Re: Murray Rothbard on Georgist fallacies

<w_b_ryan@xxxxxxxxx> wrote in message ...
Murray Rothbard
Man, Economy and State:

I'm not a big fan of the LVT, but the proponents make good arguments.
OTOH, Rothbard's came up short.

<snip Rent vs. Capitalized value stuff>
Example: there are emply plots of land in New York City. Why are they empty?
Because they're next door to crack houses. But the land is still expensive
to buy. Why? Because the owners are hoping that someday the crack houses
will be cleared out, the neighborhood will improve, and the land's value
will skyrocket.

This is not in conflict with the LVT. If the owner rents the land to someone
now, he'll earn $0 per year, hence pay $0 in tax. Then someday, when things
improve, he'll rent the land for $100,000 and pay tax on that.


The landowner earns the highest ground rents by
allocating land sites to their most value-productive
uses, i.e., to those uses most desired by consumers.

This 'allocating land sites to their most productive value' requires no
effort: just sell to the highest bidder.


But since all ground rent is siphoned off to the
government, there is no reason for owners to charge
any rent.

Wrong. If the government is taxing the landowner $100,000 per year, that
landowner will _definitely_ rent out that land for $100,000 (not zero as
Rothbard implied).


The only valid criticism was regarding the government's measurement of land
value. Yes, that would be difficult. But right now, measuring 'income' for
our income tax is also difficult. Besides, the LVT could be applied at 90%
or 80% or whatever, rather than 100%, to allow for some mis-measurement.


Dan in Philly




.

Relevant Pages

  • Re: Land, Labour and Capital Taxation....
    ... "Taxes levied upon the value of land cannot check production in the ... NOTICE IT SAYS UNTIL THEY EXCEED RENT. ... If the tax goes above rent it starts effecting production and shuts down ...
    (sci.econ)
  • Re: What the LVT is, and what its advantages are - must read
    ... tax systems being by far *the worst* at this, ... you are simply calling what is not LVT LVT. ... public land. ... LVT in Hong Kong is a constantly told huge Georgist success ...
    (sci.econ)
  • Re: Land, Labour and Capital Taxation....
    ... > certainly will effect production. ... This tax is ... The problem is that market prices are driven by more than economic rent. ... theory is the best land is settled first. ...
    (sci.econ)
  • Re: Land, Labour and Capital Taxation....
    ... >start to affect decisions of land owners. ... It affects decisions of landowners at any level: the higher the tax, ... >REMAINS HOW DO YOU CALCULATE RENT SO YOU FIND A TAX RATE THAT WILL NOT ... Property taxes in fact have lower administration and compliance costs ...
    (sci.econ)
  • Re: Relative poverty, a problem?
    ... traders because it is a tax on income. ... LVT would reduce the tax burden on farming ... Use 100 acre of land in countryside. ...
    (sci.econ)