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Re: some benefits of the georgist policy



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Bossman Prakash, 

I am not arguing that Georgyboy doesnt have a good argument,  I myself do
not understand why wealth created is taxed while the inputs are subsidised. 
The inputs should be taxed as they are extracted from the commons (forests,
water, etc) while wealth produced should be for the person who created it.  

My complaint with georgy is that his argument that a land tax is some sort
of a panacea is invalid.  His conclusions are kinda invalid.  

You said "The tendency of the consumers of land will be to move out to a
place with relatively cheaper land. ".  Not true in my example.  There is
cheap land outside Bombay now, yet no one is moving there now.  Why are
offices not moving out of downtown Bombay now????  And why will they when a
land tax is brought in ????  

You said "the land value or the unimproved land value which is sought to be 
taxed, is actually the rent paid out to the landlord forever".  This is true
in case of George's example.  I.E. a farmer can generate x amount from a
free crappy piece of land.  If a landowner can generate y from his land,
then y-x is the rent.  True true...  But how will you value urban land???? 
y-x would value urban land really low.  And what kind of figures do you
envisage urban homeowners to be paying annually???   And if you tax this
y-x, what is the motivation to own rural land ???  

Again, I am for a land tax of this sort, but I do not feel it will not
affect the rents that people pay in urban areas as Georgiboy suggests... 
Also its ramifications are not as simple as he thinks they will be.  It
really needs to be looked into much deeper.  

AP






--- Cprakash <Cprakash@goplay.com> wrote:
> ---------------------------------------------------------------------
> Please help make the Manifesto better, or accept it, and propagate it!
> ---------------------------------------------------------------------
> Dear Abhijeet,
> 
> the land value or the unimproved land value which is sought to be 
> taxed, is actually the rent paid out to the landlord forever, 
> capitalised to a present value taking the inflation rate into 
> account. Now in the case you suggested that since all landowners are 
> being taxed, they will raise the rents. That is true, but their 
> tendency to raise the rents will be limited by the market. I do not 
> mean other landwoners, i mean LAND itself. The tendency of the 
> consumers of land will be to move out to a place with relatively 
> cheaper land. The tendency of the rent will be to reduce to the state 
> where the only rent paid to a builder will be the charge for his 
> construction, i.e the 40 lakhs, i.e land will be almost valueless.
>                              This proposal will, i agree be very 
> heavy to those people who own large tracts of land now. It will 
> discourage land speculation and allow for a more gradual and 
> integrated development of cities instead of the incessant 
> urbanisation we see today. It is also, a FAIR proposal of taxation, 
> since it taxes something that cannot be hidden, is not made by your 
> own effort - hence will not discourage production and does not 
> penalise enterprise. I do not propose to add land tax as another to 
> our list of burdens, but to replace our entire list of burdens with 
> land tax. The regulation mechanism to monitor land tax is very snall 
> when compared to the present mechanisms. With increasing complexity 
> in the world with the advent of the internet, this is a fair and 
> simple way to finance a minimal government. Also, another proposal in 
> a related website was to give all citizens of a country a CITIZENS 
> DIVIDEND when the rent is more than sufficient to finance the 
> activities of the state. This will ensure that the benefits that the 
> concentration of people are bestowing to the community are shared by 
> all of the community.
> 
> c.prakash
> 
>
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=====
Ah Love, could you and I conspire, To grasp this sorry state of things
entire, 
To smash it all into a million bits, And mold it back to heart's desire.

Jab purdah nahi koi khudah seh, to bandhon se purdah kya.

Abhijeet A. Pradhan, 44J, Reading Rd, Edison, NJ 08817
Tel #: 732-452-1157      email: perdi420@yahoo.com
http://www.geocities.com/perdi420/       http://www.thethinkingindian.com



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This is the National Debate on System Reform.       debate@indiapolicy.org
Rules, Procedures, Archives:            http://www.indiapolicy.org/debate/
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