[nucklepunche]

I have recently embraced a Georgist economic paradigm. For those who do not know Henry George was an American economist who lived in the late 19th century. George was originally from the east but moved to California, which at the time was newly settled and had lots of cheap land. George returned east and was struck by the massive disparity in living standards he saw between the poor in California, who lived well, and the poor of New York City who lived in squalor. He recognized the central difference was the lack of availability of cheap land in New York City. Obviously, we are talking about a much different time because California has expensive land today, however it might be from not heeding George's warnings.

George was basically a quasi-libertarian in that he recognized that individuals have a right to the fruits of their labor, and thus he opposed all taxation on labor, production, and consumption. Instead he favored a single Land Value Tax on the unimproved value of the land. He differed from libertarians in that he believed that nature could not be owned, as it had existed before man and would need to remain for future generations. He viewed our presence on Earth as like borrowing the land from nature, so he argued that a Land Value Tax would essentially be like a form of rent owed to the community for occupying the land.

George opposed traditional property taxation, which assesses buildings and improvement to land, and favored taxing the land itself. He believed that failing to do so encouraged speculation in land. In general he noticed that there was a paradox in that the better public services became, the higher rents went up, but wages didn't keep up. He recognized two key facts. 1) Land values are important in relation to poverty because housing was (and remains) usually the largest single expense for most people and 2) Real estate speculation is closely tied to economic bubbles and depressions, true then as now.

A properly structured LVT would encourage landlords to put property to productive use, and encourage landlords from sitting on their properties. Finally, as it removed taxation from production and improvements, landlords woud maximize the value of their land via constructing new things on it, which would in turn lead to both lower rents and higher employment and wages. It would decrease speculation and thus bubbles and reccessions following them.

George's ideas were considered progressive at the time, as a LVT would fall mostly on the wealthy and the property speculation industry. The single LVT saw some success in the early 20th century, unfortunately though, throughout most of the 20th century communities shifted toward traditional property taxation that took improvements into account, as well as taxation of production and consumption. However there has been some interest in his ideas since they seem to speak to the problems of our time.

George lived in an era of much smaller government, and he anticipated that his tax would replace all others. He did not anticipate the entitlement state or America's giant military. He also lived in an era where states and municipalities were the government with which people dealt the most, and the Federal government was an afterthought. It is questionable whether we could raise enough capital to fund the Federal government via an LVT from the outset. One thing remains clear, most of the state budget could be funded via a shift toward greater LVT and a shift away from taxing production, consumption, and investment. Theoretically, a Georgist framework could also support a tax on pollution and other negative externalities, since these impact the collective inheritance of man.

Even if it could not address the Federal issue directly, it would eventually trickle down, as I believe it would greatly ease the supply of housing, increase economic growth, lowering prices and increasing wages. The massive entitlement state's burden would be eased somewhat by the resulting decrease in poverty rates at local levels, which could lead to a more efficient tax shift at the Federal level.

I do not view Georgism as left or right, but a synthesis of both, perhaps left-libertarian from a point of view. It is on the left in that it recognizes nature as something more than a commodity and its reforms would primarily reduce the power of speculators and landlords. On the other hand, it is on the right in that it is free market oriented and would result in radical tax reform, and reduces poverty via increasing economic efficiency as opposed to traditional income redistribution. The main thing standing in the way, would be the powerful lobby of landlords, real estate, and speculators of all kind, but there is no inherent ideological obstruction on either side. The only reasonable philosophical objections could come from anarcho-capitalists who reject even the LVT and from those who favor the elimination of the market system altogether on the far-left.

Either way Georgism could give open minded members of both sides a lot of what they often tout, the left will get reduced poverty and unjust wealth concentration, the right will get smaller government and a more efficient tax system. I believe the primary work will be educating people. On first glance, some on the left might reject it because it could on the surface sound like ultra-regressive tax reform, and on the right some might be put off because the talk of land being the common inheritance of all will sound like something a hippie environmentalist would say, however I believe this could be overcome by patient teaching.

[Rei Murasame]

I do not view Georgism as left or right, but a synthesis of both

It's great to have watched you figure things out right up to reaching this stage. Taken in conjunction with the rest of your economic positions, is this about the time that you will consider how Georgism has partly inspired just about every Third Position movement that ever called for land reform, and even also inspired most of the second generation of Fabian socialists in the United Kingdom.

The main thing standing in the way, would be the powerful lobby of landlords, real estate, and speculators of all kind, but there is no inherent ideological obstruction on either side.

