I agree that LVT doesn’t address the fundamental class antagonism. It only addresses economic rent.
Landlords can’t just jack up prices. LVT doesn’t distort prices because the supply of land is perfectly inelastic - the revenue comes entirely out of landlord surplus. UBIs so far haven’t caused significant inflation, which makes sense if the total amount distributed equals the total amount taxed.
Okay, imagine a hypothetical. You’re a landlord with 90 percent occupancy rate across 100 apartments. For simplicity let’s say they all pay you 1000 dollars a month. With the lvt tax you pay 100 dollars a month per apartment. Your renters simultaneously get 90 dollars a month(let us assume that renters make up 50 percent of the population and slightly more than half of the tax comes from residential land, giving us 90 dollars)
You’re going to raise rent by 90 dollars, at least. Maybe 111 dollars, to compensate for the empty apartments, if you want to continue making the same amount of money.
If I jack up my prices, then my tenants would move to other apartments because overall market prices have not been distorted.
As a hypothetical landlord, i do want to continue making the same amount. Heck, I’d make more if I could! But I don’t want to lose it all on empty rental units.
What determines tax incidence - “I make less” or “you pay more” - is elasticity. The supply of land is inelastic, so the supplier (not the consumer) bears the burden of the tax.
Don’t sweat it to much, you are arguing against someone with an anti-education on how economics actually works to the point you can intuit how they’re wrong without knowing any of the theory behind their argument.
No it doesn’t. As you can see, market price is where the supply line meets the demand line. Since supply is perfectly inelastic (vertical), a higher tax rate cuts into producer surplus without changing where supply and demand meet.
That isnt true, housing supply isn’t inelastic. Houses decay, new homes are built, and landlords remove homes from the market to artificially constrain supply.
LVT taxes the unimproved value of land, so we are talking about land itself not what is built on top of it such as housing. Since land is a product of nature, the supply of it is perfectly inelastic
Okay, no, youre operating off of faulty logic. Everyone is going to be jacking up their prices the same amount, because they all can and they all want to maintain income. They will move in a coordinated fashion to raise prices as they always have historically done, whether that coordination is merely born of the same interests or active conspiracy.
Also even within neoclassical logic demand would increase as people have more money, the supply would stay the same, so prices would equalize higher.
There’s two things at play here: the LVT and the UBI.
LVT does not distort prices. It doesn’t matter if they want to maintain income any more than they currently want to increase income. Their income has always been based on the chart above; it’s not a conspiracy.
The UBI doesn’t significantly increase demand for housing in practice. We hear this same argument about minimum wage increases or anything else that puts more money in the hands of the working class. People having more money doesn’t make them spend it all on more housing.
I’m trying to explain the logic behind the underlying economics, but these have both been tested in practice too.
I think you’re getting the logic wrong, and the basic logic also isn’t rooted in empirical studies.
Can you please cite empirical studies that make your case?
I could be wrong of course, but even if LVT plus UBI work it would still be better to just do what the CPC did and stop enforcing the right to own other people’s homes.
I’m not sure which part about this you’re not getting and I don’t want to explain what elasticity is. LVT and UBI not distorting prices isn’t contentious outside of internet arguments like these. No offense but have you taken econ 101?
You make a fair point about the adversarial relationship. I can see how you might be right about that. I’m only disputing the claim about LVT leaving economic rent, and that it would cause inflation. Since that’s the initial claim, I would like you to cite studies for that first.
I’ve taken econ 101. It seems like you’ve only taken econ 101. I know of no serious academic that argues that lvt has no price distortions, only that lvt has lower price distortions than other modes of taxation.
What economics education do you have? I’ve spent years studying neoclassical, Keynesian, and Marxist economics. (Well, more than a decade on marxist economics, I’ve even read translated Vietnamese and Chinese texts on it) I am confident in saying that the assumptions you are relying on is faulty on theoretical bounds within neoclassical economics (which is where your argument is coming from) as well as within Marxist economics. But theory only goes so far, and if you have empirical evidence to the contrary I’d love to see it.
I agree that LVT doesn’t address the fundamental class antagonism. It only addresses economic rent.
