Anon let loose in the comments to part 151. He uses a fairly basic Home-Owner-Ist strategy, which is to start off by denying reality and then to accuse your opponent of the very crimes which the Homeys themselves are perpetrating:
There is NO wealth in the value/price of a HOME, when will you get it into your thick heads. It's a HOME where, children are brought up , meals are prepared and cooked, stories are read at bedtime, gardens are tended, TV is watched, radios are listened to, etc. etc. etc.
The vast majority are HOME owners and have no interest whatsoever about what some dink in a suit thinks. What you and your henchmen are proposing is outright theft, which is really what taxation is all about...
AS I tried to point out but you thieves refuse to take it on board. My home has no monetary value TO ME, it's price/value is set by some dink in a suit. My home has no value, ergo, cannot be taxed.
To which Fraggle then posted this fine riposte:
This is what happens when you abandon reason for epithets.
"The vast majority are HOME owners and have no interest whatsoever about what some dink in a suit thinks."
The prevalence of property porn protests against your perfunctory prattle. Its simply not true. Even people who most of the time could be described in those terms get uppity when actual house prices are mentioned. I'm related to plenty of them.
"What you and your henchmen are proposing is outright theft"
Ahh...the irony...it is theft (current and ongoing) that we are trying to resolve*.
"My home has no monetary value TO ME, it's price/value is set by some dink in a suit"
So, you paid nothing to acquire your home, I take it. You inherited it? You'll give it away to a random stranger when you die? You're too funny....
This is slightly by-the-by however as LVT, by definition, is not a tax on homes. MW doesn't always make that distinction clear because he uses house prices as a readily understandable (and generally reliable) proxy, but he is well aware of it.
LVT actually isn't interested in your home at all, it's interested on the land on which it stands. Take that on board for starters.
Incidentally, you haven't stated what you think the right thing to do would be instead...
* More specifically, the two types of theft the Home-Owner-Ists are guilty of are a) imposing taxes on individual efforts (VAT, NIC, income tax, corporation tax) and b) the fact that some individuals appropriate wealth created by the community by charging other people rent, regardless of the fact that it is the people living somewhere who created the wealth in the first place, not the landowners. Rent = actual rent, as well as capitalised rent (selling prices) or rent on money borrowed to pay the capitalist rent (mortgage interest).
Saturday 6 August 2011
Killer Arguments Against LVT, Not (153)
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So, my HOME and the land upon which it is built are separate entities. I now pronounce that a "dink phrase".
My HOME has cost me money, not only the purchase price but the maintainance costs. I used to pay "rates" which were based upon the rentable value of my HOME, now I pay Council tax. My HOME has never, ever been and will never, ever be, a source of income to me.
So how will you work out how much you want to steal from me just because I had the nous to get up off my arse and buy a HOME.
Over.
Anon, the bricks and mortar are your business, the land value is something quite different. Like a car is different to petrol, a physical radio set is different to a radio broadcaster. The bricks and mortar are different to the land/location value. Fact. You don't need to be an expert to realise this.
The land value is created by the community (aka "Location, location, location") and you get a benefit from exclusive occupation thereof which is equal and opposite to the burden you place on everybody else by excluding them.
So maybe your home does not generate cash income for you in itself, but so what? Neither does the food you eat, the electricity you use, the furniture you buy.
If you argue that
a) the community has no moral right to compensation from landowners for being deprived of the value it creates, then by logical extension, you are also arguing that
b) you are happy to waive your share of compensation from all other landowners (because you are also a member of 'the community')
c) As the food, electricity and furniture you use does not generate cash income, you should be given them for free, and
d) As your own labour costs you nothing, in cash terms, your employer or customers are under no obligation to pay you.
Your last question seems to relate to the valuation question, which is easily answered if you apply common sense.
In any event, once you've replied to my more specific comments, can you please explain to me why you are grudgingly accept income tax, VAT, NIC and so on but get so hysterical about LVT or Council Tax?
Do you not realise that reducing income tax by £1 and increasing LVT by £1 makes the whole economy about 50p better off? Why do you have such a moral conviction that it is better for everybody to be poorer than necessary?
On the subject of location value, not all location value is made by the community. A cottage on the edge of the sea, for instance, derives its location value from the scenery, rather than anyone's efforts (apart from those of the builders).
B, there is a sliding scale here, as I said in a comment earlier today:
... there is a sliding scale between
a) Things which are just there, not created by any particular individual (such as minerals or location values - one created by nature and the other by the community). You can tax these as much as you like, they won't go away and don't really belong to any individual and no individual created them.
b) Transactions between persons, which are clearly down to individual effort (or small identifiable groups of individuals) and which are discouraged if taxed, which is why VAT and NIC are even worse taxes than income tax.
Having a nice view clearly falls into category (a).
