What do you think of Land Value Tax (LVT)

[redbluepill]

Seraphim, I would like it if you addressed the Paine quote.

 

[VBRonPaulFan]

Nobody ever disputed the Thomas Paine quote. I'll post it again: “it is the value of the improvements only, and not the Earth itself, that is individual property."

Is Thomas Paine wrong? If he is wrong in his assumption then what is the definition of individual property? Is property what we create through the fruit of our labor? If that is the case then how does an individual create land or its resources?

There isn't really any argument there because he is stating the obvious. Of course, he never gives any indication of how to determine the value... because it is wholly subjective. Being that it is subjective, there is no way of definitively creating a price for all intents and purposes. But your solution of the LVT gives the ability to the government to define an arbitrary price for purposes of defining a taxable amount. I think that is fundamentally unsound.

 

[redbluepill]

There isn't really any argument there because he is stating the obvious. Of course, he never gives any indication of how to determine the value... because it is wholly subjective. Being that it is subjective, there is no way of definitively creating a price for all intents and purposes. But your solution of the LVT gives the ability to the government to define an arbitrary price for purposes of defining a taxable amount. I think that is fundamentally unsound.

It is not subjective. Realtors assess value of land separate from improvements every single day. And for the third time, government does not determine the rent, the market does.

 

[redbluepill]

More evidence of Friedman's geoist leanings:

“Free to Choose: A Conversation with Milton Friedman” — July 2006: http://www.hillsdale.edu/imprimis/ The following is an edited transcript of a conversation between Hillsdale College President Larry Arnn and Milton Friedman, which took place on May 22, 2006, at the Ritz-Carlton Hotel in San Francisco, California, during a two-day Hillsdale College National Leadership Seminar celebrating the 25th anniversary of Milton and Rose Friedman's book, Free to Choose: A Personal Statement. excerpt:

LA: Let me ask you about demographic trends. Columnist Mark Steyn writes that in ten years, 40 percent of young men in the world are going to be living in oppressed Muslim countries. What do you think the effect of that is going to be?

MF: What happens will depend on whether we succeed in bringing some element of greater economic freedom to those Muslim countries. Just as India in 1955 had great but unrealized potential, I think the Middle East is in a similar situation today. In part this is because of the curse of oil. Oil has been a blessing from one point of view, but a curse from another. Almost every country in the Middle East that is rich in oil is a despotism.

LA: Why do you think that is so?

MF: One reason, and one reason only — the oil is owned by the governments in question. If that oil were privately owned and thus someone's private property, the political outcome would be freedom rather than tyranny. This is why I believe the first step following the 2003 invasion of Iraq should have been the privatization of the oil fields. If the government had given every individual over 21 years of age equal shares in a corporation that had the right and responsibility to make appropriate arrangements with foreign oil companies for the purpose of discovering and developing Iraq's oil reserves, the oil income would have flowed in the form of dividends to the people — the shareholders — rather than into government coffers. This would have provided an income to the whole people of Iraq and thereby prevented the current disputes over oil between the Sunnis, Shiites and Kurds, because oil income would have been distributed on an individual rather than a group basis.

LA: Many Middle Eastern societies have a kind of tribal or theocratic basis and long-held habits of despotic rule that make it difficult to establish a system of contract between strangers. Is it your view that the introduction of free markets in such places could overcome those obstacles?

MF: Eventually, yes. I think that nothing is so important for freedom as recognizing in the law each individual's natural right to property, and giving individuals a sense that they own something that they're responsible for, that they have control over, and that they can dispose of.

 

[libertybrewcity]

i'd rather own my land than rent it.

 

[Wesker1982]

Correct answer. Taxes should be based on consumption, in order to encourage savings and capital formation.

Is a Tax on Consumption Possible?

 

[helmuth_hubener]

I know that many people here would like to see all taxes abolished. I'm wondering if you think LVT is an improvement over traditional property taxes or other taxes. As long as a government exists, what would be the most liberty-friendly way of funding that government? Does LVT have a place in funding local governments, for example?

