Land taxers believe in the removal of income and property taxes.
Since farm land is (pardon the pun) dirt cheap, the tax money that they would have to pay for that land would be low. So long as the farm is in rural territory, the average farmer would have lower taxes than currently.
This is only true if the tax doesn't account for improvements to the land. If you clear, level, and plant the land, it is suddenly more valuable. Alternatively, If you pay to bring an aqueduct into a desert, it is vastly more valuable.
Yes, Land Value Taxers would exempt improvements. Notably, "The Greening of the California Desert" was financed with Land Value Taxes and "A significant amendment to the Wright Act also embodies the ideas of Henry George. The revised act exempted "all trees, vines, alfalfa, growing crops and all the structures of whatever class or description," from taxation. The full cost of the irrigation systems to be built would fall on the land, not the improvements. Small farmers could take control of their destiny and bring water to their farms." https://www.henrygeorge.org/caldes.htm
Some Land value taxers would exempt improvements. however, in practice, it is very difficult separate the hypothetical pre-improvement value from market value.
Imagine trying to asses the value of a modern farm today for the hypothetical where a connecting aqueduct had not been built 70 years ago.
Exempting improvements also undermines the argument that LVT puts the land to it's best possible use.
When you improve land, the best possible use is now different. ostensibly, that's why you improved it in the first place.
This is why we're starting occasionally to use the term "location value" instead of "land value". When we are taxing the land, what we are really accomplishing most of the time is taxing the positive externalities that your city is providing, as well as that or your neighbors and businesses.
Building the aqueduct, or a city building a train terminal, both provide positive externalities for the entire region. Those externalities should be taxed.
The soil quality or clearing of forest itself is an improvement much the same way a house is, so that would not be taxed.
This all assumes that it is moral and just to try to capture the value of positive externalities.
I fundamentally disagree on grounds of consent and equity.
It is one thing to recoup costs and upkeep for a collectively endorsed project.
It is entirely different to claim and capture perpetual dividends on the positive externalities.
If a city builds a train terminal, the citizens pay for it once in taxes and bonds. The city should not be able to extract further value beyond upkeep. After investment costs are covered, the entirety of the benefit should belong to the people.
How many times over is it equitable to expect citizens to pay for a project?
This is the difference between non-profit and rent-seeking behavior, and I think governments should ask more as a non-profit.
This is why use and service taxes are far superior for taxing benefit.
That's preposterous and I can easily prove why. Do you think it is just and fair that once a factory makes back its cost that it should then go profit free? Of course not. So there must be something different between public and private organizations. But train stations need not be public only - Japanese train stations are owned by companies. Just because something is done by the public does not fundamentally change anything about it. It's just a different source of funds.
The true unjust behavior is the monopolization of land, land that through many inheritences and sales ultimately comes from force and violence. Us Georgists understand that monopolization of land is a good thing, and allows much further uses that an anarchist model would allow, but you need to pay your fair share.
After investments are covered, the entirety of the benefit DOES belong to the people. Ultimately those taxes are coming back to the citizens the way that the citizens decide is the best use of them.
And this is before we get into how the bad incentives produce all sorts of car-centric and SFH-centric developments, as those waste the most amount of land, and the more the land is wasted the more it costs. Rising costs allow the speculator to buy even more land to waste. This eventually makes those train stations unviable, which hurts everyone.
It is not very difficult to separate improvements from the land. Critically, due to the deadweight loss of present taxes, even an inaccurate LVT would be superior to the present tax system. The margin of error for LVT is essentially "is it worse than the present system?" I'd recommend reading -
As a simple practical matter, the "Highest and Best Use" is ultimately subservient to "demand for land". Simply because you -could- build the Empire State Building in the desert does not make it so that every plot of land in this desert is assessed at this level. In fact, if you were to build the Empire State Building in the middle of nowhere, the rental value of the plot and the surrounding plots would remain at or near $0. It is inaccurate to suggest that the improvement gives the land its value. People give the land its value, and the location value is not equal to the improvements. Why would I pay someone else rent (which is ultimately what we're discussing here) when I could make those same improvements elsewhere? Louis F Post gets into this point below
"Q6. If a land-owner builds, does not that increase the value of his land and consequently the amount of the tax he would have to pay? If so, would not he be taxed for his improvement?
A. No. Upon the value of the building he would never pay any tax. It is true that his improvement might attract others to the locality in such numbers as to make land there scarcer and consequently dearer. His own lot would in that case rise in value with the other land and be taxed more, just as the rest would be. But that would not take any of his labor in taxes; he would still have his building free of taxation. Thus: If on a lot worth $1000 a building worth $1000 were erected, making the whole worth $2000, the tax would fall only upon the $1000 which represents the value of the lot. If land then became so scarce that the lot rose in value to $1500 the tax would be raised. But the owner's improvement would be still exempt. When his property was worth $2000 he was taxed on $1000, the value of the lot, leaving $1000, the value of the building, free; and now, though he is taxed on $1500, the value of the lot, $1000, the value of the building, is still free."
Land and its value is the joint product of at least three things:
• nature, which created it;
• government, which acquired it from other sovereigns and protects it from other powers and extends public works for the public's benefit;
and
• synergism, which is the increment to value that spills over from social and economic activity in the neighborhood of each parcel of land.
Value stemming from all these elements is regarded as unearned by the individual landowner. It is the product of outside forces and therefore a fit object of taxation
I will focus on your last three points as I think it summarizes the above examples. Generally,
I have two criticisms.
1) The claimed purpose of sate to allocate resources to the "Highest and Best Use" seems in conflict with the purpose of the state to protect individual autonomy and freedoms. Placing economic development and growth above the latter is essentially economic utilitarianism, and carries all of the baggage that goes along with it.
2) It models the state as a sovereign to the people, with overlying claims to any positive externalities of development, opposed to the servant of the people, who retain the rights to these externalities. I think this is apparent in the idea that the three value streams are unearned, and therefor belong to the government.
>Land and its value is the joint product of at least three things:
• nature, which created it;
-I see this as neutral, as this predates both the existence of the government and the people.
• government, which acquired it from other sovereigns and protects it from other powers and extends public works for the public's benefit
-As the servant of the people, the government is not entitled to the benefits of public works. These belong to the people, who commissioned the public works. By analogy, If a city builds a train terminal, the citizens pay for it once in taxes and bonds. The city should not be able to extract further value beyond upkeep. After investment costs are covered, the entirety of the benefit should belong to the people. How many times over is it equitable to expect citizens to pay for a project?
• synergism, which is the increment to value that spills over from social and economic activity in the neighborhood of each parcel of land.
-As I understand it, incremental value is generated by the social and economic activity of the people. It is the result of the labors, improvements, and collaboration with the community. It seems that the people have more collective claim than the government.
In summary, the people and the government have a working relationship. Is the model one where government behaves like a employer which entitled to the excess value after services rendered, or is the government the employee and the people entitled to the excess value after services rendered. I prefer the latter, and it seems LVT assumes the former.
Since farm land is (pardon the pun) dirt cheap, the tax money that they would have to pay for that land would be low. So long as the farm is in rural territory, the average farmer would have lower taxes than currently.