Discussion:
Tax cuts are not working
(too old to reply)
Nospam
2007-08-23 13:58:34 UTC
Permalink
Yet another conservative myth crashing to the ground.

New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
actually harmful:


"""
Generous tax breaks given to companies that threaten to take their business
elsewhere are coming under increasing scrutiny from state and local
officials who say taxpayers aren't getting their money's worth.

Critics say the tax breaks and other financial incentives have gotten out of
hand, costing taxpayers billions of dollars and doing little for the
economy.

...

State and local governments offer about $50 billion a year in tax breaks and
other economic incentives, according to economists Alan Peters and Peter
Fisher.

Academics say there is little evidence to show that tax breaks have a
lasting effect on a local economy.

Property tax breaks to manufacturers appear to boost industrial employment
for a short time, says University of Nebraska economist John Anderson, a
former Michigan economic developer.

"But the impact of incentives dissipates quickly, so in a few years, there's
no benefit to employment," he says.

...

Funkhouser says tax breaks take money from services such as police and
schools that make a local economy successful. "Tax breaks are like taking
a painkiller to mask the underlying problem, which are quality-of-life
issues," he says.

Fain says government involvement is vital in a global economy. "We're
competing against Ireland, Eastern Europe, Singapore, not to mention China
and India," he says. "We have to use the tools that we have."
"""

From:
http://www.usatoday.com/news/nation/2007-08-21-states-incentives_N.htm?csp=1
John Galt
2007-08-23 15:13:40 UTC
Permalink
Post by Nospam
Yet another conservative myth crashing to the ground.
New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
The article you posted refers to local tax abatements, not "tax cuts". An
abatement is not a "cut", it's a period of time under which the new business
does not have to pay the tax.

Abatements are used as an incentive (by both convervatives and otherwise) to
lure businesses for the purpose of (eventually) improving the tax base of
the municipality.

JG
Post by Nospam
"""
Generous tax breaks given to companies that threaten to take their business
elsewhere are coming under increasing scrutiny from state and local
officials who say taxpayers aren't getting their money's worth.
Critics say the tax breaks and other financial incentives have gotten out of
hand, costing taxpayers billions of dollars and doing little for the
economy.
...
State and local governments offer about $50 billion a year in tax breaks and
other economic incentives, according to economists Alan Peters and Peter
Fisher.
Academics say there is little evidence to show that tax breaks have a
lasting effect on a local economy.
Property tax breaks to manufacturers appear to boost industrial employment
for a short time, says University of Nebraska economist John Anderson, a
former Michigan economic developer.
"But the impact of incentives dissipates quickly, so in a few years, there's
no benefit to employment," he says.
...
Funkhouser says tax breaks take money from services such as police and
schools that make a local economy successful. "Tax breaks are like taking
a painkiller to mask the underlying problem, which are quality-of-life
issues," he says.
Fain says government involvement is vital in a global economy. "We're
competing against Ireland, Eastern Europe, Singapore, not to mention China
and India," he says. "We have to use the tools that we have."
"""
http://www.usatoday.com/news/nation/2007-08-21-states-incentives_N.htm?csp=1
Hillary Rotten Clintoon
2007-08-23 16:23:13 UTC
Permalink
Post by John Galt
Post by Nospam
Yet another conservative myth crashing to the ground.
New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
The article you posted refers to local tax abatements, not "tax cuts". An
abatement is not a "cut", it's a period of time under which the new
business does not have to pay the tax.
Abatements are used as an incentive (by both convervatives and otherwise)
to lure businesses for the purpose of (eventually) improving the tax base
of the municipality.
JG
==============
You are trying to explain tax laws to a Libmaggot that cant figure out what
hole to poke on a paper ballot next to AL gore's name.
Gandalf Grey
2007-08-23 22:30:32 UTC
Permalink
You are trying to explain tax laws to a Repubicunt that cant figure out
how many holes to poke on a paper ballot next to George Bush's name.
Hillary Rotten Clintoon
2007-08-24 19:07:48 UTC
Permalink
"Gandalf Grey" <***@infectedmail.com> wrote in message news:46ce0878$0$31006$***@news.newshosting.com...

You are trying to explain tax laws to a Libmaggot that cant figure out what
hole to poke on a paper ballot next to AL gore's name.
robw
2007-08-25 05:13:26 UTC
Permalink
Really? Gore got more votes than Busch.
Post by Hillary Rotten Clintoon
You are trying to explain tax laws to a Libmaggot that cant figure out what
hole to poke on a paper ballot next to AL gore's name.
Gandalf Grey
2007-08-25 06:08:00 UTC
Permalink
You are trying to explain tax laws to a Conservamaggot that cant figure
out how
many holes to poke on a paper ballot next to Bush's name.
Davinchi
2007-08-23 23:05:28 UTC
Permalink
Tax cut or Abatements -
mmmm, what happened to the "free market" making everything
so perfect.
Even if you understand the theory of corp. double taxation
(and I have my doubts that very many people understand it
very well), corporations still need to contribute to
infrastructure costs, public goods, and costs for
remediation of the negative externalities that they produce.
This happens by, **say it all together now**, Taxes.
Rational public policy demands that everyone who is able
contribute to a civil society.

Incentive should focus on resources that make the firm more
productive, not simply adding to their profit margins by raw
savings. That is not much different than a subsidy, and
does not necessarily enhance productivity or market
expansion. That's why some call it corporate welfare.

btw
What's are "convervatives" ?
V***@tcq.net
2007-08-24 04:00:42 UTC
Permalink
On Aug 23, 6:05 pm, Davinchi
Post by Davinchi
Tax cut or Abatements -
mmmm, what happened to the "free market" making everything
so perfect.
Even if you understand the theory of corp. double taxation
(and I have my doubts that very many people understand it
very well), corporations still need to contribute to
infrastructure costs, public goods, and costs for
remediation of the negative externalities that they produce.
This happens by, **say it all together now**, Taxes.
Rational public policy demands that everyone who is able
contribute to a civil society.
Incentive should focus on resources that make the firm more
productive, not simply adding to their profit margins by raw
savings. That is not much different than a subsidy, and
does not necessarily enhance productivity or market
expansion. That's why some call it corporate welfare.
btw
What's are "convervatives" ?
thieves. conservatism is theft, it is poison to a middle class and
democracy
they would complain even if we did not collect one nickel in tax from
them. they would demand the right to tax us if they could, err, that
is right, they already do.
they will not rest till we address them on our knee's as lords and
ladies.
r***@telus.net
2007-08-23 20:32:02 UTC
Permalink
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Post by John Galt
Post by Nospam
Yet another conservative myth crashing to the ground.
New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
The article you posted refers to local tax abatements, not "tax cuts". An
abatement is not a "cut",
?? Yes, of course it is. Stop lying.
Post by John Galt
it's a period of time under which the new business
does not have to pay the tax.
No, it's usually a reduction, not elimination. But either way, it's a
tax cut.
Post by John Galt
Abatements are used as an incentive (by both convervatives and otherwise) to
lure businesses for the purpose of (eventually) improving the tax base of
the municipality.
But they don't work, and even when they do, they only rob Peter to pay
Paul. Property taxes are the fairest, most efficient and progressive
taxes we have, and cutting (or "abating") them, thus putting more of
the fiscal burden on worse taxes, is a stupid, unjust and
self-defeating policy, as well as an open invitation to corruption.

-- Roy L
John Galt
2007-08-23 20:54:56 UTC
Permalink
Post by r***@telus.net
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Post by John Galt
Post by Nospam
Yet another conservative myth crashing to the ground.
New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
The article you posted refers to local tax abatements, not "tax cuts". An
abatement is not a "cut",
?? Yes, of course it is. Stop lying.
A "cut" implies a permanent cessation.
Post by r***@telus.net
Post by John Galt
it's a period of time under which the new business
does not have to pay the tax.
No, it's usually a reduction, not elimination. But either way, it's a
tax cut.
It is inherently different then decreasing a tax marginal rate. By using the
same term to describe both, you invite confusion, IMO.
Post by r***@telus.net
Post by John Galt
Abatements are used as an incentive (by both convervatives and otherwise) to
lure businesses for the purpose of (eventually) improving the tax base of
the municipality.
But they don't work, and even when they do, they only rob Peter to pay
Paul. Property taxes are the fairest, most efficient and progressive
taxes we have, and cutting (or "abating") them, thus putting more of
the fiscal burden on worse taxes, is a stupid, unjust and
self-defeating policy, as well as an open invitation to corruption.
Possibly so. However, as long as a single municipality is prone to use them,
all will.

JG
Davinchi
2007-08-23 23:10:47 UTC
Permalink
Post by John Galt
Post by r***@telus.net
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Post by John Galt
Post by Nospam
Yet another conservative myth crashing to the ground.
New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
The article you posted refers to local tax abatements, not "tax cuts". An
abatement is not a "cut",
?? Yes, of course it is. Stop lying.
A "cut" implies a permanent cessation.
Post by r***@telus.net
Post by John Galt
it's a period of time under which the new business
does not have to pay the tax.
No, it's usually a reduction, not elimination. But either way, it's a
tax cut.
It is inherently different then decreasing a tax marginal rate. By using the
same term to describe both, you invite confusion, IMO.
Post by r***@telus.net
Post by John Galt
Abatements are used as an incentive (by both convervatives and otherwise) to
lure businesses for the purpose of (eventually) improving the tax base of
the municipality.
But they don't work, and even when they do, they only rob Peter to pay
Paul. Property taxes are the fairest, most efficient and progressive
taxes we have, and cutting (or "abating") them, thus putting more of
the fiscal burden on worse taxes, is a stupid, unjust and
self-defeating policy, as well as an open invitation to corruption.
Possibly so. However, as long as a single municipality is prone to use them,
all will.
JG
The last point is unfortunately true. Development councils,
etc. can't seem to see the forest for the trees, so to speak.

Any real economist will tell you there is a better way.
alexy
2007-08-23 23:35:23 UTC
Permalink
Post by Davinchi
Post by John Galt
Possibly so. However, as long as a single municipality is prone to use them,
all will.
JG
The last point is unfortunately true. Development councils,
etc. can't seem to see the forest for the trees, so to speak.
Any real economist will tell you there is a better way.
And what is that way? I have only a surface knowledge of these types
of arrangements, but from what I read in press reports (highly
suspect), it sounds like those development councils often "give away
the store" without putting any teeth in the promised returns to the
community.
--
Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.
Straydog
2007-08-24 00:35:57 UTC
Permalink
Post by alexy
Post by Davinchi
Post by John Galt
Possibly so. However, as long as a single municipality is prone to use them,
all will.
JG
The last point is unfortunately true. Development councils,
etc. can't seem to see the forest for the trees, so to speak.
Any real economist will tell you there is a better way.
And what is that way? I have only a surface knowledge of these types
of arrangements, but from what I read in press reports (highly
suspect), it sounds like those development councils often "give away
the store" without putting any teeth in the promised returns to the
community.
The guys with the money have by the balls the guys without the money
because the guys with the money go to multiple sites that are starving for
jobs and get them in a bidding war that spirals to the bottom (i.e.
maximum options to the guys with the money, maximum lockins-giveaways from
the community). After all, the guys with the money can always threaten to
put their plant in India or China and the developement councils all shit
in their pants when they hear this. Thus the guys with the money usually
win, and in the end a lot of them close the plant, anyway, that they just
opened or bought.

The "press reports" don't need the nitty-gritty details, just the "bottom
line."
Post by alexy
--
Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.
Davinchi
2007-08-24 06:57:35 UTC
Permalink
Post by alexy
Post by Davinchi
Post by John Galt
Possibly so. However, as long as a single municipality is prone to use them,
all will.
JG
The last point is unfortunately true. Development councils,
etc. can't seem to see the forest for the trees, so to speak.
Any real economist will tell you there is a better way.
And what is that way? I have only a surface knowledge of these types
of arrangements, but from what I read in press reports (highly
suspect), it sounds like those development councils often "give away
the store" without putting any teeth in the promised returns to the
community.
You've pretty much answered your own question. The
"abatements" have little teeth. A well targeted and defined
(legally, under statute) tax credit is more likely than the
"economic development subcommittee of the Board of
Supervisors'" plan to generate results.
Why, you say? A couple of reasons: first is data collection
and analysis, and a tax credit will require the burden of
accounting for the benefits to the community on the party
that benefits from the tax credit. Second, there will be
more public discussion of policy options, and thirdly the
political power and responsibility is shifted to elected
representatives, if not the electorate themselves.

How many times have we read in the papers something like
this or that economic development council is in negotiations
with some potential industry but they can't say with whom or
for what activity because **the firm** doesn't want the
information to affect their competitive position with
competing firm in that market space?" Every time you see
something like this you should be thinking **the firm**
doesn't want to compete with it's competitors but **does**
want governments to compete over it. That's competition in
the vertical market for their inputs, and proclaiming (while
not actually required) to produce substantial gains for the
community. It's not always like this, but I've seen my
share of cases.

Case in point, Echostar opens a call center in
Christiansburg, VA claiming large number of jobs at
12+dollars an hour (that and benefits for a call center job
is not too bad for that area), but three years latter they
only hire part-time (temp to perm) for 8 dollars an hour.
It's not even close to what was "advertised" when getting
the incentives from the local authorities. There is no way
the firm can totally manipulate the labor market, but they
do have information that is just as good as the local
government and their analysis is probably better. So what
do we make of this - I think they just lie to get the best
deal.

There's an old saying free advise is worth what you paid for
it, and in some cases the economic development teem is
taking the firms numbers for payroll, payroll taxes,
outsourced services, local vendor commitments, and so on.
The companies have almost zero responsibilities to the
"agreement" compared to that of their shareholders.
But if it's a tax credit, and they lie to get it, well that
would probably be a "go to jail" felony or at least a very
stiff fine.

I personally would prefer that every locality that gets into
this kind of bidding war puts employee ownership on the
agenda. It you had more of this happening, then the firms
and the employees and the local government would be better
off imho.
John Galt
2007-08-24 01:36:22 UTC
Permalink
Post by John Galt
Post by r***@telus.net
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Post by John Galt
Post by Nospam
Yet another conservative myth crashing to the ground.
New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
The article you posted refers to local tax abatements, not "tax cuts". An
abatement is not a "cut",
?? Yes, of course it is. Stop lying.
A "cut" implies a permanent cessation.
Post by r***@telus.net
Post by John Galt
it's a period of time under which the new business
does not have to pay the tax.
No, it's usually a reduction, not elimination. But either way, it's a
tax cut.
It is inherently different then decreasing a tax marginal rate. By using
the same term to describe both, you invite confusion, IMO.
Post by r***@telus.net
Post by John Galt
Abatements are used as an incentive (by both convervatives and otherwise) to
lure businesses for the purpose of (eventually) improving the tax base of
the municipality.
But they don't work, and even when they do, they only rob Peter to pay
Paul. Property taxes are the fairest, most efficient and progressive
taxes we have, and cutting (or "abating") them, thus putting more of
the fiscal burden on worse taxes, is a stupid, unjust and
self-defeating policy, as well as an open invitation to corruption.
Possibly so. However, as long as a single municipality is prone to use
them, all will.
JG
The last point is unfortunately true. Development councils, etc. can't
seem to see the forest for the trees, so to speak.
Any real economist will tell you there is a better way.
Generally speaking, I couldn't argue. However, there are special situations
where dragging in a major employer may be *so* significant for a
municipality that the abatement makes sense.

And if one does it.........all follow suit.

JG
r***@telus.net
2007-08-24 23:45:05 UTC
Permalink
On Thu, 23 Aug 2007 15:54:56 -0500, "John Galt"
Post by John Galt
Post by r***@telus.net
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Post by John Galt
Post by Nospam
Yet another conservative myth crashing to the ground.
New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
The article you posted refers to local tax abatements, not "tax cuts". An
abatement is not a "cut",
?? Yes, of course it is. Stop lying.
A "cut" implies a permanent cessation.
No, it doesn't. It implies nothing but a reduction, no limits on how
big or for how long.
Post by John Galt
Post by r***@telus.net
Post by John Galt
it's a period of time under which the new business
does not have to pay the tax.
No, it's usually a reduction, not elimination. But either way, it's a
tax cut.
It is inherently different then decreasing a tax marginal rate. By using the
same term to describe both, you invite confusion, IMO.
Calling a marginal rate reduction a "tax cut" is correct but IMO
deceptively vague. It should be called a rate cut. Tax cuts can be
rate cuts, amount cuts, selective elimination, or whatever.

-- Roy L
professorchaos
2007-08-29 02:03:27 UTC
Permalink
Post by r***@telus.net
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Property taxes are the fairest, most efficient and progressive
taxes we have, and cutting (or "abating") them, thus putting more of
the fiscal burden on worse taxes, is a stupid, unjust and
self-defeating policy, as well as an open invitation to corruption.
Wrong. Property taxes in the US are not Henry George's idea of a
property tax. George advocated a tax on the unimproved value of land.
That is not what happens in the US. Taxes are levied on improvements as
well which in no means are assumed to be even relatively inelastic like
land maybe. Even a tax on unimproved values is only efficient if the
demand for land is perfectly inelastic which is unlikely. Not all land
is identical and some land has better location and qualities to it. This
will mean owners will different reservation prices for selling their
land. This means land is not perfectly inelastic. Therefore there is an
excess burden to even an unimproved land tax. Albeit a much smaller one
than other taxes.

There is nothing progressive about current land taxes. We all have to
live on some sort of land. The poor may not be directly taxed by land
taxes but they pay it. The owners of rent houses and apartments must pay
property taxes. Those taxes are part of the rent charged on the
apartment or the house. A raise in property taxes is regressive in that
the poor spend a larger portion of their income on housing and increase
land taxes means increases on the rent charge for housing to meet the
bigger tax bill. There is absolutely nothing progressive about land
taxes of any sort. They are a sales tax on housing and it is regressive
because poor people have a higher percentage of income going to housing.

Even a Georgian land tax would be regressive. Income taxes are the only
progressive tax we have. EIC makes them even more progressive in that
the poor get a subsidy instead of paying taxes.

I would much rather see an elimination of property and sales taxes in my
state and have it replaced with an income tax. Income taxes are not
great but they cost less to administer. States spend a lot of the tax
money going to business to make sure they are not hiding sales and
hiring appraisers to asses property taxes. In this day and age for 99%
of the population it is hard to lie about income because their employers
have to report the income while paying SS taxes. Income taxes can be
easily e-filed. Few audits are needed. The state of Texas has to check
up on everything from Exxon to mom and pop shops to make sure they are
reporting sales correctly and paying taxes. It is easier for them to
cheat and more incentive for them to do it than it is for an individual
to cheat on income taxes. The cost of administering an income tax is
most less than the army of auditors and appraisers needed to enforce
property taxes.

When looking at one tax is economically best one must consider the
administrative burden (cost of enforcing the tax) as well as the excess
burden (lost gains from trade) from the tax. Income taxes have lower
administrative burdens than other taxes and can much more easily be
manipulated to fit people's idea of fairness than sales or property
taxes. If you live in a state with a sales tax you know what I mean.
When you go into a grocery store some things are subject to sales tax
and some are not. It is messed cause by trying to limit the regressive
of the tax. So hot food is taxed unprepared not. Pure juice is tax free
while juice drinks are not, yes there is a definition for what is a
juice drink and what is not. Bread on the bread aisle is not taxed if
you buy it from the deli freshly baked it is taxed. The system is
confusing and extremely costly to implement and enforce. As for property
taxes, counties hire appraisers every year to appraiser your property.
Then have to deal with appeals for months from land owners who argue the
appraisal. The system is very costly to implement. Income taxes usually
see fewer audits and less argument than property taxes.
r***@telus.net
2007-08-29 18:08:45 UTC
Permalink
On Tue, 28 Aug 2007 21:03:27 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Property taxes are the fairest, most efficient and progressive
taxes we have, and cutting (or "abating") them, thus putting more of
the fiscal burden on worse taxes, is a stupid, unjust and
self-defeating policy, as well as an open invitation to corruption.
Wrong. Property taxes in the US are not Henry George's idea of a
property tax. George advocated a tax on the unimproved value of land.
That is not what happens in the US. Taxes are levied on improvements as
well which in no means are assumed to be even relatively inelastic like
land maybe.
No one denies that there are many imperfections in property tax
systems. Which local tax system is perfect?
Post by professorchaos
Even a tax on unimproved values is only efficient if the
demand for land is perfectly inelastic which is unlikely.
Thank you for proving again that you are absolutely ignorant of
economics.
Post by professorchaos
Not all land
is identical and some land has better location and qualities to it. This
will mean owners will different reservation prices for selling their
land. This means land is not perfectly inelastic.
No, Professor economic ignoramus, it most certainly does not.
Post by professorchaos
Therefore there is an
excess burden to even an unimproved land tax. Albeit a much smaller one
than other taxes.
Flat false.
Post by professorchaos
There is nothing progressive about current land taxes. We all have to
live on some sort of land. The poor may not be directly taxed by land
taxes but they pay it.
Wrong again. You are really totally ignorant, aren't you? Have you
ever read a book on economics?
Post by professorchaos
The owners of rent houses and apartments must pay
property taxes. Those taxes are part of the rent charged on the
apartment or the house.
No, actually, they are not. Only _part_ of the improvement value
portion of the property tax can be passed on to tenants, and the poor
tend to live in dwellings with almost no improvement value. You are
just flat wrong.
Post by professorchaos
A raise in property taxes is regressive in that
the poor spend a larger portion of their income on housing and increase
land taxes means increases on the rent charge for housing to meet the
bigger tax bill.
False, as proved above.
Post by professorchaos
There is absolutely nothing progressive about land
taxes of any sort.
That is of course also flat false, as land taxes are borne entirely by
land_owners_, a fact of economics that has been known for nearly 200
years, and is not disputed by any competent economist.
Post by professorchaos
They are a sales tax on housing
That is of course an absurd lie, as a nanosecond's honest thought will
confirm.
Post by professorchaos
and it is regressive
because poor people have a higher percentage of income going to housing.
As land rent is unaffected by taxation (fact known for nearly 200
years), and the poor pay almost all of their housing rent for land,
they pay almost none of the property tax burden.

But thank you for proving again that you know absolutely no economics
whatsoever.
Post by professorchaos
Even a Georgian land tax would be regressive.
Thank you for proving that you are stupid and ineducable.
Post by professorchaos
Income taxes are the only progressive tax we have.
Thank you for proving that you are stupid and ineducable.
Post by professorchaos
EIC makes them even more progressive in that
the poor get a subsidy instead of paying taxes.
EIC is a very progressive and beneficial policy because it is the
opposite of income tax. True.
Post by professorchaos
I would much rather see an elimination of property and sales taxes in my
state and have it replaced with an income tax.
As in low-property-tax economc powerhouses like Alabama, Arkansas, and
Washington DC?
Post by professorchaos
Income taxes are not
great but they cost less to administer.
That is of course wildly false.
Post by professorchaos
States spend a lot of the tax
money going to business to make sure they are not hiding sales and
hiring appraisers to asses property taxes.
?? Businesses don't hire tax assessors, stupid.
Post by professorchaos
In this day and age for 99%
of the population it is hard to lie about income because their employers
have to report the income while paying SS taxes.
ROTFL!!! Yeah. It is hard for _employees_ to lie about their
_wages_. Every other form of income is pretty easy to lie about.
Post by professorchaos
Income taxes can be
easily e-filed. Few audits are needed.
Needed for what? The typical audit results in an order of magnitude
more additional tax revenue than it costs.
Post by professorchaos
The state of Texas has to check
up on everything from Exxon to mom and pop shops to make sure they are
reporting sales correctly and paying taxes. It is easier for them to
cheat and more incentive for them to do it than it is for an individual
to cheat on income taxes. The cost of administering an income tax is
most less than the army of auditors and appraisers needed to enforce
property taxes.
That is of course the exact opposite of the truth. Where property tax
rates are substantial, property taxes have the lowest administration
cost per dollar of revenue raised. Property taxes are only
inefficient when the rate applied is so low (<1%) that assessment
costs are a significant fraction of typical taxes owing.
Post by professorchaos
When looking at one tax is economically best one must consider the
administrative burden (cost of enforcing the tax) as well as the excess
burden (lost gains from trade) from the tax. Income taxes have lower
administrative burdens than other taxes
Lie.
Post by professorchaos
and can much more easily be
manipulated to fit people's idea of fairness than sales or property
taxes.
Nope. Only _your_ idea of fairness.
Post by professorchaos
If you live in a state with a sales tax you know what I mean.
When you go into a grocery store some things are subject to sales tax
and some are not. It is messed cause by trying to limit the regressive
of the tax. So hot food is taxed unprepared not. Pure juice is tax free
while juice drinks are not, yes there is a definition for what is a
juice drink and what is not. Bread on the bread aisle is not taxed if
you buy it from the deli freshly baked it is taxed. The system is
confusing and extremely costly to implement and enforce.
Sales taxes are indeed a poor alternative to property taxes. That was
kinda my point.
Post by professorchaos
As for property
taxes, counties hire appraisers every year to appraiser your property.
Liar. There is not one county in the USA that appraises every
property every year. This proves that you are just another stupid,
lying, anti-justice sack of $#!+.
Post by professorchaos
Then have to deal with appeals for months from land owners who argue the
appraisal. The system is very costly to implement.
Hehe. That must be why land taxes have been common and highly
successful since the dawn of recorded history, even in societies with
little capacity for information processing.
Post by professorchaos
Income taxes usually
see fewer audits and less argument than property taxes.
That is of course another flat-out lie.

Why do I even bother with stupid garbage like you?

-- Roy L
professorchaos
2007-08-29 21:22:28 UTC
Permalink
Post by r***@telus.net
On Tue, 28 Aug 2007 21:03:27 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Property taxes are the fairest, most efficient and progressive
taxes we have, and cutting (or "abating") them, thus putting more of
the fiscal burden on worse taxes, is a stupid, unjust and
self-defeating policy, as well as an open invitation to corruption.
Wrong. Property taxes in the US are not Henry George's idea of a
property tax. George advocated a tax on the unimproved value of land.
That is not what happens in the US. Taxes are levied on improvements as
well which in no means are assumed to be even relatively inelastic like
land maybe.
No one denies that there are many imperfections in property tax
systems. Which local tax system is perfect?
Post by professorchaos
Even a tax on unimproved values is only efficient if the
demand for land is perfectly inelastic which is unlikely.
Thank you for proving again that you are absolutely ignorant of
economics.
Really can you define would perfectly inelastic means? Can you explain
to me how the elasticities of demand and supply affect excess burdens of
taxation. I suppose I just need to email all the authors of every
textbook I ever used and tell they are wrong because Roy said this
analysis shows no knowledge of economics. I suppose I will start with
Greg Mankiw and say I know you have been a professor at Harvard, an
author of many peer reviewed journals, and the cheif economic advisor to
the President. However, could please change you principles textbook. I
was trained as you were and some publications as well but a man named
Roy L, posted to a forum, which had threads asking about Jews and Jewish
conspiracies in it, and stated this analysis was ignorant of economics.
Dr. Mankiw it seems you and I have to learn about economics despite our
graduate training, our practice in the field, and publications. This was
posted on an internet forum it must be right.

I am sure Mankiw would get a good laugh and write me off as a total kook
if it didn't realize how scarcastic I was.
Post by r***@telus.net
Post by professorchaos
Not all land
is identical and some land has better location and qualities to it. This
will mean owners will different reservation prices for selling their
land. This means land is not perfectly inelastic.
No, Professor economic ignoramus, it most certainly does not.
Really what is the definition of elasticity? What is the definition of
perfectly inelastic? I hate to break this to you but the consensus in
the professor, what I had to learn and even teach, is that elasticity is
a measure of responsive to quantity demanded or quantity supply to a
change in price. Perfectly inelastic supply means that the same amount
of the good would be supplied regardless of the price. So would sell you
home if someone offered $1? What about $1 billion? If the answers are no
then yes then the elasticity of supply is not perfectly inelastic. There
will be an excess burden to the tax.
Post by r***@telus.net
Post by professorchaos
Therefore there is an
excess burden to even an unimproved land tax. Albeit a much smaller one
than other taxes.
Flat false.
Really? Milton Friedman didn't know what he was talking about when he
said that a land tax was the least bad tax? That is exactly what
Friedman said. There is an excess burden to the tax but it is less than
other taxes. Hmm, Noble laureate versus Roy. I think I will go with
Friedman as knowing more than Roy.
Post by r***@telus.net
Post by professorchaos
There is nothing progressive about current land taxes. We all have to
live on some sort of land. The poor may not be directly taxed by land
taxes but they pay it.
Wrong again. You are really totally ignorant, aren't you? Have you
ever read a book on economics?
Many times. I teach from them every semester. The land tax is a cost to
sellers of rental units. You would not rent an apartment or a house for
less than your mortgage, taxes, and maintenance of the unit. Would you?
If so I have a deal for you. Renters pay property taxes in their rent.
Depending on the elasticity of supply and demand for rental units the
price may not increase at 100% of the increase in taxes but some of the
tax is passed on to renters.
Post by r***@telus.net
No, actually, they are not. Only _part_ of the improvement value
portion of the property tax can be passed on to tenants, and the poor
tend to live in dwellings with almost no improvement value. You are
just flat wrong.
Again you are making a statement of elasticity. What are the
elasticities of supply and demand. SHOW SOME PROOF. Even show you can
explain why the elasticity of demand for rental units is elastic, that
is what you are claim. The more elastic demand the less tax can be
placed. I have a feeling you are flat wrong here. Demand for rental
units is likely very inelastic. They are a necessity, there are few
close substitutes, and the definition of the market is rather broad. The
only thing saying it may be elastic is that they may be a large portion
of the income of the renter.

Do you understand what improvement value is. That is the building. Any
multi-unit apartment or set of duplex will have a significant
improvement value. The taxes will be more strongly passed to consumers
because the supply of rental units is more likely to be more elastic
than demand. If you had read an economic textbook you would understand
this and how taxes work.
Post by r***@telus.net
Post by professorchaos
A raise in property taxes is regressive in that
the poor spend a larger portion of their income on housing and increase
land taxes means increases on the rent charge for housing to meet the
bigger tax bill.
False, as proved above.
You have proved nothing your argument rest on proving that the
elasticity of demand for rental units is very elastic and therefore
taxes can not be passed on to renters. You had nothing that even
remotely indicates that. Pick up a copy of Mankiw. Read the chapter on
elasticity, ch. 5. Place close attention to the section showing how
elasticity of demand and supply determine how much tax is passed on to
the consumer. Then read chapter 7 on efficiency. After chapter 8 or 9
explains how efficiency analysis is used in taxation. It explains how
the elasticity of supply and the elasticity of demand determine the dead
weight loss of a tax. It will show how only when one of the curves are
perfectly inelastic there is no dead weight loss.

Funny you ask if I have read a textbook on economics when your opening
argument was that economist were liars who try to confuse people and
that teaching is intentionally befuddled to mislead. So why do you not
ask if I had read a textbook as if textbooks were the authority on
economics. Certainly if you believed we are liars and we try to
intentionally befuddle when teaching at the textbooks are a conspiracy
by the rich to perpetuate there wealth then why would reading one tell
me anything about economics?

You just blatantly contradicted yourself. You say textbooks intentional
mislead and teach nothing about economics then ask if I read one
implying that the textbooks teach proper economics. Keep on rolling
David Eicke or John Hoague. Pseudo-researchers never have problem
contradicting themselves. When pointed out they have it is suddenly that
is the man trying to confuse you.
Post by r***@telus.net
Post by professorchaos
There is absolutely nothing progressive about land
taxes of any sort.
That is of course also flat false, as land taxes are borne entirely by
land_owners_, a fact of economics that has been known for nearly 200
years, and is not disputed by any competent economist.
Completely wrong when the land is rented. The market for rental units
has to do with the supply of rental units and the demand for them. The
land cost is one of the cost in this market. Taxing this raises rental
rates unless the elasticity of supply is perfectly inelastic. Something
many would disagree. I suppose you think Noble Laurette Milton Friedman
is not competent either. By saying land taxes are least bad, he is
saying they are bad just not as bad as other. His claim is that they
have cost to.

If you understand that your claim is that the land tax is borne
completely by land owners you have to prove the elasticity of supply of
land is perfectly inelastic. This is just plain false and foster by bad
thinking that because supply is "fixed" that it is perfectly inelastic.
The supply of Monet paintings is fixed there can be no more made.
However, each owner still has a different willingness to sell the paint
he owns. This means the same quantity is not offered up for sale at all
prices.

Like I said before perfectly inelastic means you will sell your house
regardless if someone offers $1 or $1 billion dollars. I have no doubt
there are perfectly inelastic portions of the supply curve for land.
However, the whole curve is not perfectly inelastic and to make the
statement that land owners will pay all the tax you have to prove that
are operating in the perfectly inelastic portion of the curve. I have
yet to see one empirical study that shows that the elasticity of supply
of land is perfectly inelastic or that we are operating in a perfectly
inelastic portion of the supply.

The fact we have speculation in land markets proves the supply is not
perfectly inelastic. Speculators will not sell until prices rises so the
elasticity of supply is not zero. It may be very small but NOT ZERO.
This means land owners will not pay 100% of land taxes on rental
property and some land tax is passed to renters. You are making a very
rigid argument that is difficult at best to prove empirically.

If the elasticity of supply is even .00000000000000000001 there will
exist a small excess burden and some taxes are passed to renters and
buyers of land and there is an excess burden. As I said before the
excess burden of land taxes is likely smaller than all other taxes, with
the exception of a lump sum tax, but not zero.
Post by r***@telus.net
Post by professorchaos
They are a sales tax on housing
That is of course an absurd lie, as a nanosecond's honest thought will
confirm.
Of course a nanosecond of honest thought confirms my argument. If the
elasticity of supply for rental units is not EXACTLY zero then some of
the tax is passed to renters. Again you are making a very rigid argument
that is only correct if the elasticity is EXACTLY zero not .00000001,
not -.0000001, or anything else but zero. Such statements require
empirical proof and I have yet to see it. I have seen some economist
believe it is exactly zero but I have yet to see any empirical proof of
the statement.
Post by r***@telus.net
Post by professorchaos
and it is regressive
because poor people have a higher percentage of income going to housing.
As land rent is unaffected by taxation (fact known for nearly 200
years),
A. Land rent is different than rental rates. You should know that. Rent
is only the profit in Smith, Ricardo, and George's sense from renting
not the rental rate.

B. It has not been well known for almost 200 years. George and some
others assumed that the elasticity of supply was exactly zero. I have
seen no evidence of this. I am not saying it does not exist but I would
like a citation to at least one paper that estimated the elasticity of
supply of land to be exactly zero before I would say that your argument
is right. I have a hunch it doesn't exist.
Post by r***@telus.net
and the poor pay almost all of their housing rent for land,
they pay almost none of the property tax burden.
Only if the elasticity of supply of rental units is EXACTLY ZERO. Note
the elasticity of supply of rental may be different from the elasticity
of supply of land.
Post by r***@telus.net
Post by professorchaos
I would much rather see an elimination of property and sales taxes in my
state and have it replaced with an income tax.
As in low-property-tax economc powerhouses like Alabama, Arkansas, and
Washington DC?
Post by professorchaos
Income taxes are not
great but they cost less to administer.
That is of course wildly false.
Administrative cost are less for income taxes than sales and property
taxes. Employers gather the data on employees wages and send it to the
taxing authority. An employee's income only effects social security
matching they have to pay. So there is little incentive to lie. The self
employed and independently wealthy are different story but for 90% of
the population it is extremely hard to hide income. It is extremely
profitable and not too hard for 100% of businesses to lose receipts hide
cash registers, etc. to avoid taxes. That makes the admin cost high. It
is very profitable for a unethical appraiser to charge more to make your
property valuation lower. Therefore SLGs have to spend tons of money on
appraisals every year to enforce the land tax.
Post by r***@telus.net
Post by professorchaos
States spend a lot of the tax
money going to business to make sure they are not hiding sales and
hiring appraisers to asses property taxes.
?? Businesses don't hire tax assessors, stupid.
I never said that I said states spend tons of money on auditors and
appraisers to enforce the tax code. A good bit of taxes goes to paying
for the collection of taxes.
Post by r***@telus.net
Post by professorchaos
In this day and age for 99%
of the population it is hard to lie about income because their employers
have to report the income while paying SS taxes.
ROTFL!!! Yeah. It is hard for _employees_ to lie about their
_wages_. Every other form of income is pretty easy to lie about.
Most people are employees. I meant to type 90%. The small business
owners and independently wealthy are few. Retirees also have income
reported for their IRA accounts to the IRS by the broker. He has no
reason to lie about what you made. It is deductions that can be faked
more easily. That is why I support a flat tax rate which still supports
the ability to pay principle. No deductions and it is harder to cheat
and we don't get government trying to socially engineer through the tax
codes.
Post by r***@telus.net
Post by professorchaos
Income taxes can be
easily e-filed. Few audits are needed.
Needed for what? The typical audit results in an order of magnitude
more additional tax revenue than it costs.
The point is there are few audits with income taxes there are tons of
audits with sales taxes. I remember not to long the owner of a topless
bar was arrested for switching out cash registers. He was trying to hide
registers that some of the records of alcohol sales to avoid taxes.
Post by r***@telus.net
Post by professorchaos
The state of Texas has to check
up on everything from Exxon to mom and pop shops to make sure they are
reporting sales correctly and paying taxes. It is easier for them to
cheat and more incentive for them to do it than it is for an individual
to cheat on income taxes. The cost of administering an income tax is
most less than the army of auditors and appraisers needed to enforce
property taxes.
That is of course the exact opposite of the truth. Where property tax
rates are substantial, property taxes have the lowest administration
cost per dollar of revenue raised. Property taxes are only
inefficient when the rate applied is so low (<1%) that assessment
costs are a significant fraction of typical taxes owing.
Proof? The administrative burden of income taxes is less because it
results in fewer collectors and fewer audits mean less cost to
administer. You can generate the same net revenue with a lower
percentage of income taxes than you can from sales or property taxes.
Property taxes involve too many appraisals and too much court cost
fighting them.
Post by r***@telus.net
Post by professorchaos
When looking at one tax is economically best one must consider the
administrative burden (cost of enforcing the tax) as well as the excess
burden (lost gains from trade) from the tax. Income taxes have lower
administrative burdens than other taxes
Lie.
You have read anything on public finance. have you? I would suggest you
start with Harvey Rosen's book once you understand what elasticity is
and how it affects who actually pays the tax and what determines
elasticity.
Post by r***@telus.net
Post by professorchaos
As for property
taxes, counties hire appraisers every year to appraiser your property.
Liar. There is not one county in the USA that appraises every
property every year. This proves that you are just another stupid,
lying, anti-justice sack of $#!+.
Really? Funny my county does appraisals every year. I am sent a new tax
bill every year with the new appraised value of my home. It has all the
stuff an independent appraiser would use on it and an analysis of how
property values for similar properties in the neighborhood has changed.
You have until a certain date to appeal it. A lot of people trust the
appraisal district values to give them an idea if the asking price of a
house is in the right ballpark and what to counter offer with.

I am anti-justice just because I think an income tax could take less
money from the people and give government more money because the
administrative cost is less.

Am I anti-justice because I disagree with your preference and would
prefer a property tax and an income tax over a sales tax and a property
and just an income tax over both of those? You have gotten so hostile
that you are not realizing I am saying that property tax are not as bad
as some other taxes. For a straight efficency argument, I beleive
property taxes have the least excess burden. Although I disagree with
the assertion that the elastic of supply of land and rental units is
exactly zero. I have little doubt the elasticity of supply is much less
than 1 and so is the elasticity of demand for land meaning a small
excess burden. I firmly agree with Friedman that the excess burden is
likely smaller from land tax than other taxes. I just do not believe it
is 0 and have seen no empirical evidence nor any compelling theoretical
argument to change my mind on that point. It always comes to the
misconception that "fixed" supply means perfectly elastic. Such an
argument misses the point that the supply curve represents willingness
to sale. In production that is cost. When it is an asset it is often
more than cost. For instance for land the PDV of the stream of expected
income is more likely to be the basis for willingness to sale. Each
piece of land will have a different PV of future earnings from the land.

I am just not convinced it is the lowest administrative cost. If not the
tax has to be higher than an income tax. So although equal a tax of 10%
on land would cause less excess burden than a tax of 10% on income I am
not sure that a tax of 30% on land causes less excess than a tax of 15%
on income. Please note I am pulling these numbers off the top of my head
and not claiming a land tax of 30% is correct or that an income tax of
15% would net the same tax revenue as a land tax of 30% after
administrative cost are taken out. I would have to gather some serious
data and spend at least 6 months research to really come to any solid
conclusion that X% land tax nets the same as Y% income tax.
r***@telus.net
2007-08-31 20:01:16 UTC
Permalink
On Wed, 29 Aug 2007 16:22:28 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Tue, 28 Aug 2007 21:03:27 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Property taxes are the fairest, most efficient and progressive
taxes we have, and cutting (or "abating") them, thus putting more of
the fiscal burden on worse taxes, is a stupid, unjust and
self-defeating policy, as well as an open invitation to corruption.
Wrong. Property taxes in the US are not Henry George's idea of a
property tax. George advocated a tax on the unimproved value of land.
That is not what happens in the US. Taxes are levied on improvements as
well which in no means are assumed to be even relatively inelastic like
land maybe.
No one denies that there are many imperfections in property tax
systems. Which local tax system is perfect?
Post by professorchaos
Even a tax on unimproved values is only efficient if the
demand for land is perfectly inelastic which is unlikely.
Thank you for proving again that you are absolutely ignorant of
economics.
Really can you define would perfectly inelastic means?
Yes: quantity unrelated to price.
Post by professorchaos
Can you explain
to me how the elasticities of demand and supply affect excess burdens of
taxation.
No, because nobody can explain any economics to you.
Post by professorchaos
I suppose I just need to email all the authors of every
textbook I ever used and tell they are wrong because Roy said this
analysis shows no knowledge of economics. I suppose I will start with
Greg Mankiw and say I know you have been a professor at Harvard, an
author of many peer reviewed journals, and the cheif economic advisor to
the President. However, could please change you principles textbook. I
was trained as you were and some publications as well but a man named
Roy L, posted to a forum, which had threads asking about Jews and Jewish
conspiracies in it, and stated this analysis was ignorant of economics.
Dr. Mankiw it seems you and I have to learn about economics despite our
graduate training, our practice in the field, and publications. This was
posted on an internet forum it must be right.
You have misunderstood the textbooks you improbably claim to have
read.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Not all land
is identical and some land has better location and qualities to it. This
will mean owners will different reservation prices for selling their
land. This means land is not perfectly inelastic.
No, Professor economic ignoramus, it most certainly does not.
Really what is the definition of elasticity? What is the definition of
perfectly inelastic? I hate to break this to you but the consensus in
the professor, what I had to learn and even teach, is that elasticity is
a measure of responsive to quantity demanded or quantity supply to a
change in price. Perfectly inelastic supply means that the same amount
of the good would be supplied regardless of the price. So would sell you
home if someone offered $1? What about $1 billion?
Because you are infinitely stupid, ignorant and dishonest, you refuse
to know the fact that a home is an improvement, and thus has no
unimproved value.

Because you are infinitely stupid, ignorant and dishonest, you also
refuse to know the fact that elasticity is not determined by comparing
people's opinions of prices different from prevailing prices, but by
how people would respond to a change in prevailing prices.

If you had asked a Tokyo landowner in 1990 if he would sell his land
for double the current prevailing price, he would have laughed at you.
But now he would jump at the chance. Yet somehow, the amount of land
for sale in Tokyo is much greater now than in 1990, while the city's
area remains quite unchanged.

Such a mystery.

To you, that is.
Post by professorchaos
If the answers are no
then yes then the elasticity of supply is not perfectly inelastic.
Of course it isn't. You changed the subject.
Post by professorchaos
There will be an excess burden to the tax.
Because you changed the subject from unimproved to improved value.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Therefore there is an
excess burden to even an unimproved land tax. Albeit a much smaller one
than other taxes.
Flat false.
Really? Milton Friedman didn't know what he was talking about when he
said that a land tax was the least bad tax?
He did.
Post by professorchaos
That is exactly what
Friedman said. There is an excess burden to the tax but it is less than
other taxes.
No. The excess burden is less than that of other taxes because it is
zero. That's why Friedman was right, and I am right, and you are
wrong.
Post by professorchaos
Hmm, Noble laureate versus Roy. I think I will go with
Friedman as knowing more than Roy.
Too bad you have to flat-out lie about what Friedman said.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
There is nothing progressive about current land taxes. We all have to
live on some sort of land. The poor may not be directly taxed by land
taxes but they pay it.
Wrong again. You are really totally ignorant, aren't you? Have you
ever read a book on economics?
Many times. I teach from them every semester.
Hehe. That's one for the "ineffective teaching" thread...
Post by professorchaos
The land tax is a cost to
sellers of rental units.
And it balances the resulting lower acquisition cost of the land,
resulting in no net increase in costs to tenants.
Post by professorchaos
You would not rent an apartment or a house for
less than your mortgage, taxes, and maintenance of the unit. Would you?
Yes, I most certainly would, if the alternative was to lose even more
money by not getting any revenue at all.

See how stupid you are?
Post by professorchaos
If so I have a deal for you. Renters pay property taxes in their rent.
No, stupid, they pay only a portion of the improvement value part of
property taxes.
Post by professorchaos
Depending on the elasticity of supply and demand for rental units the
price may not increase at 100% of the increase in taxes but some of the
tax is passed on to renters.
Yes, some of the _improvement_ value portion is passed on. _None_ of
the land value portion.
Post by professorchaos
Post by r***@telus.net
No, actually, they are not. Only _part_ of the improvement value
portion of the property tax can be passed on to tenants, and the poor
tend to live in dwellings with almost no improvement value. You are
just flat wrong.
Again you are making a statement of elasticity. What are the
elasticities of supply and demand. SHOW SOME PROOF. Even show you can
explain why the elasticity of demand for rental units is elastic, that
is what you are claim. The more elastic demand the less tax can be
placed. I have a feeling you are flat wrong here. Demand for rental
units is likely very inelastic. They are a necessity, there are few
close substitutes, and the definition of the market is rather broad.
As usual, you are flat wrong. If rental units get too expensive,
people just share instead of having apartments to themselves.
Post by professorchaos
The
only thing saying it may be elastic is that they may be a large portion
of the income of the renter.
Do you understand what improvement value is. That is the building. Any
multi-unit apartment or set of duplex will have a significant
improvement value.
No, stupid, it won't, stupid, because, stupid, the improvements,
stupid, might not add any value to the property, stupid. If the
property would sell for the same amount if the improvements were
demolished, the improvements have no value.

Stupid.
Post by professorchaos
The taxes will be more strongly passed to consumers
because the supply of rental units is more likely to be more elastic
than demand. If you had read an economic textbook you would understand
this and how taxes work.
<yawn>
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
A raise in property taxes is regressive in that
the poor spend a larger portion of their income on housing and increase
land taxes means increases on the rent charge for housing to meet the
bigger tax bill.
False, as proved above.
You have proved nothing your argument rest on proving that the
elasticity of demand for rental units is very elastic and therefore
taxes can not be passed on to renters.
You are of course just lying about what I plainly wrote again.
Post by professorchaos
You had nothing that even
remotely indicates that. Pick up a copy of Mankiw. Read the chapter on
elasticity, ch. 5. Place close attention to the section showing how
elasticity of demand and supply determine how much tax is passed on to
the consumer.
Right back atcha, moron.
Post by professorchaos
Then read chapter 7 on efficiency. After chapter 8 or 9
explains how efficiency analysis is used in taxation. It explains how
the elasticity of supply and the elasticity of demand determine the dead
weight loss of a tax. It will show how only when one of the curves are
perfectly inelastic there is no dead weight loss.
Funny you ask if I have read a textbook on economics when your opening
argument was that economist were liars who try to confuse people and
that teaching is intentionally befuddled to mislead. So why do you not
ask if I had read a textbook as if textbooks were the authority on
economics. Certainly if you believed we are liars and we try to
intentionally befuddle when teaching at the textbooks are a conspiracy
by the rich to perpetuate there wealth then why would reading one tell
me anything about economics?
You just blatantly contradicted yourself. You say textbooks intentional
mislead and teach nothing about economics then ask if I read one
implying that the textbooks teach proper economics. Keep on rolling
David Eicke or John Hoague. Pseudo-researchers never have problem
contradicting themselves. When pointed out they have it is suddenly that
is the man trying to confuse you.
If you were not infinitely stupid and ignorant, you would know that
successful deceit requires a careful combination of truth and lies,
and the number of lies must be kept to a minimum.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
There is absolutely nothing progressive about land
taxes of any sort.
That is of course also flat false, as land taxes are borne entirely by
land_owners_, a fact of economics that has been known for nearly 200
years, and is not disputed by any competent economist.
Completely wrong when the land is rented.
No, it is entirely true, and you are just stupid and ignorant.
Post by professorchaos
The market for rental units
has to do with the supply of rental units and the demand for them.
Rental units, stupid, are not land, stupid.
Post by professorchaos
The
land cost is one of the cost in this market. Taxing this raises rental
rates unless the elasticity of supply is perfectly inelastic. Something
many would disagree. I suppose you think Noble Laurette Milton Friedman
is not competent either. By saying land taxes are least bad, he is
saying they are bad just not as bad as other. His claim is that they
have cost to.
No, stupid, it is not.
Post by professorchaos
If you understand that your claim is that the land tax is borne
completely by land owners you have to prove the elasticity of supply of
land is perfectly inelastic. This is just plain false and foster by bad
thinking that because supply is "fixed" that it is perfectly inelastic.
ROTFL!!
Post by professorchaos
The supply of Monet paintings is fixed there can be no more made.
However, each owner still has a different willingness to sell the paint
he owns. This means the same quantity is not offered up for sale at all
prices.
Like I said before perfectly inelastic means you will sell your house
regardless if someone offers $1 or $1 billion dollars.
No, stupid, it doesn't, stupid. If you were not lying, stupid, and
the item in question was indeed houses and not land, stupid, then
perfectly inelastic supply would mean the quantity of houses was
unaffected by their price.
Post by professorchaos
I have no doubt
there are perfectly inelastic portions of the supply curve for land.
However, the whole curve is not perfectly inelastic and to make the
statement that land owners will pay all the tax you have to prove that
are operating in the perfectly inelastic portion of the curve. I have
yet to see one empirical study that shows that the elasticity of supply
of land is perfectly inelastic or that we are operating in a perfectly
inelastic portion of the supply.
Of course you have seen no such empirical study, stupid. It's not an
empirical question.

Stupid.
Post by professorchaos
The fact we have speculation in land markets proves the supply is not
perfectly inelastic.
Wrong, stupid.
Post by professorchaos
Speculators will not sell until prices rises so the
elasticity of supply is not zero.
Wrong again, stupid. Speculators are quick to sell when prices fall.

Stupid.
Post by professorchaos
It may be very small but NOT ZERO.
This means land owners will not pay 100% of land taxes on rental
property and some land tax is passed to renters. You are making a very
rigid argument that is difficult at best to prove empirically.
If the elasticity of supply is even .00000000000000000001 there will
exist a small excess burden and some taxes are passed to renters and
buyers of land and there is an excess burden. As I said before the
excess burden of land taxes is likely smaller than all other taxes, with
the exception of a lump sum tax, but not zero.
<sigh> No, stupid. The number of people can be changed. The amount
of land can't.

Stupid.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
They are a sales tax on housing
That is of course an absurd lie, as a nanosecond's honest thought will
confirm.
Of course a nanosecond of honest thought confirms my argument. If the
elasticity of supply for rental units is not EXACTLY zero then some of
the tax is passed to renters. Again you are making a very rigid argument
that is only correct if the elasticity is EXACTLY zero not .00000001,
not -.0000001, or anything else but zero. Such statements require
empirical proof and I have yet to see it. I have seen some economist
believe it is exactly zero but I have yet to see any empirical proof of
the statement.
<yawn> Have you seen an empirical proof that all men are mortal?
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
and it is regressive
because poor people have a higher percentage of income going to housing.
As land rent is unaffected by taxation (fact known for nearly 200
years),
A. Land rent is different than rental rates. You should know that. Rent
is only the profit in Smith, Ricardo, and George's sense from renting
not the rental rate.
B. It has not been well known for almost 200 years. George and some
others assumed that the elasticity of supply was exactly zero. I have
seen no evidence of this. I am not saying it does not exist but I would
like a citation to at least one paper that estimated the elasticity of
supply of land to be exactly zero before I would say that your argument
is right. I have a hunch it doesn't exist.
<yawn> Have you seen a peer-reviewed paper proving that all men are
mortal?

Stupid.
Post by professorchaos
Post by r***@telus.net
and the poor pay almost all of their housing rent for land,
they pay almost none of the property tax burden.
Only if the elasticity of supply of rental units is EXACTLY ZERO.
No, stupid.
Post by professorchaos
Note
the elasticity of supply of rental may be different from the elasticity
of supply of land.
Which is why you are wrong again.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Income taxes are not
great but they cost less to administer.
That is of course wildly false.
Administrative cost are less for income taxes than sales and property
taxes.
Wrong. Property taxes cost least to administer, as long as the rate
is not derisory (obviously, if the income tax rate was as low as the
property tax rate, income taxes would cost an order of magnitude more
to administer per unit of revenue obtained).
Post by professorchaos
Employers gather the data on employees wages and send it to the
taxing authority. An employee's income only effects social security
matching they have to pay. So there is little incentive to lie. The self
employed and independently wealthy are different story but for 90% of
the population it is extremely hard to hide income. It is extremely
profitable and not too hard for 100% of businesses to lose receipts hide
cash registers, etc. to avoid taxes. That makes the admin cost high. It
is very profitable for a unethical appraiser to charge more to make your
property valuation lower. Therefore SLGs have to spend tons of money on
appraisals every year to enforce the land tax.
That is of course a flat-out lie.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
States spend a lot of the tax
money going to business to make sure they are not hiding sales and
hiring appraisers to asses property taxes.
?? Businesses don't hire tax assessors, stupid.
I never said that I said states spend tons of money on auditors and
appraisers to enforce the tax code. A good bit of taxes goes to paying
for the collection of taxes.
Is that your way of admitting that you are a stupid, ignorant, lying
sack of $#!+?
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
In this day and age for 99%
of the population it is hard to lie about income because their employers
have to report the income while paying SS taxes.
ROTFL!!! Yeah. It is hard for _employees_ to lie about their
_wages_. Every other form of income is pretty easy to lie about.
Most people are employees. I meant to type 90%. The small business
owners and independently wealthy are few. Retirees also have income
reported for their IRA accounts to the IRS by the broker. He has no
reason to lie about what you made. It is deductions that can be faked
more easily. That is why I support a flat tax rate which still supports
the ability to pay principle. No deductions and it is harder to cheat
and we don't get government trying to socially engineer through the tax
codes.
Income is not a measure of ability to pay. By definition, assets are.

Stupid.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
The state of Texas has to check
up on everything from Exxon to mom and pop shops to make sure they are
reporting sales correctly and paying taxes. It is easier for them to
cheat and more incentive for them to do it than it is for an individual
to cheat on income taxes. The cost of administering an income tax is
most less than the army of auditors and appraisers needed to enforce
property taxes.
That is of course the exact opposite of the truth. Where property tax
rates are substantial, property taxes have the lowest administration
cost per dollar of revenue raised. Property taxes are only
inefficient when the rate applied is so low (<1%) that assessment
costs are a significant fraction of typical taxes owing.
Proof? The administrative burden of income taxes is less because it
results in fewer collectors and fewer audits mean less cost to
administer. You can generate the same net revenue with a lower
percentage of income taxes than you can from sales or property taxes.
?? Uh, stupid? What is the typical rate of income tax, and the
typical rate of property tax?

STUPID.
Post by professorchaos
Property taxes involve too many appraisals and too much court cost
fighting them.
<yawn> That must be why the US states with the highest property tax
rates, like NH, NJ, CT, OR, WI and TX, tend to have the best economies
and highest quality of life, while the states with the lowest property
tax rates, like AL, AR, DC, CA and MA tend to have the worst economies
and the lowest quality of life.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
As for property
taxes, counties hire appraisers every year to appraiser your property.
Liar. There is not one county in the USA that appraises every
property every year. This proves that you are just another stupid,
lying, anti-justice sack of $#!+.
Really? Funny my county does appraisals every year.
Lie.
Post by professorchaos
I am sent a new tax
bill every year with the new appraised value of my home.
Lie.
Post by professorchaos
It has all the
stuff an independent appraiser would use on it and an analysis of how
property values for similar properties in the neighborhood has changed.
IOW, it is not an appraisal of your property, but an _assessment_
based on observed trends. Thank you for providing the proof that you
lied again, as usual.
Post by professorchaos
I am anti-justice just because I think an income tax could take less
money from the people and give government more money because the
administrative cost is less.
More accurately, because you falsely claim that.
Post by professorchaos
Am I anti-justice because I disagree with your preference and would
prefer a property tax and an income tax over a sales tax and a property
and just an income tax over both of those?
Yes.
Post by professorchaos
I just do not believe it
is 0 and have seen no empirical evidence nor any compelling theoretical
argument to change my mind on that point. It always comes to the
misconception that "fixed" supply means perfectly elastic.
No, stupid. It means perfectly _in_elastic.

Can anyone tell me why I bother with this fool?

-- Roy L
professorchaos
2007-08-31 23:38:33 UTC
Permalink
Post by r***@telus.net
On Wed, 29 Aug 2007 16:22:28 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Tue, 28 Aug 2007 21:03:27 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Property taxes are the fairest, most efficient and progressive
taxes we have, and cutting (or "abating") them, thus putting more of
the fiscal burden on worse taxes, is a stupid, unjust and
self-defeating policy, as well as an open invitation to corruption.
Wrong. Property taxes in the US are not Henry George's idea of a
property tax. George advocated a tax on the unimproved value of land.
That is not what happens in the US. Taxes are levied on improvements as
well which in no means are assumed to be even relatively inelastic like
land maybe.
No one denies that there are many imperfections in property tax
systems. Which local tax system is perfect?
Post by professorchaos
Even a tax on unimproved values is only efficient if the
demand for land is perfectly inelastic which is unlikely.
Thank you for proving again that you are absolutely ignorant of
economics.
Really can you define would perfectly inelastic means?
Yes: quantity unrelated to price.
Post by professorchaos
Can you explain
to me how the elasticities of demand and supply affect excess burdens of
taxation.
No, because nobody can explain any economics to you.
I do not need explanation I was curious to see if you understand it. I
will take that as a no.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Not all land
is identical and some land has better location and qualities to it. This
will mean owners will different reservation prices for selling their
land. This means land is not perfectly inelastic.
No, Professor economic ignoramus, it most certainly does not.
Really what is the definition of elasticity? What is the definition of
perfectly inelastic? I hate to break this to you but the consensus in
the professor, what I had to learn and even teach, is that elasticity is
a measure of responsive to quantity demanded or quantity supply to a
change in price. Perfectly inelastic supply means that the same amount
of the good would be supplied regardless of the price. So would sell you
home if someone offered $1? What about $1 billion?
Because you are infinitely stupid, ignorant and dishonest, you refuse
to know the fact that a home is an improvement, and thus has no
unimproved value.
No you are the one arguing that THE PRESENT LAND TAX ON IMPROVED AND
UNIMPROVED VALUE IS EFFICIENT. Not I.

Still if someone offered to buy your unimproved land for $1 would you
sell? Would you sell it if they offered $1 billion ? Again if no to the
first and yes to the second then quantity supplied went up when price
rose and that is not perfectly inelastic.