Phew, I thought your opening post was going to be a set up for Invasion of the Georgists! From this post and looking at your posting history, I see that's not the case.

Charles Adams gave a whole series of lectures available on http://Mises.org on this very thing: taxation, how does it affect things, what are the least destructive methods of taxation, etc. The Greeks thought a lot about it, too. The Greeks figured that the more indirect the tax, the better, while direct taxation (like an income tax, estate tax, or property tax) was inimical to liberty.

The Greeks were good thinkers and we ought to consider what they had to say. Certainly we had more of a spirit of liberty and independence when the federal government was funded with tariffs and excise taxes (which are indirect taxes).

However, ultimately Adams admits that the rate of taxation is a huge factor, maybe even more so than the method. He gives the example of when he used to live in a country with a poll tax (one of those evil direct taxes), and he absolutely loved it. The rate was so low, it was wonderful. Yes, it was direct taxation, but you could pay this small amount of money and boom, you're taken care of for the year. No IRS, no withholding, no nothing.

I personally think a poll tax would be a fantastic way to go, as long as it was literally a tax on going to the polls. Make the law: thou shalt pay $1000 per year if you want to vote in the elections. Otherwise, if you don't pay, you can't vote that year. That's well-nigh voluntary. If I don't want to pay taxes, I can't vote (over-rated anyway) but I am otherwise left alone. No Tax-Evasion Prison, no IRS spying on bank accounts, no nothing. Plus the people paying for it make the decisions, and that's only fair.

 

[helmuth_hubener]

I say: eliminate all taxes,

Screech!! Stop that sentence right there! Do not proceed any further. Nothing you could follow those words with could possibly improve the sentence. Just stop while you're ahead and I will say Amen, Hallelujah, right on Brother JackieDan!

 

[heavenlyboy34]

The OP's idea is more reasonable, moral, and Constitutional than the Income tax, but I still say that people should avail themselves of the IRS' "patriotic donation" program instead of insisting on any sort of tax. Tariffs are okay too, IMO.

 

[helmuth_hubener]

What makes it your land?

The life and liberty that I put into making it mine. I worked and saved, using my time, talents, and energy, and thus was, after a long time, able to trade someone for the land. To rob me of my property, to claim it isn't mine, is to claim that portion of my past which I traded for it was not or is not mine. It is to rob me of years of my past, just as to murder me is to rob me of (potentially) years of my future, and to enslave me is to rob me of my present. All these acts are fundamentally evil and anti-life.

That is why it is mine. I came by it honestly and upstandingly. It would be dishonest and despicable to rob me of it.

 

[redbluepill]

The OP's idea is more reasonable, moral, and Constitutional than the Income tax, but I still say that people should avail themselves of the IRS' "patriotic donation" program instead of insisting on any sort of tax. Tariffs are okay too, IMO.

I don't think I have ever met a geolibertarian/Georgist who was pro-IRS.

 

[redbluepill]

The life and liberty that I put into making it mine. I worked and saved, using my time, talents, and energy, and thus was, after a long time, able to trade someone for the land. To rob me of my property, to claim it isn't mine, is to claim that portion of my past which I traded for it was not or is not mine. It is to rob me of years of my past, just as to murder me is to rob me of (potentially) years of my future, and to enslave me is to rob me of my present. All these acts are fundamentally evil and anti-life.

That is why it is mine. I came by it honestly and upstandingly. It would be dishonest and despicable to rob me of it.

Alright, you bought it from someone. What made the land theirs?

You have a natural right to work the land. You also must acknowledge the right of others around you to have equal access to land. When you have a few people grabbing up all the land then you have a problem. That is why there was and is such a huge gap between the wealthy and impoverished in the South starting in the colonial days. Many poor people became indebted to a few wealthy landowners. They never experienced freedom because they were not allowed access to the land without permission.

I once asked a fellow libertarian to consider the following scenario:

There is an island where one man lives. Since he was there first he claimed the island as his property. One day another man who is shipwrecked shows up on the island. The first man declared that if the second man is to stay he must become his servant.

What did the fellow libertarian say? He said the first man had every right to make the second man his 'bitch'. I was appalled.

