u/Titanium-Skull

Context for those who don’t know:

The bottom graph is the supply and demand graph for land, which is fixed in supply, and the LVT revenue refers to a land value tax. What this means is that taxing land doesn’t cause less land to be produced (being a natural resource it’s already non-producible), and so doesn’t discourage production in the same way taxes on produced goods and services do, be it taxing the work of laborers, the investment into capital, or the like.

There’s a whole lot of writings on the efficiency of taxing land (and the income of other finite resources) compared to taxing produced goods and services. But a good one to check out is this one from the Chicago Fed .

I got inspired to make this meme by this article by Stephen Hoskins from 2023. Here's the last snippet which summarizes it well:

>Privatized land rents and exclusionary zoning are the most destructive union of political interests of our time, and all urban advocates should embrace any and all opportunities to undermine either. YIMBY groups should place land value capture at the core of their policy objectives. Georgists should support YIMBY efforts to intensify cities and stress that LVT can both boost and broaden the benefits of upzoning.

>Wherever possible, we should support housing policy that dulls landowners’ financial interest in speculation and exclusion, by zoning for density and producing competing supply via public & third-sector providers. We must use the tax system to discourage land banking, and punish the speculative under-utilization of valuable urban sites, by taxing land value and capturing the windfalls from rezoning or public investment.

>We face a generation beset by rising inequality and increasing rents. Millions will, without a significant change in our land use policies, be locked out of the places that provide them with the most opportunity. If we do not take the necessary steps to liberate our cities from the twin scourges of rentierism and NIMBYism, we will condemn ourselves and those who will come after us to a cycle of poverty, exclusion and extraction. Georgists and YIMBYs must urgently forge their alliance. Only by so doing can we can create a nation with a place for all.

For those who don't know:

Tax soil not toil means replacing taxes on production: labor, investment, and trade all together with taxes on the value of land itself (while discounting the value of any improvements made to the land). Land isn't the only limited resource/privilege Georgists can target for taxation (or other reforms) in lieu of taxing production and trade, but it is the biggest and most important as it relates to housing.

Unlike speculation in other commodities, land speculation (which leads to holding vacant land out of use) can't be offset with any new production since land is finite, which leads to a whole slew of problems as parcels are wasted while raising the scarcity and price of usable land. When this is combined with taxing people on the work and investment they put into the land, much is lost.

Georgism seeking to tax soil and not toil would discourage people from holding vacant land out of use while not punishing (through taxation) landowners actually putting their land to use. This isn't to say it's the only solution to solving the crisis, but it provides a core benefit by giving the incentive to put land to productive use for the benefit of others instead of wasting it at the cost of others. There are real world examples of this too, New York did it in the 1920s to great success, many cities in Pennsylvania do a lightweight form of it by biasing their property tax towards land and away from buildings, and countries like Singapore have recaptured land values through a variety of means to fund widespread public housing.

For anyone wondering, there is a simple reason for this: Public investments can increase land values. Typically when governments fund public goods, the increase in land values goes to landowners instead of society, which locks public bodies out of accessing the land value increase they created while forcing them into harmful taxes on the people's production.

This culminates in something known as the Henry George Theorem, which states that in specific conditions the aggregate increase in land's rental value due to public investment can outpace aggregate spending put into that investment. This means that governments can fully fund their public expenditures off recapturing those land rents through something like a land value tax.

What this shows is that governments should be looking to the land and all the value increases caused by public investments in that finite natural resource as the way to fund public investments; instead of taxing what people make. Right now, places like New York City are trying something similar in land value capture as a way to fund new transit lines, and hopefully more will come.

The original edition was called The Landlord’s Game, which was created by Elizabeth “Lizzie” Magie to make teaching Georgism easier.

