They are efficient at not consuming too many resources while producing a lot of value? Probably shouldn't pay much then.
But this applies not only to big tech companies but to individuals too - they shouldn't pay much if they don't consume or extract from others.
Taxes are only a last-resort mechanism to raise money in absence of proper funding model.
If you can price government provided services appropriately then you don't need taxes.
Eg. to build infrastructure (roads, networks) you can predict that it'll benefit owners of nearby properties. They will benefit by landfall increase to the value of their property because the land on which it stands becomes more valuable.
So you collect the money for the infrastructure project by land "tax" before you begin with construction.
("tax" because it's not a tax but payment for exclusive land ownership rights)
If you follow MMT, taxes are the way governments withdraw money from circulation.
> So you collect the money for the infrastructure project by land "tax" before you begin with construction.
No, you use land taxes after completion to pay back the debt incurred to create the infrastructure. Adjustments of valuations based on the advantages of the infrastructure result in a greater burden of that repayment on those that receive the greatest benefit, but everyone contributes.
I'd like to see your "proper funding model" for the military.
Or you'd have to say that the military is part of your "last resort". But then you need to raise enough money to pay for all your last resorts. If LTV is your method, the numbers may not work (as others have said here).
Or, instead of raising all that money, you could say that we don't need that big of a military. That's not an insane position. But using desire for an LVT as the basis for deciding on the size of your military seems to me to be putting the cart before the horse.
First: "They can flee to another country in case of war" is terrible reasoning. You expect the other country to let them in? All of them? Yeah, that's not the way things actually happen in this flawed world. Most of them will not have the opportunity to flee. So... they should just die?
No, the military is there to protect the people, not just the wealth. So your post seems like it's trying to rationalize a not-up-for-debate position, rather than actually reasoning based on reality. Georgism claims to be motivated by compassion for those who are at the mercy of rentiers, but your position shows an immense lack of compassion. "Let them flee to a different country" is the most cold-hearted thing I've heard in a long time.
Second: that wasn't my point. My point was, let's see the plan where you actually produce $800 billion (or whatever the military budget is) just from a land tax. Let's see what the actual rates would have to be, and what the effects of those rates would be.
Look. You only seem to want to make it complicated.
If your military is too expensive and not covered by LVT, just go ahead and add a specific tax to fund your military. If you can justify that it'll protect everybody then people will be fine with it.
Idea of LVT as a single or zero tax is a political move to get you thinking about better government funding schemes. You should think of "paying for specific services" instead of "pooling money and allocating them according to wishes of select few" as is the case of current tax systems.
> Idea of LVT as a single or zero tax is a political move to get you thinking about better government funding schemes.
You know, if you had said that up front, we could have had a more productive discussion. But everybody's been saying "This is The Right Way(TM) to do taxes!" When non-true-believers point out all the problems, then we get "it's just a talking point".
In fact, I suspect that a number of LVT supporters on this thread don't agree with you. I suspect that several of them believe that it's the answer.
The point of invasion has been to kill people until the other government will do what you want. "Kill people" is supposed to be just the military, but there are inevitably civilian casualties. A big part of the point of a military (namely defense) is to keep anybody else's military from getting inside our borders, where it's our people being killed.
Both snidane and I assumed that there would be danger to civilians in case of an invasion. The invader doesn't have to intend genocide for that to be true.
> If you can price government provided services appropriately then you don't need taxes.
This is absolute nonsense. It's somewhat true for roads, provided you can efficiently price every single piece of road (which you can't). But it's horribly wrong for things like the police or fire fighting.
They generally locate where they can draw on a pool of talented people, and those people are drawn by social amenities, good schools, good infrastructure. All those things contribute to land value.
And those who are late to the game and buy a piece of land comparable to their entrenched competitor who bought years ago are paying multiples of the property tax.
Those late to the game who decide to rent are paying rents based on current land values, but their landlords, who may have owned the property for 10, 20, 30, 40 years, are paying to the community based on their purchase price. It becomes a form of sharecropping. Landlording can be very profitable, especially in California, if you own or inherit property from someone who bought it decades ago. Cui bono?
George was for removing taxes altogether which is possible if you fund government services properly in a pay for what you use scheme.
It is not good politics to start your political campaign by proclaiming that you will remove all taxes altogether because it is so far out of anyone's reality that he would have been considered crazy.
You're not being concrete. How do you properly tax a tech company whose land allocation is negligible compared to the overall value of the company? Tech companies have less than 1% of their value tied up in land. If they're all-remote and cloud-based, then they have $0 in land. How would you even tax them if the only tax is based on land?
Also, I live in an apartment. Should my tax be $0? Or if I owned and lived on land way out in a rural area where a small plot is only worth a few thousand bucks, do I only pay tax on that despite my income being mid six figures? The point is, as a knowledge worker, my economic productivity is entirely divorced from land. This is true of most white collar workers. Land value taxes may have made sense as the primary tax hundreds of years ago but they don't make sense for that purpose now.
How much of the rent on your apartment is due to its location? might be 10% in a small town, but it is likely more like 50% in most cities (unless the landlord is providing a lot of services -- doorman, flowers in the lobby). In his land value tax, he'd be paying for the value of the site. In a highrise, that value gets used by dozens of housing units in each column.