Actually, liberal-capitalists would oppose it precisely because those people have an ideological predispostion to side with precisely that powerful lobby you've just named. Asking people who have any kind of serious commitment to the present system to consider your idea would be pointless, since those people are the ones you'll be pitted against anyway.

I believe the primary work will be educating people.

In the developed world as it stands, that's the best way to go about it.

This quote put it well:

For the right moment you must wait, as Fabius did most patiently, when warring against Hannibal, though many censured his delays; but when the time comes you must strike hard, as Fabius did, or your waiting will be in vain, and fruitless.

[Brother of Karl]

I never understood Georgism, even though I've read a little about it. I just don't see how it could be any less destructive or more fair than the current system. By taxing only land (and it would have to be a ridiculously high tax to offset the other taxes we lose), you greatly distort the economy. First of all, not all of the economy relies on land, in fact, most of it doesn't. So this makes it less than a perfect money vector from which to skim money. Granted, all primary industries (agriculture, resource extraction, etc.) require some land.

That brings me to my next point. By taxing land so high, you would discourage people from owning for any longer than they need to. Mineral rights owners would make sure their land is strip mined as fast as possible to eliminate taxes. Farmers would be forced to use destructive practices such as mono-cropping to maximize short term profits. No one would want to own rental property in the first place, since it could be taxed even if there are no profits or if you spend time without a tenant.

And then by divorcing the value of land from what has been produced on it, you are forced to ignore reality. For instance, producing land could change its inherent value. When you mine resources, the land used becomes worthless. When you farm, it can go either way depending on whether sustainable methods are used. When you build a township or city, the land surrounding it becomes more valuable because of its proximity to the city. And so on. Who is supposed to determine the value of things in this system?

[Rei Murasame]

Indeed. But it's on thinking about those problems that Nucklepunche will probably see that Georgism has a whole array of problems which need to be sorted out. 'Inspiration' is one thing, 'adherence' is another. After all, no one who was ever inspired by Georgism, ended up actually adhering to it, and there is a reason for that.

Hopefully it will be fleshed out in this topic.

[nucklepunche]

Actually, liberal-capitalists would oppose it precisely because those people have an ideological predispostion to side with precisely that powerful lobby you've just named. Asking people who have any kind of serious commitment to the present system to consider your idea would be pointless, since those people are the ones you'll be pitted against anyway.

A valid point. I call it "vulgar libertarianism" or "royalist libertarianism." It is when people on the mainstream right conflate free market principles with an automatic kneejerk defense of the business community, when in reality the business community is deeply entrenched with an economic system that grants numerous privileges, not only direct government subsidies but a tax system rigged in their favor. Even intellectual property and corporate personhood are creations of government. Unfortunately classic welfare state liberalism says little to counter less unless it is Bill Maher or some other liberal commentator smugly laughing at the hypocrisy of Republicans claiming free markets while supporting corporate subsidies, however their solution always goes back to the old paradigm of welfare state liberalism.

I never understood Georgism, even though I've read a little about it. I just don't see how it could be any less destructive or more fair than the current system. By taxing only land (and it would have to be a ridiculously high tax to offset the other taxes we lose), you greatly distort the economy.

I mentioned in my OP the shortcomings. I stated that Henry George lived in an era of much smaller government, and was essentially a libertarian on all issues but this. I am not, although I am on some. That being said there is no way we could fund the entitlement state with LVT alone. I only suggested adopting it at the state or local level at this point.

There is a whole set of issues at the Federal level, and I could write a tome about my ideas on how things dealt with at that level could be reformed.

As for economic distortion, all taxes distort economic incentives to some extent, but LVT does it less than any other tax I can think of.

First of all, not all of the economy relies on land, in fact, most of it doesn't. So this makes it less than a perfect money vector from which to skim money. Granted, all primary industries (agriculture, resource extraction, etc.) require some land.

This is true, but the cost of housing is the primary cost people are fleeced by, and we have a lot of able bodies sitting idle. The idea of LVT is actually to encourage people to improve upon the land they have. It would benefit cities because it would increase urban density, at the expense of suburbs. This is why it is often cited as a green tax. At the rural level there is not a dense network of services, so taxation could be lower.

That brings me to my next point. By taxing land so high, you would discourage people from owning for any longer than they need to. Mineral rights owners would make sure their land is strip mined as fast as possible to eliminate taxes.

They already pay property taxes. As I noted earlier, Georgism recognizes, at least philosophically, that humans did not create the land and owe it to their posterity to preserve it. It does not preclude regulation of strip mining, because it recognizes that when you take future generations into account, rampant environmental destruction is not a victimless crime, the victims are future generations. This being said LVT is not so much a tax as it is "rent," it views natural resources as essentially being the common inheritance of man. Yes somebody has to extract them, but the community can legitimately regulate this extraction.