It was your argument that the land tax in the US is progressive and
efficient not mine. I correctly pointed out it is not Georgian and taxes
unimproved and improved values therefore it is not efficient. You argued
I was liar implying you believed a tax on improvements to be efficient
or that wrongfully thought that US states taxed only unimproved values.
I can't speak for all states with a land tax but I know first hand does
tax the improved value of the land.
Post by r***@telus.net
Because you are infinitely stupid, ignorant and dishonest, you also
refuse to know the fact that elasticity is not determined by comparing
people's opinions of prices different from prevailing prices, but by
how people would respond to a change in prevailing prices.
What are you babbling about? Perception of price movements certainly
affect the supply curve. If you are holding land and you have
expectation of price movements in the next few months it will effect the
elasticity at current prices.
Post by r***@telus.net
If you had asked a Tokyo landowner in 1990 if he would sell his land
for double the current prevailing price, he would have laughed at you.
But now he would jump at the chance.
Exactly THE SUPPLY OF LAND IS NOT PERFECTLY INELASTIC. A change in price
affects quantity supplied. Furthermore your argument has more to do with
shifts in supply due to expectations than elasticity of supply.
Post by r***@telus.net
Yet somehow, the amount of land
for sale in Tokyo is much greater now than in 1990, while the city's
area remains quite unchanged.
Meaning what? That supply has shifted perhaps. Shifts in supply and the
elasticity of supply are two completely different concepts.
Post by r***@telus.net
Such a mystery.
No mystery at all I understand supply and demand. So why the reliance on
textbook economics now? I thought earlier you said economist and authors
of textbook lie and intentionally try to confuse people so people do not
understand economics. Earlier you said textbook authors were puppets for
the interest of the rich. So why do you now want to argue that what is
written in a textbook is a. clear and b. correct? You just contradicted
yourself again. Good try Eicke. I can actually think and spot
contradictions that is why you dislike me so.
Post by r***@telus.net
Post by professorchaos
If the answers are no
then yes then the elasticity of supply is not perfectly inelastic.
Of course it isn't. You changed the subject.
No I didn't. You correctly said that perfectly inelastic means quantity
supplied does not respond to price. So if you do not sell your land for
$1 but you do sell it when the price is $1 billion then quantity
supplied responds to price. At $1 Qs is 0 at $1 billion QS is 1 that is
an elasticity of supply of 1/1 billion that is not equal to 0.
Post by r***@telus.net
Post by professorchaos
There will be an excess burden to the tax.
Because you changed the subject from unimproved to improved value.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Therefore there is an
excess burden to even an unimproved land tax. Albeit a much smaller one
than other taxes.
Flat false.
Really? Milton Friedman didn't know what he was talking about when he
said that a land tax was the least bad tax?
He did.
Post by professorchaos
That is exactly what
Friedman said. There is an excess burden to the tax but it is less than
other taxes.
No. The excess burden is less than that of other taxes because it is
zero. That's why Friedman was right, and I am right, and you are
wrong.
Post by professorchaos
Hmm, Noble laureate versus Roy. I think I will go with
Friedman as knowing more than Roy.
Too bad you have to flat-out lie about what Friedman said.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
There is nothing progressive about current land taxes. We all have to
live on some sort of land. The poor may not be directly taxed by land
taxes but they pay it.
Wrong again. You are really totally ignorant, aren't you? Have you
ever read a book on economics?
Many times. I teach from them every semester.
Hehe. That's one for the "ineffective teaching" thread...
Post by professorchaos
The land tax is a cost to
sellers of rental units.
And it balances the resulting lower acquisition cost of the land,
resulting in no net increase in costs to tenants.
Post by professorchaos
You would not rent an apartment or a house for
less than your mortgage, taxes, and maintenance of the unit. Would you?
Yes, I most certainly would, if the alternative was to lose even more
money by not getting any revenue at all.
See how stupid you are?
Post by professorchaos
If so I have a deal for you. Renters pay property taxes in their rent.
No, stupid, they pay only a portion of the improvement value part of
property taxes.
Post by professorchaos
Depending on the elasticity of supply and demand for rental units the
price may not increase at 100% of the increase in taxes but some of the
tax is passed on to renters.
Yes, some of the _improvement_ value portion is passed on. _None_ of
the land value portion.
Post by professorchaos
Post by r***@telus.net
No, actually, they are not. Only _part_ of the improvement value
portion of the property tax can be passed on to tenants, and the poor
tend to live in dwellings with almost no improvement value. You are
just flat wrong.
Again you are making a statement of elasticity. What are the
elasticities of supply and demand. SHOW SOME PROOF. Even show you can
explain why the elasticity of demand for rental units is elastic, that
is what you are claim. The more elastic demand the less tax can be
placed. I have a feeling you are flat wrong here. Demand for rental
units is likely very inelastic. They are a necessity, there are few
close substitutes, and the definition of the market is rather broad.
As usual, you are flat wrong. If rental units get too expensive,
people just share instead of having apartments to themselves.
Post by professorchaos
The
only thing saying it may be elastic is that they may be a large portion
of the income of the renter.
Do you understand what improvement value is. That is the building. Any
multi-unit apartment or set of duplex will have a significant
improvement value.
No, stupid, it won't, stupid, because, stupid, the improvements,
stupid, might not add any value to the property, stupid. If the
property would sell for the same amount if the improvements were
demolished, the improvements have no value.
Stupid.
Post by professorchaos
The taxes will be more strongly passed to consumers
because the supply of rental units is more likely to be more elastic
than demand. If you had read an economic textbook you would understand
this and how taxes work.
<yawn>
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
A raise in property taxes is regressive in that
the poor spend a larger portion of their income on housing and increase
land taxes means increases on the rent charge for housing to meet the
bigger tax bill.
False, as proved above.
You have proved nothing your argument rest on proving that the
elasticity of demand for rental units is very elastic and therefore
taxes can not be passed on to renters.
You are of course just lying about what I plainly wrote again.
Post by professorchaos
You had nothing that even
remotely indicates that. Pick up a copy of Mankiw. Read the chapter on
elasticity, ch. 5. Place close attention to the section showing how
elasticity of demand and supply determine how much tax is passed on to
the consumer.
Right back atcha, moron.
Post by professorchaos
Then read chapter 7 on efficiency. After chapter 8 or 9
explains how efficiency analysis is used in taxation. It explains how
the elasticity of supply and the elasticity of demand determine the dead
weight loss of a tax. It will show how only when one of the curves are
perfectly inelastic there is no dead weight loss.
Funny you ask if I have read a textbook on economics when your opening
argument was that economist were liars who try to confuse people and
that teaching is intentionally befuddled to mislead. So why do you not
ask if I had read a textbook as if textbooks were the authority on
economics. Certainly if you believed we are liars and we try to
intentionally befuddle when teaching at the textbooks are a conspiracy
by the rich to perpetuate there wealth then why would reading one tell
me anything about economics?
You just blatantly contradicted yourself. You say textbooks intentional
mislead and teach nothing about economics then ask if I read one
implying that the textbooks teach proper economics. Keep on rolling
David Eicke or John Hoague. Pseudo-researchers never have problem
contradicting themselves. When pointed out they have it is suddenly that
is the man trying to confuse you.
If you were not infinitely stupid and ignorant, you would know that
successful deceit requires a careful combination of truth and lies,
and the number of lies must be kept to a minimum.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
There is absolutely nothing progressive about land
taxes of any sort.
That is of course also flat false, as land taxes are borne entirely by
land_owners_, a fact of economics that has been known for nearly 200
years, and is not disputed by any competent economist.
Completely wrong when the land is rented.
No, it is entirely true, and you are just stupid and ignorant.
Post by professorchaos
The market for rental units
has to do with the supply of rental units and the demand for them.
Rental units, stupid, are not land, stupid.
Post by professorchaos
The
land cost is one of the cost in this market. Taxing this raises rental
rates unless the elasticity of supply is perfectly inelastic. Something
many would disagree. I suppose you think Noble Laurette Milton Friedman
is not competent either. By saying land taxes are least bad, he is
saying they are bad just not as bad as other. His claim is that they
have cost to.
No, stupid, it is not.
Post by professorchaos
If you understand that your claim is that the land tax is borne
completely by land owners you have to prove the elasticity of supply of
land is perfectly inelastic. This is just plain false and foster by bad
thinking that because supply is "fixed" that it is perfectly inelastic.
ROTFL!!
Post by professorchaos
The supply of Monet paintings is fixed there can be no more made.
However, each owner still has a different willingness to sell the paint
he owns. This means the same quantity is not offered up for sale at all
prices.
Like I said before perfectly inelastic means you will sell your house
regardless if someone offers $1 or $1 billion dollars.
No, stupid, it doesn't, stupid. If you were not lying, stupid, and
the item in question was indeed houses and not land, stupid, then
perfectly inelastic supply would mean the quantity of houses was
unaffected by their price.
Post by professorchaos
I have no doubt
there are perfectly inelastic portions of the supply curve for land.
However, the whole curve is not perfectly inelastic and to make the
statement that land owners will pay all the tax you have to prove that
are operating in the perfectly inelastic portion of the curve. I have
yet to see one empirical study that shows that the elasticity of supply
of land is perfectly inelastic or that we are operating in a perfectly
inelastic portion of the supply.
Of course you have seen no such empirical study, stupid. It's not an
empirical question.
Stupid.
Post by professorchaos
The fact we have speculation in land markets proves the supply is not
perfectly inelastic.
Wrong, stupid.
Post by professorchaos
Speculators will not sell until prices rises so the
elasticity of supply is not zero.
Wrong again, stupid. Speculators are quick to sell when prices fall.
Stupid.
Post by professorchaos
It may be very small but NOT ZERO.
This means land owners will not pay 100% of land taxes on rental
property and some land tax is passed to renters. You are making a very
rigid argument that is difficult at best to prove empirically.
If the elasticity of supply is even .00000000000000000001 there will
exist a small excess burden and some taxes are passed to renters and
buyers of land and there is an excess burden. As I said before the
excess burden of land taxes is likely smaller than all other taxes, with
the exception of a lump sum tax, but not zero.
<sigh> No, stupid. The number of people can be changed. The amount
of land can't.
Stupid.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
They are a sales tax on housing
That is of course an absurd lie, as a nanosecond's honest thought will
confirm.
Of course a nanosecond of honest thought confirms my argument. If the
elasticity of supply for rental units is not EXACTLY zero then some of
the tax is passed to renters. Again you are making a very rigid argument
that is only correct if the elasticity is EXACTLY zero not .00000001,
not -.0000001, or anything else but zero. Such statements require
empirical proof and I have yet to see it. I have seen some economist
believe it is exactly zero but I have yet to see any empirical proof of
the statement.
<yawn> Have you seen an empirical proof that all men are mortal?
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
and it is regressive
because poor people have a higher percentage of income going to housing.
As land rent is unaffected by taxation (fact known for nearly 200
years),
A. Land rent is different than rental rates. You should know that. Rent
is only the profit in Smith, Ricardo, and George's sense from renting
not the rental rate.
B. It has not been well known for almost 200 years. George and some
others assumed that the elasticity of supply was exactly zero. I have
seen no evidence of this. I am not saying it does not exist but I would
like a citation to at least one paper that estimated the elasticity of
supply of land to be exactly zero before I would say that your argument
is right. I have a hunch it doesn't exist.
<yawn> Have you seen a peer-reviewed paper proving that all men are
mortal?
Stupid.
Post by professorchaos
Post by r***@telus.net
and the poor pay almost all of their housing rent for land,
they pay almost none of the property tax burden.
Only if the elasticity of supply of rental units is EXACTLY ZERO.
No, stupid.
Post by professorchaos
Note
the elasticity of supply of rental may be different from the elasticity
of supply of land.
Which is why you are wrong again.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Income taxes are not
great but they cost less to administer.
That is of course wildly false.
Administrative cost are less for income taxes than sales and property
taxes.
Wrong. Property taxes cost least to administer, as long as the rate
is not derisory (obviously, if the income tax rate was as low as the
property tax rate, income taxes would cost an order of magnitude more
to administer per unit of revenue obtained).
Post by professorchaos
Employers gather the data on employees wages and send it to the
taxing authority. An employee's income only effects social security
matching they have to pay. So there is little incentive to lie. The self
employed and independently wealthy are different story but for 90% of
the population it is extremely hard to hide income. It is extremely
profitable and not too hard for 100% of businesses to lose receipts hide
cash registers, etc. to avoid taxes. That makes the admin cost high. It
is very profitable for a unethical appraiser to charge more to make your
property valuation lower. Therefore SLGs have to spend tons of money on
appraisals every year to enforce the land tax.
That is of course a flat-out lie.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
States spend a lot of the tax
money going to business to make sure they are not hiding sales and
hiring appraisers to asses property taxes.
?? Businesses don't hire tax assessors, stupid.
I never said that I said states spend tons of money on auditors and
appraisers to enforce the tax code. A good bit of taxes goes to paying
for the collection of taxes.
Is that your way of admitting that you are a stupid, ignorant, lying
sack of $#!+?
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
In this day and age for 99%
of the population it is hard to lie about income because their employers
have to report the income while paying SS taxes.
ROTFL!!! Yeah. It is hard for _employees_ to lie about their
_wages_. Every other form of income is pretty easy to lie about.
Most people are employees. I meant to type 90%. The small business
owners and independently wealthy are few. Retirees also have income
reported for their IRA accounts to the IRS by the broker. He has no
reason to lie about what you made. It is deductions that can be faked
more easily. That is why I support a flat tax rate which still supports
the ability to pay principle. No deductions and it is harder to cheat
and we don't get government trying to socially engineer through the tax
codes.
Income is not a measure of ability to pay. By definition, assets are.
Stupid.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
The state of Texas has to check
up on everything from Exxon to mom and pop shops to make sure they are
reporting sales correctly and paying taxes. It is easier for them to
cheat and more incentive for them to do it than it is for an individual
to cheat on income taxes. The cost of administering an income tax is
most less than the army of auditors and appraisers needed to enforce
property taxes.
That is of course the exact opposite of the truth. Where property tax
rates are substantial, property taxes have the lowest administration
cost per dollar of revenue raised. Property taxes are only
inefficient when the rate applied is so low (<1%) that assessment
costs are a significant fraction of typical taxes owing.
Proof? The administrative burden of income taxes is less because it
results in fewer collectors and fewer audits mean less cost to
administer. You can generate the same net revenue with a lower
percentage of income taxes than you can from sales or property taxes.
?? Uh, stupid? What is the typical rate of income tax, and the
typical rate of property tax?
STUPID.
Post by professorchaos
Property taxes involve too many appraisals and too much court cost
fighting them.
<yawn> That must be why the US states with the highest property tax
rates, like NH, NJ, CT, OR, WI and TX, tend to have the best economies
and highest quality of life, while the states with the lowest property
tax rates, like AL, AR, DC, CA and MA tend to have the worst economies
and the lowest quality of life.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
As for property
taxes, counties hire appraisers every year to appraiser your property.
Liar. There is not one county in the USA that appraises every
property every year. This proves that you are just another stupid,
lying, anti-justice sack of $#!+.
Really? Funny my county does appraisals every year.
Lie.
Post by professorchaos
I am sent a new tax
bill every year with the new appraised value of my home.
Lie.
Post by professorchaos
It has all the
stuff an independent appraiser would use on it and an analysis of how
property values for similar properties in the neighborhood has changed.
IOW, it is not an appraisal of your property, but an _assessment_
based on observed trends. Thank you for providing the proof that you
lied again, as usual.
Post by professorchaos
I am anti-justice just because I think an income tax could take less
money from the people and give government more money because the
administrative cost is less.
More accurately, because you falsely claim that.
Post by professorchaos
Am I anti-justice because I disagree with your preference and would
prefer a property tax and an income tax over a sales tax and a property
and just an income tax over both of those?
Yes.
Post by professorchaos
I just do not believe it
is 0 and have seen no empirical evidence nor any compelling theoretical
argument to change my mind on that point. It always comes to the
misconception that "fixed" supply means perfectly elastic.
No, stupid. It means perfectly _in_elastic.
Can anyone tell me why I bother with this fool?
-- Roy L
r***@telus.net
2007-09-04 03:26:24 UTC
Permalink
On Fri, 31 Aug 2007 18:38:33 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Wed, 29 Aug 2007 16:22:28 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Tue, 28 Aug 2007 21:03:27 -0500, professorchaos
Post by professorchaos
Not all land
is identical and some land has better location and qualities to it. This
will mean owners will different reservation prices for selling their
land. This means land is not perfectly inelastic.
No, Professor economic ignoramus, it most certainly does not.
Really what is the definition of elasticity? What is the definition of
perfectly inelastic? I hate to break this to you but the consensus in
the professor, what I had to learn and even teach, is that elasticity is
a measure of responsive to quantity demanded or quantity supply to a
change in price. Perfectly inelastic supply means that the same amount
of the good would be supplied regardless of the price. So would sell you
home if someone offered $1? What about $1 billion?
Because you are infinitely stupid, ignorant and dishonest, you refuse
to know the fact that a home is an improvement, and thus has no
unimproved value.
No you are the one arguing that THE PRESENT LAND TAX ON IMPROVED AND
UNIMPROVED VALUE IS EFFICIENT.
I said it was more efficient than other taxes, stupid liar.
Post by professorchaos
Still if someone offered to buy your unimproved land for $1 would you
sell? Would you sell it if they offered $1 billion ? Again if no to the
first and yes to the second then quantity supplied went up when price
rose and that is not perfectly inelastic.
Thank you for proving again that you have no idea what elasticity of
supply is. If A sells some land to B, it does not change the supply
of land no matter what price it trades for, any more than the dizzily
rising prices of Van Gogh's paintings showed their supply was elastic.

But because you are infinitely and immutably stupid, ignorant and
dishonest, you have decided to be permanently ignorant of that fact.
Post by professorchaos
Post by r***@telus.net
Because you are infinitely stupid, ignorant and dishonest, you also
refuse to know the fact that elasticity is not determined by comparing
people's opinions of prices different from prevailing prices, but by
how people would respond to a change in prevailing prices.
What are you babbling about? Perception of price movements certainly
affect the supply curve. If you are holding land and you have
expectation of price movements in the next few months it will effect the
elasticity at current prices.
No, of course it won't, stupid. See above re Van Gogh.
Post by professorchaos
Post by r***@telus.net
If you had asked a Tokyo landowner in 1990 if he would sell his land
for double the current prevailing price, he would have laughed at you.
But now he would jump at the chance.
Exactly THE SUPPLY OF LAND IS NOT PERFECTLY INELASTIC. A change in price
affects quantity supplied.
No, stupid, it just changes who has it.
Post by professorchaos
Furthermore your argument has more to do with
shifts in supply due to expectations than elasticity of supply.
Which is kinda the point.

Stupid.
Post by professorchaos
Post by r***@telus.net
Yet somehow, the amount of land
for sale in Tokyo is much greater now than in 1990, while the city's
area remains quite unchanged.
Meaning what?
Meaning that you are stupid, ignorant, lying garbage.
Post by professorchaos
Post by r***@telus.net
Such a mystery.
No mystery at all I understand supply and demand.
You do not understand supply or demand, nor will you ever do so.
Post by professorchaos
So why the reliance on
textbook economics now? I thought earlier you said economist and authors
of textbook lie and intentionally try to confuse people so people do not
understand economics. Earlier you said textbook authors were puppets for
the interest of the rich. So why do you now want to argue that what is
written in a textbook is a. clear and b. correct? You just contradicted
yourself again.
No, stupid. Liars choose what to lie about in order to preserve their
credibility. But you are so stupid that you do not understand that,
and are incapable of ever understanding it.
Post by professorchaos
Good try Eicke. I can actually think and spot
contradictions that is why you dislike me so.
I dislike you because you are infinitely and immutably stupid,
ignorant and dishonest, so if the aliens by some chance encounter you
first, we are all doomed.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
If the answers are no
then yes then the elasticity of supply is not perfectly inelastic.
Of course it isn't. You changed the subject.
No I didn't. You correctly said that perfectly inelastic means quantity
supplied does not respond to price. So if you do not sell your land for
$1 but you do sell it when the price is $1 billion then quantity
supplied responds to price. At $1 Qs is 0 at $1 billion QS is 1 that is
an elasticity of supply of 1/1 billion that is not equal to 0.
No, stupid, because the quantity is unchanged. The only thing that
has changed is whether A has the land or B. Because you are stupid,
you refuse to know the fact that elasticity of supply is defined on
the quantity available, not on who has it.

-- Roy L
professorchaos
2007-09-04 13:34:09 UTC
Permalink
Post by r***@telus.net
Post by professorchaos
No you are the one arguing that THE PRESENT LAND TAX ON IMPROVED AND
UNIMPROVED VALUE IS EFFICIENT.
I said it was more efficient than other taxes, stupid liar.
It is about time for me to leave for work. I just had few minutes
between morning work and hit the streets so I will keep this brief. If
Roy wants to present economic theory and challenge economist he has to
learn the language. You get no where in psychics arguing that people who
have degrees in psychics are stupid because the speed you are traveling
is accerelation and by using that definition a result now longer works.
You won't get far with economist either by saying they are lying because
you changed the definition of efficiency.
Post by r***@telus.net
Post by professorchaos
Still if someone offered to buy your unimproved land for $1 would you
sell? Would you sell it if they offered $1 billion ? Again if no to the
first and yes to the second then quantity supplied went up when price
rose and that is not perfectly inelastic.
Thank you for proving again that you have no idea what elasticity of
supply is. If A sells some land to B, it does not change the supply
of land no matter what price it trades for,
No it changes the quantity supplied changes not necessiarly supply.
Elasticity of supply is the change in QUANTITY SUPPLIED DIVIDED BY THE
CHANGE IN PRICE. Not the change in supply divided by the change in
price. That is insane because prices of the good in question do not
shift the supply curve.

Learn the language Roy. Learn what efficiency means. Learn what
elasticity means.
Post by r***@telus.net
any more than the dizzily
rising prices of Van Gogh's paintings showed their supply was elastic.
Of course rising prices would not show supply is elastic, note I never
argued supply of land was elastic just not perfectly inelastic. To show
something elastic you have to show that (the percentage change in
Quantity supplied)/(the percentage change in price) > 1. Show prices
rising do not show something to be elastic. Something is elastic if and
only the percentage change in quantity supplied is > than the percentage
change in price. Thank you for confirm you have no idea what the
definition of elasticity of supply is. What is no surprise considering
you do not know the difference between supply and quantity supplied.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
If you had asked a Tokyo landowner in 1990 if he would sell his land
for double the current prevailing price, he would have laughed at you.
But now he would jump at the chance.
Exactly THE SUPPLY OF LAND IS NOT PERFECTLY INELASTIC. A change in price
affects quantity supplied.
No, stupid, it just changes who has it.
Again you show your ignorance. A change in quantity supplied must happen
for land sales to increase. If it does not change then the same amount
of land is offered. For someone to buy the land someone has to be
willing to sell at a price that the buyer will pay. If the amount of
land sellers are willing to sell is sensitive to price then the
elasticity of supply is not perfectly inelastic. By definition perfectly
inelastic means (the percentage change in quantity supplied)/(the
percentage change in price) = 0.

Until you learn the language we can not have this discussion. I am
speaking economics and you are speaking a completely different language.
Until you learn how to speak economics you can not understand what
economist are saying. Just as you have to learn terms in psychics to
understand psychics.

I refuse to continue this conservation until Roy learns the terms. At
least the Trucker was smart to understand once the definition used by
economist are understood the argument makes sense. As long as Roy wants
to the be the High Priest, Keeper of Morals, and Pontiff of definitions
he can not have a proper discussion.
Post by r***@telus.net
Post by professorchaos
Furthermore your argument has more to do with
shifts in supply due to expectations than elasticity of supply.
Which is kinda the point.
Which means you are way off topic. Because it has nothing to do with the
conservation. The tax causes a shift in demand due to being placed on
buyers. The deadweight loss being zero depends entirely on the
elasticity of supply being 0.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Such a mystery.
No mystery at all I understand supply and demand.
You do not understand supply or demand, nor will you ever do so.
Not in Roy's fantasy land where he makes up the definitions of quantity
supplied and elasticity of supply. No one but Roy can understand it in
Roy's Narnia where he can change definitions to suit his own purposes.
Post by r***@telus.net
Post by professorchaos
Good try Eicke. I can actually think and spot
contradictions that is why you dislike me so.
I dislike you because you are infinitely and immutably stupid,
ignorant and dishonest, so if the aliens by some chance encounter you
first, we are all doomed.
No I use correct definitions and you don't like being told that your
definitions are incorrect and that is the cause of your
misunderstanding. No matter how true it may be. So you create the
typical conspiracy smoke screen that people are lying about things and
the fact you can't prove it just means someone is covering it up.

You are marveling at how the romance novel claimed the woman got her
lost long foot back when in reality you translate the word love
incorrectly.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
If the answers are no
then yes then the elasticity of supply is not perfectly inelastic.
Of course it isn't. You changed the subject.
No I didn't. You correctly said that perfectly inelastic means quantity
supplied does not respond to price. So if you do not sell your land for
$1 but you do sell it when the price is $1 billion then quantity
supplied responds to price. At $1 Qs is 0 at $1 billion QS is 1 that is
an elasticity of supply of 1/1 billion that is not equal to 0.
No, stupid, because the quantity is unchanged.
What quantity? Quantity supplied? Quantity sold on the market? Quantity
in existence? Hint there is only right answer here and it is the one you
think it is.
Post by r***@telus.net
The only thing that
has changed is whether A has the land or B.
For B to have A's land, A must be willing to sell to sell to B. In terms
economist use that means A must be willing to supply the land at a price
B will pay. If A's willingness to sell the land is sensitive to B's
offer for the price of the land, then supply is not perfectly inelastic.
If B offers $1 and A will not sell then quantity supplied is 0 at $1. By
definition, the amount sellers are willing to sell at a given price =
quantity supplied. If A is willing to sell at $10000 dollars then
Quantity suppiled is 1 at $10,000. That means the elasticity of supply
using the midpoint method (1/((1+0)/2))/((10,000 - 1)/((10000+1)/2) <1
but not zero.

Do you really argue that A will sell at $1 or do you think the formula I
used for elasticity of supply, which you find in any textbook, is wrong?
If you answer yes to either question you are just being stubborn and
will not admit you are wrong.

Well off to work. I have some econometrics to do today.
r***@telus.net
2007-09-07 03:35:31 UTC
Permalink
On Tue, 04 Sep 2007 08:34:09 -0500, professorchaos
Post by professorchaos
What is no surprise considering
you do not know the difference between supply and quantity supplied.
<sigh> Has the quantity of land supplied changed, no matter what the
price is?
Post by professorchaos
If the amount of
land sellers are willing to sell is sensitive to price
Which it isn't.
Post by professorchaos
then the
elasticity of supply is not perfectly inelastic. By definition perfectly
inelastic means (the percentage change in quantity supplied)/(the
percentage change in price) = 0.
Which it is.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Furthermore your argument has more to do with
shifts in supply due to expectations than elasticity of supply.
Which is kinda the point.
Which means you are way off topic. Because it has nothing to do with the
conservation. The tax causes a shift in demand due to being placed on
buyers. The deadweight loss being zero depends entirely on the
elasticity of supply being 0.
Which it is.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Good try Eicke. I can actually think and spot
contradictions that is why you dislike me so.
I dislike you because you are infinitely and immutably stupid,
ignorant and dishonest, so if the aliens by some chance encounter you
first, we are all doomed.
No I use correct definitions and you don't like being told that your
definitions are incorrect and that is the cause of your
misunderstanding.
No, stupid, ignorant, lying garbage, you do not use correct
definitions. You pretend that the definition of elasticity of supply
is buyers' and sellers' willingness to ignore prevailing prices.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
If the answers are no
then yes then the elasticity of supply is not perfectly inelastic.
Of course it isn't. You changed the subject.
No I didn't. You correctly said that perfectly inelastic means quantity
supplied does not respond to price. So if you do not sell your land for
$1 but you do sell it when the price is $1 billion then quantity
supplied responds to price.
No, stupid, because whether I sell or not does not depend on the
price, but only on whether it matches the _prevailing_ price. The
same land that was sold for $1 centuries ago now fetches millions.
Post by professorchaos
At $1 Qs is 0 at $1 billion QS is 1 that is
Post by r***@telus.net
Post by professorchaos
an elasticity of supply of 1/1 billion that is not equal to 0.
No, stupid, because the quantity is unchanged.
What quantity? Quantity supplied? Quantity sold on the market? Quantity
in existence? Hint there is only right answer here and it is the one you
think it is.
Right. Quantity supplied, which in the case of natural resources is
unrelated to price.
Post by professorchaos
Post by r***@telus.net
The only thing that
has changed is whether A has the land or B.
For B to have A's land, A must be willing to sell to sell to B. In terms
economist use that means A must be willing to supply the land at a price
B will pay. If A's willingness to sell the land is sensitive to B's
offer for the price of the land, then supply is not perfectly inelastic.
If B offers $1 and A will not sell then quantity supplied is 0 at $1. By
definition, the amount sellers are willing to sell at a given price =
quantity supplied. If A is willing to sell at $10000 dollars then
Quantity suppiled is 1 at $10,000. That means the elasticity of supply
using the midpoint method (1/((1+0)/2))/((10,000 - 1)/((10000+1)/2) <1
but not zero.
I don't know why I still bother demolishing you; you have proved many
times that you refuse to learn anything no matter how many times I
prove you wrong. But here is one more proof, from REA's Economics
Problem Solver, 1998 edition, p. 276:

"On the graph shown in Fig. 1, we see that as demand increases from DD
to D1D1, the price of land jumps drastically while the quantity
supplied and demanded remains constant due to the inelasticity of
supply."

Got that, stupid?

THE QUANTITY SUPPLIED AND DEMANDED REMAINS CONSTANT DUE TO THE
INELASTICITY OF SUPPLY.

You are destroyed. Inevitably.
Post by professorchaos
Do you really argue that A will sell at $1 or do you think the formula I
used for elasticity of supply, which you find in any textbook, is wrong?
You are asking the wrong question. Elasticity has nothing to do with
whether people are willing to buy or sell at prices far below or above
the prevailing prices. Of course if sellers know the prevailing price
is $2X, they will sell for $3X but not for $X. That is totally
irrelevant to elasticity of supply, because elasticity is determined
by how much more or less people are willing to buy or sell in response
to a CHANGE in prevailing prices, not offers wildly different from
prevailing prices. If the prevailing price of land is $1, landowners
sell it for $1. If the prevailing price is $1G, they sell it for $1G.
The quantity they sell is not related to the SIZE of the prevailing
price, only whether any given offer matches it or not. That is why
the elasticity of supply for land is zero.
Post by professorchaos
Well off to work. I have some econometrics to do today.
Hehe. I suppose it beats having to produce something of value....

-- Roy L
professorchaos
2007-09-07 08:07:14 UTC
Permalink
Post by r***@telus.net
On Tue, 04 Sep 2007 08:34:09 -0500, professorchaos
Post by professorchaos
If the amount of
land sellers are willing to sell is sensitive to price
Which it isn't.
Back the claim up with some data. Just one article that estimates the
elasticity of supply of land to 0.
Post by r***@telus.net
Post by professorchaos
then the
elasticity of supply is not perfectly inelastic. By definition perfectly
inelastic means (the percentage change in quantity supplied)/(the
percentage change in price) = 0.
Which it is.
One citation of the elasticity of supply of land is 0.

Check out
http://links.jstor.org/sici?sici=0034-6527(193402)1%3A2%3C149%3AIEOSAT%3E2.0.CO%3B2-R

See Smith Barton, The Supply of Urban Housing, QJE 1976. He estimates
the elasticity of supply to be over 5. That is elastic. Bart is a well
respected urban economist.

You can't see the paper without jstor but look at this google search page.

http://www.google.com/search?q=Elasticity+of+supply+of+land+estimates&sourceid=navclient-ff&ie=UTF-8&rlz=1B2DVFC_enUS226US227


JSTOR: "Open Space Preservation in Developing Areas: An ...
In this case, the elasticity of supply of urban land nationwide is
estimated to be 1.09.10 Although these are not refined estimates, they
do indicate that ...
links.jstor.org/sici?sici=0023-7639(197511)51%3A4%3C385%3A%22SPIDA%3E2.0.CO%3B2-W
- Similar pages

I was actually wrong the estimates I am finding is the supply of land is
elastic. I had believed that the traditional ASSUMPTION of perfect
inelastic land supply was close.

"The other side of Eight Mile: suburban population and housing ...
(2) Most models of urban structure, density and growth refer to land use
and ... He estimates the price elasticity of supply to be 0.58 in 1988
and 1.03 in ...
goliath.ecnext.com/coms2/gi_0199-4675658/The-other-side-of-Eight.html -
31k - Cached - Similar pages"

http://www.tinbergen.nl/discussionpapers/07058.pdf
"Despite its relevance for housing market and aggregate economic
outcomes, the body
of empirical work on housing supply seems small and fairly inconclusive
(DiPasquale, 1999).
Estimates of the price elasticity of supply in the US range from 1 to 4,
with outliers from
almost zero to infinity, while this literature generally does not deal
explicitly with investments
in the existing stock."

"Institutions in land and housing markets vary substantially between
countries, and
recent studies point to a strong relationship between the
restrictiveness of land use regulation
and the price elasticity of housing supply (cf. Green et al., 2005,
Quigley and Raphael, 2005).1"
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Furthermore your argument has more to do with
shifts in supply due to expectations than elasticity of supply.
Which is kinda the point.
Which means you are way off topic. Because it has nothing to do with the
conservation. The tax causes a shift in demand due to being placed on
buyers. The deadweight loss being zero depends entirely on the
elasticity of supply being 0.
Which it is.
One citation. Just one.
Post by r***@telus.net
Right. Quantity supplied, which in the case of natural resources is
unrelated to price.
I had to see this stupidity in print again. Roy is saying price will not
affect the amount of resources offered for sale because they are natural.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
The only thing that
has changed is whether A has the land or B.
For B to have A's land, A must be willing to sell to sell to B. In terms
economist use that means A must be willing to supply the land at a price
B will pay. If A's willingness to sell the land is sensitive to B's
offer for the price of the land, then supply is not perfectly inelastic.
If B offers $1 and A will not sell then quantity supplied is 0 at $1. By
definition, the amount sellers are willing to sell at a given price =
quantity supplied. If A is willing to sell at $10000 dollars then
Quantity suppiled is 1 at $10,000. That means the elasticity of supply
using the midpoint method (1/((1+0)/2))/((10,000 - 1)/((10000+1)/2) <1
but not zero.
I don't know why I still bother demolishing you; you have proved many
times that you refuse to learn anything no matter how many times I
prove you wrong. But here is one more proof, from REA's Economics
"On the graph shown in Fig. 1, we see that as demand increases from DD
to D1D1, the price of land jumps drastically while the quantity
supplied and demanded remains constant due to the inelasticity of
supply."
Got that, stupid?
Oh wow an example of how to solve a problem. This is far from empirical
data and it is not even explaining right. The quantity only remains
constant if it is perfectly inelastic. So whomever wrote didn't even
explain it right.
Post by r***@telus.net
THE QUANTITY SUPPLIED AND DEMANDED REMAINS CONSTANT DUE TO THE
INELASTICITY OF SUPPLY.
I have no contention with that if it is perfectly inelastic. What I want
to see evidence to suggest is that land is perfectly inelastic. I know
that was the traditional assumption but assuming it and it be true are 2
different things. I have point out to articles showing the land of
supply is important and articles using real data showing that the
elasticity is not 0. All you can do is say no it is not.

You still have not given one compelling reason why the elasticity of
supply is 0. Only that it is fixed supply. As I have stated that does
not mean that people will sell the same amount regardless of price.

Efficiency for dummies. If the market sales than the total possible
amount that could be sold then the market is inefficient. If a tax
causes quantities sold to be less than the total possible amount it is
inefficient. If the supply curve means people sell fewer parcels of land
when price drops (due to a decrease in demand) then the market is
inefficient because more land is sold without the tax.

Got it.
Post by r***@telus.net
You are destroyed. Inevitably.
ROTFLMAO. Yeah someone who has no idea what the terms mean has destroyed
my argument by showing a hypothetical problem that does not even explain
the solution correctly. You don't have a leg to stand on and zero
credibility. Paranoia! Paranoia! Going to Destroy YA!!
Post by r***@telus.net
Post by professorchaos
Do you really argue that A will sell at $1 or do you think the formula I
used for elasticity of supply, which you find in any textbook, is wrong?
You are asking the wrong question. Elasticity has nothing to do with
whether people are willing to buy or sell at prices far below or above
the prevailing prices.
I have to see this in print again. Is the formula correct or not?
Post by r***@telus.net
Of course if sellers know the prevailing price
is $2X, they will sell for $3X but not for $X.
Prevailing price is irrelevant. Elasticity measures how the supply curve
reacts to a hypothetical change in price. The prevailing price is not
even factored into the supply curve. The supply curve ask what will you
be well to sell at $X how much at $Y and so on. The only thing the
prevailing price does is let you where on the supply curve you are so
you what the elasticity is at that point. The elasticity usually changes
along the supply curve. So the correct question is the elasticity at
what point. You can take a supply curve with the slope of 1 and find
elastic regions and inelastic regions.
Post by r***@telus.net
That is totally
irrelevant to elasticity of supply, because elasticity is determined
by how much more or less people are willing to buy or sell in response
to a CHANGE in prevailing prices,
No how much people respond to hypothetical changes in prices. Prevailing
price has nothing to do with calculating elasticity other than knowing
from what point to calculate it.
Post by r***@telus.net
not offers wildly different from
prevailing prices.
In sense you are somewhat right. An elasticity is only accurate if the
change is small. Because the elasticity is derived from a derivative the
bigger the change the less accurate the prediction. I gave the huge
price differs to show that at one point the quantity supplied is 0 and
at another the quantity supply is $1. I chose numbers where I knew
anyone would say to no to selling for $1 and yes to selling for $1
million to prove that quantity supplied can and does change when prices
change. The example could have just been as easily you sell at $1000 but
not at $999. QS is 1 at $1000 and 0 at $999. Elasticity of supply is
1/((1000-999)/((1000+999)/2) which is not zero. However, it is not
clear to me or the common person that you would sell at $1000 and not at
$999. It is clear you will not sell at $1 and sell at a million. All I
had to do was show that quantity supplied responds to price to show that
the elasticity of supply is not 0.
Post by r***@telus.net
If the prevailing price of land is $1, landowners
sell it for $1.
No land owners who wish to sell sell at $1 NOT ALL LANDOWNERS AND NOT
ALL PARCELS OF PROPERTY. If your illogic were correct then every piece
of property would be on the market everyday because everyone would sell
at the going price. This is clearly not true.
Post by r***@telus.net
If the prevailing price is $1G, they sell it for $1G.
Only those who are want to sell at $1G. My point is more land owners
want to sell at $1G than at $1. Meaning more parcels of land are offered
of the market at $1G than at $1.
Post by r***@telus.net
The quantity they sell is not related to the SIZE of the prevailing
price, only whether any given offer matches it or not.
Bullshit. If that were true you would sell your house at $1 if that was
the going price. I don't believe you would.

Your failed premise is that land gives nothing to the owner so they dump
at any given price. This is false. Land used in farming brings a profit.
Land used in housing has a value to the owner. They will not dump land
at any price only if the price is greater than the value they put on the
land.
Post by r***@telus.net
That is why
the elasticity of supply for land is zero.
Bullshit. I am not categorical saying it can not be but this "argument"
is bullshit. It says that every piece is always on the market regardless
of the price. It says if your neighbors all sell for $1 and I offer you
$1 for your house you will sell to me regardless of what value you put
on your house. That is a bullshit argument and you know it. It says you
do not care if paid $10 million for the land or you think the land is
worth $10 million to you. If the going rate is $10 you will take the
$9,999,990 hit to sell it if someone offers you $10. Complete and utter
bullshit.
r***@telus.net
2007-09-08 20:49:37 UTC
Permalink
On Fri, 07 Sep 2007 03:07:14 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Tue, 04 Sep 2007 08:34:09 -0500, professorchaos
Post by professorchaos
If the amount of
land sellers are willing to sell is sensitive to price
Which it isn't.
Back the claim up with some data. Just one article that estimates the
elasticity of supply of land to 0.
People don't publish articles to identify facts of economics that have
been known for hundreds of years, stupid.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
then the
elasticity of supply is not perfectly inelastic. By definition perfectly
inelastic means (the percentage change in quantity supplied)/(the
percentage change in price) = 0.
Which it is.
One citation of the elasticity of supply of land is 0.
"This figure illustrates a vertical supply curve. No matter what the
price, only a fixed quantity is available. The supply curve for land,
for instance, is vertical."

http://www.wku.edu/~dennis.wilson/intermediate/l01.doc


"It is sometimes the case that the supply curve is vertical: that is
the quantity supplied is fixed, no matter what the market price. For
example, the amount of land in the world can be considered fixed.
In this case, no matter how much someone would be willing to pay for a
piece of land, the extra cannot be created. Also, even if no one
wanted all the land, it still would exist. These conditions create a
vertical supply curve, giving it zero elasticity (ie. - no matter how
large the change in price, the quantity supplied will not change)."

http://faculty.smu.edu/maasoumi/Pdf%20Files/lawdemand.pdf

Of course, these citations mean nothing to you, as you have absolutely
no regard for fact.
Post by professorchaos
Check out
http://links.jstor.org/sici?sici=0034-6527(193402)1%3A2%3C149%3AIEOSAT%3E2.0.CO%3B2-R
See Smith Barton, The Supply of Urban Housing, QJE 1976. He estimates
the elasticity of supply to be over 5. That is elastic. Bart is a well
respected urban economist.
Housing is not land, stupid, ignorant, lying garbage.
Post by professorchaos
You can't see the paper without jstor but look at this google search page.
http://www.google.com/search?q=Elasticity+of+supply+of+land+estimates&sourceid=navclient-ff&ie=UTF-8&rlz=1B2DVFC_enUS226US227
JSTOR: "Open Space Preservation in Developing Areas: An ...
In this case, the elasticity of supply of urban land nationwide is
estimated to be 1.09.10 Although these are not refined estimates, they
do indicate that ...
links.jstor.org/sici?sici=0023-7639(197511)51%3A4%3C385%3A%22SPIDA%3E2.0.CO%3B2-W
- Similar pages
Please note that you are stupid, ignorant, lying garbage.

The fact that the amount of land devoted to urban use has increased
over time along with rising land prices does not mean the supply of
land is elastic.

Stupid.
Post by professorchaos
"The other side of Eight Mile: suburban population and housing ...
(2) Most models of urban structure, density and growth refer to land use
and ... He estimates the price elasticity of supply to be 0.58 in 1988
and 1.03 in ...
goliath.ecnext.com/coms2/gi_0199-4675658/The-other-side-of-Eight.html -
31k - Cached - Similar pages"
Not referring to supply of land.

You are again proved to be stupid, ignorant, lying garbage.
Post by professorchaos
http://www.tinbergen.nl/discussionpapers/07058.pdf
"Despite its relevance for housing market and aggregate economic
outcomes, the body
of empirical work on housing supply seems small and fairly inconclusive
(DiPasquale, 1999).
Estimates of the price elasticity of supply in the US range from 1 to 4,
with outliers from
almost zero to infinity,
Hehe. Nice scientific consensus you've got there....

And because you are stupid, ignorant, lying garbage, you have again
substituted "housing" for "land."
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Furthermore your argument has more to do with
shifts in supply due to expectations than elasticity of supply.
Which is kinda the point.
Which means you are way off topic. Because it has nothing to do with the
conservation. The tax causes a shift in demand due to being placed on
buyers. The deadweight loss being zero depends entirely on the
elasticity of supply being 0.
Which it is.
One citation. Just one.
I've already cited it for you. Citations mean nothing to you, because
facts mean nothing to you.
Post by professorchaos
Post by r***@telus.net
Right. Quantity supplied, which in the case of natural resources is
unrelated to price.
I had to see this stupidity in print again. Roy is saying price will not
affect the amount of resources offered for sale because they are natural.
That's right, and it is proven by all historical data. A rising price
for land sites is just as likely to stimulate further hoarding as
increased sales, as proved over and over again throughout history.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
The only thing that
has changed is whether A has the land or B.
For B to have A's land, A must be willing to sell to sell to B. In terms
economist use that means A must be willing to supply the land at a price
B will pay. If A's willingness to sell the land is sensitive to B's
offer for the price of the land, then supply is not perfectly inelastic.
If B offers $1 and A will not sell then quantity supplied is 0 at $1. By
definition, the amount sellers are willing to sell at a given price =
quantity supplied. If A is willing to sell at $10000 dollars then
Quantity suppiled is 1 at $10,000. That means the elasticity of supply
using the midpoint method (1/((1+0)/2))/((10,000 - 1)/((10000+1)/2) <1
but not zero.
I don't know why I still bother demolishing you; you have proved many
times that you refuse to learn anything no matter how many times I
prove you wrong. But here is one more proof, from REA's Economics
"On the graph shown in Fig. 1, we see that as demand increases from DD
to D1D1, the price of land jumps drastically while the quantity
supplied and demanded remains constant due to the inelasticity of
supply."
Got that, stupid?
Oh wow an example of how to solve a problem. This is far from empirical
data and it is not even explaining right. The quantity only remains
constant if it is perfectly inelastic. So whomever wrote didn't even
explain it right.
As I said above, facts and citations mean nothing whatever to you.
Post by professorchaos
Post by r***@telus.net
THE QUANTITY SUPPLIED AND DEMANDED REMAINS CONSTANT DUE TO THE
INELASTICITY OF SUPPLY.
I have no contention with that if it is perfectly inelastic. What I want
to see evidence to suggest is that land is perfectly inelastic. I know
that was the traditional assumption but assuming it and it be true are 2
different things. I have point out to articles showing the land of
supply is important and articles using real data showing that the
elasticity is not 0. All you can do is say no it is not.
You are of course lying again. None of the articles you cited said
the elasticity of supply for land was not zero. None.
Post by professorchaos
You still have not given one compelling reason why the elasticity of
supply is 0.
The reason is obvious: unlike the case of produced goods, sales of
land do not change the amount available. They only change who has it.
Post by professorchaos
Only that it is fixed supply. As I have stated that does
not mean that people will sell the same amount regardless of price.
Yes, it does, because if they don't sell it, they get nothing.
Post by professorchaos
Efficiency for dummies. If the market sales than the total possible
amount that could be sold then the market is inefficient. If a tax
causes quantities sold to be less than the total possible amount it is
inefficient. If the supply curve means people sell fewer parcels of land
when price drops (due to a decrease in demand) then the market is
inefficient because more land is sold without the tax.
Got it.
But in point of fact, more land is sold _with_ the tax. Taxing it is
therefore MORE efficient than not taxing it.
Post by professorchaos
Post by r***@telus.net
You are destroyed. Inevitably.
ROTFLMAO. Yeah someone who has no idea what the terms mean has destroyed
my argument by showing a hypothetical problem that does not even explain
the solution correctly.
<yawn> The third edition of a popular study guide disagrees with you,
so you conclude that it must be wrong, not you.

Stupid.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Do you really argue that A will sell at $1 or do you think the formula I
used for elasticity of supply, which you find in any textbook, is wrong?
You are asking the wrong question. Elasticity has nothing to do with
whether people are willing to buy or sell at prices far below or above
the prevailing prices.
I have to see this in print again. Is the formula correct or not?
The numbers you are putting into it are not correct. Asking if the
owner will sell for $X when the going price is $1000X is not the same
as the going price actually being $X.
Post by professorchaos
Post by r***@telus.net
Of course if sellers know the prevailing price
is $2X, they will sell for $3X but not for $X.
Prevailing price is irrelevant.
No, stupid. That is how elasticity is defined: the effect on quantity
of a change in prevailing price. Not asking people if they will buy
or sell for prices different from the prevaling price.
Post by professorchaos
Elasticity measures how the supply curve
reacts to a hypothetical change in price.
Right. A CHANGE in price, not an offer far above or below the price.

Too bad you can't remember that from one line to the next.

Stupid.
Post by professorchaos
The prevailing price is not
even factored into the supply curve. The supply curve ask what will you
be well to sell at $X how much at $Y and so on. The only thing the
prevailing price does is let you where on the supply curve you are so
you what the elasticity is at that point.
No, stupid. The prevailing price also tells you what price people are
willing to offer and accept. The fact that sellers are willing to
accept higher prices than that and buyers to offer lower ones does not
demonstrate elasticity of supply or demand.

Stupid.
Post by professorchaos
Post by r***@telus.net
That is totally
irrelevant to elasticity of supply, because elasticity is determined
by how much more or less people are willing to buy or sell in response
to a CHANGE in prevailing prices,
No how much people respond to hypothetical changes in prices.
That is just flat wrong, as I have already proved to you. If the
going price for a land parcel is $X, and you ask the owner if he would
sell if the price were $X/2, he will say No. But let the going price
ACTUALLY DECLINE to $X/4, and he will be much more willing to sell for
$X/2 than he was to sell it for $x when the going price was $X.

Stupid.
Post by professorchaos
Prevailing
price has nothing to do with calculating elasticity other than knowing
from what point to calculate it.
It has much more to do with it than hypothetical prices different from
prevailing prices.
Post by professorchaos
Post by r***@telus.net
not offers wildly different from
prevailing prices.
In sense you are somewhat right. An elasticity is only accurate if the
change is small. Because the elasticity is derived from a derivative the
bigger the change the less accurate the prediction. I gave the huge
price differs to show that at one point the quantity supplied is 0 and
at another the quantity supply is $1. I chose numbers where I knew
anyone would say to no to selling for $1 and yes to selling for $1
million to prove that quantity supplied can and does change when prices
change.
But the price didn't change. Only the offer changed. That is the
point.

Stupid.
Post by professorchaos
The example could have just been as easily you sell at $1000 but
not at $999. QS is 1 at $1000 and 0 at $999. Elasticity of supply is
1/((1000-999)/((1000+999)/2) which is not zero. However, it is not
clear to me or the common person that you would sell at $1000 and not at
$999. It is clear you will not sell at $1 and sell at a million. All I
had to do was show that quantity supplied responds to price to show that
the elasticity of supply is not 0.
And you failed, as always.
Post by professorchaos
Post by r***@telus.net
If the prevailing price of land is $1, landowners
sell it for $1.
No land owners who wish to sell sell at $1 NOT ALL LANDOWNERS AND NOT
ALL PARCELS OF PROPERTY. If your illogic were correct then every piece
of property would be on the market everyday because everyone would sell
at the going price. This is clearly not true.
Thank you for proving that you are so completely ignorant of economics
that you have never heard of the effect of transaction costs on market
liquidity.
Post by professorchaos
Post by r***@telus.net
If the prevailing price is $1G, they sell it for $1G.
Only those who are want to sell at $1G. My point is more land owners
want to sell at $1G than at $1. Meaning more parcels of land are offered
of the market at $1G than at $1.
But in fact, of course, they aren't.
Post by professorchaos
Post by r***@telus.net
The quantity they sell is not related to the SIZE of the prevailing
price, only whether any given offer matches it or not.
Bullshit. If that were true you would sell your house at $1 if that was
the going price. I don't believe you would.
A house is not land, stupid, ignorant, lying garbage.
Post by professorchaos
Your failed premise is that land gives nothing to the owner so they dump
at any given price. This is false. Land used in farming brings a profit.
?? ROTFL!!! Thank you for proving your stupidity again.
Post by professorchaos
Land used in housing has a value to the owner. They will not dump land
at any price only if the price is greater than the value they put on the
land.
Post by r***@telus.net
That is why
the elasticity of supply for land is zero.
Bullshit. I am not categorical saying it can not be but this "argument"
is bullshit. It says that every piece is always on the market regardless
of the price. It says if your neighbors all sell for $1 and I offer you
$1 for your house you will sell to me regardless of what value you put
on your house. That is a bullshit argument and you know it.
No, stupid, ignorant, lying garbage. Substituting "house" for "land"
-- as you have done every time you have essayed this "argument" -- is
a bullshit argument, and YOU know it.

I am done with you.

-- Roy L
professorchaos
2007-09-08 22:49:27 UTC
Permalink
Post by r***@telus.net
On Fri, 07 Sep 2007 03:07:14 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Tue, 04 Sep 2007 08:34:09 -0500, professorchaos
Post by professorchaos
If the amount of
land sellers are willing to sell is sensitive to price
Which it isn't.
Back the claim up with some data. Just one article that estimates the
elasticity of supply of land to 0.
People don't publish articles to identify facts of economics that have
been known for hundreds of years, stupid.
Funny if it is so well known then how did a search of JSTOR and a google
search both turn up papers of elasticities of supply of land. All of
them saying that the elasticity of supply was not 0.

You are confusing a traditional assumption made for simplification with
fact. George does not even argue this. In fact he argues that a land tax
can be very large before collapsing the land market. George understood
that the quantity of land bought and sold responds to price. Unlike you.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
then the
elasticity of supply is not perfectly inelastic. By definition perfectly
inelastic means (the percentage change in quantity supplied)/(the
percentage change in price) = 0.
Which it is.
One citation of the elasticity of supply of land is 0.
"This figure illustrates a vertical supply curve. No matter what the
price, only a fixed quantity is available. The supply curve for land,
for instance, is vertical."
http://www.wku.edu/~dennis.wilson/intermediate/l01.doc
I went run backed up by data. I give example where a tax on a cigarettes
is perfectly inelastic in my classroom to show how there is no dead
weight loss on a tax on cigarettes. Do that mean it is. I tell my
students it isn't perfectly inelastic but lets assume it were.

You are quoting the traditional assumption being asserted here. The
assumption is not a fact and I have given links to sources to show that
it is not.
Post by r***@telus.net
"It is sometimes the case that the supply curve is vertical: that is
the quantity supplied is fixed, no matter what the market price. For
example, the amount of land in the world can be considered fixed.
In this case, no matter how much someone would be willing to pay for a
piece of land, the extra cannot be created. Also, even if no one
wanted all the land, it still would exist. These conditions create a
vertical supply curve, giving it zero elasticity (ie. - no matter how
large the change in price, the quantity supplied will not change)."
http://faculty.smu.edu/maasoumi/Pdf%20Files/lawdemand.pdf
A fallacy of logic. Again one peer reviewed paper that gives estimates
to back this up. I don't doubt there are some economist who do not care
to look at the data and perpetuate this foolish notion. However, data
and studies show the opposite. I give you econometric studies you post
assertions and what to just say because an economist said it is it is.
So where is the data to back it up. The data say otherwise. So show me
an estimate not the tired old hack argument that doesn't hold water.

I am assuming you can understand statistics and would know what an
estimate is or could understand what a paper that estimates elasticity
of supply is doing.
Post by r***@telus.net
Of course, these citations mean nothing to you, as you have absolutely
no regard for fact.
No i have no regard for assertion not backed by data. Which is exactly
what these quotations are.
Post by r***@telus.net
Post by professorchaos
Check out
http://links.jstor.org/sici?sici=0034-6527(193402)1%3A2%3C149%3AIEOSAT%3E2.0.CO%3B2-R
See Smith Barton, The Supply of Urban Housing, QJE 1976. He estimates
the elasticity of supply to be over 5. That is elastic. Bart is a well
respected urban economist.
Housing is not land, stupid, ignorant, lying garbage.
No but the paper also estimates the supply of raw land to be not 0.
Post by r***@telus.net
Post by professorchaos
You can't see the paper without jstor but look at this google search page.
http://www.google.com/search?q=Elasticity+of+supply+of+land+estimates&sourceid=navclient-ff&ie=UTF-8&rlz=1B2DVFC_enUS226US227
JSTOR: "Open Space Preservation in Developing Areas: An ...
In this case, the elasticity of supply of urban land nationwide is
estimated to be 1.09.10 Although these are not refined estimates, they
do indicate that ...
links.jstor.org/sici?sici=0023-7639(197511)51%3A4%3C385%3A%22SPIDA%3E2.0.CO%3B2-W
- Similar pages
Please note that you are stupid, ignorant, lying garbage.
The fact that the amount of land devoted to urban use has increased
over time along with rising land prices does not mean the supply of
land is elastic.
Not is what you are measuring when you measure the elasticity of supply.
It is a measure of the percentage change in quantity supplied of land in
urban areas divided by the percentage in price. Not the change in land
used for urban use. You still do not understand what elasticity means.
Post by r***@telus.net
Post by professorchaos
"The other side of Eight Mile: suburban population and housing ...
(2) Most models of urban structure, density and growth refer to land use
and ... He estimates the price elasticity of supply to be 0.58 in 1988
and 1.03 in ...
goliath.ecnext.com/coms2/gi_0199-4675658/The-other-side-of-Eight.html -
31k - Cached - Similar pages"
Not referring to supply of land.
Yes it is the elasticity of supply of land. Lying about it and denying
it does not change that fact. As usual Roy comments without reading the
paper.
Post by r***@telus.net
Post by professorchaos
http://www.tinbergen.nl/discussionpapers/07058.pdf
"Despite its relevance for housing market and aggregate economic
outcomes, the body
of empirical work on housing supply seems small and fairly inconclusive
(DiPasquale, 1999).
Estimates of the price elasticity of supply in the US range from 1 to 4,
with outliers from
almost zero to infinity,
Hehe. Nice scientific consensus you've got there....
Again the estimates show 0 to be an outlier. Most studies estimate the
supply of land between 1 and 4. It is not perfectly inelastic.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Furthermore your argument has more to do with
shifts in supply due to expectations than elasticity of supply.
Which is kinda the point.
Which means you are way off topic. Because it has nothing to do with the
conservation. The tax causes a shift in demand due to being placed on
buyers. The deadweight loss being zero depends entirely on the
elasticity of supply being 0.
Which it is.
One citation. Just one.
I've already cited it for you. Citations mean nothing to you, because
facts mean nothing to you.
No citing someone making the same assertion means nothing to me. Citing
some data and a study were the estimate of the elasticity of supply of
land is 0 does mean something. Finding some people with titles who make
the same stupid comment that people will be willing to sell the same
amount of land regardless of price does not make the claim right.

Again I ask you if you have a farming business on a piece of land that
brings $10,000 dollars a year in profit will you sell the land it is on
for $1? Will you sell it for a million dollars. If you answer no to the
first question and yes to the second then QUANTITY SUPPLIED CHANGES. The
elasticity of supply is not 0. The statement made by you and your two
citations make the same logical fallacy. That is just because it exist
it will be sold. That is illogical and does not hold up to data.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Right. Quantity supplied, which in the case of natural resources is
unrelated to price.
I had to see this stupidity in print again. Roy is saying price will not
affect the amount of resources offered for sale because they are natural.
That's right, and it is proven by all historical data.
Give one citation Roy. You can find people assert this but show one
studied that looked at data and concluded this. You find very quickly as
I did that the surprise is there are few studies on the elasticities.
Most people who have made the claim assert this.
Post by r***@telus.net
A rising price
for land sites is just as likely to stimulate further hoarding as
increased sales, as proved over and over again throughout history.
Fine if quantity supplied drops or even changes when prices rise THEN
THE ELASITICITY OF SUPPLY IS NOT ZERO. Thank you for finally agreeing
with the point. Your own comment here says that the price affects
people's willingness to sell. THAT MEANS THE ELASTICITY OF SUPPLY IS NOT
0! You finally might start to understand what I am talking about.
Whether you realize it or not you have just said as I have the assertion
that quantity supplied does not change when prices change is false. Your
statement clearly shows that changes in prices affect how much people
want to sell.

So which is it Roy? Does the historical data show price does not affect
the resources for sale or does the historical data show that a rising
price is just as likely to stimulate furthering hoarding (quantity of
supplied) decreases as increases in value? The two statements
contradict. Hoarding means that a rising price affects how much people
are willing to sell. It means people do not automatically sell if
someone offers the prevailing price if they are hoarding they do not
sell at the prevailing price.

So either you are the liar and the one trying to confuse or you are too
stupid to realize that this statement contradicted everything you have
been arguing. That a rising price will decrease quantity supplied
because of hording. That is the opposite case. I sell at $10 but do not
sell at $100. Elasticity of supply is therefore
((0-1)/((1/2)))/((100-10)/(110/2)) which is NOT EQUAL TO O.

When you make up your mind which it is we will talk.
Ronald L. Weston
2007-09-08 23:18:14 UTC
Permalink
Then why pay a tax you don't even know:

'None are so hopelessly enslaved as those that falsely believe they are
free, truth has been kept from the depths of their minds, by masters who
fool them with lies, they feed them with falsehoods till wrong seems like
right in their minds. ' - words from the song "Jesus, The Way and the Truth
and the Life".

There are many beliefs concerning the income tax. The problem is most are
based on misinterpretations of what the laws actually state and get the
believers in trouble. I have myself been guilty of doing this, but have
learned many things that have made it possible to remove several liens. I
put together a document called "ABC's of Federal Theft" that is based on
government sources and Supreme Court decisions.

In it you will learn that the 16th Amendment did not change the constitution
in any way.

That the Forms W-4, W-2, and 1099-MISC are classified as Tax Class 5 forms,
meaning they apply to Estate and Gift taxes only.

That the United States District Courts are territorial courts and that
District Courts of the United States (yes they are different) are courts
over the insular possessions, therefore neither of these courts has
jurisdiction within the lands belonging to the 50 states (all based on
Supreme Court decisions).

That the IRS has never been created by law.

That the lien filing procedures are governed by state law. Since most states
have adopted the Uniform Federal Tax Lien Act, and the Uniform Commercial
Code you will learn that county clerks do not check the validity of these
liens and file the fraudulent notices as if they were perfected liens.

You will learn the trickery of redefining certain terms.

The document includes the following chapters, all of them important:

Introduction
Socialist (Communist) Manifesto
Federal Government Misinformation Exposed
The Documentation System of Federal Law
Definitions
The Income Tax and the Employment Tax
Forms W-2, 1099, W-4, 941, 1040, and the IRS
Federal Debt Collection
Fraudulent Tax Law Application
The State's Contribution to the Fraud
Other Abuses of the Taxing Statutes
Jurisdiction of Federal Government
Researching Law Citations
Recover by Using the Law
GOD Denied by Government and Church
Conclusion
Appendix A - Sources
Appendix B - Other Supreme Court Cites

It is at http://one.fsphost.com/ronarl/ and additional material is at
http://one.fsphost.com/ronarl/Files.html.
Post by professorchaos
Post by r***@telus.net
On Fri, 07 Sep 2007 03:07:14 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Tue, 04 Sep 2007 08:34:09 -0500, professorchaos
If the amount of land sellers are willing to sell is sensitive to
price
Which it isn't.
Back the claim up with some data. Just one article that estimates the
elasticity of supply of land to 0.
People don't publish articles to identify facts of economics that have
been known for hundreds of years, stupid.
Funny if it is so well known then how did a search of JSTOR and a google
search both turn up papers of elasticities of supply of land. All of them
saying that the elasticity of supply was not 0.
You are confusing a traditional assumption made for simplification with
fact. George does not even argue this. In fact he argues that a land tax
can be very large before collapsing the land market. George understood
that the quantity of land bought and sold responds to price. Unlike you.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
then the elasticity of supply is not perfectly inelastic. By
definition perfectly inelastic means (the percentage change in
quantity supplied)/(the percentage change in price) = 0.
Which it is.
One citation of the elasticity of supply of land is 0.
"This figure illustrates a vertical supply curve. No matter what the
price, only a fixed quantity is available. The supply curve for land,
for instance, is vertical."
http://www.wku.edu/~dennis.wilson/intermediate/l01.doc
I went run backed up by data. I give example where a tax on a cigarettes
is perfectly inelastic in my classroom to show how there is no dead weight
loss on a tax on cigarettes. Do that mean it is. I tell my students it
isn't perfectly inelastic but lets assume it were.
You are quoting the traditional assumption being asserted here. The
assumption is not a fact and I have given links to sources to show that it
is not.
Post by r***@telus.net
"It is sometimes the case that the supply curve is vertical: that is
the quantity supplied is fixed, no matter what the market price. For
example, the amount of land in the world can be considered fixed.
In this case, no matter how much someone would be willing to pay for a
piece of land, the extra cannot be created. Also, even if no one
wanted all the land, it still would exist. These conditions create a
vertical supply curve, giving it zero elasticity (ie. - no matter how
large the change in price, the quantity supplied will not change)."
http://faculty.smu.edu/maasoumi/Pdf%20Files/lawdemand.pdf
A fallacy of logic. Again one peer reviewed paper that gives estimates to
back this up. I don't doubt there are some economist who do not care to
look at the data and perpetuate this foolish notion. However, data and
studies show the opposite. I give you econometric studies you post
assertions and what to just say because an economist said it is it is. So
where is the data to back it up. The data say otherwise. So show me an
estimate not the tired old hack argument that doesn't hold water.
I am assuming you can understand statistics and would know what an
estimate is or could understand what a paper that estimates elasticity of
supply is doing.
Post by r***@telus.net
Of course, these citations mean nothing to you, as you have absolutely
no regard for fact.
No i have no regard for assertion not backed by data. Which is exactly
what these quotations are.
Post by r***@telus.net
Post by professorchaos
Check out
http://links.jstor.org/sici?sici=0034-6527(193402)1%3A2%3C149%3AIEOSAT%3E2.0.CO%3B2-R
See Smith Barton, The Supply of Urban Housing, QJE 1976. He estimates
the elasticity of supply to be over 5. That is elastic. Bart is a well
respected urban economist.
Housing is not land, stupid, ignorant, lying garbage.
No but the paper also estimates the supply of raw land to be not 0.
Post by r***@telus.net
Post by professorchaos
You can't see the paper without jstor but look at this google search page.
http://www.google.com/search?q=Elasticity+of+supply+of+land+estimates&sourceid=navclient-ff&ie=UTF-8&rlz=1B2DVFC_enUS226US227
JSTOR: "Open Space Preservation in Developing Areas: An ...
In this case, the elasticity of supply of urban land nationwide is
estimated to be 1.09.10 Although these are not refined estimates, they
do indicate that ...
links.jstor.org/sici?sici=0023-7639(197511)51%3A4%3C385%3A%22SPIDA%3E2.0.CO%3B2-W
- Similar pages
Please note that you are stupid, ignorant, lying garbage.
The fact that the amount of land devoted to urban use has increased
over time along with rising land prices does not mean the supply of
land is elastic.
Not is what you are measuring when you measure the elasticity of supply.
It is a measure of the percentage change in quantity supplied of land in
urban areas divided by the percentage in price. Not the change in land
used for urban use. You still do not understand what elasticity means.
Post by r***@telus.net
Post by professorchaos
"The other side of Eight Mile: suburban population and housing ...
(2) Most models of urban structure, density and growth refer to land use
and ... He estimates the price elasticity of supply to be 0.58 in 1988
and 1.03 in ...
goliath.ecnext.com/coms2/gi_0199-4675658/The-other-side-of-Eight.html -
31k - Cached - Similar pages"
Not referring to supply of land.
Yes it is the elasticity of supply of land. Lying about it and denying it
does not change that fact. As usual Roy comments without reading the
paper.
Post by r***@telus.net
Post by professorchaos
http://www.tinbergen.nl/discussionpapers/07058.pdf
"Despite its relevance for housing market and aggregate economic
outcomes, the body
of empirical work on housing supply seems small and fairly inconclusive
(DiPasquale, 1999).
Estimates of the price elasticity of supply in the US range from 1 to 4,
with outliers from
almost zero to infinity,
Hehe. Nice scientific consensus you've got there....
Again the estimates show 0 to be an outlier. Most studies estimate the
supply of land between 1 and 4. It is not perfectly inelastic.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by r***@telus.net
Furthermore your argument has more to do with shifts in supply due
to expectations than elasticity of supply.
Which is kinda the point.
Which means you are way off topic. Because it has nothing to do with
the conservation. The tax causes a shift in demand due to being placed
on buyers. The deadweight loss being zero depends entirely on the
elasticity of supply being 0.
Which it is.
One citation. Just one.
I've already cited it for you. Citations mean nothing to you, because
facts mean nothing to you.
No citing someone making the same assertion means nothing to me. Citing
some data and a study were the estimate of the elasticity of supply of
land is 0 does mean something. Finding some people with titles who make
the same stupid comment that people will be willing to sell the same
amount of land regardless of price does not make the claim right.
Again I ask you if you have a farming business on a piece of land that
brings $10,000 dollars a year in profit will you sell the land it is on
for $1? Will you sell it for a million dollars. If you answer no to the
first question and yes to the second then QUANTITY SUPPLIED CHANGES. The
elasticity of supply is not 0. The statement made by you and your two
citations make the same logical fallacy. That is just because it exist it
will be sold. That is illogical and does not hold up to data.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Right. Quantity supplied, which in the case of natural resources is
unrelated to price.
I had to see this stupidity in print again. Roy is saying price will not
affect the amount of resources offered for sale because they are natural.
That's right, and it is proven by all historical data.
Give one citation Roy. You can find people assert this but show one
studied that looked at data and concluded this. You find very quickly as I
did that the surprise is there are few studies on the elasticities. Most
people who have made the claim assert this.
Post by r***@telus.net
A rising price
for land sites is just as likely to stimulate further hoarding as
increased sales, as proved over and over again throughout history.
Fine if quantity supplied drops or even changes when prices rise THEN THE
ELASITICITY OF SUPPLY IS NOT ZERO. Thank you for finally agreeing with the
point. Your own comment here says that the price affects people's
willingness to sell. THAT MEANS THE ELASTICITY OF SUPPLY IS NOT 0! You
finally might start to understand what I am talking about. Whether you
realize it or not you have just said as I have the assertion that quantity
supplied does not change when prices change is false. Your statement
clearly shows that changes in prices affect how much people want to sell.
So which is it Roy? Does the historical data show price does not affect
the resources for sale or does the historical data show that a rising
price is just as likely to stimulate furthering hoarding (quantity of
supplied) decreases as increases in value? The two statements contradict.
Hoarding means that a rising price affects how much people are willing to
sell. It means people do not automatically sell if someone offers the
prevailing price if they are hoarding they do not sell at the prevailing
price.
So either you are the liar and the one trying to confuse or you are too
stupid to realize that this statement contradicted everything you have
been arguing. That a rising price will decrease quantity supplied because
of hording. That is the opposite case. I sell at $10 but do not sell at
$100. Elasticity of supply is therefore ((0-1)/((1/2)))/((100-10)/(110/2))
which is NOT EQUAL TO O.
When you make up your mind which it is we will talk.
r***@telus.net
2007-09-10 21:02:02 UTC
Permalink
On Sat, 08 Sep 2007 17:49:27 -0500, professorchaos
Post by professorchaos
Again I ask you if you have a farming business on a piece of land that
brings $10,000 dollars a year in profit will you sell the land it is on
for $1? Will you sell it for a million dollars.
And again I tell you: that is not how elasticity is determined.
Post by professorchaos
If you answer no to the
first question and yes to the second then QUANTITY SUPPLIED CHANGES. The
elasticity of supply is not 0. The statement made by you and your two
citations make the same logical fallacy. That is just because it exist
it will be sold. That is illogical and does not hold up to data.
Wrong, stupid, ignorant, lying garbage. Elasticity is determined by
how quantity responds to a change in the going price, not by asking
people if they would accept prices different from the going price.

Stupid.

How many times do I have to prove you wrong before you will become
willing to consider the possibility that you actually ARE wrong?
Post by professorchaos
Post by r***@telus.net
A rising price
for land sites is just as likely to stimulate further hoarding as
increased sales, as proved over and over again throughout history.
Fine if quantity supplied drops or even changes when prices rise THEN
THE ELASITICITY OF SUPPLY IS NOT ZERO. Thank you for finally agreeing
with the point.
Wrong again, stupid, ignorant, lying garbage. The fact that a rising
price for land can be accompanied by an increase, a decrease, or no
change at all in the quantity supplied proves that elasticity of
supply is indeed zero, because quantity "supplied" is responding to
something OTHER THAN PRICE.

Stupid.
Post by professorchaos
Your own comment here says that the price affects
people's willingness to sell. THAT MEANS THE ELASTICITY OF SUPPLY IS NOT
0!
No, it does not, as proved above.

Stupid.
Post by professorchaos
You finally might start to understand what I am talking about.
If I do, I'll kill myself.
Post by professorchaos
Whether you realize it or not you have just said as I have the assertion
that quantity supplied does not change when prices change is false. Your
statement clearly shows that changes in prices affect how much people
want to sell.
Post hoc fallacy.

Just to prove to you and everyone else reading this how completely
stupid you are, consider a village of naked, illiterate savages (i.e.,
people whose understanding of economics is exactly the same as yours).
Each month, the villagers pool their surplus funds and engage the
services of the rainmaker, who in return for these contributions
supplies the village with rain in much the same way landowners
"supply" users with land in return for rent: by threatening to
withhold it. Noticing that the size of the rainmaker's income varies
from month to month, and so does the amount of rain he supplies, these
holders of advanced degrees in econometrics, these geniuses of
economics conclude, as you do, that the elasticity of supply for rain
might be positive and it might be negative, but it is certainly not
zero.
Post by professorchaos
So which is it Roy? Does the historical data show price does not affect
the resources for sale or does the historical data show that a rising
price is just as likely to stimulate furthering hoarding (quantity of
supplied) decreases as increases in value? The two statements
contradict.
See above, stupid. And try to understand it.
Post by professorchaos
When you make up your mind which it is we will talk.
And my motive for doing that would be what, exactly?

-- Roy L
professorchaos
2007-09-11 04:22:16 UTC
Permalink
Post by r***@telus.net
On Sat, 08 Sep 2007 17:49:27 -0500, professorchaos
Wrong, stupid, ignorant, lying garbage. Elasticity is determined by
how quantity responds to a change in the going price, not by asking
people if they would accept prices different from the going price.
Stupid.
How many times do I have to prove you wrong before you will become
willing to consider the possibility that you actually ARE wrong?
Once if you actually do it. Repeating the same bullshit you pulled out
of your hat is not proving me wrong. Would you care to produce a
definition of elasticity from a textbook. Over and Over I have produced
the same formula and the same equation for elasticity provided in ANY
microeconomics textbooks. All you can counter is that it is wrong.