 

[heavenlyboy34]

I don't think I have ever met a geolibertarian/Georgist who was pro-IRS.

I'm not pro-IRS, but until we transition away from the prevailing system, we've got to work with what we've got. It took more that 100 years to get here, and it's not going to be fixed overnight.

 

[heavenlyboy34]

Alright, you bought it from someone. What made the land theirs?

You have a natural right to work the land. You also must acknowledge the right of others around you to have equal access to land. When you have a few people grabbing up all the land then you have a problem. That is why there was and is such a huge gap between the wealthy and impoverished in the South starting in the colonial days. Many poor people became indebted to a few wealthy landowners. They never experienced freedom because they were not allowed access to the land without permission.

I once asked a fellow libertarian to consider the following scenario:

There is an island where one man lives. Since he was there first he claimed the island as his property. One day another man who is shipwrecked shows up on the island. The first man declared that if the second man is to stay he must become his servant.

What did the fellow libertarian say? He said the first man had every right to make the second man his 'bitch'. I was appalled.

This is not true. People are limited in how much land they own by how much money they earn. All men have equal rights, but not all men are created equal. Since you start with this faulty premise, the rest also falls apart.

ETA: Your use of the labor theory of value here is poor. It's not labor alone that gives a man a title to property. Otherwise, the workers would own the means of production, and we would be living in the mythical workers' paradise.

 

[redbluepill]

I'm not pro-IRS, but until we transition away from the prevailing system, we've got to work with what we've got. It took more that 100 years to get here, and it's not going to be fixed overnight.

Agreed. Too radical of a change too soon may have a negative rather than positive effect.

 

[redbluepill]

This is not true. People are limited in how much land they own by how much money they earn. All men have equal rights, but not all men are created equal. Since you start with this faulty premise, the rest also falls apart.

ETA: Your use of the labor theory of value here is poor. It's not labor alone that gives a man a title to property. Otherwise, the workers would own the means of production, and we would be living in the mythical workers' paradise.

Except when you work for a business you are agreeing to forfeit any ownership of what you create and get reimbursed through wages, benefits, etc. But we cannot trace back the creation of natural land to any single person or company. Therefore, land is different from capital and therefore must be treated differently.

Not all men are created equal? So I assume you disagree with the Declaration of Independence?

 

[helmuth_hubener]

You also must acknowledge the right of others around you to have equal access to land.

I must not and do not acknowledge any such outlandish thing.

You know perfectly well the homesteading theory. If potential property is unowned, you come in and claim it, in the case of land by fencing it off and making use of it. It's straightforward, you just disagree with it, on the grounds of some "enough and as good" tripe.

I have just one question for you, because this is what all Georgist conversations come down to. If I fly up to space and claim a small asteroid, are you going to force me to pay land tax on it? Have I somehow violated the rights of the poor and land-less by owning the asteroid? Or under your philosophy may I own the asteroid, absolutely, free and clear?

 

[LibertyEagle]

I don't like a tax where if unpaid, they can take your land. It's my land, and they should have no power over any of it. All property taxes should be abandoned.

Quoted for truth.

 

[redbluepill]

I must not and do not acknowledge any such outlandish thing.

Right, so outlandish that libertarians, paleoconservatives and classical liberals like Frank Chodorov, Milton Friedman, Adam Smith, Libertarian Party Founder David Nolan, William F. Buckley, Stephen Moore, Fred Foldvary, and Albert Jay Nock have voiced their support for geoist theory.

You know perfectly well the homesteading theory. If potential property is unowned, you come in and claim it, in the case of land by fencing it off and making use of it. It's straightforward, you just disagree with it, on the grounds of some "enough and as good" tripe.

Most homesteaders lived a hard life because all the good land was immediately horded by those before them.