Farmers would be forced to use destructive practices such as mono-cropping to maximize short term profits.

Actually the current system is precisely to blame for the big agribusiness bonanza. Absentee landlords are paid outrageous sums by government for land they do not even farm. LVT would in fact be more friendly to the small farmer people often lament is being wiped out, as it would discourage formation of larger agribusiness, or encourage them to reduce their footprint.

No one would want to own rental property in the first place, since it could be taxed even if there are no profits or if you spend time without a tenant.

Not really. This is precisely the problem George sought to address. He actually wanted to bring more housing to the market more quickly. In essence we have a system that encourages greater urban sprawl outside of cities, not to mention discourages central city development in all but a few places in the USA (like NYC). The truth is it would encourage them to build more, and more densely with less sprawl, increasing the number of rentals in cities, lowering rents.

On the other hand, outside of cities, it would discourage the building of purely speculative housing. In 2009 and 2010 entire tracts in Florida, Arizona, and Nevada were just empty houses built in the bubble. Were LVT implimented across the USA these would not have been, and there would have been no bubble. Instead people would have invested that money in actual productive enterprise, instead of massive speculation.

And then by divorcing the value of land from what has been produced on it, you are forced to ignore reality. For instance, producing land could change its inherent value. When you mine resources, the land used becomes worthless. When you farm, it can go either way depending on whether sustainable methods are used. When you build a township or city, the land surrounding it becomes more valuable because of its proximity to the city. And so on. Who is supposed to determine the value of things in this system?

LVT is assesed ad valorem based on market conditions, the same as property taxation traditionally is, the difference is the value of buildings is divorced from the land. Market conditions are derived by assesors to assess the value of property, and in the same way they will be determined for land. Land itself already has a market value. The difference is we will be removing all taxes on improvements, and shifting taxes up on the land. In essence this encourages people to build more improvements on the land they occupy.

The intent is to discourage accumulation of large tracts of land and housing speculation, and encourage denser development on occupied land, or rather remove the perverse incentives that encourage the opposite. Our current tax system actively encourages the accumulation of large tracts, housing speculation, and urban sprawl, and discourages inner city development while encouraging higher rents.

A good thought experiment would be if Detroit adopted LVT. There are numerous abandoned buildings in Detroit, encouraging criminals to take refuge and set up crack houses. It destroys the desirability of the neighborhood, discouring people from moving there. The few who do must put up with some of the highest taxes in that nation, including a city income tax, which the state of Michigan allows larger cities to assess. Essentially the only people who are actually trying to revitalize Detroit are doing so out of a sense of pride or altruism, this is good, but it alone will not fix the city. With LVT people will be encouraged to develop new properties since they will not be taxed on improvement, and put it to productive use. It encourages dense inner city development, whereas other regimes encourage urban sprawl and speculation, which is what led to white flight in the first place.

Indeed. But it's on thinking about those problems that Nucklepunche will probably see that Georgism has a whole array of problems which need to be sorted out. 'Inspiration' is one thing, 'adherence' is another. After all, no one who was ever inspired by Georgism, ended up actually adhering to it, and there is a reason for that.

There is plenty good in Georgism, and some holes. I am not going to turn Georgism into another Marxism where it becomes all about ideological dogma. The truth is LVT alone cannot suffice in the modern system, however it makes sense to introduce one and reduce or eliminate taxation on improvements. It will not replace the Federal income tax and fund Social Security and Medicare, however. It is primarily a state and local issue, but I see it is as important because I see it focusing on three major problems in our society 1) speculative real estate bubbles, 2) high rents combined with stagnant wages, and 3) urban sprawl.

I have plenty of other ideas for how reforms at the Federal level would go, and I could write an entire book on it. I do not see Georgism as a panacea that will fix all the world's problems. There are plenty of other things. Georgism solves a small part of the economic end of the problem. The truth is the larger problem is political, in the sense that we have a system where an establishment is fundamentally entrenched, and that establishment primarily represents a form of corporate capitalism that often touts free markets, but is in fact a massive rigged game designed to make money flow to those who already have it, shield them from competition, and shred every check and balance against their interests in the name of "free enterprise" and "fiscal responsibility."

[Rei Murasame]

I'm going to be a little bit cutting here, but I believe it's for a good cause that I do this:

A valid point. I call it "vulgar libertarianism" or "royalist libertarianism."

