So one of the users mentioned in the past article posted an article about LVT in more detail, proposing an alternative vision for LVT. The user claimed I got it wrong, it wasn't the total land value calculated, it was the capitalization, which i guess is how much it can be rented out for in one year, and this article assumes 5% a year.
Generally speaking, my own article which was based on last year's UBI numbers estimated that a $150,000 property would have a $45000 land value, and taxed at a 18% rate, would amount to an $8100 tax. That means if I had a $13,200 UBI, that I would benefit around $5100. Not that great. I wouldn't be ruined by this but given my own idea for how UBI should work based on income taxes, this isn't what I really want. I feel entitled to the full $13200 check assuming I pay $0 in taxes. If I want to earn more money I can pay taxes on that, and to pay $8100, I would earn around $45000 a year. And that would be fair because at that point my net income would be $50100. That's how I think it should work.
But this article has some different models at the bottom. They assume with a $150,000 home, and 50% land value, that with a 5% capitalization rate I would pay $3750 in taxes. And I would get back....$5738.11 on the low end. Quite frankly, that's pitiful. not only is that nowhere near a full UBI, but with the LVT I would be brought down to $1,988.11. While I would be in the black, let's face it, for a UBI, this is pitiful.
I mean, I get it, LVT advocates look at LVT from a perspective of you are owed only your fair share of land and LVT targets those big mean land owners, and while it might help renters it's not great for home owners, but yeah. This UBI is not only pathetic, but the numbers on the low end lead to less of a check than I would get under my own math. For all the people claiming I don't understand LVT, i think I understand it quite well.
To be fair, the grant could also be as high as $11,376.22. In which case, I would benefit by $7,626.22. This is better than my original math, but the UBI is still lower than the UBI i advocate for. Both the net UBI would be, and the full UBI are lower than they'd be under my plan.
Now, which plan is correct? Based on a 5% effective LVT on $23 trillion (what my model assumes) of land, we're talking $1.15 trillion in revenue. Dividing this among 250 million adults means a $4600 check, which is lower than even their most pessimistic estimates. Yeah, georgists once again miss the mark. This would mean a net benefit of $850. Even worse than their worst estimate. To be fair my model would assume a home has 30% land value rather than 50%, which would make the taxes go down, but that's the thing about georgism, it varies, and based on some data the guy I was arguing with presented, land value CAN be as high as 70% of a home's value if it's in a valuable location. So some people can really get burned on this thing while others who live in less valuable areas would probably benefit more. Assuming a 30% land value, we're talking only $2250 in taxes rather than $3750, but that still would only net around $2350, which is better but FAR from an actual UBI.
I get it, if you're renting, it sucks, sometimes you're paying $1000, 2000, even $3000+ for rent. The market is broken. I'd like to see fixes too. But LVT doesnt seem to actually correct for this. It just turns me into a renter of my own property too.
I could see a component of UBI being funded by LVT, but the whole thing? No. The thing is this is a highly variable tax with a highly variable impact household to household, and it doesnt really guarantee anyone a liveable income.
I get it if you rent you probably gotta buddy up with a roommate, even with UBI. I just don't like the idea of impacting homeowners that way. Homeowners are not ATMs. Georgists love to act like they're piggy banks for some LVT but just because you own a home doesnt mean you have liquidity. When I tax income, I can be like, you just earned $50000. You should turn over $9000 of that for a UBI and have $41000 left, you should then get a $14400 UBI like everyone else. And a good 80% of people would benefit in net. But if you're taxing land....your income might not reflect your housing situation. And even if you do still somehow benefit in net, it's not gonna be enough.
If I worked in my city, I'd earn like, idk, $10-15 an hour these days? That's $20,000-30000 a year. I'd pay roughly $4000-6000 on taxes for my income, and get $14,400 back. I'd benefit in net too. And I'd benefit by $8000-10000 or so. Not $2000-7000.
