There is brilliant way to solve it so that value and market-value meet. Keep the land always in market.

It's called Common Ownership Self-Assessed Tax (COST).

Land owner would self-assess the value of assets they possess, pay a tax on that value. The owner would be required to sell the asset to anyone willing to purchase them at this self-assessed price.

If you value the land high for any reason and want to keep it, you must self-assess the value higher than anyone is willing to pay for it and pay tax for it. If value it too low, someone might buy it.

That would mean anyone who has enough money can buy the land that people live on just to harass them.

It’s an interesting idea, and I like it in principal, but I also like living in my house on my land knowing that I need to give permission before someone can buy it.

You solve this easily by assessing value and buying the land rights for a period of time - say 7 years.

So basically you lock down the price in an auction once every 7 years giving you enough predictability and time to justify your investment.

This is how these groups operate in present day already

1. businesses renting space in cities - they lock down rent for say 10 years

2. individual apartment renters - price is usually locked down for 1 year

3. domain name system - you lock down piece of land in "string space" for a year

4. electromagnetic spectrum auctions (LTE, 5g spectrum bands for telephone companies) every several years usually when new technology is deployed

5. technology patents locked down for 20 years

6. Government LAND to LANDOWNERS - locked down once, with expiration time at infinity and passable down through generations

It helps to see what Georgists actually want to achieve with LVT - proper auction mechanism for something everybody needs and there is scarcity of it - land.

For political reasons they attack it from the position of tax, not from the position of an auction. Which makes it a bit convoluted and confusing unfortunately.

It works if everybody puts up a defensive value because tax rates would drop for constant revenue. Also consider how much value would be assessed for all property, e.g. google.com.

In the US there is $16T currency, $38T stocks plus a roughly equal amount in corporate internal valuation, ~$30T small business, $33T houses, $17T commercial real estate, plus commodities, any other mark to market securities, vehicles, collectibles, intangibles like copyrights, patents, operating licenses, and really anything else that a court can adjudicate possession of.

I would expect somewhere around $250-500T with defensive valuation, so tax rates <1%. If your house is worth $1M, it’ll cost you $800/mo. By comparison, a US top 5%-er pays the same in property tax, plus income tax of about $7000/mo.

And it seems amazingly efficient. List and pay. If you like it, pay more. If you want to sell, just pay less and somebody will inquire. Market liquidity and order book depth transparency would be amazing. Capitalizations would be accurate for liquidation rather than estimated by float pricing.

The big monkey wrench I see is privacy. I believe this can be solved with zero-knowledge proofs. Maybe this is my next project.

OK, wait a minute. The tax is on the value of the land, right? It's not supposed to change just because I build a house on it, right? (Though having power and sewer to the lot may improve the value.)

So if I don't value it highly enough myself, someone else can come in and take the land. But the house is on the land. So I'm going to have to adjust the price to the actual price of the house + land, or someone else will outbid me and take it, thereby getting both the land and the house.

Or else, when they outbid me, they only get the land but I keep the house. But how's that actually going to work in practice?

The net effect is that this scheme stops being Georgism. It becomes a tax on the total value of the land plus improvements.

Yes; that’s true, it’s not a land tax. But many have pointed out that land fails to capture the scarce raw material that makes up an economy, such as human attention. These are very hard to assess. Land is too, and frankly the productivity of land alone is probably not enough to pay for the government, so all profits get collected as tax and the value of the land drops to zero.

There would be likely exception for normal sized houses where people actually live or if there is way to asses the value other way. Pay normal n% tax and they can't buy it.

Mansions and expensive property would be always on the market.

The problem with this is that the improvements wind up bidding up the land underneath because people know if they get the land the old owner forfeits the improvements.

This is exactly how non-private copyright & patents should work. That is copyright/patent "for hire" would be COST, with the rate of taxation increasing by a small amount each year until tax rate was 100%. This would given Disney the ability to keep the mouse for 120 years, but also free up less lucrative works for public enjoyment.

Why is it a goal to allow the Disney corporation to keep the mouse to itself for 120 years?

This notion of copyright has basically destroyed the idea of folklore in the last few hundred years, relegating it from one of the main areas of human expression to a corner of the internet.

I think even 20 + 20 copyright is problematic. People should be free to use characters and stories while they are still relevant, and create their own variations that may even become more popular than the 'original creation' (in quotes because so much of creativity rests on the shoulder of others).

