The Marxist-vs-capitalist False Dichotomy

[Injin]

That's a reasonable analysis, but it still does not answer the question I've been asking.

How are any of these revolutionary programmes of land and money reform to be achieved without revolutionary action lead by a Bonepartist adventurer?

Social change over time.

Usually by the time some "big event" happens that is always held to be the moment of change by historians, theres a popular movement well behind it making the tipping point what it is. Slavers were cold shouldered at the dinner table long before any official changes occured.

[HumanAction]

No, because the tax reduces the price of land and so reduces production / barrier costs to his competitors - he can't raise his prices

Ok, now make a case to actually show that this is the case. So far all I see is a constant repetition of what seems like political dogma.

Land taxes I am supposed to believe drive prices down despite the fact that taxation in general has the opposite effect on prices in general. Ok there could be an exception but I think you do in fact need to demonstrate a case why this should be so.

Worse we already know that land taxes cannot compensate for lost access and result in advantage to those paying them. In such conditions there is no reason to believe that land holders will act against their own interests by lowering either the price at which they sell or are willing to buy. They ultimately cannot be taxed heavily enough to stop them making a profit on the deal if the cost goes up because there is only so much land and people cannot choose to go without access. High prices makes for wealthy land holders, even with high taxes. Rationally you dont get competition between land holders here, it makes much more sense to act as a cartel, either formally or informally and extract the max out of those without access.

[Authoritarian]

That's a reasonable analysis, but it still does not answer the question I've been asking.

How are any of these revolutionary programmes of land and money reform to be achieved without revolutionary action lead by a Bonepartist adventurer?

Thats a good question, I'm not sure is the answer because it involves politicising an unpoliticised and very bored electorate.

Perhaps we can appeal to people's self interest and let them know that landlords don't need to be paid ransom money before people can access what is rightfully theirs; nature.

[Stars]

Taxes define the land.

No taxes = no land divisions.

I couldn't agree more - the problem is there are good pragmatic reasons for land divisions

[Injin]

I couldn't agree more - the problem is there are good pragmatic reasons for land divisions

Name one that doesn't have massive hidden costs that make it a pointless exercise.

[Stars]

Ok, now make a case to actually show that this is the case. So far all I see is a constant repetition of what seems like political dogma.

Land taxes I am supposed to believe drive prices down despite the fact that taxation in general has the opposite effect on prices in general. Ok there could be an exception but I think you do in fact need to demonstrate a case why this should be so.

A short answer is, unlike other taxes, the tax is not the introduction of a new cost for production because it is already charged as deadweight cost on production by landowners. This isn't actually particularly controversial; land taxes are different because land is in fixed supply and so a tax on it does not fall on making it available and so reduce supply and raise price.

I will reply to this question more completely later today

In the meantime, there is some explanation in this link

http://en.wikipedia.org/wiki/Land_value_tax

[HumanAction]

A short answer is, unlike other taxes, the tax is not the introduction of a new cost for production because it is already charged as deadweight cost on production by landowners. This isn't actually particularly controversial; land taxes are different because land is in fixed supply and so a tax on it does not fall on making it available and so reduce supply and raise price.

I will reply to this question more completely later today

In the meantime, there is some explanation in this link

http://en.wikipedia.org/wiki/Land_value_tax

This seems to be a case to support the idea that land tax would not raise prices because it simply replaces land costs paid to landowners, it includes no mechanism for price reduction which is the continual claim from your side of the debate.

EDIT: Ok looked at the wiki and that just repeats assertions too, even the source linked just asserts rather than argues. I'm really quite intrigued to see your case ( if you have one that doesnt rest on other assertions ).

Edited September 9, 2009 by HumanAction

[Authoritarian]

This seems to be a case to support the idea that land tax would not raise prices because it simply replaces land costs paid to landowners, it includes no mechanism for price reduction which is the continual claim from your side of the debate.

The price of land is the capitalisation of the rental element (plus speculation in our market). So if a piece makes £10k in rent per annum then the full price will probably range between £100-£200k which gives a yield of between 5-10%. Take away the rental portion and then there's no value to be had from selling it or renting it to to others, you squeeze out the land price and leave only whats left on top, like buildings etc.

