Re: Tax with positive growth effect
- Original Message - From: "Fred Foldvary" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Friday, November 02, 2001 9:25 AM Subject: Re: Tax with positive growth effect > > Whereas if there were no tax (i.e. if it was voluntary), individual > businesses would be reluctant to use their money that way, even if > they knew that everybody would be better off if everybody invested > their share into the collective fund > > (prisoner's paradox). > > Gustavo > > Does the prisoners' paradox not disappear when the game is on-going > and the participants may communicate? Why would a trade association > with mutual benefits not work? > The prisoner's dilemma does not tend to disappear when there are many participants. It pays off to be a leech. If there are enough leeches, participation in a trade association may cost too much for the benefits it provides. It would be more beneficial to not participate in the trade association and reap the benefits anyway... in this case, the people who do participate end up paying for the ones that don't. Again, this is because the return is collective while the investment is invididual. (unless we have a mandatory investment, i.e. a tax) Gustavo
Re: Tax with positive growth effect
> Whereas if there were no tax (i.e. if it was voluntary), individual businesses would be reluctant to use their money that way, even if they knew that everybody would be better off if everybody invested their share into the collective fund > (prisoner's paradox). > Gustavo Does the prisoners' paradox not disappear when the game is on-going and the participants may communicate? Why would a trade association with mutual benefits not work? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Tax with positive growth effect
>> cost of replacing the building, subtracts depreciation, and that >> amount is subtracted from the prevailing market prices in that >> neighborhood to estimate the land value. > I agree, but you are talking about is price of land, not its value; > that is market price!!!The difference makes the difference. > Alexander Guerrero I don't understand what difference you are referring to. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Tax with positive growth effect
--- [EMAIL PROTECTED] wrote: > For a very brief period of time several places in South Carolina > tried to tax idle land. The accessor would try to figure out what the most valuable improvement to the land would be and then asses based on that. It was a horrible failure. > What did happen is that landlords would throw up the absolute cheapest building that he could in order to avoid the assesor coming up with some idea.< > Mitch That is an incorrect way of assessing land value. The correct way to estimate the land value based on its best use is to use typical neighboring land values. The particular improvements of the particular plot under consideration should be utterly ignored. The site owner would then have no incentive to put up something just for show. Hong Kong is an example of successful public revenue from land value or rent. Under the UK colonial government, the government there obtained much of its revenue from leasing sites, which in turn were leased for 99 years from China until 1997. The rental revenue enables the administration to have low taxes (they could have zero taxes). Sidney, Australia, is among several cities world-wide which exempt improvements from the real-estate property tax, taxing only the land value. It does not seem to me that there have been any ill effects there or other cities that exempt improvements. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Tax with positive growth effect
> > No, the whole rationale for taxing land value is that it does not > > matter what the site owner does with the land. >What you are proposing is a kind of capital tax. I do not have >anything against it, but your face the economic consequences of >taxing "capital". No, because land is not capital. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Tax with positive growth effect
I agree, but you are talking about is price of land, not its value; taht is market price!!!The difference makes the difference. Alexander Guerrero - Original Message - From: "Fred Foldvary" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Friday, November 02, 2001 2:20 AM Subject: RE: Tax with positive growth effect > --- Alexander Guerrero <[EMAIL PROTECTED]> wrote: > > How do you estimante market value? > > With respect to land value, besides monitoring sales and rentals of > undeveloped land or sites such as parking lots, one estimates the > cost of replacing the building, subtracts depreciation, and that > amount is subtracted from the prevailing market prices in that > neighborhood to estimate the land value. > > > and what kind of land you are talking about > > All land. > > Fred Foldvary > > = > [EMAIL PROTECTED] > > __ > Do You Yahoo!? > Find a job, post your resume. > http://careers.yahoo.com >
RE: Tax with positive growth effect