This is a pragmatic approach to the reality of the situation: Disney and other large copyright holders have historically been able to leverage their position to increase copyright universally to absurdly long levels. The idea of a COST based mechanism for copyright tries to address a few practical approaches to copyright:

1. Copyright that's not assigned value defaults to the public domain; this provides an avenue for copyright to devolve to public domain immediately which does not currently exist;

2. Copyright that's no longer maintained by its owner devolves to the public domain (similar to 1), taking it out of "copyright limbo";

3. Any group with sufficient resources can take a copyright into the public domain as a public good, e.g., "we" could buy Wolverine into the public domain;

4. Copyright can be maintained for very long durations for entities that choose to do so;

5. The ever-increasing cost means that eventually the copyright "buys itself out", that is, when the COST is assessed at 100%, the Fed has sufficient funds to simply buy the copyright outright (this is a choice, btw, the Fed could happily accept 130% of COST!); and,

6. Absurd copyright lengths no longer universally apply.

I think (but I've not completely thought this through) that such a system could help with patent litigation. Specifically, consortia of entities can buy out a patent if the patent is weaponized. Mind you, the patent holder can no longer "squat" on a patent for free: they must pay the COST of a patent portfolio! This naturally handles the asymmetry of costs between NPEs and regular old entities.

What is the benefit of increasing the rate?

If you like 100 years of ownership, set the rate at 1% per year, calculated on the copyright/patent holder's self-assessed price. Every century, the polity collects 100% of the value. What the polity does with the money collected is up to the polity.

This seems to be directly in conflict with the idea that once you own land, it's yours. I don't see this flying at all, at least not with the current expectations of most people.

Any sizable company could easily bully any number of people out of their homes to acquire the land. It's hard to overstate how much people would hate this.

> the idea that once you own land, it's yours.

This idea is the problem. Taken to its logical conclusion, we get feudalism, where those who don't own land will forever pay rent the landed gentry, only because they were fortunate enough inherit land.

Property tax fixes this somewhat, but California decided to weaken that with Prop 13, and now is approaching feudalism. For example, in the apartment I lived in California, the rent paid would cover the landlord's property tax obligations in a month, and the remaining rent is the landlord's (minus whatever costs they have for maintenance).

> once you own land, it's yours.

Idea that you can buy a monopoly is generally a bad idea.

Clearly people don't think so, as the vast majority do agree with private property exclusive ownership.

Ownership of land by individuals within any national border is always subject to local government power (taxation, eminent domain, police power, escheat). True exclusive land ownership is prohibitively expensive for individuals, since it would require military defense.

Most people haven’t thought about it very deeply.

You were sold a lie. You don't own land today if you buy it.

Consider what the government would do if a huge oil deposit was found under your house.

Easily fixed by having an exception for people's primary place of residence. And other reasonable exceptions.

The issue with that is that you then have the exact same issue with assessing the value of the improvements made in order to determine non-improved value from improved value. No issue is fixed, it's just moved around.

Someone being able to take my house or business away at any time because they have more money doesn’t sound brilliant or practical. It’s also not market based at all. Trades are willing.

Yes, trades are willing; and when you turn down a bona-fide offer to buy your house for $X, that is very strong evidence that you value your house at more than $X.

or have good reason to think that if you hold onto it for another year, it will be worth a lot more.

There were years, under Prop 13, when many people's houses -- that is, their land -- rose in value by more than their gross salary. Not their savings, but their gross wages!

And Prop 13 keeps taxes artificially low, driving the prices up. Normal turnover doesn't happen, so retirees stay in family-sized homes close to jobs they no longer fill, and young families are forced to "drive until they qualify" for a mortgage, and every workday thereafter.

What happens if I build a house in the land ? Is the house is still mine ? It seems like it would keep me from improving the land.

Your possession would be just as secure as it is today. If a huge city grew up around it, your property taxes would rise over time, and at some point, your single family home would be surrounded by skyscrapers, and no longer be using the land effectively. But if you were wedded to that house in that location, and had the funds to continue to pay your property tax, or your land value tax, you could stay forever. No one would stop you.

Occasionally one sees a diner in a skyscraper neighborhood. Under LVT, their incentive would be to find another place to conduct business, perhaps on the 1st floor of a taller building, and let the site be redeveloped to meet current needs.

The land most people live on does have market precedent so this would be unnecessary.

This idea could still be workable for unimproved land

Then we're back to square 1: how do you determine the unimproved land value of improved land, so you can tax it?

