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smurficus103 t1_jebkjmg wrote

Reply to comment by Dwarfdeaths in It's becoming increasingly clear that fintech has a fraud problem by marketrent

This subject is super interesting and concerns our entire social structure.

Instead of land, as important as it is, my thoughts consider water. You can draw an example: someone built a fence around the last freshwater lake and river and defends it with force. You and your family are dying of thirst. What do you do? Sit outside of the fence, allowing you and your family to die of thirst, out of respect for ownership?

Pretty fucked up, but, extrapolate that scene outwards to every resource.

Whatever I happen to own, I feel like i worked hard to own it, I even feel like I earned more than I own (why am i paid so little?). I can only assume people with excessive lives, that can afford to go on vacations and retire, also feel like they deserve that...

So we're at this bizarre impass of ownership of everything that has value vs being born into a world where there's no freshwater source, no land, no fishes that aren't claimed by somebody & they enforce ownership with violence

It seems obvious: if you want this type of structure to sustain, everyone must have at least the opportunity to own something. Forcing people to work 3 jobs and live in shared housing is just asking for violence, and, the general narrative pushed is "work hard and you can do anything" rather than "get extremely lucky and you might have a successful buisness after a few failed attempts ". This isn't a guaranteed path for everyone to obtain land and water rights. It's more of a lottory & people rightfully point out that the deck is stacked. I can't to take out a billion dollar loan from the federal reserve to implement my will onto other people.

All that said, i don't want to hand over everyone's possessions to the federal government, that would just concentrate all power and fuck everyone hard. I suppose all consistent philosophies converge on anarchy.

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Dwarfdeaths t1_jebnd6h wrote

> Instead of land, as important as it is, my thoughts consider water.

Henry George, the pioneer of this field of thought and the land value tax policy, had a fairly broad definition of "land" which would include not only water but "all natural forces and opportunities." This would include things like sunlight, radio bands, low earth orbits, mineral deposits, and so on.

Personally, I might go even further and include "sufficiently old capital" under land. In this context "capital" means "wealth employed for the increased productivity of future labor." Someone who saves their money to build a tractor instead of buying ice-cream should enjoy return to their capital, aka interest or dividends. On the other hand, if someone built a tractor thousands of years ago (that somehow still works) we might consider it "land" since no one alive today made it. Use of that tractor excludes everyone else from using it and the user should have to pay the "rent" for it if they want to use it. In a world of increasing automation, taxing ownership of robots/software that you didn't personally build would be a critical step in approaching the UBI paradise that we all hope for.

> All that said, i don't want to hand over everyone's possessions to the federal government

The land value tax doesn't take away land, it just charges people the "ground rent" to keep private ownership of it. You can own a square mile of Manhattan and do whatever you want with it, you just have to pay others for your exclusive use of that valuable land. And if you don't want to use it, let someone else use it (either renting it out or "selling" it). Ideally under a properly assessed LVT, the price of land should tend towards zero, because there is no economic advantage in just having it.

> The general narrative pushed is "work hard and you can do anything" rather than "get extremely lucky and you might have a successful buisness after a few failed attempts "

Indeed rent will soak up any increased productivity and hand it to land owners, whether it's residential land or the industrial land. To "get ahead" and perhaps own some land, you basically have to exceed the average productivity expected from a location. (Assuming they haven't over-estimated rent, which is what leads to economic depressions btw). You can do this either by working way harder than the average person, inventing a way to increase your productivity beyond expectations. Either way, this is not accessible for the average person almost by definition.

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smurficus103 t1_jebt3h9 wrote

Wow, yeah, that does seem to solve the "old money" conundrum without bloodshed, if you expand the definition of land into all sufficently old property and charge a property tax on even, say, automation systems. A productivity tax? Sounds bizarre, but, also the opposite of a regressive tax.

/s, If only there were a way to itemize taxes,

Production taxes could go toward developing small buisness, little guys and gals getting out of h.s., for example

I had a similar thought that nobody cared for: as companies "write off" old equipment, they could choose to donate it for an additional write off & it gets lottoried to the public. Hopefully, this could encourage competitors to emerge from their backyard, or something. "Honey, i won a silicon furnace!"

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Dwarfdeaths t1_jebwqhd wrote

For corporations, at least, I think a stock-based solution might be a good approach to the transition of capital to land.

The work you do for a company can be divided into two broad categories: (1) directly trading time for product, and (2) creating stuff that increases productivity of future labor. Manually stamping every part on a factory line or waiting tables would be type 1, and writing code or building robots would be type 2.

So, it seems logical that you could define two classes of stock: "labor stock" and "productivity stock." Labor stock is issued when you join and dissolved when you leave, which basically pays wages for type 1 work (companies must now issue regular dividends as their wage process).

Productivity stock is issued as you work and stays with you when you leave, until it expires (end of life or some fixed time). When productivity stock expires, it is transferred to the public.

Depending on the scope of work, a worker may be paid in some mixture of the two classes.

As time moves forward, ownership of a company (and its assets) will gradually move from the original workers to the public, while still incentivizing the production of new capital at the company. In this system you could no longer issue stock to raise money; instead, money would have to be raised through "loans" with fixed payback terms, rather than indefinite future ownership of the company.

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lzwzli t1_jecpr2s wrote

I don't get it. We already have property tax. If you fail to pay property tax, the government can reposes the land and sell it to someone else who can pay. How is what you're proposing different?

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Dwarfdeaths t1_jecsnrs wrote

(1) Property tax considers both land and land improvements, e.g. a house or factory. Taxing the house disincentivizes construction and investment on land, which is exactly the opposite of what we want. The land value tax only attempts to capture rent, which is an intrinsic value associated with the productivity of the location compared to alternatives. Actual studies of this policy have been done and LVT encourages construction when used to displace property taxes.

(2) A tax on the market value of the land (or property) can never capture the full ground rent. This is because the market value of land derives from the rent you could collect from it (or the work you could do on it yourself). The market value of the land will decrease, adjusting for the lost tax revenue, and that in turn changes the amount of tax that will be collected...

Let's call "Rev" the annual tax revenue, "Rate" the annual tax rate on land value, "Rent" the true ground rent, and "t" the number of years someone considers in their assessment of market value of real estate.

Rev = (market_value)*Rate
Rev = (Rent*t - Rev*t)*Rate
Rev = Rent * t*Rate/(1 + t*Rate)

No matter what combination of t and Rate you choose, the tax revenue will always be smaller than ground rent. Moreover, the higher you try to set the tax rate, the more unstable the assessment will get, because you're trying to charge large multiples of tiny appraisal values. Instead you have to assess the ground rent directly.

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