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A Libertarian Tomorrow Begins Today!

Gideon MacLeish

Join Date 06/2004

A Libertarian Tomorrow Begins Today!

(author's note: the article below was copied and pasted from my own forum post on a Libertarian message board.)

Believe it or not, the federal government over the last four years has given us as Libertarians an incredible gift. Because of their continued violations of individual liberties, they've given us common ground with many Americans who are disgusted with a "nanny state", and they've given us wonderful opportunities to initiate discussions with those who may be teetering on the fence between a choice for the LP, "independent" status, or either of the "big two" parties. In any objective evaluation of platform positions on individual liberties, the LP obviously emerges the big winner.

The question, then, is what we DO with the opportunity we have been given.

As an amateur historian, I believe we are at a political crossroads. My personal opinion is that Rand will be viewed as influencing the 21st century to the same extent that Marx influenced the 20th (although in a positive direction, unlike the negative direction of Marxism). If one watches the growth of libertarian ideals and principles, it's easy to see a parallel to encourage us along those lines. Our ideals have already begun to influence prominent columnists such as Walter Williams, and we have made inroads among the Republican Party (The Republican Liberty Caucus is an example of this).

But if we are to move forward, we must act, recruit, and encourage our fellow party members to act and recruit. I personally believe that our commitment should extend as far as ensuring that our party dues are paid up, and evaluating whether we can afford to contribute more to the party than we are already contributing. We should also set personal recruitment goals to complement the party's recruitment goals; we are, after all, the ones who can be instrumental in the success or failure of such goals.

I have personally set forth goals for myself and the county organization, and encourage others to do the same. If each LP member recruited one new member per year (with the recruited members doing likewise), we would have somewhere around 350,000 party members by November 2008. Imagine the impact if we DOUBLED that.

If every one of us set aside $30 a month towards the 2008 Presidential race(less than many of us pay for cable TV), then we would have over $1000 apiece to contribute to the Libertarian candidate. If every person who voted for Michael Badnarik in the 2004 race were to do that, that would give our presidential candidate a "war chest" of nearly half a billion dollars; easily enough to place them among the "serious players" in the race. Going further, we could up our commitment to $50 a month, and apply the additional $20 to local and state races. It may represent a financial sacrifice on your part, as it does on ours, but in the end, you should ask yourself what price you are willing to pay for freedom.

There's a tendency to forget about third parties between presidential election years. As a party, we should not let that happen. We should be active, visible, and speaking out at every opportunity...and we should take advantage of the low voter turnout of "midterm" elections (such as 2006) to put leaders who CAN and WILL make a difference into elected office. I would also encourage anyone who can to attend state conferences and conventions (such as the conference scheduled for September 16-18th of this year), but, as one who may be unable to attend due to a number of potential conflicts, I realize there are many among you in the same position. That doesn't change the fact that it is still in our best interest if we are able.

Yes, this also involves an intense TIME commitment on all of our parts, but again, we must ask: What price are we willing to pay for freedom?

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#14 by Andrew J. Brehm
Friday, July 29, 2005

"Land ownership creates security creates the value"

And that statement is plain wrong.

The value of a piece of land is not based on anything its owner does with it. It is based ONLY on what OTHER people do near it

Imagine two identical houses. Both owners have invested the same amount of money to create exactly the same buildings with exactly the same features.

Now for some reason somebody else happens to pay for a street (income tax payers, probably). And the street just happens to be located so that the one house benefits but not the other.

And the house thus becomes more valuable, not because of what it is, but because of where it is. It is not a property of the house, but a property of the location, of the land, that makes it more valuable.

It is not the ownership of the land that created the value.

It is the street.

Sorry Andrew, but THIS is what I was talking about! No where in your reply were you talking about taxes. Just the value of a piece of property. And no matter what you say, if you add buildings, running water or get electricity to it they are considered improvements and make the property worth more! Please note the highlighted section.

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"Bakerstreet has two problems here. One is the fact that he cannot grasp the idea that I was talking about land taxation, not any of the concepts he brought up (even though I repeatedly told him that). Resolving that issue would take more intellectual honesty on his part."

Leauki, aka Andrew J. Brehm, has several problems here. One is the fact that he has no idea of cause and effect, and doesn't realize that giving the government the right to tax natural resources enevitably leads to the concepts I brought up. Without the ability to enforce taxation of land, taxes are meaningless. Once you give them the right to seize and sell the land, you rent it, you don't own it.