Foldvary noted earlier in the chapter this snippet was taken from that this isn't the way we define "monopoly" today:

>Some, however, question the use of the term "land monopoly". Grounds for discontent have traditionally centered on the conventional definition of a monopoly as exclusive purchase or sale of some commodity, implying also that there are no close substitutes of the commodity being held by others. Based on this definition, how then can we speak logically of a land monopoly? For, in many countries, thousands if not millions of people possess and sell land

Foldvary instead uses the term entry-monopolies to describe this situation of no new entry. This is the older definition of monopoly that the classical economists, from Adam Smith to Henry George, used to describe the uniqueness of nature as a factor of production.

The crux of George's argument was that instead of taxing production, we should tax the land monopoly, alongside dealing with other monopolies where entry and competition are impossible. He included legal monopolies like patents/copyrights and natural monopolies like utilities as other examples to make his point. Georgists have continued to apply this broad anti-entry-monopolism to today, and updated it to reflect changes in how we understand things since George's time (e.g. treating land and the minerals underneath it as separate, or accounting for new phenomena like network effects).

I'd also recommend checking out this good post on land as monopolistic competition and how that ties into this whole idea form u/Ewlyon

For anyone wondering:

This quote is from Chapter 33 of George's most important and well-known work, Progress and Poverty

The important thing to note here is that Henry George was using the classical definition of a monopoly, not the sense of a single seller dominating a market as we know it today, but controlling any asset where new production and entry into the market is impossible (entry-monopolies as Georgist economist Fred Foldvary calls them). The most important of these is nature (which he grouped under the umbrella term of land), and which he describes as the following:

>Rent, in short, is the price of monopoly. It arises from individual ownership of the natural elements — which human exertion can neither produce nor increase.

(Rent here means economic rent, the returns to land).

Because monopoly is a complex term for this, I'll be using finite resource to describe this from now on. But it's for this reason that, in a weird sense, we actually tax production twice. Currently to get public revenue we levy taxes on workers, businesses, and sales. At the same time we allow people to withhold finite resources like land and use them to extract from those who produce; inviting those who further want to profiteer off withholding finite resources, which only drives costs up and worsens the whole situation.

In order to remediate this, the Georgist solution is to simply untax the things people make, and instead compensate (or mitigate) the finite resources people take. This includes compensating all natural resources when they're taken (and tangentially when they're destroyed through pollution), compensating/mitigating exclusive legal monopolies (like the ones given out by patents/copyrights over particular innovations), dealing with natural monopolies in some way so they can serve the public and not be extractive, and just dealing with any finite resources in general that nobody else can compete with in the economy.

This post, interestingly enough, was inspired by a Lenin quote. It was probably said out of disdain, but it shows what kind of recognition Georgism got in its prime.

Explanation:

The reason for this is simple, Georgism fully protects workers and actually competitive businesses from those who control and withhold finite resources (finite here meaning we can't produce more of it) while looking to untax the goods and services people make for each other. Land is the most important finite resource, but this also extends to other natural resources; exclusive legal privileges like patents/copyrights over particular innovations; control over naturally monopolistic markets like utilities; and the like.

The current system of Capitalism we have is marred because we both tax people when they work and invest for the benefit of society, and at the same time those who own these finite resources can extract wealth without providing anything in return; harming the economy while increasing inequality by controlling a finite bottleneck and forcing tolls to be paid by society. Georgism seeks to solve this by untaxing what people make and instead compensating (or otherwise mitigating) the finite resources people take. This means taxing the full value of all natural resources; taxing, replacing, or otherwise mitigating patents/copyrights and other exclusive legal privileges; making sure natural monopolies serve the public (in a variety of ways as described here); and more broadly just being opposed to all forms of monopoly, in other words markets where entry from the outside is impossible.

What we have right now is essentially monopoly/rentier Capitalism and Georgism, at least in its most classic sense, aims to fix it into truly something truly productive and competitive; as it should’ve been.

There's been some discussion here and everywhere about wealth taxes recently so it was a good time to whip this one out.