--- Alexander Guerrero <[EMAIL PROTECTED]> wrote: > How do you estimante market value? With respect to land value, besides monitoring sales and rentals of undeveloped land or sites such as parking lots, one estimates the cost of replacing the building, subtracts depreciation, and that amount is subtracted from the prevailing market prices in that neighborhood to estimate the land value. > and what kind of land you are talking about All land. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Tax with positive growth effect
All I am saying is that it is possible, *in principle*, for the effect of the increased tourist consumption to overcome the costs imposed by this tax. The point is that everybody benefits from the advertising investment, and if this investment was voluntary (i.e. not a tax), it could happen that while the investment pays off as a whole (i.e. total return > total investment), it doesn't pay off for the people who made the investment (i.e. return for investor I <= investment by investor I) (e.g. if they were the only ones investing in it). Whereas, if the investment was mandatory (i.e. a tax), the return for most individual investors could exceed their investment. Of course this has problems, as some businesses may NOT benefit from the investment the are paying for. Not to mention the ethical problems of taxation. If you are saying that this is impossible, the burden of proof is on you. Gustavo - Original Message - From: "Alexander Guerrero" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, October 31, 2001 2:57 PM Subject: Re: Tax with positive growth effect > This statemente is not true, investment decision are no taken for government > advertisement campaigns. Investors ask for, first of all, the rule of law to > be accomplished, clear rules of the game, low taxes, they know hau to > calculate the return of their investment. On the other hand, taxes collected > for this advertisement campaign, recue consumption, investment and make > investment costly, so reduces wealth. > Alexander Guerrero > St Antonys College > Oxford University > > > - Original Message - > From: "Gustavo Lacerda" <[EMAIL PROTECTED]> > To: <[EMAIL PROTECTED]> > Sent: Thursday, November 01, 2001 2:14 AM > Subject: Re: Tax with positive growth effect > > > > In the following example, it isn't the taxing itself that promotes growth, > > but its spending. > > > > If a state uses tax money to attract rich tourists to the area (by > > advertising, for example), that could promote consumption, in such a way > > that the tax promotes growth more than it hampers it. Whereas if there was > > no tax (i.e. if it was voluntary), individual businesses would be > reluctant > > to use their money that way, even if they knew that everybody would be > > better off if everybody invested their share into the collective fund > > (prisoner's paradox). > > > > I would be interested to know if there are real-world cases of this, or of > > any tax promoting economic growth. > > > > Gustavo > > > > > > At 08:20 PM 31-10-01 +0200, you wrote: > > > > >Has anybody read/heard about a tax which does have a positive effect on > > >the economic growth? The professors at my university say so, but I > > >wouldn't be so sure so that's the reason I'm asking. > > > > > >Also I'm writing my course paper about the effects of the fiscal policy > to > > >economic growth. Any good links, thoughts, ideas etc. would be > > >appriciated. > > > > > >Regards, > > >Kristjan Kanarik > > >
RE: Tax with positive growth effect
Something is not clear jet to me in your post. How do you estimante market value? and what kind of land you are talking about, the one that is urban or the one that potentially for agricultural reasons. Alexander Guerrero >Just taxing idle land isn't the Georgist tax as I know it. In Australia it >is used by most local councils as a primary source of revenue. The point is >to tax all land based on market value. Thus idle land becomes expensive to >keep. Very expensive in the Georgist model as this is the sole source of all >tax! It sounds very equitable. It is a resource tax not a capital tax. The >greatest part of the retail land value often is position position position. >Thus it encourages diversification and taxes high status areas higher. I >like the idea of only taxing common resources one of which is social >position. Is there a problem with that? > >> -Original Message- >> From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of >> [EMAIL PROTECTED] >> Sent: Thursday, 1 November 2001 6:31 PM >> To: [EMAIL PROTECTED] >> Subject: Re: Tax with positive growth effect >> >> >> For a very brief period of time several places in South Carolina tried >> to tax idle land. The accessor would try to figure out what the most >> valuable improvement to the land would be and then asses based on that. >> >> It was a horrible failure. While I don't know of any corruption, you >> can imagine that there was an opportunity for it. What did happen is >> that landlords would throw up the absolute cheapest building that he >> could in order to avoid the assesor coming up with some idea. >> >> It turns out that cheap often vacant buildings have all sorts of >> externalities that idle land does not have. I don't think the >> experiment lasted a full two years. >> >> Mitch >> >> - Original