In that respect, I generally see property taxes as more just than income taxes. However, I am sure that there are exceptions and any tax code would need to be nuanced.
[1] Although owning capital may allow you to do some labor that you couldn't otherwise in which case the profit gained from that labor would not be rent.
You know that this is not true in most places?
If you put a hundred dollar bill under your pillow, it will be worth less and less as time goes by thanks to inflation. And if you use that hundred dollar bill to buy an asset that hopefully keeps its real value, you pay capital gains taxes on the nominal increase in value (even if there was no real increase in value).
That's because capital gains taxes that don't account for inflation (which is most of them) are essentially a stealth wealth tax.
> When inflationary systems are well controlled, they do create some positive incentives (primarily to spend money and put capital to productive use).
I find that those incentives are a bit silly. First, the central bank can print enough money to get any level of aggregate nominal spending they fell like. No need for inflation. George Selgin's book 'Less than Zero' even makes a convincing argument in favour of deflation. (He essentially argues for a fixed nominal GDP, and an economy that's growing in real terms would thus see the price of goods decline.)
Inflation is also not an incentive to put capital to good use. That's because money isn't real capital. If I have a factory or a piece of land that sits idle, that's a real cost to the economy. But if I have a hundred dollar bill that's siting idle under my pillow, nothing of value has been lost: hundred dollar bills are essentially free to print.
The central bank can put them in and out of circulation by buying and selling assets. So when I remove my bill from under my pillow to spend it, the central bank can react by selling assets. (They don't need to monitor my pillow. They can just go by statistical measures of spending or inflation.)
In fact, in order for me to have a hundred dollar bill under my pillow, it means I refrained from consuming some real goods earlier. So those real goods are available for investment by the wider economy while my pillow serving as a piggy bank.
A house in a city has lots of resources deployed there and land value tax pays for those things.
This tax makes better for people who invest locally and hurts people who don't.
I would really only object to property taxes (as a concept) in situations where intensified high density infrastructure doesn’t exist (or isn’t required to exist).
No man is an island; land should be seen as something rented from the people, especially in cities, where most of its value comes from the efforts of others. I'm sympathetic to the idea that one is entitled to the sweat of their brow and the work of their hands, but land is neither; property in general may not be theft, but private land ownership is, because land rightly belongs to everyone and no-one.
> Your use of the phrase “rent seeking” is also a bit weird. It sounds like any extraction of value from capital would meet your definition. It’s fine if you object to a persons right to extract value from their capital, but rent seeking typically describes attempting to extract value from capital _without_ reciprocating any productive value to the person who’s paying you. Which is certainly not the case with land use.
There's a reason "rents" are called "rents"; land rent is the most classic example of them. The "owner" of a piece of land does nothing to produce its value, they just take money for nothing because they hold a scarce resource.
right but if this is my only piece of land where I live on, I am "the people". I need to live somewhere, I have no choice. It's like asking a prisoner to pay weekly tax for the cell he lives on: He has no choice, he has to live in some cell. Instead tax it intelligently so that I'm exempt for my first and only house on a moderately sized piece of land.
We all need to live somewhere bruh, you're not special. If you pick a piece of land that no-one else wants, you'll be paying zero or very close to it. But if you want your "first and only house" in the middle of Manhattan, either you pay a fair tax to compensate the rest of us for the valuable land you're taking out of public circulation, or you let someone else have their go.
That implies a size-based exemption, not a value-based one. And that kind of thing is how you get loopholes that the super-rich exploit. Keeping the tax system simple is the only way to do it. Tax all land in proportion to its value, no exceptions.
> The solution is never to tax working people even more just because they want to have a home.
Part of the point of the idea is to (eventually) move away from taxes on working. It's not like having a home is being treated as a special case, and nor should it be. Again: if you're taking the land out of public use, you pay your fair share of tax, in proportion to the value of the land you're monopolising. Keeping the rules simple ultimately benefits the working poor far more than trying to create special case carve outs.
What about all of the billionaires buying ridiculous properties in Manhattan as havens for their ill-gotten gains? If they aren't the problem, who is?
> The solution is never to tax working people even more just because they want to have a home.
Ok, so it's not the rich and it's not the working people. Who is the problem?
Rent seeking is a clearly defined economic concept that is not related to the seperate concept of renting an asset to somebody.
> Rent seeking is an economic concept that occurs when an entity seeks to gain wealth without any reciprocal contribution of productivity. An example of rent seeking is when a company lobbies the government for grants, subsidies, or tariff protection.
https://www.investopedia.com/terms/r/rentseeking.asp
Renting an asset to somebody has a very obvious reciprocal consideration of value.
It's called rent seeking because the thing you're seeking is rent ( https://en.wikipedia.org/wiki/Economic_rent - your link claims a false definition of the term).
> Renting an asset to somebody has a very obvious reciprocal consideration of value.
You could make the same argument for any of the classic examples of economic rents. A doctor's license or a taxi medallion is obviously economically valuable; that doesn't make it not a rent. The thing that makes it a rent is when you're able to rent it out for more than it cost you to produce, or when you don't produce it at all.
Rent seeking describes a specific case of “economic rent” where the reciprocal value either doesn’t exist or is highly contrived. As I’ve said, it’s fine to be against a persons right to seek “economic rent” from their capital or land. But this isn’t an “anti-rent-seeking” position. That’s an economically Marxist anti-capitalist position, as that is the most fundamental component of Marx’s economic model.