Whether the view is more akin to a natural state of affairs (like having coal or gold in the ground) or a community made state of affairs (because planning permission restricts the number of cottages, because of environmental policies to keep the beach clean, prevent off shore oil drilling, not using the beach as a harbour etc) is a separate topic, but it's certainly category A and thus the location value of that cottage is still a suitable subject for taxation.
And again, we note that a cottage by the sea a few miles from London is worth more than a cottage by the sea on the north coast of Scotland, or a cottage by the sea on the Baltic Coast of Germany - the £-s-d value is a function of what people will pay, which in turn is a function of how many large towns there are nearby etc.
B, furthermore, without the state to protect exclusive possession of the cottage, it would be worthless anyway.
If LVT is imposed the "state", far from "protecting my exclusive possession", will confiscate should I, for any reason, default on the theft payment. What then?
My HOME becomes a "social bonus", in other words thieved.
Er its not "capitalist rent". There is no capital involved in a mortgage. Ditto for labour. There is only land value involved. OK its semantics. But why not make it clear. Call it monopoly rent. Or oligarchy rent. Or... just Rent proper. No need to invent any new terms.
Also the chap at first denies its "wealth" (another dodgy term) and then clams it is wealth soon after by saying you are stealing it.
Defining terms is an ancient art lost long ago. We pay the price today because we all refuse to do it. Yet its so simple to do.
PS my word verification here was "Pro BJ"
Anon, as Robin points out, you are now just contradicting yourself over and over.
LVT is payment in return for exclusive possession, if you don't pay, then you lose exclusive possession. I would have thought that blindingly obvious. It's like rent. In fact it is rent.
And under current rules, if you evade income tax and run up a big enough bill, then HMRC can take your house, so what's the problem? Would you rather pay half your salary in exchange for the right to work or pay a fair price for something in return?
You could look on the bright side and say "Ah well, at least I won't have to pay income tax, VAT will be scrapped so goods will be cheaper, and I'll get a bonus out of the LVT collected which is not spent on police, defence and so on, so if I live in an average house, I'll pay a net balance of nothing." but you appear to be more of the hysterical Home-Owner-Ist persuasion.
Also, can you clarify whether you think that land values are private wealth or not? Either they are, and you retract your initial statement, or they are not, and you retract your later statement.
"B, furthermore, without the state to protect exclusive possession of the cottage, it would be worthless anyway."
Not if it's Benton Castle http://www.pemcoastphotos.com/photo_3286680.html
You either won't or can't understand that to be taxed on something that something must have a tangible "worth" in order to calculate the "theft".
I do not derive any "wealth" in kind nor in deed from my HOME nor the land upon which it is built - geddit Nothing, zip, nowt.
In order to pay the "theft" I would have to use money that I haved "earned" through the sweat of my labours, Unless you would want me to meet the "theft" demand by demolishing my HOME and remitting the bricks as payment.
I derive no monetary benefit from my HOME, never have, never will. how do you propose to "steal" what's not there?
Lol...Anon, you are the gift that keeps on giving...
"So, my HOME and the land upon which it is built are separate entities." - Yep you heard that right. Why that observation should be so controversial for you I have no idea.
"My HOME has cost me money, not only the purchase price but the maintainance costs." - Lol, so you're claiming that you've paid money for something that has no value to you...that was stupid of you...or else you have no idea what 'value' is.
"I do not derive any "wealth" in kind nor in deed from my HOME nor the land upon which it is built - geddit Nothing, zip, nowt." - Of course you do. The house gives you shelter at the very least, among other tangible benefits. As for the land (the important bit where LVT is concerned), there are very clear benefits for being located where you are, whether it means you're close to work, or you're in the catchment area of a decent school, or whatever. Those benefits have nothing to do with your home and everything to do with where it is. The structure and the site are two very different things that get bundled together in real estate.
"In order to pay the "theft" I would have to use money that I haved "earned" through the sweat of my labours" - Very true. Location values are, in the end, paid out of wages, but that doesn't make it theft. Answer this: Why do you think LVT is theft, yet you didn't cry theft when you paid money for the land you now occupy to the person who was occupying it?
The tangible worth of your house is whatever other people are prepared to pay for it. Your choice if you wish to ignore what they would offer. Others in your position might act differently. But on to your other points.
Most people derive wealth from their houses by buying houses close to where they work. I mean, it would certainly be possible to buy a cheap house in Newcastle and commute to a job in London but would it be practical? Well some highly paid people do it but for most of us -- it's not really a possibility. That's why houses close to jobs cost more than houses far from jobs. So it's a bit iffy to say that you derive no monetary benefit for your home. At the least it's saved you commuting costs.
