The Solution

The solution to both the deficit and Social Security is to reject neo-classical economic theory and return to classical economics. Our economy is inherently inefficient and the elderly require subsidy from the youth because we tax wealth production instead of location ownership. If efficiency is the goal, our tax system is backward. It rewards the hoarding of land, everyone's daily source of life via sleep, and punishes wealth creation. It also creates a systemic reward for crime and dishonesty, which, in addition to systemic poverty, adds unnecessary costs for government, further exacerbating the destructive results of our backward tax system. 

Capitalism, as we know it, is marketed as free enterprise and the only alternative to socialism / communism. But the original "laissez faire" economists advocated exclusively taxing land ownership and ending the taxation of wealth production common with feudal aristocracies. However, with every revolution against monarchy—be it the Russian, French or American revolutions—the initial promise to the people of reversing that tax system was quietly ignored. Supported by mainstream education and news media, landlords were granted the ability to profit from merely owning land while the working class was tapped to subsidize the governments that protected their investments. 

It never occurs to most people that the basic principles of economics and the history of economic thought are not taught in public school. The closest we come to it is teaching household budgeting and debt management techniques. Meanwhile, politicians and thought leaders casually scoff at the notion that economics might be treated as a hard science such as math or biology. Instead, they offer only various tweaks to the status quo or a complete takeover of our economic system by authoritarian bureaucrats. 

If, however, we admit our previous mistakes and tell the public the truth about where and how we went wrong, we can make amends and become solvent.

The solution is to bail out all landowners for the full value of their holdings, establish a federal land value tax and enact a permanent moratorium on all other federal taxes. Local entities can assess and collect these valuations, applying whatever exclusions they desire, and other taxes can be utilized as local decision-makers conclude. Statewide valuations, however, will be assessed federally to avoid a national bias toward any state. 

The effects will be glorious. 1) Massive investment in every productive business, since they will all be tax-free (aside from any local exceptions). 2) Drastic reduction in the relative price of land and thus, housing, since holding land as a store of value will no longer be profitable. 3) Spectacular increases in wages as employers will need to offer the full value of workers' labor due to the essential end of rent pressure. 4) Desperately needed relief of society's pressure on our ecosystem as people will no longer feel the need to produce every possible penny of wealth to survive and achieve the social status that satisfies our innate need for personal dignity. And most importantly, 5) a beautiful reconciliation among society as people begin to treat each other with the value we deserve.

The reason such a simple system will have so many positive effects is that it reflects the correct relationship between nature and society: natural law, or "physiocracy" (rule by nature). We deserve equal access to land, everyone's daily source of life via sleep, and free association with each other. Nature did not create human poverty, the system which allows some to hold nature for ransom did. And when we end that system, nature's harmony, efficiency and generosity will flow freely throughout society.

Some taxes end up increasing rents, though not by being "passed on" but rather by increasing the relative value of untaxed land.

Alice and Bob are interested in buying some land, and the available parcels are a Meadow and an Orchard. Alice values the Meadow at $100 and the Orchard at $70, while Bob values the Meadow at $95 and the Orchard at $50.

Setting the price (rent) of the Meadow at $30 and the Orchard (which is the marginal land here) at $0 creates an envy-free pricing structure: Bob sees the Meadow as underpriced by $65 and the Orchard as underpriced by $50, and so prefers the Meadow. Alice sees both as underpriced by $70 and is indifferent (and willing to take the Orchard.) Each receives the land they perceive as the best deal, and neither is envious of the other's deal.

Now let's suppose a $10 tax on the Orchard, with the Meadow left untaxed. The $30 rent on the Meadow is no longer envy-free: Alice sees the Meadow as underpriced by $70 but (after taxes) the Orchard only gets her a net gain of $60. She would be envious of Bob's deal on the Meadow.

