Any time anyone says that complex societal issues can be solved with simple policy changes, alarm bells go off in my head.
By that I don't mean that simple solutions to complex problems do not exist, rather that getting them approved and implemented is often not so straight forward as some would like to think. Human societal systems are complex and very messy.
Watching the introduction of the embedded video gives me the feeling that the author is perhaps still studying economics and so it does come across quite hubristic to say to have a definitive answer in a early career paper that has yet to go through rigorous peer review.
A land value tax seems like such an obvious solution to so much that ails our societies. Allowing legacy land owners to accrue vast sums of untaxed value due to the economic activity of everyone else in the vicinity of their land creates such perverse incentives.
A great example near me is in midtown Atlanta. For decades there have been empty lots that just sat empty and empty and empty until enough economic growth happened around them that their owners finally sold it for development. Even today, there are empty lots and vacant decrepit buildings in some of the most valuable locations for hundreds of miles because we are not taxing the value of the land these people are accruing.
And Ironically across the sea in UK, to a smaller extent Ireland (and I'm not sure perhaps may be elsewhere too). There's been a concerted social media push by some folks to reduce inheritance taxes and portray them as bad. One visible proponent was Jeremy Clarkson, you know the large farm owner, it's quite easy to see why he would benefit.
Most states tax land at the time of sale and annually. It's just that the millage is low for raw land.
Taxing something based on hypothetical value is an extremely dangerous proposition. Why not tax people an imputed income tax based on what we thing a person's labor is worth? It makes more sense to tax money when money is actually made.
Land value taxes are fundamentally opposed to freedom and liberty by implicitly forcing an owner to do use the land for use that others want based on hypothetical uses.
I think your position is true - it does compel people to use their land for value creation (even if they don't want to). There is a positive trade-off though; a system that derives tax from rent-seeking activities can reduce the tax it levies on value-creating/facilitating activities.
"Value creation" is euphemism for making profit. It forces use of land towards the currently most profitable in an area, which is not necessarily what is socially valuable, because if you do not get enough money to pay for the hypothetical value you cannot do anything else. Eg in places where tourism is a prevailing source of making the most money it would mean that you cannot do anything else than short renting to tourists or stuff directed to tourists, which can be destructive for a lot of local businesses and communities (there are already problems and this would make it worse). Similar to other types of using land that may or may not be always attainable for every single piece of land even.
It also sounds like a mechanism to induce appropriation of property of small landowners to big corporations and interests, and not sure this furthering of concentration of land and wealth is great for local communities either. It basically gives more power to those who already have more power.
You're absolutely right about value creation being a euphemism for profit. A gaping hole in economic theory is that we don't have a general theory of value. Our so-called theories of value are in fact theories of price, and we don't actually know how to properly value things.
If you had such a theory, you would have a much easier time using taxes to reward things that society benefits from, and dissuade things that society suffers from. It's a complicated subject.
Holding raw land doesn't become a rent-seeking activity until it is sold. The owner could be waiting to accuse capital for development, waiting to purchase an ajoining property to expand, etc. A transfer tax fits this better than a land value tax.
There'll definitely be people in that camp, with good reasons for holding on to land. Flipside, there are many other people that know the land value mechanic and take advantage.
A transfer tax is decent, but it can be sidestepped by just holding land and selling when the tax changes. Land holding is a long game.
On the other hand you could argue that someone who had a better strategy for accruing capital should instead have purchased that land. The opportunity cost of nothing happing on that land is there regardless of the users intended future development.
The obscene limitation on freedom and liberty is the idea that a person can stake a claim to earth's productive power and deny everyone else the upside under threat of injury or death.
This makes no sense at all unless you believe that nobody should own property. The government is much more likely to be the one using threat of force to take your property for lack of tax payment than anyone else is for any other reason.
The value of land is only what people make of it. It's mostly hypothetical as to what you could use it for. The driving factor in land "value" is location, which is an artificial factor created by humans. That same empty lot in a city that everyone complains about needing to have a land value tax assessed against it is pennies on the dollar our in the county. Perhaps we should look at efficient use of resources and population distribution policies rather than focusing on the symptoms rather than the problem.
