I feel like it’s still Moloch to blame, if a sufficient bribe to landowners would cost less than indefinitely continued rent-seeking.
I don’t have any calculations to offer in support; but I would generally expect an individual landowner’s time preference to be lower than society’s as a whole, so I suspect this is indeed the case.
So the actual reason is that landowners don’t want to be seen taking a bribe, because that would involve acknowledging they have been knowingly rent-seeking since 1879; and the government doesn’t want to openly bribe them for moral hazard whatever; so even though everyone would be better off by their own lights it can’t happen. And that’s fairly moloch-flavored.
if a sufficient bribe to landowners would cost less than indefinitely continued rent-seeking.
Note that if made in public, for legitimately-owned assets, and voluntarily accepted, the term is no longer “bribe” but “purchase”. A whole ton of my objections go away if the government (or even a private entity) is buying land and then figuring out the best use for it, charging optimal rent to the people who own the improvements separately.
How many older people who own land do you know, who’re happy with CURRENT inheritance taxes? Saying “land value is no longer inheritable, it goes only to the state” seems about as likely as any other implementation of massive tax increases.
I know! I own property myself. Obviously, people don’t like big sudden changes that cost them a lot of money. That’s why I asked for more incremental approaches. Though, I guess the problem is that small changes will not get a lot of support from non-property owners—because the effect is small—but will get opposition from large owners because they see the effect.
people don’t like big sudden changes that cost them a lot of money.
People don’t like ANY changes that cost them a lot of money. The only saving grace of gradual rollout is that it’s easy to continuously delay the next step until it gets fully killed before going too far.
Any proposal that amounts to “nationalize Trillions of dollars worth of land value (or of net present value of future rent streams, same thing), without compensation” is going to face backlash from a lot of people, including me. REGARDLESS of timeframe or gradualness.
Well, there will be compensation, that’s the whole idea of LVT—it’s a more efficient tax, so you can reduce inefficient taxes. But I guess you mean for the same person. And that is the hard to prove point.
I guess the only time to introduce such a tax is after a war.
The only saving grace of gradual rollout is that it’s easy to continuously delay the next step until it gets fully killed before going too far.
This is a bit hyperbolic. As a general matter, gradual rollouts have other important benefits, such as the fact that they allow people to be free to optimize: by maintaining a more transparent, slow-moving pace of change in the background legal system, citizens (and companies etc.) are able to more easily deal with the modifications by “smoothing” their adaptations over time instead of being hit with something they were not prepared for and are unable to deal with in a very short time-frame.
Very rapid rollouts generate more uncertainty and unpredictability, which can sometimes result in a situation that’s even worse than if a bad, but more certain option was chosen (partly because individuals who react rationally to uncertainty generally do so by hedging their bets and wasting resources on preparing for future world-states that seemed possible at the time but were not actually reached, in hindsight).
I feel like it’s still Moloch to blame, if a sufficient bribe to landowners would cost less than indefinitely continued rent-seeking.
I don’t have any calculations to offer in support; but I would generally expect an individual landowner’s time preference to be lower than society’s as a whole, so I suspect this is indeed the case.
So the actual reason is that landowners don’t want to be seen taking a bribe, because that would involve acknowledging they have been knowingly rent-seeking since 1879; and the government doesn’t want to openly bribe them for moral hazard whatever; so even though everyone would be better off by their own lights it can’t happen. And that’s fairly moloch-flavored.
Note that if made in public, for legitimately-owned assets, and voluntarily accepted, the term is no longer “bribe” but “purchase”. A whole ton of my objections go away if the government (or even a private entity) is buying land and then figuring out the best use for it, charging optimal rent to the people who own the improvements separately.
Would it work if the tax was raised very slowly? Like 10% points per generation.
Would it work if the tax sets in only after death for privately owned property? That might significantly reduce resistance by individual land owners.
How many older people who own land do you know, who’re happy with CURRENT inheritance taxes? Saying “land value is no longer inheritable, it goes only to the state” seems about as likely as any other implementation of massive tax increases.
I know! I own property myself. Obviously, people don’t like big sudden changes that cost them a lot of money. That’s why I asked for more incremental approaches. Though, I guess the problem is that small changes will not get a lot of support from non-property owners—because the effect is small—but will get opposition from large owners because they see the effect.
People don’t like ANY changes that cost them a lot of money. The only saving grace of gradual rollout is that it’s easy to continuously delay the next step until it gets fully killed before going too far.
Any proposal that amounts to “nationalize Trillions of dollars worth of land value (or of net present value of future rent streams, same thing), without compensation” is going to face backlash from a lot of people, including me. REGARDLESS of timeframe or gradualness.
Well, there will be compensation, that’s the whole idea of LVT—it’s a more efficient tax, so you can reduce inefficient taxes. But I guess you mean for the same person. And that is the hard to prove point.
I guess the only time to introduce such a tax is after a war.
This is a bit hyperbolic. As a general matter, gradual rollouts have other important benefits, such as the fact that they allow people to be free to optimize: by maintaining a more transparent, slow-moving pace of change in the background legal system, citizens (and companies etc.) are able to more easily deal with the modifications by “smoothing” their adaptations over time instead of being hit with something they were not prepared for and are unable to deal with in a very short time-frame.
Very rapid rollouts generate more uncertainty and unpredictability, which can sometimes result in a situation that’s even worse than if a bad, but more certain option was chosen (partly because individuals who react rationally to uncertainty generally do so by hedging their bets and wasting resources on preparing for future world-states that seemed possible at the time but were not actually reached, in hindsight).