But hey! Maybe you never needed a job. Perhaps you have always been independently wealthy. So you don't care that your house is close to well-paying jobs. Trouble is that other people do. You may have paid the previous owner to vacate the premises and to allow you the right to live there but you didn't agree anything with the rest of us. And the main reason that we don't start putting up tents in your fine garden, close to those lovely jobs, is that there's an expensive legal system (courts, laws, police, prisons and all that) keeping us out so that you don't have to stand guard 24 hours a day. If you didn't pay for them through your taxes (whether land or income) you'd have to pay a security firm to keep us undesirables out of your home and garden, estate, whatever. Could be expensive.
Of course a bigger home takes more protecting, particularly if it's got more than a few acres attached, or if it's closer to a lucrative job market. So it's perfectly reasonable to expect a security firm to charge you more to keep the riff-raff out of a bigger place. And if it's reasonable to expect the security firm to charge more it's reasonable to expect the government to do the same. After all it's providing the same service. So no theft involved just honest payment for an honest service.
There's more to Land Value Tax than that but this comment is long enough, so I'll leave it there.
Fraggle, Derek, thanks for back-up.
There's a grain of truth in what Anon says, actually: "In order to pay the "theft" I would have to use money that I haved "earned" through the sweat of my labours" but how is that any different, or indeed worse, than income tax? At least LVT does not punish individual effort and you can decide how much you are willing and able to pay.
But he then goes back into reality denial:
"Unless you would want me to meet the "theft" demand by demolishing my HOME and remitting the bricks as payment."
It would be pretty stupid to demolish it. If you think the LVT demand is unreasonably high, you could rent out your house to somebody prepared to pay market rent for that area and pocket the difference after paying the LVT. Or you could sell it and buy somewhere smaller or in a cheaper area.
I'm sure you'll find somewhere to "bring up children, cook meals" that's within your budget.
Anon, do you live under a bridge and have problems with gruff billy-goats?
Mark, I really don't think you've understood his point. It's because you're stuck with this silly Ricardian class analysis, in which everyone who owns a home is in the "landowner class" and thus considered to be the same. It's the same error that drives marxism ("the capitalist class") and feminism ("the male class") and so on. It's a fundamental fallacy. Ricardo was wrong, and every economic philosophy derived from Ricardo was wrong.
Now, there are severe problems with State intervention in the land market, yes. We can all agree. And large landowners benefit in divers ways from that, yes. The Big Rentier does indeed get a transferred rent from the State.
But the small landowner- he who only owns his house- does not benefit, because his house is not a source of income, which is what the OP was saying. It's a cost not an investment. In the same way that a shop that hires morning suits for weddings makes money from clothes, but my clothes don't make me any money, they just cost me money.
So the small homeowner's position is quite different from the proffesional rentier's. Because he will always need a home (and unlike clothes which are relatively cheap, cannot afford to sink money into homes which is lost) he wants the house price to not fall so that he can sell his present home and buy a new one. For home *users* rather than home *renters* it is effectively a zero sum game.
The bizarre Ricardian obsession leads you to this fallacy that everyone who owns land makes money from it. Most don't. They're just trying not to lose any value (paying a £100,000 mortgage for a house that drops to £50,000). Their housing is a cost to them.
How hard is this, Mark?
Ian B: "Mark, I really don't think you've understood his point..."
Well, you're not wrong there. Any person who starts an argument by saying "My home has no value" has me completely stumped. It's like a physicist arguing with someone who reckons that gravity pushes heavy objects away from a planet's surface.
"But the small landowner - he who only owns his house - does not benefit, because his house is not a source of income.."
Of course it's a source of income. It's a source of rental income for him, it just so happens that he consumes this income himself. It's like saying "My apple tree has no value because I eat all the apples myself". Not having to pay rent is a negative expense which is equivalent to income.
"In the same way that a shop that hires morning suits for weddings makes money from clothes, but my clothes don't make me any money, they just cost me money."
Well, I once hired one of those fancy suits for a black tie do, cost me £30 (or whatever). So next time, I thought sod this, I'll buy myself one (cost about £100). I've used it about six times since then, so by spending £100, I've avoided a bill of 6 x £30 = £180. Ergo, by making the decision to buy that suit, I am £80 better off. Ergo that suit has earned me £80.
"How hard is this, Mark?"
How hard is this, IanB?
Bigger picture, I wholeheartedly agree that most of us do NOT benefit from Home-Owner-Ism, where we not only have to pay over half our income in income tax, NIC, VAT and so on BUT also have to pay huge amounts to buy (or rent) pre-owned land.
We'd be better off with a Georgist system, whereby
a) there is NO income tax, NIC, VAT etc.
b) all land is liable to LVT, which goes into the pot to pay for public goods and the rest goes as a Citizen's Dividend.
c) The average bloke is therefore neither a net taxpayer nor a net welfare recipient. The benefits he get = the tax he pays.
If you want to do some clever maths and invent a system of personal 'land allowances' whereby those who live on median value plots don't have to pay LVT but don't get the Citizen's Income etc, then feel free to do so.