Message - >> From: Fred Foldvary <[EMAIL PROTECTED]> >> Date: Wednesday, October 31, 2001 11:39 pm >> Subject: Re: Tax with positive growth effect >> >> > --- Alexander Guerrero <[EMAIL PROTECTED]> wrote: >> > > Well before yo tax "idle" land, you must be "sure" that the land >> > > is "wasted", >> > >> > No, the whole rationale for taxing land value is that it does not >> > matter what the site owner does with the land. Those who "waste" it >> > will have to pay the same rate as those who maximize rental income. >> > >> > > And, believe me, this is something which has been >> > > always very difficult to assess. >> > >> > How do you know? >> > Insurance companies manage to appraise land value, because they don't >> > want the insured to collect on that if the building burns down. >> > >> > > The big >> > > question is : Does the land lord like to have idle land? >> > >> > If he does, fine; let him pay for that consumption. >> > >> > Fred Foldvary >> > >> > >> > = >> > [EMAIL PROTECTED] >> > >> > __ >> > Do You Yahoo!? >> > Make a great connection at Yahoo! Personals. >> > http://personals.yahoo.com >> > > > >_ >Do You Yahoo!? >Get your free @yahoo.com address at http://mail.yahoo.com > >
RE: Tax with positive growth effect
Just taxing idle land isn't the Georgist tax as I know it. In Australia it is used by most local councils as a primary source of revenue. The point is to tax all land based on market value. Thus idle land becomes expensive to keep. Very expensive in the Georgist model as this is the sole source of all tax! It sounds very equitable. It is a resource tax not a capital tax. The greatest part of the retail land value often is position position position. Thus it encourages diversification and taxes high status areas higher. I like the idea of only taxing common resources one of which is social position. Is there a problem with that? > -Original Message- > From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of > [EMAIL PROTECTED] > Sent: Thursday, 1 November 2001 6:31 PM > To: [EMAIL PROTECTED] > Subject: Re: Tax with positive growth effect > > > For a very brief period of time several places in South Carolina tried > to tax idle land. The accessor would try to figure out what the most > valuable improvement to the land would be and then asses based on that. > > It was a horrible failure. While I don't know of any corruption, you > can imagine that there was an opportunity for it. What did happen is > that landlords would throw up the absolute cheapest building that he > could in order to avoid the assesor coming up with some idea. > > It turns out that cheap often vacant buildings have all sorts of > externalities that idle land does not have. I don't think the > experiment lasted a full two years. > > Mitch > > - Original Message - > From: Fred Foldvary <[EMAIL PROTECTED]> > Date: Wednesday, October 31, 2001 11:39 pm > Subject: Re: Tax with positive growth effect > > > --- Alexander Guerrero <[EMAIL PROTECTED]> wrote: > > > Well before yo tax "idle" land, you must be "sure" that the land > > > is "wasted", > > > > No, the whole rationale for taxing land value is that it does not > > matter what the site owner does with the land. Those who "waste" it > > will have to pay the same rate as those who maximize rental income. > > > > > And, believe me, this is something which has been > > > always very difficult to assess. > > > > How do you know? > > Insurance companies manage to appraise land value, because they don't > > want the insured to collect on that if the building burns down. > > > > > The big > > > question is : Does the land lord like to have idle land? > > > > If he does, fine; let him pay for that consumption. > > > > Fred Foldvary > > > > > > = > > [EMAIL PROTECTED] > > > > __ > > Do You Yahoo!? > > Make a great connection at Yahoo! Personals. > > http://personals.yahoo.com > > _ Do You Yahoo!? Get your free @yahoo.com address at http://mail.yahoo.com
Re: Tax with positive growth effect
This statemente is not true, investment decision are no taken for government advertisement campaigns. Investors ask for, first of all, the rule of law to be accomplished, clear rules of the game, low taxes, they know hau to calculate the return of their investment. On the other hand, taxes collected for this advertisement campaign, recue consumption, investment and make investment costly, so reduces wealth. Alexander Guerrero St Antonys College Oxford University - Original Message - From: "Gustavo Lacerda" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Thursday, November 01, 2001 2:14 AM Subject: Re: Tax with positive growth effect > In the following example, it isn't the taxing itself that promotes growth, > but its spending. > > If a state uses tax money to attract rich tourists to the area (by > advertising, for example), that could promote consumption, in such a way > that the tax promotes growth more than it hampers it. Whereas if there was > no tax (i.e. if it was voluntary), individual businesses would be reluctant > to use their money that way, even if they knew that everybody would be > better off if everybody invested their share into the collective fund > (prisoner's paradox). > > I would be interested to know if there are real-world cases of this, or of > any tax promoting economic growth. > > Gustavo > > > At 08:20 PM 31-10-01 +0200, you wrote: > > >Has anybody read/heard about a tax which does have a positive effect on > >the economic growth? The professors at my university say so, but I > >wouldn't be so sure so that's the reason I'm asking. > > > >Also I'm writing my course paper about the effects of the fiscal policy to > >economic growth. Any good links, thoughts, ideas etc. would be > >appriciated. > > > >Regards, > >Kristjan Kanarik >
