1. I see land value taxation as the very best way to move us toward a society where low fixed incomes are the exception, not the norm, for our elderly.
2. Yes, perhaps many more of us would choose to live in apartments were they available at a reasonable price, and if our incentives were neutral. In California, for example, Proposition 13 keeps people in oversized well-located homes long after they no longer need to be close to the city to access their jobs. The incentives are just perverse! And the result has been that, while homeownership among the elderly is higher than in most of the rest of the country, among those who are younger, it is much lower than the rest of the country.
Apartments tend to be well-located, in the center of things, so that one can walk to the services one needs, or take public transportation. As we move into a future where energy supplies are going to become increasingly expensive, we need to keep our constraints in mind. As people age, they may not want to take care of a single family home, or may not be able to take care of it. Make it easy to move to a more suitable home. Good for the older person, good for the younger families who need housing appropriate to their family size.
3. The wealthy among us are often those who own not only their own single family home (or two, or three) but also a bit of commercial real estate. Sometimes it is where they conduct their business, but often it is simply their source of income, where a series of tenants conduct their business, until they post the "lost our lease" sign, or the "going out of business" or the "under new management" or "opening soon." The landlord keeps getting paid. The entrepreneur struggles under the strain of paying that rent, because in order for his business to have a chance, he needs a good site -- location, location, location -- where he will be accessible to potential customers and to employees.
Then we tax him. We don't tax the landlord much, but we sure sock it to the entrepreneur who is paying the rent. He pays twice, first to the landlord, and then in the form of income taxes and wage taxes and such. What do those taxes support? The kinds of spending that allow his landlord to charge him more next year, without providing anything additional in the way of amenities or services. And then we allow the landlord to depreciate not just the building, but often the value of the land, which of course is not wearing out a bit -- and when he sells the property, the next owner starts depreciating it from a higher rate! Who loses? We the people, the wage earners, who pay a portion of our wages to make this all possible.
No wonder we have poverty and people struggling to support their families. No wonder we don't have as many jobs as we need, or jobs that pay well. The landlord is collecting his free lunch, but it isn't free to society. Someone must pay for it. And we are!
Most of us who live in single family homes don't live on particularly valuable land, and most of us live on smallish lots (If I recall correctly the census data I've seen, the median lot size for single family homes is well under 0.5 acre.)
But the land in the central business districts of our largest cities is awesomely valuable: in the range of $250,000,000 per acre in some places. But that value lodges in private pockets and in corporate pockets, and I suspect you've seen the data about how concentrated the ownership of corporate stock is: the top 10% of us own the lion's share (and the lion doesn't leave a whole lot for his fellow hunters, if you remember Aesop), so the best land is effectively owned by relatively few of us -- and the rental value stays in those pockets, untaxed! (Works for them, but not for the rest of us!)
Tax the annual value of that land, and we'll have a revenue stream that doesn't steal the fruits of anyone's labors. Better yet, its value won't come down (it may even rise) but its *price* will come down, so that others can afford to use it.
Who loses? Only the land speculator, the landlord who has retired to Florida, or offshore, or somewhere to collect his rent, which is mostly locational value, not the value of the building he or his predecessor built. He is pocketing the land value, the value the community creates. And we let him.
Winston Churchill called it "the mother of all monopolies."
In 1903, Lizzie Magie created a board game called The Landlord's Game to teach these ideas. If you saw the board, you'd recognize it as Monopoly.
Where do the wealthy put their money? Good land.
Our "founding fathers" were mostly big landholders, and they weren't about to limit the privileges of the owners of land. But today, we can trace some of our most serious social and economic problems to permitting the holders of our best land to privatize its value, as if they had actually created it, or bought it from the guy who created it. BZZZT! Good deal if they can get it -- sorry for the rest of you!
Tax the land value first. Then, if we still have to tax other things, tax sales a little and income a little. Land value is very big, very concentrated, hidden in plain sight.
Our wages should be ours to keep. It is part of owning oneself.