Where are you getting your definition. Oh I know Rocky let me pull a
rabbit out of my ass.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
A rising price
for land sites is just as likely to stimulate further hoarding as
increased sales, as proved over and over again throughout history.
Fine if quantity supplied drops or even changes when prices rise THEN
THE ELASITICITY OF SUPPLY IS NOT ZERO. Thank you for finally agreeing
with the point.
Wrong again, stupid, ignorant, lying garbage. The fact that a rising
price for land can be accompanied by an increase, a decrease, or no
change at all in the quantity supplied proves that elasticity of
supply is indeed zero, because quantity "supplied" is responding to
something OTHER THAN PRICE.
It says nothing of the such. It says the elasticity of supply differs
over the supply curve. LEARN YOUR DEFINITIONS ROY. If the quantity
supplied changes the elasticity of supply is not 0 at that point.
Post by r***@telus.net
Stupid.
Post by professorchaos
Your own comment here says that the price affects
people's willingness to sell. THAT MEANS THE ELASTICITY OF SUPPLY IS NOT
0!
No, it does not, as proved above.
Proved. You have a low standard of proof. Your standard of proof is here
watch me pull something out of my ass, see I proved it. Lets not ask if
the terminology you are using is right or if the "conclusion" is really
different from theory. Roy pulled it out of his ass therefore he is right.
Post by r***@telus.net
Stupid.
Post by professorchaos
You finally might start to understand what I am talking about.
If I do, I'll kill myself.
Why because the lying agents of the templars got to you? You really are
a sick paranoid aren't you. At first I thought you were half joking. Now
I realize you really do need lithium. So I am part of the government
agency you believed to have planned and carried out 9/11 Alex?
Post by r***@telus.net
Post by professorchaos
Whether you realize it or not you have just said as I have the assertion
that quantity supplied does not change when prices change is false. Your
statement clearly shows that changes in prices affect how much people
want to sell.
Post hoc fallacy.
Bullshit. You said it yourself a rising price can lead to less quantity
supplied on the market as people hoard land. THAT MEANS THE ELASTICITY
OF SUPPLY IS NOT 0. It was your own quotation that says that. I was your
assertion it was historically proven. Not mine. I really don't agree
with you. I think the example you gave shows in a shift in supply but
regardless your logic, or lack of, agreed with me. You can call it a lie
all you want that doesn't change the fact.
Post by r***@telus.net
Just to prove to you and everyone else reading this how completely
stupid you are, consider a village of naked, illiterate savages (i.e.,
people whose understanding of economics is exactly the same as yours).
Coming from your lack of even what the terms mean, I take that is a
complement.
Post by r***@telus.net
Each month, the villagers pool their surplus funds and engage the
services of the rainmaker, who in return for these contributions
supplies the village with rain in much the same way landowners
"supply" users with land in return for rent: by threatening to
withhold it.
A. You are crazy.
B. This has nothing to do with a market nor elasticity.
Post by r***@telus.net
Noticing that the size of the rainmaker's income varies
from month to month, and so does the amount of rain he supplies, these
holders of advanced degrees in econometrics, these geniuses of
economics conclude, as you do, that the elasticity of supply for rain
might be positive and it might be negative, but it is certainly not
zero.
No we never look at income to determine elasticity of supply. You still
do not understand the concept. To calculate elasticity in this example
you would have to see how much rain he would supply if the price were X.
Then see how much he would supply if price were y. Then take the
percentage change in quantity supplied and divide by the percentage
change in price.

Examining his income tells us nothing about the elasticity of supply.
You have to examine price and quantity supplied combinations. You still
do not understand the elasticity of supply.
Post by r***@telus.net
Post by professorchaos
When you make up your mind which it is we will talk.
And my motive for doing that would be what, exactly?
Making up your mind might make a consistent argument.

I will state it again I firmly believe Roy uses fuzzy and language and
refuses to use terms as economist use to make economics seem confusing.
Why? Because when he manages to muddle terms and confuse he then
proceeds to claim that he proves his point that economist intentionally
try to confuse to support the interest of the rich. Note this is exactly
what David Eicke does. Throws a fact here and a fact then comes to a
conclusion he manufactured. So Roy intentionally confuses and outright
lies about his statements so that others will believe his lack of
lithium driven statement that economist intentional confuse and lie to
support our right masters.

Now off to the super duper secret meeting of the mason so I can collect
for trying to keep Roy's arguments in the dark. <tongue firmly in cheek.>
Post by r***@telus.net
-- Roy L
r***@telus.net
2007-09-11 22:57:34 UTC
Permalink
On Mon, 10 Sep 2007 23:22:16 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Sat, 08 Sep 2007 17:49:27 -0500, professorchaos
Wrong, stupid, ignorant, lying garbage. Elasticity is determined by
how quantity responds to a change in the going price, not by asking
people if they would accept prices different from the going price.
Stupid.
How many times do I have to prove you wrong before you will become
willing to consider the possibility that you actually ARE wrong?
Once if you actually do it. Repeating the same bullshit you pulled out
of your hat is not proving me wrong. Would you care to produce a
definition of elasticity from a textbook. Over and Over I have produced
the same formula and the same equation for elasticity provided in ANY
microeconomics textbooks. All you can counter is that it is wrong.
Because you are stupid, ignorant, lying garbage, you are again just
lying about what I have plainly written. I did not say the formula
was wrong. That is merely another of your lies. I said that the
numbers you were hypothesizing were not changes in price but merely
offers wildly different from the price. Which they were. I proved
the irrelevance of your stupidity with the example of gold prices,
which you then simply lied about. Which proves you are stupid,
ignorant, lying garbage.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
A rising price
for land sites is just as likely to stimulate further hoarding as
increased sales, as proved over and over again throughout history.
Fine if quantity supplied drops or even changes when prices rise THEN
THE ELASITICITY OF SUPPLY IS NOT ZERO. Thank you for finally agreeing
with the point.
Wrong again, stupid, ignorant, lying garbage. The fact that a rising
price for land can be accompanied by an increase, a decrease, or no
change at all in the quantity supplied proves that elasticity of
supply is indeed zero, because quantity "supplied" is responding to
something OTHER THAN PRICE.
It says nothing of the such.
Ah, yes, actually, that is exactly what it says.
Post by professorchaos
It says the elasticity of supply differs
over the supply curve.
No, it does not.
Post by professorchaos
LEARN YOUR DEFINITIONS ROY.
Learn what they mean, John.
Post by professorchaos
If the quantity
supplied changes the elasticity of supply is not 0 at that point.
Because you are stupid, ignorant, lying garbage, you are now claiming
that the elasticity of supply for rain "supplied" by a shaman is not
zero.

You are stupid, John. Stupid. You are a stupid man, and what you are
is stupid. I don't know any simpler way of explaining that to you.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
You finally might start to understand what I am talking about.
If I do, I'll kill myself.
Why because the lying agents of the templars got to you?
No, because it will prove that the terminal stages of Alzheimer's have
set in.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Whether you realize it or not you have just said as I have the assertion
that quantity supplied does not change when prices change is false. Your
statement clearly shows that changes in prices affect how much people
want to sell.
Post hoc fallacy.
Bullshit.
Fact.
Post by professorchaos
You said it yourself a rising price can lead to less quantity
supplied on the market as people hoard land.
Or more, as they try to bail out before the crash.
Post by professorchaos
THAT MEANS THE ELASTICITY
OF SUPPLY IS NOT 0. It was your own quotation that says that. I was your
assertion it was historically proven. Not mine. I really don't agree
with you. I think the example you gave shows in a shift in supply but
regardless your logic, or lack of, agreed with me.
ROTFL!! The king of unparsable sentences accuses me of lack of
logic...
Post by professorchaos
You can call it a lie
all you want that doesn't change the fact.
All your stupidity can't change the fact that supply is not dependent
solely on price, and a change in supply that is unrelated to price
says nothing whatever about elasticity, as the rainmaker example
proves so very thoroughly.
Post by professorchaos
Post by r***@telus.net
Just to prove to you and everyone else reading this how completely
stupid you are, consider a village of naked, illiterate savages (i.e.,
people whose understanding of economics is exactly the same as yours).
Coming from your lack of even what the terms mean, I take that is a
complement.
Oh, it was, believe me.
Post by professorchaos
Post by r***@telus.net
Each month, the villagers pool their surplus funds and engage the
services of the rainmaker, who in return for these contributions
supplies the village with rain in much the same way landowners
"supply" users with land in return for rent: by threatening to
withhold it.
A. You are crazy.
B. This has nothing to do with a market nor elasticity.
Right. Which is why it proves you are wrong and stupid. And
ignorant. And dishonest. And garbage.
Post by professorchaos
Post by r***@telus.net
Noticing that the size of the rainmaker's income varies
from month to month, and so does the amount of rain he supplies, these
holders of advanced degrees in econometrics, these geniuses of
economics conclude, as you do, that the elasticity of supply for rain
might be positive and it might be negative, but it is certainly not
zero.
No we never look at income to determine elasticity of supply.
<sigh> Uh, stupid? The rainmaker's income is exactly the price of
rain.

Stupid. STUPID. STUPID. STUPID. STUPID. STUPID. STUPID.
Post by professorchaos
You still
do not understand the concept. To calculate elasticity in this example
you would have to see how much rain he would supply if the price were X.
Then see how much he would supply if price were y. Then take the
percentage change in quantity supplied and divide by the percentage
change in price.
He supplies exactly the amount of rain that falls, no matter what the
price. The price and quantity both vary more or less at random.
Because you are simply stupid, you claim that these random variations
show the elasticity of supply being now positive, now negative.

STUPID.
Post by professorchaos
Examining his income tells us nothing about the elasticity of supply.
Yes, stupid, it does, stupid, because his income is the price of rain,
stupid.

STUPID. STUPID. STUPID. STUPID. STUPID. STUPID.
Post by professorchaos
You have to examine price and quantity supplied combinations. You still
do not understand the elasticity of supply.
I already told you, stupid, the amount of rain he supplies is
unrelated to the price of rain, stupid, just as the amount of land
landowners "supply" is unrelated to the price of land.

Stupid.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
When you make up your mind which it is we will talk.
And my motive for doing that would be what, exactly?
Making up your mind might make a consistent argument.
I have presented numerous consistent arguments that have utterly
demolished everything you have said. It has made no difference
whatever to you, and has wasted my time. Others may have derived some
entertainment from seeing you destroyed and humiliated. It's an ill
wind that blows no good, I suppose.
Post by professorchaos
I will state it again I firmly believe Roy uses fuzzy and language and
refuses to use terms as economist use to make economics seem confusing.
No one could make economics seem more confusing than it actually is
when you "explain" it.
Post by professorchaos
Why? Because when he manages to muddle terms and confuse he then
proceeds to claim that he proves his point that economist intentionally
try to confuse to support the interest of the rich.
Do you know which economists changed the definition of rent, when, and
why? Until you can tell me that, your claims that _I_ muddle terms
are disingenuous at best.
Post by professorchaos
So Roy intentionally confuses and outright
lies about his statements
Liar.
Post by professorchaos
Now off to the super duper secret meeting of the mason so I can collect
for trying to keep Roy's arguments in the dark.
Somehow, I doubt that any actual conspiracy would be willing to accept
your "help," stupid. You're sort of neoclassical economics's answer
to Zacharias Moussaoui.

-- Roy L
professorchaos
2007-09-12 07:57:53 UTC
Permalink
Post by r***@telus.net
On Mon, 10 Sep 2007 23:22:16 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
Noticing that the size of the rainmaker's income varies
from month to month, and so does the amount of rain he supplies, these
holders of advanced degrees in econometrics, these geniuses of
economics conclude, as you do, that the elasticity of supply for rain
might be positive and it might be negative, but it is certainly not
zero.
No we never look at income to determine elasticity of supply.
<sigh> Uh, stupid? The rainmaker's income is exactly the price of
rain.
The income must be price times Quantity which is NOT PRICE. Are you
really this daft?
Post by r***@telus.net
Post by professorchaos
You still
do not understand the concept. To calculate elasticity in this example
you would have to see how much rain he would supply if the price were X.
Then see how much he would supply if price were y. Then take the
percentage change in quantity supplied and divide by the percentage
change in price.
He supplies exactly the amount of rain that falls, no matter what the
price.
This is not what was stated in the example nor would observing higher
income if the quantity of rain supplied lead to the conclusion
elasticity of supply was 0. Roy you have no understanding of the term or
what it means. The reason is that you still do not under supply.
Post by r***@telus.net
Post by professorchaos
Examining his income tells us nothing about the elasticity of supply.
Yes, stupid, it does, stupid, because his income is the price of rain,
stupid.
Moron, income is price times quantity not price.
Post by r***@telus.net
Post by professorchaos
You have to examine price and quantity supplied combinations. You still
do not understand the elasticity of supply.
I already told you, stupid, the amount of rain he supplies is
unrelated to the price of rain, stupid, just as the amount of land
landowners "supply" is unrelated to the price of land.
That was A. not in the original statement and B. Not shown in the data.

None the less I have explained over and over again why the amount for
sell on the market is related not to price. Not the amount in existence
not the amount in Timbuktu, not the size of your vagina but the amount
of land offered for sale on the market is affected by price. All you can
you do is give some hokey argument that rests on 2 things.

A. The owners not having any value on the land they own so they sell
regardless of the price
B. The amount of land being fixed.

B. If is definitely true. Only so much land exist.

A. If is not true. People buy land because it has a value to them.
Something you have failed to refute only posted assertions that owners
are all speculators. If I paid $500 for the land it has a value of least
$500 dollars to me. I will not sell unless price is $500 or greater.
Someone else bought their land at $300. They had a value of $300 placed
on owning the land. At $300 I do not sell the land because my value of
ownership is $500 but person B does. When the price is $500 we both sell.

This is the point you have missed all along. Your absurd so called
argument only works if every land owner has the value placed on owning
the land and that value is 0. Ricardian rents show that different land
will give different values to the owner. Therefore a rise in price will
cause more land to be offered for sale on the market.

This has little to do with land in existence. When I decide not to sell
the land is not destroyed but it is not supplied either. When I decide
to sell it is not created but it is supplied. You can't get this through
your thick head.
Post by r***@telus.net
I have presented numerous consistent arguments that have utterly
demolished everything you have said.
You are a legend in your own mind. If repeating the same bullshit over
and over is a consistent argument then I have nothing to say. It is
consistent but not an argument. The only thing you have destroyed is the
clear discourse of economics. You have slaughtered terms. Crucified
concepts and destroyed any possibility of you making a clear concise
argument due to fuzzy language and a lack of deep understanding of the
concepts involved. You have wanted to argue in Roy's fantasy land on
Roy's term. Roy's fantasy land is a land of psycho paranoia and blind
zealotry that calls for crucification of non-believers. A land were no
argument will be evaluated. Instead you try to shout louder than the
other person and muddle terms and concepts so people are so confused
they miss the other person's point. This is David Eicke style
"research". I come to a conclusion with little reason for it and if you
disagree you are part of the conspiracy and trying to cover it up. If
you can't find evidence it is proof of a coverup. That is what your so
called arguments are.
Post by r***@telus.net
It has made no difference
whatever to you, and has wasted my time.
Your silly blind zealotry is a waste of time. You refuse to understand
economic concepts or even what definitions mean.
Post by r***@telus.net
It's an ill
wind that blows no good, I suppose.
You certainly are full of wind and its coming out your ass right now.
Post by r***@telus.net
Post by professorchaos
I will state it again I firmly believe Roy uses fuzzy and language and
refuses to use terms as economist use to make economics seem confusing.
No one could make economics seem more confusing than it actually is
when you "explain" it.
Of course now Roy is trying to prove his contention. Because real
economist do not use his terms and show him he has no clue to the
concepts in place we are trying to confuse.
Post by r***@telus.net
Post by professorchaos
Why? Because when he manages to muddle terms and confuse he then
proceeds to claim that he proves his point that economist intentionally
try to confuse to support the interest of the rich.
Do you know which economists changed the definition of rent, when, and
why? Until you can tell me that, your claims that _I_ muddle terms
are disingenuous at best.
No one did Roy. I understand Ricardo's definition. It is the same
definition applied to other rents that do not apply to land. You do not
understand Ricardo's definition or you would clearly see why land prices
affect the amount of land for sale and why people will want to sell all
the land they own regardless of price. An understanding that the theory
of rents shows a difference in returns due to innate characteristics of
the land clearly shows that people will not part with the higher return
from the land that generates rent unless prices rise enough to at least
be equal to possible rent generated.

You won't understand this because it proves you wrong. You refuse to
understand anything that proves you wrong. Instead you resort to what
every blind zealot results to it. That is if it shows me to be wrong it
must be a lie. I can not listen, I might not be a blind zealot anymore.
Your want to hold on to paranoia is stronger than your want to seek
knowledge. You really need psychological counseling and medication Roy.
I am not saying this to be rude only because you display a high degree
of paranoia and an unwillingness to see anything that might decrease
that paranoia.
Post by r***@telus.net
Post by professorchaos
So Roy intentionally confuses and outright
lies about his statements
Liar.
My point exactly. Again Roy can not see that he must be wrong and when
something challenges his paranoia it must be a lie.
professorchaos
2007-09-08 23:44:47 UTC
Permalink
Post by r***@telus.net
On Fri, 07 Sep 2007 03:07:14 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
THE QUANTITY SUPPLIED AND DEMANDED REMAINS CONSTANT DUE TO THE
INELASTICITY OF SUPPLY.
I have no contention with that if it is perfectly inelastic. What I want
to see evidence to suggest is that land is perfectly inelastic. I know
that was the traditional assumption but assuming it and it be true are 2
different things. I have point out to articles showing the land of
supply is important and articles using real data showing that the
elasticity is not 0. All you can do is say no it is not.
You are of course lying again. None of the articles you cited said
the elasticity of supply for land was not zero. None.
Post by professorchaos
You still have not given one compelling reason why the elasticity of
supply is 0.
The reason is obvious: unlike the case of produced goods, sales of
land do not change the amount available. They only change who has it.
If you believe that then why did you say this.
"> That's right, and it is proven by all historical data. A rising price
Post by r***@telus.net
for land sites is just as likely to stimulate further hoarding as
increased sales, as proved over and over again throughout history."
If a rising price stimulates hording then quantity supplied drops and
prices after quantity supplied.

I am not repeating my argument again just because you keep rehashing the
same crap. Crap on toast or crap on wheat is still crap.
Post by r***@telus.net
Post by professorchaos
Only that it is fixed supply. As I have stated that does
not mean that people will sell the same amount regardless of price.
Yes, it does, because if they don't sell it, they get nothing.
If they get noting from the land why do they own it? That is the point.
The land brings a stream of profits or some benefit. There is no reason
to own the land if it brings no benefit. To sell the price must be
higher than the benefit of owning.
Post by r***@telus.net
Post by professorchaos
Efficiency for dummies. If the market sales than the total possible
amount that could be sold then the market is inefficient. If a tax
causes quantities sold to be less than the total possible amount it is
inefficient. If the supply curve means people sell fewer parcels of land
when price drops (due to a decrease in demand) then the market is
inefficient because more land is sold without the tax.
Got it.
But in point of fact, more land is sold _with_ the tax.
What that is not what you were saying before. How is there more land
sold with the tax if the supply curve is vertical. You contradicted
yourself. Best case scenario is vertical supply and no change in land sold.
Post by r***@telus.net
Taxing it is
therefore MORE efficient than not taxing it.
That is not even an argument George would have made. Lets just assume
this idiotic statement was true that people buy more land when the cost
rises. Do you understand that too much sold on the market is also
inefficient? If the price tax value to the buyer is less than the pretax
willingness to sell of the seller for that unit of land it decreases
surplus.

You have just shown you don't know basic supply and demand by stating
the tax leads to more land sold. You also have shown you do not
understand efficiency by stating more sells are always better. That is
why efficiency is a maximization problem. Beyond the efficient point
surplus drops if you increase how much is provided on the market.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Do you really argue that A will sell at $1 or do you think the formula I
used for elasticity of supply, which you find in any textbook, is wrong?
You are asking the wrong question. Elasticity has nothing to do with
whether people are willing to buy or sell at prices far below or above
the prevailing prices.
I have to see this in print again. Is the formula correct or not?
The numbers you are putting into it are not correct. Asking if the
owner will sell for $X when the going price is $1000X is not the same
as the going price actually being $X.
You still do not understand elasticity. If I were speaking I would say
this real real real slow. It is the percentage CHANGE in quantity
supplied divided by the percentage CHANE in price. Asking an owner if
you would sell for $X when the going price is $1000 does not estimate a
change.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Of course if sellers know the prevailing price
is $2X, they will sell for $3X but not for $X.
Prevailing price is irrelevant.
No, stupid. That is how elasticity is defined: the effect on quantity
of a change in prevailing price.
No moron. It is the percentage change in quantity supplied divided by
the percentage change in price. If you are talking about the elasticity
of supply. The price need not change to predict what happen if it did.
This is like arguing moment measures the mass times velocity when the
car is actually moving and we can't measure velocity for a hypothetical
situation.
Post by r***@telus.net
Not asking people if they will buy
or sell for prices different from the prevaling price.
Read a textbook Roy. The prevailing price has no role in the definition
of elasticity. Just because the prevailing price is $1000 does not mean
we can not calculate the elasticity of a hypothetical change of $1 to
$2. You have zero understanding of elasticity or economics for that matter.
Post by r***@telus.net
Post by professorchaos
Elasticity measures how the supply curve
reacts to a hypothetical change in price.
Right. A CHANGE in price, not an offer far above or below the price.
The actual price plays no role here. It says person X will sell Y land
at price $Z. At Price $A person X will sell B land. So what is the
elasticity of supply. This is a straight test question with letters
substituted for numbers. ((B-Y)/((B+Y)/2))/(($A - $B)/(($A+$B)/2)). Do
you deny this is the formula? Where is prevailing price and difference
in prevailing price here. IT IS NOT!
Post by r***@telus.net
Post by professorchaos
The prevailing price is not
even factored into the supply curve. The supply curve ask what will you
be well to sell at $X how much at $Y and so on. The only thing the
prevailing price does is let you where on the supply curve you are so
you what the elasticity is at that point.
No, stupid. The prevailing price also tells you what price people are
willing to offer and accept. The fact that sellers are willing to
accept higher prices than that and buyers to offer lower ones does not
demonstrate elasticity of supply or demand.
Stupid.
Yes you are showing that you are quite dense and unopen to discuss
things that do not fit into your narrow mind frame. You are showing a
belief of infallibility when speaking of something you do not even have
a degree in.

I really don't understand this. I wonder if physics forums have people
posting saying physics is wrong by using muddled terms and actually
having the Gaul to say someone who has a Ph.D. in physics does not what
the terms mean?
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
That is totally
irrelevant to elasticity of supply, because elasticity is determined
by how much more or less people are willing to buy or sell in response
to a CHANGE in prevailing prices,
No how much people respond to hypothetical changes in prices.
But let the going price
ACTUALLY DECLINE to $X/4, and he will be much more willing to sell for
$X/2 than he was to sell it for $x when the going price was $X.
Then the elasticity of supply is not 0. And you are wrong. You confused
a change in price in your Tokyo example with a change in supply. What
you describe is only consistent with a shift in supply.

I would really like to see try to find economist to back up this silly
claim that the supply curve for land is downward sloping. None the less
either the supply curve is vertical or it is not.

Again you contradict yourself because you claim the supply curve is
vertical (perfectly inelastic) then give a supposed example that shows
as price decreases sellers sell more land, a supply curve with a
negative slope not vertical and a negative elasticity not 0.

Again make up your mind. Does price have no effect on how much land
people offer on the market or does a decrease in price influence people
to sell more land on the market? You are making both claims here.
Post by r***@telus.net
Post by professorchaos
The example could have just been as easily you sell at $1000 but
not at $999. QS is 1 at $1000 and 0 at $999. Elasticity of supply is
1/((1000-999)/((1000+999)/2) which is not zero. However, it is not
clear to me or the common person that you would sell at $1000 and not at
$999. It is clear you will not sell at $1 and sell at a million. All I
had to do was show that quantity supplied responds to price to show that
the elasticity of supply is not 0.
And you failed, as always.
Roy obviously has a math problem or a reading comprehension problem.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
If the prevailing price of land is $1, landowners
sell it for $1.
No land owners who wish to sell sell at $1 NOT ALL LANDOWNERS AND NOT
ALL PARCELS OF PROPERTY. If your illogic were correct then every piece
of property would be on the market everyday because everyone would sell
at the going price. This is clearly not true.
Thank you for proving that you are so completely ignorant of economics
that you have never heard of the effect of transaction costs on market
liquidity.
Even if it is transaction cost that is part of what makes up supply. So
if a trade is blocked because of transaction cost to seller when price
is X but not blocked at price Y then quantity supplied changes with price.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
The quantity they sell is not related to the SIZE of the prevailing
price, only whether any given offer matches it or not.
Bullshit. If that were true you would sell your house at $1 if that was
the going price. I don't believe you would.
A house is not land, stupid, ignorant, lying garbage.
You can't sell the land out from under it without selling the house.
Post by r***@telus.net
I am done with you.
Punish me. I don't have to respond to this bullshit anymore simply
because someone who doesn't see the lapse of logic might be convinced
that economics is something that it isn't.

You were actually done a long time ago. It was apparent when you started
throwing insults and repeating the same crap over and over.
Andy F.
2007-08-30 12:38:42 UTC
Permalink
Post by r***@telus.net
On Thu, 23 Aug 2007 10:13:40 -0500, "John Galt"
Property taxes are the fairest, most efficient and progressive
taxes we have, and cutting (or "abating") them, thus putting more of
the fiscal burden on worse taxes, is a stupid, unjust and
self-defeating policy, as well as an open invitation to corruption.
Wrong. Property taxes in the US are not Henry George's idea of a property
tax. George advocated a tax on the unimproved value of land. That is not
what happens in the US. Taxes are levied on improvements as well which in
no means are assumed to be even relatively inelastic like land maybe. Even
a tax on unimproved values is only efficient if the demand for land is
perfectly inelastic which is unlikely. Not all land is identical and some
land has better location and qualities to it. This will mean owners will
different reservation prices for selling their land. This means land is
not perfectly inelastic. Therefore there is an excess burden to even an
unimproved land tax. Albeit a much smaller one than other taxes.
You've got it the wrong way round. Demand for land is elastic, but the
supply is inelastic.This means that a tax on unimproved land values can't be
passed on to tenants.
This ought to be obvious to anyone who understnds economics well enough to
teach it.
professorchaos
2007-08-30 19:24:02 UTC
Permalink
Post by Andy F.
You've got it the wrong way round. Demand for land is elastic, but the
supply is inelastic.
A. The land market is not what we are talking about. It is the rental
market. Rental markets do not buy and sell land. They allow someone to
use the land and STRUCTURES on it. Therefore what the elasticity of
demand and supply of land are is irrelevant to the conversation.

B. There is every reason to think that the demand for rental units is
inelastic. Living space is a necessity and there are few close
substitutes. As far as elasticity of supply of rental units. I would
need some data or to see if any papers have calculated. New construction
of rental units does not necessiarly mean new land needs to bought. The
buildings on the land can be modified.

Also note that only if the supply of rental units is perfectly inelastic
that a tax can not partially be passed on. Just inelastic won't do it.
It has to be perfectly inelastic which is a very rigid argument that is
tough to prove. Owners can pass on a percentage less than 50% is much
easier to prove in that you only have to prove the elasticity of supply
is less than the elasticity of demand.

Given the inelasticity of demand for rental units a tax on improvements
increase cost for the agents who rent. Granted this is a fixed cost that
has to be covered. It is only avoidable in the long run. This means less
construction of new rental units due to the increase in taxes by
constructing them and raises prices. When prices rise due to taxes that
is what is meant by passing on the tax to the consumer.
Post by Andy F.
This means that a tax on unimproved land values can't be
passed on to tenants.
I never argued otherwise. I argued that taxing the improvements on the
land, like we do in the US, passes on taxes to the tenants. The
unimproved tax does add to cost but it adds to fixed cost and not
variable cost. In the classic short run analysis of tax this would have
no effect on the market. However, it can have long run effects on the
price renters pay which means the tax does effect rental rates. It may
not be exactly correct to say the tax is passed on but it is correct to
say in the long run the tax would affect rental rates if neither the
elasticity of demand nor elasticity of supply are zero.

In the long run is supply of land is not perfectly inelastic this would
lead to inefficiency in that land that could be sold and put to better
use is not sold. Even though I do not believe the elasticity of supply
of land is zero. Speculation and different grades of land indicate that
people have different reservation prices. I believe it is pretty close
so the dead weight loss from land not be used to its best purpose would
be small. This could have some effect on the rental markets and raise
prices if the rise in fixed cost due to the tax put some rental units
out of business, therefore decreasing supply. This would mean incentives
would be distort in that after the tax rental units made less money than
selling the land and resorting to the next best alternative. Say a
service industry based in your home. However, to call this taxes being
passed on to renters may not be the right way to say. In the end it
raises prices for renters though.
Post by Andy F.
This ought to be obvious to anyone who understnds economics well enough to
teach it.
It is obvious. You and I are arguing two different things. My argument
was referring to a tax on the improved value on the land not the
unimproved value. See my post last night. You will clearly see that. If
I was unclear I apologize.

I agree if the land tax in the US was Georgian this effect would go away
or at the very least be smaller but the sad truth is that it is not
Georgian. Roy was arguing that land taxes that exist in the US now are
efficient and not passed on. He doesn't understand the difference
between taxing improvements and taxing land. The land tax in the US,
well at least in Texas, taxes the improved value of the land as well as
the unimproved and therefore is not efficient or progressive in any sense.

To get to Roys arguments you have to have two things. A tax on the
unimproved value ONLY and the elasticity of supply or elasticity of
demand to be exactly 0. If those conditions hold then Roy is right. They
do not hold in the US. The first is clearly violated and I believe the
second is as well.
r***@telus.net
2007-08-31 07:51:59 UTC
Permalink
On Thu, 30 Aug 2007 14:24:02 -0500, professorchaos
Post by professorchaos
Roy was arguing that land taxes that exist in the US now are
efficient and not passed on.
You are, inevitably, lying. I said they were the most efficient and
progressive tax we have, not that they were perfectly efficient; and I
certainly never said that the improvement value portion could not be
passed on.
Post by professorchaos
He doesn't understand the difference
between taxing improvements and taxing land.
No, stupid liar, you just need to lie about what I have plainly
written in order to have something to say.
Post by professorchaos
The land tax in the US,
well at least in Texas, taxes the improved value of the land as well as
the unimproved and therefore is not efficient or progressive in any sense.
Ah, yes, actually, it most certainly is, because most property value
is land value. The property tax in Texas is quite a bit more
efficient and progressive than income tax (which IIRC TX does not
have, but other states and of course the federal government do).
Post by professorchaos
To get to Roys arguments you have to have two things. A tax on the
unimproved value ONLY and the elasticity of supply or elasticity of
demand to be exactly 0.
Another stupid lie.

-- Roy L
professorchaos
2007-08-31 17:36:22 UTC
Permalink
Post by r***@telus.net
On Thu, 30 Aug 2007 14:24:02 -0500, professorchaos
Post by professorchaos
He doesn't understand the difference
between taxing improvements and taxing land.
No, stupid liar, you just need to lie about what I have plainly
written in order to have something to say.
I have read it and you make the same mistake again in your next statement.
Post by r***@telus.net
Post by professorchaos
The land tax in the US,
well at least in Texas, taxes the improved value of the land as well as
the unimproved and therefore is not efficient or progressive in any sense.
Ah, yes, actually, it most certainly is, because most property value
is land value.
That is not the point. George argues a land tax on the unimproved value
is efficient because it will not affect the decision of how to improve
the land. THIS ONLY WORKS FOR A TAX ON THE UNIMPROVED VALUE. A tax on
improvements distorts incentives to improve the land. If you have zero
tax for building an office building then you will build more building
than if you have a 10% tax on the building once built. George argues
that I argue that. You are arguable an indefensible position in any
regards. You are misapplying George's arguments to a tax on improved and
unimproved value.
Post by r***@telus.net
The property tax in Texas is quite a bit more
efficient
No such thing as more efficient. If it is efficient it has 0 zero dead
weight loss. You can not have 2 efficient things and say one is more
efficient. The lost gains from trade are 0 or they are not. Something is
efficient or it is isn't. If you mean there is a smaller dead weight
loss you might be right but that is an empirical question. The only way
to show that is with data.
Post by r***@telus.net
and progressive than income tax (which IIRC TX does not
have, but other states and of course the federal government do).
If your argument were right that the poor own no land, which is not true
some poor people own houses and it takes a bigger percentage of their
income to pay the note and the tax, then this is still not correct. The
income tax has a negative tax component through the EIC that makes the
income tax system much more progressive than any other tax. There are no
provisions that some property owners have negative property tax. That
can be done and is done in the income tax system.

Correct Texas has a confusing and highly regressive sales tax.
Post by r***@telus.net
Post by professorchaos
To get to Roys arguments you have to have two things. A tax on the
unimproved value ONLY and the elasticity of supply or elasticity of
demand to be exactly 0.
Another stupid lie.
Roy again shows zero understanding of what efficient means or even what
George argued. For no deadweight loss in any market after a tax is
imposed you have to have one party that will not react to the price
change. If people buy the same amount regardless of price or sellers
sell the same amount regardless of price then the quantity sold on the
market does not change and there are no lost gains from trade. If this
condition is violated then the high cost to seller if the tax is levied
on the seller or higher cost to the buyer is the tax is levied on the
buyer will mean people will want to buy less or sellers will be willing
to sell less. This means fewer trades.

As George correct stated a land tax on the unimproved value will not
affect decisions for improvements but a tax on improvements will cause
owners to not improve to avoid the tax. To loosely quote George, a tax
on olive trees will lead to land owners cutting down olive trees to
avoid the tax. A tax on the land will not lead to such behavior because
the tax can not be avoided other than selling the land. It will give no
incentive to cut down olive trees. A tax on improvements will distort
incentives and cause the market for improvements to be inefficient.

I think Roy is confused with the concept of efficiency. Given his
previous unsubstantiated comments he believes that a land gives a higher
percentage of net revenue. I believe he thinks that efficiency. A
reading of the first 6 of chapters of a good microeconomic textbook will
clearly show that is not how an economist defines efficiency. An
economist defines efficency as all resources being used. A tax on market
when the elasticity of supply or the elasticity of demand is not zero
will not lead to this criteria.
The Trucker
2007-08-31 21:03:55 UTC
Permalink
Post by professorchaos
Roy again shows zero understanding of what efficient means or even what
George argued. For no deadweight loss in any market after a tax is
imposed you have to have one party that will not react to the price
change. If people buy the same amount regardless of price or sellers
sell the same amount regardless of price then the quantity sold on the
market does not change and there are no lost gains from trade. If this
condition is violated then the high cost to seller if the tax is levied
on the seller or higher cost to the buyer is the tax is levied on the
buyer will mean people will want to buy less or sellers will be willing
to sell less. This means fewer trades.
However, the number of trades will be increased if there is no impediment
to the trades. If the "buyer" is simply assuming a rent, and the "seller"
is abandoning that rent, then there is no transaction cost.
Post by professorchaos
As George correct stated a land tax on the unimproved value will not
affect decisions for improvements but a tax on improvements will cause
owners to not improve to avoid the tax. To loosely quote George, a tax
on olive trees will lead to land owners cutting down olive trees to
avoid the tax. A tax on the land will not lead to such behavior because
the tax can not be avoided other than selling the land. It will give no
incentive to cut down olive trees. A tax on improvements will distort
incentives and cause the market for improvements to be inefficient.
The argument is more than that, but your point is valid.
Post by professorchaos
I think Roy is confused with the concept of efficiency. Given his
previous unsubstantiated comments he believes that a land gives a higher
percentage of net revenue. I believe he thinks that efficiency. A
reading of the first 6 of chapters of a good microeconomic textbook will
clearly show that is not how an economist defines efficiency.
I think that I speak for most of the human race when I say that I am
beginning to not give a rat's ass how a neoconomist redefines the language
in order to sell snake oil.
Post by professorchaos
An
economist defines efficency as all resources being used.
Then the word is simply useless. With that stupidity I can create a
lollipop by burning all the oil there is and such an endeavor would be
efficient.
Post by professorchaos
A tax on
market when the elasticity of supply or the elasticity of demand is not
zero will not lead to this criteria.
I think you mean a tax on market value and if that is the case then your
statement is reasonably correct. Your problem is in your refusal of the
reality concerning LOCATIONS in the real world; your idea that
the quantity of naturally occurring stuff will respond to the efforts of
man. They put that word "natural" in front of that word "resources" for a
reason. The terminology is used to describe that which is NOT the fruit of
man's labor/efforts.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org
professorchaos
2007-08-31 23:46:01 UTC
Permalink
Post by The Trucker
Then the word is simply useless. With that stupidity I can create a
lollipop by burning all the oil there is and such an endeavor would be
efficient.
No because you are far from minimizing cost so not all resources are
being used. By using all the oil there is then it means other resources
that use oil are idle. So you get 1 lollipop instead of 1 million
lollipops and 10 million gallons of gas. When all resources are used
efficient it also implies cost are being minimized and all resources are
put to its best use.
Post by The Trucker
Post by professorchaos
A tax on
market when the elasticity of supply or the elasticity of demand is not
zero will not lead to this criteria.
I think you mean a tax on market value and if that is the case then your
statement is reasonably correct.
Is there any other kind of value? <tongue in cheek.> I realize the
classical economist from Smith to Marx had a lot of arguments over what
is value. I am not getting into that. Today we see value objectively.
The value of the good is its market price which is determined by scarcity.
r***@telus.net
2007-09-04 02:52:31 UTC
Permalink
On Fri, 31 Aug 2007 12:36:22 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Thu, 30 Aug 2007 14:24:02 -0500, professorchaos
Post by professorchaos
He doesn't understand the difference
between taxing improvements and taxing land.
No, stupid liar, you just need to lie about what I have plainly
written in order to have something to say.
I have read it and you make the same mistake again in your next statement.
Post by r***@telus.net
Post by professorchaos
The land tax in the US,
well at least in Texas, taxes the improved value of the land as well as
the unimproved and therefore is not efficient or progressive in any sense.
Ah, yes, actually, it most certainly is, because most property value
is land value.
That is not the point.
It is the point that you refuse to know, so you obfuscate, equivocate
and prevaricate in order to avoid knowing the facts that prove your
beliefs are false.
Post by professorchaos
A tax on
improvements distorts incentives to improve the land.
You just made a true statement. Congratulations. Let's see if you
can do it again.
Post by professorchaos
If you have zero
tax for building an office building then you will build more building
than if you have a 10% tax on the building once built. George argues
that I argue that.
And so do I, as everyone here but you knows, and you refuse ever to
know.
Post by professorchaos
You are arguable an indefensible position in any
regards. You are misapplying George's arguments to a tax on improved and
unimproved value.
No, stupid, I am not.
Post by professorchaos
Post by r***@telus.net
The property tax in Texas is quite a bit more
efficient
No such thing as more efficient.
Thank you for again proving that you are infinitely stupid, ignorant
and dishonest.
Post by professorchaos
You can not have 2 efficient things and say one is more
efficient.
Thank you for again proving that you are stupid, ignorant and
dishonest.
Post by professorchaos
The lost gains from trade are 0 or they are not. Something is
efficient or it is isn't.
LOL! That depends on what your definition of "is isn't" isn't, is, or
is isn't.
Post by professorchaos
If you mean there is a smaller dead weight
loss you might be right but that is an empirical question. The only way
to show that is with data.
No, stupid, it isn't. It is already known that a tax that falls
mainly on land must be more efficient than one that falls entirely on
production and consumption, like a sales tax.
Post by professorchaos
Post by r***@telus.net
and progressive than income tax (which IIRC TX does not
have, but other states and of course the federal government do).
If your argument were right that the poor own no land, which is not true
some poor people own houses and it takes a bigger percentage of their
income to pay the note and the tax,
There are no poor people who own houses, at least not in the USA, and
if there were, the houses they own would be old and depreciated, so
the property tax would mainly just reduce the cost of acquiring the
land.
Post by professorchaos
The income tax has a negative tax component through the EIC that makes the
income tax system much more progressive than any other tax.
No, stupid, it does not. It makes income tax very progressive within
the range where EITC applies, and it is clear that that policy has
been extremely beneficial and effective.

[stupid garbage and lies snipped]

-- Roy L
professorchaos
2007-09-04 03:55:57 UTC
Permalink
Post by r***@telus.net
On Fri, 31 Aug 2007 12:36:22 -0500, professorchaos
Post by professorchaos
If you have zero
tax for building an office building then you will build more building
than if you have a 10% tax on the building once built. George argues
that I argue that.
And so do I, as everyone here but you knows, and you refuse ever to
know.
Really then why I am making the same argument, well at least for the
short run? Are you really this daft?
Post by r***@telus.net
Post by professorchaos
You are arguable an indefensible position in any
regards. You are misapplying George's arguments to a tax on improved and
unimproved value.
No, stupid, I am not.
Of course you were. You claimed that land taxes in the US were
efficient. Land taxes in the US tax improved and unimproved value. I am
also pointing out that just because in the short run an unimproved value
tax does not effect improvements, it may in the long run. Secondly that
the only way that the tax can be seen as efficient in the land market,
not the market for improvements, is if the elasticity of supply is
exactly zero.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
The property tax in Texas is quite a bit more
efficient
No such thing as more efficient.
Thank you for again proving that you are infinitely stupid, ignorant
and dishonest.
Quite the contrary. If you had studied economics you would understand
efficiency is defined as total surplus in the market being maximized.
You would understand this definition does not allow for degrees of
efficency. Pick up a microeconomic textbook and read. Just because
economist do not use the home made definitions that you and "The
Trucker" use does not mean we are lying.

The cold hard truth is efficiency characterizes a situation to where all
resources are put to their best use. A situation where the addition of
consumer surplus and producer surplus is maximized. You can not have
something more maximized than another. It is impossible. It is either
maximized or its not. Your lack of economic education does not make me a
liar.
Post by r***@telus.net
Post by professorchaos
You can not have 2 efficient things and say one is more
efficient.
Thank you for again proving that you are stupid, ignorant and
dishonest.
It just proves I know the definition of efficency and how to apply it to
a market and you do not.
Post by r***@telus.net
Post by professorchaos
The lost gains from trade are 0 or they are not. Something is
efficient or it is isn't.
LOL! That depends on what your definition of "is isn't" isn't, is, or
is isn't.
No. It depends on if you are using the correct and accepted definition
of efficiency. You and "the trucker" want to argue economics but do not
want to the speak the language of economics. You want to make up your
own terms, not define them, and expect everyone else just to accept
them. Economist use a set of terms that are well defined and agreed
upon. If you think efficiency means something else then define it when
argue that something is efficient.

So what is your definition of efficient? I am really curious to know
since you have implied you have a vast knowledge of what is in economic
textbooks.

As for me I have just taught from economic textbooks from several years
now and had to not only memorize the definitions but also understand for
7 years of taking test to earn my Ph.D. Something tells if I didn't
understand efficiency correctly I would have failed a test in principles
of macro, undergraduate public finance, field courses that apply the
concept of efficency, Graduate level Micro I and Micro II, Graduate
level Macro II were efficiency was used in contexts of externalities,
industrial organization, or even development field courses. Some how I
passed all of those classes and never failed a test.

Were my professors liars because they refused to accept Roy's home made
definition that he refuses to put in print?
Post by r***@telus.net
Post by professorchaos
If you mean there is a smaller dead weight
loss you might be right but that is an empirical question. The only way
to show that is with data.
No, stupid, it isn't. It is already known that a tax that falls
mainly on land must be more efficient than one that falls entirely on
production and consumption, like a sales tax.
A. There is no such thing as more efficient. Less deadweight loss perhaps.

B. No categorial statement can be made such as this because there is no
criteria for what size the tax is. Does a 100% tax on the unimproved
value of land yield a smaller dead weight loss than a 1% tax on income?
Does it yield a smaller dead weight loss than a 5% sales tax. That is
why it is an empirical question that takes more than talking it out.

C. THANK YOU FOR ADMITTING THAT LAND TAXES HAVE A DEADWEIGHT LOSS AND
THEREFORE ARE NOT EFFICIENT. If by more efficient you mean smaller
deadweight loss which is what you have implied in your response then you
are admitting that land taxes have some dead weight loss perhaps just
less than others.

I recall my initial statement paraphrased for those who do not
understand what efficiency means. A tax on the unimproved value of land
carries a dead weight loss. Albeit possibly a smaller dead weight loss
than other taxes.

You see Roy I never argued anything that much different from you. I
simply pointed out you were using the term efficiency wrong. There are
no degrees of efficiency. Either a market outcome maximizes total
surplus or it does not. There can be a smaller dead weight in tax A vs.
tax B. That does not make tax A more efficient because the fact that a
dead weight loss exist means tax A is not efficient.

Your original claim was that land taxes on unimproved and improved value
were efficient. You changed that argument when I showed it was wrong to
they are more efficient. I pointed out there is no such thing and now
you are trying to have a pissing contest over definitions. You are
showing that you are extremely ill equipped to argue over definitions.
If you had really studying modern economist there would be no debate
over a definition.

This is why people do not like economist or scientist in general. They
want to make claims using terms incorrectly then someone who understands
what the term means points out they are using the term wrong and the
wrong use of the term shows a misunderstanding of the concept. Instead
of trying to learn from the experience and perhaps read some economic
textbooks to confirm that Roy beleives he is high priest Roy who is not
only the decider and keeper of morals but he is also omnipotent and can
not be wrong. Therefore his definition must be correct and anyone who
says differently is damned by High Priest Roy and called a heretical liar.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
and progressive than income tax (which IIRC TX does not
have, but other states and of course the federal government do).
If your argument were right that the poor own no land, which is not true
some poor people own houses and it takes a bigger percentage of their
income to pay the note and the tax,
There are no poor people who own houses, at least not in the USA, and
if there were, the houses they own would be old and depreciated, so
the property tax would mainly just reduce the cost of acquiring the
land.
Proof? Want to cite some evidence? How about a study on homeownership
that supports your conclusion?

Here I can cite wrong that shows that you are wrong.
http://www.hungerinamerica.org/snapshot_comparisons/income_variables/home_ownership.html
Look at the table 2.0% percent of their clients with 0 income own a
place to live. 19% of clients in the 76%-100% of the poverty line range
own a home. Are you ready to admit you are pulling rabbits out of your
hat yet?


There are people below the poverty line that own land and homes. You
don't have to drive far from where I live to see that. There are many
near the poverty line that own homes. Granted some of this is through
HUD but it happens.
r***@telus.net
2007-09-05 00:20:21 UTC
Permalink
On Mon, 03 Sep 2007 22:55:57 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Fri, 31 Aug 2007 12:36:22 -0500, professorchaos
Post by professorchaos
If you have zero
tax for building an office building then you will build more building
than if you have a 10% tax on the building once built. George argues
that I argue that.
And so do I, as everyone here but you knows, and you refuse ever to
know.
Really then why I am making the same argument, well at least for the
short run?
Because you are stupid, ignorant, lying garbage, of course.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
You are arguable an indefensible position in any
regards. You are misapplying George's arguments to a tax on improved and
unimproved value.
No, stupid, I am not.
Of course you were.
No, stupid, ignorant, lying garbage, I was not.
Post by professorchaos
You claimed that land taxes in the US were efficient.
I stated the fact that PROPERTY taxes in the USA are more efficient
than other commonly levied taxes such as income and sales taxes.
Which, for all their faults, they are, because they fall mainly on
land.
Post by professorchaos
Land taxes in the US tax improved and unimproved value. I am
also pointing out that just because in the short run an unimproved value
tax does not effect improvements, it may in the long run.
Of course. It leads to more improvement, as seen in every single
historical example.
Post by professorchaos
Secondly that
the only way that the tax can be seen as efficient in the land market,
not the market for improvements, is if the elasticity of supply is
exactly zero.
Which it is.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
The property tax in Texas is quite a bit more
efficient
No such thing as more efficient.
Thank you for again proving that you are infinitely stupid, ignorant
and dishonest.
Quite the contrary. If you had studied economics you would understand
efficiency is defined as total surplus in the market being maximized.
And if, as is invariably the case in reality, it is not....?
Post by professorchaos
You would understand this definition does not allow for degrees of
efficency.
Of course it does, stupid, ignorant, lying garbage, just as the
definition of "white" as an absolute allows for degrees of whiteness,
the definition of "complete" as an absolute allows for degrees of
completeness, the definition of "vacuum" as an absolute allows for
degrees of vacuity (though none that can do justice to your
"arguments," of course), etc. If there were no degrees of economic
efficiency, the concept would be quite useless, as it would have no
empirical meaning. If 5% unemployment were not more efficient than
25% unemployment, there would be no economic reason to prefer the
former to the latter.

Everything you say is solely for the purpose of deceit, and your every
post here only solidifies the proof that I am 100% correct: economists
are largely paid liars for the privileged.
Post by professorchaos
Pick up a microeconomic textbook and read. Just because
economist do not use the home made definitions that you and "The
Trucker" use does not mean we are lying.
<yawn> Either show me the peer-reviewed journal article where it says
that 5% unemployment and 25% unemployment are equally inefficient, or
admit that you are stupid, ignorant, lying garbage.
Post by professorchaos
The cold hard truth is efficiency characterizes a situation to where all
resources are put to their best use.
The cold, hard truth is that such a situation can never exist in
reality, stupid, ignorant, lying garbage, and scientists who are not
liars are interested in describing things that can exist in reality.
Zero tolerance is unscientific nonsense -- which might be why you are
trying so hard to eliminate any possibility of empirical scientific
observation of degrees of economic efficiency.
Post by professorchaos
A situation where the addition of
consumer surplus and producer surplus is maximized. You can not have
something more maximized than another. It is impossible. It is either
maximized or its not.
Uh, stupid, ignorant, lying garbage? You likewise can't have
something more complete than 100% complete. But that doesn't mean
something that is 99% complete isn't more complete than something that
is only 90% complete. Like "complete," "economically efficient" is an
absolute. But like "complete," there are also degrees of economic
efficiency, which economists understand and talk about routinely.
Post by professorchaos
Your lack of economic education does not make me a liar.
Indeed. You would still be a liar even if I had never existed. Just
not such a busy one.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
The lost gains from trade are 0 or they are not. Something is
efficient or it is isn't.
LOL! That depends on what your definition of "is isn't" isn't, is, or
is isn't.
No. It depends on if you are using the correct and accepted definition
of efficiency.
No, it depends on if you are trying to enhance understanding, or to
prevent it.
Post by professorchaos
You and "the trucker" want to argue economics but do not
want to the speak the language of economics.
Indeed. The language of economics is very much a part of the problem.
It has been constructed expressly for the purpose of obfuscation and
deceit, as documented by Prof. Mason Gaffney in "The Corruption of
Economics." And even that work does not take the full measure of the
deceit.
Post by professorchaos
You want to make up your
own terms, not define them,
Lie.
Post by professorchaos
and expect everyone else just to accept
them. Economist use a set of terms that are well defined and agreed
upon.
ROTFL!!!
Post by professorchaos
If you think efficiency means something else then define it when
argue that something is efficient.
<yawn> Because you are stupid, ignorant, lying garbage, you claim
that because "vacuum" is an absolute -- one cannot have less matter
than none -- physicists cannot talk about degrees of vacuum.
Post by professorchaos
So what is your definition of efficient? I am really curious to know
since you have implied you have a vast knowledge of what is in economic
textbooks.
"Efficient" is not an unreasonable term for maximum surplus. You are
just lying when you claim that one cannot describe less than maximum
surplus as being less efficient than that.
Post by professorchaos
As for me I have just taught from economic textbooks from several years
now and had to not only memorize the definitions but also understand for
7 years of taking test to earn my Ph.D.
The idea that an abhorrent, stupid, ignorant, lying sack of $#!+ like
you could have obtained a PhD in economics is nauseating. But not
unexpected.
Post by professorchaos
Something tells if I didn't
understand efficiency correctly I would have failed a test in principles
of macro, undergraduate public finance, field courses that apply the
concept of efficency, Graduate level Micro I and Micro II, Graduate
level Macro II were efficiency was used in contexts of externalities,
industrial organization, or even development field courses. Some how I
passed all of those classes and never failed a test.
Congratulations. You proved you can regurgitate the required lies.
Post by professorchaos
Were my professors liars because they refused to accept Roy's home made
definition that he refuses to put in print?
They were liars because they didn't give you failing grades for your
ignorance and dishonesty.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
If you mean there is a smaller dead weight
loss you might be right but that is an empirical question. The only way
to show that is with data.
No, stupid, it isn't. It is already known that a tax that falls
mainly on land must be more efficient than one that falls entirely on
production and consumption, like a sales tax.
A. There is no such thing as more efficient. Less deadweight loss perhaps.
?? So, an efficient result is not more efficient than an inefficient
one?

Stupid, ignorant, lying garbage.
Post by professorchaos
B. No categorial statement can be made such as this because there is no
criteria for what size the tax is.
Equivalent revenue, obviously. Stupid, ignorant, lying garbage.
Post by professorchaos
Does a 100% tax on the unimproved
value of land yield a smaller dead weight loss than a 1% tax on income?
Yep, even though it would yield at least an order of magnitude more
revenue.
Post by professorchaos
Does it yield a smaller dead weight loss than a 5% sales tax.
Yep, even though it would yield at least an order of magnitude more
revenue.
Post by professorchaos
That is
why it is an empirical question that takes more than talking it out.
It is not an empirical question, it is an empirical fact.
Post by professorchaos
C. THANK YOU FOR ADMITTING THAT LAND TAXES HAVE A DEADWEIGHT LOSS AND
THEREFORE ARE NOT EFFICIENT.
Land taxes can be badly designed, like any other tax. However, a land
tax that is proportional to rent has no deadweight loss.
Post by professorchaos
If by more efficient you mean smaller
deadweight loss which is what you have implied in your response then you
are admitting that land taxes have some dead weight loss perhaps just
less than others.
The currently levied PROPERTY tax, which I correctly stated is more
efficient than common alternative taxes such as sales and income
taxes, is not a land tax. You have been very sloppy (or more likely,
deliberately deceitful) in sometimes describing it as a land tax,
sometimes as a tax on improvements. IIRC, you have even once
described it accurately as a tax on both land and improvements, a
statement that almost made me spill a cold beverage on my keyboard
when I saw that you had uttered it, as its accuracy was so utterly
unexpected and out of character.
Post by professorchaos
I recall my initial statement paraphrased for those who do not
understand what efficiency means. A tax on the unimproved value of land
carries a dead weight loss.
Flat false.
Post by professorchaos
You see Roy I never argued anything that much different from you.
Liar. I have tried to illuminate. You have tried only to obfuscate
and prevaricate.
Post by professorchaos
I simply pointed out you were using the term efficiency wrong. There are
no degrees of efficiency. Either a market outcome maximizes total
surplus or it does not. There can be a smaller dead weight in tax A vs.
tax B. That does not make tax A more efficient because the fact that a
dead weight loss exist means tax A is not efficient.
Your original claim was that land taxes on unimproved and improved value
were efficient.
Lie. I stated the fact that they are more efficient than the commonly
employed alternatives.
Post by professorchaos
You changed that argument when I showed it was wrong to
they are more efficient. I pointed out there is no such thing and now
you are trying to have a pissing contest over definitions. You are
showing that you are extremely ill equipped to argue over definitions.
If you had really studying modern economist there would be no debate
over a definition.
Wrong. The only really meaningful debates in economics are over
definitions, which is why mainstream neoclassical economics is not an
empirical science.
Post by professorchaos
This is why people do not like economist or scientist in general.
People don't mind scientists much. But they mind economists much less
than they deserve.
Post by professorchaos
They
want to make claims using terms incorrectly then someone who understands
what the term means points out they are using the term wrong and the
wrong use of the term shows a misunderstanding of the concept.
Claiming there are no degrees of economic efficiency shows a
misunderstanding of the concept.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
and progressive than income tax (which IIRC TX does not
have, but other states and of course the federal government do).
If your argument were right that the poor own no land, which is not true
some poor people own houses and it takes a bigger percentage of their
income to pay the note and the tax,
There are no poor people who own houses, at least not in the USA, and
if there were, the houses they own would be old and depreciated, so
the property tax would mainly just reduce the cost of acquiring the
land.
Proof? Want to cite some evidence?
No evidence is needed to establish what is true by definition.
Post by professorchaos
How about a study on homeownership that supports your conclusion?
Here I can cite wrong that shows that you are wrong.
No, of course you can't.
Post by professorchaos
http://www.hungerinamerica.org/snapshot_comparisons/income_variables/home_ownership.html
Look at the table 2.0% percent of their clients with 0 income own a
place to live. 19% of clients in the 76%-100% of the poverty line range
own a home. Are you ready to admit you are pulling rabbits out of your
hat yet?
No, because I am completely correct. "Poor" and "rich" are not
defined by income but by assets. Because you are mainly interested in
lying, you claim that a billionaire who has no income is poorer than a
minimum-wage worker who has no assets. Defining poverty by income
rather than assets is one of the lies economists commonly tell.
Post by professorchaos
There are people below the poverty line that own land and homes.
A billionaire who has no income is also below your deceitful "poverty"
line, stupid, ignorant, lying garbage.

-- Roy L
professorchaos
2007-09-05 04:17:52 UTC
Permalink
Post by r***@telus.net
Post by professorchaos
You claimed that land taxes in the US were efficient.
I stated the fact that PROPERTY taxes in the USA are more efficient
than other commonly levied taxes such as income and sales taxes.
Which, for all their faults, they are, because they fall mainly on
land.
Roy still refuses to speak the language of economics or even understand
English. To say something is more efficient states that something is not
only embodies efficiency but has more of the quality of efficiency. Roy
refuses to understand that economic efficiency is not like the term used
in engineering. In engineering 20% efficient deals with how much energy
is created. So 30% efficient is more efficient. In economics there is no
such thing. In the language of economics more efficient is nonsensical.
In the language of economics something is efficient or it is not
efficient. Roy still does not understand this point or even what
efficiency means to an economist. Lets see if he understands it after I
explain it for the 100th time squared.
Post by r***@telus.net
Post by professorchaos
Land taxes in the US tax improved and unimproved value. I am
also pointing out that just because in the short run an unimproved value
tax does not effect improvements, it may in the long run.
Of course. It leads to more improvement, as seen in every single
historical example.
As compared to what? The correct answer is as compared to a tax on land
improvements. It will not lead to more improvements than no taxes at
all. Even if you look at the short run only.
Post by r***@telus.net
Post by professorchaos
Secondly that
the only way that the tax can be seen as efficient in the land market,
not the market for improvements, is if the elasticity of supply is
exactly zero.
Which it is.
2 markets. Market A is the market for land. This shows how much land is
bought and sold. The cost increases the purchase price of the land. This
means consumers will want to buy less land. Less land will be traded on
the market after the tax unless the quantity supplied of land is not
affected by price, the elasticity of supply is 0. If the elasticity of
supply is not zero then the quantity of land bought and sold will
decrease. Some land that would have been allocated to buyers who place a
higher value on the land than the owners reservation price will not be
sold because the tax will make the cost of aquiring the land (the
purchase price + taxes incurred as a consequence of owning the land)
greater than the buyers value on the land. So trades are lost and land
that would have gone to people with higher values does stays in the
hands of people who place a lower value on the land as compared to the
person who would have bought the land without the tax. This is inefficient.

Is the loss in total surplus from such a tax less than other taxes?
Maybe. It depends if land has rather inelastic supply and labor has
rather inelastic supply it is hard to say. Why? Because the elasticities
of supply and demand determine the size of the lost gains of trade. My
hunch is that elasticities in the land are smaller than in the labor
market but I have no empirical evidence to back that up so I can not say
if it is true or not.


Market B is a market for improvements on the land. This occurs due to
current landowners decisions. There is a demand for improvements and a
supply of improvements. If only the unimproved land value is taxed then
there is no short run tax on improvements and the market is not impeded
in anyway.

That being said one must realize that improvements are similar to
capital accumulation. They occur from retained profits. If unimproved
land taxes lower profits then firms have less to spend on capital
improvements and in the long run a tax on unimproved land does affect
improvements. There is a short of crowding out that occurs when tax
revenue replaces investment. The effect is not entirely clear though
because less investment demand should decrease interest rates offsetting
the effect at least some.

We also must realize that an unimproved land tax increases the fixed
cost of doing business. In the long run that drives some firms out of
business that were profitable before and distorts investment decisions.
So if you office building is making profits that are exactly equal to
the opportunity cost of running an internet business from your home
before the tax then it can distort the decision if the increase in fixed
cost make using the office building drives you out of the rental market
and into running an internet business. If no one can make an economic
profit from using the offices given the market after taxation then it
would cause the office building to be razed and something else built.
That would not have occurred without the tax so it shows the tax
distorts decisions.


What you have missed in my argument is I am refering to two seperate and
distinct markets. In one market the tax on unimproved land causes lost
gains from trade(another term for dead weight loss). In the other market
the tax has no short run effect. Once you understand what I have clearly
said about the tax effects on two markets the argument because easier to
see.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
The property tax in Texas is quite a bit more
efficient
No such thing as more efficient.
Thank you for again proving that you are infinitely stupid, ignorant
and dishonest.
Quite the contrary. If you had studied economics you would understand
efficiency is defined as total surplus in the market being maximized.
And if, as is invariably the case in reality, it is not....?
What is the case that markets are efficient or that in reality the
definition of efficiency is total surplus being maximized. The first has
no bearing on the statement that there is no such time as more efficient
only efficient and inefficient. It is a question of how often efficiency
exist. The second does have bearing and can be easily seen that in
reality textbooks and economist alike use the definition of efficiency
being the maximization of total surplus. Therefore something can not be
more efficient. It is either maximized or it is not.
Post by r***@telus.net
Post by professorchaos
You would understand this definition does not allow for degrees of
efficency.
Of course it does,
LoL! Really show one calculus problem where something is more maximized
than another. So if total surplus is maximized in two cases which is
more efficient. It is a nonsensical question because total surplus is
maximized in both cases. One can not say something is more maximized
than another. The only thing you may be able to say is that if both
markets are inefficient one has a smaller dead weight loss than the
other. This is not always true the dead weight loss can be equal.

Please do explain to me how when the definition of efficiency is that
all resources are put to their best use or that total surplus is
maximized one situation can be more efficient than the other. I really
want to hear this. Either all resources are used and put to their best
use or they are not. Efficiency is a statement of is or is not not 10%
efficient versus 20% efficient.
Post by r***@telus.net
lying garbage, just as the
definition of "white" as an absolute allows for degrees of whiteness,
Efficiency is not a color. It can not be measured on a scale like white
can. All RGB monitors use a numerical scale of colors to produce a color
less white contains more of Red, Green, or Blue. Efficiency is not a
number and can be expressed as a number or set of numbers. White can be
measured as a set of numbers. That is how computers make different
colors and HTML code codes this these numbers to produce color.
Post by r***@telus.net
the definition of "complete" as an absolute allows for degrees of
completeness,
Maximization does not. Something is either maximized or it is not. Show
one page in a calculus book that refers to a function as 10% maximized.
It does not exist. You met FOCs or you do not. I can say a computer is
10% complete if I have 10% of the parts for it. In this case
completeness is easily measured on numerical system based on the number
parts needed. Maximization in calculus is not. The Social welfare
function can not be 10% maximized. Calculus does not allow for it.
Either you meet first order conditions or you do not. If you meet the
conditions it is maximized. If you do not it is not maximized.
Post by r***@telus.net
the definition of "vacuum" as an absolute allows for
degrees of vacuity (though none that can do justice to your
"arguments," of course), etc.
Why because vacuity is not a concept of maximization. It is a numerical
scale. You can not place a maximization problem on a numerical scale and
one maximized problem has a higher value than another. Efficiency is not
a numeric concept where reaching 5 or 10 is efficient. Efficiency is a
concept that saves the social welfare function that is Value to buyer -
price paid + price recieved - cost + tax revenue is maximized. You can
not say it is more or less maximized. Maximization is an absolute with
no degrees in it.

Question. I have 2 profit functions.

1. Profit = (10-Q)(Q) - Q. If I maximize this then 10 - 2Q - 1 = 0 is
the first order condition. Q = 4.5 maximizes profit. So profit is
maximized when Q= 4.5 and P (P=10-Q) = 5.5. Profit = 20.25

2. Profit = (11 - Q) Q - 2Q FOC 11 - 2Q -2 = 0

At maximization Q = 4.5 P = 6.5. Profit = 20.25

Is equation 2 more maximized than equation 1? Had profit been higher in
equation one would equation one been more maximized than equation 2?
Obviously this is a nonsensical question. Just as when total surplus is
maximized in both cases which is more efficient.
Post by r***@telus.net
If there were no degrees of economic
efficiency, the concept would be quite useless, as it would have no
empirical meaning.
Absolutely not. It is a baseline for comparison only by knowing the
efficient solution can one determine if the current solution is
efficient or not. If inefficient Only by knowing the efficent quantity
and the efficient price can one determine how much damage or benefit the
externality gives, how big are the lost gains from trade due to trade
barriers, or how big of an economic loss a tax brings. Efficiency is
the starting point to compare the outcome to. With no idea of what
quantities and prices would be without taxes you can not make a
statement of how much damage a tax does.
Post by r***@telus.net
If 5% unemployment were not more efficient than
25% unemployment, there would be no economic reason to prefer the
former to the latter.
On the contrary. 5% and 25% unemployed are both inefficient. It is the
lost gains from trade that are different. 25% unemployment results in
more products being not made as compared to 0% unemployment (or 6% if
you believe that is the natural rate) than 5% unemployment. The
deadweight loss to 25% unemployment is larger but 5% employment is not
more efficient. It is inefficient and so 25% unemployment it gives a
smaller excess burden (another term for dead weight loss or lost gains
from trade).

Here is the point in that in designing a tax the tax that gives the
smallest excess burden and the least administrative cost is preferred.
Say a 10% income tax gives a dead weight loss of 5 and a 10% sales tax
gives a dead weight loss of 4%. The sales tax has a smaller excess
burden. However it cost twice as much to administer a sales tax and
sales = income, there is no savings (I realize this is unrealistic) then
a sales tax would have to be at a higher rate to get the same revenue.
So if the cost of collection is $1 under income taxes and $2 under sales
taxes then which is prefered? Lets say income and sales are $30. 10%
grosses $3. An income tax nets $2 and a sales tax nets $1. If the
government wants to raise $2 in revenue a 10% income tax works but they
need a 13% sales tax. A 13% sales tax might have a dead weight loss of 6
which is greater than the dead weight loss of 5 from a 10% income tax.

