At the start of capitalism land was *enclosed* and people were forced out and forced to sell their labor in factories. If you were a farmer and not suitable for such factory work you were likely criminalized or worse. " *Enclosure* is a term, used in English landownership, that refers to the appropriation of "waste" or "common land" *enclosing* it and by doing so depriving commoners of their rights of *access* and privilege." -Wikipedia
related: Primitive accumulation of capital "Marxist Scholar David Harvey explains Marx's primitive accumulation as a process which principally "entailed taking land, say, enclosing it, and expelling a resident population to create a landless proletariat, and then releasing the land into the privatized mainstream of capital accumulation"."-Wikipedia
@@volta2aire "Where ordinary people have a place to live and monopoly is frowned on all day..." I meant this part, it sounds like Henry George, but I am not sure.
8:56 I don't think it is dramatic, once you know that poverty and all the hardship that comes with it is preventable, and all that has to happen is what you think you know, how can you not get both with hope and fear?
I had never heard of Georgism before this video. About a week after this video, I was reading a book about David L. Lawrence (Pittsburgh's Renaissance mayor, 1946-59) and there was a passage that mentioned Georgism with the assumption that the reader would be familiar with it.
@@oscarmartinezcastro7725 It could be referring to the adoption of split-rate taxation in several Pennsylvanian cities, of which I believe Pittsburgh was first and much before the acceleration after deindustrialization. The state made these reforms available in 1913.
California specifically passed an amendment to their charter to go even further away from georgism and towards landlordism. They don't allow properties build before the 80's to get re-appraised, essentially paying taxes on their valuation back then, rather than 2022.
To me it seems that there is an inherent problem with the land value tax. It is based on the value of the land (absent the improvements), which is basically impossible to ascertain. Any improvements that are made are hostage to some committee with the power to reassess the value of the land sufficient to capture the values of the improvements. So it degrades into a property tax. An example: You are a farmer, and you build a barn, silo, corn crib, improve the soil, and build irrigation systems. Now the government puts a road right to the property. That makes it feasible for someone to put in apartments. The value of the land has increased, so the taxes/rent is raised so you can no longer profitably farm. Your non-taxed improvements have been rendered nearly worthless.
I agree with the idea that its is impossible for a government to ascertain the unimproved value of land. Whose to say the government will be fair and unbiased, and have the neccessary expertise to do it? Even if they did, they would still be guessing at the fair market price for the unimproved land. I would support a small percentage tax on actual earned rents, and the same percentage tax on the potential rent on similar or equivalent properties, if the property in question was not being rented. (the potential rent thing is so that you aren't punished for renting a place out vs living in it yourself.) The farm example though would still apply without land taxes. If the government built a road that increased land value beyond the use for farming, the farmer's land would be bought out and converted to apartments regardless.
What I don't understand is WHO decides what the value of the land is? And how often does it get reevaluated? How does it deal with a corrupt evaluator? eg. Someone wants to take over his competitor factory, so bribes the evaluator to set the value sky-high for just one term - current occupier can't afford it and has to leave, and the new occupier gets a lower value next term to make up for the loss on the first term. Even it it was up for auction to avoid the corrupt evaluator problem, then you could still get people outbidding the current occupier just to put them out of business since there's a cost to picking up the business and moving it elsewhere.
