Why We Can’t Tax Land Values Down to Zero

by Polly Cleveland

Georgists often claim that we can and should tax land values down to zero, or almost zero. However, this claim depends on ignoring how taxes are spent. As Mason Gaffney has shown, All Taxes Come Out of Rent (ATCOR) — including bad taxes like sales taxes. Moreover, all deadweight loss or “Excess Burden Comes Out of Rent” or EBCOR. Less obviously, all subsidies and spillovers from public investments go into rent, call this ASGIR. Let’s take three examples to follow the implications. Continue reading

Sacred Water, Profane Markets

On May 19th, a forum explored the issues raised by Mason Gaffney in a special issue of the American Journal of Economics and Sociology (Nov. 2016). Held at Manhattan’s Open Center, the event was sponsored by the Journal, the Robert Schalkenbach Foundation and the International Union. Three featured speakers and three respondents shared a wealth of provocative information on the challenges and opportunities in water policy today. Continue reading

The Public Financiers:

Ricardo, George, Clark, Ramsey, Mirrlees, Vickrey, Wicksell, Musgrave, Buchanan, Tiebout, and Stiglitz, by Colin Read, Palgrave-MacMillan, 2016. Review by Bill Batt

Professor Read gives us an eminently readable book about the leading economists responsible for developing the sub-discipline of public finance. It is part of the author’s “Great Minds Series.” Continue reading

What Trump (Doesn’t Get) Right on Trade

by Lindy Davies

Alan Tonelson is a Research Fellow at the US Business and Industry Council Educational Foundation, an organization that seeks to shore up US “sovereignty” by means of protectionist trade policy. On March 2nd, he contributed an op-ed piece to the New York Times praising Donald Trump’s ideas on international trade. Continue reading

A Few Questions for Mason Gaffney

We thought this might be an opportune time to check in with the eminently sane Prof. Mason Gaffney at his home in Redlands, California. The author of The Corruption of Economics, After the Crash: Designing a Depression-Free Economy and The Mason Gaffney Reader (as well as hundreds of published papers and articles: see masongaffney.org )has slowed down a little, perhaps, but not awfully much. Continue reading

Charting the Costs of Land Speculation

by Lindy Davies

The familiar “Law of Rent Chart” first appeared in print in the 1915 book by Louis F. Post, The Taxation of Land Values. The chart shows the simple fact that different locations offer different productive potentials — and that the wealth the average producer can create, and keep, on the free land represents the alternative return for producers everywhere. Continue reading

On Fictitious Commodities, and Sacred Land

by Lindy Davies

It’s very likely that we Georgists will keep trying to “diagnose our failure” until society finally adopts the Georgist remedy. One chestnut that’s resurfaced recently is the notion that our focus on the land monopoly, while OK as far as it goes, naively ignores other modern evils that do just as much damage. Continue reading

Did You Know?

15cpwby Polly Cleveland

One of New York City’s priciest and poshest addresses is 15 Central Park West, home of elegant twin limestone towers, and many celebrities. The 36-story, 202-unit building was was completed in 2008, at a cost of $950 million. Before that, this lot, on the Central Park side, had been vacant for many decades. It had been owned by a Greek shipping family, but was finally pried loose for $401 million in 2004.

On the Broadway side of the lot stood the old Mayflower Hotel. Its last resident, a 73-year old rent-controlled tenant, was paid $17 million to give up his lease.

Condos in this building have been owned by the likes of Robert DeNiro, Alex Rodriguez and various cash-loaded Russian oligarchs. Sales to date stand at $2.5 billion. Units in this building are notably good investments; apartments purchased for $5-7 million are now flipping for $30 million and up.

niceviewNew York City’s property tax system offers a sweet deal to condominium owners. Units are assessed as though they were rental apartments; their often gigantic asset value does not enter into the property tax picture at all. This has created a gigantic speculative market in luxury condos, which has spurred the recent trend toward “supertall” luxury buildings.

supertall