No, people should own property that they created or that someone else created and willingly sold to them. Land values are by definition neither of those things.
> The government is much more likely to be the one using threat of force to take your property for lack of tax payment than anyone else is for any other reason.
Physical coercion is much more common to enforce evictions than nonpayment of taxes. This is because landlords offloaded the responsibility of enforcement and security back to the peasants in exchange for having rule of law.
> The value of land is only what people make of it.
This entire paragraph is meaningless. More valuable land is more valuable because it's more productive. It is more productive not because of the actions of the owner of that land, but because of either 1) nature's productive power, or 2) the surroundings of that land (nearby amenities, infrastructure, employers, etc). In either case, the owner of the plot of land did not produce the value of the raw land. They are not entitled to upside they did not produce.
The elites will go full throttle on "bullshit jobs" — after all, if unemployment hits 50%, who’s going to consume their crappy products? Give people a UBI? Hah! So they can start taking an active interest in politics? AIN'T GONNA HAPPEN.
The only interest people will have in politics would be be around their UBI and other benefits. The old saying of once they know they hold the keys to the treasury they vote to direct it to themselves thing.
I don't think UBI is going to lead to significantly more interest in political involvement in an age where people are socializing less and spending hours a day scrolling algorithmic feeds.
People change what they do when they go from full-time work to UBI teaters. You could either argue that they will go further into the feeds or something else, but to assume statis is suspect. So you actively have to argue that.
Joe Beergut sits in front of the television (scene from 1995). Is it relevant that he worked hard from eight to five prior to that? Probably.
I'm positive that the elite will soon only need a really really small number of people (especially in their vicinity) for their happiness. Robots will be able to provide food, safety, entertainment, health, in a self-sustaining manner.
I predict that if we let the elite do whatever they want, they would eliminate common people (actively or passively) because they wouldn't need them.
In my opinion the only thing that can stop this scenario unfolding is the government which currently has the power over the elite, and currently is governed by the people (more or less). I frankly don't think any other scenario is realistic (e.g. small number of Robin Hood terrorists, like how it plays out in movies).
Currently I strongly support the idea of disempowering the elite: making it a law that a single person can have at most X amount of wealth. (For organizations and funds that would be wealth/member.) Also there need to be more guarantees that the government (only holder of power) is controlled by the people and is working for the people.
As a country, I host a somewhat large and educated group of humans. Some of them are economists like you. They most certainly have heard about georgism before.
The current issue is not so much that they don’t have enough ideas, but that they can’t agree on which ones to apply.
Funny timing. The NZ Election is coming up on the 7th of November, and there is a party campaigning on a Land Value Tax and UBI [0]. Despite never being in parliament before, they're polling at 5% [1], just above the threshold to make it in (but would have quite a lot of leverage over the next government.)
It will be very interesting to watch and see if this does get implemented.
We just saw mass protests in Spain over an elderly lady that couldn't afford the new rent in her desirable City apartment. What do you think will happen in France when suddenly lots of elderly people can't afford the taxes on the house and property that they've lived in their entire lives?
Any discussion about taxes is a complete non-starter. France needs less taxes, not more. Their entire society and business environment is completely taxed out and they still can't afford their public welfare and benefits. They need to reduce public spending in order to maybe one day, also reduce taxes.
> lots of elderly people can't afford the taxes on the house and property that they've lived in their entire lives?
I think exempting your primary residence from LVT (or capping it at the value of UBI, in that proposal) would not defeat the purpose of LVT, and would eliminate such problems.
> Any discussion about taxes is a complete non-starter. France needs less taxes, not more. Their entire society and business environment is completely taxed out and they still can't afford their public welfare and benefits. They need to reduce public spending in order to maybe one day, also reduce taxes.
Yes, most developed countries are overtaxed. They should get rid of nearly all of them and replace them with a high LVT. Near-zero regulatory complexity, paperwork, enforcement burden, or economic distortions.
Is LVT funding UBI or reverse mortgages? Seems like supporters think it can fund anything and everything.
"Near-zero regulatory complexity, paperwork, enforcement burden, or economic distortions."
This isnt true in the least. Land value calculations would be require all sorts of regulations and appeal processes to set true land value and prevent gaming the system. Just want until private equity figures out they can drive up property values in a residential area so they can use the tax on existing properties to force the owners to sell to them.