There is a much better tax base. It can't go off shore, or hide behind paperwork. None of us can produce any more of it, no matter how high demand gets. What is it? LAND! As Will Rogers put it, they aren't making any more of it.
Since none of us made it, none of us is more entitled to its economic value than the next guy. So it is the perfect tax base. Tax the annual value of land, and good things happen. You haven't stolen anyone's creation (as you would by taxing wages.) You haven't distorted the demand for a product someone has made (as you do with a sales tax or a tariff). You haven't punished someone who has produced something (a house, a factory, jobs for others, for example). All you've done is collect from all the landholders something they didn't create and shouldn't be able to privatize. And you haven't disturbed title to property at all.
Better yet, the underused downtown land will get put to better use, as lazy speculators are inspired to stop waiting for their land to "ripen." They'll be motivated to lower their asking price, or put that choice location to good use themselves.
And when a downtown acre gets developed, 10 or more acres on the fringes get protected from premature development... retarding sprawl. Shorter commutes for workers. Less fuel used. Less time. Less pollution.
And when you tax land values, you bring down the price of the land, making it affordable to those who need it. Our children will be able to afford a place to live -- not spend their adult years in their parents' homes. Firemen and teachers and nurses and janitors will be able to afford a place to live, and they won't spend their lives commuting.
How do we do this again? Just tax land value. Collect for the community the value that is made by the presence of the community.
Why tax commuters? Tax those who own the land they commute to! They're the big beneficiaries of everything we do today, and they aren't about to speak up and complain about this state of affairs... like the blue pain reliever pill, it works for them!
Today, we tax the landholder lightly, then tax the worker and the consumer in order to fund the very spending which drives up property values, so that the landlord can charge his tenant more next year, and the seller can ask a higher price for his property next year. No wonder we have problems! No wonder a few are getting rich and the rest of us are paying twice -- once to the landlord (or the mortgage lender) and once to the government.
Slashdot Mirror
Further, to your points:
1. I see land value taxation as the very best way to move us toward a society where low fixed incomes are the exception, not the norm, for our elderly.
2. Yes, perhaps many more of us would choose to live in apartments were they available at a reasonable price, and if our incentives were neutral. In California, for example, Proposition 13 keeps people in oversized well-located homes long after they no longer need to be close to the city to access their jobs. The incentives are just perverse! And the result has been that, while homeownership among the elderly is higher than in most of the rest of the country, among those who are younger, it is much lower than the rest of the country.
Apartments tend to be well-located, in the center of things, so that one can walk to the services one needs, or take public transportation. As we move into a future where energy supplies are going to become increasingly expensive, we need to keep our constraints in mind. As people age, they may not want to take care of a single family home, or may not be able to take care of it. Make it easy to move to a more suitable home. Good for the older person, good for the younger families who need housing appropriate to their family size.
3. The wealthy among us are often those who own not only their own single family home (or two, or three) but also a bit of commercial real estate. Sometimes it is where they conduct their business, but often it is simply their source of income, where a series of tenants conduct their business, until they post the "lost our lease" sign, or the "going out of business" or the "under new management" or "opening soon." The landlord keeps getting paid. The entrepreneur struggles under the strain of paying that rent, because in order for his business to have a chance, he needs a good site -- location, location, location -- where he will be accessible to potential customers and to employees.
Then we tax him. We don't tax the landlord much, but we sure sock it to the entrepreneur who is paying the rent. He pays twice, first to the landlord, and then in the form of income taxes and wage taxes and such. What do those taxes support? The kinds of spending that allow his landlord to charge him more next year, without providing anything additional in the way of amenities or services. And then we allow the landlord to depreciate not just the building, but often the value of the land, which of course is not wearing out a bit -- and when he sells the property, the next owner starts depreciating it from a higher rate! Who loses? We the people, the wage earners, who pay a portion of our wages to make this all possible.
