Re: What the LVT is, and what its advantages are - must read
- From: royls@xxxxxxxxx
- Date: Thu, 18 Jan 2007 01:32:59 GMT
On Wed, 17 Jan 2007 11:20:00 -0500, S. Doo <none@xxxxxxxxxxxx> wrote:
On Wed, 17 Jan 2007 08:06:41 GMT, royls@xxxxxxxxx, in reference to
some stange, alternative-universe earth, wrote:
On Tue, 16 Jan 2007 17:25:50 -0500, S. Doo <none@xxxxxxxxxxxx> wrote:
...land taxes *exactly like all other taxes* have
costs that rise with the tax rate only more rapidly than the rate:
by increasingly hampering open markets and creating black markets, by
increasing administrative and litigation costs (with appraisal-based
tax systems being by far *the worst* at this, for reasons obvious to
anyone with a functioning frontal lobe) by increasing the ability of
and incentives for politicians to profit by using their power to
manipulate the system for self-gain, etc. etc.
LVT eliminates politicians' power to manipulate the system by taking
the decisions out of their hands.
ROTFLMAO! ;-)
Again, you are simply calling what is not LVT LVT.
The costs are that appraisal-based assessment systems are a costly
bitch -- so the assessment system always resorts to some kind of
shortcut that compromises the fundamental claimed benefits for land
tax
Because wealthy and politically powerful landowners order their
politicians to make such shortcuts in order to sabotage the system.
But I thought a LVT "eliminates politicians' power to manipulate the
system by taking the decisions out of their hands". ;-)
Yes, if it is actually implemented. Landowners just order their
politicians not to implement it, or if it has been implemented (as,
effectively, it was in HK), to dismantle it.
Well, surely it did in Hong Kong, at least, didn't it?
To some degree. But since 1997 HK has been under control of the PRC,
which seems very keen to shovel money into landholders' pockets for
doing nothing, and has accordingly moved giant steps away from HK's
former system of raising public revenue via market-based leasing of
public land.
Surely the LVT in Hong Kong eliminated the power of the greedy land
owners, developers and politicians to act in concert to rig the land
system for self-gain -- and it must have eliminated the power of the
land barons order the politicians about!
After all, LVT in Hong Kong is a constantly told huge Georgist success
story!
HK's system was never strictly LVT per se but public ownership of land
and recovery of the rent through market-based leasing, which has
economic effects similar to those of LVT. It was very successful for
many decades, but has been less and less so in recent decades,
especially since the handover to the PRC, as the market-based leasing
policy was dismantled for the unearned benefit of wealthy landholders.
As HK has moved away from its former LVT-like system, it has
increasingly experienced economic problems. This has happened over
and over again throughout history, dating back at least to Egypt's Old
Kingdom, and has destroyed many societies.
As to these downside costs, Hong Kong happens to be the world's famous
#1 textbook example among real tax professionals working down here on
Earth. Those costs nearly did in Hong Kong's economy about ten years
back.
??? ROTFL!! Lie. HK and Taiwan, because they recover so much land
rent for public purposes, were barely affected by the Asian financial
crisis of 1997....
You are just makin' $#!+ up again.
Time Magazine, 2/15/99:
Two years after the PRC took over and took an axe to the former
LVT-like system. Marx, remember, was vituperative in his
denunciations of Henry George.
A Dangerous Miscalculation
Hong Kong's fixation on property is an obstacle to economic recovery
By SIN-MING SHAW
As I told you before, fixations on property are effectively proof that
land rent is being privately appropriated, and LVT is not in place.
The Hong Kong economy is in deep trouble. GDP fell about 5.6% last
year, the worst decline on record...
[This would be the Hong Kong on *our* planet Earth!]
After how many decades of explosive growth _before_ the PRC took over
and started screwing things up?
Hong Kong's high cost structure is due to lofty property prices, which
in turn depend largely on how much land the government decides to
sell. Many other prices, especially wages, reflect past and
anticipated property values. In Hong Kong, real estate and related
activities account for no less than 40% of GDP.
It is a myth that Hong Kong is a low-tax haven, as there is a steep
implicit tax in the form of artificially high land prices that the
government engineers by limiting the amount of land sold to the
community. Hong Kong's famous fiscal reserves are nothing but
cumulative land-tax revenues. No government elsewhere relies as much
on real estate for its income.
Thank you for proving me right and you wrong.
