The primary criteria for taxes is to collect money without alienating the payers. Part of this is keeping rates low, but basing them on increasing income for the payers, so the suckers that pay more are OK with it because they’re getting richer. It turns out that no matter how just or logical, you can’t squeeze much more money out of grandma. You CAN squeeze it out of fancy apartment or building owners.
I think you’re understating the difficulties and overstating the benefits of both of these. The calculation problem with Georgian taxes is insurmountable—a whole lot of value isn’t the land nor the structure, but the network effect of neighboring structures and neighboorhood/district evolution. This is both influenced by building choices, and by uncontrollable decisions of strangers (and, importantly, the government itself).
Harberger taxes are unworkable if there are significant transfer costs. It’s easy to expect that it costs multiple year’s taxes to move somewhere else, and that’s deadweight loss, leading to massive distortion.
I disagree about the transfer costs making Harberger tax unworkable, that gets priced into the self-assessed property value. You pay taxes on the use value of the property to you, not the market value, which is typically lower. When you want to sell, you’ll offer at the lower market rate.
But this actually points to an even larger problem. Harberger taxes as such would be incredibly destructive to communities. The stronger the community, the higher the use value, meaning the higher the self-assessed tax rate would have to be in order to reflect the worth to you. But the value from community is uncashable, meaning that there’s an unjust tax burden for having a better community. And people are usually only liquid to a minute proportion of the value of the intangible things in their lives.
Thus, people likely have to assess below their use value, which means the community can be eroded by compulsory sale and eviction. This already occurs in rent-paying communities, which are destroyed when property value goes up and they can no longer afford to rent there.
Tbh, you probably end up fighting this by having your neighbors in the community firebomb the property which got bought out from under you.
There is no calculation problem whatsoever in appraising land, which is commonplace today. It’s only influenced by uniform application of the same formula to every enrolled parcel, so the comparison will vary a bit, but remain generally fair. It’s not at all essential to arrive at a ‘perfect’ number, it’s just an administrative decision. It’s just the method of arriving at standard equivalence, otherwise it could just be $5,000/acre across the board
If you don’t like the assessment it’s immediately appealable through the administrative process, and then into the judicial courts. That’s how it works right now, the innovation of Henry George is taxing only the land value, and ignoring the improvements.
The primary criteria for taxes is to collect money without alienating the payers. Part of this is keeping rates low, but basing them on increasing income for the payers, so the suckers that pay more are OK with it because they’re getting richer. It turns out that no matter how just or logical, you can’t squeeze much more money out of grandma. You CAN squeeze it out of fancy apartment or building owners.
I think you’re understating the difficulties and overstating the benefits of both of these. The calculation problem with Georgian taxes is insurmountable—a whole lot of value isn’t the land nor the structure, but the network effect of neighboring structures and neighboorhood/district evolution. This is both influenced by building choices, and by uncontrollable decisions of strangers (and, importantly, the government itself).
Harberger taxes are unworkable if there are significant transfer costs. It’s easy to expect that it costs multiple year’s taxes to move somewhere else, and that’s deadweight loss, leading to massive distortion.
I disagree about the transfer costs making Harberger tax unworkable, that gets priced into the self-assessed property value. You pay taxes on the use value of the property to you, not the market value, which is typically lower. When you want to sell, you’ll offer at the lower market rate.
But this actually points to an even larger problem. Harberger taxes as such would be incredibly destructive to communities. The stronger the community, the higher the use value, meaning the higher the self-assessed tax rate would have to be in order to reflect the worth to you. But the value from community is uncashable, meaning that there’s an unjust tax burden for having a better community. And people are usually only liquid to a minute proportion of the value of the intangible things in their lives.
Thus, people likely have to assess below their use value, which means the community can be eroded by compulsory sale and eviction. This already occurs in rent-paying communities, which are destroyed when property value goes up and they can no longer afford to rent there.
Tbh, you probably end up fighting this by having your neighbors in the community firebomb the property which got bought out from under you.
There is no calculation problem whatsoever in appraising land, which is commonplace today. It’s only influenced by uniform application of the same formula to every enrolled parcel, so the comparison will vary a bit, but remain generally fair. It’s not at all essential to arrive at a ‘perfect’ number, it’s just an administrative decision. It’s just the method of arriving at standard equivalence, otherwise it could just be $5,000/acre across the board
If you don’t like the assessment it’s immediately appealable through the administrative process, and then into the judicial courts. That’s how it works right now, the innovation of Henry George is taxing only the land value, and ignoring the improvements.