Born in Wisconsin of a farming family, familiar with the related questions of land and poverty through actual experience on Iowa and Dakota farms, [Hamlin Garland] was ready, when he picked up by chance a copy of the Lovell edition of Progress and Poverty on a Dakota homestead, to accept the truth of George's ideas. "Up to this time," he wrote later in his autobiography, A Son of the Middle Border, "I had never read any book or essay in which our land system had been questioned. …I caught some glimpse of the radiant plenty of George's ideal Commonwealth. The trumpet call of the closing pages filled me with a desire to battle for the right. . . ." For some time he had been searching for the cause of the misery and poverty which he saw about him in the lives of the homesteaders, and with Henry George as his guide he discovered the answers for which he searched. In Boston a few years later he heard George address a meeting in Faneuil Hall (an experience he described in detail in A Son of the Middle Border), and he came away convinced that he now knew the cause of poverty. He shortly joined the Anti-Poverty League which had sprung up under George's influence, spoke from the platform in defense of the movement, and did his best to convince his friends, among them William Dean Howells, of the need for economic and social reform. He had not yet turned his mind to literature, but when Joseph Kirkland, the author of Zury, a grimly realistic novel of farm life, encouraged him to "write the truth" about what he saw, he began in 1887 to write stories of the life he had known in the Midwest, drawing upon his own experiences for the background of his work and upon Henry George for its controlling philosophy.

http://www.cooperativeindividualism.org/nye-russel_garland-and-george.html

I have just one question for you, because this is what all Georgist conversations come down to. If I fly up to space and claim a small asteroid, are you going to force me to pay land tax on it? Have I somehow violated the rights of the poor and land-less by owning the asteroid? Or under your philosophy may I own the asteroid, absolutely, free and clear?

No one else is living on that asteroid. Not an issue.

Let me ask you about a similar scenario: Suppose you are on a spaceship that malfunctions and crashlands on an asteroid. Now suppose another man is already living on that asteroid. He says you have now right trespassing on his asteroid and must leave. Of course you can't because your ship is no longer operational. Since it is his asteroid and you have 'no right' to be there he says you may stay as long as you remain his servant (hey, better than being shot for trespassing on his rock right?)

 

[redbluepill]

Depression Hits Robinson Crusoe's Island
by Mrs. Mary Atterbury

"Friday," said Robinson Crusoe, "I'm sorry, I fear I must
lay you off."

"What do you mean, Master?"

"Why, you know there's a big surplus of last year's crop. I
don't need you to plant another this year. I've got enough
goatskin coats to last me a lifetime. My house needs no
repairs. I can gather turtle eggs myself. There's an
overproduction. When I need you I will send for you. You
needn't wait around here."

"That's all right, Master, I'll plant my own crop, build up
my own hut and gather all the eggs and nuts I want myself.
I'll get along fine."

"Where will you do this, Friday?"

"Here on this island."

"This island belongs to me, you know. I can't allow you to
do that. When you can't pay me anything I need I might as
well not own it."

"Then I'll build a canoe and fish in the ocean. You don't
own that."

"That's all right, provided you don't use any of my trees
for your canoe, or build it on my land, or use my beach for
a landing place, and do your fishing far enough away so you
don't interfere with my riparian rights."

"I never thought of that, Master. I can do without a boat,
though. I can swim over to that rock and fish there and
gather sea-gull eggs."

"No you won't, Friday. The rock is mine. I own riparian rights."

"What shall I do, Master?"

"That's your problem, Friday. You're a free man, and you
know about rugged individualism being maintained here."

"I guess I'll starve, Master. May I stay here until I do? Or
shall I swim beyond your riparian rights and drown or starve
there?"

"I've thought of something, Friday. I don't like to carry my
garbage down to the shore each day. You may stay and do
that. Then whatever is left of it, after my dog and cat have
fed, you may eat. You're in luck."

"Thank you, Master. That is true charity."

"One more thing, Friday. This island is overpopulated. Fifty
percent of the people are unemployed. We are undergoing a
severe depression, and there is no way that I can see to end
it. No one but a charlatan would say that he could. And if
any ship comes don't let them land any goods of any kind.
You must be protected against foreign labor. Conditions are
fundamentally sound, though. And prosperity is just around
the corner."

http://ricardo.ecn.wfu.edu/~cottrell/ope/archive/0409/0030.html