The current system discourages people from investing in the land because the more you invest in the land, the more it gets taxed.
The Georgist assumption isn't that land in NYC (or wherever) is inherently valuable. However, I think we'd all agree that a plot of land in NYC is valuable - maybe you think it shouldn't be, but I think we'd both agree that it is. The value might not be inherent to the land. Much of the value of land in NYC is because of what others have built in NYC.
Georgism encourages land owners to invest in the land in valuable places (like NYC) because they will be taxed the same whether they improve the land or not. If they have a vacant lot, they pay $X in taxes. If they have that same lot with an office building on it, they pay $X in taxes.
The current system allows land owners to profit off the improvements others create around their land without making any improvements. Many people sit on unimproved property in major cities like NYC because they pay almost nothing in taxes on unimproved property.
Let's say that you own a vacant lot in a part of a city that's seeing revitalization. People are putting up office buildings, biotech lab space, etc. In the current system, you think "if I just wait another 20 years, I'll have the only unimproved land in the area and it'll be worth 10-100x more!" You pay near-zero property taxes and look to profit off what everyone else is creating around your property. People creating housing, office space, lab space, etc. are all creating value around you and you're looking to leech off that value. Every resident, worker, artist, community organizer, etc. that ends up in your area is creating value near your property and you get to leech off that value they're working hard to create.
In a Georgist system, the taxes on your vacant lot would increase and that would encourage you to put the lot to use or sell it to someone who would. In effect, a Georgist system taxes you on the value that everyone is creating around you rather than letting you leech off that value.
> The assumption here seems to me that land in NYC/wherever is inherently valuable, which doesn’t seem true to me. Especially in a remote working world increasingly detached from physical spaces.
Going back to this point, from a market-based perspective, we can both agree that land in NYC is valuable - that people are willing to pay more for land in NYC. You might think they're foolish to pay for it, but they are paying for it. The vast majority of the most successful companies are all locating themselves in the most expensive cities in the world. Most people disagree with your assessment of the value of land in NYC.
Cities provide access to lots of opportunities. Yes, remote work detached from physical spaces might offer that. One can debate the value of remote work for the next decade. However, right now, land in NYC is definitely valuable. Most people and companies still perceive a lot of value there - even if you don't. Therefore, a vacant lot in NYC is squatting on a lot of value
> then move to cheaper land as soon as possible/when their current land becomes more valuable?
Ah, but this is where markets work. If the land becomes more valuable because it is more valuable to you, then you wouldn't want to move. If the land gets assessed at a higher value, but it isn't delivering that value to you or anyone else, demand will go down and then the valuation goes down.
I think what's hard for you wrapping your head around this is that to you the land in NYC isn't valuable. Would you pay to rent an apartment in NYC? I think the answer is "no" based on how you've talked about it. You probably think people renting apartments in NYC are wasting their money. However, most people don't think that way. If they did, everyone would leave NYC and rents would go down. Maybe you find no value in location. That's not true for most people.
You might be correct about the future: maybe all work will become remote and to take it a step further let's say that all friendships, dating, education, and community move to remote/metaverse. NYC no longer has any value beyond things like access to a good harbor.
But in the world we live in today, NYC is highly valued. You might not value it highly, but it is highly valued. There are many highly valued things that I see no reason to be valued highly - but I acknowledge that they are highly valued even if I don't personally value them. In the world we live in today, people can squat on vacant lots and leech off what others are building around them.
Maybe location will have zero value in the future. I don't want to put words in your mouth, but that seems to be where your thought process is going: NYC doesn't seem to have any value for you and in a remote-working world, physical space wouldn't have any value (beyond things like shelter and such). If that's the case, then all land would have equal value and pay equal Georgist taxes.
That's not the world we live in today. Even if you think people are foolish for valuing NYC highly, I think you can agree that they are valuing NYC highly. Even if you think companies are wasting money on offices in NYC, I think you can agree that they are paying lots of money for those NYC offices. That's the reality on the ground. Likewise, the reality on the ground is that there are people squatting on land that would provide real value to people if it were improved, but they're hoping to pay near-zero taxes and just squat on the land realizing a profit for zero work on their part - leeching off the work of those around them.
To flip this around on you: why do you live where you live? Why do you not move to the middle of nowhere 100 miles from anyone else? Even for those who don't like cities and might want to move to rural areas, they often still put value on place/location to an extent. You want to be proximal enough to a supermarket. Most people don't want a 4-hour round-trip to get food. Many people want to be within community rather than just being lonely - that could just mean being proximal to people that can come over and watch sports with you at your home (which they won't drive 2-hours to get to) or close enough that you can join a gym or do recreational sports with others. And you might answer that you can buy workout equipment for your house and chat with people online while watching sports together or that you'll just order food to be delivered (though if more people decided to move to inconvenient locations, free delivery to rural areas would probably need to cease as it's basically subsidized today).