I call it something wider than that, I call it liberal-capitalism. That is what this whole system is about. There's nothing 'vulgar' about libertarians and liberals who take positions that help capitalists to do whatever they feel like at everyone else's expense. That's the whole design purpose of the system, its rhetoric, and all the institutional framework that encloses it.

It is when people on the mainstream right conflate free market principles with an automatic kneejerk defense of the business community, when in reality the business community is deeply entrenched with an economic system that grants numerous privileges, not only direct government subsidies but a tax system rigged in their favor.

But that is not a conflation. That is on purpose. I keep getting the impression that you are trying to 'take back' these terms from someone. You can't, the 'entrenched business community' are the legitimate owners of these concepts. The whole idea of 'free market principles' was specifically invented at the exact time when it became necessary in political economy for the masters of the capitalist state to explain and justify the maintenance of an ever more retrograde economic order.

Unfortunately classic welfare state liberalism says little to counter less unless it is Bill Maher or some other liberal commentator smugly laughing at the hypocrisy of Republicans claiming free markets while supporting corporate subsidies, however their solution always goes back to the old paradigm of welfare state liberalism.

But you are also doing this. To quote you:

I believe private property rights are linked very strongly with the preservation of liberty and virtue, and capitalism is the best economic system to those ends. [...] support free market capitalism and fiscal conservatism in most cases [...] increasing taxation on consumption and the introduction of a Land Value Tax [...] free trade and a relatively liberal immigration policy [...] the primary focus of our foreign policy should be twofold, first we ought to advance our national interests, second we ought to pursue a stable world order

I hadn't noticed this post by you before just now, but it has changed my response to you considerably. The net effect of including the Land Value Tax among that list of things doesn't do much to make you any different from the present system. In fact, it would make you somehow even worse, since it walks you right into a thing that Karl Marx complained about long ago:

I said of it [using exclusively Land Value Tax] in 1847, in my work against Proudhon: “We can understand that economists like Mill” (the elder, not his son John Stuart, who also repeats this in a somewhat modified form) “Cherbuliez, Hilditch and others have demanded that rent should be paid to the state in order that it may serve as a substitute for taxes. This is a frank expression of the hatred which the industrial capitalist dedicates to the landed proprietor, who seems to him a useless and superfluous element in the general total of bourgeois production.”

[...]

This cloven hoof (at the same time ass’s hoof) is also unmistakably revealed in the declamations of Henry George. And it is the more unpardonable in him because he ought to have put the question to himself in just the opposite way: How did it happen that in the United States, where, relatively, that is in comparison with civilised Europe, the land was accessible to the great mass of the people and to a certain degree (again relatively) still is, capitalist economy and the corresponding enslavement of the working class have developed more rapidly and shamelessly than in any other country!

Well, that is a good question!

The truth is LVT alone cannot suffice in the modern system, however it makes sense to introduce one and reduce or eliminate taxation on improvements. It will not replace the Federal income tax and fund Social Security and Medicare, however. It is primarily a state and local issue, but I see it is as important because I see it focusing on three major problems in our society 1) speculative real estate bubbles, 2) high rents combined with stagnant wages, and 3) urban sprawl.

But you know how that's really going to end up. Making it 'the only tax' would be horrible, but putting alongside other taxes also is bad, as even its proponents point out:

[...] George believed that LVT should be a single tax. Its efficiency and productivity-enhancing effects would be such that all other taxes could and should be done away with.

[...]

So here are the crucial questions: is an LVT worth having and does it actually work? That is pretty hard to say. Look at Denmark. Fans of the LVT will be irritated to note that it has suffered something of a property price crash over the past few years, even as its neighbour Sweden – which slashed its own property taxes to almost nothing (a maximum of SEK6,000 [£585]) and abolished wealth taxes in 2000 – has not (yet). There has been a lot of speculation in the Danish market. The Danes love buy-to-let investments in the same way as the British and in the run-up to the crash their banks loved to compete to lend cheap money to do so. Then there is the US, where an out-of-control property bubble, from which as far as I can see Pennsylvania was never immune, kicked off one of the worst financial crashes in history. So much for that.

Still, just because countries with progressive-looking property taxes have crashes does not necessarily mean that the tax could not work. Why? Because in the vast majority of cases in which it has been applied it has not been high enough relative to other taxes to make a difference. You might pay pretty big property taxes in Denmark (by European standards) but you also pay an awful lot of tax on everything else too. Think cars. If you buy a Renault Scenic in the UK it will cost £20,975. Buy it in Denmark and it will be £34,400. A pretty basic BMW 5 series? £29,830 in the UK, £63,800 in Denmark. And a basic Range Rover? £70,000 in the UK, £250,000 if you want to pick it up in Copenhagen. Oh, and the top income tax rate? Not only is it more than 50 per cent but it kicks in at a mere DKK389,900 (£44,000). The LVT only really works (or so the theorists say) if it is the only tax in town. And it never is.