"The bizarre Ricardian obsession leads you to this fallacy that everyone who owns land makes money from it. Most don't."
I never said that, did I? Show me where I ever said "everyone who owns land makes money from it". People who bought houses before 2000 or thereabouts are quids in, those who bought in the last five years will end up paying the bank (the real owners of urban land) more in mortgage interest than the land is worth.
So in fairness, most people in the UK have made a lot of money from being a land owner, i.e. they are considerably wealthier than they would have been had they all stayed renting (the rental value they enjoyed plus capital gains is far, far in excess of the mortgage repayments they made) and some of the last people to join the Ponzi scheme have lost out.
Mark, I don't know if you realise the ramifications of what you just argued, but what it boils down to is that everything is a person owns is a "source of income" since they are avoiding renting it, which is...
Barmy? Doolally? Batshit insane? I can't think of a strong enough word, sorry.
A source of income would be an investment. That would be something where you say spend £1 and get back £2. That is, your wealth would increase. It's not the same as avoiding a decrease. Really it isn't. The only way you can get your bizarre argument is to postulate some strange society where rental of everything is the norm, and thus the datum. Basically, you've mashed up the whole concept of an investment versus a cost.
Still, if it takes the abolition of 200 years of economic theory to justify the LVT, hey. Go for it.
The basic problem you've got here and you are never going to get around- since it is a law of nature- is that economic value does not exist except during transactions. You're trying to tax potential values, not actual values. It goes back to my Whore Value Tax. Every woman has some potential value she could earn as a courtesan, and you could have an army of assessors trying to guess what that might be. But unless she actually is a courtesan, there is no way to know it, and no actual income to tax.
Value is not intrinsic. It is not created by labour, nor by land, nor by anything else. It is transient, and arbitrarily defined between traders at the instants of trade. That is all there is.
If you want to tax trades; fine, go ahead. Have a rental tax or a land sales tax. But you can't have a land value tax, because there is no such thing as land value, just a guess at what land might be worth if it were sold, which isn't value itself.
Now you might say, "well, my assessors can look at similar land, and guess what it would be worth if it were sold or rented". Well, yes. And my army of assessors can take a look at women on the game and guess by comparison what other women would be worth if they were on the game too. But because they aren't actually on the game, their "Whore Value" doesn't actually exist. They have earned nothing, and there is nothing to tax.
You see?
Ian B, You've got more than Ricardian analysis to worry about. Even economists who think Ricardo is bunk came to the same conclusion about land tax. The Austrian, Walras, was a strong supporter too and he hated taxes. Menger thought much as Adam Smith did on taxes and we know that Smith liked LVT. So did many of the Austrian school. Don't be confused by the fact that one or two of them like Jevons or Rothbard didn't like it.
The fact is that even if Ricardian analysis is bollocks, a perfectly good case for LVT can be made based on the principle of compensation for exclusion from natural resources, like living space.
Mark's already answered your other points, so I'll leave it at that.
Derek, nobody is "excluded" from owning land. Anyone can buy some. That's how markets work. Unless you want to argue that nobody should be allowed to own anything, because that excludes everyone else from owning it- the pure communist argument- you're on a hiding to nowhere with that one.
The other point, using my WVT as the example is this; if all the women in the world were on the game, the actual whore values would change drastically; in particular they would fall a great deal.
Likewise, by assessing land values as if all land were rented which it isn't, you are mightily overassessing the aggregate land value.
Ian B, thanks for the LOLs
"Mark, I don't know if you realise the ramifications of what you just argued, but what it boils down to is that everything is a person owns is a "source of income" since they are avoiding renting it, which is... Barmy? Doolally? Batshit insane? I can't think of a strong enough word, sorry."
Where have I ever said that? Do you not remember me pointing out that taxes on labour, turnover, profits etc are BAD taxes, these things are sources of income but, for reasons which I have explained elsewhere, we make ourselves poorer if we tax them?
Have I not also dealt with the frankly twatty Home-Owner-Ist argument "If you think that land should be taxed then why not other assets, like lawnmowers, paintings, cars" on plenty of occasions? Have I not explained why lawnmowers, paintings, cars are the result of the efforts of individuals and hence that to tax them is much the same as income tax? Have I not explained that land 'assets' are like financial 'assets' - they cannot exist without a corresponding liability and hence are not real assets at all? Do I really have to revisit all this again?
IanB, yet more LOLs:
"economic value does not exist except during transactions."
Right. So if I grow an apple and eat it, that apple has no value, but if I buy one in a shop, it has value? If I mow my own lawn, that has no value to me, but if I pay a gardner to mow my lawn, that has value?
Now you're getting hilarious:
"nobody is "excluded" from owning land. Anyone can buy some."
