The Singapore Model?

[Roy L]

glad I learned today, that no land ownership is compatible with free market.

It's more than that: land ownership is NOT compatible with a free market.

 

[Roy L]

I'm not sure how much I agree with George's assertions; I haven't studied them enough, but I think what he was getting at, and this could explain the relative prosperity of Singapore and Hong Kong, is that if the government collects the rent on land, that eliminates a landlord class whose economic role is to essentially capture the rental value on land.

Correct. We can have a system like the current one, where the productive pay taxes to government to fund services and infrastructure, and then have to pay land rent to landowners for access to the same services and infrastructure their taxes just paid for, or we can have a system where the productive just pay land rent to government for access to the services and infrastructure their land rent payments will pay for, cutting out the something-for-nothing payment to the landowner. Do you like paying for government twice so that landowners can pocket one of those payments in return for doing nothing?

It is really just that simple.

The thought is that people would be left to collect all of the income on improvements they made on the land; for instance, the developer might pay the state 100% of the value on the unimproved land, but he would be entitled to all of the profit, untaxed, on the improvements made on the land he for which he pays the government.

Right. By recovering the unearned welfare subsidy to landowners, government no longer has to take the rightful earnings of producers.

I'm not sure how it would work out in a large country, but I believe part of Pittsburgh's revival (relative to other Rust Belt cities) was due to them changing the tilt in property taxation towards land values and away from land improvements.

Right again. Recovering publicly created value for public purposes and benefit is a system that has always worked, everywhere it has ever been tried.

 

[Demigod]

There is some private landowning in Singapore (about 1/4 IIRC), none in HK.

??? Cuba is far from isolationist. It is just blockaded by the US; most other countries trade with Cuba, have diplomatic relations, etc. North Korea is isolationist.

North Corea is not isolationist.They trade with Russia,China,Iran and many others.

The problem is that just like Cuba they have sanctions but unlike Cuba its not just the US but the UN.

So unless the country they export to is not directly bordering and wants to break the UN sanctions them(China and Russia) or the thing they are selling cant be easily transported (Rocket technology to the Iranians) they cant trade.

The moment their ship is in international waters the US navy would confiscate it.

 

[Roy L]

North Corea is not isolationist.They trade with Russia,China,Iran and many others.

North Korea has almost no trade with anyone but Russia and China, and it is mostly military equipment and conducted in secret. North Korea's official guiding policy is "juche," or self-reliance, which is explicitly isolationist.

So unless the country they export to is not directly bordering them(China and Russia) or the thing they are selling cant be easily transported (Rocket technology to the Iranians) they cant trade.

They can't trade because they don't recognize international treaties dealing with payments, currencies, ship transit and so on, they block connections with international communication networks, etc.

 

[eworthington]

North Korea has almost no trade with anyone but Russia and China, and it is mostly military equipment and conducted in secret. North Korea's official guiding policy is "juche," or self-reliance, which is explicitly isolationist.

They can't trade because they don't recognize international treaties dealing with payments, currencies, ship transit and so on, they block connections with international communication networks, etc.

I would wager to say that North Korea probably trades a lot more than we think. Much of it might be through front groups based out of neighboring countries or just outright smuggling, but they obviously bring in enough currency to build a large scale defense infrastructure. Their neighbors also have an interest in keeping North Korea's regime afloat because, as annoying as they can be, nobody wants to cleanup the disaster that would occur if the Kim dynasty were to end.

 

[Becker]

As others would otherwise be at liberty to use it, appropriating it as property violates their rights to liberty without just compensation. The only difference between landowning and slavery is that owning a slave violates all of one person's rights, while owning land violates one of all persons' rights.

try telling that to homesteaders.

 

[Becker]

It's more than that: land ownership is NOT compatible with a free market.

sounds like the same thing to me. thanks.

 

[Becker]

If land is owned, there are only two ways to not subsidize it: recover the publicly created value of land for public purposes and benefit

Which would mean selling it. what's wrong with that?

(which is the way to liberty, justice and prosperity, as explained in the "land value tax" thread); or remove the economic advantage of using the land by eliminating government services and publicly provided infrastructure (i.e., abolishing government, which is the way to feudalism).

can you be a little more specific? What advantage does the land owner have that isn't what the leasing party or building owner has, as long as they both utilize the location?

Are you basically saying, that "permanent" land ownership violates free market because the ownership and advantages don't die with the owner, therefore only short term (30 years) , non-inheritable leasing and ownership, or "users only" ownership is fair?

If so, aren't you basically saying iheritance violates free market? Or anything other than "you get only what you personally worked for" violates free market?

 

[eworthington]

Which would mean selling it. what's wrong with that?



can you be a little more specific? What advantage does the land owner have that isn't what the leasing party or building owner has, as long as they both utilize the location?

Are you basically saying, that "permanent" land ownership violates free market because the ownership and advantages don't die with the owner, therefore only short term (30 years) , non-inheritable leasing and ownership, or "users only" ownership is fair?