[...]

However, as Brian Reading, of economic consultancy Lombard Street Research, points out, when governments cannot squeeze quite enough money out of their existing tax frameworks, they tend to introduce new ones. The recent signs of improvement across the west notwithstanding, it is obvious that as populations age and growth stays low (there is only so long you can borrow growth from the future with ultra-low interest rates) tax revenues will disappoint. That means new taxes. New taxes mean wealth taxes – for the simple reason that there is not much else left to tax. And in the main, wealth taxes mean property taxes. That is partly because you can collect them, and partly because you can back up the case for them with a huge pile of academic research. We will get more of them. But unfortunately we will also get them for all the wrong reasons – not because our governments want to try a new method of encouraging productivity, but because they have lost control of their finances.

So yeah, this is a horrible idea.

However, the inspiring part in all of this is that once you've allowed yourself to think of doing something as drastic as this, and then realised that it doesn't work, it means you are already branching out and being angry and adventurous, so why not just become more radical and think about advocating for fundamental change instead?

[Rainbow Crow]

I too am a fan of Georgist principles and theories, and have paid some attention to places that have partially instituted them, like Singapore and Tennessee.

Georgism doesn't necessarily mean that you tax only the land, though that is the extreme position of it. It's possible to have a land tax and then other taxes as well. A land tax is also only one theory for implementing geo-Libertarianism.

[Rei Murasame]

This is just a tax increase targeted at anyone who happens to own land in a nice location, isn't it? How does this actually help anything?

[AFAIK]

Has anyone suggested making LVT progressive?
How might that look?

[mikema63]

It was my understanding that it would be progressive.

Anyway, nuckle, its a slippery slope from here into radicalism.

Georgism was Paradigms gateway into anarchism after all.

[Rainbow Crow]

In application, any land tax is likely to be part of a market-socialist policy, but then market-socialism is arguably an attempt at geo-libertarianism anyway, because it tries to reconcile socialism with a free market and the outcome of this would be pretty similar to geo-Libertarianism, for in both cases you have a free market and what is equivalent to a guaranteed income.

The theoretical advantage of geo-Libertarianism is that tax rates are relatively firmly set, which prevents excessive growth of the government bureaucracy.

[nucklepunche]

This is just a tax increase targeted at anyone who happens to own land in a nice location, isn't it? How does this actually help anything?

Think about the number one expense most people of limited means have. It is housing. Mortgages or rents are the largest single expense for most people. Even the very rich tend to spend a plurality of the money they actually spend on housing. For a person of limited means, it can be a squeeze.

In the central cities, rent is high for a valid reason that these are desirable locations with many public services. The lower classes are routinely pushed out further into more undesirable locations with fewer public services. The rich meanwhile speculate in luxury condominiums and things like that.

With LVT you would see less speculation. Instead occupiers of land would have an incentive to build more densely on the land they have and maximize their profit from it, increasing the rental housing available, which in turn would lead to a slowing of increases in rent. This building boom meanwhile would bring more work into the inner city. It would also decrease urban sprawl, which would arguably be a good thing for environmental reasons.

The main benefit is that it would reduce gentrification and lead to more mixed income affordable housing within cities.

It was my understanding that it would be progressive.

It would be since it would primarily fall on real estate speculators and wealthy landlords. The middle class homeowner would see little affect, and if anything it would benefit them because improvements would not be taxed as they currently are.

[Figlio di Moros]

Have you looked into any other alternative taxes, NP? I'm a proponent of LVT, as you'd possibly remember; it could cover 1/3rd of current federal expenses if the bulk went to supporting state and local outlays. What's funny is I've recently come across the "Wall Street Tax" movement; my first thought being, those projected incomes seem like bullshit. My second was, how can you possibly tax a service provided (stock exchanges being a government service)? It's a fee, and the current fee from stock exchanges in the US is .0034% of transactions, net $1.8 billion in 1998. Other improvements, such as having the exchanges run their own statarb functions to stabilize trading while prohibiting private companies from doing so, would greatly increase or offset our taxes.

