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.
f***@msn.com
2007-08-29 22:46:03 UTC
Permalink
Post by professorchaos
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.
This is quite a way away from the notion that renters pay all land
taxes.

Now here's some questions for you.

Given that land value tax is not the same as improvement tax...

Case 1:
Land value is taxed but improvements are not.

Case 2:
Land value is untaxed but improvements are taxed.

Case 3:
Land value and improvements are equally taxed.

Under what demand conditions are each more advantageous for
the owner?

How likely are each of these conditions given high land values?

Under which case is the most improvement likely to occur
given a demand for improved land and why?

Bonus question:
Given the owners' (irrational?) belief that land value and
improvement
replacement value is going up and all esle being equal, under which
case would you expect the house renter to pay the most per square
foot
and why?

If I haven't given enough information to answer the question then
let me know what else needs to be added. Thanks.
professorchaos
2007-08-30 05:58:31 UTC
Permalink
Post by f***@msn.com
Post by professorchaos
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.
This is quite a way away from the notion that renters pay all land
taxes.
Now here's some questions for you.
Given that land value tax is not the same as improvement tax...
Land value is taxed but improvements are not.
The importance of this in Henry George's theory had little to do with
the efficiency of the land market argument. The argument here is what is
done with the land when it is bought. If improvements are not taxed then
there is no disincentive to improving the land.
Post by f***@msn.com
Land value is untaxed but improvements are taxed.
In this case the increase in taxes due to improvements gives less
incentive to improve the land. Lets say you want to build a factory that
will bring $5000 in profits. If the improvements cause taxes to go up
more than $5000 a month then you will not make the investment. You would
make the investment if there was no tax on the improved value.
Post by f***@msn.com
Land value and improvements are equally taxed.
Under what demand conditions are each more advantageous for
the owner?
In the market for land all of these would work the same assume that the
increase in taxes were equal. The difference is that a tax on
improvements decreases the amount of improvements while a tax on the
unimproved value does not. To use George's example, if you tax trees on
the land (improvements) then the owners will cut down the trees to avoid
the tax. If you tax the land itself the tax is only avoidable by selling
the land. Therefore, it will not affect the level of improvements on the
land.

The discussion Roy and I were having is essentially if taxes of improved
value or unimproved value mean that the landowner pays the entire tax. I
am not sure if Roy realizes that his statement that landowners will pay
the entire tax rest on elasticity of supply being 0 but it does. This
would efficient under an improvement or under improved land tax if this
were the case. That is when considering the market for land. An
elasticity of zero means a change in price has no effect on the quantity
that someone is willing to sell (elasticity of supply) or buy
(elasticity of demand). Efficiency argues that is undesirable to sell
less than the maximum goods possible which in a competitive is where
quantity demanded equal quantity supplied. If the elasticity is not 0
then a change in price causes owner to offer less land for sale when a
tax is imposed and the quantity of land sold drops causing the
inefficiency.

So in sort rather Roy realizes it or not the argument he and I are
having is whether or not you can prove the elasticity of supply is zero.
I have seen no empirical evidence saying so. Roy believes it is because
he thinks Henry George said so. George said no such thing. He actually
said that the opposite. He claimed the land market would collapse if the
tax rate was too high. Although that would take an extremely high tax
rate. This proves George did not see the elasticity of supply of land
as zero nor that the tax would be efficient from the stand point of
buying or selling land.

Where the tax is efficient is in the market for improvements on the
land. A tax on the land only gives no disincentive to drain a swamp,
irrigate, or build a building on the land. A tax on improvements does
give disincentive to build because it decreases your return on your
investment.
Post by f***@msn.com
How likely are each of these conditions given high land values?
A tax on only unimproved land is likely to give high land values. There
is no disincentive to build. An improvement will not increase you tax
bill so there is more incentive to improve which will lead to higher
land values.
Post by f***@msn.com
Under which case is the most improvement likely to occur
given a demand for improved land and why?
The tax on unimproved land as I have stated before.
Post by f***@msn.com
Given the owners' (irrational?) belief that land value and
improvement
replacement value is going up and all esle being equal, under which
case would you expect the house renter to pay the most per square
foot
and why?
That is difficult to say because demand and supply for rental units is
determined by more than land taxes and land prices. The buying price of
land is a sunk cost and will not affect supply of rental units. After
the land is improved maintenance and administer cost and the cost of new
construction are more likely to affect supply of rental units. In this
case, the tax on improvements is more likely to make supply grow more
slowly. It would likely lead to smaller or fewer apartment buildings and
fewer rent houses as compared to a tax only on the unimproved value.
Less supply generally means high prices. Exactly how much higher depends
on the elasticity of supply and elasticity of demand for rental units.
Demand is likely inelastic due to lack of substitutes and housing being
a necessity, although that is muddled a bit if you look at different
qualities of housing as being substitutes.