This simple concept shows why income tax cuts lower benefits. The higher
the income tax the more attractive a benefit is. A worker can $10 worth
of benefit for $10 if it is insurance. To give them $10 to buy insurance
would require increasing pay by about $15 to give the worker $10 take
home pay at 35%. As the tax rate lowers there is less incentive for
benefits. If a worker pays no income tax than giving him $10 in pay
equals $10 in benefits, if it does not change the person's tax bracket.
So there is no incentive to give benefits instead of pay. Anyway I
disgress.
Post by r***@telus.net
Everything you say is solely for the purpose of deceit, and your every
post here only solidifies the proof that I am 100% correct: economists
are largely paid liars for the privileged.
Collecting my paychecks from the tri-lateral commission, council for
foreign affairs, templars, mason, and illumanti as we speak. <tongue in
cheek> Sorry Roy but this is my free time. I am not paid by anyone to
post here nor would anything I have posted risk my job even if I wasn't
annoymous.

Just because you do not understand the language of economics does not
make us liars. You are still the person reading a romance novel and
thinking that love really means foot then saying what a crock how could
a woman get her long lost foot back.
Post by r***@telus.net
Post by professorchaos
Pick up a microeconomic textbook and read. Just because
economist do not use the home made definitions that you and "The
Trucker" use does not mean we are lying.
<yawn> Either show me the peer-reviewed journal article where it says
that 5% unemployment and 25% unemployment are equally inefficient, or
admit that you are stupid, ignorant, lying garbage.
I can't because no one would ever use those terms. By definition there
is no such thing as equally inefficient just as there is no such thing
is efficient. The concept of equally inefficient is just as nonsensical
as the concept of equally efficient. The fact that no one can find a
journal article that ever makes a statement that something is more
efficient than something else or something is more inefficient supports
my point.

Since your criteria will not work by definition and you are trying to
bait me into something that doesn't exist, which you would know if you
understood the definition, then I have a challenge for you. Show me one
AER paper that contains the phrase more efficient in it. Just one. It
doesn't even have to be AER. Any AEA publication, NBER, publication or
any first or second teir publication that says anywhere in the text more
efficient. I am giving you a much broader area to search in. If you are
right this should be easy to find. If I am right it will be impossible
to find and I am right.
Post by r***@telus.net
Post by professorchaos
The cold hard truth is efficiency characterizes a situation to where all
resources are put to their best use.
The cold, hard truth is that such a situation can never exist in
reality,
Although I disagree. No one said anything about it actually existing. It
is a base line for comparison. It is something a model can solve for and
yield estimable parameters. The base line need not exist to use it as a
comparison for what is desirable. A truly honest person may not exist.
Does that mean we can not use it as a baseline to compare if someone is
truly honest or not? We not find a perfect person but does it not mean
we can not have a criteria for perfection used to judge if someone is
perfect. Can we not use that measure to show the damage from
imperfection that occurs that would not occur if the person were
perfect? Can we not predict what a perfect person would do and say this
is not the action the person took and this is the amount of damage that
occurred from acting imperfectly. NB: I am not equating efficiency and
perfection by any means here.

Efficient markets may be rare and due to the necessity of taxation may
not even exist in the US or any country. Sales taxes cause
inefficiencies. Income taxes are a sales tax on all goods you would buy.
Land tax distort the land market. Yet, how we can we call these outcomes
inefficient and undesirable if we do not know what is efficient and what
is desirable. That is what efficiency does it says this is efficient and
from the economic viewpoint desirable. Then we can compare an outcome
and say this is efficient or this is not efficient.
Post by r***@telus.net
Zero tolerance is unscientific nonsense -- which might be why you are
trying so hard to eliminate any possibility of empirical scientific
observation of degrees of economic efficiency.
No I am not trying to eliminate anything. What you call degrees of
economic efficiency is term the size of dead weight loss to economist.
That is what I have been trying to drill in your thick head. I have no
problem discussing the size of deadweight loss or even seeking empirical
measures. My own reasearch initially focused on how far a particular
market outcome was from optimal. In economist terms, the size of dead
weight and gave policy implication for how to correct that dead weight
loss. I have no problem with anyone studying how far from optimal an
outcome is. I have no problem with a statement that this outcome IS
CLOSER TO EFFICIENCY than another, which is what you mean in your
statement. However to speak in degrees of efficiency when you are
arguing the size of the dead weight loss (how far the outcome is from
the efficient outcome) shows a complete misunderstanding of efficiency is.

Show if you want to have this decision try to understand and respect
what the terms mean. When you say more efficient what you mean in terms
an economist can understand and that make sense by economic definitions
is a smaller dead weight loss. When you say 25% unemployment is more
inefficient than 5% unemployment that is nonsensical in the language of
economics. The proper terminology is that either
A. 25% unemployment results in fewer lost gains from trade;
B. 25% unemployment results in a smaller dead weight loss;
or C. 25% unemployment results in less excess burden.
If you do the same search I challenged you to do using these terms you
will find this sort of statements in peer reviewed articles. You will
never find someone in a peer reviewed article say some is more efficient.

I know it seems like nitpicking over semantics but loose language like
this is exactly why people find economics confusing. Because people
misuse terms all the time. Bush was talking about gas prices in a speech
and said they are high because supply exceeds demand. That is
nonsensical to an economist. Does that mean the supply curve seems to be
higher on the graph than the demand curve. Does that mean quantity
supplied exceeds quantity demanded? This is why people find economics
confusing because people outside of the profession use terms wrongly
everyday so they are completely befuddled when they hear an economist
use the term correctly. Like the example before it is like a Frenchman
thinking love translate to pied (foot in french) and being completely
befuddled by a story about a woman trying to get her long lost foot back.

Tight proper use of economic language avoids confusion. Sloppy use of
language and use of connotations confuses people especially when someone
like I start using the terms correctly.

Roy in the end I know what you mean by more efficient but the term you
use is not correct. The proper and clear way to say it in the language
of economics is that a land tax yields a smaller dead weight loss. More
efficient confuses people when they see an exposition of efficency and
suddenly realize that this is an efficient and lots of inefficient
points not points that somewhat efficient and puts that are less
somewhat efficient. I am actually picking this battle to educate and
illuminate terminology so economics is not so confusing. It is not
economist who make economics confusing it is people who are not
economist who try to use economic terms and use them incorrectly that
makes economics confusing. The hardest part of economics is learning the
language and understanding what the terms mean.

BTW, you are far from the only person who has this confusion over the
term efficiency. Too many teachers and professors don't spend enough
time talking to students and non economist and take for granted the
terms are understood. This causes them sometimes to not explain them at
all or gloss over them. As you might notice, I am a stickler for
terminology because I believe firmly that is the muddling of terminology
by people who are non economist and even worse economist who try to
speak in the muddy connotations of terms that causes confusion by
non-practitioners.
Post by r***@telus.net
You likewise can't have
something more complete than 100% complete.
Maximization is not completion. It has no numerical scale to be
evaluated on. There is no concept of somewhat maximized like there is
somewhat complete. If you don't solve for FOCs and tell your calculus
professor the problem is 50% maximized you missed the entire problem.
Post by r***@telus.net
But that doesn't mean
something that is 99% complete isn't more complete than something that
is only 90% complete.
Again you can define a set of numbers that defines how complete
something is. You can not create a set of numbers that defines how
maximized something is. Completely different concepts.
Post by r***@telus.net
Like "complete," "economically efficient" is an
absolute.
Complete is not an absolute if you create a set of numbers that defines
the amount of completion. It is no longer complete or incomplete it can
now be 50% complete. There is no way to assign a set of numbers to
measure how maximized something is.
Post by r***@telus.net
But like "complete," there are also degrees of economic
efficiency, which economists understand and talk about routinely.
Not if you understand the terms correctly. Again I challenge you to find
one refereed journal article that uses the term more efficient. I know
you can find all sorts of hacks with journalism degrees use the term but
few economist who will ever use that phrase if any. If they do they are
talking to non-economist and thank that incorrect phrase will be better
understood. I abhor it when people do that because propagating incorrect
terminology makes economist look like we are locked away in ivory towers
and the common man can not understand economics. It propagates views
like yours that economics is meant to intentionally confuse. It is a
well observed correlation that students who miss lectures that explain
key definitions are much likely to say economics is confusing than those
who attend the lectures where key terms are explained. 9 times out of 10
a student who says they are totally confused by the class did not
understand a key term. When the key term is explained every suddenly
starts to click.
Post by r***@telus.net
Post by professorchaos
No. It depends on if you are using the correct and accepted definition
of efficiency.
No, it depends on if you are trying to enhance understanding, or to
prevent it.
It is the unwillingness to accept key terms and understand them that
causes confusion. It is muddled language and improper terminology that
muddles economics. This is done by non economist who want to speak about
economics but do not understand the terms. See the thread with the
Trucker where he claimed price theory did not work because price caused
in an increase in demand when Marshall said that an increase in price
would cause a decrease in demand. It was a clear misunderstanding, which
I think he understands now, of what is meant by quantity demanded and
demand. The law of demand says that an increase in price can not
increase quantity demanded.
Post by r***@telus.net
Post by professorchaos
You and "the trucker" want to argue economics but do not
want to the speak the language of economics.
Indeed. The language of economics is very much a part of the problem.
It has been constructed expressly for the purpose of obfuscation and
deceit, as documented by Prof. Mason Gaffney in "The Corruption of
Economics." And even that work does not take the full measure of the
deceit.
No it has not. It just has some key definitions that people use in
common language that have connotations that are very different from what
the term means. This is no different from psychics in that people
confuse what physic measures are all the time. In any science you have
to understand the terminology which is either not used in common
language or means something different in common language, eg. force.
Damn, I just realized my frigging spell check has been turning some
misspelling of physics I used into psychics for some damn reason. I
should watch my own spelling instead of relying on this stupid thing.
See how confusing the wrong terminology can be. People must have thought
me to be a kook to be talking about psychics as science! :) Sorry about
that. Physics can be confusing as well if people do not understand the
proper terminology. Was Newton intentionally try to confuse people so
that he could the secrets of a physics to a few elite? I highly doubt it.
Post by r***@telus.net
Post by professorchaos
You want to make up your
own terms, not define them,
Lie.
Yet you are. You are defining the elasticity of supply as being
determined by quantity available and not the quantity supplied. You are
defining efficiency as something that can be measured in degrees. These
are not accepted terms. Yet you preach them as gospel.
Post by r***@telus.net
Post by professorchaos
If you think efficiency means something else then define it when
argue that something is efficient.
<yawn> Because you are stupid, ignorant, lying garbage, you claim
that because "vacuum" is an absolute -- one cannot have less matter
than none -- physicists cannot talk about degrees of vacuum.
I never said that you did. I said a vacuum can be place on a scale of
numbers. An equation can not be defined as a set of numbers that
represent how maximized it is. Efficiency is the maximization of total
surplus.
Post by r***@telus.net
Post by professorchaos
So what is your definition of efficient? I am really curious to know
since you have implied you have a vast knowledge of what is in economic
textbooks.
"Efficient" is not an unreasonable term for maximum surplus.
Thank you. So how do you get degrees of maximum surplus. Surplus is
either maximized or it is not.
Post by r***@telus.net
You are
just lying when you claim that one cannot describe less than maximum
surplus as being less efficient than that.
No I am saying it is not accepted economic terminology. Accepted
terminology says less surplus than maximum is inefficient not less
efficient. To say something is less efficient says it is efficient but
has less efficiency than something else. A situation where total surplus
is not maximized is not efficient so it can not be less efficient. Again
I challenge to find the phrase more efficient in an article in a peer
reviewed journal. I would even challenge you to find that phrase in any
textbook.
Post by r***@telus.net
Post by professorchaos
Something tells if I didn't
understand efficiency correctly I would have failed a test in principles
of macro, undergraduate public finance, field courses that apply the
concept of efficency, Graduate level Micro I and Micro II, Graduate
level Macro II were efficiency was used in contexts of externalities,
industrial organization, or even development field courses. Some how I
passed all of those classes and never failed a test.
Congratulations. You proved you can regurgitate the required lies.
Here we go Eicke. If it doesn't fit you definition or it counters your
point then the other person is working for the global elite to cover up
your criticism. There is a word for people like you. It is called paranoid.
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
If you mean there is a smaller dead weight
loss you might be right but that is an empirical question. The only way
to show that is with data.
No, stupid, it isn't. It is already known that a tax that falls
mainly on land must be more efficient than one that falls entirely on
production and consumption, like a sales tax.
A. There is no such thing as more efficient. Less deadweight loss perhaps.
?? So, an efficient result is not more efficient than an inefficient
one?
No it is not. An efficient result is efficient. An inefficient result is
not. Proper understanding of the English language, Queen's English or
American, will show that to say something is less efficient means it has
the quality of being efficient just in a lesser degree. Inefficient does
not have the quality of being efficient so it can not be less efficient.
To say I am less jovial than someone else implies I am jovial just to a
smaller degree. You would not say that of someone who never possess the
characteristic of being jovial. It would be incorrect but it says the
posses a some degree of being jovial. Saying less efficient implies
something is efficient just to a lesser degree. So even an understanding
of the English language shows why you are wrong.

However, the rules of the English would say more inefficient would be
somewhat correct because it says the outcome has the quality of being
inefficient. It fails by implying it is inefficient to a greater degree.
Although still not correct more inefficient mean more dead weight loss
is more acceptable. It is much less likely to cause confusion.
Post by r***@telus.net
Stupid, ignorant, lying garbage.
Post by professorchaos
B. No categorial statement can be made such as this because there is no
criteria for what size the tax is.
Equivalent revenue, obviously. Stupid, ignorant, lying garbage.
Equivalent revenue would mean different size taxes if administration
cost are different. This would mean that you might need a 15% land tax
to have the same revenue as a 10% income tax if income taxes cost less
to administer. Even if an income tax gives a higher dead weight for the
same % taxed it could give a smaller dead weight because the % of income
taxed is less than the percentage of land taxed.
Post by r***@telus.net
Post by professorchaos
Does a 100% tax on the unimproved
value of land yield a smaller dead weight loss than a 1% tax on income?
Yep, even though it would yield at least an order of magnitude more
revenue.
Hey Rocky watch me pull a rabbit out of my ass. You are really insane if
you believe you make this sort of statement with no data what so ever.
You can't even say a 100% land tax yeilds more revenue than a 1% income
tax. What if taxable land is $100 and taxable income is $1 million does
the land tax still give more revenue at 100% than a 1% income tax. No
the land tax yeilds $100 in revenue the income tax yields $1000 in revenue.

Which has less excess burden. I honestly have no clue without looking at
the data or at least an idea of what the elasticities of supply and
demand are in the labor market and the land market. Both would likely
have rather inelastic, although not perfectly, inelastic supply curves
meaning both would have the nonspecific statement of a small dead weight
loss.
Post by r***@telus.net
Post by professorchaos
Does it yield a smaller dead weight loss than a 5% sales tax.
Yep, even though it would yield at least an order of magnitude more
revenue.
As I point out before without measures of elasticities and what the tax
base is you are taxing you can not categorically make such a statement.
Again we have land valued at $1000 in our locality. Business sales after
the tax are $5 million. The 100% land tax gives $1000. The 5% sales tax
gives $5000 in revenue. Which has a smaller dead weight loss? No one can
tell you without estimating a model. No one can even guess without
knowing the elasticities in the land market and for the goods taxed.
Post by r***@telus.net
Post by professorchaos
That is
why it is an empirical question that takes more than talking it out.
It is not an empirical question, it is an empirical fact.
Give me one citation. Just One. If it is an empirical fact show me one
study that found this conclusion.
Post by r***@telus.net
Post by professorchaos
C. THANK YOU FOR ADMITTING THAT LAND TAXES HAVE A DEADWEIGHT LOSS AND
THEREFORE ARE NOT EFFICIENT.
Land taxes can be badly designed, like any other tax. However, a land
tax that is proportional to rent has no deadweight loss.
You just do not understand what makes something inefficient do you. I
have to go to bed. Keep having nightmares about the man coming to get
you in your fantasy world where you hold all the definitions and the
truth and the man is trying to suppress you by not accepting your home
made definitions. I have already wasted way too much time on this. I
feel confident if anyone else is reading they will see you are a kook
who will not accept proper terminology. You are too far gone into a mode
of egotistical righteous to be convinced of anything that does not fit
your narrow paranoid and wrong preconceptions.
Post by r***@telus.net
Post by professorchaos
I recall my initial statement paraphrased for those who do not
understand what efficiency means. A tax on the unimproved value of land
carries a dead weight loss.
Flat false.
In Roy's world. Prove it. Just one citation. Not the tired old quotation
from Friedman that says "property taxes are the least bad." That states
they have dead weight loss just not as much as other taxes. Which is not
something I accept or deny. I need to see some real studies not some
kook who believes economist are agents of the global elite and they are
out to get him saying so.
Post by r***@telus.net
Post by professorchaos
You see Roy I never argued anything that much different from you.
Liar. I have tried to illuminate. You have tried only to obfuscate
and prevaricate.
The only obfuscation comes from you incorrectly using terms and refusing
to have a discussion using the proper language of economics. By changing
definitions from those accepted you are obfucating and being
intentionally confusing or intentional ignorant once. I have tried to
explain to you what these terms mean in economics and you refuse to
listen. You just want to call me a liar and claim I am getting paid by
the global elitist who have trained economist they use like attack dogs
to protect their interest. Those of who are not paranoid schizophrenics
know differently.
Post by r***@telus.net
Post by professorchaos
I simply pointed out you were using the term efficiency wrong. There are
no degrees of efficiency. Either a market outcome maximizes total
surplus or it does not. There can be a smaller dead weight in tax A vs.
tax B. That does not make tax A more efficient because the fact that a
dead weight loss exist means tax A is not efficient.
Your original claim was that land taxes on unimproved and improved value
were efficient.
Lie. I stated the fact that they are more efficient than the commonly
employed alternatives.
By saying more efficient you are not only saying they are posses the
quality of efficiency but even more so than other taxes. Something that
is not efficient does not posses the quality of being efficient. THERE
IS NO SUCH THING AS MORE EFFICIENT. THERE IS NO SUCH THING AS MORE
EFFICIENT. THE PROPER TERM IS THAT THE TAX CARRIES LESS DEAD WEIGHT
LOSS! THE PROPER TERM IS THAT THE TAX CARRIES LESS DEAD WEIGHT LOSS.
Look it up schmuck .
Post by r***@telus.net
Wrong. The only really meaningful debates in economics are over
definitions, which is why mainstream neoclassical economics is not an
empirical science.
You are clueless.
Post by r***@telus.net
Post by professorchaos
They
want to make claims using terms incorrectly then someone who understands
what the term means points out they are using the term wrong and the
wrong use of the term shows a misunderstanding of the concept.
Claiming there are no degrees of economic efficiency shows a
misunderstanding of the concept.
In Roy land maybe. In Roy Land high priest Roy gets to make up what ever
terms he wants. Do you think imaginary numbers are numbers that exist
only in your head?
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
and progressive than income tax (which IIRC TX does not
have, but other states and of course the federal government do).
If your argument were right that the poor own no land, which is not true
some poor people own houses and it takes a bigger percentage of their
income to pay the note and the tax,
There are no poor people who own houses, at least not in the USA, and
if there were, the houses they own would be old and depreciated, so
the property tax would mainly just reduce the cost of acquiring the
land.
Proof? Want to cite some evidence?
No evidence is needed to establish what is true by definition.
Delusions of grandeur. Roy defines it this way therefore it is true and
proven by Roy's definition. All hail the omnipotent Roy. Theocracy went
out a long time ago Roy.
Post by r***@telus.net
Post by professorchaos
How about a study on homeownership that supports your conclusion?
Here I can cite wrong that shows that you are wrong.
No, of course you can't.
Post by professorchaos
http://www.hungerinamerica.org/snapshot_comparisons/income_variables/home_ownership.html
Look at the table 2.0% percent of their clients with 0 income own a
place to live. 19% of clients in the 76%-100% of the poverty line range
own a home. Are you ready to admit you are pulling rabbits out of your
hat yet?
No, because I am completely correct. "Poor" and "rich" are not
defined by income but by assets.
Really then the poverty line measures what? Man I am glad I put my hip
waders on here. High Priest Roy is really cranking out his dictates for
definitions now.
Post by r***@telus.net
Because you are mainly interested in
lying, you claim that a billionaire who has no income is poorer than a
minimum-wage worker who has no assets.
A billionaire with no income that would be a trick. He would have to be
incredibly stupid and keeping all his money in cash under his bed. Do
you think billionaires with no income are clients of an organization in
which there website is name hungerinamerica.org?

Some background on the study.
http://www.hungerinamerica.org/about_the_study/
"The study provides authoritative, comprehensive, and statistically
valid data on the national charitable response to hunger and the people
served by private hunger-relief agencies. Through 52,000 face-to-face
client interviews and 30,000 surveys of local charitable agencies,
Hunger in America 2006 chronicles the nature and incidence of demand for
emergency food assistance which, in turn, helps charitable feeding
organizations better address the burgeoning need through program
development and refinement. "

How many billionaires with no income are clients of local charities that
feed people with no or little money?

I offer empirical evidence you are wrong. You offer bullshit that
doesn't address the study. POOR PEOPLE OWN HOMES TOO. The tax is
regressive. Even if you were right and poor people don't own homes. The
middle class still spend a higher percentage of income on home ownership
than the rich therefore a they pay higher tax rates as compared to their
income. It is still regressive even only middle class and rich own homes.
Post by r***@telus.net
Defining poverty by income
rather than assets is one of the lies economists commonly tell.
The study was from local charities who provide food. The clients were
people who the charities were given food to. You can call economist
liars all you want. It doesn't change the fact you are wrong and poor
people own homes.
Andy F.
2007-09-08 14:58:33 UTC
Permalink
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
You claimed that land taxes in the US were efficient.
I stated the fact that PROPERTY taxes in the USA are more efficient
than other commonly levied taxes such as income and sales taxes.
Which, for all their faults, they are, because they fall mainly on
land.
Roy still refuses to speak the language of economics or even understand
English. To say something is more efficient states that something is not
only embodies efficiency but has more of the quality of efficiency. Roy
refuses to understand that economic efficiency is not like the term used
in engineering. In engineering 20% efficient deals with how much energy is
created. So 30% efficient is more efficient. In economics there is no such
thing. In the language of economics more efficient is nonsensical. In the
language of economics something is efficient or it is not efficient. Roy
still does not understand this point or even what efficiency means to an
economist. Lets see if he understands it after I explain it for the 100th
time squared.
Post by r***@telus.net
Post by professorchaos
Land taxes in the US tax improved and unimproved value. I am also
pointing out that just because in the short run an unimproved value tax
does not effect improvements, it may in the long run.
Of course. It leads to more improvement, as seen in every single
historical example.
As compared to what? The correct answer is as compared to a tax on land
improvements. It will not lead to more improvements than no taxes at all.
Even if you look at the short run only.
Post by r***@telus.net
Post by professorchaos
Secondly that the only way that the tax can be seen as efficient in the
land market, not the market for improvements, is if the elasticity of
supply is exactly zero.
Which it is.
2 markets. Market A is the market for land. This shows how much land is
bought and sold. The cost increases the purchase price of the land. This
means consumers will want to buy less land. Less land will be traded on
the market after the tax unless the quantity supplied of land is not
affected by price, the elasticity of supply is 0. If the elasticity of
supply is not zero then the quantity of land bought and sold will
decrease. Some land that would have been allocated to buyers who place a
higher value on the land than the owners reservation price will not be
sold because the tax will make the cost of aquiring the land (the purchase
price + taxes incurred as a consequence of owning the land) greater than
the buyers value on the land. So trades are lost and land that would have
gone to people with higher values does stays in the hands of people who
place a lower value on the land as compared to the person who would have
bought the land without the tax. This is inefficient.
Wrong. Owners who didn't sell would still have to pay the tax. This would
reduce their reservation prices, so that overall cost to the buyer would be
unchanged.
Post by professorchaos
Is the loss in total surplus from such a tax less than other taxes? Maybe.
It depends if land has rather inelastic supply and labor has rather
inelastic supply it is hard to say. Why? Because the elasticities of
supply and demand determine the size of the lost gains of trade. My hunch
is that elasticities in the land are smaller than in the labor market but
I have no empirical evidence to back that up so I can not say if it is
true or not.
Market B is a market for improvements on the land. This occurs due to
current landowners decisions. There is a demand for improvements and a
supply of improvements. If only the unimproved land value is taxed then
there is no short run tax on improvements and the market is not impeded in
anyway.
That being said one must realize that improvements are similar to capital
accumulation. They occur from retained profits. If unimproved land taxes
lower profits then firms have less to spend on capital improvements and in
the long run a tax on unimproved land does affect improvements. There is a
short of crowding out that occurs when tax revenue replaces investment.
The effect is not entirely clear though because less investment demand
should decrease interest rates offsetting the effect at least some.
Improvements aren't all paid from retained profits. A significant amount
comes from wages.
If the land tax disappeared into nowhere, this would lead to less
investment. If the revenue was redistributed, there's no reason to suppose
this would lead to less investment.
Post by professorchaos
We also must realize that an unimproved land tax increases the fixed cost
of doing business. In the long run that drives some firms out of business
that were profitable before and distorts investment decisions. So if you
office building is making profits that are exactly equal to the
opportunity cost of running an internet business from your home before the
tax then it can distort the decision if the increase in fixed cost make
using the office building drives you out of the rental market and into
running an internet business. If no one can make an economic profit from
using the offices given the market after taxation then it would cause the
office building to be razed and something else built. That would not have
occurred without the tax so it shows the tax distorts decisions.
Wrong again. Land tax would be a cost of owning land, not a cost of doing
business.
If there's a more profitable way of using the land, what's the office
building doing there?
professorchaos
2007-09-08 15:54:48 UTC
Permalink
Post by Andy F.
Wrong. Owners who didn't sell would still have to pay the tax. This would
reduce their reservation prices, so that overall cost to the buyer would be
unchanged.
You are making a very rigid assumption here. No one denies market price
will drop after the tax. However, I am debating as to if market price
will drop enough to compensate for the tax and they will be no change in
quantity traded. For your claim to happen, we need one of the curves to
be perfectly inelastic. That is the traditional assumption but data
shows that to be wrong. If one of the curves is not perfectly inelastic
then the price sellers receive will not drop enough to fully compensate
for the tax. The only way your argument is correct is if the supply of
land has an elasticity of zero. That is the only way you will see that
the cost to the buyer after tax will remain unchanged.
Post by Andy F.
Post by professorchaos
That being said one must realize that improvements are similar to capital
accumulation. They occur from retained profits. If unimproved land taxes
lower profits then firms have less to spend on capital improvements and in
the long run a tax on unimproved land does affect improvements. There is a
short of crowding out that occurs when tax revenue replaces investment.
The effect is not entirely clear though because less investment demand
should decrease interest rates offsetting the effect at least some.
Improvements aren't all paid from retained profits.
That is not the point. Improvements in business only happen if the
return on the investment exceeds the cost. When unimproved land tax rise
it causes returns to drop because of the extra fixed cost involved in
acquiring the land. The opportunity cost of holding the land and using
it rises.
Post by Andy F.
A significant amount
comes from wages.
Perhaps for home owners. Not for multistory office buildings.
Post by Andy F.
If the land tax disappeared into nowhere, this would lead to less
investment.
Why? It would have no effect at best if the land tax went away. At
worst, it hurts investment some because the land tax lowers returns on
what ever improvement you want to do. The tax is part of your cost of
the property and it raises fixed cost.
Post by Andy F.
If the revenue was redistributed, there's no reason to suppose
this would lead to less investment.
Yes there would be. Redistribution does not change the fact that my
McDonald's franchise is no longer making money after the rise in fixed
cost so I sell to someone who would build a home on the property. I am
not saying having a McDonald's is better than having a home. Only that
in the market before the tax there was a higher value to the owner of
the McDonald's than the homeowner. Land has shifted from someone who
values the land more to some who values the land less. That is inefficient.
Post by Andy F.
Post by professorchaos
We also must realize that an unimproved land tax increases the fixed cost
of doing business. In the long run that drives some firms out of business
that were profitable before and distorts investment decisions. So if you
office building is making profits that are exactly equal to the
opportunity cost of running an internet business from your home before the
tax then it can distort the decision if the increase in fixed cost make
using the office building drives you out of the rental market and into
running an internet business. If no one can make an economic profit from
using the offices given the market after taxation then it would cause the
office building to be razed and something else built. That would not have
occurred without the tax so it shows the tax distorts decisions.
Wrong again. Land tax would be a cost of owning land, not a cost of doing
business.
Can you define fixed costs? If I own land with a business on it how
could a tax on the land NOT affect my fixed cost. No it is not a
variable cost, the tax has to be paid rather I make 0 or 1000 units. In
the short run it has no effect. However, it is a fixed cost I have to
pay it if I am going to use the land. This is still cash flow out and it
still lowers profits. If in the long run that fixed cost increases
causes my fixed, variable, and opportunity cost to exceed revenue I shut
down and sell the land to someone who I would have outbid for the land
if the tax was not in place. That is inefficient.
Post by Andy F.
If there's a more profitable way of using the land, what's the office
building doing there?
It was more profitable before the tax. Now it isn't profitable so it
goes to some other use. Like a conservationist who puts a high value on
raw land and low value on improvements or a home owner who is not
worried about profits the land returns. That is the point the office
building WAS profitable before the tax. Now the tax could cause fixed
costs to rise because I have another bill to pay and cause profits to be
negative.
Andy F.
2007-09-09 12:46:53 UTC
Permalink
Post by professorchaos
Post by Andy F.
Wrong. Owners who didn't sell would still have to pay the tax. This would
reduce their reservation prices, so that overall cost to the buyer would
be unchanged.
You are making a very rigid assumption here. No one denies market price
will drop after the tax. However, I am debating as to if market price will
drop enough to compensate for the tax and they will be no change in
quantity traded. For your claim to happen, we need one of the curves to be
perfectly inelastic. That is the traditional assumption but data shows
that to be wrong. If one of the curves is not perfectly inelastic then the
price sellers receive will not drop enough to fully compensate for the
tax. The only way your argument is correct is if the supply of land has an
elasticity of zero. That is the only way you will see that the cost to the
buyer after tax will remain unchanged.
The only assumption I'm making is that people are rational. If I value the
use of my land at $1000 and the tax is $400, my reservation price will be
$600. If I rent out the land for $600 I save $400 in tax so I'm $1000 better
off.
If someone offers me $600 they must value the land at $1000 since they also
have to pay $400 tax.
So the land goes to whoever values it the most, and the tax is economically
efficient.
Post by professorchaos
Post by Andy F.
Post by professorchaos
That being said one must realize that improvements are similar to
capital accumulation. They occur from retained profits. If unimproved
land taxes lower profits then firms have less to spend on capital
improvements and in the long run a tax on unimproved land does affect
improvements. There is a short of crowding out that occurs when tax
revenue replaces investment. The effect is not entirely clear though
because less investment demand should decrease interest rates offsetting
the effect at least some.
Improvements aren't all paid from retained profits.
That is not the point. Improvements in business only happen if the return
on the investment exceeds the cost. When unimproved land tax rise it
causes returns to drop because of the extra fixed cost involved in
acquiring the land. The opportunity cost of holding the land and using it
rises.
No, because the cost of acquiring the land doesn't increase.
Post by professorchaos
Post by Andy F.
A significant amount comes from wages.
Perhaps for home owners. Not for multistory office buildings.
Yes for office buildings. Or have you never heard of pension funds?
Post by professorchaos
Post by Andy F.
If the land tax disappeared into nowhere, this would lead to less
investment.
Why? It would have no effect at best if the land tax went away. At worst,
it hurts investment some because the land tax lowers returns on what ever
improvement you want to do. The tax is part of your cost of the property
and it raises fixed cost.
Post by Andy F.
If the revenue was redistributed, there's no reason to suppose this would
lead to less investment.
Yes there would be. Redistribution does not change the fact that my
McDonald's franchise is no longer making money after the rise in fixed
cost so I sell to someone who would build a home on the property. I am not
saying having a McDonald's is better than having a home. Only that in the
market before the tax there was a higher value to the owner of the
McDonald's than the homeowner. Land has shifted from someone who values
the land more to some who values the land less. That is inefficient.
No it isn't. If the McDonalds isn't generating enough profits to pay the
rent on the land, it isn't a profitable business.The owner would be better
off pulling it down and selling the land to someone else. This is true
wether or not there's a tax on the land.
Post by professorchaos
Post by Andy F.
Post by professorchaos
We also must realize that an unimproved land tax increases the fixed
cost of doing business. In the long run that drives some firms out of
business that were profitable before and distorts investment decisions.
So if you office building is making profits that are exactly equal to
the opportunity cost of running an internet business from your home
before the tax then it can distort the decision if the increase in fixed
cost make using the office building drives you out of the rental market
and into running an internet business. If no one can make an economic
profit from using the offices given the market after taxation then it
would cause the office building to be razed and something else built.
That would not have occurred without the tax so it shows the tax
distorts decisions.
Wrong again. Land tax would be a cost of owning land, not a cost of doing
business.
Can you define fixed costs? If I own land with a business on it how could
a tax on the land NOT affect my fixed cost. No it is not a variable cost,
the tax has to be paid rather I make 0 or 1000 units. In the short run it
has no effect. However, it is a fixed cost I have to pay it if I am going
to use the land. This is still cash flow out and it still lowers profits.
If in the long run that fixed cost increases causes my fixed, variable,
and opportunity cost to exceed revenue I shut down and sell the land to
someone who I would have outbid for the land if the tax was not in place.
That is inefficient.
You keep repeating the same fallacy.The people you're bidding against have
to pay the same tax as you. So if they weren't outbidding you before the tax
they won't outbid you after the tax.
professorchaos
2007-09-09 14:43:34 UTC
Permalink
Post by Andy F.
The only assumption I'm making is that people are rational. If I value the
use of my land at $1000 and the tax is $400, my reservation price will be
$600. If I rent out the land for $600 I save $400 in tax so I'm $1000 better
off.
Yes but whether or not the actual rental price is $600 is not determined
solely by reservation price. Supply is only half of it. Demand plays a
role too. If after the tax people will offer $700 for the land you will
rent at $700. The only way one party absorbs the full amount of the tax
is if their elasticity is exactly zero.
Post by Andy F.
If someone offers me $600 they must value the land at $1000 since they also
have to pay $400 tax.
What you are arguing here is that supply increases and demand decreases.
In this case price would definitely fall. If supply and demand drop by
the same amount then prices stay constant and quantities stay constant.
Elasticities would no longer be an issue.

What I disagree with here is that reservation price will fall. You still
value the land at $1000 it just cost you $400 to keep it. Your valuation
of the land has not changed not in the short run. In the short run fixed
costs are ignored. So if reservation prices do not change in the short
run then supply is constant and demand decreases. Only if the elasticity
of supply is 0 will the price drop by exactly the tax.

Now if you arguing the long run. This might be true fixed cost coming
into play and my willingness to sell is affected by the profits I gain
from owning the land if I am a business. Yet does it affect my valuation
of the land if I am a conservationist who just wants the land to stay raw?
Post by Andy F.
So the land goes to whoever values it the most, and the tax is economically
efficient.
Post by professorchaos
Post by Andy F.
Post by professorchaos
That being said one must realize that improvements are similar to
capital accumulation. They occur from retained profits. If unimproved
land taxes lower profits then firms have less to spend on capital
improvements and in the long run a tax on unimproved land does affect
improvements. There is a short of crowding out that occurs when tax
revenue replaces investment. The effect is not entirely clear though
because less investment demand should decrease interest rates offsetting
the effect at least some.
Improvements aren't all paid from retained profits.
That is not the point. Improvements in business only happen if the return
on the investment exceeds the cost. When unimproved land tax rise it
causes returns to drop because of the extra fixed cost involved in
acquiring the land. The opportunity cost of holding the land and using it
rises.
No, because the cost of acquiring the land doesn't increase.
Of course it does. If you have to pay $00 on the sale of the land or
$400 dollars at a date later because you own the land makes no
difference. Acquiring the land cost you $400 more than it would, at the
same price, without the tax. So people will want to buy less at all
possible prices, for each price it cost $400 more than it would have
before, demand decreases.
Post by Andy F.
Post by professorchaos
Yes there would be. Redistribution does not change the fact that my
McDonald's franchise is no longer making money after the rise in fixed
cost so I sell to someone who would build a home on the property. I am not
saying having a McDonald's is better than having a home. Only that in the
market before the tax there was a higher value to the owner of the
McDonald's than the homeowner. Land has shifted from someone who values
the land more to some who values the land less. That is inefficient.
No it isn't. If the McDonalds isn't generating enough profits to pay the
rent on the land,
The point it was before the tax. Only the tax changed here. It was
profitable before tax. It is not after. So the tax caused a profitable
business to be unprofitable. It distorted decisions.
Post by Andy F.
it isn't a profitable business.The owner would be better
off pulling it down and selling the land to someone else.
This is only the case after the tax. You have the most value on the land
by McDonald's before tax and someone else gets the land after the tax.
That person who buys the land after the tax had a lower value before tax
or they would have owned it. The tax influenced decisions. It
redistributed land from someone with a higher before tax value to
someone with a lower before tax value.
Post by Andy F.
This is true
wether or not there's a tax on the land.
No because the business was profitable before tax and not profitable
after the tax. The tax has changed the mix of products produced.
Post by Andy F.
Post by professorchaos
Can you define fixed costs? If I own land with a business on it how could
a tax on the land NOT affect my fixed cost. No it is not a variable cost,
the tax has to be paid rather I make 0 or 1000 units. In the short run it
has no effect. However, it is a fixed cost I have to pay it if I am going
to use the land. This is still cash flow out and it still lowers profits.
If in the long run that fixed cost increases causes my fixed, variable,
and opportunity cost to exceed revenue I shut down and sell the land to
someone who I would have outbid for the land if the tax was not in place.
That is inefficient.
You keep repeating the same fallacy.The people you're bidding against have
to pay the same tax as you. So if they weren't outbidding you before the tax
they won't outbid you after the tax.
That is only true if the quantity sold on the market does not decrease.
If quantity sold decreases then someone who had has a higher value on
the land than market price + tax will not get the land.

You are assuming the reservation price drops because of the tax. This
would assume the willingness to sell changes and supply increases. Short
run decisions are not affected by fixed costs so the increased in fixed
cost has no effect on short run willingness to sell.
Mark M.
2007-09-09 16:54:40 UTC
Permalink
Post by professorchaos
Post by Andy F.
No it isn't. If the McDonalds isn't generating enough profits to pay
the rent on the land,
The point it was before the tax. Only the tax changed here. It was
profitable before tax. It is not after. So the tax caused a profitable
business to be unprofitable. It distorted decisions.
Post by Andy F.
it isn't a profitable business.The owner would be better off pulling
it down and selling the land to someone else.
This is only the case after the tax. You have the most value on the land
by McDonald's before tax and someone else gets the land after the tax.
That person who buys the land after the tax had a lower value before tax
or they would have owned it. The tax influenced decisions. It
redistributed land from someone with a higher before tax value to
someone with a lower before tax value.
A tax on land rent does not increase costs to land users. On the contrary, a shift
to land rent tax from taxes on labor decreases the total land use/tax burden to the
land user. A tax on land rent falls wholly on land owners whether or not they
happen to be land users. Users qua users do not pay any more land rent then they
did before the land tax.

Rent is rent. Read von Thunen. Locational opportunity is there whether or not
land is taxed. Many of the best retail locations are leased. An increase on land
rent tax on these locations will be borne by the land owner, and the tenant's rent
cannot be increased to recover it.

Mark M.
professorchaos
2007-09-09 17:15:06 UTC
Permalink
Post by Mark M.
A tax on land rent does not increase costs to land users. On the
contrary, a shift to land rent tax from taxes on labor decreases the
total land use/tax burden to the land user. A tax on land rent falls
wholly on land owners whether or not they happen to be land users.
This has been shown not to be true. That a tax on land owners can affect
rents. I will post the citation when my connection to JSTOR is up. The
site I conncect through is under maintenance at the moment.

The argument depends on elasticities of demand and supply.
Post by Mark M.
Users qua users do not pay any more land rent then they did before the
land tax.
Empirical evidence? Theory shows this is not always the case. It
requires a strong assumption about elasticities.
Post by Mark M.
Rent is rent. Read von Thunen. Locational opportunity is there whether
or not land is taxed. Many of the best retail locations are leased. An
increase on land rent tax on these locations will be borne by the land
owner, and the tenant's rent cannot be increased to recover it.
Again you are making elasticity assumption. Von Thuenen made assumptions
about elasticity of supply and elasticity of demand. I have explained
the counter argument earlier. As I said later on today when scheduled
maintenance is complete or I receive my login information that I had
forgotten from my other access to JSTOR I will post the citation.
Andy F.
2007-09-10 09:19:17 UTC
Permalink
Post by professorchaos
Post by Andy F.
The only assumption I'm making is that people are rational. If I value
the use of my land at $1000 and the tax is $400, my reservation price
will be $600. If I rent out the land for $600 I save $400 in tax so I'm
$1000 better off.
Yes but whether or not the actual rental price is $600 is not determined
solely by reservation price. Supply is only half of it. Demand plays a
role too. If after the tax people will offer $700 for the land you will
rent at $700. The only way one party absorbs the full amount of the tax is
if their elasticity is exactly zero.
If someone offers me $700 and is willing to pay the $400 tax , they must
value the land at $1100. In which case it's rational and efficient for me to
rent the land to them.
Post by professorchaos
Post by Andy F.
If someone offers me $600 they must value the land at $1000 since they
also have to pay $400 tax.
What you are arguing here is that supply increases and demand decreases.
In this case price would definitely fall. If supply and demand drop by the
same amount then prices stay constant and quantities stay constant.
Elasticities would no longer be an issue.
What I disagree with here is that reservation price will fall. You still
value the land at $1000 it just cost you $400 to keep it. Your valuation
of the land has not changed not in the short run. In the short run fixed
costs are ignored. So if reservation prices do not change in the short run
then supply is constant and demand decreases. Only if the elasticity of
supply is 0 will the price drop by exactly the tax.
Nonsense. I have a $400 tax bill if I keep the land, and a zero tax bill if
I rent it out. So the $400 is clearly going to affect my decision wether or
not to keep the land.
Post by professorchaos
Now if you arguing the long run. This might be true fixed cost coming into
play and my willingness to sell is affected by the profits I gain from
owning the land if I am a business. Yet does it affect my valuation of the
land if I am a conservationist who just wants the land to stay raw?
That makes no difference.If you value the land more than the other person,
for whatever reason, you will outbid them.
Post by professorchaos
Post by Andy F.
So the land goes to whoever values it the most, and the tax is
economically efficient.
Post by professorchaos
Post by Andy F.
Post by professorchaos
That being said one must realize that improvements are similar to
capital accumulation. They occur from retained profits. If unimproved
land taxes lower profits then firms have less to spend on capital
improvements and in the long run a tax on unimproved land does affect
improvements. There is a short of crowding out that occurs when tax
revenue replaces investment. The effect is not entirely clear though
because less investment demand should decrease interest rates
offsetting the effect at least some.
Improvements aren't all paid from retained profits.
That is not the point. Improvements in business only happen if the
return on the investment exceeds the cost. When unimproved land tax rise
it causes returns to drop because of the extra fixed cost involved in
acquiring the land. The opportunity cost of holding the land and using
it rises.
No, because the cost of acquiring the land doesn't increase.
Of course it does. If you have to pay $00 on the sale of the land or $400
dollars at a date later because you own the land makes no difference.
Acquiring the land cost you $400 more than it would, at the same price,
without the tax. So people will want to buy less at all possible prices,
for each price it cost $400 more than it would have before, demand
decreases.
That's just nonsense. The price after tax is very clearly less than the
price before tax, for reasons which have been very clearly explained above.
Post by professorchaos
Post by Andy F.
Post by professorchaos
Yes there would be. Redistribution does not change the fact that my
McDonald's franchise is no longer making money after the rise in fixed
cost so I sell to someone who would build a home on the property. I am
not saying having a McDonald's is better than having a home. Only that
in the market before the tax there was a higher value to the owner of
the McDonald's than the homeowner. Land has shifted from someone who
values the land more to some who values the land less. That is inefficient.
No it isn't. If the McDonalds isn't generating enough profits to pay the
rent on the land,
The point it was before the tax. Only the tax changed here. It was
profitable before tax. It is not after. So the tax caused a profitable
business to be unprofitable. It distorted decisions.
If it was making enough profit to pay the rent, it's making enough to pay
the tax.
Post by professorchaos
Post by Andy F.
it isn't a profitable business.The owner would be better off pulling it
down and selling the land to someone else.
This is only the case after the tax. You have the most value on the land
by McDonald's before tax and someone else gets the land after the tax.
That person who buys the land after the tax had a lower value before tax
or they would have owned it. The tax influenced decisions. It
redistributed land from someone with a higher before tax value to someone
with a lower before tax value.
Post by Andy F.
This is true wether or not there's a tax on the land.
No because the business was profitable before tax and not profitable after
the tax. The tax has changed the mix of products produced.
Post by Andy F.
Post by professorchaos
Can you define fixed costs? If I own land with a business on it how
could a tax on the land NOT affect my fixed cost. No it is not a
variable cost, the tax has to be paid rather I make 0 or 1000 units. In
the short run it has no effect. However, it is a fixed cost I have to
pay it if I am going to use the land. This is still cash flow out and it
still lowers profits. If in the long run that fixed cost increases
causes my fixed, variable, and opportunity cost to exceed revenue I shut
down and sell the land to someone who I would have outbid for the land
if the tax was not in place. That is inefficient.
You keep repeating the same fallacy.The people you're bidding against
have to pay the same tax as you. So if they weren't outbidding you before
the tax they won't outbid you after the tax.
That is only true if the quantity sold on the market does not decrease. If
quantity sold decreases then someone who had has a higher value on the
land than market price + tax will not get the land.
Is there no limit to how much nonsense you're willing to post here? If
someone values the land more that market price + tax, they will obviously
pay the market price and get the land.
professorchaos
2007-09-10 16:49:22 UTC
Permalink
Post by Andy F.
Post by professorchaos
Post by Andy F.
The only assumption I'm making is that people are rational. If I value
the use of my land at $1000 and the tax is $400, my reservation price
will be $600. If I rent out the land for $600 I save $400 in tax so I'm
$1000 better off.
Yes but whether or not the actual rental price is $600 is not determined
solely by reservation price. Supply is only half of it. Demand plays a
role too. If after the tax people will offer $700 for the land you will
rent at $700. The only way one party absorbs the full amount of the tax is
if their elasticity is exactly zero.
If someone offers me $700 and is willing to pay the $400 tax , they must
value the land at $1100. In which case it's rational and efficient for me to
rent the land to them.
The only way this occurs if the quantity on the market drops showing
lost gains from trade. This means land that would have sold when the
price was $1000, before the tax, WILL NOT SELL. So it may be a zero net
change in surplus on that sale but those who would have bought for $1000
before the tax can not buy. Therefore it is loss in TOTAL Surplus. The
transaction you speak of may not be a loss in surplus. However, there is
a loss in surplus from those who would have bought per tax and now will
not buy because the market price + tax excludes them.

The only way this does not occur is one of the elasticities is 0.
Post by Andy F.
Post by professorchaos
Post by Andy F.
If someone offers me $600 they must value the land at $1000 since they
also have to pay $400 tax.
What you are arguing here is that supply increases and demand decreases.
In this case price would definitely fall. If supply and demand drop by the
same amount then prices stay constant and quantities stay constant.
Elasticities would no longer be an issue.
What I disagree with here is that reservation price will fall. You still
value the land at $1000 it just cost you $400 to keep it. Your valuation
of the land has not changed not in the short run. In the short run fixed
costs are ignored. So if reservation prices do not change in the short run
then supply is constant and demand decreases. Only if the elasticity of
supply is 0 will the price drop by exactly the tax.
Nonsense. I have a $400 tax bill if I keep the land, and a zero tax bill if
I rent it out. So the $400 is clearly going to affect my decision wether or
not to keep the land.
Not in the short run. If I am farmer and I make $300 dollars in profit
off the land then I will stay open in the short run because my price is
still above average variable cost. The tax does not affect variable
cost. As long as I have a revenue above variable cost I will stay in
business in the short run so I meet some of my fixed cost. If I shut
down I pay all the fixed and loose the revenue net of fixed cost. The
effect will happen in the long run. In the long run I shut down if I can
not meet all my fixed costs.
Post by Andy F.
Post by professorchaos
Now if you arguing the long run. This might be true fixed cost coming into
play and my willingness to sell is affected by the profits I gain from
owning the land if I am a business. Yet does it affect my valuation of the
land if I am a conservationist who just wants the land to stay raw?
That makes no difference.If you value the land more than the other person,
for whatever reason, you will outbid them.
Again what determines the value is the point. How does the short run
valuation differ for the log run valuation? Also it does not change the
fact I still think the land is worth $X it does present an opportunity
of cost of holding the land.
Post by Andy F.
Post by professorchaos
Post by Andy F.
No, because the cost of acquiring the land doesn't increase.
Of course it does. If you have to pay $00 on the sale of the land or $400
dollars at a date later because you own the land makes no difference.
Acquiring the land cost you $400 more than it would, at the same price,
without the tax. So people will want to buy less at all possible prices,
for each price it cost $400 more than it would have before, demand
decreases.
That's just nonsense. The price after tax is very clearly less than the
price before tax, for reasons which have been very clearly explained above.
How much less? It will only drop by the amount of the tax if the
elasticity of supply is 0. I have no problem with the fact market price
drops because consumer incur a tax from the transaction the real
question is how much and that is an empirical question.
Post by Andy F.
Post by professorchaos
Post by Andy F.
No it isn't. If the McDonalds isn't generating enough profits to pay the
rent on the land,
The point it was before the tax. Only the tax changed here. It was
profitable before tax. It is not after. So the tax caused a profitable
business to be unprofitable. It distorted decisions.
If it was making enough profit to pay the rent, it's making enough to pay
the tax.
Nonsense. Lets you use the farming business example again. I make $300
in profit a month. The land tax is $400 a month. Prior to the tax I made
$300 profit after the tax I lose $100 a month. That is solely because
the tax. I was profitable before the tax and not profitable after the
tax. The land that was best used for farming before the tax is not used
for farming after taxes. The tax causes a distortion. Just because I was
profitable before the tax does not mean I am profitable after having to
pay the tax.
Post by Andy F.
Post by professorchaos
Post by Andy F.
it isn't a profitable business.The owner would be better off pulling it
Is there no limit to how much nonsense you're willing to post here? If
someone values the land more that market price + tax, they will obviously
pay the market price and get the land.
What you are not seeing is the whole market. They are people who have a
higher value on the land than market price before the tax that will not
buy after the tax. If my willingness to pay is $1000 and price + tax
goes to $1100, then I would have bought the land at $1000 before the tax
and will not buy at $1100, price + tax. The point is this a trade that
would have brought benefit to me and the owner of the land that WILL NOT
OCCUR. This decrease total surplus and represents dead weight loss.

The only way of avoid this is if one of the elasticities is exactly 0.
f***@msn.com
2007-09-11 02:16:33 UTC
Permalink
Post by professorchaos
Post by Andy F.
If it was making enough profit to pay the rent, it's making enough to pay
the tax.
Nonsense. Lets you use the farming business example again. I make $300
in profit a month. The land tax is $400 a month. Prior to the tax I made
$300 profit after the tax I lose $100 a month. That is solely because
the tax. I was profitable before the tax and not profitable after the
tax. The land that was best used for farming before the tax is not used
for farming after taxes. The tax causes a distortion. Just because I was
profitable before the tax does not mean I am profitable after having to
pay the tax.
The assumption is that tax is no more than the land rent.
You make an additional assumption that the owner profit does not go
down
when the tax goes up. Since the renter only looks at monthly cost and
doesn't care how this is split between owner profit and tax the owner
profit will go down (aproximately) as the tax goes up. With lower
profits
the land value goes down and the tax goes down until the ROI
aproximates
opportunity costs. There is some price stickyness involved in
establishing
the new equalibrium.
professorchaos
2007-09-11 16:44:14 UTC
Permalink
Post by f***@msn.com
Post by professorchaos
Post by Andy F.
If it was making enough profit to pay the rent, it's making enough to pay
the tax.
Nonsense. Lets you use the farming business example again. I make $300
in profit a month. The land tax is $400 a month. Prior to the tax I made
$300 profit after the tax I lose $100 a month. That is solely because
the tax. I was profitable before the tax and not profitable after the
tax. The land that was best used for farming before the tax is not used
for farming after taxes. The tax causes a distortion. Just because I was
profitable before the tax does not mean I am profitable after having to
pay the tax.
The assumption is that tax is no more than the land rent.
The only way to do that is a non-uniform rate that has to be set for
each property. A simple ad valeroum tax will not do that. You do realize
Ricardian rents postulate different rents for different grades of land.
Trying to implement that would cause the cost of administrating the tax
to take up most, if not all the revenue.
Post by f***@msn.com
You make an additional assumption that the owner profit does not go
down
when the tax goes up.
Not necessary. If profit, pre-tax, did go down it makes the point even
more poignant. Before I made $300 a month now I make $200 a month. A
$400 a month tax still drives me out of business.
Post by f***@msn.com
Since the renter only looks at monthly cost and
doesn't care how this is split between owner profit and tax the owner
profit will go down (aproximately) as the tax goes up.
With lower
profits
the land value goes down and the tax goes down until the ROI
aproximates
opportunity costs.
You still do not understand if the business on the land was profitable
before and not profitable afterward, then the mix of products change.
Sure someone else is willing to buy the land and invest in something
else and might be able to make a profit. That is not the point. The
point is that this tax distorts incentives. The land was used best for
farming before the tax and used best for something else or by a farmer
growing something else after the tax. It distorts the markets
determination of what products are available.
f***@msn.com
2007-09-11 19:45:03 UTC
Permalink
Post by professorchaos
Post by f***@msn.com
Post by professorchaos
Post by Andy F.
If it was making enough profit to pay the rent, it's making enough to pay
the tax.
Nonsense. Lets you use the farming business example again. I make $300
in profit a month. The land tax is $400 a month. Prior to the tax I made
$300 profit after the tax I lose $100 a month. That is solely because
the tax. I was profitable before the tax and not profitable after the
tax. The land that was best used for farming before the tax is not used
for farming after taxes. The tax causes a distortion. Just because I was
profitable before the tax does not mean I am profitable after having to
pay the tax.
The assumption is that tax is no more than the land rent.
The only way to do that is a non-uniform rate that has to be set for
each property. A simple ad valeroum tax will not do that. You do realize
Ricardian rents postulate different rents for different grades of land.
Trying to implement that would cause the cost of administrating the tax
to take up most, if not all the revenue.
No, no, no. Suppose I have two investments. On one I get a 10% ROI.
On the other I get 5% ROI. Now I try to optimize my ROI. What
actions
should I take? I think I should dump some portion of the investment
yielding 5% and put the money where I'm getting 10%. (There is some
notion of risk involved so there are some factors not mentioned in
my actual decision making.)

I know you scoff at Wikipedia but try reading:
http://en.wikipedia.org/wiki/Law_of_Rent
and
http://en.wikipedia.org/wiki/Capital_asset_pricing_model


Different grades of land produce different rents however land value is
a discounted aggregate of future rents (
Post by professorchaos
Post by f***@msn.com
You make an additional assumption that the owner profit does not go
down
when the tax goes up.
Not necessary. If profit, pre-tax, did go down it makes the point even
more poignant. Before I made $300 a month now I make $200 a month. A
$400 a month tax still drives me out of business.
The tax is a percentage of the land value. It should be no more than
the nominal land rent. If you made $300 a month from land whose rent
is $400 then you would be better off renting out the land.
Post by professorchaos
Post by f***@msn.com
Since the renter only looks at monthly cost and
doesn't care how this is split between owner profit and tax the owner
profit will go down (aproximately) as the tax goes up.
With lower profits
the land value goes down and the tax goes down until the ROI
aproximates opportunity costs.
You still do not understand if the business on the land was profitable
before and not profitable afterward, then the mix of products change.
As a society, should we subsidize marginal production? Sure, the mix
of poducts will change. It will change to what is more valued
production.
That's how markets work. People have imperfect knowledge but they can
look at how they invest their time and money so as to maximize their
returns (including intangibles.) I believe we are better off by
applying
our labor most productively (again including intangibles such as the
value
of reduced stress and increased happiness as personally monitized.)
Post by professorchaos
Sure someone else is willing to buy the land and invest in something
else and might be able to make a profit. That is not the point.
Wrong. That is the point. Land value is not a product of owner
effort.
We are best served by moving land utilization into the hands of those
who place the most value on it.
Post by professorchaos
The point is that this tax distorts incentives.
The tax removes the distortions put in place by allowing private
ownership of land.
Post by professorchaos
The land was used best for
farming before the tax and used best for something else or by a farmer
growing something else after the tax.
If the land was used best for farming then farming would value the
land
the highest. This being said, it would still be true after the tax
was
imposed since the tax is based upon land value not improvement value.
Now it's true that rehabilitating land for farming after
"improvements"
have been made could be quite expensive, reducing the land's value for
farming. Figuring these things out is more of an art than science.
Post by professorchaos
It distorts the markets determination of what products are available.
I believe it removes distortions introduced by the subsidization of
land
owners.
professorchaos
2007-09-11 21:11:35 UTC
Permalink
Post by f***@msn.com
No, no, no. Suppose I have two investments. On one I get a 10% ROI.
On the other I get 5% ROI. Now I try to optimize my ROI. What
actions
should I take?
You still do not see the point. You take the 10% investment before and
after the tax. Someone else takes the 5% investment before tax and not
after tax. Investment decreases. The 5% ROI gets dumped but IS NOT
REPLACED. Total investment drops.
Post by f***@msn.com
I think I should dump some portion of the investment
yielding 5% and put the money where I'm getting 10%. (There is some
notion of risk involved so there are some factors not mentioned in
my actual decision making.)
You assume that 10% was available but not used before the tax. An
example you have 10 projects that net 10% before the tax. All 10
projects are funded. You have 5 projects that net 5% before tax all
projects are funded. The tax changes the ROI where the 5% are no longer
funded but you can't dump that money into a 10% project because there
are still 10 projects that have received funding.

In case of land at $5000 there are 10,000 lots that people will buy for
$7000 or above and 5000 that people will buy for $5000 or above. This
means that when the tax raises price + tax to $7000 only 5,000 lots will
be bought maximum. That is the same 5000 lots that people valued above
$7000 before. You lose trades. The people who would buy at prices from
$5000 to $6999 will not buy. The people who were willing to sell from
$5000 to $6999 will not sell. These are trades the tax prevents. These
are trades where the buyer has a higher value than the seller but the
tax means they have to pay a higher price than they are willing to pay
and the seller receives less than he is willing to sell at.

You can't shift the money to higher return because all those of higher
return projects are invested in without or without the tax.
Post by f***@msn.com
http://en.wikipedia.org/wiki/Law_of_Rent
and
http://en.wikipedia.org/wiki/Capital_asset_pricing_model
I have no problem with the Ricardian idea of rent. It is my basis for my
argument. I have no problem with CAPM either. I am simply pointing out
that the 10% returns will be exhausted in the market before people
invest in 5% returns. Therefore if a tax makes a 5% return unprofitable
you can not shift the money to a 10% because those are exhausted. People
will invest in the highest return until it is exhausted. The only reason
you would invest in 5% in the first place if all 10% returns are
exhausted and market conditions make the 5% return profitable.
Post by f***@msn.com
The tax is a percentage of the land value. It should be no more than
the nominal land rent.
Which is not just a single tax on unimproved land. It is a tax
calculated for each piece according to rent. THis is costly to
administer because each piece of land would have to be taxed at
different rates.
Post by f***@msn.com
Post by professorchaos
You still do not understand if the business on the land was profitable
before and not profitable afterward, then the mix of products change.
As a society, should we subsidize marginal production?
No Subsidy is in place. The production is profitable without tax or
subsidy. Not taxing is not the same as subsidizing. Should we put
profitable business out of business?
Post by f***@msn.com
Sure, the mix
of poducts will change. It will change to what is more valued
production.
That is not the case. The "value" changes due to the tax.
Post by f***@msn.com
That's how markets work.
Right best when they are not taxed.
Post by f***@msn.com
People have imperfect knowledge but they can
look at how they invest their time and money so as to maximize their
returns (including intangibles.)
These decisions are distorted when we tax and the government causes
people to change the decisions that previously maximized their time.

In one paragraph you argue the tax is necessary to shed off marginal
production that the market brings then argue markets give good outcomes
because people maximize. Which is it?
Post by f***@msn.com
I believe we are better off by
applying
our labor most productively (again including intangibles such as the
value
of reduced stress and increased happiness as personally monitized.)
Which is why you should be concerned when people make a decision that
labor is applied most productively and suddenly after a tax that labor
is no longer most productive. An example is the income tax code. Perhaps
I think my money is best spent renting. Market prices are high and I
don't want to take the hit if they drop. There is no home mortgage
deduction. The government puts one in place. I am still at risk of
losing money if the market drops but the risk is mitigated by the
government tax break to buying a home. Now the decision that I believe
has changed solely because the government enticed to buy a home I did
not think was the best option until they paid me to do it.
Post by f***@msn.com
Post by professorchaos
Sure someone else is willing to buy the land and invest in something
else and might be able to make a profit. That is not the point.
Wrong. That is the point. Land value is not a product of owner
effort.
This is not the point. The point is that trades of land that would occur
prior to the tax WILL NOT OCCUR NOW. In the numerical example you have
people that would sell at $5000 who will not sell because price is now
$3000 dollars. You have people who would have bought at $5000 dollars
will not buy because the cost is now $7000 after tax. The difference
between the price the buyer pays and the price the seller receives means
there are trades that would benefit society that do not occur. Prior to
the tax someone who would sell the land for $5000 could sell to someone
who value the land at $6000. An improvement because land goes to someone
with a higher value. After the tax the trade is not made because the
seller receives $4000 while the buyer pays $7000. Neither will sell or
buy. So that someone else places a higher value in stays in the hands of
someone with a lower value. Why? Because market price is too low for the
seller to sell and after tax price is too high for the buyer to buy.
This would not happen without the tax.
Post by f***@msn.com
We are best served by moving land utilization into the hands of those
who place the most value on it.
Post by professorchaos
The point is that this tax distorts incentives.
The tax removes the distortions put in place by allowing private
ownership of land.
You are assuming that private ownership causes a distortion. Something I
see no reason to believe. I disagree with you M. Rousseau.
Post by f***@msn.com
Post by professorchaos
The land was used best for
farming before the tax and used best for something else or by a farmer
growing something else after the tax.
If the land was used best for farming then farming would value the
land
the highest. This being said, it would still be true after the tax
was
imposed since the tax is based upon land value not improvement value.
Wrong again. If because of profits I put a value on the land at $5000
before the tax and after the tax prices drop to $3000. I do not sell
when I would have sold. Now lets say there was a buyer willing to pay
$5000 before the tax because he valued the land at $6000. I keep the
land that is valued at $5000 to me and do not sell to the guy who valued
it at $6000. Why because the market price is now $30000. The man who
valued at $6000 will not buy either if tax + market price is $6000.01 or
higher. This is why lost gains from trade occur and people with lower
values hold the land while people with higher values do buy after the tax.

The only way this works if all land owners have no value on the land and
will sell at any price. Then the price drops by exactly the tax and the
same amount of land is sold. This is an absurd notion that I will sell
my land regardless of the going price.
Post by f***@msn.com
Post by professorchaos
It distorts the markets determination of what products are available.
I believe it removes distortions introduced by the subsidization of
land
owners.
How do you subsidize land owners when they are payments in place. If you
are arguing tax breaks that may be in existence mention that. Understand
I am coming from the typical prospective of analyzing a tax that is the
market is efficient before the tax there are no subsidies in place. Not
taxing someone is not the same as subsidizing them.
r***@telus.net
2007-09-11 20:40:32 UTC
Permalink
On Tue, 11 Sep 2007 11:44:14 -0500, professorchaos
Post by professorchaos
Post by f***@msn.com
Post by professorchaos
Post by Andy F.
If it was making enough profit to pay the rent, it's making enough to pay
the tax.
Nonsense. Lets you use the farming business example again. I make $300
in profit a month. The land tax is $400 a month. Prior to the tax I made
$300 profit after the tax I lose $100 a month. That is solely because
the tax. I was profitable before the tax and not profitable after the
tax. The land that was best used for farming before the tax is not used
for farming after taxes. The tax causes a distortion. Just because I was
profitable before the tax does not mean I am profitable after having to
pay the tax.
The assumption is that tax is no more than the land rent.
The only way to do that is a non-uniform rate that has to be set for
each property.
Wrong, stupid. A simple, uniform ad valorem tax rate ensures the tax
is no more than the land rent.
Post by professorchaos
A simple ad valeroum tax will not do that.
That would depend on what you imagine an "ad valeroum" tax is. It is
known that an _ad_valorem_ tax will definitely be no more than the
rent, as the value of the land would become negative if the tax
exceeded the rent.
Post by professorchaos
You do realize
Ricardian rents postulate different rents for different grades of land.
That is kinda the point.

Stupid.
Post by professorchaos
Trying to implement that would cause the cost of administrating the tax
to take up most, if not all the revenue.
That is of course false.
Post by professorchaos
Post by f***@msn.com
You make an additional assumption that the owner profit does not go
down when the tax goes up.
Not necessary. If profit, pre-tax, did go down it makes the point even
more poignant. Before I made $300 a month now I make $200 a month. A
$400 a month tax still drives me out of business.
No, stupid. It has been known for nearly 200 years that a tax on the
economic rent of land cannot possibly drive anyone out of business
other than the landowner, whose sole "business" is to pocket rent for
doing nothing.
Post by professorchaos
Post by f***@msn.com
Since the renter only looks at monthly cost and
doesn't care how this is split between owner profit and tax the owner
profit will go down (aproximately) as the tax goes up.
With lower profits
the land value goes down and the tax goes down until the ROI
aproximates opportunity costs.
You still do not understand if the business on the land was profitable
before and not profitable afterward, then the mix of products change.
No, stupid. _YOU_ still do not understand that a land value tax does
not change the user's rent expense, only who gets it.
Post by professorchaos
Sure someone else is willing to buy the land and invest in something
else and might be able to make a profit. That is not the point.
It is very much the point.
Post by professorchaos
The point is that this tax distorts incentives.
No, it removes a distorted incentive: the incentive to seek rent in
return for doing nothing.
Post by professorchaos
The land was used best for
farming before the tax and used best for something else or by a farmer
growing something else after the tax. It distorts the markets
determination of what products are available.
No, stupid. It removes the distortion caused by giving landowners
something for nothing.