As Rei pointed out, a LVT is, in fact, rent. I'm running the contention that we could actually run a war-time economy without either taxes or inflation, though the plausible amount received from rent, fees, and surcharges is quite questionable when many proponents don't quite "show their work". Another important issue, it should be pointed out, is political limitations themselves; social insurance programs rely on payroll taxes, not out of necessity for funding, but out of political phrasing that ensures they're earned benefits rather than "handouts".

[nucklepunche]

Have you looked into any other alternative taxes, NP? I'm a proponent of LVT, as you'd possibly remember; it could cover 1/3rd of current federal expenses if the bulk went to supporting state and local outlays.

I am a proponent of excise taxes on liquor and tobacco. I also believe we might as well legalize and tax marijuana now as it has become culturally accepted enough that any negative effects are a moot point, the door is off the hinges so we might as well tax it. I also am in favor of a shift toward "green" taxes. I see nothing inconsistent with this and Georgist principles, although the concept of taxing pollution would have been impossible in his time because it would have been impossible to measure. Now we could reasonably place a tax on emissions. I am against cap and trade, instead I favor using these taxes to offset taxes on wages and investment.

The point is I have some geo-libertarian leanings, but I am not a card carrying libertarian by any measure. I am not morally opposed to most taxes. I simply recognize a valid point that economists make that taxing wages, income, and investment tends to be economically distortive. Taxing consumption is less so but is inherently regressive. I view taxation like LVT as less economically distortive. Even if we cannot eliminate the other taxes completely, I nonetheless favor introducing the more efficient tax system I propose and lessening the others as much as possible. If LVT can only produce 1/3 of the revenue needed at this point, that is fine, but even if we could reduce income taxation by 1/3 it would be a good thing.

What's funny is I've recently come across the "Wall Street Tax" movement; my first thought being, those projected incomes seem like bullshit. My second was, how can you possibly tax a service provided (stock exchanges being a government service)? It's a fee, and the current fee from stock exchanges in the US is .0034% of transactions, net $1.8 billion in 1998. Other improvements, such as having the exchanges run their own statarb functions to stabilize trading while prohibiting private companies from doing so, would greatly increase or offset our taxes.

The financial services tax doesn't apply to just stock exchanges, but is a tiny fractional tax that applies every time you use an ATM or a bank. It is a tiny tax that you will not notice, less than a fraction of a percent, yet so many financial transactions happen every year it would add up. The problem is like LVT there are interests opposed to it. The core reason is it would essentially be a tax on speculation, which LVT is. Wall Street speculators are politically powerful, as is real estate.

As Rei pointed out, a LVT is, in fact, rent. I'm running the contention that we could actually run a war-time economy without either taxes or inflation, though the plausible amount received from rent, fees, and surcharges is quite questionable when many proponents don't quite "show their work". Another important issue, it should be pointed out, is political limitations themselves; social insurance programs rely on payroll taxes, not out of necessity for funding, but out of political phrasing that ensures they're earned benefits rather than "handouts".

The problem is I've seen a lot of different numbers. I am sure an LVT tax would be a positive thing economically even if it did not replace all other taxes, because it would encourage a lot of good investment and discourage a lot of bad. As to whether it can replace all taxes there is a big range from those who say it would not without being so high as to have a negative effect on economic growth, and there are those who argue that it could.

The issue is that a lot of proponents are generally libertarian on most issues outside of LVT. Georgism does not necessarily imply libertarianism, but there are a lot of geo-libertarians. Some argue for a basic income of some kind, but outside of that most oppose much of what government does outside basic infrastructure. That being said as of right now our three biggest expenses are Social Security, Medicare, and defense. If we didn't have SS or Medicare and cut defense down to a level that only sufficed defending US borders and eliminated any role in manipulating world affairs an LVT would easily replace all taxes. Many geo-libertarians assume a "package deal" in which the LVT is introduced with a massive decrease in government down to the levels they propose.

A basic income would indeed be cheaper than current entitlements, the problem is a lot of people do not like the idea of it because it sounds like welfare. Americans love welfare, they just like to structure it in a way that makes it seem like it isn't welfare. That's why we have Social Security and Medicare for the elderly and a lot of means tested programs. They are much more costly than just sending everybody a check, but they seem on the surface to be more compatible with our cultural ethic of rugged individualism and Puritan work ethic. We are hypocrites you see, we love to sound like rugged individualists but are afraid of actually being such.

If a lot of conservative politicians were not hypocrites they would go before the people who hold up signs extorting Obama to keep his hands off their Medicare and Social Security and tell them that neither of those programs are compatible with free market principles, and that if they genuinely believe in such principles they should have exercised personal responsibility and saved for their own retirement and medical expenses. My understanding is that even if the taxes are mandatory, you do not actually have to draw Social Security or enroll in Medicare if you don't want to, at very least they don't simply just send you the check unless you sign up. I wonder how many elderly Tea Partiers put their money where their mouth is?