Another is he doesn't read my posts, he just skips over them. As I said, I can take a bulldozer onto a piece of undeveloped land, and drive away at the end of the day with the land having increased in value by thousands or even tens of thousands of dollars, LEAVING NOTHING THAT WASN'T THERE BEFORE.

I think it is pretty obvious we're dealing with someone that has never managed any real estate, or had to pay property taxes. The idea that "Land cannot be improved" is so asinine I don't know why we are even discussing it.

If you want to define "land", feel free, but I would suggest you adapt that when dealing with the rest of society. I don't think the people that assess your property for taxation are going to be as patient as we are. You can call water, electric, roads, etc "produced goods", but in reality they become part of the value of your land.

And as I said, I can take a bulldozer onto undeveloped land and raise the assessed price of it by thousands without even getting into all that.

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"Sorry Andrew, but THIS is what I was talking about! No where in your reply were you talking about taxes. Just the value of a piece of property. And no matter what you say, if you add buildings, running water or get electricity to it they are considered improvements and make the property worth more! Please note the highlighted section."

I don't know what you were talking about, it wasn't the point. I was trying to tell you what _I_ was talking about and how Bakerstreet misunderstood it.

But it really begins to seem to me that what I wrote simply doesn't arrive in the same way I wrote it. You are saying that I wasn't talking about taxes at all (nowhere). I can clearly see that it was the subject of my postings and the word, in contrast to some of the words Bakerstreet quoted, does appear quite often.

May I inquire as to what exactly you where reading if you think that I wasn't talking about taxes?

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May I inquire as to what exactly you where reading if you think that I wasn't talking about taxes?

Quit skipping over stuff. I directly quoted your reply that I was refering to. It was reply 14. And there is "nothing" in there in regards to taxes. And for that matter baker misunderstood nothing. See his last reply and read the last 4 paragraphs.

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"Leauki, aka Andrew J. Brehm, has several problems here. One is the fact that he has no idea of cause and effect, and doesn't realize that giving the government the right to tax natural resources enevitably leads to the concepts I brought up. "

The fact that I disagree with you about the effect of taxing natural resources doesn't mean that I don't realise them. I merely disagree with you about what the effects would be.

And given that you STILL don't understand the difference between natural resources and produced goods, I don't believe that you have any idea what the consequences of taxing the one and not the other would be.

I am in fact a land owner and pay property taxes. But that doesn't mean that I don't understand the difference between a natural resource (like land) and man-made improvements (like a building or street).

If you can't or won't understand the difference, that is perfectly fine. But it does mean that you are UNABLE to judge a tax system based on the difference.

Just accept that.

If you want to criticise my theory, you can do so once you understand the basics of it.

I suggest you start with Adam Smith, who will explain to you why ground rents are an economic rent (payment to a factor of production or input in excess of that which is needed to keep it employed in its current use). Then, as I assume you wouldn't want to read "Progress and Poverty", which explains the whole thing at once, you can begin to understand why, for example, Milton Friedman was in favour of land value taxation (and why the founder of the LP is).

But as I said, all of it requires an understanding of the difference between natural resources and produced goods, and also considerable skills in reading a text without remembering different words.

As for your claim that you "can open a newspaper and see [the results of such a policy]", I would like to call it. Please quote a news paper that tells of negative results of land value taxation. I believe Estonia practices a land value taxation system (in case you need help finding a case).

I for one don't believe that you can find any such negative results as you claim exist. I put it to you that you completely made up the claim that land value taxation has negative effects and that such effects are so widespread that you can find evidence of them simply by opening a news paper. And I put it to you that such results would contradict what leading economists have said about the effects.

And I would bet you a post card that you will refuse to quote a news paper report about such effects or will change the subject to something I did not speak about again.

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"I directly quoted your reply that I was refering to. It was reply 14. And there is "nothing" in there in regards to taxes. And for that matter baker misunderstood nothing. See his last reply and read the last 4 paragraphs."

You must have missed several of my replies where I was going on about taxation. How odd. In the very text you quoted (#14 apparently) I speak of how income tax pays for streets and such.

And Bakerstreet did misunderstand a lot. He still doesn't seem to understand the difference between land and improvements and how these improvements (man-made such) are NOT a part of the land (the natural resource), and would thus not be taxed (by a system that taxes natural resources instead of produced goods).