Elasticity of supply depends most on the time horizon. It is likely that
the elasticity of demand is less than the elasticity of supply so the
tax on the building being rented, which is what an improvement tax is a
tax on the value of the improvement, would be passed on to the consumer.
How much is an empirical question I can not answer off the top of my
head it would need some research.

However, without a doubt improvement taxes would lead to higher rental
prices than taxes on unimproved land. The tax on improvements would
decrease supply of rental units raising prices. They would be more
supply of rental units under an unimproved land tax and rent prices
would be lower.

That is part of what was behind the argument with Roy and I. Land taxes
as used in the US are not progressive. Improvements do affect the supply
of rental units, and new housing construction. Therefore they raise the
price of housing and that hits the poor harder than the rich because
more of their income is spent on housing.

A Georgian tax, a tax on unimproved value only, would have a much
smaller effect on rental rates . I think this is where is confused when
he stated that a land tax does not affects rents. He is assuming a tax
only on unimproved value or he is confusing classical rents with rental
rates a totally different kettle of fish there. If the tax is only on
unimproved land then it has a smaller effect on rental markets. It only
shows up as how much tax is passed on to the renter due to increased
yearly cost to the land owner. How much of the extra cost can be passed
on depends on the elasticities of supply and demand. If supply of rental
units is perfectly elastic then the renters do not get taxes passed on
to them. If supply is rather elastic, NB: supply of rental units is not
the supply of land you can always build upward and build more floors in
your buildings, and demand is inelastic then renters will have the tax
that most be paid by the owners passed largely on them.

However, in the US there is no doubt that taxes decrease supply of
rental units. The improvement tax decreases the supply of housing, just
as George pointed out in the tree example, which raises prices. This is
more than just an argument of passing on taxes. It is similar to the
other cases in that increasing cost will always decrease supply but the
unimproved tax gives no disincentive for building new units in the
future. So supply would increase faster in the long run with a
unimproved tax and help to keep housing prices down.
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.
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.
f***@msn.com
2007-08-30 14:52:14 UTC
Permalink
Post by Andy F.
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's argument isn't that the quantity of land can change
but
rather that the willingness to sell it can. It should be clear that
the
supply, that is the quantity (and quality) of land put on the market,
changes
with price. Even though the supply curve is completely different from
manufactured goods it still exists.
r***@telus.net
2007-08-31 07:45:35 UTC
Permalink
Post by f***@msn.com
Post by Andy F.
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's argument isn't that the quantity of land can change
but
rather that the willingness to sell it can. It should be clear that
the
supply, that is the quantity (and quality) of land put on the market,
changes
with price.
But it is far from clear that that is the case, or that the elasticity
wrt market inventories isn't _NEGATIVE_.
Post by f***@msn.com
Even though the supply curve is completely different from
manufactured goods it still exists.
No, because if the landowner does not put the land on the market, he
gets nothing whatever for it. What looks like elasticity of supply is
in fact just speculation.

-- Roy L
professorchaos
2007-08-31 17:19:50 UTC
Permalink
Post by r***@telus.net
Post by f***@msn.com
Post by Andy F.
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's argument isn't that the quantity of land can change
but
rather that the willingness to sell it can. It should be clear that
the
supply, that is the quantity (and quality) of land put on the market,
changes
with price.
But it is far from clear that that is the case, or that the elasticity
wrt market inventories isn't _NEGATIVE_.
IF IT IS NEGATIVE IT IS NOT ZERO. IF IT IS NOT ZERO YOU ARE WRONG! Thank
you for agreeing with that the land tax is not efficient.
Post by r***@telus.net
Post by f***@msn.com
Even though the supply curve is completely different from
manufactured goods it still exists.
No, because if the landowner does not put the land on the market, he
gets nothing whatever for it. What looks like elasticity of supply is
in fact just speculation.
What a bunch of crap. If I owe a piece of land I farm or a land with an
office building on it I get nothing if I don't sell it. I am not even
sure you what you are arguing here.
f***@msn.com
2007-08-31 20:20:53 UTC
Permalink
Post by professorchaos
Post by r***@telus.net
Post by f***@msn.com
Post by Andy F.
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's argument isn't that the quantity of land can change
but
rather that the willingness to sell it can. It should be clear that
the
supply, that is the quantity (and quality) of land put on the market,
changes
with price.
But it is far from clear that that is the case, or that the elasticity
wrt market inventories isn't _NEGATIVE_.
IF IT IS NEGATIVE IT IS NOT ZERO. IF IT IS NOT ZERO YOU ARE WRONG! Thank
you for agreeing with that the land tax is not efficient.
Post by r***@telus.net
Post by f***@msn.com
Even though the supply curve is completely different from
manufactured goods it still exists.
No, because if the landowner does not put the land on the market, he
gets nothing whatever for it. What looks like elasticity of supply is
in fact just speculation.
What a bunch of crap. If I owe a piece of land I farm or a land with an
office building on it I get nothing if I don't sell it. I am not even
sure you what you are arguing here.
If you don't utilize the land (where utilization includes renting and
improving it by letting it rest in a controlled way) but you are
expecting
a profit at a later date then you are speculating on its increased
future
value.