You wouldn't see a tax bill because you're not a landowner. But you'd be paying your share via your monthly rent. And your rent would not rise: your landlord is already charging what the market will bear.
And if there is a vacant lot next door, its owner would be motivated to build on it or sell to someone who would. That would likely reduce the rise in your monthly rent.
The whole point of this tax type is encouraging efficiency. Tech companies are usually efficient, and taxing them less increases their efficiency even more. At the same time their harmful effects should be regulated (GDPR is an example of such regulation).
Countries and states that let tech companies thrive are winning the race for capital.
The point of taxes is absolutely not to encourage efficiencies. The point of taxes is to fund the state in order to provide for defense and palliate the ills of capitalism.
I didn't write about the point of taxes, but about the point of a type of taxation. A government can collect the same amount of tax with different rules and procedures.
I agree with you, providing defense and protecting real capitalism, stopping oligarchies/long term monopolies from forming is important, to be able to have a return on investment on the taxed capital in the country.
As I wrote before, countries are competing for investor money, that's why it's important how they collect and distribute taxes. The counterforce is usually corruption inside the political system though.
The whole point of taxes is to fund government spending. That is a large amount of money you need to bring in every year. Taxing based on income seems to make the most sense for that, not "taxing based on efficiency". If tech companies have billions of dollars but aren't paying taxes just because their business doesn't happen to use land, how does that make sense? Why is land efficiency the only thing that matters? The government needs to fund its spending, and they're not going to ignore large profitable tech companies for taxation merely because said industries happen to not be land-intensive.
Who do you think should pay more taxes: someone sitting on 10M worth of land and doing nothing or a factory worker with no assets making 20$/hour? Income tax is unfair. It taxes productive people instead of those who benefits the most from the stable system (land owners).
By occupying that space in Brooklyn, that landowner excludes others from the opportunities that they enjoy. The land, which the homeowner didn't create, has tons of benefits that accrue only to the owner that come not from the owner's labor, but from the labor of others that are nearby, merely by being close to all those other people.
So how much does that Brooklyn homeowner owe to the rest of society for excluding others from what they enjoy? How much does the SaaS millionaire exclude others from opportunities?
Many proposed economic systems distinguish between property that comes from your own labor, and profits that come from idly owning an asset and restricting its use by others in certain ways. The slogan "property is theft" doesn't refer to the bookshelf that a person crafted, it refers to real estate and the economic systems of the time that excludes so many people from the opportunity to escape the economic rents of those who were born with more wealth and privilege.
There are many reasons to tax things: to make life more fair, to raise funds for government, to improve economic efficiency, to reduce pollution. It's so hard to say who should be taxed more without baseline values!
> there's way more economic activity happening that isn't associated with land than there is that is.
First, that is an actively contested claim. Pointing to tech companies as "way more economic activity" is laughable because (even though they occupy a huge proportion of public discourse) tech companies are a very small percentage of economic activity globally.
Second, intellectual property holdings would be considered "land" in the Georgian sense.
> tech companies are a very small percentage of economic activity globally.
This flat-out isn't true. Tech companies alone are a significant part of economic activity globally (e.g. they make up the majority of the top 10 largest companies in the world by market cap). Once you include all white collar work, which generally tends to be similarly divorced from land value, you're talking about the majority of the world economic activity at this point.
> Second, intellectual property holdings would be considered "land" in the Georgian sense.
Oh really? How the hell do you value that if not based on the actual income derived from said intellectual property? I.e. this is just the taxation regime that already exists.
Sort by profit, not be revenue, and you see the tech companies appearing again. Profit (or even just total corporate spending) is a better measure of economic activity than revenue.
> Profit (or even just total corporate spending) is a better measure of economic activity than revenue.
Profit is a terrible measure of economic activity because it is unrelated to the amount of goods changing hands. Indeed, in industries where lots and lots of goods change hands, profit is likely to be lower.
e: Also, real estate is extremely profitable, it's just not as consolidated as the major tech companies are.
Your focus on profit is misguided. It's neither measuring economic activity nor is a good base for taxation.
If someone makes a painting in 5 minutes and another guy pays 10M USD for it very little happened. 10M changed hands and the other guy has a painting on his wall. Yet somehow income tax proponents thinks it's fair to now take 50% from that transaction just because money changed hands. It's just not a good way to organize your tax system.
Patents are essentially the "land" of the tech industry. With weaker patents there probably wouldn't be any such thing as "big tech" as it would be constantly disrupted from below.
The exception is google's search index, which is, given its capital intensity and power requirements, practically a form of of heavy industry on a par with aerospace or automotive.
You let the free market decide the price of patents. Each year they are all put up for sale. Highest bid wins and gets the patent, and they can license it to others or keep it for themselves.
1% of patent value is paid each year as compensation for the government protecting the IP.
If they don't pay anything it's not really a problem. Their owners will and their employees will. Corporate income tax is the worst possible tax as it creates incentives for all the things at both don't want and which are very hard to police in a fair way (is this 1M they paid for licensing really a fair price or is it tax evasion?).
This taxation system does make sense for land, but there's way more economic activity happening that isn't associated with land than there is that is.