Re-reading what Bakerstreet wrote doesn't change the fact that he misquoted me (and apologised for it once) and never understood that I was talking about taxing natural resources of which I consider man-made improvements not to be a part of.

Perhaps if the two of you could simply accept that there is a difference between land and improvements and that land value taxation taxes the one but not the other, you would be able to build a case against land value taxation. But without understanding what a particular tax taxes, any argument against it is plain nonsense.

I guess we will have to wait for the news paper report Bakerstreet claims to have found.

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If you will note the first statement about land taxation I have made:

"I'd only want a few changes to get closer to my ideal place. For example if use of land and other natural resources as well as pollution (which is, in a way, also a use of a natural resource) was taxed and income and property (that is personal property, aka stuff) were not, the guiding principle would be exactly what I mentioned: natural resources would benefit everyone (users would pay a tax that benefits everybody else) and one's own labour would benefit oneself (since no other man has any claim to it, I think)."

Bakerstreet responded to that thus:

"If the government can "redistribute" land and natural resources for the public good, the natural resources "benefit everybody", and we're taxed for using the land, do we really own it?

If you take the benefit from land ownership, and allow the government to "manage" land ownership, then is there really any point IN land ownership?"

Note how I didn't speak of "redistribute" and "manage", even though he puts the words in quotes as if referring to something I or somebody else had said. I informed him of what I considered a misunderstanding on his part:

"I did say "tax" land ownership, I did not speak of "redistribute", even though you put the word in quotes. Redistributing land is a concept you brought up, not I. Please remember that when you address my point, should you decide to do so."

A second misunderstanding came about when I tried, apparently unsuccessfully, to explain that taxing natural resources means taxing natural resources, not taxing man-made things.

That's the part he never understood. Instead he continued to speak of government "managing" land, even though I have never said anything about supporting such a concept.

Since then he continued to put words in quotes even though I kept telling him that I neither said the words nor made any claim to support the position they described.

That's when I thought that I cannot explain my position to him.

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The results of land value taxation:

www.findarticles.com/p/articles/mi_m0254/is_5_59/ai_70738923

While I could not simply open a news paper to see the results, I could find it on the Web. It seems my memory of Estonia using such taxation was correct. What I do not find is the negative effects Bakerstreet claims to have found doing similar research (or the effects he is sure he will find should he do such research).

I therefor put it to Bakerstreet that the effects of land value taxation are not negative, certainly not quite as negative as he thought they would be, that it is not as easy as he claimed to find evidence of such negative effects, and that his opinion on land value taxation is based on ignorance of the effects, unwillingness to research the effects, and the belief that land value taxation leads to government land management (a point he has neither supported with evidence nor explained).

I also suggest that government land management, in the form of, for example, imminent domain, is probably the result of policies unrelated to taxation of the properties involved and certainly not the result of specifically a land value taxation system.

If Bakerstreet wants to support his position, he would have to point out why Estonia's results are either bad for Estonia or incorrectly reported in the article linked to, and find statistics that support the idea that government land management happens more often in Estonia because of their tax system than in the US because of theirs.

Otherwise I suggest that Bakerstreet change his mind and say that land value taxation does not inevitably lead to government land management, that the effects of land value taxation are not uniformly negative, and that making the claim that the effects are positive does not necessarily document cluelessness (I know that is not a real world) or a regrettable disability to understand reality.

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I don't pay taxes to you. The people who assess my property, and the people who come to buy it, DO count improvements that you irrationally consider to be "improvements to the nature of space time." If I don't pay those taxes, my property IS redistributed to someone who will. That right eventually led to the right to simply snatch it and redistribute it for the greater good.

You see this a lot from his ilk, though. They invent some system, and then when you try and show them the results of it in the real world, they accuse you of diverting the subject away from their system. What he calls "research", the rest of us call reality, since we actually live in it. I get the bills. Research is for people who pretend to own land to better serve their argument.

It's like someone theorizing that we should have rain 24/7, and when you tell them there would be floods, they accuse you of making "straw man" arguments because in their system there are no floods. That's been the way of socialists for a long time, really, much to the regret of several billion people around the world. Jokes are funny, but I'm tired of arguing with this one.

I suggest you explain your theory of land ownership the next time you pay property tax, tell that the only value is, I suppose, the minerals. Refuse to pay for all those man-made improvements. Then tell them later as they are auctioning it off that your system doesn't include redistibution...

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So I take it you didn't read the article about Estonia and I see that you still didn't get the difference between land and improvements (and why property tax is not the same as a land value tax).