I take Roy to be saying that utilization of the land *is* putting it
on the market.
professorchaos
2007-08-31 23:41:18 UTC
Permalink
Post by f***@msn.com
If you don't utilize the land (where utilization includes renting and
improving it by letting it rest in a controlled way) but you are
expecting
a profit at a later date then you are speculating on its increased
future
value.
I take Roy to be saying that utilization of the land *is* putting it
on the market.
None the less that is a bad definition. I can unitize the land by
keeping and planting crops or by building an office building. I don't
have to put the land on the market to be utilizing it.

That is where Roy is horribly confused. The difference between a land
market and a market for improvements, such as a construction market. You
can have an efficient tax on improved and unimproved value of the land
in the land market and it is still inefficient in the market for
improvements.
f***@msn.com
2007-09-01 03:07:41 UTC
Permalink
Post by professorchaos
Post by f***@msn.com
If you don't utilize the land (where utilization includes renting and
improving it by letting it rest in a controlled way) but you are
expecting
a profit at a later date then you are speculating on its increased
future
value.
I take Roy to be saying that utilization of the land *is* putting it
on the market.
None the less that is a bad definition. I can unitize the land by
keeping and planting crops or by building an office building. I don't
have to put the land on the market to be utilizing it.
Do you see a difference between generating rent from your land and
not generating rent from your land? What is that difference? If
the land value is taxed then will a person be more or less inclined
to generate rent from the land?
Post by professorchaos
That is where Roy is horribly confused. The difference between a land
market and a market for improvements, such as a construction market. You
can have an efficient tax on improved and unimproved value of the land
in the land market and it is still inefficient in the market for
improvements.
Do you believe that a tax that increases economic activity or one
that suppresses economic activity better? Does a tax on land value
increase or decrease economic activity? I think it increases economic
activity but could be wrong.
professorchaos
2007-09-01 03:38:19 UTC
Permalink
Post by f***@msn.com
Do you believe that a tax that increases economic activity or one
that suppresses economic activity better? Does a tax on land value
increase or decrease economic activity? I think it increases economic
activity but could be wrong.
It without a doubt decreases economic activity if you tax improvements
and unimproved value. I have explained this earlier so I apologize for
being brief but a tax on the improved value means less incentive to
improve the land because returns are lower. A tax on unimproved land
doesn't do this but it is likely to keep some land from being sold for
business activity that would occur without the tax. So the volume of
land changing hands would be smaller. NB: Land sales are not part of GDP
so they do not decrease economic activity by the standard macro measure.
The sell of land is not the sell of a final good or service produced
that year. However, if in the long run the rise in fixed cost force some
people out of business that was profitable using then the tax would
decrease economic activity, if that land were sold for non-business
purposes like housing.
f***@msn.com
2007-09-01 14:37:52 UTC
Permalink
Post by professorchaos
Post by f***@msn.com
Do you believe that a tax that increases economic activity or one
that suppresses economic activity better? Does a tax on land value
increase or decrease economic activity? I think it increases economic
activity but could be wrong.
It without a doubt decreases economic activity if you tax improvements
and unimproved value.
Why are you changing the subject like this? Do you not understand
or are you intentionally misunderstanding? A land value tax does not
tax improvements but only the land value.
Post by professorchaos
I have explained this earlier so I apologize for
being brief but a tax on the improved value means less incentive to
improve the land because returns are lower. A tax on unimproved land
doesn't do this but it is likely to keep some land from being sold for
business activity that would occur without the tax.
This last statement bothers me. Why would taxing the land value
(not unimproved land) keep some land from being sold for business
activity that would occur without the tax? What business activity
would occur on land whose value isn't being taxed would occur on
land whose value isn't being taxed? What do you think determines
land value if not the desire of people to use it? If I had to pay
a tax on land I was underutilizing based upon other's willingness
to buy the land I'd sell it unless I was speculating on the value
going even higher relative to the tax burden. Why would anyone do
otherwise?
Post by professorchaos
So the volume of land changing hands would be smaller.
You shouldn't conclude your assumptions. Maybe you really meant
"unimproved land" but if you did you weren't considering a
land value tax but rather an unimproved land tax.
Post by professorchaos
NB: Land sales are not part of GDP
so they do not decrease economic activity by the standard macro measure.
This is why considering utilization rather than land sales when
looking
at the economic effects of a land value tax is important.
Post by professorchaos
The sell of land is not the sell of a final good or service produced
that year. However, if in the long run the rise in fixed cost force some
people out of business that was profitable using then the tax would
decrease economic activity, if that land were sold for non-business
purposes like housing.
Given the local's need for equivalent revenues from either land value
tax or land and improvement value taxes, which would have less fixed
cost for businesses appropriately placed?

