Re: Land, Labour and Capital Taxation....
From: Igor (jjweatherby_at_houston.rr.com)
Date: 12/30/04
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Date: Thu, 30 Dec 2004 18:43:22 GMT
Andy F wrote:
> Igor wrote:
>
>
>>No. It is simple. The tax is a cost. A cost could affect whether a
>>business stays in the market. So what happens if building the railroad
>>knocks out some businesses out of the market who would use it? It means
>>less return to the railroad owner. So it is less likely the railroad
>>gets built.
>
>
> No. Under LVT, a business would only get 'knocked out' if somebody else was
> willing to pay more for the land.
>
Do you think just because someone ownes land they would use it for
productive purposes at a loss? A land tax can knock out firms in the
long run. The increase tax leads to lower profits. For competitive firms
and monopolisticly competitive firms in the long run profits are zero. A
tax would cause negative profits and people to go out of business. This
would decrease the value of the railroad. Just because a piece of land
is there and it is not used for speculation does not mean someone will
produce on it if the tax is high enough to force negative long run profits.
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