Re: Tax with positive growth effect
I do not agree, since it is not consumption tax, accordingly with the definition. Whta you are proposing is a kind of capital tax. I do not have anithing against to, but your face the economic consecuences of taxing "capital". Alexander Guerrero - Original Message - From: "Fred Foldvary" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Thursday, November 01, 2001 4:39 AM Subject: Re: Tax with positive growth effect > --- Alexander Guerrero <[EMAIL PROTECTED]> wrote: > > Well before yo tax "idle" land, you must be "sure" that the land > > is "wasted", > > No, the whole rationale for taxing land value is that it does not > matter what the site owner does with the land. Those who "waste" it > will have to pay the same rate as those who maximize rental income. > > > And, believe me, this is something which has been > > always very difficult to assess. > > How do you know? > Insurance companies manage to appraise land value, because they don't > want the insured to collect on that if the building burns down. > > > The big > > question is : Does the land lord like to have idle land? > > If he does, fine; let him pay for that consumption. > > Fred Foldvary > > > = > [EMAIL PROTECTED] > > __ > Do You Yahoo!? > Make a great connection at Yahoo! Personals. > http://personals.yahoo.com
Re: Tax with positive growth effect
For a very brief period of time several places in South Carolina tried to tax idle land. The accessor would try to figure out what the most valuable improvement to the land would be and then asses based on that. It was a horrible failure. While I don't know of any corruption, you can imagine that there was an opportunity for it. What did happen is that landlords would throw up the absolute cheapest building that he could in order to avoid the assesor coming up with some idea. It turns out that cheap often vacant buildings have all sorts of externalities that idle land does not have. I don't think the experiment lasted a full two years. Mitch - Original Message - From: Fred Foldvary <[EMAIL PROTECTED]> Date: Wednesday, October 31, 2001 11:39 pm Subject: Re: Tax with positive growth effect > --- Alexander Guerrero <[EMAIL PROTECTED]> wrote: > > Well before yo tax "idle" land, you must be "sure" that the land > > is "wasted", > > No, the whole rationale for taxing land value is that it does not > matter what the site owner does with the land. Those who "waste" it > will have to pay the same rate as those who maximize rental income. > > > And, believe me, this is something which has been > > always very difficult to assess. > > How do you know? > Insurance companies manage to appraise land value, because they don't > want the insured to collect on that if the building burns down. > > > The big > > question is : Does the land lord like to have idle land? > > If he does, fine; let him pay for that consumption. > > Fred Foldvary > > > = > [EMAIL PROTECTED] > > __ > Do You Yahoo!? > Make a great connection at Yahoo! Personals. > http://personals.yahoo.com >
Re: Tax with positive growth effect
--- Alexander Guerrero <[EMAIL PROTECTED]> wrote: > Well before yo tax "idle" land, you must be "sure" that the land > is "wasted", No, the whole rationale for taxing land value is that it does not matter what the site owner does with the land. Those who "waste" it will have to pay the same rate as those who maximize rental income. > And, believe me, this is something which has been > always very difficult to assess. How do you know? Insurance companies manage to appraise land value, because they don't want the insured to collect on that if the building burns down. > The big > question is : Does the land lord like to have idle land? If he does, fine; let him pay for that consumption. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: Tax with positive growth effect
In the following example, it isn't the taxing itself that promotes growth, but its spending. If a state uses tax money to attract rich tourists to the area (by advertising, for example), that could promote consumption, in such a way that the tax promotes growth more than it hampers it. Whereas if there was no tax (i.e. if it was voluntary), individual businesses would be reluctant to use their money that way, even if they knew that everybody would be better off if everybody invested their share into the collective fund (prisoner's paradox). I would be interested to know if there are real-world cases of this, or of any tax promoting economic growth. Gustavo At 08:20 PM 31-10-01 +0200, you wrote: >Has anybody read/heard about a tax which does have a positive effect on >the economic growth? The professors at my university say so, but I >wouldn't be so sure so that's the reason I'm asking. > >Also I'm writing my course paper about the effects of the fiscal policy to >economic growth. Any good links, thoughts, ideas etc. would be >appriciated. > >Regards, >Kristjan Kanarik