[AFAIK]

The point is I have some geo-libertarian leanings, but I am not a card carrying libertarian by any measure. I am not morally opposed to most taxes. I simply recognize a valid point that economists make that taxing wages, income, and investment tends to be economically distortive. Taxing consumption is less so but is inherently regressive. I view taxation like LVT as less economically distortive. Even if we cannot eliminate the other taxes completely, I nonetheless favor introducing the more efficient tax system I propose and lessening the others as much as possible. If LVT can only produce 1/3 of the revenue needed at this point, that is fine, but even if we could reduce income taxation by 1/3 it would be a good thing.

Would it be mandatory to pay LVT in $US? This would be massively distortive as it would force people to acquire dollars to pay rent. It creates artificial demand for dollars. Markets are the result of social engineering by the state and modern taxation is a method of forcing people to acquire the state's fiat money, which can then be inflated at will by the mint and/or central bank. Legal tender laws force people to accept whatever medium the state defines as money. If your primary motivation is to reduce economic distortions then you should consider more than just where tax is levied.

Currently the USA has over consumption and underinvestment, wouldn't economists argue that the tax code be used to discourage the former and promote the later (in the near term)?

[Figlio di Moros]

Of course the LVT would be required to be collected in $, as all taxes, duties, fees, etc. are. No country is so stupid as to not require taxes paid in their own revenue.

I am a proponent of excise taxes on liquor and tobacco. I also believe we might as well legalize and tax marijuana now as it has become culturally accepted enough that any negative effects are a moot point, the door is off the hinges so we might as well tax it. I also am in favor of a shift toward "green" taxes. I see nothing inconsistent with this and Georgist principles, although the concept of taxing pollution would have been impossible in his time because it would have been impossible to measure. Now we could reasonably place a tax on emissions. I am against cap and trade, instead I favor using these taxes to offset taxes on wages and investment.

I'm not a fan on excise taxes on tobacco or alcohol, mainly because I'm a fan of alcohol and tobacco. I'd be in favor of piguvian taxes, though I suppose we may as well define them as "fines", in other areas, such as glycemic load, emissions, other sources of pollution, etc. However, I don't anticipate those would significantly cover any portion of federal receipts, nor would it be their purpose. I was speaking more to the "Wall Street Tax", though there's a broader suggestion as well, Automated Payment Transaction Tax. At first it appears preposterous, but once you keep in mind that currency is a government function, fees, surcharges, etc. on it's use also makes sense.

So, I got a hold of a CPI calculator, and the $1.8 billion in 1998 would be the equivolent of $2.585 billion today, though this doesn't factor in the rise of high-speed trading or growth in the market compared to inflation. It's perfectly reasonable to point out that raising the transaction fees to a third of a percent would raise at least $285 billion, and a Spahn Surcharge would increase funds by placing a higher charge against profitable but unsavory practices. Of course, the stock exchanges themselves could run a program to ensure microstabilazation (sic) such as statarb, bringing in whatever profits would otherwise go to companies w/ supercomputers instead.

If we look at the returns from these programs, a 100% LVT (or 'rent', more properly) would bring in ~6.666% GDP, covering a third of federal expenditures, which would be a greater portion of receipts, allowing it to replace income tax. If not completely, a bridge elsewhere could fit it. Furthermore, we know reform of our stock exchanges would bring in at least an additional $285 billion dollars; this would likely be much higher due to the total sum of transactions being twice as high in 2011 as in 2001, so we could conservatively argue it'd bring in $570 billion, and more from an automatic arbitrage function and a surcharge against risky trading behavior.

Now, bear in mind FICA pays for Social Insurance programs w/ total 40% of the budget, and can be separated out. Our Social Insurance programs need to be greatly reformed, anyways, but I can discuss how to bring down rates w/ improving benefits later. The point is that if Federal expenditures equal 20% of GDP on average, the 60% non-SI part equals 12% of GDP. Rent, split between all portions of government to offset state and local taxes foremost, would still raise 6.66% of GDP, and fees/exchange stabilization would easily raise another 5% GDP (tier-one, as described, bridging 4% GDP itself). So, at least 10.666% out of the 12% of federal expenditures is met by those two functions, FICA supporting SI programs counted separately, and the returns from microstabilization and a surcharge not yet factored in. That's enough to eliminate Income, Corporate, and Capital Gains tax (though I favor a high tariff on currency manipulators and non-fair trade items to protect American workers as a better offset of the corporate tax).