Here's my way of thinking about your example: Suppose the land value
of a business was $200k and the tax was 10% or $20k per year. Now,
you want me to consider what would happen if that land were sold
for non-business purposes like housing. The land value wouldn't
decrease, nor would the tax so the goverment would still be getting
that $20k. Do people typically move on to land whose value doesn't
support its utilization? If resident housing is the best utilization,
that is business isn't as willing to buy the land as people intending
to live on the land, then there is other land close by where business
activity is going on that supports the high resident land value.

How do you suppose the value of the land could exceed that which
could be supported by the region's economic activity?
professorchaos
2007-09-01 19:10:03 UTC
Permalink
Post by f***@msn.com
Post by professorchaos
Post by f***@msn.com
Do you believe that a tax that increases economic activity or one
that suppresses economic activity better? Does a tax on land value
increase or decrease economic activity? I think it increases economic
activity but could be wrong.
It without a doubt decreases economic activity if you tax improvements
and unimproved value.
Why are you changing the subject like this? Do you not understand
or are you intentionally misunderstanding? A land value tax does not
tax improvements but only the land value.
That is not how the tax is implemented in the United States. Property
tax taxes the unimproved and improved value. Land value for property
taxes includes both. You are talking about what should be not what is.
Post by f***@msn.com
This last statement bothers me. Why would taxing the land value
(not unimproved land) keep some land from being sold for business
activity that would occur without the tax?
Because it raises the fixed cost of doing business. In the long run this
will push some firms out of business. The land would be sold and
possibly used for purposes other than business.
Post by f***@msn.com
What business activity
would occur on land whose value isn't being taxed would occur on
land whose value isn't being taxed?
A business that is breaking even after fixed cost before the tax will
have negative economic profits after the tax and go out of business.
Post by f***@msn.com
What do you think determines
land value if not the desire of people to use it?
Use it for what purpose? Building houses on it means it is not for used
for economic activity once the house is sold. Building a park or some
nice landscaping is not business activity.
Post by f***@msn.com
If I had to pay
a tax on land I was underutilizing based upon other's willingness
to buy the land I'd sell it unless I was speculating on the value
going even higher relative to the tax burden. Why would anyone do
otherwise?
Sell to whom for what purpose is the question. If you sell it to someone
who wants to build a personal residence or erect a statue or a moment
economic activity ceases once the building is done. You have gone from
land where economic activity was occurring to land where no economic
activity is occurring.
Post by f***@msn.com
Post by professorchaos
So the volume of land changing hands would be smaller.
You shouldn't conclude your assumptions. Maybe you really meant
"unimproved land" but if you did you weren't considering a
land value tax but rather an unimproved land tax.
What happened to "A land value tax does not
Post by f***@msn.com
tax improvements but only the land value." So if a land value tax
doesn't tax improvements what it is other than the unimproved value of
the land?
Post by f***@msn.com
Post by professorchaos
The sell of land is not the sell of a final good or service produced
that year. However, if in the long run the rise in fixed cost force some
people out of business that was profitable using then the tax would
decrease economic activity, if that land were sold for non-business
purposes like housing.
Given the local's need for equivalent revenues from either land value
tax or land and improvement value taxes, which would have less fixed
cost for businesses appropriately placed?
Depends on what rates were set on an unimproved value tax versus an
improved value tax. If my land is worth $10 base and $100 with
improvements than a 10% tax on the improved value = 100% on the
unimproved value. If you are comparing equal rates than I don't think I
have to answer that for you. Do I?
Post by f***@msn.com
Here's my way of thinking about your example: Suppose the land value
of a business was $200k and the tax was 10% or $20k per year. Now,
you want me to consider what would happen if that land were sold
for non-business purposes like housing.
No first consider what happens if before the tax your profit on your
business is $10 k per year. Now do you start to see the point?
Post by f***@msn.com
The land value wouldn't
decrease, nor would the tax so the goverment would still be getting
that $20k.
Of course it would the demand for land for would decrease while the
price rose. Why because the seller doesn't get the amount of the tax for
a year for the land but the buyer has to pay the tax per a year for the
land. It is part of the price the buyer has to pay to obtain and keep
the land. So the seller receives less than the buyer pays. The selling
price might drop but the actual price paid by the buyer rises. This is
the fallacy that governments used in the luxury tax. The belief
quantities would not change and prices would remain the same. This only
works if the elasticity of supply or the elasticity of demand is EXACTLY 0.