Re: Tax with positive growth effect
Well before yo tax "idle" land, you must be "sure" that the land is "wasted", and that his owner for some planetary reasons does not want to invest on it. And, believe me, this is something which has been always very difficult to assess. Some times you get otherways perverse outcomes. The big question is : Does the land lord like to have idle land? Alexander Guerrero St Antnys College Oxford University - Original Message - From: "Ben Powell" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, October 31, 2001 9:11 PM Subject: Re: Tax with positive growth effect > It wouldn't be growth in a proper methodologically > individual sense but in the standard notion of GDP > growth or whatever, I flate sum tax on "Raw" land both > developed and undeveloped. This is what Henery George > and his followers advocated. It would encourage > undeveloped land to be developed. > > Ben > > --- Kristjan Kanarik <[EMAIL PROTECTED]> wrote: > > > > Has anybody read/heard about a tax which does have a > > positive effect on > > the economic growth? The professors at my university > > say so, but I > > wouldn't be so sure so that's the reason I'm asking. > > > > Also I'm writing my course paper about the effects > > of the fiscal policy to > > economic growth. Any good links, thoughts, ideas > > etc. would be > > appriciated. > > > > Regards, > > Kristjan Kanarik > > > > > __ > Do You Yahoo!? > Make a great connection at Yahoo! Personals. > http://personals.yahoo.com
Re: Tax with positive growth effect
--- Kristjan Kanarik <[EMAIL PROTECTED]> wrote: > Has anybody read/heard about a tax which does have a positive > effect on economic growth? Yes. Land-value taxation promotes growth by having less excess burden, and by inducing more productive use of suboptimally used land. You could also force growth by taxing leisure, but that would distort choices and lead to less overall economic benefits. See the book "Land and Taxation" as well as "Land Value Taxation Around the World" (Vol 59 (5) supplement, 2000), American Journal of Economics and Sociology). Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: Tax with positive growth effect
Holding spending constant, it is certainly true that some taxes are better for growth than other taxes. To summarize a large literature taxes on capital tend to be very bad for growth because of positive externalities associated with capital, taxes on income are better and something like a consumption tax is best for growth. One of the best paper written in recent years (IMHO) is on the subject of taxes and growth: Ohanian, Lee and Thomas Cooley. 1997. Postwar British Economic Growth and the Legacy of Keynes, Journal of Political Economy , vol. 3, (105), 1997, pp. 439 472. Alex -- Dr. Alexander Tabarrok Vice President and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621-1428 Tel. 510-632-1366, FAX: 510-568-6040 Email: [EMAIL PROTECTED]
Re: Tax with positive growth effect
It wouldn't be growth in a proper methodologically individual sense but in the standard notion of GDP growth or whatever, I flate sum tax on "Raw" land both developed and undeveloped. This is what Henery George and his followers advocated. It would encourage undeveloped land to be developed. Ben --- Kristjan Kanarik <[EMAIL PROTECTED]> wrote: > > Has anybody read/heard about a tax which does have a > positive effect on > the economic growth? The professors at my university > say so, but I > wouldn't be so sure so that's the reason I'm asking. > > Also I'm writing my course paper about the effects > of the fiscal policy to > economic growth. Any good links, thoughts, ideas > etc. would be > appriciated. > > Regards, > Kristjan Kanarik > __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: Tax with positive growth effect
How about taxing leisure; which would induce people to work more (or leave)? - Original Message - From: "Kristjan Kanarik" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, October 31, 2001 11:20 AM Subject: Tax with positive growth effect > > Has anybody read/heard about a tax which does have a positive effect on > the economic growth? The professors at my university say so, but I > wouldn't be so sure so that's the reason I'm asking. > > Also I'm writing my course paper about the effects of the fiscal policy to > economic growth. Any good links, thoughts, ideas etc. would be > appriciated. > > Regards, > Kristjan Kanarik > >
Tax with positive growth effect
Has anybody read/heard about a tax which does have a positive effect on the economic growth? The professors at my university say so, but I wouldn't be so sure so that's the reason I'm asking. Also I'm writing my course paper about the effects of the fiscal policy to economic growth. Any good links, thoughts, ideas etc. would be appriciated. Regards, Kristjan Kanarik