A basic income would indeed be cheaper than current entitlements, the problem is a lot of people do not like the idea of it because it sounds like welfare. Americans love welfare, they just like to structure it in a way that makes it seem like it isn't welfare. That's why we have Social Security and Medicare for the elderly and a lot of means tested programs. They are much more costly than just sending everybody a check, but they seem on the surface to be more compatible with our cultural ethic of rugged individualism and Puritan work ethic. We are hypocrites you see, we love to sound like rugged individualists but are afraid of actually being such.

A Basic Income Guarantee would cost as much as our current Social Insurance programs combined, while not covering healthcare expenses and being inherently more inflationary. I'd rather simply reform unemployment insurance into a Job's Guarantee, wherein people are already receiving wages but would gain other benefits such as healthcare (offsetting Medicaid expenses) to do social work, requiring an additional $100 billion in initial spending (projected to go down, based on similar programs in other countries) while reintroducing 10% of workers to the workforce, eliminating welfare spending and greatly increasing input of labor.

If a lot of conservative politicians were not hypocrites they would go before the people who hold up signs extorting Obama to keep his hands off their Medicare and Social Security and tell them that neither of those programs are compatible with free market principles, and that if they genuinely believe in such principles they should have exercised personal responsibility and saved for their own retirement and medical expenses. My understanding is that even if the taxes are mandatory, you do not actually have to draw Social Security or enroll in Medicare if you don't want to, at very least they don't simply just send you the check unless you sign up. I wonder how many elderly Tea Partiers put their money where their mouth is?

That is a very libertarian position, and one even the GOP finds extreme. Note that 70-some odd percent of Republicans support Social Security & Medicare, and believe we ought to remove the payroll cap as the best means of protecting the long-term viability of the trust funds (which is really a non-issue drummed up to pressure people into privatization, anyways). It'd be political suicide even for tea party candidates; however, we spend some $830 billion on corporate subsidies, which attention could be drawn to quite easily and, partisanship aside, would receive broad support across the political spectrum for being cut.

[nucklepunche]

I'd rather simply reform unemployment insurance into a Job's Guarantee, wherein people are already receiving wages but would gain other benefits such as healthcare (offsetting Medicaid expenses) to do social work,

I like the idea. I support an exemption for those who are too physically or mentally disabled to work (and a lot of people on disability today would not qualify IMHO) but other than that you work or you starve. This way everbody can have a job, but nobody will get anything for nothing. This being said I do believe work hours are attritioning downward over time, so perhaps at least a 20 hour job.

[Figlio di Moros]

Current UI pays for 30 hrs, and most JG supporters call for 35 hrs/wk. I'm fine sticking w/ 30 hrs, which has the additional benefit of including the 9.4% U5 in the FICA base. Naturally, the disabled are covered under SSDI, and would be exempt; but yes, if you refuse to work then you refuse to eat. One additional benefit incurs such things as food stamps or section 8; community gardens and partnering w/ Habitat for Humanity could replace a pittance for cereals w/ a community edible garden to feed the working poor, and building houses a better alternative than paying their landlord.

[Paradigm]

When I came to this forum, I was the only one preaching the gospel of Henry George. Now no one here seems to argue against it. But now that I've moved on from that phase, allow me to give my critique:

LVT would indeed have tremendous effects if implemented to the degree that Georgists advocate. But that's exactly why it cannot be implemented by reform. It runs counter to the inherent logic of capitalism. Capitalism is based on the maximization of profit, which requires capital to continue to expand in search of more sources of surplus value in order to stave off the tendency of the rate of profit to fall. LVT would accelerate the tendency of the rate of profit to fall, thus accelerating the collapse of capitalism. Capitalists would never allow this. It would be suicide for them. Not just a small group of "special interests," but the entire capitalist class. There is no way to successfully pursue such a strategy from within the system itself. It would have to be implemented by revolution. The fascists at least have that part figured out, though they would presumably take other measures to maintain some class system that would otherwise dissolve with the collapse of capitalism.

[Rei Murasame]

Yes. When it eventually happens, there would have to be a system of social ranking to prevent the whole thing from falling into the hands of the communists (well, maybe even communists wouldn't, in some instances they didn't remove all social rankings). One of the dangers in the Third Position is always that the proletariat might decide to liquidate the very same petite-bourgeoisie and/or clerical-progressive forces that led them to carry out a revolution in the first place.

Obviously we don't like being liquidated, so it's like an occupational hazard for us.