Income Inequality in America

It was Jeshu's post that was in question here, not the post by "GPerrault" (The link he posted has already been debunked in another thread). Good lord, you're incapable of following and remembering posting sequences. Happens A LOT that you post something and it feels like you're addressing something which wasn't even in question.

I live my life on the assumption that man, whether landlord or not, is basically good.

 

Does it matter, if real poverty has been solved in our republic through the socialism of income transfers, such that only relative forms of poverty exist, in one of the largest and most developed economies in the world; and, where for relative wealth/poverty purposes, corporate welfare even has paid multimillion dollar bonuses to CEOs on corporate welfare.

So, from that perspective and in that alternative, you were saying?

 

Murray Rothbard is next to retarded when it comes to economics. Let's just take a look at some of his mind-boggling stupid claims, from your link:

“A 100 percent tax on rent would cause the capital value of all
land to fall promptly to zero. Since owners could not obtain any net
rent, the sites would become valueless on the market.”
--Murray Rothbard

This is completely wrong. The site would be valued by how much people were willing to pay the government in taxation in order to gain secure tenure. That value might be next to nothing for marginal land, but for highly fertile land or land near population centers that value would be very high. Murray Rothbard just doesn't get it.

Below is the whopper of all stupid statements, the mother of stupid statements by Murray Rothbard:

"The first consequence of the single tax, then, is that no revenuewould accrue from it. Far from supplying all the revenue of government, the single tax would yield no revenue at all. For if rents are zero, a 100 percent tax on rents will also yield nothing." -- Murray Rothbard

This statement is so mind-boggling stupid that I can honestly say that after reading it, I never took anything Murray Rothbard said seriously again. This statement just proves that he has no clue, absolutely no clue, when it comes to economics. In this statement, Murray Rothbard claims that government can collect no revenue from taxing land value … that nobody will pay government even a dime in order to gain government secured tenure to land. Rothbard claims that if government collects the land rents, that the land rents just disappear. I can forgive a lot of people for such ignorance, but for someone of such high regard to say something so obviously stupid is just more than I can accept. If Murray Rothbard believe that the land value tax will “yield no revenue at all” then that just proves that he is an economic ignoramus.
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"In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago." — Milton Friedman, Nobel laureate in Economics (1976)
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"Pure land rent is in the nature of a 'surplus' which can be taxed heavily without distorting production incentives or efficiency." —Paul Samuelson, Nobel laureate in Economics (1970)
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"Economists are almost unanimous in conceding that the land tax has no adverse side effects." — William Vickrey, Nobel laureate in Economics (1996)
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"And using natural resource extraction and using land rents as the basis of taxation is an argument that I think makes an awful lot of sense because it is a non-distortionary source of income and wealth." -- Joseph Stiglitz, Nobel laureate in Economics (2001)

 

The store (generally) will NOT adjust prices which are limited by what the market will bear. The MARKET determines the prices of product not the store (it's owner). As for taxes, less taxes will be paid ? Yeah ? well, I wish luck to whoever isn't paying their taxes. You pay your taxes, you go to jail. Even Al Capone couldn't avoid that.

 

No Armor, it wasn't. Claims were made, there was no "debunk" or refutation.

And yet you have repeatedly denigrated the role of landowners as a group. Are there some bad people who are landowners? Sure, just like their are doctors or lawyers or even some preachers who would fit the bill. My entire purpose in this discussion with you, which is not on topic of the OP, was to counter the propaganda being spread that landowners are typically corrupted parasites. Most are nice decent people who are not out to take advantage of anyone, period. If you get off that merry-go-round I have no problem with you.

 

Money used to help the poor who cannot help themselves is not socialism. At most it is a social program, but not socialism.

I do not agree with corporate welfare at all. But when discussing relative poverty, no matter how good the standard of living the lower quintile earners happens to be, relative to those who make more they are still living in "relative poverty." We have come a long way in solving the problem of real poverty, just not all of it, and we still have work to do. But if I have $50 and a person has public housing, food stamps, medicaid and other safety net programs taking care of him, I will send my $50 to someone taking care of a person who has no public housing, no food stamps, no government medical program because that human being needs it more. Is that so hard to understand?

 

1. This silly post (# 603) had already been proven wrong even before you posted it. See my Post # 592.

2. Yes, having just about all electronics manufactured off-shore IS INDEED 'atrocious", as I've been saying here, in numerous posts.

3. Some of the finEST musical instruments are produced off-shore ??? Be careful there, buddy. FinEST means there isn't a comparable American-made musical instrument which is finer. Care to give an example of any ? (with sources of course) And I did answer this also in Post # 627, which was also confirmed in Post # 646.

 

On what basis do you claim it is any form of capitalism? If none, then it must be a form of social-ism.