Sure, but only by buying a monopoly right from a member of the cartel. In any event, "land" as a physical thing is not so relevant, it is "location values" which LVT seeks to tax, not physical land.
I'm not sure whether I need to rehearse this again, but just to remind you, you can buy an acre of Scottish grouse moor with no planning permission in the middle of nowhere for about £1,000.
An acre of residential land with planning permission in England costs you about £500,000 to £1,000,000 pounds.
An acre of central London costs you about £70,000,000.
All of these figures are just for the location value, not the buildings thereon.
Perhaps you with your infinite foresight and wisdom might like to explain to a humble idiot like me why you think that the second category is worth a thousand times as much as the first, and the third category is worth seventy times as much as the second?
IanB, ROFLMFAO:
"Likewise, by assessing land values as if all land were rented which it isn't, you are mightily overassessing the aggregate land value."
I wonder whether you can imagine the following scenario: a country where
a) There is no income tax, VAT, NIC, corporation tax etc
b) Where everybody gets a Citizen's Income of a few thousand pounds a year
c) Where everybody rents their business premises or where they live. All rental income is taxed at about 60% of gross income, with no deduction for interest costs , and this money goes into the pot to pay for core functions of the state, health and education vouchers and the Citizen's Income.
d) Where every individual who does not want to rent is entitled to buy their home or business premises, but is still obliged to pay the 60% tax on gross rental value.
It's a simple question: can you imagine what such a country would be like? Do you realise that the maths stacks up? Or if not, can you please show me your own workings to illustrate that 'something terrible would happen and the world would come to an end'.
Right. So if I grow an apple and eat it, that apple has no value, but if I buy one in a shop, it has value? If I mow my own lawn, that has no value to me, but if I pay a gardner to mow my lawn, that has value?
It has no economic value Mark, that is no monetary value.
That's the problem you have here. You're taxing potentia rather than actuals. You're taxing the imaginary rather than the real. You're trying to tax my own subjective perception of how much I enjoy my lawn; but that isn't a monetary value. It's just a pattern of neural firing in my head. You're literally trying to tax my thoughts!
If you don't grasp this, you don't grasp economics. It is as simple as that. My lawn does not have an economic value until I either sell it or rent it or use it for some other commercial purpose (e.g. I charge admission for its use as a playground). On its own it has no intrinsic value.
You're up against reality here Mark, and you're losing badly. Intrinsic value was dumped by economics in the nineteenth century and nobody has believed in it since, because it is not true.
Perhaps you with your infinite foresight and wisdom might like to explain to a humble idiot like me why you think that the second category is worth a thousand times as much as the first, and the third category is worth seventy times as much as the second?
The problem with the Corn Laws wasn't the private market for corn, it was state intervention to manipulate the price. Does that get you anywhere on the long lonely journey to a basic grasp of reality, Mark, or are you still staring at an upside down map with a puzzled expression on your face?
IanB: "It has no economic value Mark, that is no monetary value."
Right. I'm still puzzled though. If I buy an apple in a shop and pay 25p, then according to you it is worth 25p. If I grow my own apple and eat it in preference to buying one, it is worth nothing. But according to your logic, if somebody were to steal all the apples from my tree which I intended to eat myself, thus forcing me to go to the shop to spend money on them, then I have lost nothing?
You've done this stuff about "no intrinsic value" before and I have dealt with it before. But so what anyway? If you personally do not value your lawn and were expected to pay LVT on it, you would quite simply sell your house to somebody prepared to pay the gross rent (which will always exceed the tax).
You get to pocket the difference (rent minus tax) and so you are a WINNER! Hooray! People are giving you money to use the lawn which you personally do not value. Or are you now going to claim that you do value your lawn?
Or will you ask the first potential tenant who applies that he is welcome to your old house for whatever value his synapses tell him it is worth - what if he says £1 a year, but you know he is stilling and able to pay £10,000? Would you charge him rent on the basis of neurals firing in his head or on the basis of what he says? Or on the basis of what market rents happen to be for that area?
It's a simple question, please answer it.
I have tried as far as possible to answer your points and have asked a couple of questions in return. You do the usual Homey-Faux Lib game of introducing yet more outrageous untruths and side alleys.
I'm happy to discuss the corn laws once you have show the good manners of providing me with your own personal understanding of why land values in Chelsea are millions of times higher than on Scottish grouse moors and have replied to my question above.
Mark, I remember from a previous discussion an admission that your economic knowledge is weak (you'd not heard of marginal utility IIRC), but you're really revealing here how weak it is.
Sigh.
Values of untraded goods are not "nothing". They are indeterminate. Do you grasp the difference?
I'm going to guess that the answer is "no" to that question. Look, really, if you want to carry on believing a 200 year old idea about value that nobody but a few hoary old Marxists still believe, fair enough. But your theory is never going to make any sense, because it is objectively wrong.
I'll try one more time.