Landlords can’t just jack up prices. LVT doesn’t distort prices because the supply of land is perfectly inelastic - the revenue comes entirely out of landlord surplus. UBIs so far haven’t caused significant inflation, which makes sense if the total amount distributed equals the total amount taxed.
http://www.ozarkia.net/bill/anarchism/library/Geoanarchism-FredFoldvary.html
Okay, imagine a hypothetical. You’re a landlord with 90 percent occupancy rate across 100 apartments. For simplicity let’s say they all pay you 1000 dollars a month. With the lvt tax you pay 100 dollars a month per apartment. Your renters simultaneously get 90 dollars a month(let us assume that renters make up 50 percent of the population and slightly more than half of the tax comes from residential land, giving us 90 dollars)
You’re going to raise rent by 90 dollars, at least. Maybe 111 dollars, to compensate for the empty apartments, if you want to continue making the same amount of money.
If I jack up my prices, then my tenants would move to other apartments because overall market prices have not been distorted.
As a hypothetical landlord, i do want to continue making the same amount. Heck, I’d make more if I could! But I don’t want to lose it all on empty rental units.
What determines tax incidence - “I make less” or “you pay more” - is elasticity. The supply of land is inelastic, so the supplier (not the consumer) bears the burden of the tax.
if all landlords’ costs go up, ALL monthly rent goes up? you’ve gotta follow the bouncing ball
Nope, see diagram
source?
Supply and demand diagrams are covered in introductory economics classes worldwide. Hint hint.
how does supply and demand relate to……land value taxes…….
You are arguing about a subject for which you have chosen to not educate yourself whatsoever.
Don’t sweat it to much, you are arguing against someone with an anti-education on how economics actually works to the point you can intuit how they’re wrong without knowing any of the theory behind their argument.
The diagram shows how price goes up and less consumers are able to access goods when you raise taxes within a market economy.
It is also an econ 101 level oversimplification, but it is arguing against your claims.
No it doesn’t. As you can see, market price is where the supply line meets the demand line. Since supply is perfectly inelastic (vertical), a higher tax rate cuts into producer surplus without changing where supply and demand meet.
That isnt true, housing supply isn’t inelastic. Houses decay, new homes are built, and landlords remove homes from the market to artificially constrain supply.
Also that isnt what the graph illustrates.
LVT taxes the unimproved value of land, so we are talking about land itself not what is built on top of it such as housing. Since land is a product of nature, the supply of it is perfectly inelastic
Okay, no, youre operating off of faulty logic. Everyone is going to be jacking up their prices the same amount, because they all can and they all want to maintain income. They will move in a coordinated fashion to raise prices as they always have historically done, whether that coordination is merely born of the same interests or active conspiracy.
Also even within neoclassical logic demand would increase as people have more money, the supply would stay the same, so prices would equalize higher.
There’s two things at play here: the LVT and the UBI.
LVT does not distort prices. It doesn’t matter if they want to maintain income any more than they currently want to increase income. Their income has always been based on the chart above; it’s not a conspiracy.
The UBI doesn’t significantly increase demand for housing in practice. We hear this same argument about minimum wage increases or anything else that puts more money in the hands of the working class. People having more money doesn’t make them spend it all on more housing.
I’m trying to explain the logic behind the underlying economics, but these have both been tested in practice too.
I think you’re getting the logic wrong, and the basic logic also isn’t rooted in empirical studies.
Can you please cite empirical studies that make your case?
I could be wrong of course, but even if LVT plus UBI work it would still be better to just do what the CPC did and stop enforcing the right to own other people’s homes.
I’m not sure which part about this you’re not getting and I don’t want to explain what elasticity is. LVT and UBI not distorting prices isn’t contentious outside of internet arguments like these. No offense but have you taken econ 101?
You make a fair point about the adversarial relationship. I can see how you might be right about that. I’m only disputing the claim about LVT leaving economic rent, and that it would cause inflation. Since that’s the initial claim, I would like you to cite studies for that first.
I’ve taken econ 101. It seems like you’ve only taken econ 101. I know of no serious academic that argues that lvt has no price distortions, only that lvt has lower price distortions than other modes of taxation.
What economics education do you have? I’ve spent years studying neoclassical, Keynesian, and Marxist economics. (Well, more than a decade on marxist economics, I’ve even read translated Vietnamese and Chinese texts on it) I am confident in saying that the assumptions you are relying on is faulty on theoretical bounds within neoclassical economics (which is where your argument is coming from) as well as within Marxist economics. But theory only goes so far, and if you have empirical evidence to the contrary I’d love to see it.
wtf is that source lol
Don’t you have something better to do than troll?