- - - Updated - - -

There is a difference between relative poverty and being poor. We can only solve relative poverty on an at-will basis and claim those Persons no longer have any excuse to stay poor on that same basis. What is your solution?

 

Actually Rothbard hit most of the nails on the head. Yes, there are people who agree with George. Yes, there are people who agree with Rothbard.

Even the people who have been arguing the hardest for LVT single tax on this thread have said that the price of land (value) would drop to near zero with LVT.

Rothbard does tend to exaggerate some, but he is a lot closer to reality than the economists you site above. The entire school of Austrian Economics is much closer to reasonable economics than any other I have read and studied. My first graduate degree was an MBA with Economics my second major. I do not believe an LVT single tax system will work in a mature economy, and I don't think it will work in a primitive economy either if the land is already owned and the owners are not properly compensated for their land. If you want any more of my opinions, go back and read the last few hundred posts. In my opinion the most outrageous statements made in favor of LVT single tax have been:

A rich man living on a yacht at sea would owe not tax because is does not own land.

That an LVT single tax would garner enough revenue for the US government, the states and the towns to do the job they are there to do.

 

Who said anything about socialism? Armor For Sleep just wants to shift the burden of taxation off of productive workers and onto landowners parasitic economic rent incomes. What does that have to do with socialism?

 

Capitalism is a form of economic system in which private people either as individuals or in groups own/control production and distribution without substantial government interference. Socialism is an economic system in which the Government either owns or carefully controls land, production, distribution from the raw material to the consumer.

Yes, there is a huge difference between relative poverty and objective poverty or "being poor." The solution has been with us for years, we just don't control it properly and people slip through the holes in the safety net. How do we solve the problems? Universal medical care is one of the first requirements. Not the ACA or Obamacare as it is called, but something more simple and more universal.

Medical Care for All

In my opinion the best way to extend our fine medical care system to those who have no coverage other than emergency room services is to automatically issue medicaid cards to everyone without current insurance.

Depending on the profitability of their employer, the employer should be billed for medicaid. If the individual earns enough to pay for his own, or part of his own coverage his employer should withhold the premiums from the individuals pay check.

For those with out jobs medicaid should be extended without premium until the individual becomes employed or can otherwise afford to pay the premiums.

Those who have refused company provided health care to get more cash in their checks should automatically be enrolled in medicaid and the cash they are now receiving withheld and used to pay medicaid premiums. lIkely they will jump at the chance to take company provided health care in lieu of medicaid.

County health units should be expanded to care within their capability all persons on medicaid, by creating out patient clinics in conjunction with any Hill-Burton hospital in the area.

The costs of this will be far less than the ACA or Obama care, and most important, will not depreciate the care those with care now receive.​

Then we have to insure that those who can't work, for what ever reason, like physical or mental disability, are given the help they need to get off the street if they are homeless, food to eat and utilities to keep them healthy.

Those that can work but don't have the skills need to be trained and work programs to give them a job. There are jobs all over our country that go crying for lack of funds every day. Public works jobs like the WPA or the CCC helped during the depression.

The malingerers have to be handled. That I have no answer for.

Just a short anecdote about the failure of government.

Years ago in a major city in the US a very wealthy contractor offered to give to the city a tract of land, and on that land he proposed building simple but sturdy housing for the homeless. His design was basically a large square room with one corner closed off for a small bath with shower and the adjacent corner a kitchen counter with range and oven. This was supposed to be a turnkey operation that he was giving the city to house the homeless and the poor. The city turned him down because the size of the space did not meet the square foot code per person. He took the land, built luxury apartments and made a few more million dollars. Short sighted public officials need to remove their head from their excremental orifice in addition to funding needed programs.

 

Your suggestion that land owners are as a group any more parasitic than any other group of people to include doctors, lawyers, manufacturers, distributors et al is basically LUDICROUS AND ARBITRARY. Good luck with your discussion. I have already had a long drawn out discussion with two people who sound like you. They were wrong. You are wrong. So have at it.

 

I used to be a college microeconomics teacher, and OH Boy, do you ever need to take my course. First of all, let me get you off your false high horse, by referring to you as "student". OK student, first of all, the business closing its OFFSHORE doors is the PURPOSE of the placing of the tariffs (or to keep them from going offshore in the first place). So if they close up (or never leave the US), then the tariff has succeeded.

Secondly, (and this is going to be a bit longer) there are a number of myths that exist in business economics. None is more prevalent than the one about businesses "passing on" added expenses to consumers. No, businesses DO NOT "pass on" anything, because, as you said, the consumers will disappear (ie, sales will drop).
Since all products are priced at the "market price" (ie. the highest price that can be charged without causing sales to drop), any price increase above that will cause sales (and income) to drop, causing you to lose money, and in business you cannot do anything that causes you to lose money. This can be graphically illustrated by a bell-shaped graph, with business income on the Y (vertical) axis, and prices (rising) on the X (horizonatal) axis. As the price goes up (moving rightward on the graph), business income also goes up (moving upward on the graph). This curve (shaped like a somewhat flattened liberty bell) then levels off at the top of the bell, and this is the market price. This is the price that you see everything being sold at on the shelves in the stores. No, a higher price CANNOT be made, because (graphically) we then see, as the curve continues rightward (higher prices), the curve now starts on a DOWNward movement, whereby the higher the price, the lower the sales/income. Sales dropping more and more, as the price goes up more and more.