A particular object has some sense of value to a person. This is simply a perception inside their brain- a pattern of brain activity- which is not accessible to anyone else. It has no objective value in monetary terms. For instance, my cat has this kind of value to me. But I have no idea what that represents in monetary terms. I'm fond of my cat, but what is the price of that? I dunno.
Now, if somebody wants to buy my cat, now we can try to test the value against money. I cannot tell you what would tempt me to sell her. I'm very fond of her, but some price would presumably tempt me. At the moment I agree to a sale, we learn one data point; that the cat is worth less to me personally than the amount I have accepted.
But this has no relation to an imaginary intrinsic value of the cat, or a "going rate" for cats in general. Many people would sell their cats for less than I would.
Have I lost you yet? I can't think of a simpler way to put this, so I might not be down at your level of understanding, sorry if that's the case.
OK, IanB, I know perfectly well what marginal utility is, you're not doing yourself any favours by just constantly insulting me.
I'll give you one last chance to answer one of the very simple questions I have asked you:
"Can you imagine the following scenario: a country where
a) There is no income tax, VAT, NIC, corporation tax etc
b) Where everybody gets a Citizen's Income of a few thousand pounds a year
c) Where everybody rents their business premises or where they live. All rental income is taxed at about 60% of gross income, with no deduction for interest costs , and this money goes into the pot to pay for core functions of the state, health and education vouchers and the Citizen's Income.
d) Where every individual who does not want to rent is entitled to buy their home or business premises, but is still obliged to pay the 60% tax on gross rental value.
It's a simple question: can you imagine what such a country would be like? Do you realise that the maths stacks up? Or if not, can you please show me your own workings to illustrate that 'something terrible would happen and the world would come to an end'."
Either you can imagine such a country, or you can't. Or you can actually explain why such a country cannot exist. Or something. Don't give me this eternal same old shite again and again, if we are to have a debate about LVT, we first have to agree whether it would work on a purely practical level.
Mark, I'm rude because you're such a rude son of a bitch, frankly. And come to that, you still haven't apologised for that post where you took my example of the (deliberately ludicrous) WVT and announced that I was actually advocating one.
Be polite, you get polite.
As to your question, yes I can imagine such a country, but what I'm addressing here is your irrational belief that one can tax hypothetical income, which is your fundamental failure with an LVT. You want to tax people who don't rent their land out as if they do (point (d) above). There is no theoretical justification for that; they haven't earned the income you are taxing. It's as simple as that. Just the same as you can't apply a hooker tax to a woman who isn't a hooker, because, well, because she isn't a hooker. That your assessor thinks she would be worth £200/hr on her back is irrelevant, because she doesn't actually have that income.
The whole problem with the LVT is the assumption that all landowners are rentiers. It's a fundamental class-analysis error, and you can't find a way round it.
Tax rents. That you can do. But you can't tax what-the-rent-would-be-if-it-was-rented-which-it-isn't.
And, let's remember why the Georgists want/ed an LVT in the first place. It was precisely so that landowners would be disowned. The whole purpose of it was to abolish land ownership and replace it with "rental from the community", i.e. the State, while forcing everyone to make maximal "productive" use of thier land, and they can go fuck themselves if their land isn't maximally productive in economic terms.
IOW, it's just communism with rentiers instead of bourgeois capitalists, and as nasty and flawed as Marxian communism for all the same reasons.
You can't get around that Mark. Your little scheme is designed to disown landowners, and will hit the small landowner who uses land for his own enjoyment- deliberately- the hardest.
Think of something else. Try a rent tax if you must. That'd work, and it'd even make theoretical sense too, unlike your 160 attempts to explain how you and your gang of thugs are going to extract money from people who haven't earned it, and how that isn't fundamentally unjust. Because it is, and deep down you fucking know it too, behind all those LOLs and ROFLs.
Now a "cherry picking dink"
Read and digest - "My HOME has NO worth TO ME".
It is "valued" by some dink in a suit.
I have no intention of "selling" - It's MY HOME.
OK, I'll pose the question for a third and final time, just to see if we are on the same page:
"Can you imagine the following scenario: a country where
a) There is no income tax, VAT, NIC, corporation tax etc
b) Where everybody gets a Citizen's Income of a few thousand pounds a year
c) Where everybody rents their business premises or where they live. All rental income is taxed at about 60% of gross income, with no deduction for interest costs , and this money goes into the pot to pay for core functions of the state, health and education vouchers and the Citizen's Income.
d) Where every individual who does not want to rent is entitled to buy their home or business premises, but is still obliged to pay the 60% tax on gross rental value.
It's a simple question: can you imagine what such a country would be like? Do you realise that the maths stacks up? Or if not, can you please show me your own workings to illustrate that 'something terrible would happen and the world would come to an end'."