But I'm guessing that you still value place/location as most people do. You might be more flexible and cost might sway you more, but I doubt that you're truly agnostic to place/location. If you live in the suburbs, there's almost assuredly a cheaper town you could have moved to and didn't move to. As such, you found more value based on place/location. Even in rural areas, there are cheaper places you can move to that people decide not to move to.
>You might be correct about the future: maybe all work will become remote and to take it a step further let's say that all friendships, dating, education, and community move to remote/metaverse. NYC no longer has any value beyond things like access to a good harbor.
Even if it's all remote work, many people like the urban lifestyle, of many things to do, shops, bars, pilates, nail saloons, pizza places, comedy clubs, dance clubs, delis, cafes, culture centers, galleries, gelato shops, museums, libraries, and so on. So, it's not like all incentives to a big city are office work opportunities.
I like your explanation. Some may think it repetitive but you arrive at the same point from slightly different angles and your writing is clear. It gets the message across to those who may not have fully appreciated the mantra that in real estate it’s all about location, location, location.
Thanks for the long reply, but I think you kind of missed the point entirely. The question was about what would happen if Georgism were adopted. Not what NYC is like now. I'll respond to each section:
The Georgist assumption isn't that land in NYC (or wherever) is inherently valuable. However, I think we'd all agree that a plot of land in NYC is valuable - maybe you think it shouldn't be, but I think we'd both agree that it is. The value might not be inherent to the land. Much of the value of land in NYC is because of what others have built in NYC.
Well, certainly it has some value, but I don't know if this value is "inherent." The fact that large parts of lower Manhattan was a kind of wasteland in the 70s would seem to indicate that it there isn't a huge amount of value in the land itself. Detroit is another good example, although definitely not as much as NYC.
Most people disagree with your assessment of the value of land in NYC.
Again, I think you are reading too much into my comment. These companies are centralized in NYC because of the social factors, not because of the inherent value of the dirt there. In the not too distant past, large parts of Manhattan had dramatically less value than today. Plenty of other cities in the world were once far more important than they are now.
Ah, but this is where markets work. If the land becomes more valuable because it is more valuable to you, then you wouldn't want to move.
But wouldn't you then be taxed more because of this value? Again, that doesn't really solve the issue. You'd just want to sell the land and move somewhere that has a lower tax burden.
You might be correct about the future: maybe all work will become remote and to take it a step further let's say that all friendships, dating, education, and community move to remote/metaverse. NYC no longer has any value beyond things like access to a good harbor.
Maybe location will have zero value in the future. I don't want to put words in your mouth, but that seems to be where your thought process is going: NYC doesn't seem to have any value for you and in a remote-working world, physical space wouldn't have any value (beyond things like shelter and such). If that's the case, then all land would have equal value and pay equal Georgist taxes.
Well, I didn't say those things and you are claiming far more than I did. So yeah, you are putting words in my mouth.
All of the comments about my personal living location are again, not really relevant to the point at all. At no point did I say NYC is not a desirable place to live, that I think the land doesn't have value, or that I have some issue with living in cities and prefer rural areas.
My question is not about how NYC is now, it's about what would happen if Georgism were adopted, and if this would set off a cycle of companies not investing into urban areas because their tax burden was determined by land value and not revenue. All of the things about NYC today are frankly irrelevant to the discussion, because the question is about effects of the policy if implemented.
Some of the philosophy all sounds reasonable and rational if the intention is to spur development from empty lots, but I still don't see how Georgeism prevents capital exit. Your assumption here is that when choosing between "keep empty lot and get taxed X" or "build thing and get taxed X", those are the only options. The other option is just to leave, which again is what my question is about. You might say, "then someone better able to capitalize on it will buy the lot," but what if there are no buyers? That's a pretty big assumption to make.
Finally, you're making a lot of giant leaps that a) I didn't make and b) aren't necessary for my point to be relevant. BigCo doesn't need to go from NYC to a barren tundra; it can just go from NYC to a smaller, cheaper city that has lower land values. If those land values rise a decade later, they can just move to another one, ad infinitum.
I still don't see how replacing income/revenue taxes with land value taxes will prevent this sort of behavior.
I think a key point is that taxation discourages certain behaviors. If you're so worried about LVT discouraging one behavior, why aren't you worried about income tax discouraging others? Many people, including myself, believe that the negative effects of taxing primarily income - wage income specifically - are far worse than those of taxing land value. There is no perfect tax system, but that's not really a strong argument against change.
I mean I don’t really have a dog in this fight. I am just trying to understand Georgism. Certainly the current tax system isn’t great either but that is a different conversation.
The Georgist assumption isn't that land in NYC (or wherever) is inherently valuable. However, I think we'd all agree that a plot of land in NYC is valuable - maybe you think it shouldn't be, but I think we'd both agree that it is. The value might not be inherent to the land. Much of the value of land in NYC is because of what others have built in NYC.
