Objections to ground rent
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The smartest person on Earth can never be rich without a strong society. However, a strong society can breed its own smart people as needed (through healthcare and education). So most of a rich person's wealth is created by society, So "keep what you create" means society gets more, not less


Ground rent does not share wealth, it gives wealth to those who create it. Sharing implies that some people cannot create enough wealth. But ground rent shows that even the old and sick generate all the wealth they need.

"Punish the rich?"

This is why we can't have nice things. Generations of poor people have attacked the rich. And so the rich fight back. And being rich, they usually win. We are wasting time! We could have enjoyed ground rent centuries ago if we had not wasted time fighting the rich. Just accept a win-win solution and move on. Stop wasting time.

"If it was so good, we would have it already."

According to this argument, no new ideas can ever be good, or we would already have them. Ground rent is a very old idea, but the new idea is that compound growth will produce plenty of money to reward landowners. So both sides can win.

"Nobody should pay for basic needs (like land)"

This is true, and only possible through ground rent. Without ground rent, landowners are rewarded for charging higher rents. With ground rent, the cheapest rents go down and down. However, ground rents are created by society, so everyone who is part of society gets a share of all rents, not just poor apartment rents. So the very poorest will receive more rent than they pay.


"Ground rent is not enough to replace tax"

Ground rent is what you would pay to live somewhere. You pay taxes, and more, in order to live in a nation. So ground rent is more than taxes. The difference is that taxation is inefficient and corrupt. Ground rent simply takes the inefficiency and corruption out of taxation.

"I can't afford ground rent"

Ground rent only takes money that is not yours in the first place: you did not create it. To say "I cannot afford ground rent" is to say "I cannot afford to pay back the money I stole". Which is no doubt true, because our economy is so corrupt and inefficient. So you must be given a large lump sum so you profit from the transition.

"Progressive taxation is already efficient"

Under progressive taxation the most efficient creators (those with economies of scale) are taxed the most. So the benefits of additional tax free work would be even greater. So replacing progressive tax with ground rent creates even greater efficiency gains than replacing a non-progressive tax.

"Progressive tax already helps the poor"

Progressive tax merely prevents the poorest from starving, though they still pay sales taxes and high rents. In contrast, ground rent removes taxes completely, reduces the lowest rents, creates jobs, and ends poverty completely.


"Growth is destructive"

That is true for tax, but not true for ground rent. Tax is extracted from others who create the wealth. That is, it hurts those people. But ground rent is the value a government creates by making land better. So tax destroys, but ground rent creates.


As resources become scarce, the price rises. So people find alternatives. So we gradually move away from the scarce resources and they never actually run out. So the real problem is not lack of resources, but lack of money to find alternatives. Ground rent solves the money problem so it solves the resources problem.

"Infinite growth?"

Growth refers to wealth. Wealth is a measure of whatever we want. Maybe we want land? Maybe we want beauty and friends? Maybe we will want things that we cannot dream of yet? Whatever we value, as long as our brains work, we can always think of ways to improve our lives.

"Secession? Balkanisation?"

As you choose your ideal government you have to be good neighbours, as you pay for any reduced land values. And economies of scale mean the most efficient nations will grow, not shrink.

Copying intelligence

"Genetic advantage is hard to identify"

True. So it is better to focus on access to resources and education. For example, a family that grabs resources becomes rich. It might see this as proof of good genes. But by restricting choice it weakens society, thus proving it has bad genes.

"Genetic advantage cannot be copied"

We've been copying the best genes for a billion years. Sexual urges mean "find the best genes and reproduce with them". As science improves it simply improves the rate at which we can copy. E.g. dating web sites make dating easier. Genetic defects like short-sightedness no longer matter (just buy cheap glasses). Now we can even identify and change individual genes.

"Raising intelligence is not always the best use of resources"

That is only true in the short term. In the long term raising intelligence is always the best investment. Because intelligence improve every decision it touches. So it is the greatest of all exponential investments.

Example numbers

At present, a typical American income is $50k per year, or over a million dollars across a lifetime. This will dramatically rise with ground rent, whereas non-land costs will fall. Interventions (better food, education, medicine) will likely cost thousands per person, but will pay off in the millions: not just for them, but for their children who benefit from our smarter choices.