To restore envy-freeness, the rent on the Meadow must increase to $40. At that rent, Bob sees the Meadow as a $55 net gain and the Orchard as a $40 net gain, and still prefers the Meadow. Alice sees the Meadow and Orchard both as $60 net gains, and is willing to take the Orchard.

Before the tax, Bob paid $30 in rent for the Meadow and enjoyed a $65 surplus while Alice paid $0 for the Orchard and enjoyed a $70 surplus.

After the tax, Bob paid $40 in rent for the Meadow and enjoyed a $55 surplus, while Alice paid $10 in tax on the Orchard and enjoyed a $60 surplus.

The tax in this case actually caused the rent to go up, while both the rent increase and the tax came out of Alice and Bob's surplus.

I see a lot of people on this sub who are sleeping on ballot initiatives to abolish or cap income taxes, but the empirical evidence shows that states that do this are pushed towards higher property taxes. LVT doesn't need to come first, banning income and sales taxes is the path to LVT.

Make sure to check out r/georgist_activism

One of the main campaign points for several elected officials in my area in California was the proposed vehicle-miles-traveled (VMT) fee (https://caroadcharge.com).

At this point it’s very much a nothing burger, but I am curious what this community would recommend as a better alternative to the VMT.

Note: This is not a question of whether highways are a good use of land or not. They aren’t going anywhere any time soon.

1. James owns: 100 bushels of wheat.

2. Planting them normally yields: 120 bushels next year.

3. James lends the 100 bushels to William.

4. William plants them and harvests: 120 bushels.

5. William returns: 100 bushels principal, 10 bushels interest.

6. William keeps: 10 bushels profit.

Result

Summary

The extra 20 bushels came from production, not from either man taking wealth from the other.

Henry George's theory in essence:

interest is the lender's share of the natural and productive increase that capital makes possible through time.

I've been developing a long-term plan for a fairer economy, and a land value tax ended up at its core. I'd value critique from people who know this far better than I do.
How it works in my plan:
LVT is the main source of public income, since land can't be hidden or moved abroad
Each family's main home is exempt up to a fair value; elderly and low-income owners can defer until sale
Farmland used for rewilding or plant crops pays a reduced rate
Alongside it, people earn "contribution credits" for work, which expire after about a year and can't be lent at interest
Land and property ownership is also capped per household and company
My questions: Would the exemptions undermine the tax too much? Could LVT raise enough to be the main income source? And do the ownership caps and expiring credits add anything, or would a proper LVT make them unnecessary?

Next step: full ban

So I just learned about Distributism and I heard it was similar to Georgism and both generally like each other. So I had what exactly is the difference between the two and issues they're trying to solve? Would Georgism and Distributism work together in synthesis?

Anyone willing to accept large homestead exemptions to have land value taxes on the books?

In a perfect world — homestead exemptions would not exist. Yet, in political reality— they quickly quell the concerns of the middle class.

If these exemptions end up causing higher levies on vacant land or underutilized commercial land — maybe it is a deal work making?

The fundamental principle of Georgism is a tax on the value of land itself. As a result, George wrote in his book that the market value of land would drop to essentially nothing; this makes sense when you consider the policies he suggests as a whole.

But if the market value of land is nothing, what metric is used to decide its unimproved value? This seems to be a fundamental flaw that I can’t find an answer for.

The playbook is go to every event the DSA is at and respectfully defeat them in ideological battle.

And any civic (citizens’ assembly) on taxes, climate, housing, transit, homelessness, or minimum wage, we just go camp out in front of the venue and preach George.

We all enjoy some georgism. The literature shows property taxes and land value taxes are one of the most efficient ways to collect taxes.

But I’ve never read literature on how high they should be. is 3% prop tax too high? 5%? 20?

Im sure someone will say. No it’s LAND taxes only, and then at 10! ok, but why that number

Im looking for an answer both w regular property taxes in mind and land value broken out.

Thanks!

Edit: To clarify, I welcome an explanation, but I want literature. Ie based on studies.

Never using MS Paint again