Stupid.

-- Roy L
professorchaos
2007-09-12 08:50:11 UTC
Permalink
Post by r***@telus.net
Post by professorchaos
Post by f***@msn.com
You make an additional assumption that the owner profit does not go
down when the tax goes up.
Not necessary. If profit, pre-tax, did go down it makes the point even
more poignant. Before I made $300 a month now I make $200 a month. A
$400 a month tax still drives me out of business.
No, stupid. It has been known for nearly 200 years that a tax on the
economic rent of land cannot possibly drive anyone out of business
other than the landowner, whose sole "business" is to pocket rent for
doing nothing.
Here we go again making the assumption that the landowner and the
business must two different people. Roy does not understand long run
from short run. Roy is trying to pin short run predictions on long run
actions. As I stated clearly the tax does not affect the short run.
However, becuase the office owners own the land and office or the
McDonald's owns the land and building the rise in tax will cause fixed
cost to rise and can push them out of business in THE LONG RUN. Roy is
trying to apply short run analysis to a long run statement. Why? Because
Roy has a shallow understanding of the concepts and no understanding of
the definitions.

That is all I will say about his nonsense.
Post by r***@telus.net
Post by professorchaos
You still do not understand if the business on the land was profitable
before and not profitable afterward, then the mix of products change.
No, stupid. _YOU_ still do not understand that a land value tax does
not change the user's rent expense, only who gets it.
Note this does not hold to theory.

See

The Surprising Incidence of a Tax on Pure Rent: A New Answer to an Old
Question
Martin Feldstein
The Journal of Political Economy > Vol. 85, No. 2 (Apr., 1977), pp. 349-360

Site Value Taxation and the Timing of Land Development
Richard W. Douglas Jr.
American Journal of Economics and Sociology > Vol. 39, No. 3 (Jul.,
1980), pp. 289-294

"Fairly recently, however, some economists have considered the dynamics
of site value taxation and have concluded that the tax may
produce non-neutral effects ( 2 )

The Incidence of the Property Tax: Old Wine in New Bottles?
Richard M. Bird
Canadian Public Policy / Analyse de Politiques, Vol. 2, Supplement:
Property Tax Reform / La
réforme de l'impôt foncier#. (1976), pp. 323-334.
Stable URL:
http://links.jstor.org/sici?sici=0317-0861%281976%292%3C323%3ATIOTPT%3E2.0.CO%3B2-U

"In a sense, the traditional view of the incidence of the property tax
is that
those who pay the tax over to the government, the owners of property, do
not,
except for owner-occupiers, in fact 'pay' the tax: rather, they shift
the burden
on to tenants and consumers. Oddly enough, the 'new view' of property tax
incidence which has recently surfaced in academic circles is that property
owners do pay the tax - not just the owners of the taxed property, however,
but all property owners."

"What is
commonly taken as the revealed truth about who really pays the property tax
represents no more than the popular acceptance of a set of ideas derived
from
classical economic theory. Recently, new theories have arrived which
threaten to topple the traditional view, at least in some professional
circles."

"A major problem with the conventional approach to the incidence of the
property tax is that this critical dependence of the results of the
analysis on the
specifics of the local situation has been neglected in favour of sweeping
assertions based, at best, on casual and limited observation. If there
is one
thing which the traditional theory makes clear, for example, it is that the
short-run incidence of a property tax increase on low-rent rental housing in
Toronto is almost certain to be different from the incidence of a similar
increase on low-income owner-occupied single-family residences in, say,
Kingston. Yet the usual analysis of property tax incidence lumps the two
together and makes the same (extreme) elasticity assumptions about both."

So it is peer reviewed published work that supports my argument versus
Roy. You decide.

Andy F.
2007-09-11 11:55:48 UTC
Permalink
Post by Andy F.
Post by professorchaos
Post by Andy F.
The only assumption I'm making is that people are rational. If I value
the use of my land at $1000 and the tax is $400, my reservation price
will be $600. If I rent out the land for $600 I save $400 in tax so I'm
$1000 better off.
Yes but whether or not the actual rental price is $600 is not determined
solely by reservation price. Supply is only half of it. Demand plays a
role too. If after the tax people will offer $700 for the land you will
rent at $700. The only way one party absorbs the full amount of the tax
is if their elasticity is exactly zero.
If someone offers me $700 and is willing to pay the $400 tax , they must
value the land at $1100. In which case it's rational and efficient for me
to rent the land to them.
The only way this occurs if the quantity on the market drops showing lost
gains from trade. This means land that would have sold when the price was
$1000, before the tax, WILL NOT SELL. So it may be a zero net change in
surplus on that sale but those who would have bought for $1000 before the
tax can not buy. Therefore it is loss in TOTAL Surplus. The transaction
you speak of may not be a loss in surplus. However, there is a loss in
surplus from those who would have bought per tax and now will not buy
because the market price + tax excludes them.
If you can't buy the land for $1000 (including tax) that means someone else
must value it above $100 (including tax). Since they're getting more benefit
from the land than you would, there isn't any loss of surplus.
The only way this does not occur is one of the elasticities is 0.
The elasticity of supply of land is zero. What I mean by that is that the
land is there, and it's available for use by whoever values it the most,
with or without the tax.
Post by Andy F.
Post by professorchaos
Post by Andy F.
If someone offers me $600 they must value the land at $1000 since they
also have to pay $400 tax.
What you are arguing here is that supply increases and demand decreases.
In this case price would definitely fall. If supply and demand drop by
the same amount then prices stay constant and quantities stay constant.
Elasticities would no longer be an issue.
What I disagree with here is that reservation price will fall. You still
value the land at $1000 it just cost you $400 to keep it. Your valuation
of the land has not changed not in the short run. In the short run fixed
costs are ignored. So if reservation prices do not change in the short
run then supply is constant and demand decreases. Only if the elasticity
of supply is 0 will the price drop by exactly the tax.
Nonsense. I have a $400 tax bill if I keep the land, and a zero tax bill
if I rent it out. So the $400 is clearly going to affect my decision
wether or not to keep the land.
Not in the short run. If I am farmer and I make $300 dollars in profit off
the land then I will stay open in the short run because my price is still
above average variable cost. The tax does not affect variable cost. As
long as I have a revenue above variable cost I will stay in business in
the short run so I meet some of my fixed cost. If I shut down I pay all
the fixed and loose the revenue net of fixed cost. The effect will happen
in the long run. In the long run I shut down if I can not meet all my
fixed costs.
Post by Andy F.
Post by professorchaos
Now if you arguing the long run. This might be true fixed cost coming
into play and my willingness to sell is affected by the profits I gain
from owning the land if I am a business. Yet does it affect my valuation
of the land if I am a conservationist who just wants the land to stay raw?
That makes no difference.If you value the land more than the other
person, for whatever reason, you will outbid them.
Again what determines the value is the point. How does the short run
valuation differ for the log run valuation? Also it does not change the
fact I still think the land is worth $X it does present an opportunity of
cost of holding the land.
Post by Andy F.
Post by professorchaos
Post by Andy F.
No, because the cost of acquiring the land doesn't increase.
Of course it does. If you have to pay $00 on the sale of the land or
$400 dollars at a date later because you own the land makes no
difference. Acquiring the land cost you $400 more than it would, at the
same price, without the tax. So people will want to buy less at all
possible prices, for each price it cost $400 more than it would have
before, demand decreases.
That's just nonsense. The price after tax is very clearly less than the
price before tax, for reasons which have been very clearly explained above.
How much less? It will only drop by the amount of the tax if the
elasticity of supply is 0. I have no problem with the fact market price
drops because consumer incur a tax from the transaction the real question
is how much and that is an empirical question.
Post by Andy F.
Post by professorchaos
Post by Andy F.
No it isn't. If the McDonalds isn't generating enough profits to pay
the rent on the land,
The point it was before the tax. Only the tax changed here. It was
profitable before tax. It is not after. So the tax caused a profitable
business to be unprofitable. It distorted decisions.
If it was making enough profit to pay the rent, it's making enough to pay
the tax.
Nonsense. Lets you use the farming business example again. I make $300 in
profit a month. The land tax is $400 a month. Prior to the tax I made $300
profit after the tax I lose $100 a month. That is solely because the tax.
I was profitable before the tax and not profitable after the tax. The land
that was best used for farming before the tax is not used for farming
after taxes. The tax causes a distortion. Just because I was profitable
before the tax does not mean I am profitable after having to pay the tax.
If the land has a rental value of $400 and the farm only makes $300 then it
isn't a profitable business or an efficient use of the land. The farmer
would be better off renting the land to someone else.
The Trucker
2007-09-11 16:29:58 UTC
Permalink
Post by Andy F.
Post by Andy F.
Post by professorchaos
Post by Andy F.
The only assumption I'm making is that people are rational. If I value
the use of my land at $1000 and the tax is $400, my reservation price
will be $600. If I rent out the land for $600 I save $400 in tax so I'm
$1000 better off.
Yes but whether or not the actual rental price is $600 is not determined
solely by reservation price. Supply is only half of it. Demand plays a
role too. If after the tax people will offer $700 for the land you will
rent at $700. The only way one party absorbs the full amount of the tax
is if their elasticity is exactly zero.
If someone offers me $700 and is willing to pay the $400 tax , they must
value the land at $1100. In which case it's rational and efficient for me
to rent the land to them.
The only way this occurs if the quantity on the market drops showing lost
gains from trade. This means land that would have sold when the price was
$1000, before the tax, WILL NOT SELL. So it may be a zero net change in
surplus on that sale but those who would have bought for $1000 before the
tax can not buy. Therefore it is loss in TOTAL Surplus. The transaction
you speak of may not be a loss in surplus. However, there is a loss in
surplus from those who would have bought per tax and now will not buy
because the market price + tax excludes them.
If you can't buy the land for $1000 (including tax) that means someone else
must value it above $100 (including tax). Since they're getting more benefit
from the land than you would, there isn't any loss of surplus.
I assume the "$100" above is meant to be "$1000". And you are correct.
The "use value" of the land to the prospective buyer and the current owner
will always determine the ACTUAL value even in trade (exchange value/price).
The land is inelastic and will not sink into the ocean as the city of
Atlantis regardless of who the owner might be. All of the tripe
concerning whether or not the current owner can fold the land profitably
gets down to use value and "profitably" is in the minds eye of the current
owner as opposed to being a strict calculus of current returns. Yet the
land is ALWAYS for sale like everything else is always for sale. And the
existence of the land is not responsive to price nor is the actual value.
The value is always based on location.
Post by Andy F.
The only way this does not occur is one of the elasticities is 0.
The elasticity of supply of land is zero. What I mean by that is that the
land is there, and it's available for use by whoever values it the most,
with or without the tax.
Correct!
Post by Andy F.
Post by Andy F.
Post by professorchaos
Post by Andy F.
If someone offers me $600 they must value the land at $1000 since they
also have to pay $400 tax.
What you are arguing here is that supply increases and demand decreases.
In this case price would definitely fall. If supply and demand drop by
the same amount then prices stay constant and quantities stay constant.
Elasticities would no longer be an issue.
What I disagree with here is that reservation price will fall. You still
value the land at $1000 it just cost you $400 to keep it. Your valuation
of the land has not changed not in the short run. In the short run fixed
costs are ignored. So if reservation prices do not change in the short
run then supply is constant and demand decreases. Only if the elasticity
of supply is 0 will the price drop by exactly the tax.
Nonsense. I have a $400 tax bill if I keep the land, and a zero tax bill
if I rent it out. So the $400 is clearly going to affect my decision
wether or not to keep the land.
Not in the short run. If I am farmer and I make $300 dollars in profit off
the land then I will stay open in the short run because my price is still
above average variable cost. The tax does not affect variable cost. As
long as I have a revenue above variable cost I will stay in business in
the short run so I meet some of my fixed cost. If I shut down I pay all
the fixed and loose the revenue net of fixed cost. The effect will happen
in the long run. In the long run I shut down if I can not meet all my
fixed costs.
And when you shut down the trade price of the land will fall from whatever
you have thought it was. The land will be reallocated at the lower
mortgaged price and the new "owner" will then again be profitable over the
discount interest rate. The land will not disappear or be hauled away to
the scrap heap. Only the "owner" is hauled away to the scrap heap.
Post by Andy F.
Post by Andy F.
Post by professorchaos
Now if you arguing the long run. This might be true fixed cost coming
into play and my willingness to sell is affected by the profits I gain
from owning the land if I am a business. Yet does it affect my valuation
of the land if I am a conservationist who just wants the land to stay raw?
That makes no difference.If you value the land more than the other
person, for whatever reason, you will outbid them.
Again what determines the value is the point. How does the short run
valuation differ for the log run valuation? Also it does not change the
fact I still think the land is worth $X it does present an opportunity of
cost of holding the land.
Post by Andy F.
Post by professorchaos
Post by Andy F.
No, because the cost of acquiring the land doesn't increase.
Of course it does. If you have to pay $00 on the sale of the land or
$400 dollars at a date later because you own the land makes no
difference. Acquiring the land cost you $400 more than it would, at the
same price, without the tax. So people will want to buy less at all
possible prices, for each price it cost $400 more than it would have
before, demand decreases.
That's just nonsense. The price after tax is very clearly less than the
price before tax, for reasons which have been very clearly explained above.
How much less? It will only drop by the amount of the tax if the
elasticity of supply is 0. I have no problem with the fact market price
drops because consumer incur a tax from the transaction the real question
is how much and that is an empirical question.
Post by Andy F.
Post by professorchaos
Post by Andy F.
No it isn't. If the McDonalds isn't generating enough profits to pay
the rent on the land,
The point it was before the tax. Only the tax changed here. It was
profitable before tax. It is not after. So the tax caused a profitable
business to be unprofitable. It distorted decisions.
If it was making enough profit to pay the rent, it's making enough to pay
the tax.
Nonsense. Lets you use the farming business example again. I make $300 in
profit a month. The land tax is $400 a month. Prior to the tax I made $300
profit after the tax I lose $100 a month. That is solely because the tax.
I was profitable before the tax and not profitable after the tax. The land
that was best used for farming before the tax is not used for farming
after taxes. The tax causes a distortion. Just because I was profitable
before the tax does not mean I am profitable after having to pay the tax.
If the land has a rental value of $400 and the farm only makes $300 then it
isn't a profitable business or an efficient use of the land. The farmer
would be better off renting the land to someone else.
Who will use it in the way that the location demands or that renter will
also lose his ass. We note that the rent and the use of the land have
nothing to do with who owns the land or with what happens to the funds
paid for rent. Those who use land will pay the cost of the allocation in
a market for such use. Owners and their willingness to sell have no
bearing on the cost of the allocation.

If illegals are removed from the fields of California, the price of the
farmland in California will fall. The price of produce will rise only
marginally and the Mexican farms, having access to labor, will probably be
profitable again. The REAL WAGES earned by a farm hand are improved if
that farmhand is not paying for accommodations in a foreign country. How
did this ridiculous mess ever happen?
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org
professorchaos
2007-09-11 21:29:40 UTC
Permalink
The land is inelastic and will not sink into the ocean as the city of
Post by The Trucker
Atlantis regardless of who the owner might be.
If you are going to use the term inelastic please learn what it means.
Inelastic says that the amount offered for sale will change as price
changes just by a smaller percentage. This has nothing to do with land
being created or destroyed. If the land my home is on is not on the
market and offered for sale at the current price, it does not mean it
suddenly does not exist. Likewise if I offer my land for sale when price
rises but not before it doesn't mean the land was somehow just created
when I offered it on the market. This is why the total land in existence
has little to do with elasticity or what is offered on the market. It is
a completely different measure than supply.
Post by The Trucker
Yet the
land is ALWAYS for sale like everything else is always for sale.
Yeah right. They will you sell me your land for a penny if that is the
going rate? If no. Why not? Maybe because the price has to equal the
value to you before you sell. Land nor anything else is always for sale.
If this were true you would work for a penny if that was the going rate.
Labor is a service sold. How many people will work for a penny given
current prices? This is an absurd notion that land or anything else is
always for sale regardless of price. If you wages were quartered would
you still sell your labor?
Post by The Trucker
And the
existence of the land is not responsive to price nor is the actual value.
Duh. Yet this has nothing to do with any argument about supply or its
elasticity.
Post by The Trucker
The value is always based on location.
And other things. The point is that different locations mean land has
different values to people. Price therefore determines how many parcels
will sell on the market. People with a beach front location will not the
parcel of land when prices is $5 an acre. Someone with a swamp location
may happily take that price. The person with the beach front location
will need a higher price before he sells the parcels located there than
the swamp owner.

You are getting the basis of the logic but refuse to see the
implication. That is prices affect the quantity supplied on the market
(parcels offered for sale). Just because my beach front location exist
does not mean I will sell the land at that location for any price. The
location gives a value to me that the price must equal or exceed for me
to sell.
Post by The Trucker
Post by Andy F.
Post by professorchaos
The only way this does not occur is one of the elasticities is 0.
The elasticity of supply of land is zero. What I mean by that is that the
land is there, and it's available for use by whoever values it the most,
with or without the tax.
Correct!
No it is incorrect usage of the term and this usage has no bearing on
the market. I can have an acre existing and available for use but not be
willing to sell. It is not part of quantity supplied.
Post by The Trucker
Post by Andy F.
Post by professorchaos
Not in the short run. If I am farmer and I make $300 dollars in profit off
the land then I will stay open in the short run because my price is still
above average variable cost. The tax does not affect variable cost. As
long as I have a revenue above variable cost I will stay in business in
the short run so I meet some of my fixed cost. If I shut down I pay all
the fixed and loose the revenue net of fixed cost. The effect will happen
in the long run. In the long run I shut down if I can not meet all my
fixed costs.
And when you shut down the trade price of the land will fall from whatever
you have thought it was. The land will be reallocated at the lower
mortgaged price and the new "owner" will then again be profitable over the
discount interest rate. The land will not disappear or be hauled away to
the scrap heap. Only the "owner" is hauled away to the scrap heap.
No it will disappear the point is the tax distorts what the best use of
the land is. No one ever said the land disappears. This is you and Roy's
absurd notion of supply that says if it exist I sell it regardless of
the price. That is not what is assumed when forming the supply curve. We
can have situations when quantity supplied does not respond to price.
Like I have an inventory that brings me no benefit so I will sell at any
price to get rid of it. This happens when you overestimate demand in
production. However, with land few if any people buy land that has no
value to them. You have to meet their value with price or exceed it for
the person to sell.
Post by The Trucker
If illegals are removed from the fields of California, the price of the
farmland in California will fall. The price of produce will rise only
marginally and the Mexican farms, having access to labor, will probably be
profitable again. The REAL WAGES earned by a farm hand are improved if
that farmhand is not paying for accommodations in a foreign country. How
did this ridiculous mess ever happen?
You can not understand because you do not understand how jobs as land
sales are determined by supply and demand. There is not much demand for
workers in Mexico due to lack of industry. In the US we have strong
demands and have always had much less population than resources. Wages
are higher here so it attracts workers from low demand countries. This
increases supply here decreasing wages.

To understand demand and supply you must first understand what demand is
and what supply is. You have a hard time turning far enough from blind
zealotry to open your mind to learning something.
professorchaos
2007-09-11 17:11:07 UTC
Permalink
Post by Andy F.
If you can't buy the land for $1000 (including tax) that means someone else
must value it above $100 (including tax).
The point is they valued it that way before the tax and would have made
the trade before tax. The person who had $1000 value would have bought
before the trade will not buy now.
Post by Andy F.
Since they're getting more benefit
from the land than you would, there isn't any loss of surplus.
Wrong the person who values at $1100 would have bought before the trade.
The consumer surplus from the sale is lower to this buyer because the
price is higher. The person who would have bought at $1000 does not buy
now so the consumer surplus from that transaction and the producer
surplus from that transaction does not occur. This is a lost gain from
trade (dead weight). It is inefficient.

IFF the price drops by exactly the tax will the quantity remain
unchanged and there are no lost gains from trade. You fail to see the
big picture because you are focused on one plot of land and not the
entire market.
Post by Andy F.
Post by professorchaos
The only way this does not occur is one of the elasticities is 0.
The elasticity of supply of land is zero. What I mean by that is that the
land is there, and it's available for use by whoever values it the most,
with or without the tax.
Here we go again. First we must understand elasticity to understand this
argument. I am really tired of defining the term to people who will not
listen. So she an online textbook. They can be found under teaching
resources at www.rfe.org or look at the discussion with Roy where over
and over again I show the formula for elasticity.

Lets forget about the term for now. In a market a trade only occurs if
the willingness to pay = willingness to sell. Now lets say at price
$1000 landowners sell 10 units of land. This implies that some land have
lower willingness to sell than $1000 and some buyers have a greater
willingness to pay than $1000. Now after the tax the price the buy pays
is $1100, after tax, and the seller recieves $900. In other words $200
is the tax incurred because the owner will now own the land. What will
happen? The amount of land available for use does not change. The amount
that owners will want to sell does change. At market price $900 those
who had a reservation price of $1000 will not sell. At after tax cost of
$1100 those who valued the land at $1000 will not buy.

This shows that all though the land is still available for use, IT IS
NOT SOLD. All buyers with a willingness to sell from $900.01 to $1000
would have sold before tax to buyers with a willingness to pay from
$900.01 to $1000. This is shift of land from people with lower values to
people with higher values that occurs with no tax. IT NO LONGER OCCURS
BECAUSE THOSE WOULD SELL AT $900.01 TO $1000 DO NOT SELL. THOSE WHO
WOULD BUY AT PRICE $900.01 TO $1000 DO NOT BUY. THE RESULT IS THAT LAND
THAT WOULD HAVE GONE TO PEOPLE WHO HAVE HIGHER VALUE DOES NOT AFTER THE
TAX. Sure all of those will with willingness to sell of $1100 or higher
and willingness to buy of $1100 or higher still make trades that sends
land to someone with a higher but there is some land that is still owned
by people with a lower value than a buyer would pay if not for the tax.
These trades that would increase surplus are blocked. So you have some
people who put a higher value on the land not being able to buy the land
from those with a lower value solely due to the fact that the tax puts a
wedge between the price the buyer pays and the seller receives.

Granted if your argument is right that reservation prices drop by the
tax (supply increases while demand decreases) this would not happen. I
know for owners using the land for profit this will not happen in the SR
but perhaps the long run. I haven't really had time to think it out
when applied to non-business land like housing. So I am not totally
dismissing it.

The other way this does not occur is if supply is constant and EVERY
owner has the SAME willingness to sell. In this case the land offered
for sale on the market will not change. I see this as an absurd
proposition that ignores the theory of Ricardian rents and assumes all
land is the same or that all owners have no value on the land and are
speculating.

Despite this being a traditional assumption, it is highly fallacious. It
says I will offer my land for sell regardless if the price is $.01 or $1
million. I still want to sell. It doesn't hold up to data or logic.
Obviously people buy land because it has value to them. The value to the
owner of the land that is a pristine beach will higher than the value to
the owner of swamp land. It will take a higher price for the owner of
beach front land to sell than the it would for the owner of swamp land
to sell.
Post by Andy F.
Post by professorchaos
Post by Andy F.
Post by professorchaos
Post by Andy F.
If someone offers me $600 they must value the land at $1000 since they
also have to pay $400 tax.
What you are arguing here is that supply increases and demand decreases.
In this case price would definitely fall. If supply and demand drop by
the same amount then prices stay constant and quantities stay constant.
Elasticities would no longer be an issue.
What I disagree with here is that reservation price will fall. You still
value the land at $1000 it just cost you $400 to keep it. Your valuation
of the land has not changed not in the short run. In the short run fixed
costs are ignored. So if reservation prices do not change in the short
run then supply is constant and demand decreases. Only if the elasticity
of supply is 0 will the price drop by exactly the tax.
Nonsense. I have a $400 tax bill if I keep the land, and a zero tax bill
if I rent it out.
What? You don't avoid paying the tax if you rent unless you can pass the
tax fully to the rent. The traditional assumptions say taxes can not be
passed to the renter. More modern papers, late 20th century, show that
the tax is shared by owner and renter. Renting the land does not avoid
the tax only selling it does.
Post by Andy F.
Post by professorchaos
Nonsense. Lets you use the farming business example again. I make $300 in
profit a month. The land tax is $400 a month. Prior to the tax I made $300
profit after the tax I lose $100 a month. That is solely because the tax.
I was profitable before the tax and not profitable after the tax. The land
that was best used for farming before the tax is not used for farming
after taxes. The tax causes a distortion. Just because I was profitable
before the tax does not mean I am profitable after having to pay the tax.
If the land has a rental value of $400 and the farm only makes $300 then it
isn't a profitable business or an efficient use of the land. The farmer
would be better off renting the land to someone else.
This based on the fallacious assumption that renting the land avoids the
tax. This is only true if the tax can be fully passed to the renter.
This would imply that the elasticity of demand for rental land is
perfectly inelastic. There is no reason to assume that.

Do you understand that the tax is on the owner of the land and based on
an estimation of the going price of the land? You still own the land you
are still tax if you rent. If the elasticity of supply of rental land is
not 0 some tax will be shared with renters but iff and only if the
elasticity of land for rent is not 0.
r***@telus.net
2007-09-11 21:02:57 UTC
Permalink
On Sun, 09 Sep 2007 09:43:34 -0500, professorchaos
Post by professorchaos
If after the tax people will offer $700 for the land you will
rent at $700.
Thanks for proving that the elasticity of supply for land is indeed
zero.
Post by professorchaos
Post by Andy F.
If someone offers me $600 they must value the land at $1000 since they also
have to pay $400 tax.
What you are arguing here is that supply increases and demand decreases.
No, stupid, he isn't.
Post by professorchaos
In this case price would definitely fall. If supply and demand drop by
the same amount then prices stay constant and quantities stay constant.
No, stupid. The rent stays constant because the advantage of using
the site stays constant.
Post by professorchaos
What I disagree with here is that reservation price will fall. You still
value the land at $1000 it just cost you $400 to keep it. Your valuation
of the land has not changed not in the short run. In the short run fixed
costs are ignored.
Thank you for proving that you are stupid.
Post by professorchaos
So if reservation prices do not change in the short
run then supply is constant and demand decreases. Only if the elasticity
of supply is 0 will the price drop by exactly the tax.
Now if you arguing the long run. This might be true fixed cost coming
into play and my willingness to sell is affected by the profits I gain
from owning the land if I am a business. Yet does it affect my valuation
of the land if I am a conservationist who just wants the land to stay raw?
Your "valuation" of the land is not its market value, stupid.
Post by professorchaos
Post by Andy F.
So the land goes to whoever values it the most, and the tax is economically
efficient.
Post by professorchaos
Post by Andy F.
Post by professorchaos
That being said one must realize that improvements are similar to
capital accumulation. They occur from retained profits. If unimproved
land taxes lower profits then firms have less to spend on capital
improvements and in the long run a tax on unimproved land does affect
improvements. There is a short of crowding out that occurs when tax
revenue replaces investment. The effect is not entirely clear though
because less investment demand should decrease interest rates offsetting
the effect at least some.
Improvements aren't all paid from retained profits.
That is not the point. Improvements in business only happen if the return
on the investment exceeds the cost. When unimproved land tax rise it
causes returns to drop because of the extra fixed cost involved in
acquiring the land. The opportunity cost of holding the land and using it
rises.
No, because the cost of acquiring the land doesn't increase.
Of course it does.
No, stupid, it falls.
Post by professorchaos
If you have to pay $00 on the sale of the land or
$400 dollars at a date later because you own the land makes no
difference. Acquiring the land cost you $400 more than it would, at the
same price, without the tax.
But the price is not the same, stupid.
Post by professorchaos
So people will want to buy less at all
possible prices, for each price it cost $400 more than it would have
before, demand decreases.
No, stupid, because the landowner just gets less.
Post by professorchaos
Post by Andy F.
Post by professorchaos
Yes there would be. Redistribution does not change the fact that my
McDonald's franchise is no longer making money after the rise in fixed
cost so I sell to someone who would build a home on the property. I am not
saying having a McDonald's is better than having a home. Only that in the
market before the tax there was a higher value to the owner of the
McDonald's than the homeowner. Land has shifted from someone who values
the land more to some who values the land less. That is inefficient.
No it isn't. If the McDonalds isn't generating enough profits to pay the
rent on the land,
The point it was before the tax. Only the tax changed here. It was
profitable before tax. It is not after. So the tax caused a profitable
business to be unprofitable. It distorted decisions.
No, stupid. It _removed_ a distortion that was causing an
unproductive, inefficient business to make profits.
Post by professorchaos
Post by Andy F.
it isn't a profitable business.The owner would be better
off pulling it down and selling the land to someone else.
This is only the case after the tax.
No, it is also the case before the tax, because the other user is
willing to pay more for the site than the McDonalds was making in
profits.

Stupid.
Post by professorchaos
You have the most value on the land
by McDonald's before tax and someone else gets the land after the tax.
False, as proved above. The other user is willing to pay more to use
the land than the McDonalds was making in profits. You are just too
stupid to understand that.

You are stupid, John. STUPID. I don't know any clearer way to
explain that.
Post by professorchaos
That person who buys the land after the tax had a lower value before tax
or they would have owned it.
Ah, no, stupid, they didn't own it because the absence of the tax was
deceiving the McDonalds owner (who was just as stupid as you) that
because he was making profits, his business must be productive. But
in fact, his "profit" was merely land rent.
Post by professorchaos
The tax influenced decisions. It
redistributed land from someone with a higher before tax value to
someone with a lower before tax value.
Wrong, as proved above.
Post by professorchaos
Post by Andy F.
This is true
wether or not there's a tax on the land.
No because the business was profitable before tax and not profitable
after the tax. The tax has changed the mix of products produced.
To a more efficient mix. Right.
Post by professorchaos
Post by Andy F.
Post by professorchaos
Can you define fixed costs? If I own land with a business on it how could
a tax on the land NOT affect my fixed cost. No it is not a variable cost,
the tax has to be paid rather I make 0 or 1000 units. In the short run it
has no effect. However, it is a fixed cost I have to pay it if I am going
to use the land. This is still cash flow out and it still lowers profits.
If in the long run that fixed cost increases causes my fixed, variable,
and opportunity cost to exceed revenue I shut down and sell the land to
someone who I would have outbid for the land if the tax was not in place.
That is inefficient.
You keep repeating the same fallacy.
Yes, because that is the only thing John knows how to do.
Post by professorchaos
Post by Andy F.
The people you're bidding against have
to pay the same tax as you. So if they weren't outbidding you before the tax
they won't outbid you after the tax.
That is only true if the quantity sold on the market does not decrease.
Which we know it doesn't, because the elasticity of supply for land is
zero, as I have already proved to you multiple times. You just refuse
to know that fact, because it disproves your false beliefs.
Post by professorchaos
If quantity sold decreases then someone who had has a higher value on
the land than market price + tax will not get the land.
Wrong again, stupid.
Post by professorchaos
You are assuming the reservation price drops because of the tax. This
would assume the willingness to sell changes and supply increases.
No, it assumes that most people, being far more intelligent than you,
would rather make money than lose money.
Post by professorchaos
Short
run decisions are not affected by fixed costs so the increased in fixed
cost has no effect on short run willingness to sell.
?? ROTFL!!! Riiiiight.

God, you are stupid. S - T - U - P - I - D.

If the government imposed a tax of $1K/week on your car, how long
would it take you to become willing to sell it, hmmmmm?

Stupid.

-- Roy L
The Trucker
2007-09-10 04:57:49 UTC
Permalink
Post by professorchaos
Post by The Trucker
Post by professorchaos
Post by The Trucker
Hell... I thought you were talking about a tax on land as opposed to a
tax on markets. A tax on markets would be a transaction tax of some kind.
A tax on land affects markets just as if you taxed the sell of land.
NO.
Post by professorchaos
A
question to help explain the concept. Lets say you had $1500 a month to
spend on the mortgage for a house.
The relevant point is that I have $1500 a month to spend on a home I will
USE.
Post by professorchaos
You love a certain home that would
cost $1500 in mortgage notes a month before tax. Would you buy the home
without a tax?
Sure...
Post by professorchaos
Would you buy the home if the tax bill was $500 a month?
NO.
Post by professorchaos
Clearly in this example you would buy the home when there was no tax and
not buy the home with the tax. Why? Simply because tax payments are
included in your purchase price.
As you have presented it that is true. However: What if the tax on the
LAND decreased the value of the LAND so as to make the mortgage still
be $1500 a month.
The only way this will happen if the elasticity of supply is 0 that is
the heart of the heart of the argument.
When we speak of taxation we always speak of revenue neutrality. We do
not speak of increasing or decreasing taxes. A tax cut in one place
must be balanced against a tax hike somewhere else. I know that
Republicans believe that to be a "hokey" theory, but most of the sane
people still subscribe to this antiquated view. In a tax shift if the
government shifts taxation onto land then it is assumed that the
government will shift taxes off something else. Maybe even off of income
or sales or excise (all of which are transaction taxes -- taxes on trade).
It is imperative to keep this in mind. It is also why focusing on price
is erroneous and why focusing on value is the correct economic point of
view. If taxes are shifted from general income taxes to special tax breaks
on mortgage interest that home owners and land owners will benefit at the
expense of other tax payers. The secondary effects might increase or
decrease total tax revenue, but if we remain revenue neutral then this
will mollify the original shift somewhat. It will not overcome it.

The proposition is placed on the table that I have a use value (an
appreciation of) a home to the tune of $1500 and that then I am told that
the tax on that home will add an additional $500 per month, and will I now
adjust my use value to $2000 per month and my answer was "no".

HOWEVER (and didn't ya know there would be a however:)

My retort is that taxes can be adjusted to where the $1500 includes
the tax if the tax is more realistic (the proposed quantity is way out of
whack with reality). Let the proposition be for $187.50 as opposed to
$500 because that is more the mean on the tax situation according to this
mean old house I happen to live in at present. The value of my house
cannot be imputed from the 1500 BTW. I imputed a value that fit the
on-line mortgage calculator to produce a $1500 per month debt service
payment over 30 years at 7%. Improvement value in this case $162k and
land value is 63k (these values are imputed from the distribution of value
on my tax assessment but the numbers do not reflect the actual price of my
home or the land). Combined tax rate = 1%. $2250 per year taxes. This is
called at least an attempt at reality in numbers.


The following rig illustrates the proper relationships that govern the
price of real estate and the mortgage. We note that price
and "use value" are not the same. The use value is the rent and it is
constant or very slowly changing as the area surrounding some physical
location attracts more and more bidders for land rights near the cause of
the clumping (jobs, opportunities for trade, or whatever). The tax rates
and interest rates do not change the use value. The use value of land in
death valley is zip because I can't get a job there. In the example given,
the use value of the home was $1500 per month.

P = R / ( i + t ) where P is the price (sale value), $225000
R is the rent (use value), $18000 (1500/mo) includes principle
i is the interest rate, .07 = $15750 ($13125/mo)
t is the tax rate .01 = $2250 ($187.50/mo)

IMPROVEMENTS:

P = $162,000
R = $12960 = ($1080/mo)
i = .07 = $11340 ($945/mo)
t = .01 = $1620 ($135/mo)

LAND:

P = $63,000
R = $5040 = ($420/mo)
i = .07 = $4410 ($366.67/mo)
t = .01 = $630 ($52.50/mo)

In this setup the tax man gets $2250 per year out of the deal.
The first tax shift is a shift from taxation of improvements and land
value to placing all the tax on land value. The shift is revenue neutral
and homeowners and businesses pay the same amount of tax as they did
before. The tax rate increases from 1% on land to 44.3% and the tax on the
improvements goes to zero. Revenue neutral. Home buyer neutral. Home
owner neutral. Business man neutral everyone neutral other than the land
speculator that is sitting around sucking on a land deed and making no
contribution whatever to the society. It ain't neutral for him. He is
gonna get the big greasy wrench. The value of his vacant lot will take a
very real hit as the potential sales price goes rather swiftly into the
ditch. Nobody wants to pay $187.50/mo. to look at a vacant lot.

P = $11359
R = $5040
i = .07
t = 44.3

Due to the tax shift the price of the land just fell $51,641. The
location is still worth $5040 per year because I still have the same
income at the job that I have in this area (the reason I am here). It
matters not to me WHO I pay the tax/land-rent. It is what I pay to occupy
this home in this location. The same house in death valley is not the
same value.

P = $185143
R = $12960
i = .07
t = .00

The price of the improvements has increased. The house is still worth the
$12960 per month to me for the same reasons. But the builder now gets $23K
more for the effort of building it. Perhaps the actual worker bees will
get a raise.

The total price of a COMPARABLE NEW home after the tax shift is $196502

P = $196502 (total of land price and improvement price)
R = $15687 $1307.26/mo (from mortgage calculator) includes principle
t = .01145 $2250/yr 187.50/mo
i = .07 $13755/yr $1146.26/mo

SOOOO!!! People who want to own their own home so as to have a place to
live and not pay rent when they get old, and to be able to improve their
homes and such will now be able to afford to buy a home. They will pay
$1494.50 per month for this home of their dreams and that includes taxes
and principle.

The fake Republican economy just bit the dust. People will get paid more
(the people that built the house got more pay), and the need to borrow
against the value of their homes will decline.


The "land owners" don't set the price of the land. As the price falls
more land becomes available for development as the "owners' attempt to
get rid of their tax liability. The supply increases as the price falls.
This seems to run counter to the concept of the standard supply demand
theory, and it may illustrate a reverse demand elasticity of land AND
locations. Or it may illustrate inelasticity of land and locations. I
have no idea any more. Nor do I care. Value matters. Prices follow.

All of this is being done to illustrate that a tax on unimproved land
puts more land on the market lowering the price and making housing much
more affordable for regular working people. Tax breaks on income tax
actually engender an increase in land prices and are also a real giveaway
to the mortgage brokers. What always matters is the use value; and the
monthly cost of the home. Prices and speculation and income from money
creation are based on tax cuts.
Post by professorchaos
I have no doubt that if sellers did change the amount of land offered
for sale on the market that the tax would have no effect on trades.
But you have no doubt that Jack climbed a beanstalk. The number
of locations offered for sale will not change. But most certainly the
trade prices of land parcels will change. That is an indication even by
your definition of "inelasticity".
Post by professorchaos
As I
have argued because in differences in reservations or you argue
difference in what ever you define as use value in the land will some
owners will decide to not sell at the lower price.
I do not argue that current and projected prices will change an owner's
willingness to sell or to hold regarding unused land. I argue that the
owners have no control over these prices nor do the people who need to use
the land. The owners do not just decide one day en-mass to drop their
reservation price because they didn't like the way the sky looked. The
buyers also do not have control. The taxing authority and the monetary
authority have control over the vacillating exchange price of land. And
there is, in addition, the effect of population both national and
proximate and, hopefully, the counter balancing effects of technological
innovation and real capital development. But the "land owner" has no
control over any of this but for his control of government taxation
methods as he bribes the congress and gives money to the schools of
neoconomic liars.
Post by professorchaos
Post by The Trucker
As it decreased the price of the house + land to a point where the
total outlay was still $1500 per month. I would probably still buy the
house based on the same assumptions. 1)I really like the House, and 2)
I have the $1500 to spend on the house.
Yes but you have to have sellers still offer the same amount of land on
the market when price changes for that to happen. If the tax distorts
the sellers incentive to sell to sell because of lower prices then the
it will cause an inefficiency.
It may be that inefficiency is in the eye of the beholder here. The
potential _VALUE_ of land to an acquiring _USER_ of the land is not
directly altered by a tax on value (projected sales price for you). Such
an adjustment merely moves the projected cost of use from interest to
taxes because the trade price of the house falls in response to the
increased cost of HOLDING THE LAND OFF THE MARKET. Interest is paid (or
foregone) on the money that was spend on the land AQUISITION. A tax on
value will reduce the trade price of the land. Then taxes are paid to the
gummint over the term of use as opposed to paying this money in the form
of "interest" to a mortgage provider. In the first order it does not
matter to the user of the land whether the money he pays for the use goes
to the gummint as taxes or to a banker as interest. But a gain to
productive people ensues when the debt service is less due to the
total price of the real estate being reduced. A revenue neutral tax shift
as opposed to a tax increase/decrease leaves the user of the land in a lot
better shape than the land owners that hold land off the market. The sales
price changes due to the tax treatment and the number of sales will not
necessarily change as a first order effect. If the number of sales changes
it will be in reverse of what Marshall would propose. The "availability"
of land parcels will increase as the anticipated future prices fall (e.g.
the speculation value erodes).
Post by professorchaos
The price will not drop the full amount
of the tax and sellers and buyers will share the burden of the tax.
I have shown that your claim is horsecrap. The cost of simply holding
the land rises as the land tax increases. It costs the holder to just
keep it and leave it idle. The cost of holding it for future return rises
such that owning the stuff for speculative purposes is not beneficial and
the price falls.
Post by professorchaos
That
is the after tax price be slightly higher to the buyer than before and
lower to the seller than before.
The higher lower depends on the type of tax. A phaseout of the special
income tax treatment on mortgages has no direct effect on the
holder/seller of land while it does offer a direct hit to the current user
of a home. The indirect effects will lower the price of homes
but the current home dwellers will suffer a direct loss unless other taxes
are adjusted at the same time. In this case the price of the land will
fall in response to slower demand for home purchases. The user/buyer will
get the short end of the stick because the tax hits the user/buyer
directly and first. It is that hit that quells the demand. In some cases
it may prompt a abandonment of a mortgage or a sale at a loss. The fall in
prices is a secondary "lagging" effect. But let us assume a revenue
neutral adjustment and allow that the overall income tax rates will be
adjusted downward to balance out the revenue gains from doing away with
the mortgage subsidy. In this case nobody takes a hit but for the fact
that land prices and resale prices will fall as the advantage to home
ownership is now less than it was and more people will move into
apartments and town homes where they don't have to cut the lawn or harvest
the dandelions. The loser in this deal is the mortgage brokers.
But the cost of living has not changed only the cost of home ownership as
versus apartment living or renting. Only the speculative value (i.e.
resale price) is altered.

The direct effect of an increase in land value tax (property tax on
unimproved land) will be to increase the cost of land ownership regardless
of whether the land is being used or not. This is much more to the
disadvantage of the land holders/speculators than it is to the
users/buyers of land. Let us assume a revenue neutral tax shift and cut
FICA taxes to offset the revenue gain from the land tax. The land holders
are hit first and the prices fall because the cost of just sucking on a
land deed has risen. Making the tax increase revenue neutral benefits the
productive members of the society but the land holder does not receive
that benefit. The use and benefit of land rises while idle speculation
gets the green weeny.
Post by professorchaos
Only if the elasticity of supply is
exactly zero will the market price drop to $1000 and everything be equal
as before.
snore...
Post by professorchaos
As your arguments and mine support a change in price will
cause sellers to sell less on the market.
I do not recall making such a case. My points have always been about WHY
the price changes as opposed to what happens because the price changes. I
am not certain what that has to do with elasticity but to me this fencing
over words is silly. The fact is that the holders/sellers of land do not
control the prices if government can tax the hell out of em. They cannot
sit there and suck on a land deed denying productive use of the land to
people until those people pay what they (the land holders) demand. The
holders of land provide no economic benefit to anyone other then
themselves. There is nothing that they do as owners that produces
anything at all. Taxing them simply makes more land available for actual
use and it has no negative effect on production if other taxes are
properly adjusted in a revenue neutral manner. I have no idea what that
FACT translates into in Wonderland.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org
professorchaos
2007-09-10 06:44:12 UTC
Permalink
Post by The Trucker
When we speak of taxation we always speak of revenue neutrality.
Maybe you do but that is not how we analyze one tax at a time. If you
have revenue neutrality then you have to analyze what you are cutting
and what you are increasing.
Post by The Trucker
In a tax shift if the
government shifts taxation onto land then it is assumed that the
government will shift taxes off something else.
Why should we assume this? This is the way things should be if we want
to keep revenue constant and seek better efficiency but why should we a
priori assume this policy will be adhered to. Neither party has done it.
Where were the tax raises to offset the cuts under Reagan? When were the
tax cuts to offset the tax increase under Clinton? Careful the middle
class tax cut was only talked about.

The scenarios given say nothing about this. However, there have been
arguments that involve this sort of thing. For instance, my argument
that shifting from an income tax to a land tax may or may not create a
bigger deadweight loss. Although supply of land is rather inelastic so
is the supply of labor. Labor study after labor study has shown labor
supply to be very inelastic except for married women with children and
perhaps a few of the very wealthy.

So if we are talking shifting taxes then we must ask which is preferred.
Public Finance gives a criteria for that. The tax gives the least dead
weight and the least administrative cost is preferred. So if income
taxes cost less to administer. Which I think they might. Then net
revenue per 1% of income tax is greater than net revenue for 1% of a
land. This means the income tax can be set at lower rate than the
property tax.

This is where you need good data and good empirics to determine which
has the lost total dead weight loss. If supply of labor is perfectly
inelastic and supply of land is perfect inelastic. This is easy the one
with the lower cost of collecting the tax wins because the rates will be
smaller and result in dead weight loss. Where it gets confusing and you
need good data is a 5% land tax gives a dead weight loss of 5 and a 5%
income tax gives a dead weight loss of 7 and the lower cost of
administering an income tax means revenue from 2% income taxes give the
same revenue as a 5% land tax.
Post by The Trucker
Maybe even off of income
or sales or excise (all of which are transaction taxes -- taxes on trade).
It is imperative to keep this in mind.
Why when it never happens? Only on the federal level would this be the
case because the constitution bans an income tax and a sales tax. The
Federal government can have one or the other but SLGs are not bound by
this.
Post by The Trucker
It is also why focusing on price
is erroneous and why focusing on value is the correct economic point of
view.
What value? Some undefined use value of the land we can not estimate.
The value to the potential buyer showed by the price he was willing to
pay? The value to the seller shown by the price he is willing to sell.
You have yet to define value in any tractable estimable way. You stick
to some hokey notion of use value in which a dollar amount is impossible
to put on.
Post by The Trucker
If taxes are shifted from general income taxes to special tax breaks
on mortgage interest that home owners and land owners will benefit at the
expense of other tax payers.
You mean if taxes are increased on everyone and some get breaks. Your
wording makes it sound like taxes are decreasing.
Post by The Trucker
The secondary effects might increase or
decrease total tax revenue, but if we remain revenue neutral then this
will mollify the original shift somewhat. It will not overcome it.
Will mollify the shift in way? Dead weight loss?
Post by The Trucker
The proposition is placed on the table that I have a use value (an
appreciation of) a home to the tune of $1500 and that then I am told that
the tax on that home will add an additional $500 per month, and will I now
adjust my use value to $2000 per month and my answer was "no".
I never said that. I said that the value would still be $1500. Your
value would increase. You would still say the land is worth $1500.

The price to the buyer is $500 higher because by buying the property he
must pay $500. This is just like a unit tax on sales. I think the
confusion may be that you are equating sales taxes with ad valoreum
(percentage of the price taxes). A sales tax can say $500 a unit. That
is what the property tax does. If you want the property you have to pay
$500 more. It does not matter if you pay at the time of the sale or in 6
months time. The action of buying the property has a tax consequence.
Post by The Trucker
HOWEVER (and didn't ya know there would be a however:)
My retort is that taxes can be adjusted to where the $1500 includes
the tax if the tax is more realistic (the proposed quantity is way out of
whack with reality). Let the proposition be for $187.50 as opposed to
$500 because that is more the mean on the tax situation according to this
mean old house I happen to live in at present.
You can lower the tax and it still will not change the fact you say the
property has a value to you of $1500.

Actually the best argument I have seen so far has been Andy F's that
says it will drop your value because you have to pay $500. So land the
land has less value to you because you have to pay the tax. I don't
agree with it but it is the best reasoned argument I have seen on this
issue that counters theory.
Post by The Trucker
The following rig illustrates the proper relationships that govern the
price of real estate and the mortgage. We note that price
and "use value" are not the same.
Of course not Aristotle. We can observe price and we can estimate or ask
people what they would pay for something or sell something for but we
can't estimate use value. That is why I call it hokey mystical.

I will read a little more to see how this supposedly illustrates price
of real estate and mortgage which is not the discussion here but I will
read.
Post by The Trucker
The use value is the rent
Rent in what sense? Ricardian?
Post by The Trucker
and it is
constant or very slowly changing as the area surrounding some physical
location attracts more and more bidders for land rights near the cause of
the clumping (jobs, opportunities for trade, or whatever).
Ok so it isn't Ricardian rather a market definition of the price of a
lease.
Post by The Trucker
The tax rates
and interest rates do not change the use value.
No they affect demand for the land which affects land prices and rents.
If you were to substitute use value for willingness to buy on the buyers
or willingness to sell on the seller's part. I think you might
understand the argument better.
Post by The Trucker
The use value of land in
death valley is zip because I can't get a job there. In the example given,
the use value of the home was $1500 per month.
P = R / ( i + t ) where P is the price (sale value), $225000
R is the rent (use value), $18000 (1500/mo) includes principle
i is the interest rate, .07 = $15750 ($13125/mo)
t is the tax rate .01 = $2250 ($187.50/mo)
P = $162,000
R = $12960 = ($1080/mo)
i = .07 = $11340 ($945/mo)
t = .01 = $1620 ($135/mo)
P = $63,000
R = $5040 = ($420/mo)
i = .07 = $4410 ($366.67/mo)
t = .01 = $630 ($52.50/mo)
In this setup the tax man gets $2250 per year out of the deal.
For the one piece of land? This is too simple you are only calculating
the willingness to buy. Just because you are willing to pay a price of
162,000 after tax does not mean someone will sell. The ONLY way that
works if the amount of land offered for sell does not change when prices
change. That is the key to the discussion. Roy is hooked only old
assumption that the amount of sell for land does not change with price.
This is absurd to say that someone would sell as beach front property
for $1 as they would swamp land when prices are low. I argue this is not
true. Beach land will not sell unless the price is sufficiently high.
Owners of a swamp will take almost anything you give them. So at low
prices less land is offered for sell because the owners of the beach
front property place a value on the property (willingness to sell) that
is higher than the current price so they will not sell. Note I use value
as a dollar amount they are willing to sell. That is the value to them
in dollars revealed by the offering of the land on the market at that
price.
Post by The Trucker
Nobody wants to pay $187.50/mo. to look at a vacant lot.
Again you miss the point here just what people want to pay does not
determine price and quantity sold on the market. It is also determined
by the minimum price owners will sell at. They have the option to keep
the land and use it for whatever use they were using it for before tax.
You and Roy assume owners are speculators who will sell because the land
brings them nothing. Surely not all owners are speculators many bought
because the land has a value to them. Either a stream of profits or a
location they really enjoy. They will not sell unless the offer equals
or exceeds the value THEY put on the land.
Post by The Trucker
P = $11359
R = $5040
i = .07
t = 44.3
Due to the tax shift the price of the land just fell $51,641.
Such one legged analysis can not determine price. You have only
determined willingness to sell. If the owners will not sell as much land
on the market as people want to buy at the price you quote, the price
must rise. This may be due to Ricardian rents. Different grades of land
give different values. Profits above normal can be gained simply because
the land is better. If Ricardian rents exist then the argument that all
land in existence will be offered for sell at all prices is false.
Post by The Trucker
The
location is still worth $5040 per year because I still have the same
income at the job that I have in this area (the reason I am here).
To whom, the original owner? The potential buyer?
Post by The Trucker
It
matters not to me WHO I pay the tax/land-rent.
No it doesn't.
Post by The Trucker
It is what I pay to occupy
this home in this location.
At what price is necessary to make the owner decide to rent instead of
use the land for whatever other purpose he wants. The opportunity cost
of renting is the inability to use the land for another purpose. If I am
farmer I will only rent you a plot or let you share crop if the rent you
pay is equal to or exceeds the profit I would get from the land from
farming myself. The fallacy is that if the land is not rented or sold it
lays fallow. In other words you are assuming land has no value to the
owner only to the buyer. This only works if only speculators own the
land. If this were true you and Roy might be right. It certainly is not
true.
Post by The Trucker
The fake Republican economy just bit the dust.
What is Republican or democrat about this?
Post by The Trucker
People will get paid more
(the people that built the house got more pay), and the need to borrow
against the value of their homes will decline.
You are beyond stretching here. I am glad I have my hip waders on.
Post by The Trucker
The "land owners" don't set the price of the land.
No supply and demand determine price.
Post by The Trucker
As the price falls
more land becomes available for development as the "owners' attempt to
get rid of their tax liability.
Why would they do this if the land has value to them and/or can still
turn a profit after tax. Why would I suddenly sell my farm that makes
$10,000 a month for hay cut to feed cattle if the taxes went up $500. I
simply would not unless someone offered me $9,500 or higher. Supply
determines price just as much as demand. To quote Marshal, "To argue if
supply or demand determines price is to argue if the top or the bottom
blade of scissors cuts the paper.
Post by The Trucker
The supply increases as the price falls.
No it does not. Quantity supplied will not increase nor will supply. You
example does not show this. You are asserting it. You are assuming a
higher tax will automatically make people sell more land at all prices.
As I explained to Andy business will not do this in the short run. The
tax is a fixed cost and DOES NOT affect short run shutdown or production
decisions.

Even if you were correct it is the change in supply causing prices to
fall not the other way around. You really do not understand supply and
demand. Learn what it is and the predictions before you try to overturn it.
Post by The Trucker
This seems to run counter to the concept of the standard supply demand
theory, and it may illustrate a reverse demand elasticity of land AND
locations.
What do you even no what you elasticity is? What do you mean by reverse
demand elasticity? That the elasticity is positive? That would mean that
demand is constant but people buy more as price rises. This is
empirically and theoretically wrong. Even if you example was right a
negative elasticity of demand would be consistent with quantity sold
increasing after an increase in supply. If it were a reserve elasticity
of demand and the elasticity was positive quantity would fall after an
increase in supply not rise.
Post by The Trucker
Or it may illustrate inelasticity of land and locations. I
have no idea any more. Nor do I care. Value matters. Prices follow.
Value in what sense? If you are using use value as I use willingness to
buy or willingness to sell then yes. The value people put on a good
which is what they will sell it for or buy it for, which you can make an
argument is use value if you want, determines the supply and demand
curves. The supply and demand curves change price. A tax changes
someone's value on the good. I would pay $5 market price for the candy
bar but because you tax $1 a candy bar owned(or bought or consumed it
doesn't matter) it will cost me $6 to buy the candy. I will no longer
buy the bar if the market price is $5. Why? Because I put a value of $5
on it and it will cost me $6 dollars to buy it. You can call that
willingness to buy use value if you want. I don't because use value is
hard to define and can not be observed. I can observe who much you are
willing to pay.

The same goes for supply. In theory, we ask people how much they would
sell at $1, $2, ..., $N. We tallying the total that people will sell at
each price. So quantity supplied is X when price is $1. The collection
of quantity supplied paired with prices is called supply. What motivates
quantity supplied? The value they place on the good. In production it is
the cost of producing it. In land or art or anything not produced it is
the dollar value the owner places on it. Again you can call that use
value. I don't because I can't observe use value. I can observe how much
they are willing to sell a unit for.

So you are correct here. Value does come first in determining demand and
supply. If value changes the curves change. Perhaps land in Spain is no
cheap enough for me to want to pay the cost of moving. I longer have a
demand for land in the US and the demand curve shifts downward.
Post by The Trucker
All of this is being done to illustrate that a tax on unimproved land
puts more land on the market lowering the price and making housing much
more affordable for regular working people.
More than what? It only lowers price and leads to more land sold if it
is a move from a tax on improved to unimproved and even then that is
questionable. Market prices may drop but it is not necessiarly more
affordable. The tax must be paid. At best the price drops enough to
compensate for the tax.
Post by The Trucker
Tax breaks on income tax
actually engender an increase in land prices and are also a real giveaway
to the mortgage brokers.
Yes but is that increase in prices greater than if the after tax price
of land under an unimproved land tax? That is something I can not
answer. Market price drops with the unimproved tax but it is because
demand decrease due to having to pay the tax. After tax price (price +
tax) may be more or the same.
Post by The Trucker
Post by professorchaos
I have no doubt that if sellers did change the amount of land offered
for sale on the market that the tax would have no effect on trades.
But you have no doubt that Jack climbed a beanstalk. The number
of locations offered for sale will not change.
Again you are making the same assumption that Roy did that I have shown
is not backed up data. That people will sell the same amount regardless
of the price. If you will not sell your beach front in CA for less than
$1 million dollars because that is your use as you call it or just the
dollar value you put on it as I would say then when price is less than
$1 million you do not sell.

Wait a second did you just claim that after tax MORE LAND IS SOLD AT
LOWER PRICES AND THAT SOMEHOW DISPROVED SUPPLY AND DEMAND.

You and Roy need to make up your minds. Does the amount of land offered
for sale stay constant with price or does it increase with price? Both
of you are making both claims. That the amount of land offered for sell
will not change but it will increase. WHICH IS IT? Both you and Roy want
to claim it doesn't change but it increases that can't happen. A few
paragraphs ago you claim supply or quantity supplied, I am not sure
which one you mean, increased. Now you are saying it doesn't change.
Make up your mind.
Post by The Trucker
But most certainly the
trade prices of land parcels will change. That is an indication even by
your definition of "inelasticity".
So there is a difference in parcels from locations offered for sale. So
can sell a location but not the parcel of land?
Post by The Trucker
Post by professorchaos
As I
have argued because in differences in reservations or you argue
difference in what ever you define as use value in the land will some
owners will decide to not sell at the lower price.
I do not argue that current and projected prices will change an owner's
willingness to sell or to hold regarding unused land.
You did a few paragraphs ago. You claimed that prices increased supply.
What ever you meant by that. You and Roy like to use fuzzy language so
you can say that is not what I meant rather than clear language that
expresses what you mean.

