Georgist Tax Clarifications
To clarify, the tax Georgists want (Land Value Tax or LVT) is a tax on the Economic Rent of the land. While you can find more detailed explanations e.g. here (excellent overview by Lars Doucet, the whole series is recommended), the tax seems to (to my understanding) wind up being around 3-4% of the value of the land per year, after all the math.
As a very basic example, the economic rent of a piece of land (not buildings, just land) from the above:
If a piece of land costs $10,000 to buy, and is leased for $500/year, then an LVT that captures 100% of the land rent is $500/year, which works out to a 5% annual tax of the land value.
While pure Georgism advocates for taxing 100% of that $500/year economic rent, most of the actual proposals top out at 85%, and the more realistic ones are less than that.
Also keep in mind a) that this is tax on the land value, not including the value of the house/apartment building/office/etc. on top of it, and b) this replaces existing property taxes, which already exist everywhere and tax both the land and whatever's on top of it.
Stock Versus Flow
My understanding of Georgist policy is that the point is that land shouldn't be a stock at all. It should not be an appreciating asset that an individual/firm holds.
This is for a number of reasons, including but not limited to:
- The individual/firm didn't create the land, so why should they exclusively benefit from it?
- Land held as stock incentivizes land speculation, which increases land prices and has all sorts of negative externalities.
- Land value generally originates from what the land is near, rather than anything on it; the old real estate adage of location, location, location is literally true. The individual didn't make the beach or park or subway system the land is near, and yet being near those things is what makes land valuable.
Instead, land should be put to productive use, so the owner can generate sufficient wealth to pay the LVT and have a little extra as a profit.
For all your Georgist needs, I recommend the substack Progress and Poverty.
For successful examples of Georgist policy, this article focuses on land policy in Singapore, while this one focuses on Norway.
Hope this helps!