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Monday, December 21, 2009

Land appropriators: parasites, or predation victims?

Pamela J. Brown wrote:
Explorers take great risks and work hard to find new territory and unincorporated land.
Yes, those smallpox-infected blankets are tricky to handle. :-)
The fertile soil (resource) is their personal reward for risk, danger and effort.
We're not saying that anyone can ever take one iota of the output generated by the explorer's labor, including the improvements he makes to the land.  We're just saying that extra surface area on the Earth's sphere is not an output of that labor.  That surface area -- that site -- was there already.
  Those that followed the path they blazed behind them (the landless) are PREDATORS.
It's the other way around.  A speculator in ground rent does no more work than to put a sign in the ground, announcing his willingness to exclude people by force from the site he is appropriating.  He then sits back and waits for nearby public goods to increase the value of his site, without him having to do anything except shoot at people who try to enter the site.  To the extent that he's a speculator in ground rent, he's a PARASITE. 

To the extent that he mixes his labor with the site, he's free to enjoy 100% of the fruits of his labor. He has full property rights in all improvements he makes to the site. What he doesn't have is the right to reap a speculative profit from the accumulated ground rent (site value) created not by his labor but by surrounding development.

Land value “taxes”, along with fees on polluting/congesting/depleting the commons, are the only kind of “taxes” that are arguably not force-initiating.  The state that gets the highest proportion of tax revenue from property taxes is one of the freest: New Hampshire.  States that tax income more than they tax property are among the least free -- like California.  Land-value taxes are defended as the least harmful kind of tax by LP founder David Nolan and by many prominent libertarian economists: Friedman, Buchanan, Solow, Modigliani, Samuelson, Simon, Tobin, Vickrey, Cowan. This is because land-value taxes

  • have no deadweight loss (unlike taxes on exchanges/income/production), because land cannot hide or flee or shrink
  • are trivial and non-intrusive to assess(*) and collect: no need for tax forms, IRS, audits, or even site visits
  • are naturally local, and so encourage Tiebout Sorting (voting with your feet)
  • can only extract the extra value actually created by public services, creating pressure to defund public services that do not actually add value in the free market for land.

LVT were also advocated by many famous classical liberals:

  • Adam Smith
  • Thomas Jefferson
  • Tom Paine
  • William Penn
  • Ben Franklin
  • Frederic Bastiat
  • John Stuart Mill
  • David Ricardo
  • Henry George
  • John Locke
  • William Lloyd Garrison
  • John Dewey
  • Lysander Spooner
  • Benjamin Tucker
  • Robert LeFevre
  • Frank Chodorov
  • Albert J. Nock
(*) David Nolan suggests that the tax basis be self-assessed. Your basis is what you’d be willing to sell for, and if given a real offer for that much, you have to either sell the land or raise your tax basis to match the offer.  The “tax” could be deferred until you transfer ownership of the site, so nobody is ever taxed off the land they hold. When a site that is in arrears is offered for sale, it would be forfeited for auction if the sale sale would not cover the back taxes.