That is why I have come to the conclusion that the people claiming that
economist lie and make economics intentionally confusing to serve their
rich "masters" are the very people trying to make economics
intentionally confusing to try to make their point. Although it is clear
they are not economist. They try to use fuzzy language that they can
easily dodge and weave from to intentionally confuse so it looks like
economics can not be understood. Then they throw up their hands and say
see I told you economics was confusing. The economist are doing this to
keep you down while they serve the rich. All the while it is the person
making the claim that is creating the confusion. Not that much
different from cultist who tells you everyone lies to you so you will
think they are honest and let you guard down to their lies.
The Trucker
2007-09-11 00:05:05 UTC
Permalink
Post by professorchaos
Post by The Trucker
When we speak of taxation we always speak of revenue neutrality.
Maybe you do but that is not how we analyze one tax at a time. If you
have revenue neutrality then you have to analyze what you are cutting
and what you are increasing.
If we wish to confine ourselves to the economics of a discussion
concerning WHAT to tax and HOW to tax then revenue neutrality is essential.
Post by professorchaos
Post by The Trucker
In a tax shift if the
government shifts taxation onto land then it is assumed that the
government will shift taxes off something else.
Why should we assume this?
Because it is essential to the discussion "all else remaining equal".
Post by professorchaos
This is the way things should be if we want
to keep revenue constant and seek better efficiency but why should we a
priori assume this policy will be adhered to.
I am not making any policy assumptions at all. I am flat out stating the
conditions for which the following illustration will be valid.
Post by professorchaos
Neither party has done it.
Where were the tax raises to offset the cuts under Reagan? When were the
tax cuts to offset the tax increase under Clinton? Careful the middle
class tax cut was only talked about.
All of that is ink in the water.
Post by professorchaos
The scenarios given say nothing about this.
The scenarios which follow are not concerned with any of that.
Post by professorchaos
However, there have been
arguments that involve this sort of thing. For instance, my argument
that shifting from an income tax to a land tax may or may not create a
bigger deadweight loss.
That is not discussed in the examples below. It is a different topic to
which I will later attend. At this point you are attempting to ink the
water some more.
Post by professorchaos
Although supply of land is rather inelastic so
is the supply of labor. Labor study after labor study has shown labor
supply to be very inelastic except for married women with children and
perhaps a few of the very wealthy.
So now that we have an admission that land supply is inelastic we want to
muddy it up with speeches about the inelesticity of whatever else we can
find to ink the water and distract the discussion. Dance, professor,
dance.
Post by professorchaos
So if we are talking shifting taxes then we must ask which is preferred.
Not necessary to the points made in this presentation. Not the least bit
germane to the points herein illustrated. Perhaps it would be better to
tax ASSHOLES. That is not part of the current illustration nor is it
intended to be.
Post by professorchaos
Public Finance gives a criteria for that. The tax gives the least dead
weight and the least administrative cost is preferred. So if income
taxes cost less to administer. Which I think they might. Then net
revenue per 1% of income tax is greater than net revenue for 1% of a
land. This means the income tax can be set at lower rate than the
property tax.
We will see about this in my next illustration. For now we are focusing on
land versus improvement taxation.
Post by professorchaos
This is where you need good data and good empirics to determine which
has the lost total dead weight loss. If supply of labor is perfectly
inelastic and supply of land is perfect inelastic. This is easy the one
with the lower cost of collecting the tax wins because the rates will be
smaller and result in dead weight loss. Where it gets confusing and you
need good data is a 5% land tax gives a dead weight loss of 5 and a 5%
income tax gives a dead weight loss of 7 and the lower cost of
administering an income tax means revenue from 2% income taxes give the
same revenue as a 5% land tax.
I assume that the land tax is less difficult to apply than is the land tax
plus the improvement tax. But that is not part of what is considered here.
If you believe that two taxes are less administratively expensive than one
then make the case for it.
Post by professorchaos
Post by The Trucker
Maybe even off of income
or sales or excise (all of which are transaction taxes -- taxes on trade).
It is imperative to keep this in mind.
Why when it never happens? Only on the federal level would this be the
case because the constitution bans an income tax and a sales tax. The
Federal government can have one or the other but SLGs are not bound by
this.
I should have never even mentioned it even in passing. You will, no doubt,
want to expand the passing thought as though it was the body of the
pesentation.
Post by professorchaos
Post by The Trucker
It is also why focusing on price
is erroneous and why focusing on value is the correct economic point of
view.
What value? Some undefined use value of the land we can not estimate.
The $1500 per month you introduced and then asked me if I was willing to
pay $2000 per month. That is USE VALUE, perfesser.
Post by professorchaos
The value to the potential buyer showed by the price he was willing to
pay?
In this case you are correct. That is a measure of how I value the home
in question. We have no disagreement here.
Post by professorchaos
The value to the seller shown by the price he is willing to sell.
You have yet to define value in any tractable estimable way. You stick
to some hokey notion of use value in which a dollar amount is impossible
to put on.
Oh horseshit... I put a dollar amount on it. $1500.
Post by professorchaos
Post by The Trucker
If taxes are shifted from general income taxes to special tax breaks
on mortgage interest that home owners and land owners will benefit at the
expense of other tax payers.
You mean if taxes are increased on everyone and some get breaks. Your
wording makes it sound like taxes are decreasing.
What part of tax shift and revenue neutral do you have a problem with?
I have been very clear about this.
Post by professorchaos
Post by The Trucker
The secondary effects might increase or
decrease total tax revenue, but if we remain revenue neutral then this
will mollify the original shift somewhat. It will not overcome it.
Will mollify the shift in way? Dead weight loss?
We will see what happens in the example/illustration.
Post by professorchaos
Post by The Trucker
The proposition is placed on the table that I have a use value (an
appreciation of) a home to the tune of $1500 and that then I am told that
the tax on that home will add an additional $500 per month, and will I now
adjust my use value to $2000 per month and my answer was "no".
I never said that. I said that the value would still be $1500. Your
value would increase. You would still say the land is worth $1500.
We were clearly speaking of a home, liar. Not a section of unimproved
land. You said "you really live the house and want it for $1500/mo",
And I agreed. That is the VALUE of the home to me.
Post by professorchaos
The price to the buyer is $500 higher because by buying the property he
must pay $500. This is just like a unit tax on sales.
The inference was that it was a property tax on value. That is the way
real estate is normally done. A $500 one time fee would not be terribly
bothersome and who the hell would ask such a stupid question. Oops, I
forgot who I was dealing with.
Post by professorchaos
I think the
confusion may be that you are equating sales taxes with ad valoreum
(percentage of the price taxes).
Really hard for you to use the "V" word isn't it?
Post by professorchaos
A sales tax can say $500 a unit. That
is what the property tax does. If you want the property you have to pay
$500 more. It does not matter if you pay at the time of the sale or in 6
months time. The action of buying the property has a tax consequence.
We are talking about a property tax in the real world. We are not
concerned with you screwing the definitions all around to suit your
neoconomic self. Any person that actually owns (or is buying) a home knows
what a property tax is. The school of lying neoconomics need not attempt
to change the real life meaning.
Post by professorchaos
Post by The Trucker
HOWEVER (and didn't ya know there would be a however:)
My retort is that taxes can be adjusted to where the $1500 includes
the tax if the tax is more realistic (the proposed quantity is way out of
whack with reality). Let the proposition be for $187.50 as opposed to
$500 because that is more the mean on the tax situation according to this
mean old house I happen to live in at present.
You can lower the tax and it still will not change the fact you say the
property has a value to you of $1500.
That is correct!!!! I am not willing to pay $1687.50 any more than I was
willing to pay $2000. I said I valued the home at $1500. That is my USE
VALUE of the home.
Post by professorchaos
Actually the best argument I have seen so far has been Andy F's that
says it will drop your value because you have to pay $500. So land the
land has less value to you because you have to pay the tax. I don't
agree with it but it is the best reasoned argument I have seen on this
issue that counters theory.
Reality is not dependent upon your agreement. Your "theory" would appear
to be total toast.
Post by professorchaos
Post by The Trucker
The following rig illustrates the proper relationships that govern the
price of real estate and the mortgage. We note that price
and "use value" are not the same.
Of course not Aristotle. We can observe price and we can estimate or ask
people what they would pay for something or sell something for but we
can't estimate use value. That is why I call it hokey mystical.
The "use value" is precisely what someone will pay. It is absolutely what
someone will pay to use or consume the object of their desires. And it is
always subjective.
Post by professorchaos
I will read a little more to see how this supposedly illustrates price
of real estate and mortgage which is not the discussion here but I will
read.
You made it the discussion when you asked if I would pay more than $1500
for "the house which I desire".
Post by professorchaos
Post by The Trucker
The use value is the rent
Rent in what sense? Ricardian?
It is Ricardian rent regarding the land unless you have some weasel
definition of Ricardian Rent.
http://en.wikipedia.org/wiki/Ricardian_rent
Post by professorchaos
Post by The Trucker
and it is
constant or very slowly changing as the area surrounding some physical
location attracts more and more bidders for land rights near the cause of
the clumping (jobs, opportunities for trade, or whatever).
Ok so it isn't Ricardian rather a market definition of the price of a
lease.
I am not interested in fencing over word use. Let us look at the
realities and see what we see.
Post by professorchaos
Post by The Trucker
The tax rates
and interest rates do not change the use value.
No they affect demand for the land which affects land prices and rents.
The tax rate on land will not effect the supply or the demand for land or
for a particular location.
Post by professorchaos
If you were to substitute use value for willingness to buy on the buyers
or willingness to sell on the seller's part. I think you might
understand the argument better.
I understand the argument quite well, thank you. It is not an argument
over word definitions.
Post by professorchaos
Post by The Trucker
The use value of land in
death valley is zip because I can't get a job there. In the example given,
the use value of the home was $1500 per month.
P = R / ( i + t ) where P is the price (sale value), $225000
R is the rent (use value), $18000 (1500/mo) includes principle
i is the interest rate, .07 = $15750 ($13125/mo)
t is the tax rate .01 = $2250 ($187.50/mo)
P = $162,000
R = $12960 = ($1080/mo)
i = .07 = $11340 ($945/mo)
t = .01 = $1620 ($135/mo)
P = $63,000
R = $5040 = ($420/mo)
i = .07 = $4410 ($366.67/mo)
t = .01 = $630 ($52.50/mo)
In this setup the tax man gets $2250 per year out of the deal.
For the one piece of land?
The forgoing relationships provide the breakdown of values associated with
a typical home being marketed for $225000 in THIS area
(general location) where I live.
Post by professorchaos
This is too simple you are only calculating
the willingness to buy.
I'm not even considering it but for the fact that we already agreed
that I would be willing to "buy" the House with a mortgage of $1500
per month, but not for a mortgage of $2000 per month or a mortgage of
$1687.50. That "willingness to buy" stuff has already been defined.
Post by professorchaos
Just because you are willing to pay a price of
162,000 after tax does not mean someone will sell.
You made the offer. I am considering it. The mortgage you offered turned
out to be $1687.50 in the real world and I said no. We are now discussing
how proper taxation can fix the disagreement and clear the market.
Post by professorchaos
The ONLY way that
works if the amount of land offered for sell does not change when prices
change.
You will see that your position is incorrect.
Post by professorchaos
That is the key to the discussion. Roy is hooked only old
assumption that the amount of sell for land does not change with price.
The willingness to sell will change. The actual sales may or may not
change and the elasticity of land or the elasticity of the locations will
not change if the word elasticity is not screwed by a neoconomist.
Post by professorchaos
This is absurd to say that someone would sell as beach front property
for $1 as they would swamp land when prices are low.
I see no such claim in anything I have aver written. You are a liar.
Post by professorchaos
I argue this is not
true. Beach land will not sell unless the price is sufficiently high.
Hide and watch, Bosco.
Post by professorchaos
Owners of a swamp will take almost anything you give them. So at low
prices less land is offered for sell because the owners of the beach
front property place a value on the property (willingness to sell) that
is higher than the current price so they will not sell. Note I use value
as a dollar amount they are willing to sell. That is the value to them
in dollars revealed by the offering of the land on the market at that
price.
(snore)
Post by professorchaos
Post by The Trucker
Nobody wants to pay $187.50/mo. to look at a vacant lot.
Again you miss the point here just what people want to pay does not
determine price and quantity sold on the market.
In this case it is better stated as what they DON'T WANT TO PAY.
Post by professorchaos
It is also determined
by the minimum price owners will sell at. They have the option to keep
the land and use it for whatever use they were using it for before tax.
They certainly do. Bub nobody, with the possible exception of you, would
be stupid enough to pay $187.50 a month to look at a vacant lot.
Post by professorchaos
You and Roy assume owners are speculators who will sell because the land
brings them nothing. Surely not all owners are speculators many bought
because the land has a value to them. Either a stream of profits or a
location they really enjoy. They will not sell unless the offer equals
or exceeds the value THEY put on the land.
The lot across the street from me is assessed at the same value as the lot
on which my home sits. That is what is on the tax records. The owner has
not been near the lot that I know of for 5 years. It is a home for
rodents and rabbits and such. The "use value" to the owner is zero. It is
ONLY speculation value (it is a Monet without the eye massage). There are
3 other such lots close by and they all are the same deal.
Post by professorchaos
Post by The Trucker
P = $11359
R = $5040
i = .07
t = 44.3
Due to the tax shift the price of the land just fell $51,641.
Such one legged analysis can not determine price. You have only
determined willingness to sell.
Yer right. The current owner can value that land at $10M, and suck on it
till hell freezes over. But the tax is going to be $187.50 and he will
need to pay it or the land will be sold to someone else.
Post by professorchaos
If the owners will not sell as much land
on the market as people want to buy at the price you quote, the price
must rise.
And so too the tax? No. The assessor collector will asses the value of
like parcels (sales/trade price) in this area and that will determine the
taxes collected at the specified rate. If there are many sales at a
higher or lower rate then the assessor collector will change the book
value for tax purposes. But the taxed value has not a damned thing to do
with what one particular "owner" might think about it.
Post by professorchaos
This may be due to Ricardian rents. Different grades of land
give different values.
BINGO!!! You are now beginning to understand what creates the actual
value.
Post by professorchaos
Profits above normal can be gained simply because
the land is better. If Ricardian rents exist then the argument that all
land in existence will be offered for sell at all prices is false.
You are very confused. The value of any parcel (for tax purposes or for
exchange price in an open market) is determined by the USABILITY of the
parcel. It need not be farmland or any other particular use.
Post by professorchaos
Post by The Trucker
The
location is still worth $5040 per year because I still have the same
income at the job that I have in this area (the reason I am here).
To whom, the original owner? The potential buyer?
The potential buyer, of course (ME). You laid out the deal. Why all the
questions?
Post by professorchaos
Post by The Trucker
It
matters not to me WHO I pay the tax/land-rent.
No it doesn't.
Post by The Trucker
It is what I pay to occupy
this home in this location.
At what price is necessary to make the owner decide to rent instead of
use the land for whatever other purpose he wants. The opportunity cost
of renting is the inability to use the land for another purpose. If I am
farmer I will only rent you a plot or let you share crop if the rent you
pay is equal to or exceeds the profit I would get from the land from
farming myself. The fallacy is that if the land is not rented or sold it
lays fallow.
In this case that is not a fallacy. It is a fact. It is an objective
reality confirmed by current visual and other senses.
Post by professorchaos
In other words you are assuming land has no value to the
owner only to the buyer.
OH NOOOOOOOOOOOOOOOOOOHHHHHHH!!!! I am not assuming that at all. The
land is of value to the owner in the exact amount of what the buyer will
pay him or it has value to the owner any way he wants to "appreciate" the
location. He can use it to open a hot dog stand (no wait... It's
residential zoned I think. So he must build a residence on it or not use
it for anything at all). So he is sucking on a land deed and paying
$187.50 for the privilege of doing so.
Post by professorchaos
This only works if only speculators own the
land. If this were true you and Roy might be right. It certainly is not
true.
Oh but it IS true. IT is the objective reality right here in my
neighborhood that stares us in the face.
Post by professorchaos
Post by The Trucker
The fake Republican economy just bit the dust.
What is Republican or democrat about this?
The fake Republican economy is built on tax cuts, escalation in land
rents, and escalation in monetary rents. These are all whipped together
to present a false "prosperity".
Post by professorchaos
Post by The Trucker
People will get paid more
(the people that built the house got more pay), and the need to borrow
against the value of their homes will decline.
You are beyond stretching here. I am glad I have my hip waders on.
I have illustrated an increase in the actual _VALUE_ of the improvements
due to the tax relief afforded by the shift of taxes off the improvements
and on to land. You apparently missed that part. The house itself. you
see, is a produced item. People must actually contribute to the economy
in order to receive income from the sale of the house. That would
normally, at least in some small part, translate to more REAL wages or
more profit. (return to _real_ capital (the house) is profit or
interest respectively depending on whether you are a classical or a
Georgist). The increase in beneficial value is taken from RENT.
Post by professorchaos
Post by The Trucker
The "land owners" don't set the price of the land.
No supply and demand determine price.
Post by The Trucker
As the price falls
more land becomes available for development as the "owners' attempt to
get rid of their tax liability.
Why would they do this if the land has value to them and/or can still
turn a profit after tax.
The case at hand is rather pointed. The locations in question are
residential locations. The owners are not showing up on sunny days to
lounge in the sun, nor do they have vegetable gardens on these plots or
anything else. Downtown lots are often used as paid parking in an attempt
to pay the taxes. That is not the case here.
Post by professorchaos
Why would I suddenly sell my farm that makes
$10,000 a month for hay cut to feed cattle if the taxes went up $500. I
simply would not unless someone offered me $9,500 or higher. Supply
determines price just as much as demand. To quote Marshal, "To argue if
supply or demand determines price is to argue if the top or the bottom
blade of scissors cuts the paper.
We are not talking about a farm. We started this discussion about the
house I wanted and the fact that I agreed to pay $1500 / mo. for the
mortgage and then you added a tax. My position is that I have now paid
the tax and gotten the house at the location I wanted for $1500 bucks.
Post by professorchaos
Post by The Trucker
The supply increases as the price falls.
No it does not. Quantity supplied will not increase nor will supply. You
example does not show this. You are asserting it. You are assuming a
higher tax will automatically make people sell more land at all prices.
As I explained to Andy business will not do this in the short run. The
tax is a fixed cost and DOES NOT affect short run shutdown or production
decisions.
Even if you were correct it is the change in supply causing prices to
fall not the other way around. You really do not understand supply and
demand. Learn what it is and the predictions before you try to overturn it.
What good would it do to "learn" anything like the shit that you've
"learned"?
Post by professorchaos
Post by The Trucker
This seems to run counter to the concept of the standard supply demand
theory, and it may illustrate a reverse demand elasticity of land AND
locations.
What do you even no what you elasticity is? What do you mean by reverse
demand elasticity? That the elasticity is positive? That would mean that
demand is constant but people buy more as price rises. This is
empirically and theoretically wrong. Even if you example was right a
negative elasticity of demand would be consistent with quantity sold
increasing after an increase in supply. If it were a reserve elasticity
of demand and the elasticity was positive quantity would fall after an
increase in supply not rise.
Post by The Trucker
Or it may illustrate inelasticity of land and locations. I have no idea
any more. Nor do I care. Value matters. Prices follow.
Value in what sense?
In the subjective sense of value as that word is understood by rational
people.
Post by professorchaos
If you are using use value as I use willingness to
buy or willingness to sell then yes. The value people put on a good
which is what they will sell it for or buy it for, which you can make an
argument is use value if you want, determines the supply and demand
curves.
Thank you.
Post by professorchaos
The supply and demand curves change price.
Yes... Price follows value.
Post by professorchaos
A tax changes
someone's value on the good.
Never claimed anything to the contrary.
Post by professorchaos
I would pay $5 market price for the candy
bar but because you tax $1 a candy bar owned(or bought or consumed it
doesn't matter) it will cost me $6 to buy the candy.
Only works for transaction taxes.
Post by professorchaos
I will no longer
buy the bar if the market price is $5. Why? Because I put a value of $5
on it and it will cost me $6 dollars to buy it. You can call that
willingness to buy use value if you want.
Thanx. I will.
Post by professorchaos
I don't because use value is
hard to define and can not be observed. I can observe who much you are
willing to pay.
You can call it a holla hoop if you want.
Post by professorchaos
The same goes for supply. In theory, we ask people how much they would
sell at $1, $2, ..., $N. We tallying the total that people will sell at
each price. So quantity supplied is X when price is $1. The collection
of quantity supplied paired with prices is called supply. What motivates
quantity supplied? The value they place on the good. In production it is
the cost of producing it. In land or art or anything not produced it is
the dollar value the owner places on it. Again you can call that use
value. I don't because I can't observe use value. I can observe how much
they are willing to sell a unit for.
So you are correct here. Value does come first in determining demand and
supply. If value changes the curves change. Perhaps land in Spain is no
cheap enough for me to want to pay the cost of moving. I longer have a
demand for land in the US and the demand curve shifts downward.
Post by The Trucker
All of this is being done to illustrate that a tax on unimproved land
puts more land on the market lowering the price and making housing much
more affordable for regular working people.
More than what? It only lowers price and leads to more land sold if it
is a move from a tax on improved to unimproved and even then that is
questionable. Market prices may drop but it is not necessiarly more
affordable. The tax must be paid. At best the price drops enough to
compensate for the tax.
The forgoing illustration proves what I have said. A tax on land as
opposed to improvements can decrease the cost of homes as those terms are
used by normal well adjusted human beings.
Post by professorchaos
Post by The Trucker
Tax breaks on income tax
actually engender an increase in land prices and are also a real
giveaway to the mortgage brokers.
Yes but is that increase in prices greater than if the after tax price
of land under an unimproved land tax?
I have just illustrated that an increase of tax on unimproved land
decreases prices. I now CLAIM (not yet proved), that a decrease in income
taxes will INCREASE the price of real estate. So why are you inking the
water again.
Post by professorchaos
That is something I can not
answer. Market price drops with the unimproved tax but it is because
demand decrease due to having to pay the tax. After tax price (price +
tax) may be more or the same.
I have just shown that the "after tax price" of the home and of
comparable homes in the same neighborhood is less if the land tax is
increased and the improvement tax is decreased -- revenue neutral tax
shift.
Post by professorchaos
Post by The Trucker
Post by professorchaos
I have no doubt that if sellers did change the amount of land offered
for sale on the market that the tax would have no effect on trades.
But you have no doubt that Jack climbed a beanstalk. The number of
locations offered for sale will not change.
Again you are making the same assumption that Roy did that I have shown
is not backed up data. That people will sell the same amount regardless
of the price.
Are you going to pay $187.50 a month to suck on a land deed or not?
Post by professorchaos
If you will not sell your beach front in CA for less than
$1 million dollars because that is your use as you call it or just the
dollar value you put on it as I would say then when price is less than
$1 million you do not sell.
I'm OK with that.
Post by professorchaos
Wait a second did you just claim that after tax MORE LAND IS SOLD AT
LOWER PRICES AND THAT SOMEHOW DISPROVED SUPPLY AND DEMAND.
I said that is seemed to disprove your position in which the owners decide
what is happening.
Post by professorchaos
You and Roy need to make up your minds. Does the amount of land offered
for sale stay constant with price or does it increase with price?
The land (in this case) is ALWAYS FOR SALE. That is the only USE of the
land is the sale of it. It has no other use.
Post by professorchaos
Both
of you are making both claims.
I may have inadvertently misspoke in passing concerning the "availability"
of lots in this area. Roy is normally a lot more careful about that sort
of thing than I am. But the fact is that the ONLY use of the land in
question is the sale of it for the building of a home. The land is always
"for sale". It is simply waiting for a willing builder. The supply of
available lots is not going to change. They are not going to run away or
sink into the ocean. Nor will the number of sellers increase or decrease
due to the tax because they all want to sell all the time unless they
think they can get a better price later. It is purely speculation.
Post by professorchaos
That the amount of land offered for sell
will not change but it will increase. WHICH IS IT? Both you and Roy want
to claim it doesn't change but it increases that can't happen. A few
paragraphs ago you claim supply or quantity supplied, I am not sure
which one you mean, increased. Now you are saying it doesn't change.
Make up your mind.
Why??? It is in my definition of the word "elasticity" totally
irrelevant. We have been through all of this before. You want to haggle
over the definition of the word and I no longer care about it. The
definition of the word does not alter the fact that all of the locations
are for sale all the time and there are no more of them nor less of them
until that ARE sold/allocated to homes. IN the broader view, the
elasticity is zero because the price that an owner might WANT will not
alter that actual quantity of like parcels. Nor does the decision of an
individual owner change the value/tax on the land. What MAY happen is that
builders may build more homes because of the INCREASE in the value of the
actual construction granted by removing the improvements tax.
Post by professorchaos
Post by The Trucker
But most certainly the
trade prices of land parcels will change. That is an indication even
by your definition of "inelasticity".
So there is a difference in parcels from locations offered for sale. So
can sell a location but not the parcel of land?
Post by The Trucker
Post by professorchaos
As I
have argued because in differences in reservations or you argue
difference in what ever you define as use value in the land will some
owners will decide to not sell at the lower price.
I do not argue that current and projected prices will change an owner's
willingness to sell or to hold regarding unused land.
You did a few paragraphs ago. You claimed that prices increased supply.
What ever you meant by that. You and Roy like to use fuzzy language so
you can say that is not what I meant rather than clear language that
expresses what you mean.
That is why I have come to the conclusion that the people claiming that
economist lie and make economics intentionally confusing to serve their
rich "masters" are the very people trying to make economics
intentionally confusing to try to make their point. Although it is clear
they are not economist. They try to use fuzzy language that they can
easily dodge and weave from to intentionally confuse so it looks like
economics can not be understood. Then they throw up their hands and say
see I told you economics was confusing. The economist are doing this to
keep you down while they serve the rich. All the while it is the person
making the claim that is creating the confusion. Not that much
different from cultist who tells you everyone lies to you so you will
think they are honest and let you guard down to their lies.
I have given you a dose of reality. If you can make your economic
theories fit that reality then that is good. If not then your economic
theories suck.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org
professorchaos
2007-09-11 06:33:23 UTC
Permalink
Post by The Trucker
Post by professorchaos
Post by The Trucker
When we speak of taxation we always speak of revenue neutrality.
Maybe you do but that is not how we analyze one tax at a time. If you
have revenue neutrality then you have to analyze what you are cutting
and what you are increasing.
If we wish to confine ourselves to the economics of a discussion
concerning WHAT to tax and HOW to tax then revenue neutrality is essential.
Post by professorchaos
Post by The Trucker
In a tax shift if the
government shifts taxation onto land then it is assumed that the
government will shift taxes off something else.
Why should we assume this?
Because it is essential to the discussion "all else remaining equal".
You misunderstand this. All else remaining equal means we are only
making one change. Why do we do this? So we isolate effects and then
build up. In physics you have a model that will predict how swing a 32"
bat at 90 mph will impact a baseball traveling 90 mph. The initial model
would be in a vacuum. This allows to predict the speed of the ball and
the distance traveled. That is one effect. Then you look at the effect
of the wind blowing in the opposite direction of the ball at 2 mph. How
will this slow the ball down and affect distance? You see all else equal
means this is the ONLY thing changing. So we analyze one effect then the
other and see what the net effect is.
Post by The Trucker
Post by professorchaos
This is the way things should be if we want
However, there have been
arguments that involve this sort of thing. For instance, my argument
that shifting from an income tax to a land tax may or may not create a
bigger deadweight loss.
That is not discussed in the examples below. It is a different topic to
which I will later attend. At this point you are attempting to ink the
water some more.
No I am trying to get back to the original argument that started this
discussion rather than the tangent it headed to.
Post by The Trucker
Post by professorchaos
Although supply of land is rather inelastic so
is the supply of labor. Labor study after labor study has shown labor
supply to be very inelastic except for married women with children and
perhaps a few of the very wealthy.
So now that we have an admission that land supply is inelastic we want to
muddy it up with speeches about the inelesticity of whatever else we can
find to ink the water and distract the discussion. Dance, professor,
dance.
Inelastic and Perfectly Inelastic are too different things. Inelastic
means the elasticity is above 0 and less than 1. Perfectly inelastic
means the elasticity is 0. I never claimed the supply of land is not
inelastic only that it is not perfectly inelastic. It sounds like a
small point but it makes a big difference in analysis. Just as a wind
resistance of .00001 instead of .000001 may sound small but it could
mean a plane doesn't fly. Or maybe it doesn't I am no expert in physics
only point out that a tiny difference in an estimate can have a huge
impact on the overall system.
Post by The Trucker
Post by professorchaos
So if we are talking shifting taxes then we must ask which is preferred.
Not necessary to the points made in this presentation. Not the least bit
germane to the points herein illustrated.
Then this is not germane to the discussion you are responding to. The
elasticity of supply being 0 or not being is only germane to if the tax
is efficient or if it is not. Which Roy now claims was not what he was
arguing. In his convuluted fuzzy language who knows what he means.
Post by The Trucker
Perhaps it would be better to
tax ASSHOLES. That is not part of the current illustration nor is it
intended to be.
Yet this is supposedly in response to a discussion of if land taxes are
superior to other taxes which was Roy's argument. I point out for his
logic to hold and to have a certainty of that without intense data it
rest on the elasticity of supply being 0.
Post by The Trucker
Post by professorchaos
This is where you need good data and good empirics to determine which
has the lost total dead weight loss. If supply of labor is perfectly
inelastic and supply of land is perfect inelastic. This is easy the one
with the lower cost of collecting the tax wins because the rates will be
smaller and result in dead weight loss. Where it gets confusing and you
need good data is a 5% land tax gives a dead weight loss of 5 and a 5%
income tax gives a dead weight loss of 7 and the lower cost of
administering an income tax means revenue from 2% income taxes give the
same revenue as a 5% land tax.
I assume that the land tax is less difficult to apply than is the land tax
plus the improvement tax.
Actually it is the other way around if you apply by a state using the
tax. You may not observe raw land prices. In a city where almost all the
land is developed you can easily estimate the price of a piece of land
plus the improvement by comparing it to similar property with similar
improvements. If little to no unimproved land exist it is hard to
compare prices of something that just isn't there.

I also think games can easily be played by buyers and sellers when
selling improved land when no unimproved land is close to the area. The
final price is all that matters so everyone sells the unimproved land at
$.50 and the rest of the price is the improvement to make a tax argument
that the price of raw land is dirt cheap so taxes should be low.

That is the main problem of implementing unimproved land taxes. In many
areas there exist little or no unimproved land to compare prices with.
It works fine for farming but in a city it is tough to estimate how much
of the price is unimproved and how much is improved. So you get some
accounting formula that says say 10% of the price is land and 90% is
improvement. Therefore increasing improvements would raise the estimated
value of the unimproved land which nullifies the purpose.
Post by The Trucker
Post by professorchaos
The value to the potential buyer showed by the price he was willing to
pay?
In this case you are correct. That is a measure of how I value the home
in question. We have no disagreement here.
Post by professorchaos
The value to the seller shown by the price he is willing to sell.
You have yet to define value in any tractable estimable way. You stick
to some hokey notion of use value in which a dollar amount is impossible
to put on.
Oh horseshit... I put a dollar amount on it. $1500.
Pulling numbers out of a hat does not mean they are tractable and
estimable. The point is the price people are willing to sell is the
value to the seller. The price people are willing to buy at is the value
to the buyer.
Post by The Trucker
Post by professorchaos
Post by The Trucker
The secondary effects might increase or
decrease total tax revenue, but if we remain revenue neutral then this
will mollify the original shift somewhat. It will not overcome it.
Will mollify the shift in way? Dead weight loss?
We will see what happens in the example/illustration.
I would still like to see that.
Post by The Trucker
Post by professorchaos
Post by The Trucker
The proposition is placed on the table that I have a use value (an
appreciation of) a home to the tune of $1500 and that then I am told that
the tax on that home will add an additional $500 per month, and will I now
adjust my use value to $2000 per month and my answer was "no".
I never said that. I said that the value would still be $1500. Your
value would increase. You would still say the land is worth $1500.
We were clearly speaking of a home, liar. Not a section of unimproved
land. You said "you really live the house and want it for $1500/mo",
And I agreed. That is the VALUE of the home to me.
Which does not change with the tax. You still say the home is worth
$1500 a month.
Post by The Trucker
Post by professorchaos
The price to the buyer is $500 higher because by buying the property he
must pay $500. This is just like a unit tax on sales.
The inference was that it was a property tax on value.
I realize that but the point is that even if this is a tax on value of
what you own that choosing to buy it triggers the tax. This is no
different from a sales tax. In both case you are only taxed if you buy.
The only difference is the timing of the tax.
Post by The Trucker
A $500 one time fee would not be terribly
bothersome and who the hell would ask such a stupid question.
Regardless a one time fee on the value of the land and home in 6 months
time is no different to me than a one time tax on the sale of the home
at POS. That is the point I am making.
Post by The Trucker
Post by professorchaos
A sales tax can say $500 a unit. That
is what the property tax does. If you want the property you have to pay
$500 more. It does not matter if you pay at the time of the sale or in 6
months time. The action of buying the property has a tax consequence.
We are talking about a property tax in the real world.
So incurring a liability from an action does not affect your decision in
the real world. Really? Do you run a red light in front of a cop because
you are late to work? If no it is because you know you will incur a
liability for that action. If there were no fine and time cost of
getting the ticket you would do it. The process of buying triggers a tax
you have to pay it affects your behavior. It would be nonsense to
believe people just ignore the tax.
Post by The Trucker
We are not
concerned with you screwing the definitions all around to suit your
neoconomic self.
This is no screwy definition. If you would pay $150,000 for the home
prior to tax and the tax will now mean paying $150,000 means you have to
pay $30,000 in taxes will you still buy if you only want to pay
$150,000? No because it will cost you $180,000
Post by The Trucker
Any person that actually owns (or is buying) a home knows
what a property tax is. The school of lying neoconomics need not attempt
to change the real life meaning.
Which is why people often decide not to buy a home AFTER THEY FIND OUT
WHAT THE PROPERTY TAX RATES ARE IN THAT LOCATION. That is the point. The
tax affects behavior. It decreases demand.
Post by The Trucker
Post by professorchaos
Post by The Trucker
My retort is that taxes can be adjusted to where the $1500 includes
the tax if the tax is more realistic (the proposed quantity is way out of
whack with reality). Let the proposition be for $187.50 as opposed to
$500 because that is more the mean on the tax situation according to this
mean old house I happen to live in at present.
You can lower the tax and it still will not change the fact you say the
property has a value to you of $1500.
That is correct!!!! I am not willing to pay $1687.50 any more than I was
willing to pay $2000. I said I valued the home at $1500. That is my USE
VALUE of the home.
You can call it use value if you want. The problem as I have stated is
you can't gather data on use value. You can gather data on the
willingness to sell. The minimum price they would sell that unit for.
Post by The Trucker
Post by professorchaos
Actually the best argument I have seen so far has been Andy F's that
says it will drop your value because you have to pay $500. So land the
land has less value to you because you have to pay the tax. I don't
agree with it but it is the best reasoned argument I have seen on this
issue that counters theory.
Reality is not dependent upon your agreement. Your "theory" would appear
to be total toast.
You and Roy have yet to realize you have to understand a theory before
you can toast. So far neither of have shown a sufficient understanding
of the theory to toast it. I have tried to explain it but rather looking
at the theory and the explanation and seeing if it holds water. You both
argue term X does not mean this so it is wrong or try to redefine terms
to make the predictions something quite different from what they are.

I used economics terms but also a lot of plain English to explain what
is happening with the theory. You and Roy refuse to read it and spout
the same idea you spouted before as if repeating the argument makes it
right. Your logic and Roy's logic is repeating the same argument after
seeing a counter destroys the counter. This is foolish indeed. You
continue to repeat the same stuff and not answer the counter.

Honestly, I am tired of repeating the argument against and trying again
and again to make it clearer so you can understand. You don't want to
understand. You and Roy are closed minded political zealots who are
completely convinced their view on politics is correct and therefore
dictates everything else.

You see the difference here between your arguments and Andy F's
argument. Andy used reason that addressed my arguments. I though I am
convinced he is wrong in the short run and have a gut feeling something
is wrong with the argument. I have taken it seriously and reconsidered
the long run effects. I am still thinking about the argument and
evaluating if it is correct.

On the other hand you and Roy do not reason and repeat the same argument
and believe anyone who disagrees is stupid. This is the mark of the
blind zealot beast. The person who thinks their party does no wrong. I
know it. It was me in early college when I saw the democrats are devils
and Ronald Reagan as an angel. I wised up and found out that both
parties have big flaws and I have an open mind about policy now.
However, I know the signs of a blind zealot who will not listen to
reason because I once was one. They I started studying political science
and found the reality of D.C. or your local statehouse. I studied
economics and saw how both parties had flaws. Education breaks blind
zealotry. You should try it.
Post by The Trucker
Post by professorchaos
Post by The Trucker
and it is
constant or very slowly changing as the area surrounding some physical
location attracts more and more bidders for land rights near the cause of
the clumping (jobs, opportunities for trade, or whatever).
Ok so it isn't Ricardian rather a market definition of the price of a
lease.
I am not interested in fencing over word use. Let us look at the
realities and see what we see.
No fencing. I am trying to make it clear. If think you are using
Ricardian rents and instead you are using how much an apartment building
is renting for then it doesn't make sense. That is why definitions and
language are so important. If you do not understand what someone else
means by elasticity or supply then you can not understand their argument.
Post by The Trucker
Post by professorchaos
Post by The Trucker
The tax rates
and interest rates do not change the use value.
No they affect demand for the land which affects land prices and rents.
The tax rate on land will not effect the supply or the demand for land or
for a particular location.
Post by professorchaos
If you were to substitute use value for willingness to buy on the buyers
or willingness to sell on the seller's part. I think you might
understand the argument better.
I understand the argument quite well, thank you. It is not an argument
over word definitions.
No You don't understand my arguments and you will not as long as you try
to replace precise language with fuzzy definitions you pull out of your
hat.
Post by The Trucker
Post by professorchaos
This is too simple you are only calculating
the willingness to buy.
I'm not even considering it but for the fact that we already agreed
that I would be willing to "buy" the House with a mortgage of $1500
per month, but not for a mortgage of $2000 per month or a mortgage of
$1687.50. That "willingness to buy" stuff has already been defined.
Post by professorchaos
Just because you are willing to pay a price of
162,000 after tax does not mean someone will sell.
You made the offer. I am considering it. The mortgage you offered turned
out to be $1687.50 in the real world and I said no. We are now discussing
how proper taxation can fix the disagreement and clear the market.
Even if this is so it misses the forest for the trees. You can say this
trade will happen but will quantity on the market be unaffected? Just
because one person sees the trade as beneficial does not mean people who
would have traded or not left out after tax. That is why you need demand
and supply and not some simple formula pulled out of a hat to estimate
the damage of a tax.
Post by The Trucker
Post by professorchaos
The ONLY way that
works if the amount of land offered for sell does not change when prices
change.
You will see that your position is incorrect.
Not to the argument I am making. The argument you are making who knows.
I have yet to see what it is supposed to be.
Post by The Trucker
Post by professorchaos
That is the key to the discussion. Roy is hooked only old
assumption that the amount of sell for land does not change with price.
The willingness to sell will change.
Then it is not perfectly inelastic. So when demand decreases due to the
tax being triggered the quantity of sells will not change iff the
elasticity of supply is 0. You find lost from trade if sales made before
tax are not made now. This happens if the elasticity supply is not 0.
Post by The Trucker
The actual sales may or may not
change and the elasticity of land or the elasticity of the locations will
not change if the word elasticity is not screwed by a neoconomist.
What the hell is the elasticity of locations. You already said you don't
sell locations only parcels of land. HOW CAN YOU FIND AN ELASTICITY FOR
A COMMODITY THAT IS NOT TRADED? You have no idea what elasticity is. If
locations are not sold and parcels are then locations PLAY NO ROLE IN
THE MARKET other than determining the willingness to sell (the supply
curve since it is the willingness to sell at different prices).
Post by The Trucker
Post by professorchaos
This is absurd to say that someone would sell as beach front property
for $1 as they would swamp land when prices are low.
I see no such claim in anything I have aver written. You are a liar.
That is what you are saying when you say the elasticity of supply is 0.
Post by The Trucker
Post by professorchaos
I argue this is not
true. Beach land will not sell unless the price is sufficiently high.
Hide and watch, Bosco.
Post by professorchaos
Owners of a swamp will take almost anything you give them. So at low
prices less land is offered for sell because the owners of the beach
front property place a value on the property (willingness to sell) that
is higher than the current price so they will not sell. Note I use value
as a dollar amount they are willing to sell. That is the value to them
in dollars revealed by the offering of the land on the market at that
price.
(snore)
Post by professorchaos
Post by The Trucker
Nobody wants to pay $187.50/mo. to look at a vacant lot.
Again you miss the point here just what people want to pay does not
determine price and quantity sold on the market.
In this case it is better stated as what they DON'T WANT TO PAY.
Note: My comment was a typo. It should have read what people want to pay
does not SOLELY determine price and quantity sold on the market.
Post by The Trucker
Post by professorchaos
It is also determined
by the minimum price owners will sell at. They have the option to keep
the land and use it for whatever use they were using it for before tax.
They certainly do. Bub nobody, with the possible exception of you, would
be stupid enough to pay $187.50 a month to look at a vacant lot.
Again you assuming that the person is a speculator buying the land for
resale. If that vacant lot netted me $300 in profits from the sunflowers
growing on it (sales of the seeds) or $300 from the sale of hay that
grows on the lot then Damn right I will pay $187.50 to look at that
vacant lot. I will laugh at your silly supposition all the way to the
bank when the people buy my sunflower seeds or hay.

You see assume only speculators hold vacant land. Others buy the land
because it has a value to me. If I thank the land is worth $188 to me
just to go out and hug a tree every now and then, I will pay $187.5 to
stare at that vacant lot and go hug the trees.
Post by The Trucker
Post by professorchaos
You and Roy assume owners are speculators who will sell because the land
brings them nothing. Surely not all owners are speculators many bought
because the land has a value to them. Either a stream of profits or a
location they really enjoy. They will not sell unless the offer equals
or exceeds the value THEY put on the land.
The lot across the street from me is assessed at the same value as the lot
on which my home sits. That is what is on the tax records. The owner has
not been near the lot that I know of for 5 years. It is a home for
rodents and rabbits and such. The "use value" to the owner is zero.
Yet he still has a value on the lot. It was worth some amount of money
to him or he would not have bought it. Perhaps he derives pleasure from
knowing the lot has not been affect by urban sprawl and has a dollar
value on it. Maybe he is a speculator. Who knows. Even if he is a
speculator it does not mean all owners of land are speculators.

The example disproves you point. The guy is obviously paying some amount
in taxes to stare at his vacant lot or should we say not stare at his
vacant lot. Something you claim would not happen. He would sell at any
price to avoid the tax. Your neighbor proves this untrue.
Post by The Trucker
It is
ONLY speculation value (it is a Monet without the eye massage). There are
3 other such lots close by and they all are the same deal.
So speculators are sitting around being willing to stare at a vacant lot
despite paying land taxes. Therefore they will not sell at any price to
avoid the tax.

Again you are assuming they are speculators. Maybe they are tree huggers
who get off to the fact empty land when squirells and rabbits play
exist. So they have a value to keeping the land empty. Now do you
understand why Use value IS NOT WILLINGNESS TO SELL? Maybe they plan to
give the land as wedding present so one of their kids can build a house.
Who knows? In either case these people have a value to the land that
must be met before they sell.
Post by The Trucker
Post by professorchaos
Post by The Trucker
P = $11359
R = $5040
i = .07
t = 44.3
Due to the tax shift the price of the land just fell $51,641.
Such one legged analysis can not determine price. You have only
determined willingness to sell.
Yer right. The current owner can value that land at $10M, and suck on it
till hell freezes over. But the tax is going to be $187.50 and he will
need to pay it or the land will be sold to someone else.
If he has a $10 million dollar value on the land he will pay the tax
rather than sell the land for $100,000.
Post by The Trucker
Post by professorchaos
If the owners will not sell as much land
on the market as people want to buy at the price you quote, the price
must rise.
And so too the tax?
Which is why with ad valeroum taxes shift not only the curve but also
the slope of the curve changes.
Post by The Trucker
No. The assessor collector will asses the value of
like parcels (sales/trade price) in this area and that will determine the
taxes collected at the specified rate. If there are many sales at a
higher or lower rate then the assessor collector will change the book
value for tax purposes. But the taxed value has not a damned thing to do
with what one particular "owner" might think about it.
And this is supposed to be a low administration cost?
Post by The Trucker
Post by professorchaos
This may be due to Ricardian rents. Different grades of land
give different values.
BINGO!!! You are now beginning to understand what creates the actual
value.
You still don't understand how this factors into elasticity however. We
can't even get to why elasticity is important in determining the effect
on the market of the tax until we understand elasticity.
Post by The Trucker
Post by professorchaos
Profits above normal can be gained simply because
the land is better. If Ricardian rents exist then the argument that all
land in existence will be offered for sell at all prices is false.
You are very confused.
No I am not. It is simply. A rent says I can make $100 more off this
land than another piece simply because I own a better grade. I will not
sell the land unless the price is $100 more than the lower grade of
land. Therefore quantity supplied is affected by price and elasticity is
not 0.
Post by The Trucker
The value of any parcel (for tax purposes or for
exchange price in an open market) is determined by the USABILITY of the
parcel. It need not be farmland or any other particular use.
We haven't even gotten to the tax yet. We must first understand why the
supply curve is not vertical or what would make it vertical to determine
what will happen with the tax. A vertical supply curve leads us to a
different conclusion about the effect of the tax than a supply curve
that is not vertical. So before figuring out taxes and what the effect
of the taxes are we need to know what demand and supply look like. Then
we move on to how the tax affects these curves.

Now lets see the big picture. The point is that we know and agree the
tax will affect the demand curve. This means two results are possible
after demand decreases due to the tax.

A. The market has no change in the number of trades made. Everyone who
would buy the land before still buys the land and everyone who would
sell the land before still sells the land. This is efficient, assuming
the market was efficient pre-tax. This happens if and only if the
elasticity of supply is 0.

B. The market has fewer trades than before. Hence, the term lost gains
from trades (deadweight loss). This is inefficient because SOME people
who would have sold before the tax do not sell now. SOME People who
would have bought before the tax will not buy now. There are fewer
trades and the market no longer captures the consumer surplus and
producer surplus from those trades.

You see the number of parcels traded will tell us if the market remains
efficient or not. If the market is efficient before tax, if more or less
parcels are traded after tax then the market is inefficient after the
tax. In the case of fewer trades, the value of the buyer, after tax, now
exceeds the willingness to sell. Surplus would be increased by
increasing trades. If too much then the value to the buyer is less than
willingness to sell decreasing surplus. The idea of surplus is Value to
buyer - price paid + price paid - willingness to sell + tax revenues. If
the value to the buyer is less than willingness to sell surplus decreases.

The shape of the supply curve, and the demand curve, are CRUCIAL
therefore in telling us how the tax will affect the market.
Post by The Trucker
Post by professorchaos
In other words you are assuming land has no value to the
owner only to the buyer.
OH NOOOOOOOOOOOOOOOOOOHHHHHHH!!!! I am not assuming that at all.
Damn. I was tired and made another typo. I had to be tired I can't blame
the partial dyslexia I have had to fight all my life on this one. It
should have read the buyer. I really apologize for the confusion. I
should have proofread better but I was tired and didn't think the cost
of proofreading was worth the benefit.

For the argument to work as I said before all land owners have to be
speculators who get nothing from the land. So the willingness to sell
does not change.
Post by The Trucker
The
land is of value to the owner in the exact amount of what the buyer will
pay him or it has value to the owner any way he wants to "appreciate" the
location.
Only at POS of the last unit sold. There is no reason to believe other
wise. If my value is less than what the person offers I will still sell.

He can use it to open a hot dog stand (no wait... It's
Post by The Trucker
residential zoned I think. So he must build a residence on it or not use
it for anything at all).
Again another assumption that will not always hold. If you want to
confine your analysis to unimproved land in a residential zoned area
then make that clear from the beginning.
Post by The Trucker
So he is sucking on a land deed and paying
$187.50 for the privilege of doing so.
Maybe that is because he uses the land for hay. Maybe he places a value
on just owning the land and is willing to pay $187.5. The guy across the
street from you obviously does. He hasn't sold at the market prices of
the last 5 years. He certainly isn't speculating. If he was he would
dumped it sometime during the lowest interest rates we have seen in a
long time or shortly after.
Post by The Trucker
Post by professorchaos
This only works if only speculators own the
land. If this were true you and Roy might be right. It certainly is not
true.
Oh but it IS true. IT is the objective reality right here in my
neighborhood that stares us in the face.
Bullshit!! If they were speculating they would have sold the land during
the boom on property values. At the lowest interest rates we have seen
for a very long time, people were willing to pay more. The owners would
have sold then or shortly after the prices dropped a bit if they were
speculators. The fact the guy held it for 5 years shows he is not
speculating, he is extremely bad at speculating, or he has a value on
that land that market price has not exceeded. My bet is on the latter.
Even a bad speculator would have sold when interest rates began to rise
again.
Post by The Trucker
Post by professorchaos
Post by The Trucker
The fake Republican economy just bit the dust.
What is Republican or democrat about this?
The fake Republican economy is built on tax cuts,
So Kennedy was a Republican?
Post by The Trucker
escalation in land
rents,
In the Ricardian sense land rents can't escalate. The real differences
in the land will always be the same unless the quality of the land changes.
Post by The Trucker
and escalation in monetary rents. These are all whipped together
to present a false "prosperity".
If you say so. That is the kind of clap trap I would expect from a blind
zealot.
Post by The Trucker
Post by professorchaos
Post by The Trucker
The "land owners" don't set the price of the land.
No supply and demand determine price.
Post by The Trucker
As the price falls
more land becomes available for development as the "owners' attempt to
get rid of their tax liability.
Why would they do this if the land has value to them and/or can still
turn a profit after tax.
The case at hand is rather pointed. The locations in question are
residential locations.
Which did not sell WHEN LAND PRICES WERE HIGHER THAN EVER in your
example of your neighbor.
Post by The Trucker
The owners are not showing up on sunny days to
lounge in the sun, nor do they have vegetable gardens on these plots or
anything else.
Does this mean they do not have a value from just knowing they could. It
is a known fact that people who have no desire to go to Yosemite do not
want it developed. People do gain value from simply knowing something is
there and THEY COULD use it, even if they have no plans to. I might have
no plans to go to independence hall but have a value on the building
existing. Even if I had no plans to see it, I might still oppose tearing
it down. That is why we can't define things as use value. Our
willingness to buy or sell sometimes has nothing to do with our use
value. I had a neighbor who parked his boat in the driveway every
weekend partially blocking the road. HE NEVER USED IT. He would just
pull it up in the drive way on weekends. I suppose to show everyone he
had a boat. IT STILL HAD VALUE TO HIM.
Post by The Trucker
Downtown lots are often used as paid parking in an attempt
to pay the taxes. That is not the case here.
Which shows that the tax affects the mix of products sold in the economy
and is not efficient.
Post by The Trucker
Post by professorchaos
Why would I suddenly sell my farm that makes
$10,000 a month for hay cut to feed cattle if the taxes went up $500. I
simply would not unless someone offered me $9,500 or higher. Supply
determines price just as much as demand. To quote Marshal, "To argue if
supply or demand determines price is to argue if the top or the bottom
blade of scissors cuts the paper.
We are not talking about a farm.
The point is still the same. If I derive $10000 worth of pleasure a year
just from knowing I own the land why would I sell if a $5000 a year tax
was placed on the land. I still gain something from it that exceeds the
cost of holding it. Granted that is a steep price for bragging rights
but people do it. They buy cars they never use just to show people they
have them. They buy property they don't intend to use to make them look
like a big man when they say I own property in 4 counties. It makes no
sense to me but to these people the bragging rights have value.
Post by The Trucker
Post by professorchaos
Even if you were correct it is the change in supply causing prices to
fall not the other way around. You really do not understand supply and
demand. Learn what it is and the predictions before you try to overturn it.
What good would it do to "learn" anything like the shit that you've
"learned"?
You might understand my argument and gain some real insight into
economics if you learned the terms and what the predictions actually are
rather than your twisted notion of what you think they are. You might
not be a blind zealot anymore when you learn Republicans and Democrats
BOTH screw up and do it a lot.

If you studied a little political science you might learn that both the
80's and 90's were results of the parties agreeing to sometimes bad
policies.
Post by The Trucker
Post by professorchaos
Post by The Trucker
Or it may illustrate inelasticity of land and locations. I have no idea
any more. Nor do I care. Value matters. Prices follow.
Value in what sense?
In the subjective sense of value as that word is understood by rational
people.
You mean people who have do not understand economics.
Post by The Trucker
Post by professorchaos
I would pay $5 market price for the candy
bar but because you tax $1 a candy bar owned(or bought or consumed it
doesn't matter) it will cost me $6 to buy the candy.
Only works for transaction taxes.
Really so how would be taxed $1 for owning the candy bar immediately
after buying it be different from being taxed $1 for buying the candy
bar at POS? One is a tax on ownership. One is a tax on the transaction.
It is only semantics. Buying the candy bar means I pay $1 tax either
way. The only difference is WHEN.
Post by The Trucker
Post by professorchaos
I will no longer
buy the bar if the market price is $5. Why? Because I put a value of $5
on it and it will cost me $6 dollars to buy it. You can call that
willingness to buy use value if you want.
Thanx. I will.
Post by professorchaos
I don't because use value is
hard to define and can not be observed. I can observe who much you are
willing to pay.
You can call it a holla hoop if you want.
I am not the one pulling out terms that have been out of use since the
Roman Empire. Not even the classical economist used use value. That
ended around Aristotle's time.
Post by The Trucker
The forgoing illustration proves what I have said. A tax on land as
opposed to improvements can decrease the cost of homes as those terms are
used by normal well adjusted human beings.
No it decreased the PRICE of homes. The after tax cost is the same as
before at best. You don't understand this because you think saying I
will tax you X amount if you own the land is somehow different from
saying I will tax you X amount if you buy the home. You have to buy the
home to own. That tax is part of the cost you pay as a consequence of
the transaction. Just as a tax on the transaction is.
Post by The Trucker
Post by professorchaos
Post by The Trucker
Tax breaks on income tax
actually engender an increase in land prices and are also a real
giveaway to the mortgage brokers.
Yes but is that increase in prices greater than if the after tax price
of land under an unimproved land tax?
I have just illustrated that an increase of tax on unimproved land
decreases prices.
No you haven't. The model is flawed one legged analysis. Even if it was
not price dropping does not a priori make the home more affordable. The
tax needs to be paid. I can make up a formula and pull numbers out of my
ass to show anything as well. That doesn't mean the formula is correct.
Post by The Trucker
I now CLAIM (not yet proved), that a decrease in income
taxes will INCREASE the price of real estate.
This is quite possible because real estate is a normal good. Providing
more income means increased demand. This is not surprising. What you are
missing is in this case the price is what the buyer ultimately pays. In
the previous case the price the buyer pays is market price + tax. Buying
the real estate triggers the tax.
Post by The Trucker
Post by professorchaos
That is something I can not
answer. Market price drops with the unimproved tax but it is because
demand decrease due to having to pay the tax. After tax price (price +
tax) may be more or the same.
I have just shown that the "after tax price" of the home and of
comparable homes in the same neighborhood is less if the land tax is
increased and the improvement tax is decreased -- revenue neutral tax
shift.
You have pulled a formula and numbers out of a hat. Under this standard
again can be "proven".
Post by The Trucker
Post by professorchaos
Post by The Trucker
Post by professorchaos
I have no doubt that if sellers did change the amount of land offered
for sale on the market that the tax would have no effect on trades.
But you have no doubt that Jack climbed a beanstalk. The number of
locations offered for sale will not change.
Again you are making the same assumption that Roy did that I have shown
is not backed up data. That people will sell the same amount regardless
of the price.
Are you going to pay $187.50 a month to suck on a land deed or not?
Yes if I have a value on the land higher than $188. If I like to brag
about how much land I own I might pay the tax instead of losing bragging
rights and listening to people laugh about how the big rich man could
not pay his taxes and had to sell off the land.

My point is the land was bought in the first place because it has value
to me. That value is still there and just because a tax is placed does
not mean I will sell regardless of what the market price is. The price
still has to meet my value.
Post by The Trucker
Post by professorchaos
You and Roy need to make up your minds. Does the amount of land offered
for sale stay constant with price or does it increase with price?
The land (in this case) is ALWAYS FOR SALE. That is the only USE of the
land is the sale of it. It has no other use.
This is where I strongly disagree. I will not sell my land if the going
price does not meet or exceed the dollar value I place on owning the
land. This may be because of use value or simply because the owner wants
to win a pissing contest and show the other redneck he has more money
than the other guy. There are people who are not used to having money
who believe a measure of a man is the amount of money he has. They will
pay to show they have the money to pay. That means they place a value on
the land that exceeds the taxes they have to pay.
Post by The Trucker
Post by professorchaos
Both
of you are making both claims.
I may have inadvertently misspoke in passing concerning the "availability"
of lots in this area. Roy is normally a lot more careful about that sort
of thing than I am.
Roy careful. That is funny.
Post by The Trucker
The supply of
available lots is not going to change. They are not going to run away or
sink into the ocean. Nor will the number of sellers increase or decrease
due to the tax because they all want to sell all the time unless they
think they can get a better price later. It is purely speculation.
Or maybe because owning the land gives them a percieved benefit. I would
spend $100,000 to show I am rich and the land sold for $100,000 or less
I would buy it. I still place that $100,000 value on the status symbol
of owning the land. I will not sell for offers less than $100,000 but
that is the value I have on owning the land. Perhaps I put a $100,000
value on the ability to go hug trees, whether I do or not, the same
happens.

The point is these people bought the land because it HAD VALUE TO THEM.
If the price does not meet that value I do not sell the land. So the lot
available for sell will change with price if people have different
values on ownership of the lot. You and Roy's argument only works if
everyone has the same value on the empty land and that is 0. This means
all owners are speculators. People who bought something with no value to
take advantage of market fluctuations. If owners have different values
on the land, to them, then it will take different prices to sell. If I
put a $10 value on the land because I can park my car there on Saturday
and walk to the river to fish and you place a $100,000 value on the land
because you will pay that much to show people you have money then we
will sell at different prices. I will sell at $10 and you will not
because owning the land gives you a status symbol that is worth $100,000
to you.
Post by The Trucker
Post by professorchaos
That the amount of land offered for sell
will not change but it will increase. WHICH IS IT? Both you and Roy want
to claim it doesn't change but it increases that can't happen. A few
paragraphs ago you claim supply or quantity supplied, I am not sure
which one you mean, increased. Now you are saying it doesn't change.
Make up your mind.
Why??? It is in my definition of the word "elasticity" totally
irrelevant.
This has nothing to do with the definition of elasticity. It has
everything to do with in one paragraph saying quantities for sale will
rise then in another saying quantities for sale can not change.
Post by The Trucker
We have been through all of this before. You want to haggle
over the definition of the word and I no longer care about it.
No haggling here just pointing out your inconsistency.
Post by The Trucker
The
definition of the word does not alter the fact that all of the locations
are for sale all the time and there are no more of them nor less of them
until that ARE sold/allocated to homes.
If they are all offered for sale at all times then HOW CAN THE AMOUNT
OFFERED FOR SALE INCREASE? HOW CAN THE AMOUNT SOLD CHANGE? You argue
this and that the amount of lots sold will increase after a tax. Which
is it?
Post by The Trucker
IN the broader view, the
elasticity is zero because the price that an owner might WANT will not
alter that actual quantity of like parcels.
Please do not use the word elasticity it is obvious from this statement
you do not know what it means. I have given the definition over and over
again to Roy and can not accept it is right and wants to use his own
homemade definition, in which only he uses.

It has nothing to do with a price an owner wants. It is measure of how
much owners are wiling to sell when prices change. It has nothing to do
with prevailing price and little to do with what price owners want. It
shows how the supply or demand curve responds to a change in price. So
how many more parcels of land are offered on the market when price
increases from $10,000 to $20,000 is what elasticity measures. It
measures the percentage change in quantity supplied divided by
percentage change in price. Something Roy is unwilling to accept and
wants to define in some other weird convoluted way like how income
changes when quantity supplied changes. Roy makes up his own definition
and calls other people stupid when they tell him this is not right.
Post by The Trucker
I have given you a dose of reality. If you can make your economic
theories fit that reality then that is good. If not then your economic
theories suck.
They fit quit well into reality. The data show it over and over again.
They might not fight well into your understanding driven by fuzzy
definitions and blind zealotry. However, to those who understand the
terms and the theory the theories fit well into reality.
Andy F.
2007-08-31 12:06:09 UTC
Permalink
Post by professorchaos
Post by Andy F.
You've got it the wrong way round. Demand for land is elastic, but the
supply is inelastic.
A. The land market is not what we are talking about. It is the rental
market. Rental markets do not buy and sell land. They allow someone to use
the land and STRUCTURES on it. Therefore what the elasticity of demand and
supply of land are is irrelevant to the conversation.
I was talking about a tax on land, not just on rented land.Owner - occupiers
are effctively renting the land to themselves, and would be taxed
accordingly. so the relevant 'supply' in this case is all the land which
existsin private hands.Since they aren't making any more land, the
elasticity is exactly zero. (Provided that the tax isn't more than 100% of
the rental value.)
Post by professorchaos
B. There is every reason to think that the demand for rental units is
inelastic. Living space is a necessity and there are few close
substitutes. As far as elasticity of supply of rental units. I would need
some data or to see if any papers have calculated. New construction of
rental units does not necessiarly mean new land needs to bought. The
buildings on the land can be modified.
I think it's definitely elastic.When land prices are high people are more
likely to live with their parents , share apartments and live in small
houses rather than big ones.
professorchaos
2007-08-31 17:47:14 UTC
Permalink
Post by Andy F.
Since they aren't making any more land, the
elasticity is exactly zero. (Provided that the tax isn't more than 100% of
the rental value.)
A. Tell that to the people in Dubai. They are making land. Tell that to
San Fransisco. Over the twentith century the bay got smaller as San
Fransisco burned several times. They piled up the remnants and covered
them with dirt. This actually claimed land from the sea. Usable can and
is made. Swamps are drained. Levies are built to claim land for the sea
(New Orleans). We certainly can make more land.

B. Land is not a produced good so think of the supply curve as cost is
not applicable. The elasticity of supply of land is not likely to be
zero. Why because land has different levels of desirability. An owner of
land in the swamps of Louisiana will sell at a lower price than an owner
of land on the Ocean front in California. Different grades of land mean
people have different willingness to sell. This will cause quantity
supplied changes as price changes.

