We need to replace all taxes with a land value tax

Discussion in 'Budget & Taxes' started by TSLexi, Nov 18, 2014.

  1. TSLexi

    TSLexi New Member

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    We need to replace all taxes with a land value tax (land in this case also means the radio spectrum and the territorial waters/EEZ).

    The current tax code is:

    1. Byzantine

    2. Distortionary

    3. Easy to avoid and evade.

    By taxing only the owners of land based on the land's value, the government will ensure:

    1. Land is not speculatively held

    2. Taxes are only incurred by those who have the most ability to pay

    3. Production and consumption are not affected.

    4. Marginal areas will be developed due to their low land values and thus low taxes

    5. Real estate bubbles will be deterred.

    6. It is impossible to externalize or evade, and simple to assess

    If we combine this with an energy-backed currency (preferably the system outlined here:http://www.energybackedmoney.com/) , and offered government subsidies to those who want to install solar panels and load balancers, our economy will prosper as businesses no longer have to worry about tax implications, the money supply will keep pace with economic activity, and real prices will not only stabilize, but they are now meaningful, as the premium of a finished product is the energy needed to convert the raw materials in it. Nearly every cost can be quantified in energy terms, as nearly everything requires energy.
     
  2. Anders Hoveland

    Anders Hoveland Banned

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    Economically this is the best form of taxation.

    However, it should be recognized that there is an inherent danger in a centralized government taxing people's property that they already own. That is one of the reasons why the U.S. constitution requires all direct tax to be apportioned among the states, with a different rate in each state based on population. Because there is a limit to how high the federal government could raise it in the most populated states, thus keeping a safety margin for the less populated states.

    But State governments could potentially implement direct taxation.
     
  3. unrealist42

    unrealist42 New Member

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    How is the value of land determined?
     
  4. politicalcenter

    politicalcenter Well-Known Member

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    Do you own any land?
     
  5. TSLexi

    TSLexi New Member

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    By independent appraisers. Like how they currently appraise land.

    - - - Updated - - -

    Yes, me and my partner own a couple acres.
     
  6. Phoebe Bump

    Phoebe Bump New Member

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    It has to be held by somebody.
     
  7. Phoebe Bump

    Phoebe Bump New Member

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    Lordy, I see that as overwhelming assessor's offices and the tax appeal process.
     
  8. unrealist42

    unrealist42 New Member

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    Really?
    Independent land appraisal as it is practised is a fraught business with a long and compelling history of bribery, fraud, collusion and misrepresentation at epic scales. It is among the most arbitrary, subjective and contentious practices in the entire economy, especially where it is taxed.

    The only realistic way to objectively determine the value of land is to sell it, all other methods of valuation are arbitrary.

    The idea that land is not speculatively held is completely ridiculous. Land speculation has been a driving factor in the US economy since before the nations founding and continues to be so right into today. Home builders in the US have purchased over a million of acres of land to build new homes in a purely speculative move. REITs are defined as speculative real estate investment trust vehicles and they currently own about half of the commercial real estate and rental housing in the US. There are no guarantees to REIT investors so their investment is pure speculation on a chance that the REIT will return them a profit. Some do, some don't.
     
  9. TSLexi

    TSLexi New Member

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    Okay, a better system: The government hires an appraiser, and the property owner hires an appraiser, and the two negotiate a land value, the fee being fixed by law. Any misdealing by either or both parties results in both civil and criminal penalties.

    Also, I am well aware land is speculatively-held. I own a few mortgage notes and REIT shares. The REITs I hold buy undeveloped land and develop them to be mortgaged or rented, because they want income, not appreciation.

    Land should be developed and used, not held un-used. Rent-seeking behavior is the cause of all our economic problems. A land value tax will discourage speculative land holding and real estate bubbles.
     
  10. TSLexi

    TSLexi New Member

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    Well, it'd be balanced by all the other tax cases they won't have to deal with.

    - - - Updated - - -

    Yes, but not *speculatively* held. If you own land, you'd better be either living on it, developing it, renting it out, or using it for business purposes, i.e. office space, manufacturing use, mining/drilling, lumber, or farming.
     
  11. Scholar

    Scholar New Member

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    The economy would crash in less than a year
     
  12. unrealist42

    unrealist42 New Member

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    There is no greater rent seeking behaviour in our modern economy than the REIT.
    There is no greater history of malfeasance in local and state government than in speculative real estate development.