Either you can imagine such a country, or you can't. Or you can actually explain why such a country cannot exist. Or something. Don't give me this eternal same old shite again and again, if we are to have a debate about LVT, we first have to agree whether it would work on a purely practical level.
-------------
PS, I'd like to alert you to the fact that the average/median/little guy will be neither net taxpayer nor net benefit claimant, as the LVT he pays will more or less net off with the Citizen's Income etc.
In the spirit of engaging in friendly 'blog debate, i will address one of your points:
"they can go fuck themselves if their land isn't maximally productive in economic terms"
No, nobody has to go f- themselves.
Every bit of land has an optimal use, whether that is generating income or for domestic/relaxation purposes. The annual value of that might be £10 per acre on a Scottish grouse moor or £100,000 per acre for residential land or £10,000,000 per acre for central London.
Nobody expects the grouse moor owner to pay a penny more than £10 a year per acre, or the average homeowner to pay more than £10,000 a year for his house and garden etc.
And if they personally and subjectively derive less than that in income or enjoyment, then they are perfectly free at any time to trade down and let somebody else occupy that land.
You keep making the assumption that LVT is a tax on a certain class of people whom I secretly see as The Class Enemy, it's not. It's not even a tax on people, it's a tax on land in the same way as petrol duty is a tax on petrol/road use or tobacco duty is a tax on cigarettes and Business Rates is a tax on rental values of commercial premises.
If you want to keep calling me a Communist, then could you explain to me how income tax etc is less Communist than LVT?
Anon: "Read and digest - "My HOME has NO worth TO ME"."
Well that is excellent news, and an LVT/Citizen's income system will suit you down to the ground. You can abandon your home, on which you place no value, collect the Citizen's Income and live under a bridge or something.
By analogy, a lifelong non-smoker to whom cigarettes have no value doesn't complain about tobacco duty. It's only the smokers to whom smoking has a value who have to pay it.
Simples!
Dear Anon or Ian B,
I have a question. How does Anon insure his home? By this I mean what does he truthfully, to the best of his knowledge, fill in the relevant 'values' boxes in the paperwork?
Does Anons house have a market value for insurance purpose if it is torched? Does it have this value, shall we say, before or after the match hits the petrol?
Best,
Mike W
"Derek, nobody is "excluded" from owning land. Anyone can buy some. That's how markets work." - except that that's not what Derek said. He was referring to land ownership as the priviledge of excluding others from the site. I also wouldn't invoke a cartel market as some sort of just playing field.
The simple fact is, it is irrelvant to the matter of *justification* of LVT whether the value of land is intrinsic or not. The point is to whom does the value rightfully belong. Once you examine that (and realise that it's not the title-holder), then you worry about assessment.
Turns out though, you don't need intrinsic value to *assess* LVT either. You just use market evidence and work iteratively. Now sure, you can argue that could lead to instances where the assessments are not 100% accurate, but why in the world would that justify *guaranteeing* wildly incorrect assessments by making all assessments zero?
fraggle-
The simple fact is, it is irrelvant to the matter of *justification* of LVT whether the value of land is intrinsic or not.
Yes it does, because a thing which does not exist cannot be taxed. This isn't a difficult point to understand once you get past the belief in objective value, which is what both Georgists and Marxists are stuck with.
"Yes it does, because a thing which does not exist cannot be taxed." - The only way for subjective value to be non-existent is to remove all subjects. You're assuming that an unevaluated thing is a non-existent thing when there is a world of difference. This is why Anon's latest gem - "My HOME has NO worth TO ME" (even as he lives in it) - is so ludicrous. If the statement were true, he wouldn't be living in it!
It has no monetary worth to him. No economic worth. It's a dead cost to him. Can't you see this?
Let's get back to my cat. She has a "value" which is quite enormous to me, since I'm very fond of her. This value is not related to her potential market value, which would be very small. All we can conclude from this is that I would not willingly sell her- which is useful economic data, but not to a taxman.
I will never realise the cat's (small) potential economic value unless I sell her, which I'm not going to. Ergo, she has no economic value to me. She's just a cost.
Same for his house.
Mark and other LVT'ers, translating this across to cats, would tax me for owning a cat, even though she provides no income because if I rented her out, or sold her, I would realise economic value.
It's imaginary value, hypothetical value. Not real money. You can have an imaginary tax paid in imaginary money to an imaginary taxman if you like, but not real money, because there isn't any. No actual transactions have occurred. The cat isn't in the economy.
And of course now Mark will say that I realise an economic value which is the savings I make by not renting a cat, because I own one.
Sigh.
The cat doesn't bring any money in. Neither does the house. Same thing.
I think we are in danger of bullying "anon" here.
He clearly has a "belief" about all this. And may not yet have the language he needs to make his case fully. A fair trial.
We want to do science do we not? Why do we not ask Anon to
1) restate his most basic objection 2) in its most basic form
This means we will first have to define terms with absolute clarity. And agree on them. Before moving on.
