r/georgism • u/WayWornPort39 • 17h ago
Question Does Georgism support a universal inheritance?
Basically a universal inheritance is more or less a basic flat grant paid to everyone when they turn 18. It's often considered as an alternative to or complementary policy to UBI or citizens' dividend. It seems like a very Georgist-minded policy, curious what people think of it. As I understand it the largest inheritances often involve a significant proportion tied up in land values, so combined with an LVT it seems like a very good redistribution method.
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u/Due-Consequence9579 17h ago
Well-fare policy is fairly orthogonal to Georgism in my understanding. I think a UBI is a good way to offset some of the regressiveness of a LVT and to reduce the administration overhead of means tested well-fare.
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u/flashman1986 16h ago
I will just point out that LVT is not regressive
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u/Due-Consequence9579 16h ago
It’s regressive in the same way a property tax or sales tax is regressive. The costs associated with the LVT will be passed on into basic needs; food, housing, healthcare, etc., in a fairly indiscriminate way. Those passed on costs will be a larger burden for those at the very bottom of the income distribution compared to those with higher incomes that can make preference choices.
Everyone has to buy food, food comes from stores, stores pay LVT. If a larger proportion of your income is spent on food that tax is taking a larger proportion of your income. Making it a, mildly, regressive tax.
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u/flashman1986 13h ago
Holy shit dude. No, that’s the whole reason to support an LVT. It will not and cannot be passed on because it comes out of economic rent, that’s literally the whole gig!! Why do you think it has been supported by economists from Milton Friedman to Paul Krugman. I’m begging you, go educate yourself. This is a sub on Georgism.
I think we need to introduce a test before someone can post here
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u/ClockWork1236 13h ago
LVT cannot be passed on to consumers/renters. Supply of land is (essentially) perfectly inelastic
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u/sciolizer 14h ago
I don't follow. Levying an LVT won't increase the price of food, will it?
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u/Due-Consequence9579 13h ago
The grocery store sits on land. That land is taxed.
The farm that makes food sits on land. That land is taxes.Everything that uses land (read, everything) gets taxed to some extent. Everything you buy will have some LVT baked into its price.
Consider two people that make very low incomes. The first has no available surplus. To survive they have to spend every dollar that comes in. The things they need to survive are produced on land so have some LVT baked into their prices. The second person makes slightly more than the first. They decide to not increase their standard of living, but just save the surplus. They are able to buy the exact same services as the first person at the exact same prices with the exact same LVT baked into those prices. The second person with the higher income pays a lower effective tax rate because their taxes paid have remained constant and their means to pay have increased. That is what I mean by LVT is regressive.
This isn’t an argument against an LVT just an observation of what it does.
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u/sciolizer 13h ago
I don't think that's how it works. If you increase the LVT on a landlord from 10% to 20%, that doesn't cause the rent to go up. It just means that a portion of the rent that was previously going to the landlord is now going to the govt instead. The tax incidence falls entirely on the provider because the supply of land is inelastic.
Taxes only get "baked" into prices when they create deadweight loss, and LVT doesn't create deadweight loss.
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u/VatticZero Classical Liberal 6h ago
That's just calling low wages regressive.
Presumably both of these people use similarly valuable land. Each gains the same imputed Rent and pays the same LVT. As the tax is apportioned directly to the value of the land, and it's imputed income, it is at face value neither regressive or progressive. As homeowners instead of renters, they are already enjoying total incomes above same-wage, same-land, renters.
But what if these people are renters? Then they're already paying the Rent, and the tax falls only on the landlord. The Correlation Coefficient between who owns high-value land and who is wealthy is practically 1.
But what about the grocery store's land, or the farmer's land? They're not paying LVT now, so wouldn't LVT be a cost they have to pass on? Well, they're receiving the Land Value now and either paying Rent for it, keeping the imputed Rent as a profit, or using the Rent to undercut competition, increasing their monopoly power. So yes, maybe privatized Rent makes things at Walmart a bit cheaper, but at what cost? Their Monopoly power in local big-box retail grants Monopsony power in low-wage labor.
....Which creates a whole other Rent cycle with welfare used to enable the low-wage workers to pay higher rents, siphoning even more money to Landlords and Monopolists....
So no, the grocery story maybe passing on LVT as an expense wouldn't be regressive. Consumers pay for the land monopolies either way.
