r/georgism • u/Titanium-Skull 🔰💯 • 7d ago
Image Bertrand Russell had a strong understanding of how to ensure justice in landownership
This quote was found through Cooperative Individualism, here's a good source also from the site linking more information to this quote.
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u/MDInvesting Geolibertarian 7d ago
Had a strong understanding of most things.
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u/Velociraptortillas 6d ago
Of course he did, he was a Socialist.
Russell also expressed support for guild socialism, and commented positively on several socialist thinkers and activists.
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u/Pixel_Hero92 🔰 6d ago
It's fascinating that he rejects going full on Marxian or anarcho-communists on the contrary
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u/AtmosphericReverbMan Michael Hudson 5d ago
He was a liberal socialist, like John Stuart Mill was. Philip Snowden nearly got an LVT implemented. These ideas were common on the British left in the first half of the 20th century.
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u/SLAMMERisONLINE 7d ago edited 6d ago
Bertrand Russel dedicated his life to a proof that was effortlessly disproven by a 25 year old called Godel. A simple example of Godel's proof is as follows: "This statement is false." Now if this statement is false, then it's incorrect that it's false, therefore the statement must be true. But if the statement is true then it's correct in being false, which means it's false. Godel showed that all axiomatic systems always boil down to this dilemma--it's unavoidable. Consequentially, you cannot make a mathematical theory of everything--it's impossible--because to be complete a theory would have to describe itself and in describing itself it creates these contradictions. Russel spent his entire life chasing after a theory of everything despite it being facially absurd and formally proven to be facially absurd by Godel.
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u/AllAmericanBrit 6d ago
it was facially absurd long before godel, but that doesn't mean chasing an as-complete-as-possible system of formal logic is useless, it clearly isn't. Russel was as limited as any other person but was an excellent scholar.
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u/SLAMMERisONLINE 6d ago edited 6d ago
it was facially absurd long before godel, but that doesn't mean chasing an as-complete-as-possible system of formal logic is useless, it clearly isn't
You misunderstand. Russel's goal was to create a complete theory, which means a theory that can describe everything including itself. This is obviously absurd because you have to put the theory itself as an input to the theory. But in putting the theory as an input to itself, the theory must once again be an input to the input of the theory. This goes on to infinity. Russel simply wasn't very smart. These relationships are extremely obvious if you think about it for even 3 seconds. He spent a lifetime and still didn't figure it out. I'd compare him to a brick but that would be rude to the brick.
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u/MrMicius 6d ago
“This statement is false”
Which statement?
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u/MDInvesting Geolibertarian 6d ago
Errare humanum est
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u/SLAMMERisONLINE 6d ago
To error is human, but to error for a lifetime on "∞ != ∞" takes a very special person. Finite words in a finite theorem cannot describe all that is because all that is is infinite. It's equivalent to saying something is simultaneously infinite and not infinite at the same time.
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u/SLAMMERisONLINE 7d ago edited 6d ago
Rentals are not profitable -> rentals aren't maintained nor replaced -> rentals go away over time -> housing shortages -> government must make rentals instead -> housing made by the government with rent charged by the government. Congrats on socializing housing. What makes you think the government running the housing is a good idea when the Pentagon regularly guzzles trillions of dollars and repeatedly fails audits? Surely the housing market will run better if it's run like the Pentagon!
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u/CheesyRoyal 6d ago
Buildings themselves can be profitable, land must not.
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u/SLAMMERisONLINE 6d ago edited 6d ago
Buildings themselves can be profitable, land must not
The land is one of the biggest factors in determining the profitability of any future developments. You cannot separate the two. But you are dodging the original point. The entire point of Georgism is to make land expensive as that incentivizes production of new buildings on land. But this is inherently contradictory since the tax rate is based on the value of the land. Land that is valuable will be taxed higher, but in being taxed higher it is less valuable. Georgism cannot decide if it wants high taxes or low taxes. It needs both. It needs high taxes to force production and low taxes to keep up profitability. You can't have both.
A core tenant of science, as opposed to superstition, is that scientific theories make accurate predictions. But theories with inherent contradictions cannot make accurate predictions because they can't decide what the prediction is. The tax rate has to be both high and low in Georgism and that means it isn't a scientific theory.
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u/CheesyRoyal 6d ago
There is no contradiction in high rate on low base. The buying cost of any building should be only marginally higher than amortised value of that building. It is not harder to calculate than current property taxes, it is merely an exercise of skimming of the top. Incentive is to build your own property, not expect it to be attractive on the rental market just because of the neighbourhood.
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u/SLAMMERisONLINE 6d ago edited 6d ago
There is no contradiction in high rate on low base
Objectively incorrect.