The reason why wealth taxes have problems at least from the perspective of Georgism is that they target all assets broadly. Georgists would consider actually produced assets like capital goods to be stored-up labor that should be rewarded just like the general labor we think of, so we see that a wealth tax is harmful because it can discourage the creation of those actually productive assets that people make. But where taxing land fixes this is that land is finite, it's not produced and is non-producible, and so taxing it can reduce inequality without hurting the economy (it could even help by discouraging speculators who hold good land out of use at the cost of productive workers and businesses) while keeping the tax base stable. It's the wealth we can actually tax.

But while land is the biggest example, it's not the only thing we can target to combine both efficiency and equality while providing a way to shift off taxing actually productive labor. Anything else which like land is finite, in that no one can make more of it, is prone to efficiency-reducing, inequality-increasing wealth extraction that we can target in different ways. For example, taxing all natural resources other than land (ore deposits, waterways, and all); mitigating (whether by taxation or abolition/replacement) exclusive legal privileges like patenting a particular innovation (e.g. patent trolls) or controlling a limited professional license; dealing with naturally monopolistic industries; etc. Another way to describe it is that any market where no new production makes entering it impossible (a good term for it is an entry monopoly) is prone to bad zero-sum behavior and is a target in the Georgist sights.

This all goes to show that we can differentiate between wealth production which stems from making new things and wealth extraction which stems from just controlling finite things. If we want to heavily reduce inequality while fully strengthening the economy: Don't tax the things we make, tax (or mitigate) the finite things we take.

As a simple explanation, here's an excerpt of the 2007 article The Green Tax Shift by Fred Foldvary, which inspired the title:

>Simply put, a green tax is a levy on pollution. It goes further than a carbon tax to levy a charge on all harmful emissions in proportion to the damage they cause, ideally making polluters pay for the full social cost of their emissions.

>The green tax shift replaces taxes on income and goods with taxes on pollution. Such environmental taxes are already levied in Germany, the Netherlands, and France for discharges into rivers and lakes, and they have greatly reduced water pollution even amidst the large chemical industry of western Germany. In the United States, a few states have very limited emissions levies
...
In a truly free market, government neither penalizes nor subsidizes production and consumption. If polluters do not compensate society for the damage they cause, they are in effect subsidized. A pollution charge prevents this subsidy. The green tax shift is therefore ethically right and good for the economy as well as the environment.

Many Georgists already support Pigouvian taxes, but even from the lens of Georgism it can be argued that pollution taxes make up a part of the core Georgist desire to untax what we make and instead compensate what finite resources people take. If we stretch the idea of taking, pollution could also include taking nature from the rest of society by damaging it and denying its use to others, which just like claiming ownership over a plot of land or a mineral deposit is an act that requires compensation. There are other ways to argue it too, the atmospheric carbon budget is a limited natural resource (here's a good meme about that by u/Fried_out_Kombi), so we should tax those who use it instead of taxing work and business.

Pollution taxation has also seen use in countries like Canada, which was combined with a dividend given to Canadians annually that helped the poorest households. A green tax shift can satisfy and combine a lot of our desires with little cost, it just needs to be more known.

For more reading about California housing becoming an inheritance scheme. Here's the link to the original post and the link to the original article this post was referencing as well.

For those who want more context, in 1978 California passed Proposition 13 which limited property taxes to 1% of the property's value, and further limited property reassessments to a 2% increase over last year's value with the exception of the property transferring hands. That was until in 1986 when California passed Proposition 58 which excluded parent-child transfers from full reassessments.

What's so bad about this? The issue is that property taxes are really two taxes: a tax on the building and a tax on the land, the former has problems because taxing buildings discourages their creation, but the latter is good because land is a finite resource and taxing it can discourage speculation that makes it more expensive to buy without us being able to make more land to bring prices back down. Instead of making this distinction, California slashed their general property taxes, basically killing their tax on land. To further add to this, they now rely more on other taxes which are worse because they target productive labor, business, and trade instead of the finite (in other words non-producible) land.