Singapore uses a system that is economically ~identical. Nearly all the land is owned by the state and leased to private parties on 99 year leases who pay "land rents" to the state.
An LVT is a way to produce the same economic effects without the starting point of "the state owns the land," which is hard to transition to from "the state does not own the land."
Even though this paper has scarcity in the title, it doesn't seem to investigate how UBI affects scarcity of resources that are not labor. Natural resources and production volume are essentially finite when looking at a current timeframe. A UBI will increase prices as demand for finite resources stays the same or increases and the money supply to consumers increases.
Wasn't there another post a week ago talking about how UBI won't save us from automation? I was much more inclined to believe that one.
It's an interesting topic. So let's say many people get laid off as automation takes over. If we have UBI that covers mostly bare necessities (as an example), shouldn't supply and demand stay basically the same? Or demand even lowers if people can't afford what they previously did.
If people have more money (or population grows) so that demand grows while supply stays the same, prices will rise and find a new equilibrium where people can again afford less and therefore buy less.
I'm not sure if it's an option to just leave most of the population to starve either so what's the alternative to some kind of social security or UBI? Long ago, nature used to provide relatively more of our needs, but that's not feasible today.
In any case, finite resources are finite regardless if we have UBI or not.
Yes, land value tax has been advocated by many, but has any country implemented this and made it their main (or at least a major) source of tax income? Why not?
A tax that prices 80 year old grandmas out of their homes and the whole area they've lived in all their lives is going to be extremely politicially unpopular.
Thing is the 80yo grandma may sit, alone, on a huge land. Meanwhile, young families are struggling to find a decent place.
Taxing/reducing the land can be perceived as unfair to grandma. Having young struggling more than previous generation and getting much smaller spaces can also be perceived as unfair.
Well all know LVT is not proposed for single-owner homeowners who live in their own home. I know it and you do too. Why are you being disingineous or deliberately obtuse?
I'm pretty sure the issue isn't economic know-how, it's all politics. We're simply stuck with a hung parliament, and while each party keeps playing in their political interests, nothing will happen.
It will take a while until we get a functional political system (i.e. parliament needs to realize coalitions are absolutely necessary to do anything), so let's just hope the french economy doesn't collapse in the mean time and its debt doesn't blow up.
Going to guess this is mostly about the housing problem that basically all modern societies are facing from Korea to Australia to Spain. There are two sides of this problem, cities where everyone wants to go and old towns where everyone is leaving.
Capitalism says buyers pay and when there are too many customers, the price goes up. This is what we are seeing, its that simple.
Some suggest to add some sort of tax to owners, but this wont help, they will of course just pass the cost onto their renters. Its pretty obvious owners dont care if you cant pay someone else will, its that simple.
The REAL problem is the concentration of living in big cities and the fact there are too many people. The same is also true of wages, wages dont go up because there will always be someone else who will do the job for the same or less be it actual wages or extra hours and other negatives.
The system is broken, we have to appreciate that all this centralisation of everything and anything is the problem. Slowly or maybe its quickly everything is becoming a monopoly of some kind.
Major cities are becoming the monopoly of employment and work, previoously it was spread across more places and more industries. Now its becoming concentrated. In Spain that means everyone wants to move to Madrid or Barca and the consequences mean too many people and too few homes. People want to live in certain places for their advantages, big cities also mean more commuting, and people want less travel time, but that means they pay more in rent. You cant win, if you have one then you lose on the other. THis is always the case in everything from commuting time, to rent, in the end most of the people lose most of the time.
What we are seeing is what happens when you have a monopoly. THe problem is people cant see who or what are the monopolies. THey think a monopoly must be a single company or person, they cant comprehend its something above that at the nationwide level, namely the structure of each country.
A perfect example is everyone in NZ is moving to Auckland, and then everyone in NZ also moves to Australia. Of course its not everyone but its alot and this affects the balance both in NZ and also in places like Sydney which grow even bigger.
The answer is to stop the centralisation, and break things up.
The passing costs on to renters is a bit of a fallacy. Rental price is market related, with the obvious question being, if a new tax would make them raise rents, why don't they just raise the rents right now and turn a larger profit?
