this post was submitted on 16 Oct 2024
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Monopoly's precursor "The Landlord's Game" was invented by Lizzie Magie in the early 1900s to demonstrate why Capitalism needs Georgism to actually have any semblance of fairness, competition, and longevity.
Georgism is roughly the idea that ALL tax should come from land ownership, and that taxes on labour/wages should be abolished.
Personally I think the landlords would just increase the rent while saying their interests are literally the only ones that need protection from the state because they generate all the revenue but can't blame them for trying.
Generally speaking landlords charge as much in rent as the market will bear. If they could get away with charging more they would already be doing so.
Right, and when tenants aren't paying taxes?
Rents will presumably rise accordingly, and then be captured in the form of a tax that is both very difficult to evade and no longer harms economic efficiency
I think that's a rather hopeful view of the situation, but, on the other hand, I guess it would also help real estate bubbles from forming so there's that at least.
Then tenants will keep more money, in any case where there's any competition in housing.
And in any case where there's no competition in the housing supply, tenants will still be unharmed because they're already paying the maximum amount that landlords can get away with.
It's risk free for tenants.
Counterintuitively, a LVT wouldn't distort prices because the supply of land is fixed.
My first thought was that ending the taxes at land ownership was shortsighted - all capital should be taxed - but then I looked up Georgism on Wikipedia and saw that that was basically already in scope (mostly by “including title of ownership for natural resources and other contrived privileges (e.g., intellectual property)”).
I'm already paying taxes for owning a small parcel of land to live on on top of income and sales taxes. It hurts from so many sides. 🥲
Georgeism would not increase your overall tax burden, it would shift taxation away from things like income and sales tax and toward land value (excluding improvements like your home). Your overall tax burden would only increase if you occupy a larger then average share of the total land in existence (by value, not physical area), and for the large majority of people it would decrease appreciably.
It does seem like it would be a reasonable tax scheme but it would have to be carefully balanced for the type of use for the land. It'd make sense to charge more for a factory making a lot of value for the economy compared to a high density residential building occupying the same area. I personally prefer mixed use zoning to make land use more efficient though so it'd be interesting to see how that'd go.
I think one of the benefits of Land Value Tax is that an empty lot costs as much as a highrise or factory. It heavily disincentivizes leaving a property undeveloped or poorly developed, like with parking lots or abandoned buildings.
That being said, it would also put pressure on underdeveloped properties, like your home on a street with rising property values. Some limitations would almost certainly be necessary.
This could also be solved with better zoning, but most of our social problems could be fixed with better governance of some kind. Land Value Tax is one of the proposed methods that would need less fixes to make work and (hopefully) be harder to co-opt for wealth extraction.
I'd accept trying anything though, instead of more tax cuts and funding cuts.
Yeah. I feel like people would get out and vote if they understood this.
I'm still concerned, since I'm planning to own a huge international chain of retail stores when I strike it rich and become a billionaire. (This is Sarcasm.)
Great explanation. Thank you.
Yes! Here's a video about it: https://youtu.be/B7nFA19Gzrw