Actually, you answered your own statement . You said if/whenever the business raises its prices (to pass a new expense on to the consumer), the business will close its doors. Yeah, and that's exactly why they DON'T (and cannot) raise the prices (above their market price).

One thing you neglected to consider though (and its a big one). In many instances the added expense is a raise in the minimum wage (which is being discussed by Obama right now). What is often lost in the discussion of this "business expense" is that it is not just a business expense, it is also a business GAIN, and a very big one. That's because minimum wage raises (which also typically raise wages which are above MW) are also sales increasers, and big time. SO when the MW goes up, and your labor costs go up, so does DISPOSABLE INCOME in the community around you (for thousands of people). This makes thousands of people now eligible buyers of the things you're trying to sell.

In the case of taxes, these too can provide govt jobs, and get more money in people's pockets, as well as provide raises for those already employed in govt. jobs. In private industry, tax increases sometimes go to loans and/or grants to private companies helping them and their employees (your potential customers). As far as many companies are concerned, it might also be noted, that they can easily afford tax increases without having their doors be closed, or even inconveniencing them at all. In the case of others whose business would be in jeopardy, perhaps some hardship exceptions could be made for them. I also, however, tend to go by the basic rule that if you can't afford to be in business, don't be in it. This is what I often say to all those sob story businesses who whine that they can't do business without hiring cheap, labor foreigners. Well, that simply means they don't have the resources to be in the business they're in, and therefore shouldn't be in it, and instead, should be doing what all the rest of us who also can't afford to be in business, and properly hire AMERICAN workers. >> Get a job.

When I owned a business my biggest problem wasn't what I paid my sales people. My biggest problem was the small amounts of money in the pockets of all the people who wanted to buy my product. I used to practically beg my legislators to raise the state minimum wage, to boost my sometimes sagging sales. And why couldn't those people afford my price ? Because someone out there was paying them minimum wage, that's why.

 

Nope. Murray Rothbard hammered his own thumb into a mush of bone matter. He embarrassed himself.

Murray Rothbard claimed that land RENT would fall to zero, which is a ridiculous fabrication. The exchange value of land is simply future rent flows which can be pocketed at present in exchange for the land. When land rent is taxed the landowner, or landholder (which I prefer), simply can't keep it any more. Thus when land rent is taxed the exchange value of land (future rent flows) would fall accordingly. The land rent itself wouldn't disappear, it would simply go to a different entity.

Rothbard's claims are silly.

Don't really care to address this part.

1. The most common way people get rich in the first place is by pocketing land rent. This would no longer be possible under the LVT. (Around 20% of the G.D.P. goes to landowners as land rent. I think it was Geofree who once showed that 3% of the population own 95% of all the privately owned land, ESPECIALLY the most valuable land.) Also, the LVT would fix exactly that: absentee landowners lying on a beach somewhere sipping pina colada, cruising around in their expensive yachts, while the productive do all the work and wealth creating, and they just pocket land rent.

2. Any companies the rich man owns will pay the land value tax wherever they're located.

3. Rich people pay a lot of money for land in expensive locations. There is no reason they would all of a sudden all start to live on yachts just because those payments would go to a different entity. So, that's a ridiculous suggestion in the first place.

4. Nobody on here suggested that the LVT would necessarily be a single tax. Though, 20% of the G.D.P. is quite a big sum and would raise a lot of revenue, allowing us to lift the massive burden of income taxes, sales taxes, etc. by at least that amount, increasing the reward of production for producers and reducing the reward for non production (making economic gain without contributing to wealth creation).

5. LVT doesn't fix everything. NOOOOOOOOOOOOOOOOOOOOOOO! (LOL)

The Henry George Theorem (only named after him) tells us a different story. And, again, even if it doesn't, it would at least allows us to reduce more economically burdensome taxation by that amount. And, again, nobody on here suggested that it should be a single tax. There are some other sources of economic rents that can be and should be tapped.

 

You only say so, but you don't actually address rebuttals.

Yes. Because the role of the landowner is detrimental to the economy and well being of society.