The Gulf coast land owner in Louisiana may not sell for $75 an acre
while the inland swamp land owner will gladly sell at that price. The
Gulf Coast land owner may not sell until the prices is $150. In this
case the supply curve is highly inelastic 1/75 but not perfectly
inelastic. It is a fallacy and a bad thought habit that because
something is in fixed supply that the elasticity of supply is zero. I
know Greg Mankiw has a not very well thought out panel in his textbook
that makes the same argument you just made but it is wrong.
Post by Andy F.
Post by professorchaos
B. There is every reason to think that the demand for rental units is
inelastic. Living space is a necessity and there are few close
substitutes. As far as elasticity of supply of rental units. I would need
some data or to see if any papers have calculated. New construction of
rental units does not necessiarly mean new land needs to bought. The
buildings on the land can be modified.
I think it's definitely elastic.When land prices are high people are more
likely to live with their parents , share apartments and live in small
houses rather than big ones.
Rental markets are what I am referring to land prices HAVE ZERO EFFECT
ON RENTAL MARKETS. The cost of the land is a sunk cost. Land available
has little effect on apartments or office buildings available. Owners
can always elect to build upward. Trump didn't much land in Chicago to
start his massive multi-story office building. Smaller structures on
existing land can be torn down to make skyscrapers. You don't have to
have empty unused land in the wilderness to make rental property.
The Trucker
2007-08-31 20:36:49 UTC
Permalink
Post by professorchaos
Post by Andy F.
Since they aren't making any more land, the
elasticity is exactly zero. (Provided that the tax isn't more than 100% of
the rental value.)
A. Tell that to the people in Dubai. They are making land. Tell that to
San Fransisco. Over the twentith century the bay got smaller as San
Fransisco burned several times. They piled up the remnants and covered
them with dirt. This actually claimed land from the sea. Usable can and
is made. Swamps are drained. Levies are built to claim land for the sea
(New Orleans). We certainly can make more land.
Only a person into deep denial would use such minutia as a
basis of argument.
Post by professorchaos
B. Land is not a produced good so think of the supply curve as cost is
not applicable. The elasticity of supply of land is not likely to be
zero. Why because land has different levels of desirability. An owner of
land in the swamps of Louisiana will sell at a lower price than an owner
of land on the Ocean front in California. Different grades of land mean
people have different willingness to sell. This will cause quantity
supplied changes as price changes.
The problem, Mr. lying sack of shit, is that the price will not alter the
characteristics of the naturally occurring land. The swamp is a swamp and
the land next to the deep water bay is still as it is regardless of the
price paid for its use. The land does not jump up and change its natural
or acquired personality in response to some asshole waving money around.
Locations are not "supplied", the fixed locations are simply allocated.
Post by professorchaos
The Gulf coast land owner in Louisiana may not sell for $75 an acre
while the inland swamp land owner will gladly sell at that price. The
Gulf Coast land owner may not sell until the prices is $150. In this
case the supply curve is highly inelastic 1/75 but not perfectly
inelastic. It is a fallacy and a bad thought habit that because
something is in fixed supply that the elasticity of supply is zero.
No. Of course it isn't, the "supply" of any particular location is fixed
and it does not respond to price. There will not be MORE or less of that
particular location regardless of what the market might induce as a price.
Post by professorchaos
I
know Greg Mankiw has a not very well thought out panel in his textbook
that makes the same argument you just made but it is wrong.
It is your supposed education that brands you as a neoconomist as opposed
to branding you as a fool.
Post by professorchaos
Post by Andy F.
Post by professorchaos
B. There is every reason to think that the demand for rental units is
inelastic. Living space is a necessity and there are few close
substitutes. As far as elasticity of supply of rental units. I would need
some data or to see if any papers have calculated. New construction of
rental units does not necessiarly mean new land needs to bought. The
buildings on the land can be modified.
I think it's definitely elastic.When land prices are high people are more
likely to live with their parents , share apartments and live in small
houses rather than big ones.
Rental markets are what I am referring to land prices HAVE ZERO EFFECT
ON RENTAL MARKETS.
More total horseshit. The price of the land must be borne by the user
of the fixed capital improvements.
Post by professorchaos
The cost of the land is a sunk cost.
There is no such thing as this in unimproved land and the land price will
rise or the fixed capital improvements will be stolen. The price of land
is a market function like all else. Fixed capital improvements will
increase the price at which the developer of the improvements will/can be
"marketed" off the land. Though the Georgists swear that fixed capital
improvements do not increase the price of the land on which they are
erected this cannot be the case. The owner of the improvements will not
then sell the underlying land to someone. Because that someone can then
demand an exorbitant rent by insisting that the capital owner move the
improvements off of the land owner's land. Or let us say that the owner
of the capital improvements will not sell the underlying land for less
than the value of the land and the improvements. Honest tax assessment
is not subject to this problem because the assessment is based on the
unimproved value of surrounding parcels. Yet the price of the land will
not engender the creation or production of additional copies of this
or adjacent similar locations.
Post by professorchaos
Land available
has little effect on apartments or office buildings available.
Damn.... You got one in the ball park. This statement MAY be true if the
trade price of the land can be minimized.
Post by professorchaos
Owners
can always elect to build upward. Trump didn't much land in Chicago to
start his massive multi-story office building. Smaller structures on
existing land can be torn down to make skyscrapers. You don't have to
have empty unused land in the wilderness to make rental property.
And yet the start-up costs are significant. And there is no reason to
build an office tower in Death Valley. The finance costs of land
allocation in a metro area are a drag on the creation of fixed capital
improvements. And there is no economic justification for these finance
costs.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org
professorchaos
2007-09-01 00:10:16 UTC
Permalink
Post by The Trucker
Post by professorchaos
Post by Andy F.
Since they aren't making any more land, the
elasticity is exactly zero. (Provided that the tax isn't more than 100% of
the rental value.)
A. Tell that to the people in Dubai. They are making land. Tell that to
San Fransisco. Over the twentith century the bay got smaller as San
Fransisco burned several times. They piled up the remnants and covered
them with dirt. This actually claimed land from the sea. Usable can and
is made. Swamps are drained. Levies are built to claim land for the sea
(New Orleans). We certainly can make more land.
Only a person into deep denial would use such minutia as a
basis of argument.
A. It is not minutia and B. it proves that land can be produced so
therefore there is no fixed supply of usable land. Matter can not be
created or destroyed by swamps can be drained, rocky outcroppings turned
to dust, and bays can filled. There is no fixed supply of USABLE land at
this point. Much more can be created and is waiting for the profits from
doing so to warrant the cost.
Post by The Trucker
Post by professorchaos
B. Land is not a produced good so think of the supply curve as cost is
not applicable. The elasticity of supply of land is not likely to be
zero. Why because land has different levels of desirability. An owner of
land in the swamps of Louisiana will sell at a lower price than an owner
of land on the Ocean front in California. Different grades of land mean
people have different willingness to sell. This will cause quantity
supplied changes as price changes.
The problem, Mr. lying sack of shit, is that the price will not alter the
characteristics of the naturally occurring land.
That has nothing to do with the argument. Do you understand it is
EXACTLY THE UNDERLYING CHARACTERISTICS THAT MEANS THAT WHEN PRICES ARE
LOW SOME LAND WILL NOT BE OFFERED FOR SALE? It is the essential fact
that land has different characteristics that shows that at low prices
less land will be offered up for sale. At low price you may only be able
to buy swamp land because people with land on beautiful pristine beaches
with clear blue water flowing over them will not sell at such a low price.
Post by The Trucker
The swamp is a swamp and
the land next to the deep water bay is still as it is regardless of the
price paid for its use.
Really is DC still a swamp? I mean the land. Of course if consider the
political activity there calling it a swamp is being rather nice.
Post by The Trucker
The land does not jump up and change its natural
or acquired personality in response to some asshole waving money around.
No but if land is in enough in demand swamps will be drained so that
people can build on it. This will happen if someone is offering enough
for land to make it profitable to drain and bring in dirt to build it
up. That does change the characteristics of the land. For instance my
neighborhood is several feet higher in elevation than it was before my
subdivision was built. It was because some asshole waved around and said
I will pay what it takes to bring in the dirt to raise the elevation so
I can build houses that will not flood. So yeah some asshole waving
money can change the characteristics of the land if he is willing to
spend it.
Post by The Trucker
Locations are not "supplied", the fixed locations are simply allocated.
Your point being? How is relevant to the discussion?
Post by The Trucker
Post by professorchaos
The Gulf coast land owner in Louisiana may not sell for $75 an acre
while the inland swamp land owner will gladly sell at that price. The
Gulf Coast land owner may not sell until the prices is $150. In this
case the supply curve is highly inelastic 1/75 but not perfectly
inelastic. It is a fallacy and a bad thought habit that because
something is in fixed supply that the elasticity of supply is zero.
No. Of course it isn't, the "supply" of any particular location is fixed
and it does not respond to price.
Wrong again. There may be only one location but at low prices the owner
may not be willing to sell. He is willing to sell if the price is high
enough. Quantity supplied is how much the owners are willing to sell not
how much exist. Again if you owned a piece of land and land was being
given away for free would you give yours away? If no then at price $0
Quantity supplied equals 0. If you are willing to sell at $1 billion
dollars than when price is $1 billion dollars quantity supplied is 1.
There is always just one piece of land it was just not supplied when P=0
and supplied when P= $1 billion. Supply has less to do with how much
exist then it does with how much people are willing to sell. If I buy up
all the Monet paintings in the world and refuse to sell at any price
then Quantity supplied is zero at all prices. It doesn't mean there are
0 Monet paintings in the world. I am just being a prick and won't sell.
Post by The Trucker
There will not be MORE or less of that
particular location regardless of what the market might induce as a price.
Very true but see the previous paragraph. The same amount exist but how
much people are to sell changes. Just because it exist doesn't mean I am
going to give it away at any price. This is not a manufactured good it
is an asset that gives a return or a place to live. Prices will affect
my willingness to sell my home. Just because when the price is $.10 and
I do not sell does not mean my home does not exist nor does it mean my
home suddenly came into existence when I decided to sell it at $500,000.
Post by The Trucker
Post by professorchaos
Post by Andy F.
Post by professorchaos
B. There is every reason to think that the demand for rental units is
inelastic. Living space is a necessity and there are few close
substitutes. As far as elasticity of supply of rental units. I would need
some data or to see if any papers have calculated. New construction of
rental units does not necessiarly mean new land needs to bought. The
buildings on the land can be modified.
I think it's definitely elastic.When land prices are high people are more
likely to live with their parents , share apartments and live in small
houses rather than big ones.
Rental markets are what I am referring to land prices HAVE ZERO EFFECT
ON RENTAL MARKETS.
More total horseshit. The price of the land must be borne by the user
of the fixed capital improvements.
Yes but it is a fixed cost. It does not affect how much the person will
supply because the note on the land or the opportunity cost of holding
it is not affect whether he rents or not. Fixed cost do not affect
decisions of production or rather to rent in the short run. They have to
be paid whether you rent or go out to your lot every day to piss on it.
They do affect the long run decision to stay in business. If you don't
meet your fix cost then you are losing money and will go out of business.
Post by The Trucker
Post by professorchaos
The cost of the land is a sunk cost.
There is no such thing as this in unimproved land and the land price will
rise or the fixed capital improvements will be stolen.
What are you talking about improvements for. Simply put the cost of land
is paid up front and does not change regardless of what you do with the
land. The bank doesn't care if you build a house on go have orgies on
the land every 3rd. Friday. The monthly payment is still the same.
Post by The Trucker
Though the Georgists swear that fixed capital
improvements do not increase the price of the land on which they are
erected this cannot be the case.
No that is the not case at all. They define the unimproved value and the
value with improvements as two different things. If you only tax the
unimproved value then it has no effect on decisions to improve the land.
This does not say that a piece of land with a 40 story office building
on it will sell for similar land with scrub brush on it.
Post by The Trucker
The owner of the improvements will not
then sell the underlying land to someone.
That is not entirely true. There are a lot of cases of people building
on leased land. I am sure the contracts are complicated and I am not
sure what happens if the lease isn't renewed since the land owner owns
the land and the renter owns the building but it happens. There is a
fraternity house at OU that has this setup. One fraternity owns the land
and leased to the other but the other fraternity built and owns the house.
The Trucker
2007-09-01 16:23:29 UTC
Permalink
Post by professorchaos
Post by The Trucker
Post by professorchaos
Post by Andy F.
Since they aren't making any more land, the
elasticity is exactly zero. (Provided that the tax isn't more than 100% of
the rental value.)
A. Tell that to the people in Dubai. They are making land. Tell that to
San Fransisco. Over the twentith century the bay got smaller as San
Fransisco burned several times. They piled up the remnants and covered
them with dirt. This actually claimed land from the sea. Usable can and
is made. Swamps are drained. Levies are built to claim land for the sea
(New Orleans). We certainly can make more land.
Only a person into deep denial would use such minutia as a
basis of argument.
A. It is not minutia and B. it proves that land can be produced so
therefore there is no fixed supply of usable land. Matter can not be
created or destroyed by swamps can be drained, rocky outcroppings turned
to dust, and bays can filled. There is no fixed supply of USABLE land at
this point. Much more can be created and is waiting for the profits from
doing so to warrant the cost.
Only a person into deep denial would use such minutia as a
basis of argument.
Post by professorchaos
Post by The Trucker
Post by professorchaos
B. Land is not a produced good so think of the supply curve as cost is
not applicable. The elasticity of supply of land is not likely to be
zero. Why because land has different levels of desirability. An owner of
land in the swamps of Louisiana will sell at a lower price than an owner
of land on the Ocean front in California. Different grades of land mean
people have different willingness to sell. This will cause quantity
supplied changes as price changes.
The problem, Mr. lying sack of shit, is that the price will not alter the
characteristics of the naturally occurring land.
That has nothing to do with the argument.
Actually it has everything to do with the fact that you are a tap-dancing
equivocator.
Post by professorchaos
Do you understand it is
EXACTLY THE UNDERLYING CHARACTERISTICS THAT MEANS THAT WHEN PRICES ARE
LOW SOME LAND WILL NOT BE OFFERED FOR SALE?
Whether land is "offered for sale or not" the land has value. The value
is anywhere and everywhere what the market will bear OR the use value to
the current land holder. These values have nothing to do with any
transaction regarding the particular location. When a seller and a buyer
value the location in a way that (in their individual opinions) produces a
positive for them a free market trade may take place. But the value of
the location was there before and after the trade and it was not defined
or changed by the trade.
Post by professorchaos
It is the essential fact
that land has different characteristics that shows that at low prices
less land will be offered up for sale.
The "offering it for sale" is irrelevant to the value of the location.
A trade may or may not take place when the seller and the market come to
terms on a price. That price is typically indicative of the value but it
did not create the value.
Post by professorchaos
At low price you may only be able
to buy swamp land because people with land on beautiful pristine beaches
with clear blue water flowing over them will not sell at such a low price.
You seem to have no idea what value is. An exchange need not take place
for value to exist.
Post by professorchaos
Post by The Trucker
The swamp is a swamp and
the land next to the deep water bay is still as it is regardless of the
price paid for its use.
Really is DC still a swamp?
No. It isn't (I can only assume that at some point it WAS due to your
spiel. But I truly do not know)
Post by professorchaos
I mean the land. Of course if consider the
political activity there calling it a swamp is being rather nice.
Apparently someone added fixed capital to that location and made it
usable.
Post by professorchaos
Post by The Trucker
The land does not jump up and change its natural
or acquired personality in response to some asshole waving money around.
No but if land is in enough in demand swamps will be drained so that
people can build on it. This will happen if someone is offering enough
for land to make it profitable to drain and bring in dirt to build it
up. That does change the characteristics of the land.
Adding appropriate fixed capital to land will allow the value of the
location to be extracted. It is fair to say that underwater land in a
swamp is essentially worthless but for the fact that it is adjacent to New
Orleans and the commerce of that particular locale. The levies are
constructed to make the locations usable. Yet the proximity of the
location has value or the improvements would not have even been
considered. It seems to be one of the very best cases of land taxation as
a proper means of infrastructure development and maintenance. The
improvement is financed due to the location and if that cannot be done
without a loss then the improvement (the levies) should not be built.
Post by professorchaos
For instance my
neighborhood is several feet higher in elevation than it was before my
subdivision was built. It was because some asshole waved around and said
I will pay what it takes to bring in the dirt to raise the elevation so
I can build houses that will not flood. So yeah some asshole waving
money can change the characteristics of the land if he is willing to
spend it.
He has attached fixed capital improvements to the land so as to make use
of the value of the location. Why did he not do that in some swamp in the
middle of nowhere? It is the location that has value BEFORE the
improvements.
Post by professorchaos
Post by The Trucker
Locations are not "supplied", the fixed locations are simply allocated.
Your point being? How is relevant to the discussion?
It is entirely relevant to the discussion because it is the essence of the
discussion. The "neighborhood" is right where it is due to proximity to
other fixed assets. The improvements were added BECAUSE the location made
the endeavor worthwhile. Surely it would have been less costly to buy
some land in the boonies and poor some dirt there instead?
Post by professorchaos
Post by The Trucker
Post by professorchaos
The Gulf coast land owner in Louisiana may not sell for $75 an acre
while the inland swamp land owner will gladly sell at that price. The
Gulf Coast land owner may not sell until the prices is $150. In this
case the supply curve is highly inelastic 1/75 but not perfectly
inelastic. It is a fallacy and a bad thought habit that because
something is in fixed supply that the elasticity of supply is zero.
No. Of course it isn't, the "supply" of any particular location is fixed
and it does not respond to price.
Wrong again. There may be only one location but at low prices the owner
may not be willing to sell.
This is the real basis of your problem here. You BELIEVE that value
arises due to ownership or trade. It doesn't.
Post by professorchaos
He is willing to sell if the price is high
enough. Quantity supplied is how much the owners are willing to sell not
how much exist. Again if you owned a piece of land and land was being
given away for free would you give yours away? If no then at price $0
Quantity supplied equals 0. If you are willing to sell at $1 billion
dollars than when price is $1 billion dollars quantity supplied is 1.
The land is worth whatever someone will pay for it. That I agree with.
But the owner and his assessment of value is irrelevant to the market
value. He does not participate in the market value of the location. It
has value based on what the market (highest bidder) would pay for the use
of the location.
Post by professorchaos
There is always just one piece of land it was just not supplied when P=0
and supplied when P= $1 billion. Supply has less to do with how much
exist then it does with how much people are willing to sell. If I buy up
all the Monet paintings in the world and refuse to sell at any price
then Quantity supplied is zero at all prices. It doesn't mean there are
0 Monet paintings in the world. I am just being a prick and won't sell.
The value of a Monet (or anything else) is what you believe it to be (your
own value in use not necessarily shared by the market), or what the market
is willing to pay. Neither of these values has anything to do with whether
a trade takes place. The trade takes place when your valuation is lower
than the market's valuation and then we have an agreement of sorts on the
value. Yet the separate value judgments are not dependent on the exchange
taking place at all. You are confusing value and price.
Post by professorchaos
Post by The Trucker
There will not be MORE or less of that
particular location regardless of what the market might induce as a price.
Very true but see the previous paragraph. The same amount exist but how
much people are to sell changes. Just because it exist doesn't mean I am
going to give it away at any price. This is not a manufactured good it
is an asset that gives a return or a place to live.
Value in use. Thank you.
Post by professorchaos
Prices will affect
my willingness to sell my home.
We were talking about land, Bosco. But the point still remains that the
value of the item is independent of the exchange. The exchange is a
result of differing value judgments that produce a positive in the eyes of
those involved in the exchange.
Post by professorchaos
Just because when the price is $.10 and
I do not sell does not mean my home does not exist nor does it mean my
home suddenly came into existence when I decided to sell it at $500,000.
The value of the location is the same whether or not you want to sell it
and whether or not you actually do sell it.
Post by professorchaos
Post by The Trucker
Post by professorchaos
Post by Andy F.
Post by professorchaos
B. There is every reason to think that the demand for rental units is
inelastic. Living space is a necessity and there are few close
substitutes. As far as elasticity of supply of rental units. I would need
some data or to see if any papers have calculated. New construction of
rental units does not necessiarly mean new land needs to bought. The
buildings on the land can be modified.
I think it's definitely elastic.When land prices are high people are more
likely to live with their parents , share apartments and live in small
houses rather than big ones.
Rental markets are what I am referring to land prices HAVE ZERO EFFECT
ON RENTAL MARKETS.
More total horseshit. The price of the land must be borne by the user
of the fixed capital improvements.
Yes but it is a fixed cost. It does not affect how much the person will
supply because the note on the land or the opportunity cost of holding
it is not affect whether he rents or not.
(sigh)... The person does not "supply" the land. The person in your
world merely prevents the use of the land until (s)he is paid a toll.
Post by professorchaos
Fixed cost do not affect
decisions of production or rather to rent in the short run. They have to
be paid whether you rent or go out to your lot every day to piss on it.
They do affect the long run decision to stay in business. If you don't
meet your fix cost then you are losing money and will go out of business.
Yet you are still profit maximizing for you are member of homo
economicus as we all must be in the science of economics. And as I have
said, the value of the land remains regardless of what you have paid or
will pay. It is the value of this location that the renter pays and it
has nothing to do with you as the proprietor. And if you "go out of
business" then you will be replaced by a different proprietor. The user
of the facility in his role of homo economicus cares not WHO owns the
facility.
Post by professorchaos
Post by The Trucker
Post by professorchaos
The cost of the land is a sunk cost.
There is no such thing as this in unimproved land and the land price
will rise or the fixed capital improvements will be stolen.
What are you talking about improvements for. Simply put the cost of land
is paid up front and does not change regardless of what you do with the
land. The bank doesn't care if you build a house on go have orgies on
the land every 3rd. Friday. The monthly payment is still the same.
Yet you as the "owner" will collect rent and this rent is for the use of
the fixed capital and the land and you will profit maximize or you are not
part of the economy studied by political economy. Your "costs" are
irrelevant to the market price. YOU can be easily replaced. It is YOU
who are a "sunk cost" :)
Post by professorchaos
Post by The Trucker
Though the Georgists swear that fixed capital
improvements do not increase the price of the land on which they are
erected this cannot be the case.
No that is the not case at all.
Many who have called themselves Georgists have insisted to me that the
production of fixed capital does not increase the value of the underlying
land and I understand their claim. But the desirability for ownership of
the underlying land must surely include the legal ability to extort rent
from the owner of the fixed (like you can't haul it away) capital. That
capital is imprisoned and enslaved by the lack of mobility and the owner
must pay whatever rack rent the owner of the underlying land might ask.
The VALUE therefore, of that land is more because of this coercive element.
That element is not considered by an outside tax assessor collector in
that the value is the same as similar land parcels without the
improvements. That is the market value as seen by a Georgist.
Post by professorchaos
They define the unimproved value and the
value with improvements as two different things. If you only tax the
unimproved value then it has no effect on decisions to improve the land.
That is true so long as the coercive element defined above is not active.
Post by professorchaos
This does not say that a piece of land with a 40 story office building
on it will sell for similar land with scrub brush on it.
What it says is that the land and the building will not be sold separately
without a long term lease on the land that extends until the building
(the fixed capital) is depreciated or totally underwritten through the
collection of rent/interest.
Post by professorchaos
Post by The Trucker
The owner of the improvements will not
then sell the underlying land to someone.
That is not entirely true. There are a lot of cases of people building
on leased land. I am sure the contracts are complicated and I am not
sure what happens if the lease isn't renewed since the land owner owns
the land and the renter owns the building but it happens. There is a
fraternity house at OU that has this setup. One fraternity owns the land
and leased to the other but the other fraternity built and owns the house.
IT is doubtless a lease situation. AT some point it will make sense to
raze the structure and replace it. That could be a thousand years.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org
professorchaos
2007-09-01 19:34:37 UTC
Permalink
Post by The Trucker
Whether land is "offered for sale or not" the land has value.
Yeah the price it can be sold on the market. This has no bearing on
whether or not the quantity supplied changes with prices. That was the
argument. Whether it is offered for sale has everything to do with
whether how much land is offered for sale changes with the price of land
or not.
Post by The Trucker
The value
is anywhere and everywhere
Is value of the land God to you?
Post by The Trucker
what the market will bear OR the use value to
the current land holder.
Sorry not biting into an old hokey convuluded notion of use value versus
market value. I am referring to market price not a subjective idea of
value. This discussion has nothing to do with if Smith, Ricardo, and
Marx were right with their theory of value. It is discussing only market
prices and the effect on a tax on markets not the mystical use value of
the land.
Post by The Trucker
Post by professorchaos
It is the essential fact
that land has different characteristics that shows that at low prices
less land will be offered up for sale.
The "offering it for sale" is irrelevant to the value of the location.
Again your definition of value has no bearing on a discussion as to if a
tax will cause the amount of land bought and sold to drop. It is not a
question of subjective value it is a question of market price. The very
fact that you are arguing that different types of land have different
characteristics and different returns to owners only supports my
contention that the elasticity of supply is not 0. If you want to have a
discussion about labor theory of value fine but that has nothing to do
with the argument nor I am really interested in discussing hokey
mystical theories that have pushed to the wayside.
Post by The Trucker
Post by professorchaos
Post by The Trucker
The swamp is a swamp and
the land next to the deep water bay is still as it is regardless of the
price paid for its use.
Really is DC still a swamp?
No. It isn't (I can only assume that at some point it WAS due to your
spiel. But I truly do not know)
Yes it was. Houston was a swamp as well. Both were drained and the
underlying characteristics of the land changed. One became our nations
capitol and a large city as opposed to a swamp no one wants to live in.
The other went from a swamp no one wanted to live in to one of the
nation's largest cities.
Post by The Trucker
It seems to be one of the very best cases of land taxation as
a proper means of infrastructure development and maintenance. The
improvement is financed due to the location and if that cannot be done
without a loss then the improvement (the levies) should not be built.
In simple terms what are you arguing is exactly what I was arguing. Due
to different grades of land that the elasticity of supply of land is not
zero. So called Georgian fail to recognize this often. So the market for
land may be inefficient but the tax gives no disincentive to improve the
land.
Post by The Trucker
Post by professorchaos
Post by The Trucker
Locations are not "supplied", the fixed locations are simply allocated.
Your point being? How is relevant to the discussion?
It is entirely relevant to the discussion because it is the essence of the
discussion.
No it has no bearing on the argument that a land tax will cause the
quantity of land traded to decrease because the elasticity of supply of
land is not exactly zero. The tax will cause some land to not be
utilized in a way it would before because the will not buy the land if
the tax causes his return on his investment to be negative. Use value
has no bearing on this discussion.
Post by The Trucker
The "neighborhood" is right where it is due to proximity to
other fixed assets. The improvements were added BECAUSE the location made
the endeavor worthwhile.
None the less would the return have been high for the builder of the
improvements if the unimproved value of the land was taxed is the
question. Would the return of buying land and using it for a business be
higher without a land tax is the other question. If add $10 a year to
fix cost because a land tax has to be paid it is $10 less in profits
regardless of it taxes improvements or not. That will cause some
businesses to choose an investment that does involve buying new land.
Like tearing down existing structures and building multi-story
structures leaving the land that would have been developed fallow.
Post by The Trucker
This is the real basis of your problem here. You BELIEVE that value
arises due to ownership or trade. It doesn't.
I have made no statement on value only a statement on the effect on the
market and what motives people to buy and sell. As modern economist do
we talk about prices and quantities not some hokey mystical notion of
value that has nothing to do with market price.
Post by The Trucker
The land is worth whatever someone will pay for it. That I agree with.
But the owner and his assessment of value is irrelevant to the market
value.
It determines how much the owners are willing to sell on the market.
Both demand and supply determine price. So the market price and the
value as you define it are determined by willingness to sell and
willingness to pay. As Marshall said to argue if supply determines price
or demand determines price is to argue if the bottom or top blade of the
scissor cuts the paper.
Post by The Trucker
The value of a Monet (or anything else) is what you believe it to be (your
own value in use not necessarily shared by the market),
Value has no bearing on the discussion this is a discussion about prices
and quantities sold. The use value has no bearing on that. Marx, Smith,
or Ricardo even argued that. So if believe in a labor theory of value
fine. Listen to the classical economist it has NO BEARING ON PRICES.
Post by The Trucker
You are confusing value and price.
No I am not. I have never mentioned value on the effects on price and
the number of trades made. You are confused that the labor theory of
value predicts market quantities. Even Smith, Marx, and Ricardo would
argue that only prices do that.

I don't feel like repeating myself several more times on this point so I
am ending my response here.
Andy F.
2007-09-01 11:48:09 UTC
Permalink
Post by professorchaos
Since they aren't making any more land, the elasticity is exactly zero.
(Provided that the tax isn't more than 100% of the rental value.)
A. Tell that to the people in Dubai. They are making land. Tell that to
San Fransisco. Over the twentith century the bay got smaller as San
Fransisco burned several times. They piled up the remnants and covered
them with dirt. This actually claimed land from the sea. Usable can and is
made. Swamps are drained. Levies are built to claim land for the sea (New
Orleans). We certainly can make more land.
No, they aren't making more land, they're improving land which is already
there.
Post by professorchaos
B. Land is not a produced good so think of the supply curve as cost is not
applicable. The elasticity of supply of land is not likely to be zero. Why
because land has different levels of desirability. An owner of land in the
swamps of Louisiana will sell at a lower price than an owner of land on
the Ocean front in California. Different grades of land mean people have
different willingness to sell. This will cause quantity supplied changes
as price changes.
That's irrelevant, since the tax would be payable whether or not the land
was sold.We aren't discussing a tax on land sales.
Post by professorchaos
The Gulf coast land owner in Louisiana may not sell for $75 an acre while
the inland swamp land owner will gladly sell at that price. The Gulf Coast
land owner may not sell until the prices is $150. In this case the supply
curve is highly inelastic 1/75 but not perfectly inelastic. It is a
fallacy and a bad thought habit that because something is in fixed supply
that the elasticity of supply is zero. I know Greg Mankiw has a not very
well thought out panel in his textbook that makes the same argument you
just made but it is wrong.
LOL. A couple of days ago you were quoting Mankiw as an authority. Now
apparently you've actually looked at his book and found he doesn't agree
with you.
Maybe we should call Harvard and tell them their internationally renowned
professor has just been overruled by a usenet cartoon character.
Post by professorchaos
Post by professorchaos
B. There is every reason to think that the demand for rental units is
inelastic. Living space is a necessity and there are few close
substitutes. As far as elasticity of supply of rental units. I would
need some data or to see if any papers have calculated. New construction
of rental units does not necessiarly mean new land needs to bought. The
buildings on the land can be modified.
I think it's definitely elastic.When land prices are high people are more
likely to live with their parents , share apartments and live in small
houses rather than big ones.
Rental markets are what I am referring to land prices HAVE ZERO EFFECT ON
RENTAL MARKETS.
Try telling that to anyone paying rent on a New York apartment.
Post by professorchaos
The cost of the land is a sunk cost. Land available has little effect on
apartments or office buildings available. Owners can always elect to build
upward. Trump didn't much land in Chicago to start his massive multi-story
office building. Smaller structures on existing land can be torn down to
make skyscrapers. You don't have to have empty unused land in the
wilderness to make rental property.
In downtown Chicago where land is very expensive, people put large buildings
on small pieces of land. In areas where land is cheap, they put buildings on
large pieces of land.Which shows that the demand for land is elastic.
professorchaos
2007-09-01 19:45:39 UTC
Permalink
Post by Andy F.
Post by professorchaos
B. Land is not a produced good so think of the supply curve as cost is not
applicable. The elasticity of supply of land is not likely to be zero. Why
because land has different levels of desirability. An owner of land in the
swamps of Louisiana will sell at a lower price than an owner of land on
the Ocean front in California. Different grades of land mean people have
different willingness to sell. This will cause quantity supplied changes
as price changes.
That's irrelevant, since the tax would be payable whether or not the land
was sold.We aren't discussing a tax on land sales.
Ah but it effects land sales. The buyer doesn't have to pay the tax if
he does not buy the land. If he has to pay a tax on the value of the
land he has to consider that and add into the purchasing price of the
land. Surely if you own a home you considered how much taxes you would
have to pay before you bought it. Surely you have been a situation or
know people in situation who wanted to buy a house at the price offered
but did not because the taxes were too high. If you didn't you made a
big mistake if you have a property tax in your state. This will lower
demand for land. If the elasticity of supply is not exactly 0 then it
results in lost gains from trade.
Post by Andy F.
Post by professorchaos
The Gulf coast land owner in Louisiana may not sell for $75 an acre while
the inland swamp land owner will gladly sell at that price. The Gulf Coast
land owner may not sell until the prices is $150. In this case the supply
curve is highly inelastic 1/75 but not perfectly inelastic. It is a
fallacy and a bad thought habit that because something is in fixed supply
that the elasticity of supply is zero. I know Greg Mankiw has a not very
well thought out panel in his textbook that makes the same argument you
just made but it is wrong.
LOL. A couple of days ago you were quoting Mankiw as an authority.
No I don't quote Mankiw as an absolute authority. He is not a god and
makes mistakes. For the most part his textbook is very good. He makes
too huge mistakes. A. Claiming there is a law of supply, if he would
said in the short run that would have been ok, and B. claiming the
elasticity of supply of land is 0 because supply is fixed.

I haven't found any other huge errors in the micro text he wrote. I
can't comment on the macro I have not used it.
Post by Andy F.
Maybe we should call Harvard and tell them their internationally renowned
professor has just been overruled by a usenet cartoon character.
No it is one person with a doctorate in economics pointing out another
doctorate in economics made two mistakes in his text. Unfortunately that
makes it one of the best textbooks on the market. There are some
absolutely horribly written textbooks that have misleading information
in all the way through the text. Unfortunately, some authors want to
spin texts to their political views rather than teach economics. No Roy
most of those are union loving democrats that do that.
Post by Andy F.
Try telling that to anyone paying rent on a New York apartment.
So you agree that land taxes affect what a renter pays?
Post by Andy F.
Post by professorchaos
The cost of the land is a sunk cost. Land available has little effect on
apartments or office buildings available. Owners can always elect to build
upward. Trump didn't much land in Chicago to start his massive multi-story
office building. Smaller structures on existing land can be torn down to
make skyscrapers. You don't have to have empty unused land in the
wilderness to make rental property.
In downtown Chicago where land is very expensive, people put large buildings
on small pieces of land. In areas where land is cheap, they put buildings on
large pieces of land.Which shows that the demand for land is elastic.
Which has shows that if the elasticity of supply for land is not zero
that the excess burden of a land tax will be greater due to the higher
elasticity of demand. It also shows that if the supply of land is
inelastic and the demand of land is elastic the consumers will pay more
of the tax than the sellers. Thank you for your support.
professorchaos
2007-09-02 07:17:04 UTC
Permalink
Post by professorchaos
Which has shows that if the elasticity of supply for land is not zero
that the excess burden of a land tax will be greater due to the higher
elasticity of demand. It also shows that if the supply of land is
inelastic and the demand of land is elastic the consumers will pay more
of the tax than the sellers. Thank you for your support.
erratta. I wrote the opposite of what I intended to say. "It also shows
that if the supply of land is
Post by professorchaos
inelastic and the demand of land is elastic the consumers will pay more
of the tax than the sellers." should have read consumers will pay
less of the tax. The implication was that they pay some of the tax even
though it was not all the tax.
r***@telus.net
2007-09-04 03:08:52 UTC
Permalink
On Fri, 31 Aug 2007 12:47:14 -0500, professorchaos
Post by professorchaos
Post by Andy F.
Since they aren't making any more land, the
elasticity is exactly zero. (Provided that the tax isn't more than 100% of
the rental value.)
A. Tell that to the people in Dubai. They are making land.
No, stupid, lying filth, they are improving land that was already
there, stupid, lying filth. I have proved that to you over and over
and over and over and over again, and the next time it comes up, you
just lie about it again.
Post by professorchaos
Tell that to
San Fransisco. Over the twentith century the bay got smaller as San
Fransisco burned several times. They piled up the remnants and covered
them with dirt. This actually claimed land from the sea. Usable can and
is made. Swamps are drained. Levies are built to claim land for the sea
(New Orleans). We certainly can make more land.
Because you are infinitely and immutably stupid, ignorant and
dishonest, you always try to pretend that IMPROVING pre-existing wet
land by draining it or building it up creates land, when it is
self-evident and indisputable that the land being IMPROVED by being
built up or drained had to exist before such efforts could improve it.

No matter how many times this self-evident and indisputable fact of
objective reality is proved to you, you invariably lie about it the
instant the opportunity presents itself.

You are therefore despicable, lying garbage: a putrescent mass of
disgusting, fungated, suppurating filth in vaguely human form.
Post by professorchaos
B. Land is not a produced good so think of the supply curve as cost is
not applicable. The elasticity of supply of land is not likely to be
zero.
OTC, it is CERTAIN to be zero.
Post by professorchaos
Why because land has different levels of desirability.
Ignoratio elenchi. Desirability defines demand, not supply.

Stupid.
Post by professorchaos
An owner of
land in the swamps of Louisiana will sell at a lower price than an owner
of land on the Ocean front in California. Different grades of land mean
people have different willingness to sell. This will cause quantity
supplied changes as price changes.
Except that it never has, and never will.
Post by professorchaos
The Gulf coast land owner in Louisiana may not sell for $75 an acre
while the inland swamp land owner will gladly sell at that price. The
Gulf Coast land owner may not sell until the prices is $150. In this
case the supply curve is highly inelastic 1/75 but not perfectly
inelastic. It is a fallacy and a bad thought habit that because
something is in fixed supply that the elasticity of supply is zero.
Because you are infinitely stupid, ignorant and dishonest, you always
have to lie about what elasticity of supply is.
Post by professorchaos
I know Greg Mankiw has a not very well thought out panel in his textbook
that makes the same argument you just made but it is wrong.
Post by Andy F.
Post by professorchaos
B. There is every reason to think that the demand for rental units is
inelastic. Living space is a necessity and there are few close
substitutes. As far as elasticity of supply of rental units. I would need
some data or to see if any papers have calculated. New construction of
rental units does not necessiarly mean new land needs to bought. The
buildings on the land can be modified.
I think it's definitely elastic.When land prices are high people are more
likely to live with their parents , share apartments and live in small
houses rather than big ones.
Rental markets are what I am referring to land prices HAVE ZERO EFFECT
ON RENTAL MARKETS.
Thank you for proving again that you are infinitely and immutably
stupid, ignorant and dishonest.
Post by professorchaos
The cost of the land is a sunk cost.
No. You are stupid.
Post by professorchaos
Land available
has little effect on apartments or office buildings available.
You are really stupid.
Post by professorchaos
Owners
can always elect to build upward.
You are really, REALLY stupid.
Post by professorchaos
Trump didn't much land in Chicago to
start his massive multi-story office building.
How much did he pay for it, Stupid?
Post by professorchaos
Smaller structures on
existing land can be torn down to make skyscrapers. You don't have to
have empty unused land in the wilderness to make rental property.
If you were not infinitely stupid, you would understand how irrelevant
that is. But you are infinitely stupid, so there is little point in
talking about it.

-- Roy L
professorchaos
2007-09-04 13:08:47 UTC
Permalink
Post by r***@telus.net
On Fri, 31 Aug 2007 12:47:14 -0500, professorchaos
Post by professorchaos
B. Land is not a produced good so think of the supply curve as cost is
not applicable. The elasticity of supply of land is not likely to be
zero.
OTC, it is CERTAIN to be zero.
Only if you apply Roy and the Trucker's home made definition of supply.
Sorry I use the standard definition of quantity supplied. That is the
amount that people are welling to sell on the market at a given price.
Unlike Roy, I use the actual definition of elasticity of supply. That is
the percentage change in Quantity supplied divided by the percentage
change in price.

The acre of the earth has almost zero to with the elasticity of supply.
Elasticity of supply measures how the amount of land people are WILLING
TO SELL changes when price changes. Roy's claim results from a
misunderstanding of what supply is. For Roy's claim to be correct, that
is the elasticity of supply of land is certainly 0 at all points it
implies that you will sell the same amount of land if price is $10 as
you would sell if the price were $1 billion dollars. An insane and not
well thought out claim.

People will have different reservation prices or as the Trucker said
values. I don't like using the word value because it implies something
different from price that can not be well defined. However, Roy might
understand the argument better in these terms.
Post by r***@telus.net
Post by professorchaos
Why because land has different levels of desirability.
Ignoratio elenchi. Desirability defines demand, not supply.
Quite the contrary. When you are talking about an asset that is not used
in production, your desirability for the good will determine your
willingness to sell. If you hate Picasso's paintings your willingness to
sell will be quite low if you inherit one. If Picasso is your favorite
artist then you will place a higher willingness to sell on the item.
Post by r***@telus.net
Stupid.
No I actually understand what drives the supply and what supply is
beyond the horrible way that some textbooks present the case. That is
concentrating only on the theory of the firm and ignoring concepts like
willingness to sell and how that forms the supply curve. A cost is what
you give up. Giving up something desirable has a larger cost than giving
up something that is not desirable. One of the first statements made in
any good economics class is the true cost of something is what you give up.
Post by r***@telus.net
Post by professorchaos
An owner of
land in the swamps of Louisiana will sell at a lower price than an owner
of land on the Ocean front in California. Different grades of land mean
people have different willingness to sell. This will cause quantity
supplied changes as price changes.
Except that it never has, and never will.
If you believe that lets do some business. How about I buy property from
you in Palm Beach for the same price that Louisiana swamp sells for?
Your argument says you would take that trade EVERY TIME because the
supply is inelastic meaning you would sell the same quantity regardless
of price. So if you would make that trade then supply is not inelastic
because land in CA. would not be supplied at the price of Louisiana
swamps but would be sold at a higher price. Quantity supplied increases
as price rises. QED.
Post by r***@telus.net
Because you are infinitely stupid, ignorant and dishonest, you always
have to lie about what elasticity of supply is.
Really? Sorry I take my definitions from textbooks and my education.
Funny I didn't fail the intermediate microeconomics exam that dealt
almost solely with elasticity. I didn't fail a single test in graduate
school or as an undergraduate. I have even learned the calculus behind
deriving elasticities and solved for elasticities. I have estimated
elasticities using real data.

So where does your definition come from? What is it?
Post by r***@telus.net
Post by professorchaos
I know Greg Mankiw has a not very well thought out panel in his textbook
that makes the same argument you just made but it is wrong.
Post by Andy F.
Post by professorchaos
B. There is every reason to think that the demand for rental units is
inelastic. Living space is a necessity and there are few close
substitutes. As far as elasticity of supply of rental units. I would need
some data or to see if any papers have calculated. New construction of
rental units does not necessiarly mean new land needs to bought. The
buildings on the land can be modified.
I think it's definitely elastic.When land prices are high people are more
likely to live with their parents , share apartments and live in small
houses rather than big ones.
Rental markets are what I am referring to land prices HAVE ZERO EFFECT
ON RENTAL MARKETS.
Thank you for proving again that you are infinitely and immutably
stupid, ignorant and dishonest.
Just calling someone stupid and dishonest is not an argument. Trying to
just call an argument stupid and dishonest with no explanation why is
dishonest and stupid.
Post by r***@telus.net
Post by professorchaos
The cost of the land is a sunk cost.
No. You are stupid.
Do you know what a sunk cost is? For someone who claims to know
economics you sure have a problem with the terms. Now I can see why you
claim your "analysis", of which I have seen none just a lot of
allegations of stupidity that supposedly proves I am wrong, can not be
published. You can't speak the language. You have no idea what the terms
mean. You make up definitions and call others who point out that is not
what the term means stupid. You are like the person reading a romance
novel that doesn't speak English well. You mis translate love as being
foot. Then you think the book is stupid because the woman in the novel
not only longs for the return of her lost foot but the lost foot
actually returns!
r***@telus.net
2007-09-06 23:24:46 UTC
Permalink
On Tue, 04 Sep 2007 08:08:47 -0500, professorchaos
Post by professorchaos
Post by r***@telus.net
On Fri, 31 Aug 2007 12:47:14 -0500, professorchaos
Post by professorchaos
B. Land is not a produced good so think of the supply curve as cost is
not applicable. The elasticity of supply of land is not likely to be
zero.
OTC, it is CERTAIN to be zero.
Only if you apply Roy and the Trucker's home made definition of supply.
Sorry I use the standard definition of quantity supplied. That is the
amount that people are welling to sell on the market at a given price.
No, stupid. Quantity supplied is the amount people WOULD be willing
to sell on the market GIVEN a certain prevailing price.

To understand how wrong and stupid you are, consider the elasticity of
gold. Let's say it is currently selling for $680/oz. Now, you ask
someone who has a lot of gold if he will sell it to you for $690/oz.
He says Yes. You ask someone who wants to buy a lot of gold if he
will buy the gold you just bought for $690/oz from you for $670/oz.
He says Yes. Because you are infinitely stupid, you conclude on this
basis that the elasticity of supply and demand for gold are very high.

But, as you are the Buzz Lightyear of stupidity, it is not enough for
you to be infinitely stupid. Oh, no. Your stupidity goes to
infinity, and beyond. So you then ask the guy you just sold the gold
to for $670/oz if he will sell it back to you for $670/oz. He says
No, come back when you are prepared to offer the going price. You ask
the guy you bought the gold from for $690/oz if he will pay you $690
for some gold. He says, Sorry, Buzz, I can get all I want for
$680/oz. On this basis you conclude that the elasticities of supply
and demand for gold are very low.

Do you understand yet, Stupid? Elasticity is not determined by
whether people are willing to buy or sell at prices different from the
prevailing ones. It is determined by how much more or less people are
willing to buy or sell if the PREVAILING price changes.
Post by professorchaos
Unlike Roy, I use the actual definition of elasticity of supply.
No, stupid, ignorant, lying garbage, you do not.
Post by professorchaos
That is
the percentage change in Quantity supplied divided by the percentage
change in price.
Then why did you ask me if I would sell land at prices wildly
different from the prevailing ones, as if that had anything to do with
elasticity?
Post by professorchaos
Elasticity of supply measures how the amount of land people are WILLING
TO SELL changes when price changes.
Right. WHEN PRICE CHANGES. Not when they are offered hypothetical
prices wildly different from prevailing ones.

Stupid.
Post by professorchaos
Roy's claim results from a
misunderstanding of what supply is.
Wrong. YOU misunderstand what supply at a given price is.
Post by professorchaos
For Roy's claim to be correct, that
is the elasticity of supply of land is certainly 0 at all points it
implies that you will sell the same amount of land if price is $10 as
you would sell if the price were $1 billion dollars. An insane and not
well thought out claim.
OTC, it is definitely true. The same plot of Tokyo land that now sells
for $1G at one time sold for the equivalent of $10. The supply is
exactly the same, even though the price has increased by eight orders
of magnitude. You just refuse to know the fact that landowners sell
at the prevailing price, WHATEVER THAT IS. If the prevailing price
for a given acre of land is $0.50, the owner will gladly sell it for
$1. If the prevailing price is $2G, he will scoff at an offer of $1G.
FOR THE SAME FREAKIN' ACRE OF LAND.

_GET_IT_??
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
Why because land has different levels of desirability.
Ignoratio elenchi. Desirability defines demand, not supply.
Quite the contrary. When you are talking about an asset that is not used
in production, your desirability for the good will determine your
willingness to sell.
But land IS used in production, stupid.
Post by professorchaos
No I actually understand what drives the supply and what supply is
beyond the horrible way that some textbooks present the case.
Hehe. So the textbooks are right when you cite them, but wrong when
you are wrong?

ROTFL!!
Post by professorchaos
That is
concentrating only on the theory of the firm and ignoring concepts like
willingness to sell and how that forms the supply curve.
Landowners are always just as willing to sell at the prevailing price,
no matter how much it is. Producers of goods are not, because in
order to produce, they have to shoulder costs that are not sunk costs.
That is why you are wrong.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
An owner of
land in the swamps of Louisiana will sell at a lower price than an owner
of land on the Ocean front in California. Different grades of land mean
people have different willingness to sell. This will cause quantity
supplied changes as price changes.
Except that it never has, and never will.
If you believe that lets do some business. How about I buy property from
you in Palm Beach for the same price that Louisiana swamp sells for?
If that's the prevailing price, that is what it will sell for, and
what it historically always HAS sold for. That is what zero
elasticity of supply MEANS.

Stupid.
Post by professorchaos
Your argument says you would take that trade EVERY TIME because the
supply is inelastic meaning you would sell the same quantity regardless
of price.
Which is exactly what landowners have always done: sold at the
prevailing price, NO MATTER HOW MUCH IT WAS.

STUPID.
Post by professorchaos
So if you would make that trade then supply is not inelastic
because land in CA. would not be supplied at the price of Louisiana
swamps but would be sold at a higher price. Quantity supplied increases
as price rises. QED.
But it doesn't, stupid, as the land crash in Japan has proved so very
thoroughly: in some cases the same land is now selling for a quarter
of the price it fetched 17 years ago, and there is MORE land on the
market, not less.

QED indeed...
Post by professorchaos
Post by r***@telus.net
Because you are infinitely stupid, ignorant and dishonest, you always
have to lie about what elasticity of supply is.
Really? Sorry I take my definitions from textbooks and my education.
?? Your WHAT?!?!? ROTFL!!!
Post by professorchaos
Funny I didn't fail the intermediate microeconomics exam that dealt
almost solely with elasticity. I didn't fail a single test in graduate
school or as an undergraduate.
I don't call that funny. I call it scary and disgraceful.
Post by professorchaos
So where does your definition come from? What is it?
Elasticity is the relative change in quantity for a given change in
price. The quantity of land supplied does not respond to price, so
it's elasticity of supply is zero.
Post by professorchaos
Post by r***@telus.net
Post by professorchaos
The cost of the land is a sunk cost.
No. You are stupid.
Do you know what a sunk cost is?
Yes, a cost already paid. The purchase cost of land is only a sunk
cost for whoever already owns it. The _TAX_ cost of land is _NOT_ a
sunk cost. Which is kinda the point.

Stupid.
Post by professorchaos
You have no idea what the terms
mean. You make up definitions and call others who point out that is not
what the term means stupid.
I know what the terms mean. You very obviously don't.

-- Roy L
professorchaos
2007-09-07 03:27:56 UTC
Permalink
Post by r***@telus.net
Post by professorchaos
Post by r***@telus.net
OTC, it is CERTAIN to be zero.
Only if you apply Roy and the Trucker's home made definition of supply.
Sorry I use the standard definition of quantity supplied. That is the
amount that people are welling to sell on the market at a given price.
No, stupid. Quantity supplied is the amount people WOULD be willing
to sell on the market GIVEN a certain prevailing price.
ROTFLMAO! Roy until you learn some definitions I feel compelled to have
a battle of wits with an unarmed man. If that were true they would be no
supply curve just a supply point. A graphical representation of each
quantity supplied at each price. It is the graphical representation of
the supply schedule. Which shows QS at each price. Until you learn some
economic terms I will not discuss this with you.
Post by r***@telus.net
To understand how wrong and stupid you are, consider the elasticity of
gold. Let's say it is currently selling for $680/oz. Now, you ask
someone who has a lot of gold if he will sell it to you for $690/oz.
He says Yes.
You miss the point. There is no measure of how much he wants to sell
here. Did the quantity he was willing to sell change when price went to
$690? If he is willing to sell all his gold at $680 and all his gold at
$690 then the elasticity of supply is 0 but if he says he will sell 5
units at $680 and 10 units at $690 the elasticity of supply is
((10-5)/((10+5)/2))/((690-680)/((690+680)/2). RTFM if you don't believe
me. Pick up any textbook. You can even go to RFE.ORG and find an online
textbook. It will give the same formula.
Post by r***@telus.net
You ask someone who wants to buy a lot of gold if he
will buy the gold you just bought for $690/oz from you for $670/oz.
He says Yes.
That would be elasticity of demand if you asked the person how much he
would buy at $690 and how much he would $680 and then divided the
percentage quantity demanded by the percentage change in price.
Post by r***@telus.net
Because you are infinitely stupid, you conclude on this
basis that the elasticity of supply and demand for gold are very high.
I would be very stupid to conclude that because you have not given
enough information to calculate elasticities. Again elasticity of supply
is the percentage change in quantity supplied divided by the percentage
change in price. Only someone who has no clue what elasticity is could
conclude ANYTHING about elasticity from the information you gave because
it gives no information on how much they are willing to sell or willing
buy changes when price changes.

Again until you learn what these terms mean I am having a battle of wits
with an unarmed man.
Post by r***@telus.net
Do you understand yet, Stupid? Elasticity is not determined by
whether people are willing to buy or sell at prices different from the
prevailing ones.
He actually said that right but I do not think he really knows why it is
right.
Post by r***@telus.net
It is determined by how much more or less people are
willing to buy or sell if the PREVAILING price changes.
I had to see this in print again. Both demand and supply are
hypothetical statements of how much sellers would sell if price were X,
if price were Y etc and how much buyers would buy at different prices.
The prevailing price has nothing to do with the hypothetical statements.
However prevailing price is determined by when buyers say they would
buy the same amount of goods sellers would.

Because elasticity is usually not constant along the demand or supply
curve, unless it is isoelastic, the prevailing price does affect what
the current elasticity is but does not determine it nor the shape of the
supply (which determines elasticity). The hypothetical percentage change
in quantity supplied if price rises from 10 to 20 has nothing to do with
if the price will ever go to 10 or 20. Although when price is 10 the
elasticity of supply, the percentage quantity supplied would increase if
prices rose slightly, would be different than the elasticity of supply
on the curve when the hypothetical price is 20. Prevailing prices do not
drive elasticities. Elasticities are driven by opportunity costs and
value of the good to buyers.
Post by r***@telus.net
Post by professorchaos
That is
the percentage change in Quantity supplied divided by the percentage
change in price.
Then why did you ask me if I would sell land at prices wildly
different from the prevailing ones, as if that had anything to do with
elasticity?
A. Because I was making up numbers to illustrate how quantity supplied
can change when price changes or in other words how the elasticity of
supply could be something other than 0.

B. Because of the definition of quantity supplied. It has nothing to do
with prevailing prices. A supply curve in theoretically created by
saying how much would you sell at $0, $1, $2, etc. This prices do not
have to prevail on the market. The supply curve represents how much you
would sell at these prices. The price does not have to be $2 for you to
be willing to sell 5 units at $10 now does it?

Just because the price is not $2 now does not mean after a tax or a
massive decrease in demand the price could not be two dollars. Granted I
would be uninterested in the elasticity of that point if prices were not
anywhere $2 but that does change the fact that there is an elasticity
there.
Post by r***@telus.net
Post by professorchaos
Elasticity of supply measures how the amount of land people are WILLING
TO SELL changes when price changes.
Right. WHEN PRICE CHANGES. Not when they are offered hypothetical
prices wildly different from prevailing ones.
You don't see the point do you? Your argument was the elasticity of
supply is 0. That the amount of land bought and sold does not change
with price. Or at least that was the logical extension of your argument
that because land can not be created the amount supplied does not
change. I am trying to illustrate to you that it is willingness to sell
and willingness to buy that determine elasticity not how much is on hand.

So lets take a more realistic approach. If land is selling for $100 an
acre and the price drops to $90 an acre do you think people will be
willing to sell the same amount of land as before? Will people not sell
as much land as they did before? There is reason to believe that some
people who would sell at $100 will not sell at $90 an acre. Lets say I
farm the land. The present value of my estimates of profits that could
be made from growing corn is $95 an acre. If the price is $100 an acre I
can get more than the present value of future profits so I sell. At $90
dollars the present value of future profits is higher than what I get
for the land so I don't sell. Elasticity here is not zero. At $100 I
supply 100 acres. At $90 I sell 0 acres because my return from farming
is greater than the return from selling the land. Now do you understand?
Post by r***@telus.net
Post by professorchaos
Roy's claim results from a
misunderstanding of what supply is.
Wrong. YOU misunderstand what supply at a given price is.
I am now to the conclusion that you are the one trying to intentional
confuse so that people do not learn economics. I believe it is because
you think economics serves the rich so you will change definitions and
argue where there is no argument to put up a smoke screen to where
people do not understand economics. Are you working for the rich interest?
Post by r***@telus.net
Post by professorchaos
For Roy's claim to be correct, that
is the elasticity of supply of land is certainly 0 at all points it
implies that you will sell the same amount of land if price is $10 as
you would sell if the price were $1 billion dollars. An insane and not
well thought out claim.
OTC, it is definitely true. The same plot of Tokyo land that now sells
for $1G at one time sold for the equivalent of $10. The supply is
exactly the same, even though the price has increased by eight orders
of magnitude.
So you are saying that the number of parcels of land on the Tokyo market
offered for sale is the same as when the price was $10. I don't believe
you. I do believe you if you use your carpenter's definition that says
there X acres there then and X acres now but is not quantity supplied or
supply.
Post by r***@telus.net
You just refuse to know the fact that landowners sell
at the prevailing price, WHATEVER THAT IS.
I do refuse to believe such an assertion. If it were true I would sell
my house right now. Owners do not always sell. They sell only when the
price is greater than the opportunity cost of giving up the land.
Post by r***@telus.net
If the prevailing price
for a given acre of land is $0.50, the owner will gladly sell it for
$1.
True but that has nothing to do with argument.
Post by r***@telus.net
If the prevailing price is $2G, he will scoff at an offer of $1G.
FOR THE SAME FREAKIN' ACRE OF LAND.
_GET_IT_??
Yes but it has nothing to do with the argument. Now lets put this in
terms of elasticity. If the price owner will sell one acre at $1 dollar
then to build a supply curve we may ask if he would sell the land IF the
price were $75. If so the elasticity between $.75 and $1 is 0 because
quantity supplied does not change. Then we ask if the owner would sell
at $.25. If the answer is no then Quantity supplied at $.25 is 0. Do you
get the point. Supply is a hypothetical statement of how much you would
sell at given prices.

If this were not so the perfect competition theory would be circular
because price determines supply and supply determines price. The
confusion here is yours that is between actual price and hypothetical
price. My willingness to sell determines how much I would sell if the
price is $X. A buyer's willing to buy determines how much they buy at
$X. When willingness to sell and willingness to buy are equal that
determines market price. The actual price determines how much will
ACTUALLY be bought and sold not how much people are willing to buy or
sell if the price rises or falls.
Post by r***@telus.net
Landowners are always just as willing to sell at the prevailing price,
no matter how much it is.
If the prevailing price were $.50 would you sell the land your home is on?
Post by r***@telus.net
Producers of goods are not, because in
order to produce, they have to shoulder costs that are not sunk costs.
Actually it is the other way around. Landowners have sunk cost that have
to be paid if they sell or not and as you said land is used in
production so they get so value from keeping the land. They will hold on
to the land if the price is not high enough but they are getting
something out of owning. If not they would not have bought.

Although production will not rise if the cost of doing so is above the
price, any good already produce will be sold at the prevailing price.
Inventories for manufacturers gave them no benefit, other than a buffer
stock against rising demands. It just sits there them making them no
money. Producers will sell inventory at any prevailing price because
inventory makes them no money and there is no value in holding it.
Landowners will not because the land brings them something. They get
something out of holding it. Only when the price is greater than the
benefit to the land owner of holding the land the land owner will sell.
The same could be said for producers but the value of holding inventory
is 0.
Post by r***@telus.net
If that's the prevailing price, that is what it will sell for, and
what it historically always HAS sold for. That is what zero
elasticity of supply MEANS.
If price change is 0 then elasticity approaches infinity not zero.
percentage change in quantity supplied / percentage change in price. If
that is what land has always sold for than the price change is 0 so the
elasticity approaches infinity.
Post by r***@telus.net
Post by professorchaos
Your argument says you would take that trade EVERY TIME because the
supply is inelastic meaning you would sell the same quantity regardless
of price.
Which is exactly what landowners have always done: sold at the
prevailing price, NO MATTER HOW MUCH IT WAS.
Really so every piece of land on the market gets traded every day. That
is what you just said. Landowners ALWAYS sell at the prevailing price.
That means my home is on the market even though I don't want to move. I
don't think so.

Now if land owners who wish to sell sell at the prevailing then yes.
That is the point of elasticity to see how changes in price will affect
how many landowners are willing to sell or more precisely how much land
owners are willing to sell.

Yes all of those who are willing to sell at the going price sell at the
going price but elasticity ask how does the going price change how many
are willing to sell.
Post by r***@telus.net
But it doesn't, stupid, as the land crash in Japan has proved so very
thoroughly: in some cases the same land is now selling for a quarter
of the price it fetched 17 years ago, and there is MORE land on the
market, not less.
QED indeed...
Now do you see why I keep saying how much land exist is not important to
supply (how much people are willing to sell on the market). Thank you
for giving an example that showed that. So either now you should realize
supply pf land and the amount of land available are not the same thing
or you arguing land was created in Japan.

Indeed QED supply has increased. The land owners are willing to sell
more land at the same prices than before. This says nothing about
elasticity. Either the supply curve has shifted or demand has decreased
and the supply curve has a negative slope. The first says nothing about
the elasticity of demand. The second say elasticity is not zero but is
negative rather than the expectation of a positive elasticity. No
problem there Marshal did describe cases when supply could be downward
sloping in the long run. Since this is not a produced good there is
reason to expect even in the short run the supply of land is upward
sloping, the law of diminishing returns does not apply.

So either supply shifted or the elasticity of supply is -X. If it is -X
then it is not zero and that is QED that the supply of land is not
perfectly inelastic and all your arguments about a fixed supply
indicating supply is perfectly inelastic too.

I will stop now because I just remembered something the Reverend Jessie
Duplantis once said. Don't argue with a fool because then people don't
know who the fool is. You arguing with a fool and people will start
saying whose the fool?
The Trucker
2007-09-02 20:05:00 UTC
Permalink
Post by professorchaos
Post by The Trucker
Whether land is "offered for sale or not" the land has value.
Yeah the price it can be sold on the market. This has no bearing on
whether or not the quantity supplied changes with prices. That was the
argument. Whether it is offered for sale has everything to do with
whether how much land is offered for sale changes with the price of land
or not.
I am going to wait for you to clarify this paragraph before I attempt to
address it. What is here does not parse and I am not going to guess at it.
Post by professorchaos
Post by The Trucker
The value
is anywhere and everywhere
Is value of the land God to you?
Nor does this interruption in the middle of a sentence make any sense.
Post by professorchaos
Post by The Trucker
what the market will bear OR the use value to
the current land holder.
Sorry not biting into an old hokey convuluded notion of use value versus
market value. I am referring to market price not a subjective idea of
value.
I have no problem with your talking about price as opposed to value. I do
have a very strong objection to your proposing that they are the same or
that price is causal and value isn't.

And this "use value" to which you seem to be so strongly opposed is
exactly what you have presented regarding the monopolization of rare
paintings. The owner has a use value that is higher than the market
value and therefore no trades will take place.

You are also in error concerning the word "elasticity". It has to do with
a change in the supply reacting to a change in price. Neither the supply
of Monet's (or land) or any individual Monet (or location) is going to be
any more or any less abundant due to a change in price. The quantity is
unchanged by the price even though the number of trades and the number
of unique owners may change. The "owners" are elastic. The locations and
the paintings are not. The number of owners may be increased by
increasing the value of private ownership through political contrivances.
Such contrivance has no effect on the actual supply of land or locations
nor on the real value of anything other than coercive power.
Post by professorchaos
This discussion has nothing to do with if Smith, Ricardo, and
Marx were right with their theory of value.
I've never mentioned them. Only you have done so.
Post by professorchaos
It is discussing only market
prices and the effect on a tax on markets not the mystical use value of
the land.
Hell... I thought you were talking about a tax on land as opposed to a
tax on markets. A tax on markets would be a transaction tax of some kind.
And here again I must wait until you decide what the hell it is you are
talking about and hope you can actually elucidate it.
Post by professorchaos
Post by The Trucker
Post by professorchaos
It is the essential fact
that land has different characteristics that shows that at low prices
less land will be offered up for sale.
The "offering it for sale" is irrelevant to the value of the location.
Again your definition of value has no bearing on a discussion as to if a
tax will cause the amount of land bought and sold to drop. It is not a
question of subjective value it is a question of market price.
The price is also irrelevant to the number of locations. Changing prices
will not produce more locations or less locations. What may change is the
number of and identity of owners. I suppose we could talk about the
elasticity of owners but that wouldn't really be right either. If they
all trade like nut cases once a week the number of owners hasn't changed
in response to the price either. We just have a lot more trading and
unproductive activity counted in the GDP.
Post by professorchaos
The very
fact that you are arguing that different types of land have different
characteristics and different returns to owners only supports my
contention that the elasticity of supply is not 0. If you want to have a
discussion about labor theory of value fine but that has nothing to do
with the argument nor I am really interested in discussing hokey
mystical theories that have pushed to the wayside.
I've not mentioned the "labor theory of value" in this discussion that I
can remember. It seems that you are not interested in seeing anything
that disproves your horseshit position. You simply refer to any
arguments as "hokey" theories. You are waving a dead cat around your head
to ward off evil spirits. The supply of locations is inelastic and does
not respond to price. The supply of supposed "owners" is highly elastic
and so too is the supply of stupidity and guile.
Post by professorchaos
Post by The Trucker
Post by professorchaos
Post by The Trucker
The swamp is a swamp and
the land next to the deep water bay is still as it is regardless of the
price paid for its use.
Really is DC still a swamp?
No. It isn't (I can only assume that at some point it WAS due to your
spiel. But I truly do not know)
Yes it was. Houston was a swamp as well. Both were drained and the
underlying characteristics of the land changed. One became our nations
capitol and a large city as opposed to a swamp no one wants to live in.
The other went from a swamp no one wanted to live in to one of the
nation's largest cities.
Post by The Trucker
It seems to be one of the very best cases of land taxation as
a proper means of infrastructure development and maintenance. The
improvement is financed due to the location and if that cannot be done
without a loss then the improvement (the levies) should not be built.
In simple terms what are you arguing is exactly what I was arguing. Due
to different grades of land that the elasticity of supply of land is not
zero. So called Georgian fail to recognize this often. So the market for
land may be inefficient but the tax gives no disincentive to improve the
land.
The natural location is inelastic just as the total quantity is inelastic.
The supply of any naturally occurring "grade" of land is just as inelastic
as the total quantity. You cannot economically grow apples at the north
pole.
Post by professorchaos
Post by The Trucker
Post by professorchaos
Post by The Trucker
Locations are not "supplied", the fixed locations are simply allocated.
Your point being? How is relevant to the discussion?
It is entirely relevant to the discussion because it is the essence of the
discussion.
No it has no bearing on the argument that a land tax will cause the
quantity of land traded to decrease because the elasticity of supply of
land is not exactly zero.
The number of trades is not the number or parcels and the amount of land
is also not the number of trades. The number of parcels nor the amount of
land will change as prices change. The distribution of the parcels may
change based on value but not specifically on price. The low interest
rates and the special tax treatment afforded residences created a very
real increase in the number of small land parcels on the market. So the
elasticity of marketable parcels is shown by that reality. But that
elasticity was a function of value and not a function of price. The price
of the parcels went up but it was an effect of the decreasing interest
rates and the decreased transaction tax treatment. The price apparent
increase of parcels was a consequence of relative value and not a *cause*
of anything at all.

But even this very strong dose of reality does not seem to shake your
religious fixation on Marshallian price theory. The increase in the
price of small land parcels would seem to have increased the demand
for such parcels. That would be a negative elasticity in the world of
Marshall. I think it a fine example as to why value is king and price is
a court jester.
Post by professorchaos
The tax will cause some land to not be
utilized in a way it would before because the will not buy the land if
the tax causes his return on his investment to be negative. Use value
has no bearing on this discussion.
The use value has everything to do with the discussion. How the
payment for use is allocated (interest on money, or taxes) is irrelevant
to the user. The user sees the entire fee as rent.

You seem to want to concentrate on short term speculation only. But
an increase in land value taxation decreases speculation as it decreases
price. So the number of transactions for the sake of speculation will
decrease. If you see that as some sort of adverse liquidity problem then
you simply are not focused on what matters. But in any case the number
of locations nor the amount of land will be altered in any way by
price fluctuations. And the value (use value) of the locations will not
change but by some sort of government contrivance in monopoly support or
taxes.
Post by professorchaos
Post by The Trucker
The "neighborhood" is right where it is due to proximity to other fixed
assets. The improvements were added BECAUSE the location made the
endeavor worthwhile.
None the less would the return have been high for the builder of the
improvements if the unimproved value of the land was taxed is the
question.
Yes. The return to the investment in fixed capital assets would have been
the same or greater depending on how you are defining unimproved value.
Post by professorchaos
Would the return of buying land and using it for a business be
higher without a land tax is the other question.
Those are both the same question and the answer is the same to both
questions. As tax is shifted from improvements to land value, the
profitability of productive capital improvements rises.
Post by professorchaos
If add $10 a year to
fix cost because a land tax has to be paid it is $10 less in profits
regardless of it taxes improvements or not.
If the improvements are not taxed the "land holder/user" can add
improvements so as to create more revenue or utility thus saving the
bottom line from the tax man. Without suffering tax or land rent
consequences or the consequences of financing the purchase of more land
the entrepreneur can actually do the stuff that neoconomic tap dancers
claim he can do. --- increase overall utility
Post by professorchaos
That will cause some
businesses to choose an investment that does involve buying new land.
Like tearing down existing structures and building multi-story
structures leaving the land that would have been developed fallow.
Yet there is also a reverse effect:

The cost of improvements is much lower if one abandons the current
improvements and relocates. That should happen if the location is not
well suited to the economic activity of the current user/owner. If the
current structure can be refitted to accommodate a more useful enterprise
then it would seem that such an upgrade to fixed capital will occur.

It is not within my limited capacity to predict which one of these two
effects will win out over the other. However, it would seem that overall
utility will be enhanced with a tax on land in lieu of other forms of
taxation.
Post by professorchaos
Post by The Trucker
This is the real basis of your problem here. You BELIEVE that value
arises due to ownership or trade. It doesn't.
I have made no statement on value only a statement on the effect on the
market and what motives people to buy and sell. As modern economist do
we talk about prices and quantities not some hokey mystical notion of
value that has nothing to do with market price.
Why would you seek to increase the number of unproductive trades? Must be
an infatuation with GDP.
Post by professorchaos
Post by The Trucker
The land is worth whatever someone will pay for it. That I agree with.
But the owner and his assessment of value is irrelevant to the market
value.
It determines how much the owners are willing to sell on the market.
And again, that has nothing to do with the value of the locations nor the
elasticity of land or locations. It will effect only the number of trades.
Post by professorchaos
Both demand and supply determine price.
True story.
Post by professorchaos
So the market price and the
value as you define it are determined by willingness to sell and
willingness to pay.
That is the market price. yes.
Post by professorchaos
As Marshall said to argue if supply determines price
or demand determines price is to argue if the bottom or top blade of the
scissor cuts the paper.
So what's yer point? I have no infatuation with price and Marshall can
stick it where the sun don't shine. I have no interest in creating or
abetting unproductive speculative market activity.

The value of the location determines the price that will be paid. If the
seller is a moron and willing to sell for less than actual value then the
price will be decreased and the profitability of the buyer/user will be
enhanced. The actual value does not change. It is merely a question of
who realizes the value. Sooner or later you should run out of morons.
I admit, however, that the state of the neoconomist profession and indeed
the nation as a whole would seem to belie this sentiment.
Post by professorchaos
Post by The Trucker
The value of a Monet (or anything else) is what you believe it to be
(your own value in use not necessarily shared by the market),
Value has no bearing on the discussion this is a discussion about prices
and quantities sold. The use value has no bearing on that. Marx, Smith,
or Ricardo even argued that. So if believe in a labor theory of value
fine. Listen to the classical economist it has NO BEARING ON PRICES.
Your position is total horseshit. The discussion is specifically about
the inelasticity of these locations. If there is any effect of increasing
the tax rate on the market value of unimproved land the effect will be to
increase the available of current locations for actual use while
decreasing speculative trades. The overall volume of trades will probably
fall in that there is currently a lot more speculation than use. In any
event the actual quantity of locations and the values will remain largely
unchanged. Arguing over price theory would seem to be somewhat like
masturbation.
Post by professorchaos
Post by The Trucker
You are confusing value and price.
No I am not. I have never mentioned value on the effects on price and
the number of trades made. You are confused that the labor theory of
value predicts market quantities. Even Smith, Marx, and Ricardo would
argue that only prices do that.
I have never used the words "labor theory of value". Nor have I, in this
discussion as I recall it, invoked the names of classical economists. Only
you have done that. For you it is somewhat like negative campaigning.
Just tar your opponent with that red commie paint brush as opposed to
addressing the fundamental concepts.
Post by professorchaos
I don't feel like repeating myself several more times on this point so I
am ending my response here.
OK with me.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org
professorchaos
2007-09-02 23:08:47 UTC
Permalink
Post by The Trucker
Post by professorchaos
Post by The Trucker
what the market will bear OR the use value to
the current land holder.
Sorry not biting into an old hokey convuluded notion of use value versus
market value. I am referring to market price not a subjective idea of
value.
I have no problem with your talking about price as opposed to value. I do
have a very strong objection to your proposing that they are the same or
that price is causal and value isn't.
I never made that statement. Yes economist use objective value. Only
looking at market prices has no bearing on whether or not other types of
value exist. Economics today is about scarcity not determine
philosophical value. You believe all you want about use value versus
objective value and still analyze only what happens in the market.
Post by The Trucker
And this "use value" to which you seem to be so strongly opposed is
exactly what you have presented regarding the monopolization of rare
paintings.
No it has everything to do with reservation price. Which has nothing to
do with use. I maybe hoarding them because I have inside information
that a new documentary on Monet will soon be released and I believe it
will spark interest and drive up demand. I may just not want the people
who make offers to have them. I may want to preserve them for my museum.
None of this has anything to do with a hokey notion of use value that
can not accurately measured nor can a consensus be found on what exactly
it means.
Post by The Trucker
The owner has a use value that is higher than the market
value and therefore no trades will take place.
Not in the examples I just gave. Maybe I want to donate them to
Smithsonian so all of America can see them. Where is the ill defined
"use" value in that. Maybe I hate the paintings but expect demand to
increase in the future. Where is the ill defined "use" value in that? In
both examples I have a reservation price but no use value in the
paintings. Whatever use value is supposed to mean. It has never been
well defined.

Question for those who want to be stuck in the 1700's.
Why would the use value to a consumer be different from the consumer's
willingness to pay? Note willingness to pay is not the market price, it
is what consumers would pay for X number of goods. The market price is
just the point for the willingness to pay of the last good sold is
exactly equal to the cost of the last good sold.
Post by The Trucker
You are also in error concerning the word "elasticity". It has to do with
a change in the supply reacting to a change in price.
No the elasticity of supply measures the change in QUANTITY SUPPLIED
when price changes not the change in supply. The first week of any
economics course explains that there is a huge difference between the
two terms. A change in supply is NEVER the result of a change of the
price of the good. That is a change in quantity supplied. Perfectly
inelastic means a 0% change in QS for any percentage price change.
Post by The Trucker
Neither the supply
of Monet's (or land) or any individual Monet (or location) is going to be
any more or any less abundant due to a change in price.
You still miss the point. Quantity supplied changes with price because
people put more on the market. It is nothing to do with how abundant
something is. It has everything to do with the willingness to sell at
the current price. How many units people are willing to sell changes as
price changes. It does not mean that land is destroyed when it is not on
the market or land has to be created to be sold. It just has to be a
situation where a rise in price caused some land owners to sell when
they would not sell before. It has nothing to do with the square footage
of usuable land on the earth. It has everything to do with what prices
entice an owner to sell. Elasticities are not determined by the quantity
that exist. They are determined by changes in willingness to buy or
willingness to sell when price changes.

I explain this to you earlier and you still resort back to the same
failed irrelevant argument. One must first learn what the difference is
between supply and quantity supplied before one can understand elasticity.
Post by The Trucker
The quantity is
unchanged by the price even though the number of trades and the number
of unique owners may change.
That is not the point either. Elasticity of supply has nothing to do
with a measure of trades. It measures how the willingness to sell
changes when price changes. It has nothing to do with quantity in
existence it shows how the amount offered for sale on the market changes
when price changes. You need to combine that with market analysis,
demand and supply, before you can find out how many trades will be made.

However, unwittingly you agree with the point that the elasticity of
supply is not 0 when you say " even though the number of trades and the
number
Post by The Trucker
of unique owners may change". The only way this occurs after a demand
shift is if owners react by offering more of less land on the market due
to the change in price. Which means that elasticity of supply is not 0.

I am really trying to explain this to you but understand this chapter 5
in a microeconomics course. You at least need to understand chapters 3
and 4 which explain what a supply curve and a demand curve is to
understand elasticity measurements. You really need to see chapter 6 on
producer surplus and consumer surplus to integrate those ideas into the
understanding of elasticity. One short post on a newsgroup can not
explain all of that.
Post by The Trucker
The "owners" are elastic.
What? This has no meaning. Either the supply curve, derived from the
owners willingness to sell, is elastic or it is not the owners are not
elastic.
Post by The Trucker
The locations and
the paintings are not.
Which has no bearing on the market. As I said before in a market
context, elasticity has nothing to do with how much exist but everything
to do with how much people change their amount they wish to buy or sell
when price changes.
Post by The Trucker
The number of owners may be increased by
increasing the value of private ownership through political contrivances.
Such contrivance has no effect on the actual supply of land or locations
nor on the real value of anything other than coercive power.
Maybe not. It depends on if the new owners have different reservation
prices than the old owners. Again supply does not measure how much is in
existence. It measures how much is willing to be sold at each possible
price. A labor theory of value or Aristole's theory of use value doesn't
change this. The definition of supply is the tabulation of quantities
supplied at all possible prices. The definition of quantity supply is
much sellers ARE WILLING TO SELL AT A GIVEN PRICE. The amount in
existence has nothing to do with elasticity of supply. Granted putting
more Monet's into existence, if you believe someone can channel Monet
and paint paintings for him, would increase supply of Monet's but would
not change the elasticity of supply of Monet paintings.
Post by The Trucker
Post by professorchaos
This discussion has nothing to do with if Smith, Ricardo, and
Marx were right with their theory of value.
I've never mentioned them. Only you have done so.
Not in name but by the theory they supported that being a labor theory
of value where value was something different from market price.
Post by The Trucker
Post by professorchaos
It is discussing only market
prices and the effect on a tax on markets not the mystical use value of
the land.
Hell... I thought you were talking about a tax on land as opposed to a
tax on markets. A tax on markets would be a transaction tax of some kind.
A tax on land affects markets just as if you taxed the sell of land. A
question to help explain the concept. Lets say you had $1500 a month to
spend on the mortgage for a house. You love a certain home that would
cost $1500 in mortgage notes a month before tax. Would you buy the home
without a tax? Would you buy the home if the tax bill was $500 a month?

Clearly in this example you would buy the home when there was no tax and
not buy the home with the tax. Why? Simply because tax payments are
included in your purchase price. It is no different from walking into a
store in a state or locality with sales taxes and seeing a price for a
good on the shelf. The candy bar might be priced at $1.00 but with an
8.5% sales you know you will have to pay $1.09 to get the $1.00 candy
bar. You factor the tax or a rough estimate into your decision. You know
if you only want to spend a $1.00 you don't buy it because the $1.00
candy bar will cost you $1.09 in the end. So you add the tax into the
purchase price when you make the decision.