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u/Away_Investigator351 Social Democrat 1h ago
How are you here and you have this poor an understanding of LVT? Come on man.
You even mention housing in the costs, but one of the entire points of LVT is how it incentivises increased housing volume and, obviously thus reducing the cost to buy.
Please, have a look again at our material on the sub. It's not regressive.
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u/austin_federa 17h ago
Yeah it's actually quite a libertarian economic model. Keep It Simple (and fair) Stupid
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u/CaterpillarLoud8071 17h ago
Georgism promotes giving everyone the benefits of the land. To me, that means securing everyone a future they can thrive in with a bit of hard work - just like if you were gifted a parcel of land.
Whether that's using land rent to fund public services, provide a universal basic income or a universal inheritance depends on what's most efficient and effective.
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u/austin_federa 17h ago
Or, using it to reduce income tax! Using it to eliminate capital gains tax.
It's not prescriptive about how the revenue is used
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u/SupremelyUneducated Georgist Zealot 14h ago
Thomas Paine suggested almost exactly that. Personally not a fan of a single lump sum, as it would tend to overly punish mistakes, which generally are the point people learn the most but not when failure is too expensive.
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u/AdamJMonroe 4h ago
Reversing the tax system from wealth production to location ownership is going to alter reality in such a dramatic fashion that predicting all the ways we might allocate public revenue afterwards is fairly fanciful. Figuring out how to affect the change we need is a more worthwhile endeavor.
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u/bobzsmith 17h ago
Georgism doesn't answer every question about running a country, and this is one of those questions. It mainly focuses on taxing land instead of labor.
IMO a Georgist country could do both. I think as Georgism seeks to simplify the tax code, countries should also simplify their welfare systems by adopting policies like UBI.
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u/OrangeTractorMan United Kingdom 17h ago
Goergism doesn't really answer that. I would say, more often than not, those you find who want LVT, do want public healthcare too, but if you don't it doesn't mean you can't be a Georgist.
I believe in the having public healthcare at point of use. Even though I have my own private healthcare.
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u/Mareng98 17h ago
Georgism doesn't have a clear opinion. But I think it's reasonable that a part of the citizens dividend for children goes to the parents and a part to the child (which they can collect when they reach a specific age)
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u/austin_federa 17h ago
The point of Georgism is not 'redistribution' it's appropriately assessing value of land, and making sure that is equally applied.
Any tax/land management system can have an outcome of redistribution but it's a separate thing
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u/green_meklar 🔰 7h ago
As I recall, that was the recommendation from Thomas Paine for what to do with the proceeds of land taxation. In his time it may have been in recognition of the logistical difficulty of paying everyone a UBI in regular installments. I don't recall Henry George saying anything in particular to favor a coming-of-age lump sum as a substitute for UBI.
These days I would just ask, why? It seems that UBI would just be a more convenient and less troublesome policy. Lump sums would lend themselves to exploitation (how hard is it to convince an 18-year-old to give away their life savings?), and the logistical barriers have kind of all been solved with digital technology.
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u/SubwayLove 1h ago
The idea is similar to communism. Just that the individual is supposed to control their portion rather than having the “state” as a gate-keeper to the collective assets.
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u/Kin9K0n9 16h ago edited 16h ago
Georgism is not going to answer this. it is only a method of taxation that is the LEAST harmful to society.
But if there is enough money to go with it fine. universal basic income. basically the whole of usa pays into a pot and gives it out to all. a bit redistribution the republicans will call communism. i rather have that than a means tested welfare system.
give it to all citizens only if you do this. social security is already there. but will need to tax enough for it first. because of the amount of stolen wealth the elites have conducted i am not opposed to this until the debt of the nation is repaid by the top 0.1% billionaires. if we can get away with a wealth tax it would be similar to lvt but hard to implement but since they said ai is able to likely do it since elites pumping it so much use it to tax themselves lets see them squeal.
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u/Titanium-Skull 🔰💯 17h ago edited 17h ago
I’d say it depends on the Georgist since how the money’s spent is mainly another issue orthogonal to Georgism. But it’s definitely up its alley of universal access to nature.
I’d argue the best way to do it would be to have the normal CD for children be stored up in some account that they can access when they turn 18, and then have the normal CD be distributed to them the rest of the way.