The root cause of Hong Kong's problems is its land policy. It has
nurtured a system in which a few developers are given the privilege of
underwriting, directly and indirectly, the 40% of government revenue
that derives from real estate. The developers serve as both de facto
tax collectors and as a construction arm for the government, for which
they receive profit margins and privileges few monopolists dare dream
of.
Right. Which is most certainly not LVT.
Sure, the tycoons make their money fairly, playing by the book.
"Fairly" and "by the book" are only the same if the book is fair.
But in
concert, the handful of developers exacerbate a housing shortage by
slowing down construction because they and the government are the only
two builders in town. It's legitimate because no rules forbid it. It's
rational because they want to maximize profit.
It's not rational for the government, though, because they miss out on
the revenue. It only maximizes profit for those who already hold
land.
In the United States, prosecutors are aggressively pursuing
Microsoft's Bill Gates for earning "monopolistic" profits. But Bill's
"evil" gains seem modest compared with those of Hong Kong's
developers.
The software giant's pre-tax profit margin averaged 42% over the past
five years, compared with 133% for Cheung Kong and 71% for Henderson
Land, two of Hong Kong's largest developers. Microsoft pays an average
of 35% profit tax, compared with 12% for Cheung Kong and 15% for
Henderson. While Gates has to worry about antitrust suits brought by
the government, Hong Kong's property tycoons serve as the government's
proxy. Hong Kong depends on them to house a growing population. As a
result, if you want to understand the territory's politics, look less
at Beijing and more at the real-estate sector.
Beijing has become largely a servant of real estate (i.e.,
landholding) interests, both in HK and on the mainland.
When Cheung Kong's chairman, multibillionaire Li Ka-shing, complained
recently about a deterioration in the investment climate, Chief
Executive Tung had to issue a public statement to soothe his ire.
Li Ka-Shing was also the major player in a huge crooked land deal here
in Vancouver that shoveled billions into his pockets.
The Hong Kong government, meanwhile, faces a fiscal dilemma. If it
decreases its dependence on property income, it has just two options.
It can slow the pace of public spending, which has grown 13% a year
for the past five years, far outpacing economic growth and revenue
intake. Or it can increase income-tax revenue by hiking the tax rate
or slapping on an additional levy, such as a vat.
Instead, it has chosen to save the property sector by freezing land
sales. It justifies this by raising the specter of a banking crisis,
arguing that a further fall in property values would cause bank runs.
Bingo: almost no one is intelligent and informed enough to understand
(certainly S. Doo is not) how banks burrow into land rent, making any
move to LVT a grave threat to the financial system. Indeed, banks'
reliance on issuing land-rent-backed mortgage credit is perhaps the
most effective anti-LVT stratagem ever devised, precisely because not
one person in a million can understand how it works. The Japanese
_saw_ it work when it gave them their 17-year (and counting) economic
doldrums, yet I've never heard of a single one of them who understands
what happened, and why.
http://www.time.com/time/asia/asia/magazine/1999/990215/shaw1.html
Write a letter to the editor, crank.
*plonk*
<yawn> I see Mr. Doo is not too stupid to contrive an excuse to cut
his losses and run away when he has been repeatedly demolished.
Attentive readers will notice that Mr. Doo had no answers whatever to
any of the demolitions of his stupid and dishonest anti-LVT arguments,
other than to claim that Hong Kong either doesn't have LVT (which it
doesn't, but it had a similar system for many decades) or is not a
success story. He can't quite make up his mind which, but he is sure
that if HK was a success story, then it couldn't have been because it
had LVT. And if it wasn't a success story, then it must have been
because it _did_ have LVT...
Readers will also notice the highly significant fact that all Mr.
Doo's claimed evidence of LVT failure in HK is from the period _after_
the land lease system was so altered as to become quite dissimilar to
LVT, _after_ Beijing took over, and _after_ HK was no longer a world
exemplar of economic success. Mr. Doo's putative rebuke to LVT
amounts to nothing but an observation that a system increasingly
dissimilar to LVT has effects increasingly dissimilar to those
Georgists claim for LVT. And he proclaims this such a definitive
disproof of Georgist theory that he need no longer respond to any
counter-arguments!
It would be funny, if it weren't so exactly typical of the only sort
of arguments that have ever been offered to justify denying the
benefits of LVT to long-suffering humanity.
-- Roy L
.
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