Leadership and equality

"Some leaders create vast wealth"

If a role is well defined then the leader can be easily replaced. If the role is not well defined then the company does not know what it is doing. Yes, a leader might make alot of money. But oif you don't know what you are doing then this is either random (some will make money, some will lose) or misleading (they "make" money in ways that harm the company in the longer term)

"We cannot all perform at the same level"

A good street sweeper can add the same as a good Chief Executive Officer. E.g. the street sweeper can prevent a mass disease epidemic. Or, by having their mind free, they may come up with an idea that will benefit society in some completely unexpected way. In contrast, the CEO has very little time to think, and may spend all her time creating fashion products that have zero net benefit to society.

"Some industries (e.g. sports) are naturally unequal"

We live in a physical universe. So top ability has physical causes. So an efficient society will divert rewards to the causes of top ability (e.g. infrastructure), rather than to its results (e.g. top athletes).

Yes, a comfortable life is one cause, as it makes people choose sports, and then enjoy the toughest training. But to go beyond that, to "winner takes all" will do more harm than good:

"'Winner takes all' motivates people to try harder"

'Winner takes all' creates enormous incentives for bending the rules. So they either create a corrupt society, or they demotivate the majority who are not corrupt, but who see all the money going to bad guys.


Keep what you create

Ground rent is simply "keep what you create", applied to land. Whenever you see people paid for their work, or businesses succeeding on merit, that is "keep what you create" in action.

Ground rent

Ground rent has been tried in a very limited way (e.g. a few percentage points as part of regular taxes) in:

Each time it led to excellent economic growth.

However, none of these experiments compensated landowners, and so landowners managed to kill the idea. Naturally they argued that the economic growth was a coincidence or overstated. For a detailed discussion, search for any "Georgist" forum and the country in question.

Counter examples?

"Hong Kong has land tax, yet has poverty"

Hong Kong now has very high house prices. Those prices are only high because of the location. Therefore that value is created by the community. If Hong Kong had full ground rent, every penny of that location value would be shared with the community, so poverty would be impossible.


On another forum somebody suggested that Pittsburgh and McKeesport (part of the Pittsburgh area) had a failed experiment with ground rent. Economist Dan Sullivan pointed out what actually happened:

[Did it cost more for poor people?] We looked up the properties [Ben Hayllar] used in his study to show how poor people paid more, and they were absentee owned. The owner-occupied properties saved, even using Hayllar's sample.

[Did it discourage green spaces?] Pittsburgh is famous for its green space, and is reputed to have more trees than any other city in the country. There are small houses tightly packed onto extremely small lots, but they were built *before* 1913, when Pittsburgh adopted land value tax.

[Did it encourage development?] From Fortune Magazine: "McKeesport (pop. 31,000), 12 miles up the Monongahela River from Pittsburgh, was on the verge of municipal bankruptcy in 1980 when it switched to split-rate real estate taxation and increased its property-tax revenues by more than 50%. The city raised taxes on land from 2.45% to 9% of assessed value, but cut taxes on existing buildings from 2.45% to 2% and granted a three-year tax exemption to all new construction. Neighboring Clairton (pop. 12,200) and Duquesne (pop. 10,100), where steel is also the main industry, left their 1-to-1 real estate tax alone. Compared with the annual average for 1977-79, the dollar value of construction in McKeesport rose by 38% in 1980-82. Clairton suffered a 28% decline, Duquesne a 22% decline." Of course, Clairton greatly outperformed McKeesport later on, after Clairton went to almost pure LVT. There are 17 Pennsylvania taxing jurisdictions (mostly cities) that levy land value tax today. Every one of them saw a construction surge after shifting to land value tax, and the closest comparable city or borough continued to languish in *every* case.

[Did it keep houses affordable?] There is data to that effect in my article, "Why Pittsburgh Never Crashes." We adopted land value tax in 1913 and missed the bubble that broke in 1925. Land values in Pittsburgh fell less than in any other big city in the country, including Washington DC, which was the boom-town of the depression. It is not necessary to drive real estate prices down if you prevent them from rising in the first place.

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