If you want to build a home you add the tax you will have to pay into
the cost of building of it. If you want to build a business on the land
you add the tax to the cost of running the business. The effect is a
higher cost of land and it works just like a sales tax. This difference
is the tax is charged over and over again not just once like a sales tax.

There can be no difference between a tax on the land and a tax on "the
market for the land". Any tax on the land is part of the cost the buyer
must pay to obtain and hold the land. In a sense a land tax says the
government owns the land and leases it to you. In reality this is what
happens. If you don't pay the land tax governments, in some places, can
seize the land.
Post by The Trucker
I've not mentioned the "labor theory of value" in this discussion that I
can remember. It seems that you are not interested in seeing anything
that disproves your horseshit position.
On the contrary. I would like to see something that address my position.
That is something that actually indicates the land offered for sale will
not change when prices of land change. That is the key to Roy's argument
that a land tax is efficient. So far I have seen no argument that
addresses that other than there is a fixed quantity of land. That
argument I have shown to have no bearing on the elasticity of supply of
land over and over again. Whether you realize it or not your arguments
have strengthened that position.
Post by The Trucker
You simply refer to any
arguments as "hokey" theories.
No just the concept of use value as being something ill defined and hard
to show. That is why I call Aristotle's idea of use value hokey and
mystical. It can not be measured.
Post by The Trucker
The supply of locations is inelastic and does
not respond to price.
Again the elasticity of supply is defined exactly as the percentage
change in quantity supplied per a 1% change in price. Quantity supplied
is the number of units that people are willing to sell at a given price.
As you have noted happens if the price changes the change in quantity
supplied will be greater than zero. When you prove that the rest is QED.
As I stated before the elasticity of supply has absolutely 0 to do with
the number locations in existence only the owners willingness to sell.

A piece of land is not on the market and not part of supply unless it is
offered for sell. Supply, to an economist, makes no reference to any
notion of how much exist just how much is willing to be sold at
different prices. The fact that the quantity supplied of land rises
makes no indication that land was created just as the observation that
quantity of land supplied decreases with price makes no indication that
land was destroyed.
Post by The Trucker
The supply of supposed "owners" is highly elastic
and so too is the supply of stupidity and guile.
Owners are not supplied just the land they own. Only in slave societies
can you sell people. It is not the owners who are sold it is the land
that is sold. Therefore there can be no supply of owners. You don't buy
Donald Trump if you buy his property.
Post by The Trucker
The natural location is inelastic just as the total quantity is inelastic.
There is no such thing as total quantity being inelastic. There is no
such thing as location being elastic or inelastic. It is the supply of
something is elastic (the number of units offered for sale increase at a
higher percentage than the price) or it is inelastic (the number of
units offered increases at lower than percentage than the increase in
price). To say a location is inelastic or an owner is inelastic is
meaningless. Elasticities have nothing to do with amounts in existence.
They are measure of how how much people want to sell or how much people
want to buy changes with price. Alone they do not even tell us how many
trades will be made. The Quantity demanded may increase by 2% when price
drops by 1% but that doesn't mean that sellers will be willing to sell
enough to meet the quantity demanded when price drops by 1%. You would
have to look at both demand and supply and their elasticities to
determine that.
Post by The Trucker
The supply of any naturally occurring "grade" of land is just as inelastic
as the total quantity. You cannot economically grow apples at the north
pole.
You are very confused as to what supply means. It is not a wood shop
definition. It does not mean what it would mean to a carpenter as in how
much wood do we have to use. It means how much wood is willing to be
sold at $1. How much wood will lumber mills sell when the price is $2.
This may be very different than the amount of wood a lumber mill has in
inventory.
Post by The Trucker
The number of trades is not the number or parcels and the amount of land
is also not the number of trades.
Exactly the point. Elasticity measures the change in the number of
trades owners are willing to make not the amount of land in existence.

The number of parcels nor the amount of
Post by The Trucker
land will change as prices change.
Which has nothing to do with the measure of elasticity.

The distribution of the parcels may
Post by The Trucker
change based on value but not specifically on price.
Which still has nothing to do with elasticity.

The low interest
Post by The Trucker
rates and the special tax treatment afforded residences created a very
real increase in the number of small land parcels on the market.
Which means that people respond to changes in prices in the land market.
Demand increases when taxes drop and because owners react to the higher
price by offering more on the market the amount of land changing hands
rises. This only occurs if the elasticity of supply is not 0. If land
owners did not react to a change in price then prices would rise but the
same amount of land would change hands in the market. That would imply
the tax was efficient. The fact the number of trades would go up with
lower taxes shows that the elasticity of supply is not 0 and the tax is
inefficient because it blocks trades that would be made if the tax did
not exist. My point all along.
Post by The Trucker
But that
elasticity was a function of value and not a function of price.
The value to the buyer didn't change the price did and that was what
caused the reaction.

The price
Post by The Trucker
of the parcels went up but it was an effect of the decreasing interest
rates and the decreased transaction tax treatment. The price apparent
increase of parcels was a consequence of relative value and not a *cause*
of anything at all.
No it was the effect of prices change. Relative value has not changed.
What in this scenario has changed the value of the land to the buyer?
Nothing so before I was willing to pay $10,000 for the land but because
of the interest rate and taxes and it would have cost me $12000 to buy
the land. I still value the land at $10,000 but the lower interest rate
and lower tax have lowered my cost of aquiring the land to $9000.
Nothing has changed with my valuation of the land or the relative value
of the land. Unless you are now defining value as price then yes a
change in price changes relative prices, cp. If you believe price is
value then and only then do relatively values changes but that is not
the same as value to the buyer(willingness to pay). Some buyers may only
$10000 but have a value the land at $20000.
Post by The Trucker
But even this very strong dose of reality does not seem to shake your
religious fixation on Marshallian price theory.
Quite the contrary it supports price theory. Perhaps not exactly as
Marshal set it forth but in the way it is presented today. There is
nothing religious about looking at the world in a way that data time and
time again has shown to be accurate. You only see it as religious
because you want to view things in mystical terms like a use value that
can not be defined. When price theory wants to move away from that you
call it blasphemy and a new religion because you have a mystical view of
how things work.
Post by The Trucker
The increase in the
price of small land parcels would seem to have increased the demand
for such parcels.
An increase in price never increases Demand. The lower taxes and lower
interest rates increased demand and that caused prices to rise. You have
it backwards and you are confused because you do not understand what the
lecture from the second week of any micro economics class. That is the
difference between demand and quantity demanded.

If you understand that key concept then you understand that your example
was exactly what price theory would have predicted. Decreasing taxes and
the cost, above market price, of acquiring land has increased demand and
that led to higher prices.
Post by The Trucker
That would be a negative elasticity in the world of
Marshall.
No wrong again. The elasticity of demand of is always negative according
to the law of demand. To break the law of demand the elasticity of
demand would have to be positive. The elasticity of demand is irrelevant
when demand is shifting as in your example.

I think it a fine example as to why value is king and price is
Post by The Trucker
a court jester.
Well you certainly have made yourself look like a synonym for jester.

Again I try of repeating the same point over and over again.
The Trucker
2007-09-03 04:40:51 UTC
Permalink
Post by professorchaos
Post by The Trucker
Hell... I thought you were talking about a tax on land as opposed to a
tax on markets. A tax on markets would be a transaction tax of some kind.
A tax on land affects markets just as if you taxed the sell of land.
NO.
Post by professorchaos
A
question to help explain the concept. Lets say you had $1500 a month to
spend on the mortgage for a house.
The relevant point is that I have $1500 a month to spend on a home I will
USE.
Post by professorchaos
You love a certain home that would
cost $1500 in mortgage notes a month before tax. Would you buy the home
without a tax?
Sure...
Post by professorchaos
Would you buy the home if the tax bill was $500 a month?
NO.
Post by professorchaos
Clearly in this example you would buy the home when there was no tax and
not buy the home with the tax. Why? Simply because tax payments are
included in your purchase price.
As you have presented it that is true. However: What if the tax on the
LAND decreased the value of the LAND so as to make the mortgage still
be $1500 a month. As it decreased the price of the house + land to a
point where the total outlay was still $1500 per month. I would probably
still buy the house based on the same assumptions. 1)I really like the
House, and 2) I have the $1500 to spend on the house.
Post by professorchaos
It is no different from walking into a
store in a state or locality with sales taxes and seeing a price for a
good on the shelf. The candy bar might be priced at $1.00 but with an
8.5% sales you know you will have to pay $1.09 to get the $1.00 candy
bar. You factor the tax or a rough estimate into your decision. You know
if you only want to spend a $1.00 you don't buy it because the $1.00
candy bar will cost you $1.09 in the end. So you add the tax into the
purchase price when you make the decision.
That is how people do it with houses for sure. The mortgage payment is
the real decision maker. Whether the money goes to interest on a higher
price tag on the house and land or the money goes for the tax on land is
not so terribly relevant especially if they know they will get a large
relief from the land tax in old age.
Post by professorchaos
If you want to build a home you add the tax you will have to pay into
the cost of building of it. If you want to build a business on the land
you add the tax to the cost of running the business. The effect is a
higher cost of land and it works just like a sales tax. This difference
is the tax is charged over and over again not just once like a sales tax.
Yet you seem to say they are the same. That is just plain nutty. A
transaction tax taxes transactions while an asset tax (land in this case)
taxes the holding of assets.
Post by professorchaos
There can be no difference between a tax on the land and a tax on "the
market for the land".
You really do shy away from the word value don't you. A tax on the market
value of land is not a tax on a market; not a tax on trades.
Post by professorchaos
Any tax on the land is part of the cost the buyer must pay to obtain
and hold the land.

No. A transaction tax is a tax the buyer must pay to buy/sell the land
(i.e. to "obtain" the land rights) and a tax on the market value of land
is a tax on holding the land whether you use the land or not.
Post by professorchaos
In a sense a land tax says the government owns the land
and leases it to you. In reality this is what happens. If you don't pay
the land tax governments, in some places, can seize the land.
True. That is not the same thing as a sales tax or income tax, is it?
Post by professorchaos
Post by The Trucker
I've not mentioned the "labor theory of value" in this discussion that
I can remember. It seems that you are not interested in seeing anything
that disproves your horseshit position.
On the contrary. I would like to see something that address my position.
That is something that actually indicates the land offered for sale will
not change when prices of land change. That is the key to Roy's argument
that a land tax is efficient. So far I have seen no argument that
addresses that other than there is a fixed quantity of land. That
argument I have shown to have no bearing on the elasticity of supply of
land over and over again. Whether you realize it or not your arguments
have strengthened that position.
I have no choice but to tell the truth. I am not going to make up some
sort of crap to finance my "opinion". If my arguments strengthen your
supposed position then so be it. I don't believe that to be the case but
you are welcomed to see it your way.
Post by professorchaos
Post by The Trucker
You simply refer to any
arguments as "hokey" theories.
No just the concept of use value as being something ill defined and hard
to show. That is why I call Aristotle's idea of use value hokey and
mystical. It can not be measured.
We just went through a nice example of use value with the $1500 a month
home. It is even easier to see in a business environment.
Post by professorchaos
Post by The Trucker
The supply of locations is inelastic and does
not respond to price.
Again the elasticity of supply is defined exactly as the percentage
change in quantity supplied per a 1% change in price. Quantity supplied
is the number of units that people are willing to sell at a given price.
As you have noted happens if the price changes the change in quantity
supplied will be greater than zero. When you prove that the rest is QED.
As I stated before the elasticity of supply has absolutely 0 to do with
the number locations in existence only the owners willingness to sell.
With that definition of supply I have no way to argue about the basic
premise that the price will change the supply. All you need do is change
the definition of all the words and you can win any argument in which you
are involved. Perhaps that is why they call you Professor Chaos. But I
will not debate the point further. With your definition of the word
"supply" I cannot contend. If you have the dictionary under control it
will make no sense for me to attempt and argument. And I will argue no
further about the definition.
Post by professorchaos
A piece of land is not on the market and not part of supply unless it is
offered for sell. Supply, to an economist, makes no reference to any
notion of how much exist just how much is willing to be sold at
different prices. The fact that the quantity supplied of land rises
makes no indication that land was created just as the observation that
quantity of land supplied decreases with price makes no indication that
land was destroyed.
But you have a second problem with this rig, to which I will attend below.
Post by professorchaos
Post by The Trucker
The supply of supposed "owners" is highly elastic and so too is the
supply of stupidity and guile.
Owners are not supplied just the land they own. Only in slave societies
can you sell people. It is not the owners who are sold it is the land
that is sold. Therefore there can be no supply of owners. You don't buy
Donald Trump if you buy his property.
Yet there is a different owner and perhaps more than one which has been
"supplied" from the "available owners". I need not create them, I need
only to supply them, or more pointedly they need only jump into the supply
pool of their own free will. The supply of "owners" is as elastic as a
rubber band.
Post by professorchaos
Post by The Trucker
The natural location is inelastic just as the total quantity is inelastic.
There is no such thing as total quantity being inelastic.
Right. There are more locations in the universe. We just can't see em
cause they exist in a "hidden dimension". They will magically appear if
we print up some more money and throw it in the air.
Post by professorchaos
There is no
such thing as location being elastic or inelastic. It is the supply of
something is elastic (the number of units offered for sale increase at a
higher percentage than the price) or it is inelastic (the number of
units offered increases at lower than percentage than the increase in
price).
We'll see how this tap dancing works out.
Post by professorchaos
To say a location is inelastic or an owner is inelastic is
meaningless. Elasticities have nothing to do with amounts in existence.
That is absolute and total masturbation.
Post by professorchaos
They are measure of how how much people want to sell or how much people
want to buy changes with price. Alone they do not even tell us how many
trades will be made. The Quantity demanded may increase by 2% when price
drops by 1% but that doesn't mean that sellers will be willing to sell
enough to meet the quantity demanded when price drops by 1%. You would
have to look at both demand and supply and their elasticities to
determine that.
It really is like falling through a little trap door into wonderland. IN
wonderland we need not sail the ocean blue to find a new world. We can
just make the current one elastic by changing all the prices.
Post by professorchaos
Post by The Trucker
The supply of any naturally occurring "grade" of land is just as
inelastic as the total quantity. You cannot economically grow apples
at the north pole.
You are very confused as to what supply means. It is not a wood shop
definition. It does not mean what it would mean to a carpenter as in how
much wood do we have to use. It means how much wood is willing to be
sold at $1. How much wood will lumber mills sell when the price is $2.
This may be very different than the amount of wood a lumber mill has in
inventory.
Why of course it is! If I offer $200 the people running the place will
just shit wood.
Post by professorchaos
Post by The Trucker
The number of trades is not the number or parcels and the amount of land
is also not the number of trades.
Exactly the point. Elasticity measures the change in the number of
trades owners are willing to make not the amount of land in existence.
The number of parcels nor the amount of
Post by The Trucker
land will change as prices change.
Which has nothing to do with the measure of elasticity.
Let me define water as air. Now let's see if I can walk from NY to
London. MY name is Professor Chaos and I represent the Galactic Economics
Police. Should work just fine. Marshall says so.
Post by professorchaos
The distribution of the parcels may
Post by The Trucker
change based on value but not specifically on price.
Which still has nothing to do with elasticity.
The low interest
Post by The Trucker
rates and the special tax treatment afforded residences created a very
real increase in the number of small land parcels on the market.
Which means that people respond to changes in prices in the land market.
No. They responded to relative changes in value.
Post by professorchaos
Demand increases when taxes drop and because owners react to the higher
price by offering more on the market the amount of land changing hands
rises.
Higher prices were not offered, Bosco:

The amount of homes available for the same monthly price was increased due
to the special tax treatments on mortgage interest and the supply of lots
of money by a willing Fed (very low interest rates). This reduced the
price of capital improvements as seen by the BUILDERS and USERS/BUYERS of
the homes. The sellers of the land were more than willing at all times at
the current prices and the prices rose ONLY AFTER the reduced user prices
increased the demand for land at the SAME PRICE as before. Then the bubble
started as the land prices were pulled up by demand and then by sheer
speculation.
Post by professorchaos
This only occurs if the elasticity of supply is not 0. If land
owners did not react to a change in price then prices would rise but the
same amount of land would change hands in the market. That would imply
the tax was efficient. The fact the number of trades would go up with
lower taxes shows that the elasticity of supply is not 0 and the tax is
inefficient because it blocks trades that would be made if the tax did
not exist. My point all along.
You simply do not understand causality. And transaction taxes are
inefficient. We do not need to get that from any discussion about
price changes. The TRADE PRICE will change due to the shape and the amount
of a tax.
Post by professorchaos
Post by The Trucker
But that
elasticity was a function of value and not a function of price.
The value to the buyer didn't change the price did and that was what
caused the reaction.
Rubbish.
Post by professorchaos
The price
Post by The Trucker
of the parcels went up but it was an effect of the decreasing interest
rates and the decreased transaction tax treatment. The price apparent
increase of parcels was a consequence of relative value and not a
*cause* of anything at all.
No it was the effect of prices change. Relative value has not changed.
Total and absolute horsecrap. People buy homes because to not buy a home
is an economic death sentence. You will not ever be able to retire unless
you are a Wall Street Wizard or you own your home. And that is most
especially true while the Republicans are totally destroying the dollar
and the rest of the currencies are following suit.
Post by professorchaos
What in this scenario has changed the value of the land to the buyer?
The value of the home to the buyer has been increased due to the inflation
of home prices that everyone else must pay. Those home prices reflect
some amount of general inflation, yet the monthly mortgage paid by
a buyer of yesteryear remains relatively constant. The percentage of the
yesteryear home buyer's income allocated to housing is therefore
decreased and that leaves funds for other things. That would be value.
Post by professorchaos
Nothing so before I was willing to pay $10,000 for the land but because
of the interest rate and taxes and it would have cost me $12000 to buy
the land.
So no sale.
Post by professorchaos
I still value the land at $10,000 but the lower interest rate
and lower tax have lowered my cost of aquiring the land to $9000.
Nope. The price of the land (the money realized by the seller) has not
changed due to a tax and interest deduction for the buyer. The price of
the land in the real world will actually increase. As people have more
money to pay the land seller because they are not paying the government
and the mortgage lender then the land seller can (and will) charge more
for the land. The land prices will increase and this MAY result in more
lots/locations for sale. So if that is elasticity to you then there you
are. We will see later that this is not what actually happened in the
real world, but it COULD happen this way.
Post by professorchaos
Nothing has changed with my valuation of the land or the relative value
of the land.
Oh but it has.... You said you could not afford to buy the land for
$10000 because the tax on the transaction would increase the AQUISITION
cost to $12000. Then you lied and said that the seller of the land was
now willing to take $9000 because YOU got a tax break. Welcome to
wonderland folks! A realistic scenario is one where you look at the
monthly USE fee which is the debt service and property taxes on raw land
or the mortgage (total taxes per year, home owners insurance, and debt
service). If the yearly INCOME tax you will pay is decreased substantially
by debt service payments as opposed to paying rent, and the property tax
is being reduced each and every year as it has been in almost every place
in the nation, and the interest rates are lower than a snakes belly, then
only a financial kamikaze would not buy a home or speculate in land
development. The result of this is that land sellers were in tall cotton
finally getting rid of that land they had been trying to sell for years.
The price did not change over their "reservation price" or "use value".
The cost of fixed improvements was reduced by falling income tax
rates, the cost of finance reduced by lower interest rates, the prospect
of sales enhanced by home mortgage deduction, and last, but not least a
loosening of environmental road blocks provided for profitable DEVELOPMENT
OF FIXED CAPITAL IMPROVEMENTS like roads and power and sewer and piped
water. The price of the land didn't change at first. It was the price they
had been asking for a long, long time. Those that held out got higher
prices for it as land price inflation took off, but the increase in
DEVELOPED locations was occasioned by a decrease in the monthly fees that
are necessary to the improvement of raw land and the acquisition of a
home. To say that an increase in the price of land caused more locations
to be "offered for sale" is total horsecrap.
Post by professorchaos
Unless you are now defining value as price then yes a
change in price changes relative prices, cp. If you believe price is
value then and only then do relatively values changes but that is not
the same as value to the buyer(willingness to pay). Some buyers may only
$10000 but have a value the land at $20000.
The increase in the usefulness of locations improved due to a declining
cost of fixed capital development and the improved *VALUE* of home
ownership (not a price or a cost of acquisition). The price of the homes
may even have increased, but the cost of occupying and using the home
fell. **VALUE IN USE**!
Post by professorchaos
Post by The Trucker
But even this very strong dose of reality does not seem to shake your
religious fixation on Marshallian price theory.
Quite the contrary it supports price theory.
Wonderland!
Post by professorchaos
Perhaps not exactly as
Marshal set it forth
Let's just redefine some more words here and we can put enough lipstick on
this pig to make it sing.
Post by professorchaos
but in the way it is presented today. There is
nothing religious about looking at the world in a way that data time and
time again has shown to be accurate. You only see it as religious
because you want to view things in mystical terms like a use value that
can not be defined.
I think I just gave you a very damned good example of "value in use".
Post by professorchaos
When price theory wants to move away from that you
call it blasphemy and a new religion because you have a mystical view of
how things work.
No. I have a REALISTIC view of how things work.
Post by professorchaos
Post by The Trucker
The increase in the
price of small land parcels would seem to have increased the demand for
such parcels.
An increase in price never increases Demand. The lower taxes and lower
interest rates increased demand and that caused prices to rise.
Well!!! A dose of reality! Or, at least, half a reality.
Post by professorchaos
You have
it backwards and you are confused because you do not understand what the
lecture from the second week of any micro economics class. That is the
difference between demand and quantity demanded.
I understand that any time you get in trouble you just double the bet and
change the ground. And you are absolutely correct concerning my lack of
acceptance of the second weak of micro horse manure.
Post by professorchaos
If you understand that key concept then you understand that your example
was exactly what price theory would have predicted. Decreasing taxes and
the cost, above market price, of acquiring land has increased demand and
that led to higher prices.
NO, Bosco. I bought my first house in 1995 because I knew the Repukes
would do whatever it might take to cut taxes on capital gains and
eliminate taxes on the trade of homes. I took the proceeds of that
speculation and leveraged them as soon as it was clear that the
Repukes were going to take over and destroy the America dollar. It is a
matter of financial survival. Any damned fool that would attempt to store
wealth away in something other than land or gold or oil futures while a
Republican is in the White House is a total idiot. Higher prices are
caused by failing dollars more than anything else. The price of land as
measured in gold has not done all that much.
Post by professorchaos
Post by The Trucker
That would be a negative elasticity in the world of Marshall.
No wrong again.
Nope. right on the money, pal. You were all this time telling
us that the increasing prices of land made more land available
and, in fact, more land became USEABLE without an increase in
price of land. And the increased availability of land at the same
price coupled with the decreased cost of ownership (not just the
transaction price) increased the value of home ownership. And all
of this reality leaves Marshall's simpleton price theory sucking
wind.
Post by professorchaos
The elasticity of demand of is always negative according
to the law of demand. To break the law of demand the elasticity of
demand would have to be positive. The elasticity of demand is irrelevant
when demand is shifting as in your example.
Post by The Trucker
I think it a fine example as to why value is king and price is
a court jester.
Well you certainly have made yourself look like a synonym for jester.
Suuuuuuuurrrrreeeee....
Post by professorchaos
Again I try of repeating the same point over and over again.
Yeah, pal. You are monotonous awright.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org
professorchaos
2007-09-03 07:22:18 UTC
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Post by The Trucker
Post by professorchaos
Post by The Trucker
Hell... I thought you were talking about a tax on land as opposed to a
tax on markets. A tax on markets would be a transaction tax of some kind.
A tax on land affects markets just as if you taxed the sell of land.
NO.
Post by professorchaos
A
question to help explain the concept. Lets say you had $1500 a month to
spend on the mortgage for a house.
The relevant point is that I have $1500 a month to spend on a home I will
USE.
Post by professorchaos
You love a certain home that would
cost $1500 in mortgage notes a month before tax. Would you buy the home
without a tax?
Sure...
Post by professorchaos
Would you buy the home if the tax bill was $500 a month?
NO.
Post by professorchaos
Clearly in this example you would buy the home when there was no tax and
not buy the home with the tax. Why? Simply because tax payments are
included in your purchase price.
As you have presented it that is true. However: What if the tax on the
LAND decreased the value of the LAND so as to make the mortgage still
be $1500 a month.
The only way this will happen if the elasticity of supply is 0 that is
the heart of the heart of the argument. Prices in this situation will
drop but not enough to fully mitigate the $500 a month increase in
unless the quantity of land in which people are willing to sell does not
respond to price. If it does the market price will not drop by $500 a
month or the present value of future cost of taxation. You see it is
crucial that sellers do not change how much they want to sell on the
market and therefore absorb the full $500 hit for this to be efficient.
I have no doubt that if sellers did change the amount of land offered
for sale on the market that the tax would have no effect on trades. As I
have argued because in differences in reservations or you argue
difference in what ever you define as use value in the land will some
owners will decide to not sell at the lower price.
Post by The Trucker
As it decreased the price of the house + land to a
point where the total outlay was still $1500 per month. I would probably
still buy the house based on the same assumptions. 1)I really like the
House, and 2) I have the $1500 to spend on the house.
Yes but you have to have sellers still offer the same amount of land on
the market when price changes for that to happen. If the tax distorts
the sellers incentive to sell to sell because of lower prices then the
it will cause an inefficiency. The price will not drop the full amount
of the tax and sellers and buyers will share the burden of the tax. That
is the after tax price be slightly higher to the buyer than before and
lower to the seller than before. Only if the elasticity of supply is
exactly zero will the market price drop to $1000 and everything be equal
as before. As your arguments and mine support a change in price will
cause sellers to sell less on the market. When you look at this in the
context of supply and demand that will mean price will not drop by
exactly $500. It may drop to $1100 still leaving the house unaffordable.
The assumption of zero elasticity of supply is essential to make this
argument work.
Post by The Trucker
Post by professorchaos
If you want to build a home you add the tax you will have to pay into
the cost of building of it. If you want to build a business on the land
you add the tax to the cost of running the business. The effect is a
higher cost of land and it works just like a sales tax. This difference
is the tax is charged over and over again not just once like a sales tax.
Yet you seem to say they are the same. That is just plain nutty. A
transaction tax taxes transactions while an asset tax (land in this case)
taxes the holding of assets.
Yes but the end effect is the same. If I tax you eight % for buying a
house is not the same as if I tax you 8% for holding the house. Will the
tax that has to be paid not be figured in when I am purchasing the
house. You have to pay 8% either way and people are not dumb enough not
to figure that into the purchase price. Sure in statue the two taxes
look different one taxes the sell one taxes ownership of the good. In
reality they have the same effect. When deciding to purchase the tax
that has be to paid has to be factored into the cost.
Post by The Trucker
Post by professorchaos
There can be no difference between a tax on the land and a tax on "the
market for the land".
You really do shy away from the word value don't you. A tax on the market
value of land is not a tax on a market; not a tax on trades.
Regardless the EFFECT is the same. If I am taxed $500 because I own a
house when purchasing it that is the same to me as if I were taxed $500
for buying the house. It makes no difference if the tax comes at the
moment of sale or lately after I own the house. Taking the action to buy
the house triggers the tax. If I do not buy the land I do not pay the
tax on it.
Post by The Trucker
Post by professorchaos
Any tax on the land is part of the cost the buyer must pay to obtain
and hold the land.
No. A transaction tax is a tax the buyer must pay to buy/sell the land
(i.e. to "obtain" the land rights) and a tax on the market value of land
is a tax on holding the land whether you use the land or not.
However, you must pay that tax if you buy the land. If you don't buy the
land you do not have to pay the tax. Semantically they are different but
the effect is the same. My purchase of the land requires me to pay $500
it doesn't matter if the reason is because I bought the land or that I
will own the land when the tax is levied. I still have to pay $500 if I
choose to buy the land therefore it is part of the cost I have to
consider in purchasing the land.

It is the same argument used in saying there is no difference in taxing
the buyer or the seller. The statutes may say the buyer pays or the
seller pays but in the end demand or supply will shift and the market
will come to the same prices regardless of who is taxed. Sure there is a
difference if the seller pays or the buyer pays but the effect on the
market is identical. Here there is a difference if the tax is on the
sale of land or because you own it. It makes a difference as to when the
tax is paid. However, it doesn't make a difference in the fact that if
you do not own the land and you buy it you will have to pay the tax. So
demand decreases regardless of which way the state words the law.

The bit about being taxed whether or not you use it is quite a different
argument. It says that an existing owner looking to improve the land
will not be impeded in regards to improving the land. The tax is the
same whether or not improvements are made. A tax on improved values of
the land and a tax on the unimproved values of the land have the same
effect on the land market, a buyer must add the tax to the cost.
However, they affect how the land is improved very differently.
Post by The Trucker
Post by professorchaos
In a sense a land tax says the government owns the land
and leases it to you. In reality this is what happens. If you don't pay
the land tax governments, in some places, can seize the land.
True. That is not the same thing as a sales tax or income tax, is it?
Not really. That was just a random thought I am not sure why I put it in
there other than the realization that is true. If the government can
seize land due to nonpayment of taxes then essentially they say they own
the land and lease it to you. That is a major blow to individual
property rights that I really do not like. Note: this is not the same if
they just fine you or put you in jail for nonpayment of taxes. The land
is still your property and still can be passed down to your descendants.
Governments therefore can not be seen as essentially owning the land.
Even if they can place a lien that says proceeds of any sale have to go
to pay the government before the owner. However, I digress.
Post by The Trucker
Post by professorchaos
Post by The Trucker
You simply refer to any
arguments as "hokey" theories.
No just the concept of use value as being something ill defined and hard
to show. That is why I call Aristotle's idea of use value hokey and
mystical. It can not be measured.
We just went through a nice example of use value with the $1500 a month
home. It is even easier to see in a business environment.
No that was market value unless you believe that there is no difference
in use value and willingness to pay. If you believe that then the demand
curve represents the use value to the buyer. I make no statement because
use value is ill defined. So I can not say if it is willingness to pay
or if other things factor in. For example if part of my willingness to
pay is because I believe that buying property in X location is a status
symbol then the $1500 a month is not all use value.
Post by The Trucker
Post by professorchaos
Again the elasticity of supply is defined exactly as the percentage
change in quantity supplied per a 1% change in price. Quantity supplied
is the number of units that people are willing to sell at a given price.
As you have noted happens if the price changes the change in quantity
supplied will be greater than zero. When you prove that the rest is QED.
As I stated before the elasticity of supply has absolutely 0 to do with
the number locations in existence only the owners willingness to sell.
With that definition of supply I have no way to argue about the basic
premise that the price will change the supply.
Price changes change quantity supplied. I am not trying to be an ass
here it is just that the distinction is crucial to understanding supply
and demand. A change in supply means that the quantity supplied changes
at each price level. Something that is held constant in determining the
quantity supplied at each price has changed. For instance a increase in
wages that means the 100th unit will cost $1.00 to make instead of $.90
to make and the 200th unit will cost $2.00 to make instead of $1.99. The
distinction is crucial in understanding supply and demand. The analysis
of taxes is nothing more than an extension of supply and demand.
Post by The Trucker
All you need do is change
the definition of all the words and you can win any argument in which you
are involved.
Perhaps but like any other science no economist will take you serious if
you do not use the definitions that are agreed upon in the field. I
could call velocity acceleration to try to win an argument but no
physicist would take me seriously because they define acceleration as
the change in velocity divided by the change in time. I am using
standard agreed upon definitions of supply and elasticity of supply that
no one from a holder of a bachelor's degree in economics to a noble
Laurette would disagree with. Like psychics economics has set definition
for what terms mean. I am not changing any terms here.
Post by The Trucker
Perhaps that is why they call you Professor Chaos. But I
will not debate the point further. With your definition of the word
"supply" I cannot contend. If you have the dictionary under control it
will make no sense for me to attempt and argument.
I don't look the word supply up in a dictionary.

From http://www.m-w.com/cgi-bin/dictionary

Main Entry: 2supply
Function: noun
Inflected Form(s): plural supplies
1 obsolete : ASSISTANCE, SUCCOR
2 a obsolete : REINFORCEMENTS -- often used in plural b : a member of
the clergy filling a vacant pulpit temporarily c : the quantity or
amount (as of a commodity) needed or available <beer was in short supply
in that hot weather -- Nevil Shute> d : PROVISIONS, STORES -- usually
used in plural
3 : the act or process of filling a want or need <engaged in the supply
of raw materials to industry>
4 : the quantities of goods or services offered for sale at a particular
time or at one price
5 : something that maintains or constitutes a supply

Definition 4 is close to how economist use the term not exactly. They
are really defining quantity supplied but you can clearly see even
Websters use my definition and not yours. The offered for sale and not
how much is in existence is crucial here.

How an economics dictionary definition.
http://economics.about.com/cs/economicsglossary/l/blsupply.htm
Definition: The total quantity of a good or service that is available
for purchase at a given price.

You see I am not pulling definitions out of a hat. This is how economist
define supply. I realize this is an internet forum so I don't say
believe me because I have credentials that you can not confirm. I do
offer evidence that what I am saying is right though.
Post by The Trucker
And I will argue no
further about the definition.
A wise move considering my definition is correct and accepted among
Economists.
Post by The Trucker
Post by professorchaos
Owners are not supplied just the land they own. Only in slave societies
can you sell people. It is not the owners who are sold it is the land
that is sold. Therefore there can be no supply of owners. You don't buy
Donald Trump if you buy his property.
Yet there is a different owner and perhaps more than one which has been
"supplied" from the "available owners". I need not create them, I need
only to supply them, or more pointedly they need only jump into the supply
pool of their own free will. The supply of "owners" is as elastic as a
rubber band.
See the definition of supply above. Hopefully that we will show you what
you do not understand here.
Post by The Trucker
Post by professorchaos
Post by The Trucker
The natural location is inelastic just as the total quantity is inelastic.
There is no such thing as total quantity being inelastic.
Right. There are more locations in the universe. We just can't see em
cause they exist in a "hidden dimension". They will magically appear if
we print up some more money and throw it in the air.
That has nothing to do with it. A quantity supplied or demand need not
even exist. In a market of production to say that a seller would sell
100 units if the price were $100 does not mean he has one hundred units
at hand. Just that he can get 100 units. These one hundred units may
never even exist if people are not willing to buy 100 units at $100.
Supply is a hypothetical statement of how much you would sell at
different prices. Elasticity of supply measures how how that how you
would sell changes if the price changes. It has zip to do with how much
is in existence. Well not zip but close to it. Obviously if the
hypothetical price were so high that owners would be willing to sell
every parcel of land in the world would be sold at that price elasticity
of supply becomes zero. Beneath that price the decision is made by each
individual owners as to if he would sell at X price. The quantity of
parcels that would be supplied at X price is quantity supplied. The QS
over the range of all possible prices is supply.
Post by The Trucker
It really is like falling through a little trap door into wonderland. IN
wonderland we need not sail the ocean blue to find a new world. We can
just make the current one elastic by changing all the prices.
Not necessiarly. However, you still do not understand that supply
measures how much is offered on the market and not how much exist even
after saying you could argue with the definition. Depending on the shape
of a curve yes changing prices changes elasticity unless the curve is
iso-elastic. Lets take a demand curve with the slope of -1. At $1 QD is
100 and at $2 QD is 99. You get a one percent change in quantity when
price drops from $2 to $1, note I am not using the midpoint formula. The
percentage change in price is negative 100%. The curve is highly
inelastic. Now lets take the same curve at a price of $99 QD is 1 and
at at $98 QD is 2. Now change in QD is 100% and change in price is 1/99.
That is highly elastic.

Elasticities only tell us what happens to how much people are willing to
sell not how much is in existence. If you want to use your own
definitions fine but do not expect to be taken seriously. People are
going to look at you just as funny as they would me if I said my
acceleration is 65 miles per hour when I am driving in my car.
Acceleration by proper definition would be measured in miles per an hour
squared or in metric meters per second squared.
Post by The Trucker
Let me define water as air.
Well you certainly have done that in your so called arguments. So how is
supply defined in your alternate universe? I would really like to know.
Post by The Trucker
Post by professorchaos
The low interest
Post by The Trucker
rates and the special tax treatment afforded residences created a very
real increase in the number of small land parcels on the market.
Which means that people respond to changes in prices in the land market.
No. They responded to relative changes in value.
Post by professorchaos
Demand increases when taxes drop and because owners react to the higher
price by offering more on the market the amount of land changing hands
rises.
Sorry Luke Duke but an increase in demand certainly leads to higher
prices. Even in your example prices rose was that not what you thought
happened that Marshal was dis proven because the increase in price led
to more demand? I am showing
A. it is the increase in demand that leads to a higher price and
B. The law of demand says quantity demanded can not increase when price
increases and that
C. Demand is not equal to quantity demanded. We only refer to a change
in QD when the demand does not change and the price does.

Hey it is your scenario I suppose you can try to change if you want but
then it would make what you said even more wrong.
Post by The Trucker
The amount of homes available for the same monthly price was increased due
to the special tax treatments on mortgage interest and the supply of lots
of money by a willing Fed (very low interest rates).
No the demand curve for housing increased first. This is due to lower
cost because of less interest and lower taxes. So the cost of owning a
home drops and people want more. Demand increases. Suppliers see the
demand increasing and the amount of homes offered on the market
increases. You skip the steps to get to the conclusion and the steps are
extremely important to your final conclusion.
Post by The Trucker
This reduced the
price of capital improvements as seen by the BUILDERS and USERS/BUYERS of
the homes.
So you are now saying supply increased as well as demand. Now we do not
know what happens to price only quantity.
Post by The Trucker
The sellers of the land were more than willing at all times at
the current prices
So now supply is not shifting ok.
Post by The Trucker
and the prices rose ONLY AFTER the reduced user prices
increased the demand for land at the SAME PRICE as before.
BINGO DEMAND INCREASED. Here's your cookie. So it does not overturn the
law of demand which says if the demand curve is constant and the price
rises the quantity demanded can not rise. This does not apply because
the demand curve is not constant.
Post by The Trucker
Post by professorchaos
This only occurs if the elasticity of supply is not 0. If land
owners did not react to a change in price then prices would rise but the
same amount of land would change hands in the market. That would imply
the tax was efficient. The fact the number of trades would go up with
lower taxes shows that the elasticity of supply is not 0 and the tax is
inefficient because it blocks trades that would be made if the tax did
not exist. My point all along.
You simply do not understand causality. And transaction taxes are
inefficient. We do not need to get that from any discussion about
price changes. The TRADE PRICE will change due to the shape and the amount
of a tax.
As are land value taxes if the elasticity is not 0. Transaction taxes
are so only inefficient iff and only if neither the elasticity of demand
nor the elasticity of supply is exactly 0 or approaches infinity. You
can get an efficient transaction tax if the change in price causes no
response in the quantity offered on the market or the quantity that
people are willing to buy. It is also efficient if buyers will buy all
that is offered at a certain price or lower and none if the price is
above the certain price. Simply applications of efficiency and
elasticity. This is about week 3 or 4 in a macroeconomics class.
Post by The Trucker
Post by professorchaos
Post by The Trucker
But that
elasticity was a function of value and not a function of price.
The value to the buyer didn't change the price did and that was what
caused the reaction.
Rubbish.
same to you. You snipped the explanation of this.
Post by The Trucker
Post by professorchaos
No it was the effect of prices change. Relative value has not changed.
Total and absolute horsecrap. People buy homes because to not buy a home
is an economic death sentence.
There precieved value of the home does not change with the tax. It is
still worth paying the same X dollars for. What changes is how many
dollars you have to pay for it.
Post by The Trucker
And that is most
especially true while the Republicans are totally destroying the dollar
and the rest of the currencies are following suit.
A myth. The weak dollar is good for US manufacturing. A weak dollar
means that one unit of foreign currency buys more dollars. This makes
American goods cheaper and more competitive on the market. An example if
the price of a Saturn is $18000 and the exchange rate for pounds to
dollars is 1:2 then it cost a Brit 9000 pounds to buy a Saturn. If the
dollar weakens and the exchange rate becomes 1:4 it now only cost the
Brit 4500 pounds to buy the car. Weak dollars are good for exports.

Over the Reagan, Bush, and Clinton administrations the dollar was strong
and weak under Carter. Under the first three Greenspan kept interest
rates up which kept down inflation and the dollar strong. Under the
Carter appointed Fed chair (Burns? it was prior to Volker) the dollar
was weak as the Fed kept interest rates low and caused price spirals. So
the party in power has little to do with how strong the dollar is. The
Fed chairman has much more to do with that. Note Greenspan was the chair
for both Democratic and Republican presidents.
Post by The Trucker
Those home prices reflect
some amount of general inflation, yet the monthly mortgage paid by
a buyer of yesteryear remains relatively constant. The percentage of the
yesteryear home buyer's income allocated to housing is therefore
decreased and that leaves funds for other things. That would be value.
How does it leave more money available if the mortgage was fixed rate as
you claim in the first sentence. It does mean less cost from those
buying and those refinancing.
Post by The Trucker
Post by professorchaos
Nothing so before I was willing to pay $10,000 for the land but because
of the interest rate and taxes and it would have cost me $12000 to buy
the land.
So no sale.
Exactly. The perceived value and how they would be willing to pay to
obtain the good has not changed. Just how much they have to pay above
the market price.
Post by The Trucker
Post by professorchaos
I still value the land at $10,000 but the lower interest rate
and lower tax have lowered my cost of aquiring the land to $9000.
Nope. The price of the land (the money realized by the seller) has not
changed due to a tax and interest deduction for the buyer.
Of course it has. It changed because demand for land shifted. The same
market price means you now pay less because of lower interest and taxes.
Therefore you want to buy more at the same price. That is a shift in
demand.
Post by The Trucker
The price of
the land in the real world will actually increase.
I never argued otherwise.
Post by The Trucker
As people have more
money to pay the land seller because they are not paying the government
and the mortgage lender then the land seller can (and will) charge more
for the land.
Why because demand has increased. They would not buy as many parcels
before at the same market price because after tax and interest cost the
price they have to pay would have been higher than it is now. With the
lower cost in interest and taxes they are willing to buy more at the
same price. That is an increase in demand. Sellers can't just raise the
price because they want to and make people buy at that price.

The land prices will increase and this MAY result in more
Post by The Trucker
lots/locations for sale. So if that is elasticity to you then there you
are.
That is the result of an elasticity of supply that is not equal to 0.
Post by The Trucker
Oh but it has.... You said you could not afford to buy the land for
$10000 because the tax on the transaction would increase the AQUISITION
cost to $12000. Then you lied and said that the seller of the land was
now willing to take $9000 because YOU got a tax break.
No I did not say that. I said that the cost may only be $9000 to me
after tax if current prices held. Therefore I would want to buy showing
that my quantity demanded would be different from when the taxes were
higher.
Post by The Trucker
The result of this is that land sellers were in tall cotton
finally getting rid of that land they had been trying to sell for years.
Why is that? Because prior to the tax break the wedge between price paid
and price received was bigger. They were not really trying to sell it if
they did not accept an offer that buyers would buy at.
Post by The Trucker
The price did not change over their "reservation price" or "use value".
Of course it did. The price the seller will receive from sell is now
above the supply curve. This is due to the shift in demand pushes prices
up.
Post by The Trucker
The price of the land didn't change at first.
Which is the opposite of what you said earlier. You wrongly said the
price increase led to an increase in demand. You do realize I have been
arguing this was wrong and you just agreed with me don't you. Of course
not you are trying to build a smoke screen for the failure of the claim
that you disproved price theory.
Post by The Trucker
It was the price they
had been asking for a long, long time.
Which meant they were not willing to supply the land at the former
equilibirum price. They were not willing to sell at that price. They
were only willing to sell at a higher price. Again the elasticity of
supply is not 0 and you are arguing it again.
Post by The Trucker
Those that held out got higher
prices
Were not supplying land on the market at the former price.

for it as land price inflation took off, but the increase in
Post by The Trucker
DEVELOPED locations was occasioned by a decrease in the monthly fees that
are necessary to the improvement of raw land and the acquisition of a
home.
Again demand increased we know that.
Post by The Trucker
To say that an increase in the price of land caused more locations
to be "offered for sale" is total horsecrap.
You just showed how it is done. The sellers would not sell at the price
that prevailed before. They wanted a higher price. They were not
offering land for sale at the previous they were holding out for a
higher price just as you said. When price rose they were sell to at the
current price so they were supplying their land to the market. Again the
definition of quantity supplied is how much people will sell at a GIVEN
price. In your example price changed and people who were holding out for
a higher price were willing to sell. If they said I will sell my land
but not at the current price then they were not supplying it for the
current price.
Post by The Trucker
Let's just redefine some more words here and we can put enough lipstick on
this pig to make it sing.
The only person redefining words to try to confuse is you. I have used
the accepted definitions of terms and been consistent with them. It is
you how are trying to redefine quantity supplied as what is offered at
any price. It is you that is redefining supply as the amount of usable
land in existence not me. Look the definitions up I am using them
correctly. It is you are trying to redefine things to make it look like
your argument works.
Post by The Trucker
Post by professorchaos
but in the way it is presented today. There is
nothing religious about looking at the world in a way that data time and
time again has shown to be accurate. You only see it as religious
because you want to view things in mystical terms like a use value that
can not be defined.
I think I just gave you a very damned good example of "value in use".
An example is not a definition. Nor is your example something that you
can measure and put a dollar amount on. Therefore, it is non-scientific.
Post by The Trucker
Post by professorchaos
When price theory wants to move away from that you
call it blasphemy and a new religion because you have a mystical view of
how things work.
No. I have a REALISTIC view of how things work.
In your mind I am sure you find it realistic. Charles Manson thought he
had a realistic view of things when he heard Helter Skelter telling him
to kill. It was everyone else that didn't have a realistic view. Does
that make his view realistic. Funny, I heard the song and didn't hear
any messages to kill in it.
Post by The Trucker
Post by professorchaos
Post by The Trucker
The increase in the
price of small land parcels would seem to have increased the demand for
such parcels.
An increase in price never increases Demand. The lower taxes and lower
interest rates increased demand and that caused prices to rise.
Well!!! A dose of reality! Or, at least, half a reality.
Which is the opposite of what you said. That is the increase in price
increased demand. That was your claim. Although I have seen you dropped
it now.
Post by The Trucker
Post by professorchaos
You have
it backwards and you are confused because you do not understand what the
lecture from the second week of any micro economics class. That is the
difference between demand and quantity demanded.
I understand that any time you get in trouble you just double the bet and
change the ground. And you are absolutely correct concerning my lack of
acceptance of the second weak of micro horse manure.
If you want to say Marshal was wrong about something then you have to
have the definitions of what he said right. If you want to make the
claim Marshal is wrong then you have to understand what he is talking
about. If you do not understand the difference between quantity demanded
and demand then you do not understand the claim you are trying to
refute. I have tried to explain it to you by Marshal's definition so you
can understand the claim. Whether you think the definition is horseshit
or not you have to understand it to understand what Marshal is saying.

Using Marshal's definitions it is entirely clear that your example is
consistent with a model of supply of demand and has nothing to do with
the law of demand. The law of demand says that as price rises quantity
demanded can not rise. A change in quantity demanded is ONLY said to
occur if the demand curve does not shift and prices change. In your
example the demand curve clearly shifts and therefore has zip to do with
the law of demand.
Post by The Trucker
Post by professorchaos
If you understand that key concept then you understand that your example
was exactly what price theory would have predicted. Decreasing taxes and
the cost, above market price, of acquiring land has increased demand and
that led to higher prices.
NO, Bosco.
No Luke Duke that is exactly what you are saying that decreasing land
taxes and interest rates lead to higher prices and more land traded.
That is the exact same prediction made by the model I used. Demand
increases meaning prices rise and more trades are made.

Furthermore your example fails to show that an increase in price led to
an increase in demand. That really makes no sense and has nothing to do
with anything Marshal said. So even if you could have proved it, it
would not have broken the law of demand which says nothing about what
happens when demand increases.
Post by The Trucker
I bought my first house in 1995
Good for you.
Post by The Trucker
because I knew the Repukes
would do whatever it might take to cut taxes on capital gains and
eliminate taxes on the trade of homes.
So the party you obviously hate support a policy that would benefit you
and gave you incentive to buy a home. So without the Republican's
contract with America you would not own a home. Why do you call them the
repukes then?
Post by The Trucker
I took the proceeds of that
speculation and leveraged them as soon as it was clear that the
Repukes were going to take over and destroy the America dollar.
Oh yeah the dollar was destroyed. Inflation rates went lower than the
rest of the 90's from 4% to 2% meaning purchasing power was degraded at
lower rates than under Carter and Reagan, Bush, and Clinton under a
democratic congress. The dollar got so strong that the Asian currency
collapse happened because they were running out of reserves to keep
their exchange rate pegged as the dollar appreciated. Yeah the American
dollar was ruined.
Post by The Trucker
It is a
matter of financial survival.
ARMAGEDDON IT! Cool! Do you take wilderness survival classes because you
believe the end is near and George Bush is a reptilian alien?
Post by The Trucker
Post by professorchaos
Post by The Trucker
That would be a negative elasticity in the world of Marshall.
No wrong again.
Nope. right on the money, pal.
Define elasticity for me. Please do I really want to have a good laugh.
If as price rises the quantity demanded or supplied falls that is a
negative elasticity.
Post by The Trucker
You were all this time telling
us that the increasing prices of land made more land available
No just that as prices increase people are willing to sell more land. At
very high prices, it could lead to expansion that involves reclaiming
land but that was not necessary for the argument.
Post by The Trucker
and, in fact, more land became USEABLE without an increase in
price of land.
No I don't recall that. Only that changes in prices led to changes in
how much people are willing to sell. As I said before the amount of land
in existence or available for use has little to no impact on elasticity
of supply. It only matters once we are to the point that every available
piece of land is offered for sell at the current price. Then the
quantity supplied can not change.
Post by The Trucker
And the increased availability of land at the same
price
I never claimed a shift in supply. The argument has been clear that
price changes motivate people to sell when they would not have before
and not to sell when they would have before. I never claimed that
quantity supplied would increase for the same price that was your claim.
Post by The Trucker
coupled with the decreased cost of ownership (not just the
transaction price) increased the value of home ownership.
I never mentioned value. In fact as I have said several times
willingness to pay is not use value but even if it were taxes will not
affect the use value nor my willingness to pay just how much the final
price (after tax) I have to pay.
Post by The Trucker
And all
of this reality leaves Marshall's simpleton price theory sucking
wind.
Before you make that claim you have to understand Marshal. Even if you
do not agree with the definition of supply and demand you must
understand that Marshal's argument can only be understood by the correct
definition of terms. It is like trying to read a boot and saying that
love really means foot and trying to understand the boot. Suddenly a
trashy romance novel seems like a story about someone who can't live
without their foot if you believe love really means foot.
Rich Hutnik
2007-08-25 08:02:51 UTC
Permalink
Post by John Galt
Post by Nospam
Yet another conservative myth crashing to the ground.
New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
The article you posted refers to local tax abatements, not "tax cuts". An
abatement is not a "cut", it's a period of time under which the new business
does not have to pay the tax.
Abatements are used as an incentive (by both convervatives and otherwise) to
lure businesses for the purpose of (eventually) improving the tax base of
the municipality.
JG
There are fundamental problems with a city relies on it to get
business in the area. Once the abatement is gone, the business can
once more threaten to leave the area, so more have to be extended. A
LOT of corporations do this, so that they can pay as little as
possible and keep threatening the leave the area card. MSG Corp for
example, pays almost no taxes, due to an agreement it signed with NYC
so that it would stay in Manhattan. What it then did was proceed to
lobby against the mayor of NY to keep the Jets out, and expanding the
Javitz center so that MSG would face less competition for convention
business. They ran TON of ads and killed the proposition.

What is most healthy for everyone is if an area has enough qualified
workers, and enough other infrastructure needs, and most importantly,
reasonable access to transportation networks to supply its goods and
services. No amount of tax abatements would be a wise choice to get a
steel refiner with no access to iron, to move somewhere, neither would
a lack of qualified workers. Of course some desperate municipalities
will try to do this, to their loss.

Nothing is better for business than a natural economy that developed
naturally by men who play fairly with one another. No amount of
government meddling can surpass this. This goes from tax breaks to
artificially building infrastructure ill-suited for the needs of a
city, just to get business in there. This means, pointless raising of
taxes.

A lot of the problems we have now today, from the fuel crunch to
medical expenses shooting through the roof were from major government
efforts to improve things, resulting in fundamental structural
problems. The building of the national highway system, using tax
dollars for example, put into motion an addiction to oil that America
developed. It led to the cities breaking down also as people hit the
roads and went to the suburbs. It wasn't a natural economic
development either. It was done by the government, under heavy
influence of the petroleum industry and Texas oilmen who happened to
be OPEC before there was OPEN.

- Rich
Hillary Rotten Clintoon
2007-08-23 16:22:17 UTC
Permalink
Yet another LIEbrul myth crashing to the ground. that Tax cust cause
revenue losses.
Posted on: Sunday, August 12, 2007
Record revenues cut Federal deficit


By Jeannine Aversa
Associated Press


WASHINGTON - The federal deficit so far this budget year is running
sharply lower, driven by record revenues pouring into government coffers

.The lower year-to-date deficit was the result of a record $2.12
trillion in revenues.

The Treasury Department

the result of a record $2.12 trillion in revenues. Spending, however,
was higher - $2.27 trillion, which also marked an all-time high.













.
Gandalf Grey
2007-08-23 22:29:10 UTC
Permalink
Yet another RepubiCON myth crashing to the ground.
Davinchi
2007-08-23 23:22:18 UTC
Permalink
Yet another RepubiCON myth crashing to the ground.
I'd be willing to bet mr. rotten has never even had a
graduate level economics class. I'll even give you odds.
Davinchi
2007-08-23 23:15:59 UTC
Permalink
Yet another LIEbrul myth crashing to the ground. that Tax cust cause
revenue losses.
http://brillig.com/debt_clock/
Mani Deli
2007-08-24 00:24:46 UTC
Permalink
---for the rich
Rich Hutnik
2007-08-25 08:05:30 UTC
Permalink
On Aug 23, 12:22 pm, "Hillary Rotten Clintoon" <Rotten
Post by Hillary Rotten Clintoon
Yet another LIEbrul myth crashing to the ground. that Tax cust cause
revenue losses.
Posted on: Sunday, August 12, 2007
Record revenues cut Federal deficit
By Jeannine Aversa
Associated Press
WASHINGTON - The federal deficit so far this budget year is running
sharply lower, driven by record revenues pouring into government coffers
.The lower year-to-date deficit was the result of a record $2.12
trillion in revenues.
The Treasury Department
the result of a record $2.12 trillion in revenues. Spending, however,
was higher - $2.27 trillion, which also marked an all-time high.
And you want to cut taxes more to pay for an invasion of Iran, don't
you?

- Rich .
*Anarcissie*
2007-08-25 12:45:53 UTC
Permalink
On Aug 23, 12:22 pm, "Hillary Rotten Clintoon" <Rotten
Post by Hillary Rotten Clintoon
Yet another LIEbrul myth crashing to the ground. that Tax cust cause
revenue losses.
Posted on: Sunday, August 12, 2007
Record revenues cut Federal deficit
By Jeannine Aversa
Associated Press
WASHINGTON - The federal deficit so far this budget year is running
sharply lower, driven by record revenues pouring into government coffers
.The lower year-to-date deficit was the result of a record $2.12
trillion in revenues.
The Treasury Department
the result of a record $2.12 trillion in revenues. Spending, however,
was higher - $2.27 trillion, which also marked an all-time high.
It seems to me the large-scale generation of funny
money ought to begin to affect the tax system as well
as the price of stock and real estate. If so, we should
see increased revenues which however cannot be
spent effectively because they are unrelated to
labor, goods, etc.
professorchaos
2007-08-25 18:30:01 UTC
Permalink
Post by Nospam
Yet another conservative myth crashing to the ground.
New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
Here is where you get it wrong. Liberals support tax cuts to get the
economy moving. Economist know this will only work if they are
permenant. Liberals want temporary tax cuts. Conservatives want to
decrease the size of government and how much money they take from you.
Instead let investors buy bonds and finance the debts. Any conservative
who tells you they want tax cuts for economic reasons is a liar or a
liberal in disguise.
Post by Nospam
"""
Generous tax breaks given to companies that threaten to take their business
elsewhere are coming under increasing scrutiny from state and local
officials who say taxpayers aren't getting their money's worth.
Democrat reforms against outsourcing and free trade. Not conservative at
all. Conservatives support free trade and realize while manufacturing
jobs drop other jobs rise as the countries who get new jobs import
different things from us and buy more from us. This is liberal unions
trying to protect their governmentally provided inefficient markets that
grant some of them higher wages and make fewer jobs available. How much
does the Union boss make from making people who make 30,000 or less pay
union dues. I bet it is the 35% tax bracket.
Nospam
2007-08-25 22:22:34 UTC
Permalink
Post by professorchaos
Here is where you get it wrong. Liberals support tax cuts to get the
economy moving. Economist know this will only work if they are
permenant. Liberals want temporary tax cuts.
For the economy to work, there need to be demand for the goods and services.

If the tax cuts, increase the share going to the rich and cut social
programs for the poor and middle class, then the demand for what rich buy
increase and the demand for what poor and middle class buy decrease.

Rich spend a big deal of money into stocks, poor and middle class buy
products of the companies traded on Wall Street. As a result, tax cuts
generate a growth in stock prices while the demand for the products will
decline (unless delayed by a cheap credit bubble).

When the bubble burst, the sales decline will be obvious. As a result, the
rich investing in stocks will be "disappointed" by the low return of
investment, and a massive dump begin. The stock market crash and a consumer
disposable income recession is guaranteed to happen.

Into a normal (exuberance only) recession, companies layoff few workers to
cut costs and make the ROI attractive again, based on the fact that even
unemployed keep buying from their savings. When earnings are attractive
again, investors put money back in, companies start to hire and the
recession ends.

Into a consumer disposable income inducted recession, the workers out of job
have no savings (today US have a NEGATIVE SAVING RATE !!!) therefore no
power to buy stuff. As companies layoff workers, they stop spending and
companies revenue decline even more. To try to cut costs even more,
companies will layoff more workers. The sales drop even more, the recession
degenerate into a DEPRESSION !!! This is what long duration tax cuts do.

If somebody claiming to be an economist advocate long term tax cuts (
especially for the wealthy) shred his useless diploma and send him back to
kindergarten.

Quick example:
==============

For the economy to work, there need to be demand for the goods and services.
Demand means both need for the product and the ability to pay for it.
If you cut wages for Microsoft janitors with let say 10% and give that extra
money to Bill Gates then:

1) ABILITY TO PAY: The janitors will buy less shirts because they can not
pay for as much as before

2) NEED: Bill Gates will not buy more shirts because he already have all the
shirts he need, he buy with them shares in shirt company

1) + 2) = The shirt company revenue decline, they will pay less dividends,
the shares drop. Also, facing a decline in sales, they put on hold the
plans to upgrade to Vista until the sales pick up again. As a result,
Microsoft sales decline too.

In the end, in long run everybody is hurt by moving money from poor to the
rich. Tax cuts for the wealthy at the expense of social programs for the
poor work EXACTLY the same way.
Davinchi
2007-08-26 02:34:48 UTC
Permalink
Post by Nospam
Post by professorchaos
Here is where you get it wrong. Liberals support tax cuts to get the
economy moving. Economist know this will only work if they are
permenant. Liberals want temporary tax cuts.
For the economy to work, there need to be demand for the goods and services.
If the tax cuts, increase the share going to the rich and cut social
programs for the poor and middle class, then the demand for what rich buy
increase and the demand for what poor and middle class buy decrease.
Rich spend a big deal of money into stocks, poor and middle class buy
products of the companies traded on Wall Street. As a result, tax cuts
generate a growth in stock prices while the demand for the products will
decline (unless delayed by a cheap credit bubble).
When the bubble burst, the sales decline will be obvious. As a result, the
rich investing in stocks will be "disappointed" by the low return of
investment, and a massive dump begin. The stock market crash and a consumer
disposable income recession is guaranteed to happen.
Into a normal (exuberance only) recession, companies layoff few workers to
cut costs and make the ROI attractive again, based on the fact that even
unemployed keep buying from their savings. When earnings are attractive
again, investors put money back in, companies start to hire and the
recession ends.
Into a consumer disposable income inducted recession, the workers out of job
have no savings (today US have a NEGATIVE SAVING RATE !!!) therefore no
power to buy stuff. As companies layoff workers, they stop spending and
companies revenue decline even more. To try to cut costs even more,
companies will layoff more workers. The sales drop even more, the recession
degenerate into a DEPRESSION !!! This is what long duration tax cuts do.
If somebody claiming to be an economist advocate long term tax cuts (
especially for the wealthy) shred his useless diploma and send him back to
kindergarten.
==============
For the economy to work, there need to be demand for the goods and services.
Demand means both need for the product and the ability to pay for it.
If you cut wages for Microsoft janitors with let say 10% and give that extra
1) ABILITY TO PAY: The janitors will buy less shirts because they can not
pay for as much as before
2) NEED: Bill Gates will not buy more shirts because he already have all the
shirts he need, he buy with them shares in shirt company
1) + 2) = The shirt company revenue decline, they will pay less dividends,
the shares drop. Also, facing a decline in sales, they put on hold the
plans to upgrade to Vista until the sales pick up again. As a result,
Microsoft sales decline too.
In the end, in long run everybody is hurt by moving money from poor to the
rich. Tax cuts for the wealthy at the expense of social programs for the
poor work EXACTLY the same way.
For the most part an accurate analysis.
What seems to be left out is that while tax cut inflations
helps the wealth (investors of bonds) it hurts the typical
household with debt (mostly from mortgages). As above this
continues until the bubble bursts, but then there is an
incentive to invest overseas - WHICH IN NO WAY CAN STIMULATE
THE ECONOMY.

A well place tax credit does a better job of stimulus than
the tax cut of recent history. But Mr. Bush is an idiot on
the economy and only cared about helping his wealthy class
and bringing money into corrupt GOP coffers.

Worst President Ever.
professorchaos
2007-08-27 03:20:30 UTC
Permalink
Post by Nospam
Post by professorchaos
Here is where you get it wrong. Liberals support tax cuts to get the
economy moving. Economist know this will only work if they are
permenant. Liberals want temporary tax cuts.
For the economy to work, there need to be demand for the goods and services.
If the tax cuts, increase the share going to the rich and cut social
programs for the poor and middle class, then the demand for what rich buy
increase and the demand for what poor and middle class buy decrease.
Name the last time this happened. The Bush tax cut's biggest winners
were single parents. When has spending for social programs decreased?
Not even in 1994. There was reform AIFDC was changed to TANF so good
ideas were put in place but social spending never dropped. In fact it
has increased greatly through the expansion of EIC. EIC used to be only
for people who qualified for AIFDC. Now it is for anyone in the lowest
couple of tax brackets. Poor get back MORE IN TAX RETURNS THAN TAXES
PAID. For a poor person more income actually means a HIGHER tax return.
The EIC gets larger as poor person's income goes up and the tax system
returns to normal somewhere in the second or third bracket. THIS WAS AN
IDEA PROPOSED BY MILTON FRIEDMAN not Hillary Clinton. It gives
incentives to work not meeting conditions for TANF.
Post by Nospam
Rich spend a big deal of money into stocks, poor and middle class buy
products of the companies traded on Wall Street.
PROVE IT. I have heard this bandied around a lot. However, how many
stock purchases were an issue in the Dennis Kowlowski trial (TYCO_ ?
Other than Enron stock what were people talking about the excess of Ken
Lay? It surely wasn't shares of Microsoft he was buying it was houses
all over the country and lots of expensive consumer goods. This is an
unproven statement that is belief and if someone actually calculated the
MPC for the most wealthy they would find all of those yachts and toys
add up to a high percentage of income. It is a fallacy to believe those
making over $250,000 only buy bonds and stocks. A good number have worse
credit problems than the poor because they access too much credit and
spend way above their means.

I have yet to see one shred of empirical evidence showing that the rich
spend a smaller percentage of current or permanent income than the poor.

As a result, tax cuts
Post by Nospam
generate a growth in stock prices while the demand for the products will
decline (unless delayed by a cheap credit bubble).
Wrong again you assume rich only buy stocks and that tax cuts are only
for the rich. The biggest percentage winners under Bush's cuts were
families with children. Even if rich did invest more it would not be in
stocks if profits were dropping due to people not buying goods. Stock
prices drop when they expectations occur. They would invest in bonds to
finance the higher government deficit or corporate bonds or other
financial instruments. There were be crowding out but no guarantee of
stock prices rising. Did stock prices rise in 2001 when the temporary
bush tax cut was passed? NO.
Post by Nospam
When the bubble burst, the sales decline will be obvious.
Wrong there is no bubble if the rich truely got all the tax cuts and
social spending were decreasing and the rich had a lower MPC than the
poor than the rich would be smart enough to see what was happening and
not invest in stocks. THAT IS WHY THEY ARE RICH THEY UNDERSTAND POLICY
IMPLICATIONS AND HOW MARKETS WORK. They set expectations due to current
information and act accordingly. The rich are rich because they get it
right more than the average guy.

No need to address the rest of this clap trap that based on empirically
unsound assumptions.
unknown
2007-08-27 18:01:48 UTC
Permalink
...THAT IS WHY THEY ARE RICH THEY UNDERSTAND POLICY
IMPLICATIONS AND HOW MARKETS WORK...
Just ask Paris Hilton.
professorchaos
2007-08-27 19:06:59 UTC
Permalink
Post by unknown
...THAT IS WHY THEY ARE RICH THEY UNDERSTAND POLICY
IMPLICATIONS AND HOW MARKETS WORK...
Just ask Paris Hilton.
Just do ask her. She is one of the few heiress to a fortune that has
made products of her own and trumped publicity for them. I may not like
how she does it but the girl has business sense regardless of how dumb
she seems to act. She has known how to get herself in the spotlight and
promote her products by doing so.
unknown
2007-08-29 09:19:26 UTC
Permalink
...THAT IS WHY THEY ARE RICH THEY UNDERSTAND POLICY
IMPLICATIONS AND HOW MARKETS WORK...
Just ask Paris Hilton.

Ask Kennyboy Lay, too, if you can find him in Paraguay.
Davinchi
2007-08-26 02:23:44 UTC
Permalink
Post by professorchaos
Post by Nospam
Yet another conservative myth crashing to the ground.
New results seems to suggest that tax cuts to improve local economy it is
just a corporate scam. They have an immediate effect, which provide the
illusion that are helpful for the economy, but on the long run they are
Here is where you get it wrong. Liberals support tax cuts to get the
economy moving. Economist know this will only work if they are
permenant.
snip


And your an economist????
really................
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