    We might be better off if land was taxed at such a rate that no one would dare to own any, which will happen if we try to derive all government revenues from a land tax.
    The government would then gain ownership of all the land through foreclosure for failure to pay taxes and then fund itself by leasing and renting it out, becoming the ultimate rent seeker.
    This would improve the economy enormously as the government would set its rents at the rate needed to fund itself and pay its debts, which is far less than what the private land owning rent seekers are sucking from the economy.
     
  13. ALL SOLUTIONS

    ALL SOLUTIONS New Member

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    Not a very good idea. Land producing no income get taxed. Granny living only on social security and living in her personally owned home has to pay tax? Little income but own land; forced to sell the land. States will little land would have high taxes per acre/lot.

    Why does land have to be used?

    Better idea would be to eliminate all real estate taxes.

    There are better ways to fix the tax code.
     
    Battle3 and (deleted member) like this.
  14. Battle3

    Battle3 Well-Known Member

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    This is about the worst proposal I have ever read.

    A land tax is a "property tax", and as all property taxes it is assessed independently of the ability of the owner to pay the tax. The tax is also assessed based on possible future gain, not real gain which has been received by the owner. That's why states are tending away from property taxes.

    Land values fluctuate based on all kinds of reasons not just speculation and bubbles. Changes in zoning and other regulations, changes in the neighborhood, changes in the economy and unemployment, change sin the environment, even changes in demographics, all impact the value of land.

    If the land owner pays taxes on his land and the land value decreases, does the govt refund those taxes back to the land owner? The owner received no benefit from the land when it was - on paper - more valuable, he paid a penalty (tax) based on that vapor ware land value. When the price drops, he deserves a refund from the govt.

    And as in all tax schemes, your proposal will neither be simple nor easy to assess, but it will be evaded and the politicians will play favorites.
     
  15. Anders Hoveland

    Anders Hoveland Banned

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    I had thought about this and came up with an idea. The owner would present a number himself and pay taxes based on that number.
    But the government could come in and say they want to buy his property for the price the owner has assigned to the land. If the owner then refuses, he could then have the option of paying an alternate higher tax, enough to have discouraged him from setting the initial number too low.
     
  16. Reiver

    Reiver Well-Known Member

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    Georgism has its purpose: typically in giving a more intellectual approach to 'green economics' (given modern economists tend to just blubber about negative externalities). However, those that think land tax provides a tax solution are snake oil salesmen.
     
  17. TRFjr

    TRFjr Well-Known Member Past Donor

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    You do realize most money made now days isn't based on land and or the recourses derived from land Tec giants like Google and Micro Soft will pay next to nothing in taxes. you do realize that?
     
  18. Reiver

    Reiver Well-Known Member

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    Nope! Land taxes do achieve what they want: attack rent seeking without distorting markets. Property taxes, in general, do not (as shown, for example, with the "poll tax" and the riots it quite rightly created). This is about how land tax is exaggerated in its important. Of course we should attack rent seekers. Land is just one 'avenue'
     
  19. Anders Hoveland

    Anders Hoveland Banned

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    I completely understand what you mean. There is some truth to this.
     
  20. Durandal

    Durandal Well-Known Member Donor

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    What economy? All we have now is a centrally managed fantasy.

    Eliminate the income tax. Income should not be taxed. Our labor and labor are not a government service, and remember that it didn't start until America's neverending warfare started with WWII, and then it was just a small tax on the very wealthy, not on every effing body with a lower middle class or higher income.

    Eliminate fiat money and the Federal Reserve, along with their collections office called the IRS, as well. There's a LOT wrong with this country, and it all starts there.
     
  21. Reiver

    Reiver Well-Known Member

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    Yes it should (unless you're an anarchist who wants to put a fire to it all). Its an integral part of ensuring progressivity and reducing income inequalities in capitalism. Real world economics always seems to get in a way of ideologues...
     
  22. Anders Hoveland

    Anders Hoveland Banned

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    Certainly not for lower income people. They barely make enough to cover their own expenses as it is.
     
  23. Shanty

    Shanty New Member

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    I'd oppose it. I'd rather see a more progressive income and capital gains tax, and strengthening inheritance taxes on the wealthy.
     
  24. danielpalos

    danielpalos Banned

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    I believe a True welfare-State could be run with only general forms of taxation simply due to a Commerce Clause.
     
  25. geofree

    geofree Active Member

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