Georgism encourages land owners to invest in the land in valuable places (like NYC) because they will be taxed the same whether they improve the land or not. If they have a vacant lot, they pay $X in taxes. If they have that same lot with an office building on it, they pay $X in taxes.
The current system allows land owners to profit off the improvements others create around their land without making any improvements. Many people sit on unimproved property in major cities like NYC because they pay almost nothing in taxes on unimproved property.
Let's say that you own a vacant lot in a part of a city that's seeing revitalization. People are putting up office buildings, biotech lab space, etc. In the current system, you think "if I just wait another 20 years, I'll have the only unimproved land in the area and it'll be worth 10-100x more!" You pay near-zero property taxes and look to profit off what everyone else is creating around your property. People creating housing, office space, lab space, etc. are all creating value around you and you're looking to leech off that value. Every resident, worker, artist, community organizer, etc. that ends up in your area is creating value near your property and you get to leech off that value they're working hard to create.
In a Georgist system, the taxes on your vacant lot would increase and that would encourage you to put the lot to use or sell it to someone who would. In effect, a Georgist system taxes you on the value that everyone is creating around you rather than letting you leech off that value.
> The assumption here seems to me that land in NYC/wherever is inherently valuable, which doesn’t seem true to me. Especially in a remote working world increasingly detached from physical spaces.
Going back to this point, from a market-based perspective, we can both agree that land in NYC is valuable - that people are willing to pay more for land in NYC. You might think they're foolish to pay for it, but they are paying for it. The vast majority of the most successful companies are all locating themselves in the most expensive cities in the world. Most people disagree with your assessment of the value of land in NYC.
Cities provide access to lots of opportunities. Yes, remote work detached from physical spaces might offer that. One can debate the value of remote work for the next decade. However, right now, land in NYC is definitely valuable. Most people and companies still perceive a lot of value there - even if you don't. Therefore, a vacant lot in NYC is squatting on a lot of value
> then move to cheaper land as soon as possible/when their current land becomes more valuable?
Ah, but this is where markets work. If the land becomes more valuable because it is more valuable to you, then you wouldn't want to move. If the land gets assessed at a higher value, but it isn't delivering that value to you or anyone else, demand will go down and then the valuation goes down.
I think what's hard for you wrapping your head around this is that to you the land in NYC isn't valuable. Would you pay to rent an apartment in NYC? I think the answer is "no" based on how you've talked about it. You probably think people renting apartments in NYC are wasting their money. However, most people don't think that way. If they did, everyone would leave NYC and rents would go down. Maybe you find no value in location. That's not true for most people.
You might be correct about the future: maybe all work will become remote and to take it a step further let's say that all friendships, dating, education, and community move to remote/metaverse. NYC no longer has any value beyond things like access to a good harbor.
But in the world we live in today, NYC is highly valued. You might not value it highly, but it is highly valued. There are many highly valued things that I see no reason to be valued highly - but I acknowledge that they are highly valued even if I don't personally value them. In the world we live in today, people can squat on vacant lots and leech off what others are building around them.
Maybe location will have zero value in the future. I don't want to put words in your mouth, but that seems to be where your thought process is going: NYC doesn't seem to have any value for you and in a remote-working world, physical space wouldn't have any value (beyond things like shelter and such). If that's the case, then all land would have equal value and pay equal Georgist taxes.
That's not the world we live in today. Even if you think people are foolish for valuing NYC highly, I think you can agree that they are valuing NYC highly. Even if you think companies are wasting money on offices in NYC, I think you can agree that they are paying lots of money for those NYC offices. That's the reality on the ground. Likewise, the reality on the ground is that there are people squatting on land that would provide real value to people if it were improved, but they're hoping to pay near-zero taxes and just squat on the land realizing a profit for zero work on their part - leeching off the work of those around them.
To flip this around on you: why do you live where you live? Why do you not move to the middle of nowhere 100 miles from anyone else? Even for those who don't like cities and might want to move to rural areas, they often still put value on place/location to an extent. You want to be proximal enough to a supermarket. Most people don't want a 4-hour round-trip to get food. Many people want to be within community rather than just being lonely - that could just mean being proximal to people that can come over and watch sports with you at your home (which they won't drive 2-hours to get to) or close enough that you can join a gym or do recreational sports with others. And you might answer that you can buy workout equipment for your house and chat with people online while watching sports together or that you'll just order food to be delivered (though if more people decided to move to inconvenient locations, free delivery to rural areas would probably need to cease as it's basically subsidized today).
But I'm guessing that you still value place/location as most people do. You might be more flexible and cost might sway you more, but I doubt that you're truly agnostic to place/location. If you live in the suburbs, there's almost assuredly a cheaper town you could have moved to and didn't move to. As such, you found more value based on place/location. Even in rural areas, there are cheaper places you can move to that people decide not to move to.