No wonder we have poverty and people struggling to support their families. No wonder we don't have as many jobs as we need, or jobs that pay well. The landlord is collecting his free lunch, but it isn't free to society. Someone must pay for it. And we are!
Most of us who live in single family homes don't live on particularly valuable land, and most of us live on smallish lots (If I recall correctly the census data I've seen, the median lot size for single family homes is well under 0.5 acre.)
But the land in the central business districts of our largest cities is awesomely valuable: in the range of $250,000,000 per acre in some places. But that value lodges in private pockets and in corporate pockets, and I suspect you've seen the data about how concentrated the ownership of corporate stock is: the top 10% of us own the lion's share (and the lion doesn't leave a whole lot for his fellow hunters, if you remember Aesop), so the best land is effectively owned by relatively few of us -- and the rental value stays in those pockets, untaxed! (Works for them, but not for the rest of us!)
Tax the annual value of that land, and we'll have a revenue stream that doesn't steal the fruits of anyone's labors. Better yet, its value won't come down (it may even rise) but its *price* will come down, so that others can afford to use it.
Who loses? Only the land speculator, the landlord who has retired to Florida, or offshore, or somewhere to collect his rent, which is mostly locational value, not the value of the building he or his predecessor built. He is pocketing the land value, the value the community creates. And we let him.
Winston Churchill called it "the mother of all monopolies."
In 1903, Lizzie Magie created a board game called The Landlord's Game to teach these ideas. If you saw the board, you'd recognize it as Monopoly.
Where do the wealthy put their money? Good land.
Our "founding fathers" were mostly big landholders, and they weren't about to limit the privileges of the owners of land. But today, we can trace some of our most serious social and economic problems to permitting the holders of our best land to privatize its value, as if they had actually created it, or bought it from the guy who created it. BZZZT! Good deal if they can get it -- sorry for the rest of you!
Tax the land value first. Then, if we still have to tax other things, tax sales a little and income a little. Land value is very big, very concentrated, hidden in plain sight.
Why do we tax wages at all?
... retarding sprawl. Shorter commutes for workers. Less fuel used. Less time. Less pollution.
... like the blue pain reliever pill, it works for them!
Our wages should be ours to keep. It is part of owning oneself.
There is a much better tax base. It can't go off shore, or hide behind paperwork. None of us can produce any more of it, no matter how high demand gets. What is it? LAND! As Will Rogers put it, they aren't making any more of it.
Since none of us made it, none of us is more entitled to its economic value than the next guy. So it is the perfect tax base. Tax the annual value of land, and good things happen. You haven't stolen anyone's creation (as you would by taxing wages.) You haven't distorted the demand for a product someone has made (as you do with a sales tax or a tariff). You haven't punished someone who has produced something (a house, a factory, jobs for others, for example). All you've done is collect from all the landholders something they didn't create and shouldn't be able to privatize. And you haven't disturbed title to property at all.
Better yet, the underused downtown land will get put to better use, as lazy speculators are inspired to stop waiting for their land to "ripen." They'll be motivated to lower their asking price, or put that choice location to good use themselves.
And when a downtown acre gets developed, 10 or more acres on the fringes get protected from premature development
And when you tax land values, you bring down the price of the land, making it affordable to those who need it. Our children will be able to afford a place to live -- not spend their adult years in their parents' homes. Firemen and teachers and nurses and janitors will be able to afford a place to live, and they won't spend their lives commuting.
How do we do this again? Just tax land value. Collect for the community the value that is made by the presence of the community.
Why tax commuters? Tax those who own the land they commute to! They're the big beneficiaries of everything we do today, and they aren't about to speak up and complain about this state of affairs
Today, we tax the landholder lightly, then tax the worker and the consumer in order to fund the very spending which drives up property values, so that the landlord can charge his tenant more next year, and the seller can ask a higher price for his property next year. No wonder we have problems! No wonder a few are getting rich and the rest of us are paying twice -- once to the landlord (or the mortgage lender) and once to the government.
Wise up, America!