>The "owner" of a piece of land does nothing to produce its value, they just take money for nothing because they hold a scarce resource
As soon as anybody owns any piece of land or capital, they are not doing anything to produce any value that is derived from it, they are simply collecting money for controlling a scarce resource. Those two factors of production can create ongoing value without any intervention from their owners, and you either support a persons right to own those resources, and collect some portion of the value they create, or you don't.
Your use of the phrase "legitimately earned" also means nothing in this context, and I presume this is just a weasel word you're using to avoid actually having to clarify any sort of concrete stance. For starters, legitimate according to who? I would further presume that you have some sort of view on who's accumulated their wealth legitimately, and who hasn't. What criteria have you invented for this? Is the use of capital and land something you would consider contributes to "illegitimate earnings"? Because all of that just circles back to "seizing the means of production" (as in land and capital).
Also, what's wrong with unearned capital? If I give somebody a hammer, do you have some sort of moral objection to them deriving income from the increased productivity that would create for them? Because I would suggest that the only thing that matters there is whether I had a legitimate ownership claim to the hammer in the first place.
It's not, but semantic arguments are pointless. If you want to use "rent seeking" to mean something different from what it normally means, fine, I don't mind using different words.
> As soon as anybody owns any piece of land or capital, they are not doing anything to produce any value that is derived from it, they are simply collecting money for controlling a scarce resource. Those two factors of production can create ongoing value without any intervention from their owners, and you either support a persons right to own those resources, and collect some portion of the value they create, or you don't.
> Also, what's wrong with unearned capital? If I give somebody a hammer, do you have some sort of moral objection to them deriving income from the increased productivity that would create for them? Because I would suggest that the only thing that matters there is whether I had a legitimate ownership claim to the hammer in the first place.
Right; the point is that land and capital are very different. People can legitimately own hammers, which are the work of human hands (yes, access to the means of production could be a factor, but if we assume that production of hammers is now widespread then it's irrelevant). Claims of ownership of land (or radio spectrum, or so on), if you mean chattel ownership, can't ever be legitimate, because people can't make land, only seize it.
> Claims of ownership of land (or radio spectrum, or so on), if you mean chattel ownership, can't ever be legitimate, because people can't make land, only seize it.
These two claims aren't logically consistent. As a factor of production, land includes all natural resources. 100% of the input materials used for the production of a hammer are land, and so are 100% of the input materials used for the entire hammer supply chain. If you claim that ownership of land is never legitimate, then how can ownership of a hammer ever be legitimate if it's made of 100% land? Nobody made the iron or the wood in the hammer with their own hands.
I can see that you prefer to invent your own vocabulary, rather than use the long established vocabulary of economics. But that doesn't make the inconsistencies in your arguments dissapear.
No, but the overwhelming majority of the value of the hammer is from human efforts, not from the raw materials. Like yes technically you could say that whoever takes the hammer should have to pay tax on the value of 100g of unrefined iron or whatever, and if we ever reach a point where good iron for the tools that you need for good jobs is so expensive that only the children of rich families are able to hope to own those tools and the rest of us have to rent them at extortionate rates then maybe that would be a policy worth adopting. In theory nothing is 100% land and nothing is 100% product. But in practice you can draw the distinction pretty easily and say which things are scarce enough that taking them out of circulation has an impact on your fellow citizens and which aren't.
You cannot defend your land property from even a marginally better equipped aggressor who seeks to take it from you. You need a court system, or for a larger aggressor, an army, to do it for you. This means that de facto, the state with the armed men owns the land. Land tax is tantamount to a fee you pay to lease it. Also it can be framed as just payment for a service rendered, that is, the service of defending your property for you. Furthermore, any entity that "owns" land property and gets protection of his claim by a court or army that does not pay a land tax is free riding.
Income taxes are unjust. By the logic of the premise, land tax that pays for anything but defense of claim to the land is unjust. Wealth taxes are unjust, as are capital gains. Tarrifs that fund a navy to protect shipments on the high seas would be just, as would registration fees to bay for highway infrastructure. The core rules are, the state must only solve a tragedy of the commons, the tax that funds such an endeavor must derive directly from benefitting from that endeavor and it must only ever be used for that endeavor. With these axioms it is easy to deduce which taxes are just and which are not, they're all payment for services rendered for a service for which a state is the optimal organization to provide.
https://falkvinge.net/2017/03/01/a-simplified-taxless-state-...
Further, healthcare isn't a commons, so it is arguable that a state has no business interfering. Emergency facilities specifically are a commons, if the hippocratic oath is followed and all in need are helped. So some scheme where people pay for the maintenance of these facilities and services rendered in them based on how much they stand to benefit from them would be just. I don't know how you'd do that beyond sending them a bill. Maybe yearly renew on an access card, like vehicle registration, that isn't based on income but maybe could be based on medical history, or just flat rate for everyone. Taxing income, or wealth, to pay for blanket coverage including person to person contracts with specialists would be unjust, socializing something that isn't a commons would be unjust, but managing emergency facilities as a commons and funding them with some type of tax directly derived from their existence would be, because they are a commons and do suffer from tragedy of the commons.
You are paying maintenance in exchange for the right to exploit that land. Streets, power, water, sewage, fire, police, schools and libraries both cost money and increase the value of your land, so it makes sense to link the tax base to the value of the land since they should be strongly correlated.
Your use of the phrase “rent seeking” is also a bit weird. It sounds like any extraction of value from capital would meet your definition. It’s fine if you object to a persons right to extract value from their capital, but rent seeking typically describes attempting to extract value from capital _without_ reciprocating any productive value to the person who’s paying you. Which is certainly not the case with land use.