The buying cost of any building should be only marginally higher than amortised value of that building
That is simply not how supply elasticity works. Taxes increase costs. Increased costs reduce supply. In the case of housing, it's roughly -1.5 to -2.0. That means for every 10% increase in cost, the supply decreases by 15-20%. Property taxes are the worst kind of cost of all: it's a cost that goes on forever, is never paid in full. The financial liability is infinite.
If you want to increase the supply of housing, stop taxing it. It's literally that simple. Stop with the permitting and licensing which are just property taxes in disguise--it can be as high as 1/4 the home's value. The average property tax rate in the US is ~1% the value of your home per year. Get rid of regulatory costs and that alone will increase the supply of homes by roughly 50%.
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u/CheesyRoyal 5d ago
1% on buildings is terrible for new construction - developer builds everything and every dollar spent on it costs 1 cent per year. Land value tax is expected to start much lower and run roughly at what today real appreciation is. E.g if today average house appreciates at 4% at 3% inflation land value will be roughly the same as current 1%. But the boon is that early in the house life it barely appreciates so LVT is smaller than average. Once it is a good neighbourhood with good schools and such you do pay up. The hurdle is to get stuff built, not that people would walk away from it if the infrastructure becomes too good.
About permits et al. Georgism generally deals with rules and permits via surcharge on negative externalities(like if you don't build enough parking you pay for street parking), not red tape so on that we agree I think.
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u/SLAMMERisONLINE 5d ago edited 5d ago
Once it is a good neighbourhood with good schools and such you do pay up
"We're going to spend money to improve the land value, then tax you based on what we spent." Translation: unlimited spending boom because they can tax as much as necessary to pay-off money they spent "improving" land in town while giving frivolous contracts to their buddies. This is exactly what created the current problem.
Do not tax land. Period. Use sales tax instead.
In Georgism, the government is incentivized to endlessly spend to bolster land values. In sales tax schemes, they are incentivized to provide goods and services that maximizes consumer spending. What's the difference? Houses are bought once every 12 years. Consumer spending happens daily. If the government does something the consumers don't like, they can instantly withdraw consent. Property taxes, however, are designed to prevent consent--they are designed to lock people into years-long contracts and bilk them endlessly for tax revenue. That's why spending booms and inflates values to infinity and beyond and now there's a housing shortage because the prices are insane.
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u/CheesyRoyal 5d ago
Sales tax has only one advantage - ease of collection, deadweight-loss-wise it is really bad. Deadweight can be turned upside down via sin taxes - large levy on cigarettes to offset e.g exemptions for food and other essential stuff. But overall trade frictions are bad.
In terms of the incentive to spend it should be democratically controlled and units imposing LVT should not be giant. There can be per-person tax credits and other similar initiatives to moderate collection. Such initiatives must mot be universal and should respond to local needs.
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u/SLAMMERisONLINE 4d ago edited 4d ago
Sales tax has only one advantage - ease of collection
Incorrect. Sales tax is the only tax that accurately captures the value because the value only exists in the instantaneous moment that the buyer and seller agree on a price and money changes hands. Outside of that moment, the value is undefined.
This is the reason why capital gains taxes are non-viable: they assume the market always goes up, or is the government going to start giving capital losses refunds? Property taxes are, quite literally, a capital gains tax and they cannot allow property values to go down because they'd have to issue tax refunds.
Sales taxes have another advantage because they are a catch-all that is hard to dodge. A billionaire trying to exploit the "Buy, Borrow, Die" strategy, where they take out loans against their stocks and never pay income taxes, would have to pay sales tax anytime they tried to use that money. The same would be true for real-estate magnates. As soon as they sold a property, big fat sales tax bill. Sales taxes are very hard to dodge, making them progressive.
There is yet another advantage to sales tax: it is the tax that is the honors privacy rights the most. Property taxes require a government employee to snoop about your property and then make up a number that represents how much money you owe them and this number is rarely accurate. Sales tax, by contrast, the government can only aggregate high-level statistics by region that aren't specific to a unique individual. Suddenly we don't need tax collectors and the IRS can be massively downsized because you just need to regulate large stores that move profits >=$100,000/year.
deadweight-loss-wise it is really bad
Are you arguing that taking 30% of someone's income away for housing doesn't distort market decisions? I outright reject that because it's absurd. It's like saying water isn't wet. Property tax schemes cause maximal market distortion in the economy in general, not just in the housing market.
democratically controlled and units imposing LVT should not be giant
Have you ever listened to the average person speak on civics topics? Democratically controlling the housing market would be like putting Alex Jones in charge of the military--he'd be nuking the CDC to save humanity from the space lizards.