I did not claim that buildings are "improvements to the nature of space time". I referred to the land itself, which you claimed could be "improved" while I maintain that such improvements constitute man-made objects and not a part of the natural resource land.

Your straw man was not your pointing out what would happen if we taxed land values, your straw man was your repeated attempt to change the subject.

I have provided evidence for my point of view, that land value tax does not have the negative effects you claim it would have.

I am waiting for you to either refute my evidence or provide some of the evidence you claim you could find simply by looking in the daily news paper.

I also suggest that your last paragraph is, again, a straw man. A change in the taxation system from property tax to land value tax is not something one would successfully enforce oneself by violating current tax law. I assume that those in the Libertarian Party who support a flat tax do not use that strategy instead of paying progressive income tax either. I assume you might, since you obviously believe that this is a procedure that would occur to people. It has not to me. You were the first to suggest it, I believe.

Did you do ANY research at all since I last brought it up or is your opinion still based on the refusal to find out what land value tax does and what the effects are.

I'll give you a hint: if you still believe that land value taxation includes the taxation of a building's value, you have NOT understood it. But I somehow doubt you will ever grasp it.

Let me just say that land value tax is economic text book. It has first been suggested by Adam Smith, the principle of it has been advocated by Thomas Jefferson and Thomas Paine, the economic impact has been explained by Henry George and much later Milton Friedman. It is for that reason, I suggest, that the founder of the Libertarian Party, David Nolan, supported the land value tax (and presumably still does).

And in no case did land value tax ever have the negative effects you claim it would have. Wherever it has been used (currently Estonia, Hong Kong, Taiwan, and Singapore, as well as in several Australian cities) the effects were not what you said they would be but instead quite the opposite.

How you can hold an opinion based on nothing but your belief that disagreeing with you about this means one has no clue and without an explanation for why in reality the effects you foresee never seem to happen, is beyond me.

But you know what the good thing is? The good thing is even if you are now even more certain of the stupidity of my tax scheme and the fact that I have absolutely no clue and that you are so much smarter than I, Estonia will probably do well with the scheme in the future too, just as they have in the last ten years.

Using your rain analogy, I would have to say that the correct analogy is arguably that you are certain that rain would have only negative effects, that it is very logical that rain could not possibly have a positive effect, that anybody who suggests otherwise has simply no clue, and that evidence that rain in Estonia does not have the effects you claim it would have could not be explained by you. It wouldn't even be addressed by you. At all.

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kingbee

Join Date 04/2004

+42

i guess this land tax thing explains why arthur j brehm shot george wallace in 72. what it dont explain is why they let him have a computer in jail.

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kingbee

Join Date 04/2004

+42

ooops sorry. that was arthur bremer. jeez im a moron sometimes.

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Kingbee,

what is the connection here?

Or were you suggesting another example of the negative effects of land value taxation using the Bakerstreet system of generating evidence?

In that case I must agree that you succeeded. I concede that murder is often considered to be as direct an effect of land value taxation as the things Bakerstreet spoke about.

In fact I would personally make the claim that the relationship between land value taxation and murder is almost exactly the same as the relationship between land value taxation and the Bakerstreet results, and that you would be similarly likely to find evidence for the one effect as for the other in news papers or the Web.

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Kingbee,

apart from the joking, I am rather interested in one thing.

Did you read the article about land value taxation in Estonia before you made the joke about the madness of supporters of land value taxation?

Or was your ridicule based solely on ignorance?

Or were you perhaps aware of some of the evidence Bakerstreet believes exists and preferred ridiculing me over supporting your position with that evidence?

To be honest, I'd rather learn of the downsides of land value taxation than being insulted for supporting it.

But it seems like ridicule and insults are more often used as arguments against land value taxation than evidence of its alleged disadvantages.

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I did not claim that buildings are "improvements to the nature of space time". I referred to the land itself, which you claimed could be "improved" while I maintain that such improvements constitute man-made objects and not a part of the natural resource land.

You are correct, buildings "are" man made and as such not a "natural resource. How ever I believe the point baker is trying to get across is that any taxation of the land by the us government will most certainly increase if any buildings are present on the land. And there will not be a separate line item on the tax roll for a building or for natural resources for that matter either. As far as the US government is concerned anything done to or on the property "increases" the intrinsic value and as far as they're concerned is an improvement. And btw....here's an excerpt from your quoted article:

is important to note the distinction between a land tax and a land-value tax, since historically there have been land taxes, such as the disastrous ryot tax in 19th century British India, which was a set amount levied without respect to the land's economic rent. In Estonia, although referred to simply as a land tax, the tax is defined by law as a land-value tax, since the statute bases it on market value. At the beginning, however, it did not really function as a genuine land-value tax. Although it was supposed to be based on market value, a true land market tax had not yet developed.