Fact is that the rent is currently set at what the market is willing and able to pay, regardless of what the cost to the owners is.
They are raising the rent, its always creeping up, its never constant. There is no universal coordinated rental increase cabal. The monopoly here is the group, they might not communicate but they act as one in terms of raising rents.
Im not saying this is bad or good, im simply saying that we are seeing independent personalities act as a monopoly because countries themselves are devouring their towns and everyone is moving into the big city or cities.
BTW: Its not only rent, thats just one example, its everything, rent, food, entertainment, traffic, lines at your favourite venue...
Good economic policy is largely context independent. It is almost always a good time to tax economic rents and deregulate starting/running a business. The basic formula for success has been well established for several centuries and even the Communists managed to figure it out a big chunk of that.
It is not surprising that the established government figures seem confused. If they've let the situation devolve to the point where there is a visible problem it is strong evidence that they just don't care about good economic policy. Not in the top 10 list of priorities. And to couple that with a forecast, that probably isn't going to change any time soon.
lvt is too ham fisted, what your really want to tax isinefficient land usage, eg your land is zoned for higher density or industrial etc and you fail to deploy it as such then you should pay a tax for that. this encourages investment and discourages land banking. moving that land into those who will deploy it and lower the overall cost of doing things overall
Your version would instead discourage zoning land for any productive use. Which is an issue in a democracy, where the same people being taxed elect the people who influence zoning
In a dictatorship your scheme would work, in a democracy it would just prevent even more economic activity
> And then the policy you want is simple: Tax the bad capitalism, don’t tax the good capitalism.
Tax isn’t punishment. Imagine a company which has a thousand trucks. The trucks themselves are ethically pure EVs. They pay the land value tax for the parking lot and the auto shop. But they don’t indirectly pay taxes for the use of the roads? That’s a massive wear on the road infrastructure.
Denmark has a land tax (grundskyld) and Estonia taxes land only, not buildings. Both real, both modest rates though, nowhere near the full rent capture Georgists want. Pennsylvania towns did split-rate too with mixed results.
People don't like land value taxes for the same reason the anti-property-tax movement is in the news these days: It reverses 100 years of pro-homeownership messaging, and it turns landowners into renters from the government.
Wouldn't a better solution be to more heavily tax voluntary vices? Gambling, drugs, prediction markets, cash-sink "luxury" products, parasitic mobile games, etc.? I think it's fine by just about everybody if those particular industries -- the real "bad capitalism" -- become almost unprofitable by default.
The secondary layer of "bad capitalism" is in finance, speculation, and even legal services. There's no reason that those, also, cannot be much more heavily taxed.
At the same time, do the extremely smart thing that Asian economies -- China and Korea foremost among them -- have been practicing: Subsidize technical and industrial innovation, strategic industries, etc. Just cut the red tape and fund it.
“ it turns landowners into renters from the government.”
With the caveat that “the government” should somehow represent the will of society (I know, basic democracy seems like a big ask today), this seems like how it should be. The land belongs to us humans together, and if someone wants to control it exclusively, there should be something in return for the rest of us.
A land value tax would also tax the poor -- it's not only fat cats who own land -- and strip of some value a vast number of presently-poor people hoping for a property inheritance.
In fact, it would tax the industrious poor with little recourse.
Vices, on the other hand, don't have to be engaged in, and should absolutely be discouraged.
Wouldn't it also screw over poor people in gentrified neighborhoods who had no control over the situation? People would be forced to sell early or risk all their savings drying up and then being forced to sell anyhow.
Assuming an efficient lending market, they can take out loans with the land as collateral. As long as the land value continues rising they can continue taking out bigger and bigger loans. Only when growth slows they are forced to sell
This shifts the optimal point for sale, but if there is explosive growth they theoretically still aren't forced to sell early, they can still capture all that growth
What this scheme prevents is them holding onto the property forever after the neighborhood gentrified. Which the author likely considers a good thing in their framework, because the land generates more economic value in other hands. The original land owner gets a payout and is forced to move. Just like a renter would be forced to move, just that the land owner gets a big payout from the land value increase
The problem with taxing vices too heavily is that it incentives a black market to emerge... and all the crime that comes with it. Australia is a great example of a place where this is causing a lot of problems.