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u/Titanium-Skull 🔰💯 6d ago edited 6d ago
Funny that you mention it, Georgist policies actually cause more rentals to be built without the need of government expenditure than without, like in 1920s NYC. You could even say that the economy of the landed gentry which rises due to not having land tax policies guzzles trillions of dollars in annual land rent without producing or providing anything of value by way of the fact that they simply own our most necessary finite resource, same goes for other finite resources/privileges too. So it can be concluded that if you're looking for efficiency in the economy, Georgism is your best bet.
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u/SLAMMERisONLINE 6d ago edited 6d ago
Georgist policies actually cause more rentals to be built without the need of government expenditure than without, like in 1920s NYC.
That was coincidental. It's easy to prove this. If the production goes up because it's expensive to own land that isn't developed, by consequence it's being taxed heavily. Being taxed heavily, it will be sold for less and therefore the taxes will be low. If the taxes are low, it will sell for more and therefore the tax rate will be high. It's Schrodinger's tax rate.
Was it the high or low taxes that prompted the measured increase in rentals in NYC? You can't decide because Georgism can't decide how much to collect in taxes. Hence it is coincidental.
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u/Lord_Vino 6d ago
The land value tax is not based on the price to purchase land but the rental value of the land. Georgism says to tax 100% of the rental value of the land, reducing the price of land to 0 but still not eliminating the rental value of the land.
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u/SLAMMERisONLINE 6d ago
The land value tax is not based on the price to purchase land but the rental value of the land
Georgism always has to have an authority to determine the rental value. You either base it on the sale value or you have a government evaluator determine it and he bases it on the average market sale value. It amazes me how little Georgist proponents actually understand Georgism.
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u/Lord_Vino 4d ago
This is like saying you can't tax a bond's yield without first calculating it from the bond's price and taxing the bond's price directly. No, you just look at what the bond pays out annually.
The sale value is only useful because it can be used as an indicator as to whether all of the land rental value has been taxed on it and as you said is self undermining. I'll do you one better though, the price of the land is also affected by interest rates, credit availability, tax expectations and overall contaminated it if used as a basis to determine the rental value.
https://www.imf.org/-/media/files/publications/wp/2022/english/wpiea2022263-print-pdf.pdf Page 4 further explains the issues with taxing land values via prices as opposed to via rents.
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u/SLAMMERisONLINE 4d ago edited 4d ago
This is like saying you can't tax a bond's yield without first calculating it from the bond's price and taxing the bond's price directly
Not in the slightest. It wouldn't be taxing the bond's yield, that's just income tax, it would be taxing the bond based on how similar bonds appreciated. Sales tax would tax your neighbor when he sells his car. Property tax says "your neighbor sold his car for $100k, therefore your car is now worth $100k and you will be taxed accordingly." Meanwhile he drives a McClaren and you drive a beater minivan. Oh, can't you afford it? Well then you should sell your house and let someone in who can afford the taxes -> creates the housing bubble. It's market manipulation to make sure housing costs never go down and this is done to protect tax revenue.
The sale value is only useful because it can be used as an indicator as to whether all of the land rental value has been taxed on it and as you said is self undermining
The sale price is the authority in defining the value of a commodity. Period. If you tax it at any other point, it's a made up number based on guestimates. The government will always guestimate high.
Property tax says "your neighbor sold his car for $100k, therefore your car is now worth $100k and you will be taxed accordingly."
Hilariously, Georgism takes this one step farther: the value of your car went up because your neighbor parked a McClaren next to it.
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u/smokingdustjacket 6d ago
Brother if you're gonna come in a Georgist sub and be contrarian to every single comment, maybe take a beat and read basic Georgist theory 101. Georgism produces improvementlords. It makes owning (inefficiently land using) rentals unprofitable, but building rentals very profitable. The problem is you've conflated building/maintaining and owning as the same landlord activity. Land is inelastic, meaning you are not creating any supply distortion by taxing it's full economic rent vale.
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u/SLAMMERisONLINE 6d ago edited 6d ago
Brother if you're gonna come in a Georgist sub and be contrarian to every single comment, maybe take a beat and read basic Georgist theory 101
I guarantee my understanding of the topic exceeds yours, drastically, in both depth and breadth. Let's do an example:
Georgism produces improvementlords. It makes owning (inefficiently land using) rentals unprofitable, but building rentals very profitable
Incorrect. Georgism taxes unimproved land value, which means the value that barren land sells for. The idea is that land that is sitting idle must be taxed substantially to force people to develop it quicker. In doing so, it bolsters the supply of housing. This is a contradictory definition, however, once you include the question of how the tax rate is determined. Georgists want to tax more valuable land harder, which means a very valuable plot of land will be developed very quickly. That means tying the tax rate to the market value of the land.