Which kinda shoots your whole argument in the foot.

Especially since "market value" takes into account all "man made" improvements.

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*boggle* Take your own advice and end this.

a) I have explained to you that you can improve upon the value of land and not leave a single thing behind that wasn't there before. land can be simply leveled or reshaped and its value is considerably increased.

I have explained that even if you and your "system" don't consider infrastructure improvements, basically everone else in the world does, and they do increase the taxable value of your land.

c) Estonia is a nation smaller than your average US state, with a population smaller than a major city, with negative population growth and an unemployment rate of 9.6 percent. Despite their size, they have a national debt of over 8 billion dollars, and recieve $108 million in foriegn aid.

So, I'm not sure that this success story you are foisting is much help to your "system" that vaguely resembles it. I think if, say, Los Angeles has a larger, more successful economy and less debt, it seems odd you have to go halfway around the world and find a moderately UNsuccessful nation to prove your point...

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"It [the tax] is based on market value of the land only (i.e., exclusive of improvements)."

"the tax is defined by law as a land-value tax, since the statute bases it on market value."

"Which kinda shoots your whole argument in the foot."

No, it doesn't. It merely specifically explains the difference between a land value tax and a "land tax" or property tax.

OF COURSE land value tax is based on the market value of land. That's what "land value" means. The idea of the land value tax is to tax the value of the land, not the improvements. The value to tax is based on the market value of the land. It's not the same as the market value of the land though.

That is the difference I have been trying to explain for some time now, and I see that it is still not understood.

If you have two lots, one with a house worth, say 250,000 coins, and one worth 500,000 coins, the first being on land worth 500,000 coins, the second being on land worth 250,000 coins, a property tax would tax them equally, a land value tax would not.

You will notice that the article specifically says this (and I have added the quote above as well to make the contrast more clear):

"It [the tax] is based on market value of the land only (i.e., exclusive of improvements)."

The article talks about a tax that SPECIFICALLY and ONLY targets land values EXCLUSIVE OF IMPROVEMENTS, and Estonia is doing well with it. Bakerstreet might not recall this, but some 15 years ago Estonia was ruled by Russian communists. It didn't start of too well when it was released into the wild. To claim that it was the land value tax that caused Estonia's relative poverty would require evidence that Estonia did better under communism or in the years between communism and introduction of the land value tax, which was introduced, if I recall correctly, in 1996. Such evidence was not brought forward, I think; not even by Bakerstreet.

My point is that despite Bakerstreet's claims the land value tax did neither destroy Estonia's economy nor did it result in any of the other scenarios Bakerstreet proudly announced to be the logical effects of the tax. And the reason I didn't use Los Angeles to prove my point is simply that I wasn't aware that Los Angeles had a land value tax (in fact, I don't believe Los Angeles has a land value tax). So I obviously chose a country that does.

My point is also that you apparently didn't understand what it means to take into account market value of the land. It does NOT mean that improvements are taxed, because the article specifically says that they are not taxed. It DOES mean that the market value of land is used to determine the value of the land sans improvements.

I would also like to add that I did not choose a random country from the other side of the world. I live in Europe. In grew up in West-Berlin. For me Estonia is not a remote little country. It is, of course, one of the new EU members. I thought an example from my area would do.

But then I am still eager to hear about the evidence for the negative effects of land value taxation that Bakerstreet said would be so easy to find. Perhaps such examples do require the ability to differentiate between land value tax and property tax though...

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To answer your early charges, Baker...I don't see where the LP philosophy must necessarily put us at odds with prolife Christians. You see, while the LP does support a woman's right to choose, we do NOT support a woman's right to use OUR money to finance her abortion...a large part of the battle going on nowadays regards abortion funding issues.

As for the drug issue, while it's fun to caricaturize libertarians as coked up perverts, the simple truth is that we are not advocating for drug usage, just its decriminalization and regulation. Want to get it out of the hands of minors? Guess what? The current system isn't working to achieve that end. Regulate the trade, and while you won't keep it out of the hands of minors entirely, you create a system whereby you can better track the drug's origin and hold the responsible persons accountable for inappropriate action. Even so, it's pretty much a commonly held myth to believe that the drug legalization/decriminalization issue is the most pressing issue for most Libertarian candidates. Many other issues take the stage.