The explosion in KYC over the past ~20 years means that a lot of digital vices simply can't meaningfully exist in black market form. Online gaming, prediction markets, predatory financial speculation, etc., are vices that only exist because they're tolerated.
You and I can theorize how black market analogs might somehow exist, but they wouldn't have 1% of the reach they currently enjoy.
I also think that conspicuous consumption in the form of yachts and $40,000 handbags is, in truth, a vice -- and one that can generate a lot of tax revenue, and only be black-marketed away with severe difficulty.
> Wouldn't a better solution be to more heavily tax voluntary vices?
Buy a pack of cigs in New York (I think it's almost $20, now). Most of that is tax. People vape, a lot, here. I know that pre-rolled cigarettes have been heavily taxed in many countries, for decades, so they sell loose tobacco and rolling papers.
Gambling also tends to get taxed a lot.
There's lots of folks that think prostitution should be legalized, so it can be taxed. The same argument was made for pot. I'm pretty sure that legal pot is heavily taxed. I have heard that illegal pot is cheaper.
It's not an easy solution. If it was easy, it would have been done, a long time ago.
"There's always an easy solution to every human problem; Neat, plausible and wrong."
Any time anyone says that complex societal issues can be solved with simple policy changes, alarm bells go off in my head.
By that I don't mean that simple solutions to complex problems do not exist, rather that getting them approved and implemented is often not so straight forward as some would like to think. Human societal systems are complex and very messy.
Watching the introduction of the embedded video gives me the feeling that the author is perhaps still studying economics and so it does come across quite hubristic to say to have a definitive answer in a early career paper that has yet to go through rigorous peer review.
A great example near me is in midtown Atlanta. For decades there have been empty lots that just sat empty and empty and empty until enough economic growth happened around them that their owners finally sold it for development. Even today, there are empty lots and vacant decrepit buildings in some of the most valuable locations for hundreds of miles because we are not taxing the value of the land these people are accruing.
Taxing something based on hypothetical value is an extremely dangerous proposition. Why not tax people an imputed income tax based on what we thing a person's labor is worth? It makes more sense to tax money when money is actually made.
Land value taxes are fundamentally opposed to freedom and liberty by implicitly forcing an owner to do use the land for use that others want based on hypothetical uses.
It also sounds like a mechanism to induce appropriation of property of small landowners to big corporations and interests, and not sure this furthering of concentration of land and wealth is great for local communities either. It basically gives more power to those who already have more power.
If you had such a theory, you would have a much easier time using taxes to reward things that society benefits from, and dissuade things that society suffers from. It's a complicated subject.
Your concern is absolutely spot-on.
A transfer tax is decent, but it can be sidestepped by just holding land and selling when the tax changes. Land holding is a long game.
The value of land is only what people make of it. It's mostly hypothetical as to what you could use it for. The driving factor in land "value" is location, which is an artificial factor created by humans. That same empty lot in a city that everyone complains about needing to have a land value tax assessed against it is pennies on the dollar our in the county. Perhaps we should look at efficient use of resources and population distribution policies rather than focusing on the symptoms rather than the problem.
> The government is much more likely to be the one using threat of force to take your property for lack of tax payment than anyone else is for any other reason.
Physical coercion is much more common to enforce evictions than nonpayment of taxes. This is because landlords offloaded the responsibility of enforcement and security back to the peasants in exchange for having rule of law.
> The value of land is only what people make of it.
This entire paragraph is meaningless. More valuable land is more valuable because it's more productive. It is more productive not because of the actions of the owner of that land, but because of either 1) nature's productive power, or 2) the surroundings of that land (nearby amenities, infrastructure, employers, etc). In either case, the owner of the plot of land did not produce the value of the raw land. They are not entitled to upside they did not produce.
Joe Beergut sits in front of the television (scene from 1995). Is it relevant that he worked hard from eight to five prior to that? Probably.
I'm positive that the elite will soon only need a really really small number of people (especially in their vicinity) for their happiness. Robots will be able to provide food, safety, entertainment, health, in a self-sustaining manner.