If so, aren't you basically saying iheritance violates free market? Or anything other than "you get only what you personally worked for" violates free market?

Becker, I'm not taking sides here, I do, however, believe that you are misunderstanding what Roy L. is saying. Georgists, I believe, assert that nobody owns the right to collect rent on undeveloped land; i.e., they did not create the land, they only possess due to privilege, conquest, or by purchasing a title from someone who at some point came into possession of the land that way. I believe that Henry George felt the government should collect land rent as the only means of revenue - no tariffs, wealth taxes, or income taxes. In that sense people have full possession of what they created, and they possess the right to keep one-hundred percent of the revenue earned by developing land. Let me give you an example from my limited understanding of their theory:

Currently property is taxed based on some ratio that includes both land value and the value of improvements. Therefore in an dense area or in prime farm land, there is an incentive, to not put money into it because you may end up ahead by making less of the property because your assessed improvement value is so low. Just think about how many slums you see in otherwise valuable urban areas. In a Georgist system, there would be no tax on improvements, but there would be a high -- possibly -- 100% tax on the land itself, so the incentive for the owner is to take care of the land and make the most of it.

From what I have seen it has worked pretty well. Pittsburgh, while never going fully Georgist, did change the tilt on taxation, and of all the large rust belt cities, it is the only one that looks like it hasn't been through a war.

 

[Becker]

Becker, I'm not taking sides here, I do, however, believe that you are misunderstanding what Roy L. is saying. Georgists, I believe, assert that nobody owns the right to collect rent on undeveloped land; i.e., they did not create the land, they only possess due to privilege, conquest, or by purchasing a title from someone who at some point came into possession of the land that way. I believe that Henry George felt the government should collect land rent as the only means of revenue - no tariffs, wealth taxes, or income taxes.

What else would they collect money for?
So far i think I understood what he said.

In that sense people have full possession of what they created, and they possess the right to keep one-hundred percent of the revenue earned by developing land. Let me give you an example from my limited understanding of their theory:

Currently property is taxed based on some ratio that includes both land value and the value of improvements.

because the assumption is you own it, or it wouldnt.

Therefore in an dense area or in prime farm land, there is an incentive, to not put money into it because you may end up ahead by making less of the property because your assessed improvement value is so low.

that's the risk you take for buying, if you don't like it, sell it to somebody who will be happy to pour money on it.

Just think about how many slums you see in otherwise valuable urban areas.

Or people who are willing to pay a tax if they can make enough money overall. But yes, it would discourage some development, which amounts to slums, but then wouldn't it be ripe for a buyout by an investor who is willing?

In a Georgist system, there would be no tax on improvements, but there would be a high -- possibly -- 100% tax on the land itself, so the incentive for the owner is to take care of the land and make the most of it.

Somehow I understood it as just the opposite. But fine.

From what I have seen it has worked pretty well. Pittsburgh, while never going fully Georgist, did change the tilt on taxation, and of all the large rust belt cities, it is the only one that looks like it hasn't been through a war.

but land ownership is still allowed?

 

[Keith and stuff]

NH has the highest property tax rates of any state as measured by net revenue per dollar of aggregate market value, and the smallest government as measured by total taxes per dollar of GDP. Coincidence?

If NH wasn't one of the 10 states with the highest property taxes, the residents of NH would likely not have what may be the lowest overall tax burden in the nation. This is especially likely in NH where there is more local control of spending than anywhere else in the US. NH is a great example that more decentralization may improve quality of life and reduce taxes.

 

[eworthington]

I don't see how land ownership would be any different than it is now. If you don't pay your property taxes you will eventually have your property taken from you.

 

[Roy L]

I don't see how land ownership would be any different than it is now. If you don't pay your property taxes you will eventually have your property taken from you.

In the legal sense, yes, it would be similar, and that was one of the points Henry George was making: leave the form, but change the essence. Economically, it would be far, far better than the current system.

Consider the analogy with slavery again. Suppose when slaves were emancipated, the slave owners still got to keep their title deeds, and could buy and sell slaves, but the slaves could not be forced to work or otherwise have their rights violated, and the title deeds only entitled the slaves' owners to charge a 1% commission on any wages the slaves were paid. The form of chattel slavery would remain, but the essence would be gone, and the title deeds would not be worth very much, if anything, like land title deeds under a land rent recovery system.

 

[Roy L]

try telling that to homesteaders.

Most homesteaders were either aware that they were violating the rights of aboriginal peoples, did not believe aboriginal peoples had rights, believed that like slavery laws, the homestead laws defined rights, or thought that because their own little slice of rights violation was so small, it didn't count.

 

[Roy L]

Which would mean selling it. what's wrong with that?

Selling it won't work, because future benefits are too deeply discounted. It's too easy for current governments to sell off the rights of future generations and then stiff them. Surely that is one of the objections to government debt.

What advantage does the land owner have that isn't what the leasing party or building owner has, as long as they both utilize the location?

I'm not sure what your question means. The landowner gets to charge the user full market value for everything government, the community and nature provide. The building owner only gets to charge for things HE provides.