Deal everyone?
Ian B, you have proposed that a Whore Value Tax and a Cat Value Tax would be much the same as Land Value Tax. I did a post explaining why a) the WVT is quite different and b) why Georgists had no intention of taxing 'whore value'. I've done one explaining why LVT does not apply to cars, paintings, lawnmowers etc which you could summarise thusly "Cars, paintings, lawnmowers etc are not LAND".
Would you like me to do another one explaining that cats are not land, or can i take it that you realise this.
Mike W, thanks for back up.
Fraggle, thanks for back up. Good point about iterative nature of valuations.
That was why I kept asking IanB whether he could imagine a country in which everybody rents and all rental income were heavily taxed etc.
I think he grudgingly admitted he could imagine such a country, in other words, he accepts that in such a country it would be possible to work out the rental value of every bit of land, whether we call this "iterative" or "market forces" or "trial and error" is neither here nor there.
IanB, You say:
Ergo, she has no economic value to me. She's just a cost.
How can something, at the same time, have both 'no economic value' and a 'cost'.
A cost IS an economic value.
Have you fallen into the same trap as Anon? You have declared it. In public debate. By your own hand. Its your own testimony.
The holding of 2 counter opposing positions at the same time and "believing" both can be true. An impossible scenario.
Or have I misread you? Please correct if so. So that I can understand what you are saying.
Read thread.
Well, that was fun wasn't it?
IanB,
RS got there first, but the idea that something can be both a cost and valueless is a contradiction.
In any case, the *minimum* economic value of the cat to you is the cost of upkeep plus whatever you could get for her on the market. At all times an exchange is open to you, the cat or the money.
(If there is no exchange with a human on offer, then there is always the exchange of releasing the cat to fend for herself, thus saving the money spent on upkeep. As upkeep is presumably comparable between owners, however, it can usually be neglected when talking about person-to-person exchanges.)
This is most obvious when someone walks up to you and says "I'll give you a tenner for the cat", but it remains true even if there is a general offer for a generic cat. That you'd rather have the cat than the money is evidence that your cat is worth more than £10 to you. Exactly how high the cat's value might be to you won't be known until someone goes high enough, but nor do we *need* to know for the purposes of a theoretical CVT. Bids, even rejected ones, are sufficient as they set the minimum possible figure.
So let's bring this back on topic (nearly), by me offering Anon £100 for his slice of real estate. I'm serious btw.
Anon, you can have £100 right now in exchange for the deed. How about it?
Now interestingly, regardless of Anon's answer the value of his home is established beyond doubt to be *AT LEAST* £100, because he could (or does) get it in exchange. That he would (I'm assuming) want much more (indeed even if he wouldn't sell for £infinity) is irrelevant to this observation. He could have £100, but he'd rather have his home, ergo the value is no less than £100.
It's not the *act* of exchange, but the *option* that gives a good economic value.
There's a further point here though that you seem confused on, you say:
"Mark and other LVT'ers, translating this across to cats, would tax me for owning a cat, even though she provides no income because if I rented her out, or sold her, I would realise economic value."
No, that's not *why* land value would be taxed, that's merely to point out that LVT *can* be assessed. This is why your invocation of a WVT or a CVT is utterly beside the point. The existence of economic value is *necessary* to make a subject suitable for taxation, but it is not *sufficient*. Location values are suitable for taxation because of a completely separate criteria to do with rightful owners, which neither a WVT nor a CVT could pass.
fraggle
I'd go deeper than that on the theory of economic value.
In the final analysis, the value of something in exchange, is the least amount of work I'm prepared to give for it.
This is really the point anon is trying to avoid. He is saying that his location is given for free(no work involved). I think he knows this in his heart but does not have the language yet. After all he has only just started to think about it. That's not unreasonable.
"I think we are in danger of bullying "anon" here."
Robin, I think we are in danger of being trolled.
Bayard, you are probably correct.
Who needs the most help though? The righteous or the sinners?
That sounds arrogant. What I mean is there is no point in converting a supporter. Every point in converting a denier.
This is a good chapter to describe the whole affair. Amazing how 10 minutes of reading and thinking can save so much time. Amazing how so many refuse to do that.
History of Land as Private Property"
B, I'm not sure if Anon was trolling. If he or she had really wanted to annoy me and waste my time, he or she would have adopted the more persistent IanB approach of coming back and saying slightly different things each time so that we end up going round in circles.
RS, yes, that is an excellent chapter. The same thought occurred to me when I bought a house - how come, all of a sudden, does this 'belong' to me? Who says? Who enforces this? The previous owner has taken the money and gone (abroad, as it happens), so who or what is it who enforces and protects my rights - it certainly was dear old Mr & Mrs Lockhart who moved (back) to Jamaica, I had no comeback against them.
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