Edited September 9, 2009 by chefdave

[Tob the Blether]

Thats a good question, I'm not sure is the answer because it involves politicising an unpoliticised and very bored electorate.

Perhaps we can appeal to people's self interest and let them know that landlords don't need to be paid ransom money before people can access what is rightfully theirs; nature.

Well at least you've had a go at answering the question.

The answer, of course, raises many more questions. Just how do you politicise the masses? As I mentioned earlier, the only thing that most people really want is to be left alone to 'get on' and compare their levels of 'having' with that of their neighbours.

It is difficult to see what could change that.

[HumanAction]

The price of land is the capitalisation of the rental element (plus speculation in our market). So if a piece yields £10k per annum then the full price will probably range between £100-£200k which gives a yield of between 5-10%. Take away the rental portion and then there's no value to be had from selling it or renting it to to others, you squeeze out the land price and leave only whats left on top, like building etc.

This all assumes the land tax system itself doesnt confer new benefits and it does in fact leave room for rental profits as the dividend fails to compensate for lost access meaning the landholder extracts real wealth by renting it to someone. So far I can show why there is advantage to be had by simply gaining exclusive access, I see nothing from your side that counters that.

[Authoritarian]

This all assumes the land tax system itself doesnt confer new benefits and it does in fact leave room for rental profits as the dividend fails to compensate for lost access meaning the landholder extracts real wealth by renting it to someone. So far I can show why there is advantage to be had by simply gaining exclusive access, I see nothing from your side that counters that.

You don't have to take the full rental value it you don't want to. So if we know that in the open market a certain location fetches £10k rent per year then we have an option of taxing that value anywhere between 0 and 100%. Adam Smith recognised this and proposed that the rental value could be partially taxed away from the owners, I think around 50%.

Its just that the lower to 0% we decide to tax the more incentive there is to invest and speculate in land ownership which adds nothing to economic output and only serves to takes away from those that have to produce.

Edited September 9, 2009 by chefdave

[Stars]

This seems to be a case to support the idea that land tax would not raise prices because it simply replaces land costs paid to landowners, it includes no mechanism for price reduction which is the continual claim from your side of the debate.

The cost reductions come from the removal of land price speculation from the competition for land.

[Stars]

This all assumes the land tax system itself doesnt confer new benefits and it does in fact leave room for rental profits as the dividend fails to compensate for lost access meaning the landholder extracts real wealth by renting it to someone. So far I can show why there is advantage to be had by simply gaining exclusive access, I see nothing from your side that counters that.

If a landowner takes a piece of land, he owes the market rent and so can't profit by simply renting out use

I think you may be conflating two meanings of the word rent, renting a house isn't only a matter of land

[Guest Steve Cook]

Errr no.

You mean shes more than happy to send you to jail?

And you still see her?

So, you have no self respect is the message you want to send then. No?

You sound like a member of a cult?

Edited September 9, 2009 by Steve Cook

[Guest Steve Cook]

Well at least you've had a go at answering the question.

The answer, of course, raises many more questions. Just how do you politicise the masses? As I mentioned earlier, the only thing that most people really want is to be left alone to 'get on' and compare their levels of 'having' with that of their neighbours.

It is difficult to see what could change that.

Nothing to lose.....

[HumanAction]

If a landowner takes a piece of land, he owes the market rent and so can't profit by simply renting out use

I think you may be conflating two meanings of the word rent, renting a house isn't only a matter of land

This wont work in practice though, only in ivory tower speculations. Determining market rents for a land tax will be virtually impossible in anything approaching a timely manner. I have said this repeatedly and you do not dispute that I am correct yet you still make arguments that essentially rely on it being untrue.....

As for the rent question, I am aware that renting a house is more than renting land but I'm also aware that this is yet another area of severe difficulty for anyone proposing land rents. Firstly you need to determine what part of a market rate is actually for the land rather than what is on it, then you have the issue that if you dont also tax the development on the land you simply cannot charge very much at all without destroying vital uses of land such as agriculture. Empty land of course has value beyond what is taxable because it's worth something to a market operator to hinder his competition even if he does nothing with the land himself, you could raise the tax on 'unused' land but what the heck is 'unused' land anyway, if he sticks a sheep on it for instance is it 'unused'?