And again, this isn't even the median, im dealing with numbers at roughly HALF the median. Median individual income is $43000. Under my UBI plan that's $7,740 in taxes, meaning a net $6660 in UBI.
Meanwhile the median home is $300k. Under my own UBI numbers you'd pay 18% on $90k. That's $16,200 for a $14,400 UBI. You're in the red if you're at the median. Under their numbers, you'd pay $7500 and get between $5738.11 and $11476.22. You'd range between losing $1761.89 and gaining $3976.22. Not really ideal.
Again with the median individual income you'd pay $7740, roughly the same, and get back $6660 by current numbers, or by last year's numbers, $5460. You'd be better off.
Now if you did my estimates, 5% of $150k is $7500, which is far in excess of the $4600 check you could expect back. If we relied on my lower 30% land value model, you're talking more $4500 to get $4600 back, so you'd benefit by $100. Whoopie.
Of course georgists assume you are earning good money if you own a home. And that's the core problem. That assumption assumes that people are making certain incomes to maintain their homes. but peoples' income situations change over the course of their lives. You might earn good money if you were a boomer in the 90s in your 40s but your living standard might only be 40-50% what it was now. But hey at least you no longer have a mortgage so it's liveable.And that's the only thing that makes such a reduction workable in practice.
With this LVT scheme, you're locked into working to maintain the income to fund the taxes to live in your own home. This is why I view LVT as against indepentarian principles and coercive in making you join the labor force. LVT advocates seem to miss that. They think just giving you a lame partial UBI as a tax refund to their crappy tax is "justice". This idea might help renters but anyone who is a home owner doesnt benefit much in net. It might not necessarily ruin home owners, but it doesnt help them either, and that's the point. UBI becomes a transfer from homeowners to renters, with poorer home owners benefitting in net but anyone at the median and above roughly being screwed.
Compared to my UBI plan, it doesn't seem very helpful. And yes, they'll claim housing prices will drop as a result, but we dont really know how much. And it sounds like the reason they will drop is it will crash the housing market because the LVT is so high. And if the effective LVT they want is ONLY 5% in practice, I really don't think the housing market would change much at all. The magic of LVT is that it would force economically inefficient people off of their property to make way for some property planning master race to come in and put high density housing on the same land, thus increasing the housing supply but at the cost of literally everyone who currently lives in their own homes.
Idk, there's just so many potential issues with this idea I just don't see the point. Given the benefits of a real UBI funded in a more NIT mirrored way, the georgist vision just doesnt seem compelling to me. It seems driven by people who buy into georgist ideology without considering how it actually impacts people. Too much theory, not enough actual analysis in practice. And while r/georgism might not appreciate my commentary and consider it surface level, well, they can bite me. I'm looking at policies through the lens of truth and objectivity, showing people what these policies would actually do. Georgism might have some interesting ideas at times, but all in all, the extreme version georgists want seems to be snake oil. It's a bad idea to fund an actual workable UBI, and its effects on the housing market range from negligible to apocalyptic depending on implementation. Seriously, I can't imagine considering myself a hardcore georgist unless I was an extremist ideologue who doesn't care about the consequences of policy. And I'm a policy driven guy who might have his little ideological quirks but largely sees himself as living in some form of objective reality.
Would georgism as suggested here be bad? No. But it wouldn't give anyone who owns any land a decently sized UBI (or even someone who doesn't own land, you can't live on $~5000). Ignoring the UBI implications would it be bad? Eh, at 5% probably not as the extra tax burden would be minimal below the median or so, but let's be honest, I don't see this as doing anything. An LVT high enough to radically change the housing market would be apocalpytic. At that level of taxation, landlords would probably absorb it and try to pass it on to renters. And while advocates will claim they can't do that, that analysis implies that the LVT is large enough to force landlords to demolish existing property to build high density apartments that allow them to make more money in such a way where they can't pass it on, so...yeah.
Idk, can you imagine being this wrapped up in theory with no basis in reality? I can't.
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