I predict that if we let the elite do whatever they want, they would eliminate common people (actively or passively) because they wouldn't need them.
In my opinion the only thing that can stop this scenario unfolding is the government which currently has the power over the elite, and currently is governed by the people (more or less). I frankly don't think any other scenario is realistic (e.g. small number of Robin Hood terrorists, like how it plays out in movies).
Currently I strongly support the idea of disempowering the elite: making it a law that a single person can have at most X amount of wealth. (For organizations and funds that would be wealth/member.) Also there need to be more guarantees that the government (only holder of power) is controlled by the people and is working for the people.
Market efficiency be damned.
As a country, I host a somewhat large and educated group of humans. Some of them are economists like you. They most certainly have heard about georgism before.
The current issue is not so much that they don’t have enough ideas, but that they can’t agree on which ones to apply.
Sincerely, France.
It will be very interesting to watch and see if this does get implemented.
[0]: https://www.opportunity.org.nz/tax-reset [1]: https://www.rnz.co.nz/news/politics_election-2026/2035492/ne...
Any discussion about taxes is a complete non-starter. France needs less taxes, not more. Their entire society and business environment is completely taxed out and they still can't afford their public welfare and benefits. They need to reduce public spending in order to maybe one day, also reduce taxes.
I think exempting your primary residence from LVT (or capping it at the value of UBI, in that proposal) would not defeat the purpose of LVT, and would eliminate such problems.
2) LVT can fund reverse mortgages
> Any discussion about taxes is a complete non-starter. France needs less taxes, not more. Their entire society and business environment is completely taxed out and they still can't afford their public welfare and benefits. They need to reduce public spending in order to maybe one day, also reduce taxes.
Yes, most developed countries are overtaxed. They should get rid of nearly all of them and replace them with a high LVT. Near-zero regulatory complexity, paperwork, enforcement burden, or economic distortions.
"Near-zero regulatory complexity, paperwork, enforcement burden, or economic distortions."
This isnt true in the least. Land value calculations would be require all sorts of regulations and appeal processes to set true land value and prevent gaming the system. Just want until private equity figures out they can drive up property values in a residential area so they can use the tax on existing properties to force the owners to sell to them.
Curious, as I dont want my cynicism to creep in...
An LVT is a way to produce the same economic effects without the starting point of "the state owns the land," which is hard to transition to from "the state does not own the land."
Wasn't there another post a week ago talking about how UBI won't save us from automation? I was much more inclined to believe that one.
If people have more money (or population grows) so that demand grows while supply stays the same, prices will rise and find a new equilibrium where people can again afford less and therefore buy less.
I'm not sure if it's an option to just leave most of the population to starve either so what's the alternative to some kind of social security or UBI? Long ago, nature used to provide relatively more of our needs, but that's not feasible today.
In any case, finite resources are finite regardless if we have UBI or not.
Taxing/reducing the land can be perceived as unfair to grandma. Having young struggling more than previous generation and getting much smaller spaces can also be perceived as unfair.
It will take a while until we get a functional political system (i.e. parliament needs to realize coalitions are absolutely necessary to do anything), so let's just hope the french economy doesn't collapse in the mean time and its debt doesn't blow up.
We Italians should be taking some notes as well... :)
Capitalism says buyers pay and when there are too many customers, the price goes up. This is what we are seeing, its that simple.
Some suggest to add some sort of tax to owners, but this wont help, they will of course just pass the cost onto their renters. Its pretty obvious owners dont care if you cant pay someone else will, its that simple.
The REAL problem is the concentration of living in big cities and the fact there are too many people. The same is also true of wages, wages dont go up because there will always be someone else who will do the job for the same or less be it actual wages or extra hours and other negatives.
The system is broken, we have to appreciate that all this centralisation of everything and anything is the problem. Slowly or maybe its quickly everything is becoming a monopoly of some kind.
Major cities are becoming the monopoly of employment and work, previoously it was spread across more places and more industries. Now its becoming concentrated. In Spain that means everyone wants to move to Madrid or Barca and the consequences mean too many people and too few homes. People want to live in certain places for their advantages, big cities also mean more commuting, and people want less travel time, but that means they pay more in rent. You cant win, if you have one then you lose on the other. THis is always the case in everything from commuting time, to rent, in the end most of the people lose most of the time.
