"Just Tax Land"
Maybe I shouldn't pursue Georgist advocacy on Substack
Many movements have a simplified slogan representing their core belief or reform. Although useful for conveying the general idea, it mostly functions as a signal for association with the movement, not an actual message for convincing others or use in real policy application. These slogans are generally agreeable, a mass-market Applause Light.
Examples include:
Defund The Police (Slightly longer version: Many tasks that Law Enforcement carry out can be replaced by other parts of the government or society, and the police aren’t suitable for these tasks because of their prejudice and focus on punishment rather than actual crime abatement)
Taxation is Theft (The government doesn’t have a right to take wealth from its citizens, and the economic social contract doesn’t have consent from the public)
All Lives Matter (Society should not care about the interests of black people in particular, as specifically caring about them is race bias)
Anything on the “We Believe / In This House, We Believe” signs
All of these are perfect examples - they don’t actually prove anything, or make actual policy suggestions, but serve as a virtue signal.
For the Modern Georgist movement, we have “Just Tax Land”. Shockingly, most georgists don’t actually think that taxing land will automatically solve problems.1 Head over to r/georgism, and you will see that if you ask about a specific aspect or implication of LVT2 or other georgist policy, many different implementations of these policies will be proposed. Most notably is the range of incrementalism and LVT rates, with most clustered around slightly less than 100% - single tax3, or between 1-10% - the system currently implemented by all governments with actual LVT, and by far the easiest for current governments to implement and gain support for without sweeping societal changes.
It is a widespread belief, however, that LVT with other georgist policy would be easy to implement, and fix most major societal problems. A popular backer of georgist policy is video essayist YouTuber BritMonkey, and I think his “The Housing Crisis is the Everything Crisis” video explains this viewpoint well. One of the main draws of Georgism is its encouragement of development, via its incentive to build denser and not taxing improved land.
Unfortunately, LVT probably won’t make a large difference in Density. Assume LVT rates are 25%4, average US rent is $2100/m5, and the land and building value inputs are 40 and 60%, respectively6. 0.4*0.75*2100=$630/m, or $7560 per year. Assume $4170/year property tax, with the same portion from land and building, or a composite $1668 land and $2502 building tax. Under the hypothetical new LVT, land tax would rise by $5892/y and building tax would drop by $2502. Because the average renter spends $25200 on rent, the additional tax on low-density and effective subsidy on building totals $8394, roughly a third of rent. I doubt that these are super effective incentives for builders to increase the density of their construction, as a direct subsidy to build densely, or a public option (a strongly recommended read) of government buildings in high productivity localities (cities) would cost much less and require significantly less political power to enact.
Now that I think about it, encouraging density is basically the main reason that I, and many others, support Georgist policy. What other good does it do? There are some inefficiencies of land use, but the current market system does a good enough job at resolving them. Landlords don’t actually make a lot in passive profit, their earnings mostly come from active labor. For example, a broad stock market index fund earns 10-11% in the US, and 7-8% after inflation. Obviously, landlords can make money fixing housing that was previously unsuitable for use, but that is encouraged by georgists. A quick glance at RE-finance content online confirms this. Popular finance YouTuber Graham Stephan has a significant portion of his RE investing videos about buying houses encourage buying uninhabitable housing and fixing it.7 This is basically house flipping but with less market risk (you balance out the RE market risk by not realizing the gains for a significant amount of time, and the rental market has much less exposure to the market), and is absolutely not rent-seeking.
4/27/26:
I no longer endorse the above (striked out); Real Estate investment can out-return index funds or other securities not through simple return percentages, but rather via the easier accessibility of credit for RE; margin trading is very expensive but mortgages on land/property are cheap. As a result, higher total profits are possible via higher leverage.
Yes, LVT is not distortionary, and the government has a more natural right to tax land, which its owners did not produce, and is essentially what the government is. However, it isn’t 1886 anymore, and most citizens are fine with taxes. The ones that aren’t want a relatively small shrink in the government budget, and people are generally fine paying income taxes in exchange for the variety of government services. Also, income tax, corporate tax, etc. aren’t that distortionary. People don’t really make decisions to work less because they will have to pay taxes (other than misunderstandings of how marginal rates work), and corporations don’t intentionally make less profit because of corporate taxes (for the most part, the exceptions are still not that impactful). The relatively small distortions that do exist don’t represent a significant issue in society, and Just Taxing Land will not cause a very large notable difference, especially relative to the political will it will take to enact.
Yes, the citizen’s dividend could be a good policy, especially if everyone loses their jobs from AGI, but I don’t think a reasonable LVT rate could cover it.