Are you basically saying, that "permanent" land ownership violates free market because the ownership and advantages don't die with the owner, therefore only short term (30 years) , non-inheritable leasing and ownership, or "users only" ownership is fair?

No, any landowning that enables the landowner to pocket publicly created value violates free market principles, because it's a subsidy. The community is creating value that the landowner takes.

If so, aren't you basically saying iheritance violates free market?

No, privilege violates the free market whether it is inherited or not. Consider a taxi medallion. It doesn't matter if it is inherited. It inherently gives the owner an unfair advantage that violates free market principles.

Or anything other than "you get only what you personally worked for" violates free market?

No, consensual trade also conserves rightful property.

 

[eworthington]

If NH wasn't one of the 10 states with the highest property taxes, the residents of NH would likely not have what may be the lowest overall tax burden in the nation. This is especially likely in NH where there is more local control of spending than anywhere else in the US. NH is a great example that more decentralization may improve quality of life and reduce taxes.

Your post brings up a good point. One benefit to property taxes, over other forms of taxation, is that it tends to localize government more -- especially when compared to sales and income taxes.

 

[Roy L]

One benefit to property taxes, over other forms of taxation, is that it tends to localize government more -- especially when compared to sales and income taxes.

Yes, land taxation is the perfect tax for local government, as land can't hide, and it can't move. However, taxing improvements at a high rate is very counter productive, as it increases their cost and discourages building and even maintenance. Detroit is finding out that excessive taxation of improvements is just as harmful as inadequate taxation of land (as in CA since Prop 13). Land values are so low in Detroit that the great majority of the property tax -- which is substantial -- ends up on improvements, which is a major reason no one wants to build there, or even spruce up existing structures, landscaping, etc.

 

[TheViper]

The Singapore model works in Singapore because Singapore is a single government. From the city government to the federal government...all pretty much the same body.

In the US, we have over 100,000 separate governments. 1 Federal, 50 states, a dozen territories, over 3,000 counties, dozens of independent cities, boroughs and parishes, and thousands of cities and towns.

 

[silverhandorder]

As others would otherwise be at liberty to use it, appropriating it as property violates their rights to liberty without just compensation. The only difference between landowning and slavery is that owning a slave violates all of one person's rights, while owning land violates one of all persons' rights. The more of the good and useful land is owned as property, the less right to liberty you have. That is why in countries where land is privately owned, but government does not make provision for the landless through minimum wage laws, welfare, publicly funded education, pensions and health care, union monopolies, etc. the condition of the landless is indistinguishable from the condition of slaves:

"During the war I served in a Kentucky
regiment in the Federal army. When the war
broke out, my father owned sixty slaves.
I had not been back to my old Kentucky
home for years until a short time ago, when
I was met by one of my father's old
negroes, who said to me: 'Master George, you
say you set us free; but before God,
I'm worse off than when I belonged to your father.'
The planters, on the other hand, are contented
with the change. They say, ' How foolish it was in
us to go to war for slavery. We get labor cheaper
now than when we owned the slaves.' How do
they get it cheaper? Why, in the shape of rents
they take more of the labor of the negro than they
could under slavery, for then they were compelled
to return him sufficient food, clothing and medical
attendance to keep him well, and were
compelled by conscience and public opinion, as
well as by law, to keep him when he
could no longer work. Now their interest and
responsibility cease when they have
got all the work out of him they can."

From a letter by George M. Jackson, St. Louis.
Dated August 15, 1885.
Reprinted in "Social Problems," by Henry George.

You have not answered my question. You just said others would be at liberty to use. Why would that be true? You are no more at liberty to use someone's land as you are liberty to use a car.

 

[Becker]

Selling it won't work, because future benefits are too deeply discounted.

So we don't discount it, we set the price at whatever is fair, and if the result is nobody can afford it, then the result is nobody owns. What demands future benefits be discounted? Supply of funds?

It's too easy for current governments to sell off the rights of future generations and then stiff them. Surely that is one of the objections to government debt.

Understandable.

I'm not sure what your question means. The landowner gets to charge the user full market value for everything government, the community and nature provide. The building owner only gets to charge for things HE provides.

Why doesn't the building owner get to charge what nature and community provides? Doesn't location always matter?

No, any landowning that enables the landowner to pocket publicly created value violates free market principles, because it's a subsidy.

I think you mean, any land ownership that lets a person walk away with the future benefits at a "one time fee" short of just market value, is unfair. Why don't we just counter the subsidy by taxing?

Or are you saying, whether leasing the land, or selling and taxing, the result is the same?

The community is creating value that the landowner takes.

Why do they do that if they're not getting something back?

No, privilege violates the free market whether it is inherited or not. Consider a taxi medallion. It doesn't matter if it is inherited. It inherently gives the owner an unfair advantage that violates free market principles.

No, consensual trade also conserves rightful property.

What's an inherited non-privilege? And what's a privilege that isn't worked for/paid for?