What we are seeing is what happens when you have a monopoly. THe problem is people cant see who or what are the monopolies. THey think a monopoly must be a single company or person, they cant comprehend its something above that at the nationwide level, namely the structure of each country.
A perfect example is everyone in NZ is moving to Auckland, and then everyone in NZ also moves to Australia. Of course its not everyone but its alot and this affects the balance both in NZ and also in places like Sydney which grow even bigger.
The answer is to stop the centralisation, and break things up.
Fact is that the rent is currently set at what the market is willing and able to pay, regardless of what the cost to the owners is.
Im not saying this is bad or good, im simply saying that we are seeing independent personalities act as a monopoly because countries themselves are devouring their towns and everyone is moving into the big city or cities.
BTW: Its not only rent, thats just one example, its everything, rent, food, entertainment, traffic, lines at your favourite venue...
Good economic policy is largely context independent. It is almost always a good time to tax economic rents and deregulate starting/running a business. The basic formula for success has been well established for several centuries and even the Communists managed to figure it out a big chunk of that.
It is not surprising that the established government figures seem confused. If they've let the situation devolve to the point where there is a visible problem it is strong evidence that they just don't care about good economic policy. Not in the top 10 list of priorities. And to couple that with a forecast, that probably isn't going to change any time soon.
In a dictatorship your scheme would work, in a democracy it would just prevent even more economic activity
> And then the policy you want is simple: Tax the bad capitalism, don’t tax the good capitalism.
Tax isn’t punishment. Imagine a company which has a thousand trucks. The trucks themselves are ethically pure EVs. They pay the land value tax for the parking lot and the auto shop. But they don’t indirectly pay taxes for the use of the roads? That’s a massive wear on the road infrastructure.
Wouldn't a better solution be to more heavily tax voluntary vices? Gambling, drugs, prediction markets, cash-sink "luxury" products, parasitic mobile games, etc.? I think it's fine by just about everybody if those particular industries -- the real "bad capitalism" -- become almost unprofitable by default.
The secondary layer of "bad capitalism" is in finance, speculation, and even legal services. There's no reason that those, also, cannot be much more heavily taxed.
At the same time, do the extremely smart thing that Asian economies -- China and Korea foremost among them -- have been practicing: Subsidize technical and industrial innovation, strategic industries, etc. Just cut the red tape and fund it.
With the caveat that “the government” should somehow represent the will of society (I know, basic democracy seems like a big ask today), this seems like how it should be. The land belongs to us humans together, and if someone wants to control it exclusively, there should be something in return for the rest of us.
That's just taxing the poor.
In fact, it would tax the industrious poor with little recourse.
Vices, on the other hand, don't have to be engaged in, and should absolutely be discouraged.
This shifts the optimal point for sale, but if there is explosive growth they theoretically still aren't forced to sell early, they can still capture all that growth
What this scheme prevents is them holding onto the property forever after the neighborhood gentrified. Which the author likely considers a good thing in their framework, because the land generates more economic value in other hands. The original land owner gets a payout and is forced to move. Just like a renter would be forced to move, just that the land owner gets a big payout from the land value increase
You and I can theorize how black market analogs might somehow exist, but they wouldn't have 1% of the reach they currently enjoy.
I also think that conspicuous consumption in the form of yachts and $40,000 handbags is, in truth, a vice -- and one that can generate a lot of tax revenue, and only be black-marketed away with severe difficulty.
Buy a pack of cigs in New York (I think it's almost $20, now). Most of that is tax. People vape, a lot, here. I know that pre-rolled cigarettes have been heavily taxed in many countries, for decades, so they sell loose tobacco and rolling papers.
Gambling also tends to get taxed a lot.
There's lots of folks that think prostitution should be legalized, so it can be taxed. The same argument was made for pot. I'm pretty sure that legal pot is heavily taxed. I have heard that illegal pot is cheaper.
It's not an easy solution. If it was easy, it would have been done, a long time ago.
"There's always an easy solution to every human problem; Neat, plausible and wrong."
-H. L. Mencken