As Republicans continually abandon fiscal responsibility and smaller government, and increasingly take antagonistic stances where individual liberties are concerned, many voters will find themselves "homeless" with the Democratic Party as an unacceptable alternative. The Libertarian Party platform, while far from perfect, has more room for reform than the platforms of EITHER of the "big two" because we are not bought and sold by big business in this country.

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Gid, Gid, Gid...

I never meant to imply that Libertarians were "coked up perverts", only that the Libertarian cause embraces many divergent moral stances, and there are some that people simply won't swallow when writing a check. An NRA Southern Baptist isn't going to donate money that will end up fostering a drug legalization, pro-choice platform. A Clintonian Liberal isn't going to donate money to a party that is anti-gun control, anti-social welfare tax.

I don't pretend that the other parties aren't self-serving with some of the stances they take, and I think the Republican party grants little more than lip service to issues like abortion. Still, though, I simply can't see moral Conservatives embracing a party that openly opposes them on moral issues.

Leuiki: "doing well with it" is pretty relative in this case, wouldn't you say? Granted, they haven't had a lot of time to prove these practices, but honestly I would have to view them skeptically until I saw something that proved the system was superior. Taxes are key in terms of their national budeget, and frankly they don't seem to be cutting it any better than we are, do they?

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Bakerstreet,

I did not claim that they are doing better than western nations. But the results the have are a lot better than the results you claimed were the obvious logical results of such a tax scheme. They might just do better than some western nations in a few years.

But I think comparing Estonia to western nations is not quite as useful as comparing them to other ex-soviet republics. And among those Estonia is doing extremely well. Their GDP/P is much higher than everybody else's (in that league) so it can certainly be said that LVT did not have quite the destructive effect you claim to be able to find.

Estonia Latvia Lithuania

1995 $5,480 4,810 3,240
2005 $16,461 11,500 12,500

Granted, Lithuania grew a bit faster than Estonia in these ten years, but then Lithuania is much closer to the rest of the EU, while Estonia has only Finland and Sweden (and Latvia) as immediate neighbours to work with. (My numbers are from the CIA World Fact Books of 1995 and Wikipedia for current numbers.)

Estonia also introduced a flat tax of 26% on income in 1994. Using a flat tax instead of a (typical) progressive income tax is a step towards taxing natural resources but not production (because it taxes production less than the progressive income tax does).

But I have yet to hear any of the horror stories you claimed would be the logical result of the tax scheme, the result I was just to clueless to foresee.

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The article talks about a tax that SPECIFICALLY and ONLY targets land values EXCLUSIVE OF IMPROVEMENTS, and Estonia is doing well with it.

Sorry, but no it's not! You did not read my quote that came from your link. I'll try again:

important to note the distinction between a land tax and a land-value tax, since historically there have been land taxes, such as the disastrous ryot tax in 19th century British India, which was a set amount levied without respect to the land's economic rent. In Estonia, although referred to simply as a land tax, the tax is defined by law as a land-value tax, since the statute bases it on market value. At the beginning, however, it did not really function as a genuine land-value tax. Although it was supposed to be based on market value, a true land market tax had not yet developed.

From your own link Estonia is operating on a land "value" tax NOT a "land tax"!

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Drmiler,

of course Estonia is operating on a land value tax. The difference between what the article calls a "land value tax" and a "land tax" is that a land value tax taxes LAND ONLY and NOT IMPROVEMENTS, while a land tax would tax both.

This is still the very same difference between natural resource and produced good that I have been trying to explain for some time now.

The article makes that very clear:

"It [the tax] is based on market value of the land only (i.e., exclusive of improvements)."

Did I not make it totally and absolutely clear that I believe that it is a) possible to distinguish between the value of land (i.e. the natural resource) and the value of improvements (i.e. buildings, streets, mines etc.) and

that a tax scheme based on the distinction would be of advantage?

And the article says that Estonia does exactly that. So what exactly is your point now?

And I did read the text you quoted. That's why I specifically addressed it in my reply:

"OF COURSE land value tax is based on the market value of land. That's what "land value" means. The idea of the land value tax is to tax the value of the land, not the improvements. The value to tax is based on the market value of the land. It's not the same as the market value of the land though."