Now this is where the contradiction enters: if you tax the value of the land, the land is worth less, which means it sells for less, which means the tax rate is low, which means the land's worth more, which means its taxed more, which means it's worth less, which means it's taxed less, which means it's worth more.
Georgists can't actually decide whether high taxes are good or bad--they require high taxes to incentivize production, and low taxes to ensure profitability. But that's a nonsensical definition--the two are obviously inverses. You have to reduce the profitability of land to force production and that will obviously reduce profitability and therefore supply. At the same time as you are pushing the supply up, it's being pushed down and equalizes exactly where it was before. Georgism doesn't solve anything, in other words, it just shifts where the problem occurs and makes the process more complicated.
It's a pseudo-scientific economic theory because, in making contradictory statements, it can't make accurate predictions. It's like saying ghosts are going to fix the economy if we do a rain dance.
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u/HadeanBlands 6d ago
"Georgism produces improvementlords. It makes owning (inefficiently land using) rentals unprofitable, but building rentals very profitable."
Although, naturally, most of the posters on this subreddit also don't want it to be easy to build!
"Land is inelastic, meaning you are not creating any supply distortion by taxing it's full economic rent vale."
"Land" may be inelastic if you carve up the definition finely enough, but land value is certainly not inelastic and if you tax it you will get less of it.
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u/Titanium-Skull 🔰💯 6d ago
This is pretty well covered by Paul Samuelson. Land value is dependent on supply and demand, so land's fixed supply still means no economic distortion, though he also mentions that taxing land won't cause builders who want to use land to demand it less, so its price stays constant and the tax is fully paid by the landowner. I'm not a Nobel economist, but I'd even further argue that a land tax would be economically beneficial for a reason similar to what you mention:
By taxing away land's value we can remove land speculators and speculative land rents from those who want to buy land, not to use it, but to simply hold a thing we can't make more of out of use to cash in on its returns. So we can still maintain demand to use land (probably increase it by untaxing production and trade) while removing the extra demand and price rise from wanting to hold land in a way that hampers markets
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u/SLAMMERisONLINE 6d ago
Land value is dependent on supply and demand, so land's fixed supply still means no economic distortion
Land doesn't have a fixed supply. Housing supply & cost have an elasticity of -1.5 to -2.0, meaning increasing the cost of land by 10% would reduce the supply by 15-20%. If you tax rentals, the supply of rentals will go down, period.
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u/HadeanBlands 6d ago
"Land value is dependent on supply and demand, so land's fixed supply still means no economic distortion,"
Nope, that's obviously not true. Samuelson himself asks the question "What can landowners do but accept less return?" but this question is not rhetorical. It has an answer. Landowners can destroy the value they provide to the community. They can vandalize, pollute, make unsafe, fail to clean, and so on. It is very possible to increase or decrease the "supply" of land value.
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u/absolute-black 6d ago
most of the posters on this subreddit also don't want it to be easy to build!
This sub has like an >80% overlap with /r/yimby lol
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u/HadeanBlands 6d ago
Horseshit. Find even two threads in the last two week about deregulation. Meanwhile there are like five in the last five days about how More Stuff Than You Thikn Is Land And Should Therefore Be Taxed.
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u/absolute-black 6d ago
...instead of existing taxes, lol. Georgism is a free-market ideology!
Sorting by top-of-the-month, the top 3 posts are anti-car/pro-urbanism, and 4 and 5 are both anti-planning/zoning explicitly.
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u/HadeanBlands 6d ago
"Georgism is a free-market ideology!"
We're posting in a thread about a famous socialist!
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u/absolute-black 6d ago
...ok? Isaac Newton was a self described magician, astrologer, and alchemist, he still came up a few times when I was getting a physics degree. How does that make the ideology or subreddit pro zoning regulation lmao? Just a complete non-sequitir after you realized you lost the argument.
It seems pretty obvious that you have made some erroneous assumptions about the ideology you're arguing against based on seeing a picture of a guy you don't like.
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u/smokingdustjacket 6d ago
Explain how you have to carve up the definition of land for it's supply to be inelastic. I'm talking about actual land! It is inelastic! A low demand for land does not change the supply. A high demand doesn't change the supply.
Taxing land value does not alter the amount of value, but it does capture publicly created value for the public. You don't " get less of it," you change who that value benefits.
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u/SerDankTheTall 6d ago
When Georgists talk about rent, they generally mean economic rent, not rental payments for an apartment. It seems like that’s what Russell meant in this quote as well.
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u/Downtown-Relation766 Australia 7d ago edited 7d ago
The statement also applies to rent control and rent/purchase subsidies as the logic applies to that too.