It should be fairly simple to take the original price of installing the components of the house and calculate depreciation. Non-improved value = market value - depreciated home value

Obviously you'd have to keep tracking the improvements over time.

Isn't that true of any assessment? With the ordinary property tax, you have to assess both the land value and the improvements. (There are of course ways of taxing property that don't involve that kind of outside assessment, but they're not commonly used.)

Yes, this, most definitely. And the land versus structure value is already calculated for most properties for insurance purposes.

Even places (like California) that do not assess tax based on value still have massive fleets of property value assessors that are used during the course of normal market transactions, since those who lend mortgages use them to prevent fraud.

The valuation for insurance purposes is generally not the current, depreciated value of the building, but the cost to rebuild, at today's material and labor prices, and with modern materials and systems.

A 50 year old building, with old systems, may be fully depreciated, but if one had to rebuild, one would need far more than the current building is worth.

When one buys a home with a mortgage, the bank requires an appraisal. In some places, the forms don't even break out land value from building value, or they do it badly. An appraisal merely compares the subject house with others that have sold recently in the same area. Better location? $15,000 more (or, in California, $100,000 more) Inferior location? subtract $15k or $100k. 1 more bathroom? Add $5,000 (CA: might be $5k or $50k) new kitchen vs 20 y/o kitchen? Add $10k, $50k or $100k, or more, depending on what is typically spent in that neighborhood. For each "comparable" add up all the pluses and minuses, and add that to the transaction price for that property. Average those, and the subject house value is estimated. Land value is in there, but not explicit.

California has assessors, too, who, after a property has sold, update the assessment on it to equal the transaction price. Some goes to land, some to the building. (check out listings at realtor.com, and fully expand the property history info. Notice when the previous transaction was, and look at the increases. They are in reality mostly land value. Buildings don't appreciate. Land rises and falls in value --- mostly rises.)

But appraisers and assessors are very different.

None of that changes the fact that there is no inherent value to land (improved or unimproved). Different people value the same piece of land (or any good) differently. This is just reality, regardless of whether someone is appointed to imagine a price for the purposes of taxation.

You may as well say that nothing has inherent value. The concept of "inherent value" is a bit broken, as the same thing that gives land value (somebody else wants it) is exactly what gives anything else value (somebody else will give you something for it).

Valuations in currency are an abstraction for how we deal with this really tricky and intractable problem. But like all abstractions, it's leaky. A $100 bill has no "inherent" value yet it's value is very precisely known.

Yes, nothing has inherent value. Different humans value things differently under different conditions. For example, I may be willing to trade a lot for oranges if no other food is available. But if lots of other food is available, I wouldn’t be willing to trade anything. Some people don’t like oranges and wouldn’t trade anything unless they were starving. This is why prices are always changing in a market. Prices only reveal two individual’s preferences at the time of a particular trade.

So you see, there is no inherent value or price to oranges or water or land, or anything. This is a fundamental misunderstanding that Georgists have about the nature of prices and the world.

The fact that someone can be appointed to declare an imagined inherent price to water or land or whatever doesn’t change it. Yes, the government does appoint people to do this and it is ridiculous. My house isn’t worth what the government says it is, it’s worth what I’m willing to trade for it.

I don't think that Georgists have the misunderstanding that you claim. I'm not a Georgist, but I do like many of their ideas and listen to some modern day ones.

What you are arguing against, the idea of taxing something based on its "value" where everybody already values things differently, this is not a new thing. It's not hard to implement. We already do it. It's here in the real world. We have property taxes. Each property is unique, non-fungible, everybody has different valuations for every property, and yet somehow we still work out a "market" value.

Establishing land values is only a slight modification of establishing property values. It's easily solvable, and the places that have implemented it have not had difficulty establishing the valuations for tax purposes, by basing these valuations off of market transactions.

But, you might argue, what if your personal valuations are different than what the "market" values them at? Well good for you, because then you are likely able to find a great deal more value out of a property than what the market values something at.

And maybe if the market values something far less than what you value something, then you can hold on to it for cheap! And if the market values something far more than you value something, you can avoid the expense of buying it, or if you have it, you can profit from selling it.

If markets are useful for something, it's finding out what a population thinks something is worth. When it comes to land, and who is excluded from using this precious and finite resource, and who is allowed to use it, market valuations are extremely useful. We can watch transactions to figure out who is using up the most of what other people want (i.e. holding land with high market value). If somebody is hoarding a precious resource, but unwilling to pay the taxes to hold onto it, perhaps they don't actually value that resource so much after all.