Did you not read that part of my reply? Or did you not make the connection between my remarks about the market value of land and the text you quoted which spoke of the same issue?

I'll try and explain it slowly.

1. The article speaks of a tax that targets land but not improvements of the land: "It [the tax] is based on market value of the land only (i.e., exclusive of improvements)."

2. The article says that the value of the land is determined using the market value of the land, as per your quote.

3. I spoke of a tax scheme in which natural resources (including land) would be taxed, and produced goods (like improvements) would not be taxed.

4. Again, the Estonian system taxes land (according to its value), but not improvements (i.e. produced goods located on it). That is why the article speaks of a "tax based on market value of the land only exclusive of improvements".

5. Bakerstreet claimed that such a tax scheme as I described would have horrible results, that I must have no clue at all if I am not able to see that, that it would only work if we all lived in tents, and that there is no distinction between man-made improvements and the natural resource "land".

6. He also claimed that evidence for his claim can easily be found in a news paper.

7. He did not provide such evidence.

8. But Estonia, a country which uses a tax system where land (the natural resource) is taxed and improvements (the produced objects located on it) are not, does not seem to suffer from these obvious results, which Bakerstreet refers to. The article does in fact claim that the tax has had a positive impact on the economy, because it prevents land from lying idle.

Where is the mistake?

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that a tax scheme based on the distinction would be of advantage?

And the article says that Estonia does exactly that. So what exactly is your point now?

No it does NOT! Are you being deliberately obtuse?

important to note the distinction between a land tax and a land-value tax, since historically there have been land taxes, such as the disastrous ryot tax in 19th century British India, which was a set amount levied without respect to the land's economic rent. In Estonia, although referred to simply as a land tax, the tax is defined by law as a land-value tax, since the statute bases it on market value. At the beginning, however, it did not really function as a genuine land-value tax. Although it was supposed to be based on market value, a true land market tax had not yet developed.

Excuse me, but basing a tax on "market value" is NOT a land tax! Do I need to spell it out for you?

8. But Estonia, a country which uses a tax system where land (the natural resource) is taxed and improvements (the produced objects located on it) are not, does not seem to suffer from these obvious results, which Bakerstreet refers to. The article does in fact claim that the tax has had a positive impact on the economy, because it prevents land from lying idle.

Where is the mistake?

The mistake is that you are operating under a erroneous assumption. See high-lighted section above and then refer to my high-lighted section.HERE:

a true land market tax had not yet developed

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drmiler,

the article specifically says that the value of land without improvements is taxed.

Assuming that this is so is NOT an erroneous assumption.

The text you quote says that _AT THE BEGINNING_ a "true land market tax had not yet developed".

The article says that Estonia has a land value tax and defines "land value tax" as a tax on land values excluding improvements, which is exactly the kind of tax I spoke about.

So what is your point?

The first main characteristic of the tax is "It is based on market value of the land only (i.e., exclusive of improvements).", according to the article.

But I am being "deliberately obtuse" if I assume that this means that land (the natural resource) is taxed, but the improvements (produced objects on it) are not???

If your point is the assumption that Estonia does not actually tax land values (while not taxing improvements), then I suggest you re-read the article.

Do you understand that the article describes a system in which a natural resource (land) is taxed but a produced good (improvement) is not?

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You don't see the corruption in a farmer with 20 acres paying the same 'land tax' as the Oligarch who has 20 acres jammed with infrastructure dragging in the wealth? I find the equity of such an arrangement a little odd, though I am sure the cronies of local politicians LOVE the idea.

As for the results, I explained it several times, you've just chosen to ignore it. When you don't pay your taxes, the land is taken. The right to take your land leads to the right to redistribute it for the greater good. I don't have to prove it, since anyone who has read many blogs or watched the news in the past month has seen it happen, and has seen it justified at the Supreme Court level.

Land taxation makes us tenants, not owners. If we don't pay our taxes (rent) the government (our landlord) takes it and leases it to someone else. The landlord role has granted them the attitude that even when we do pay our taxes, said land can be taken and redistributed if it is in the public interet. If you aren't aware of any new developments in that area, I suggest you pay a bit more attention to the news.

If this is going to continue, you guys need to take it elsewhere. Gid isn't writing about experimental Estonian taxation, or the validity of the idea that "Land cannot be improved". I played into it too much, myself, and the futility of it has proven itself over and over.

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