If it is so profitable to extract rent, why isn’t everyone doing more of it? Sure, approximately 2/3rds of Americans own the home they live in, but this is mostly to prevent exposure to fluctuating RE prices, and to ensure they can continue living their on their own terms, not to extract rent from raising house prices. Owning a house, maintaining it, and improving the neighborhood by productive labor and community building isn’t rent seeking. Approximately 4% of adult US residents report rental income on their taxes. The median taxpayer that reports rental income owns one property, with a small percentage owning more than two (still heavily weighted towards small numbers of properties). There is almost nobody who actually supports themselves on rental income (rent in the non-economic definition), and the amount of rent-seeking prevented by LVT is quite minimal. I doubt that enacting a reasonable tax on land would make a large difference in society by redistributing income from rent-seekers to those who earn an income from labor, capital, or entrepreneurship (the other 3 factors of production), and a high LVT would cause a large negative change to society.
Thinking about this more, a common Georgist narrative is that the Upper Class owns a significant amount of land, and fights to prevent the public from knowing about georgism as it would destroy their immoral source of rent-seeking money.
This is obviously and completely false. Rich people and large corporations own a much smaller fraction of their wealth in both land and Real Estate in general. I’m sure that in the late 1800s, in Henry George’s time of early capitalism, farmers, landlords, natural resource companies, etc. were much more common. Nowadays, basically the entire economy is in capital or intellectual outputs. Sure, IP has some problems that George pointed out, but he didn’t come up with very good solutions, and IP is labor with a touch of Entrepreneurship, not Land which georgist ideas could be applied to. Also, it is very difficult to make an idea leave the societal headspace by negatively campaigning against it. People know about communism and don’t support it. If communism had been successfully stopped by a campaign by the 1%, this is what you would expect to see, not a complete lack of knowledge of communism by the general public. (this is not me advocating for communism).
Georgism simultaneously frames itself as Marxist-style fighting the Bourgeoisie parasite class (this time rent-seekers), and also being a rational, intellectual, non-extremist set of ideas for property tax reform. Also, there are literally no objections, and everyone supports it.
No, Marx wasn’t a supporter of Georgism. No, the libertarian subreddit, which is for what is considered the closest ideology to georgism (aside from geolibertarianism, and other georgist offshoots), is vehemently anti-georgism. Maybe the “everyone famous supports it, and all political ideologies agree with it” is more “all political ideologies should agree with it”, and there are many famous people who lived when georgism was a large group in politics, so of course there will be famous people supporting it, as well as a large number of famous people against it, which doesn’t get mentioned.
When I post mild criticism of Georgism on the r/georgist subreddit, the commenters will act as if I am doing a terrible deed by questioning their ideas, as they are the perfect solution to everything, and to doubt that is to stop progress and perpetuate poverty. Anyone who promotes georgism is automatically deserving praise and cannot be criticized, even if they have extremely unusual behavior.
Maybe Modern Georgism is a movement that fails to recognize the actual benefits of a policy.
Old ideas will make you effective at solving old problems but not new ones.
Just Taxing Land claims to solve everything, except never the specific one you look at under a microscope.
All of the economists know that LVT is great, but nobody has heard of it, so you can still have a sense of superiority for knowing something unique.
Georgism doesn’t have an issue with unintended consequences, it has the issue of nonexistent consequences.
The solution to the housing crisis is building houses and reforming zoning.
Georgism is a pretty good idea, but just that. It will solve some problems, and make some minor changes, but it won’t be that big. If many states and localities enact some LVTes, it won’t be in the public school history textbooks 200 hypothetical years from now.
Yes, I would still vote for a georgist candidate in an election, but I wouldn’t run as one. The way forward is with bureaucracy and policies even more boring than fundamental political restructuring, not with invincible ideologies.
Most marxists believe that creating a communist society will automatically solve most issues affecting the worker class. This is why Marx spent much more effort critiquing capitalism than creating solutions for its problems, essentially believing Easy Conflict theory.
Land Value Tax: Like a property tax, but without tax on the building value.
Using an LVT as the sole funding mechanism for all government. I consider this to mostly be a relic of the time period when georgism was developed, with much less taxes and much smaller government used. In fact, some initially criticized georgism because it would generate too much tax revenue, and expand the government. However, geolibertarians are vastly in majority support of single tax, because of their support for small government.
When you hear 10% LVT, this is of the rent value (i.e. how much it costs to rent the property minus the cost the building contributes), not the total property value. If a plot of land is worth $100, and renting it costs $20, you would pay $2 under 10% LVT.
https://www.zillow.com/rental-manager/market-trends/united-states/
This is only for housing, not other types of land usage. I don’t think these differences matter very much.
https://chatgpt.com/share/689f5983-95c8-800e-b657-9c765a6daaf3
https://www.youtube.com/playlist?list=PLPdoRGhsS-tuA2NCFXV9xpEJbXUoAIFQL