I'm mainly attacking the entity of the landowner. The landowner's role in the economy. I never claimed that all landowners are bad people. Some are really just good people and just try to do their best to have a good life not knowing how parasitic their role in the economy is. I think the vast majority are good guys. And then you have guys like Donald Turmp or the Duke of Westminster who do far more damage to others than tens of thousands of other landowners combined. But that doesn't change that the role of the landowner in the economy is purely parasitic, even if some are enormously parasitic while others are just parasitic enough not to become net losers. I don't fault you either for trying to have a good retirement with such investments. You'd be silly not to when you get the chance to in our system. The system as a whole needs to change.

Yes, it is. Landowning causes massive wealth inequality.

That doesn't change that every single cent in payment received for land is the result of parasitism on the part of the landowner. He may not even have any bad intentions. He may not be a bad guy. That doesn't change the nature of the income.

I have a problem with your defense of the unjust system of landowning, not with you personally. I don't know what's going on inside of you, so I'm not sure whether you actually understand what landowning does to others or not. Whether you are just oblivious to it or maliciously want it to continue.

 

Snappo's solution. Stop committing crime, hand in your illegal guns, flush your drugs, marry the woman you had a baby with, go back to school, get an education and a real job, and become one of the "haves" instead of the "have-nots".

 

Good post. About the only thing it leaves out is the income inequality caused by the job hiring inequality of affirmative action, which leaves Whites at a disadvantage to try to be equal to Blacks.

 

So you want to expand the poorly run Medicaid system? Any other near bankrupt programs we should double down on?

 

"Snappo's solution. Stop committing crime, hand in your illegal guns, flush your drugs, marry the woman you had a baby with, go back to school, get an education and a real job, and become one of the "haves" instead of the "have-nots". "

Taxcutter agrees:
This is the grass-roots, bottom-up approach that would bring long-term improvement.

This approach will require cultural change.

My top-down approach would reinforce bottom-up change.

 

Your opinion does little to impress me.

Either you or Langston, at one time or another in this and other threads have said that the value of land would drop to near zero, thus logically land rent would be next to zero based on your own description of LVT. The exchange value of land is simply future rent flows which can be pocketed at present in exchange for the land. When land rent is taxed the landowner, or landholder (which I prefer), simply can't keep it any more. Thus when land rent is taxed the exchange value of land (future rent flows) would fall accordingly. The land rent itself wouldn't disappear, it would simply go to a different entity.[/quote]According to some of your earlier posts the value of the land would decrease to near zero so 100% tax would still be near zero.

No more than your claims.

Of course you don't. There is little in rebuttal you could come up with.

Absurd!

Still, based on your earlier admission, a rich man who makes millions on investments which do not include land would get away without paying any tax. This reason alone is enough to throw the concepts of LVT out the window.

Even rich people like Donald Trump contributed millions to the economy when he paid the contractors to build his tower.

Many do suggest an LVT would be a single tax system and that is the only real value in the system which has so little value overall.

It actually fixes very little and introduces a whole lot of problems to a mature economy.

The very best form of taxation there is or ever will be is a progressive individual income tax system used to replace all of the regressive tax schemes like sales tax, real estate property tax, fuel tax et al.

 

There has never been even an insignificant rebuttal to address.

No more than doctors, lawyers, corporation owners, investors, bankers etc etc.

Especially since capitalism and private property (even of land) is much better than any other system ever tried.

Ah equality your say. How about the fact that the landowners had more before they bought the land, not because of the land. After all, except for the original settler the landowner had to buy his land.

It surely does. Landowners are no more parasitic than any other group of people. Actually less so than those who use the infrastructure without having paid taxes to create that infrastructure.

I have a problem with the way you called me a liar several times. I don't have a problem with landowners as they are part of the culture which created the economy prosperity in our country.

 

No John, I want to run the Medicaid properly and use that system instead of the ACA. It will be much less expensive than Obamacare.

 

George Reisman on Land Rent

The inference, so easily drawn from Ricardo's theory, that private ownership of land enables landowners passively to sit back and pocket the fruits of economic progress and other people's labor, is utterly mistaken. The truth is exactly the opposite: namely, private ownership of land is an essential foundation of economic progress, and the more i tis respected, the more rapid is economic progress. Thus, it is precisely the private ownership of land that prevents land rent from constituting and ever growing share of income. For private ownership of land operates to increase the productivity of land thus reduce its scarcity value and rent.

 

Even the left leaning tendencies of Paul Krugman does not advocate shifting taxes off labor onto property.

 

And interesting comment by Richard Bramhall

Land Value Tax is levied on the annual value of each parcel of land. The annual value can be assessed in much the same way as the old UK rating system - that is, as a rental. Unlike the rating system, however, it would be assessed as if the site were bare and unimproved - that is, it is a tax on the value of the land alone, and excludes any structures or improvements (otherwise it would be a tax on capital as well as land).​

Since almost all credible economists view land, labor and time as the three elements of capital, it is obvious that land tax does in fact tax capital. Taxing capital does in fact have a negative effect on production.