[HumanAction]

The cost reductions come from the removal of land price speculation from the competition for land.

Yawn do you have a case that doesnt just rely on asserting things without either giving evidence or reason for believing what is asserted?

[Stars]

This wont work in practice though, only in ivory tower speculations. Determining market rents for a land tax will be virtually impossible in anything approaching a timely manner. I have said this repeatedly and you do not dispute that I am correct yet you still make arguments that essentially rely on it being untrue.....

No i told you that you were incorrect and told you why

The tax itself will stabilise and lower the exchange price by removing speculation

I think this is the third time

[Stars]

Yawn do you have a case that doesnt just rely on asserting things without either giving evidence or reason for believing what is asserted?

The incentive to speculate is removed because the landowner no longer receives the price

Second time i have told you this

Edited September 9, 2009 by Stars

[the wizard]

I don't see it this way, IMO the labourer vs capitalist doctrine has only clouded the issue because its enabled the real parasites to get away scot free. I'm not saying that labour and capital are best friends but their interests are broadly aligned because the prices they charge are limited in a free market as anyone is able to replace the services that they offer. This isn't so with the other factor of production, land; where there is a very real monopoly at work. (The mother of all monopolies as Churchill put it)

Landowners like socialism, it adds value to their property and leaves them untouched.

Really? I mean really?

Socialists = Bad

Landlords = Bad

=> Socialists = Landlords.

Ok, I get it now.

[Stars]

Here is a brief explanation as to why the tax can't be passed on in prices, by Henry George

http://www.grundskyld.dk/1-shift.html

[HumanAction]

No i told you that you were incorrect and told you why

The tax itself will stabilise and lower the exchange price by removing speculation

I think this is the third time

As I have said repeatedly, simply asserting that stuff will happen "as if by magic" is of little interest to me. That speculation will be removed is an assertion itself as is the idea that merely removing it automagically lowers prices ( people sell speculatively too afterall which means prices can be lowered speculatively as well as raised ). All you are doing is pushing the problem back a level and then acting as though it's solved.

[HumanAction]

The incentive to speculate is removed because the landowner no longer receives the price

Second time i have told you this

How do you even know the price though? It's going to be nigh impossible to determine a fair value for your tax, particularlky if the land is not empty. And this must be at least the third time of asking by now!!!!!

[HumanAction]

Here is a brief explanation as to why the tax can't be passed on in prices, by Henry George

http://www.grundskyld.dk/1-shift.html

The explanation answers none of the central objections actually being made, it relies on the same old assertions and fails to deal with the central knowledge problems. That is the danger of arguing from a textbook rather than of thinking about issues beyond what you read. When objections are made that your authority fails to address you just end up in 'stuck record mode' or slightly better fallaciously appealing to what amounts to disputed authority.

[the wizard]

The explanation answers none of the central objections actually being made, it relies on the same old assertions and fails to deal with the central knowledge problems. That is the danger of arguing from a textbook rather than of thinking about issues beyond what you read. When objections are made that your authority fails to address you just end up in 'stuck record mode' or slightly better fallaciously appealing to what amounts to disputed authority.

1. Landlords always charge the absolute maximum amount that can be paid by the tenants. In other industries, there are limits to the amount that can be charged because the business can be undercut by new competition. Since you cannot produce land, landlords cannot be undercut, and so they charge as much as the market will take.

2. In this way, the cost of rent is driven only by the earned wealth of the nation, and is a direct tax on that wealth taken from the productive and given to landlords.

3. A land value tax cannot be passed on, because the rent is already as high as possible. Increasing it further will simply produce void periods.

4. A land value tax reduces the net yield on land, relative to other asset classes. This makes it a less attractive investment and reduces the cost.

5. A land value 'tax' would arise naturally, in a free market, thanks to Coase's theorem.

Which part of this argument do you disagree with specifically?