Combined with California's strict laws on land use, those who brought land when it was cheap have all but gotten rich by controlling our most important finite natural resource, while those on the other side have been faced with ever deepening costs. It's no wonder California's housing market is so backwards

(third try at this meme, surely this time it's the charm)

For anyone who wants more context:

A lot of the issues labor and capital face actually stem from a deeper enemy than the other, one which hurts them both and causes them both problems. Henry George mentioned it in 1883 and it still remains quite true to this day.

When I say finite resources, I mean a whole lot of things: Natural resources like land, exclusive legal privileges like patents or limited licenses, and naturally monopolistic powers. The word "resource" is doing some heavy lifting here but the idea is that any particular privilege which is limited, since we can't produce more of it, is included in the sights. As it currently stands we allow people to take these finite assets and extract wealth from them without producing or providing anything in return, which hurts both workers and businesses who have to face higher costs of living and production; leaving those who own finite resources richer while squeezing those trapped on the other side dry. It creates a two-tier society that hurts the productive economy while raising inequality, and it can be said that a lot of our most monopolistic companies today which slam the door on competitors and workers alike get their wealth and power in large part by controlling these finite resources, be they resource barons or Big Tech.

At the same time, taxes on production hurt both work and business by putting the costs directly on the workers and productive business themselves. Payroll taxes, sales taxes, income taxes, tariffs, taxes on produced assets (be it as part of a wealth tax or otherwise), and the like all act as a disincentive to produce and provide for each other by adding that extra tax burden. They prevent us from doing what we otherwise could to produce and provide for each other.

The Georgist solution is to reverse course and, instead of taxing the goods and services people make, compensate (or otherwise reform) the finite resources people take. Georgists broadly propose untaxing work, investment, and trade and instead advocate recouping the value of all natural resources, as well as targeting exclusive legal privileges like IP (be it for taxation, dismantling, or some other reform), and dealing with natural monopolies (here's a set of proposals from late Georgist economist Fred Foldvary).

Labor and capital have a common enemy that hurts them both badly, and while I can't say if all their woes with each other would be solved by enacting Georgism, both workers and actually competitive businesses would at least be much better off without it.

For those who don’t know, property taxes actually target two different assets while rolling them up into a single tax bill: the land itself and the buildings on the land. The former is good since land is our most important finite resource; taxing it doesn’t discourage producing it (since we already can’t make it anyways, and reclamation is just making pre-existing seabed land usable above water) and instead discourages speculators who hold on to it without using it, leaving our most important natural resource to waste. In contrast the latter is bad because taxing buildings discourages their creation and encourages keeping them barren and wasted to keep the tax bill low.

The best way to do property taxes is to universally exempt buildings and solely target the land, which Greg Miller and Lars Doucet of the Center for Land Economics have written plenty about. Here’s a good graphic too to highlight the difference It’s a simple expression of the idea that, instead of taxing what people make, governments should compensate the finite resources people take.

Source article: https://eyeonhousing.org/2025/10/supply-side-cost-pressures-drove-housing-as-inflation-leader-in-2024/

As the article points out, this is mainly a supply-side issue of not enough affordable housing supply to meet increasing demand. It mentions monetary policy, but this problem stems heavily from the land crisis. Our land is massively constrained by a combination of far too restrictive land use policies, land speculators banking on our most important finite resource, and harmful taxes on work and investment discouraging doing putting that land into use. The best use of our land would mean building more housing supply in the cities where it’s most demanded, but that combination of bad policies right now makes it incredibly difficult.

The solution, for anyone wondering, would be to go the opposite direction. Heavily relax land use restrictions (except for the ones which improve health and safety) and tax land instead of labor and investment. Break the land and harmful tax barrier so that people can produce and provide for each other far more freely.