The Crime of Poverty

[dsyddall]

@Autolykos

@dsyddall

You defy the laws of physics often then, do you?

I haven’t defied them so far. That doesn’t mean I never will.

You are quite an optimist!

@Autolykos

@dsyddall

What right did B have to sell his work in advance to A if it was never his in the first place?

I don’t understand this question. Could you please clarify?

Well, presumably, A’s right to sell his work to B derives from the fact that he is the legitimate owner of his work. If he is selling something that legitimately belongs to somebody else, or already belongs to the person to whom it is being sold, isn’t that fraudulent?

@Autolykos

Okay, so in other words, you’re saying that production implies property, but property does not imply production. However, production as a sufficient but not necessary determinant of property implies that one or more other determinants of property exist. Do you have any thoughts as to what they are?

That’s indeed what I’m saying. Another form of property besides that which I have created might be the right to prevent others from accessing my body.

@Autolykos

That’s not my point. My point is that it’s impossible to prove that presence of LVT encourages allocation of land to the highest bidder over its absence.

Yes, it can’t be deductively proved that LVT will improve allocation in any given instance, since it’s always possible that in that instance the land is already allocated to the highest bidder - but that’s not what I’m saying. My point is that since the holding costs of land are so low, and the rewards so high (regardless of who the land is leased to, since the greater part of the return is through asset price rises), it makes sense to own land even if you aren’t going allocate it to the highest bidder. During “boom” years, even poorly allocated (or even unallocated) land can be much more profitable than the same investment in capital goods.

@Autolykos

Okay, at this point, I have no idea what definition you’re actually using for “tax”.

A tax is an extra-economic obligation. That is, an obligation that results from privilege or coercion rather than the voluntary activity of the market.

@Autolykos

One reason among multiple is an example reason, isn’t it? I’m not demanding any evidence at all - I’m demanding proof.

If you don’t think the reason is a good reason, then provide a rebuttal. So far all you are doing is asking for more reasons.

@Autolykos

How do you expect “highest (financial) value” to be determined in the absence of anyone bidding (either because no one wants to bid or because the “land” in question isn’t up for bid)?

I don’t need to determine the highest value in order to make the claim that LVT encourages land to go to the highest bidder.

@Autolykos

@Autolykos

@dsyddall

Suppose there are n people who each value a piece of land at a different price x_i (i.e., they are willing to bid that particular amount if a bid were to take place). Suppose the list of valuations is ordered such that x₀ refers to the highest valuation and x_n-1 refers to the lowest valuation and that Px_i refers to the person who values the piece of land at price x_i. Supposing an auction was to take place and that the auction uses standard English auction rules, person Px₀ would have the successful bid at a cost of x₁.

Now, what I’m asserting here is that it does not follow from the fact that the landlord is not leasing his land, that x₁ = 0.

In that last sentence, do you mean x₀ instead of x₁? Your assertion doesn’t make sense otherwise, so I’ll assume you’ll answer my question affirmatively.

I mean x₁, since under standard competitive open bidding rules, the winning bidder pays the second highest bid. Think about the way eBay works - you can enter any amount as your highest bid, but you’ll only pay what the second highest bidder bids.

@Autolykos

What difference does it make that there are people willing to buy “land” at a given price, but the “land” isn’t for sale?

The difference it makes is that the difference between the highest bid and the current bid, if positive, represents a loss of production to the economy as a whole.

@Autolykos

Indeed, wouldn’t the fact that the “land” isn’t for sale suggest that the owner of the “land” considers its value (to him) to be above any and all would-be bidders?

Yes, but since the value he assigns is an imputed cost, he can assign any value he likes to it, even if it is not necessarily representative of the value he would assign if he actually bore the cost of his decision. In other words, while the economic cost of his action may be high, the accounting cost may be low.

@Autolykos

If I own “land”, and you come to me and offer to buy my “land” for $1 million, and I refuse, that means I prefer owning the “land” to owning the $1 million, doesn’t it? So the “land” is apparently already allocated to the person who considers it the most valuable - me.

Correct. Let’s suppose that you value the land at $2 million and I value it at $1 million, and that apart from yourself I have the highest bid. Under an open bid LVT (which would be my preferred implementation), the site would be assigned the taxable value of $1 million.