This is the same effect as if governments wanted consumers to keep
receipts and pay sales taxes on items bought. The market price would
decrease but consumers would pay more. If you tax the supplier market
price increases but sellers receive less than before, the same amount as
if you taxed the buyers.
Post by f***@msn.com
Do people typically move on to land whose value doesn't
support its utilization?
Define value. Do you mean price or a classic notion of use value?
Post by f***@msn.com
If resident housing is the best utilization,
You still do not understand taxes distort the decision and cause things
not to be utilized best unless elasticity of supply of elasticity of
demand are exactly 0. If a tax raises fixed cost enough to where a
business is not profitable then will not buy the land to use it for the
business.
Post by f***@msn.com
that is business isn't as willing to buy the land as people intending
to live on the land,
Oh yeah, that is why whole neighborhoods are sometimes bought by
business who want to build something in that location.
f***@msn.com
2007-09-01 21:09:46 UTC
Permalink
Post by professorchaos
Post by f***@msn.com
Post by professorchaos
Post by f***@msn.com
Do you believe that a tax that increases economic activity or one
that suppresses economic activity better? Does a tax on land value
increase or decrease economic activity? I think it increases economic
activity but could be wrong.
It without a doubt decreases economic activity if you tax improvements
and unimproved value.
Why are you changing the subject like this? Do you not understand
or are you intentionally misunderstanding? A land value tax does not
tax improvements but only the land value.
That is not how the tax is implemented in the United States. Property
tax taxes the unimproved and improved value. Land value for property
taxes includes both. You are talking about what should be not what is.
Absolutely. I thought that clear. One doesn't take what is as the
only alternative when discussing what would be more efficient (for
a specific purpose.)
Post by professorchaos
Post by f***@msn.com
This last statement bothers me. Why would taxing the land value
(not unimproved land) keep some land from being sold for business
activity that would occur without the tax?
Because it raises the fixed cost of doing business. In the long run this
will push some firms out of business. The land would be sold and
possibly used for purposes other than business.
So? If that's the most efficient use of the land then that should
be an economic gain, should it not?
Post by professorchaos
Post by f***@msn.com
What business activity
would occur on land whose value isn't being taxed would occur on
land whose value isn't being taxed?
A business that is breaking even after fixed cost before the tax will
have negative economic profits after the tax and go out of business.
So be it. The tax has to be paid. A business that could get free
labor and was breaking even would go out of business if it had to
pay for labor. Why single out taxes?
Post by professorchaos
Post by f***@msn.com
What do you think determines
land value if not the desire of people to use it?
Use it for what purpose? Building houses on it means it is not for used
for economic activity once the house is sold. Building a park or some
nice landscaping is not business activity.
Surely you don't exclude rent for enjoyment from economic activity.
Do you exclude hotels from "economic activity"? If you do not then
would you exclude appartment rent from economic activity? If you
do not then why do you exclude rent value of owned property from
economic activity? You make it sound like owning is bad for the
economy.
Post by professorchaos
Post by f***@msn.com
If I had to pay
a tax on land I was underutilizing based upon other's willingness
to buy the land I'd sell it unless I was speculating on the value
going even higher relative to the tax burden. Why would anyone do
otherwise?
Sell to whom for what purpose is the question. If you sell it to someone
who wants to build a personal residence or erect a statue or a moment
economic activity ceases once the building is done. You have gone from
land where economic activity was occurring to land where no economic
activity is occurring.
It's just accounting. The rent value of the land should still be
included
in economic activity even when one owns the property. That some one
would
forego renting some land and buy it instead can't be bad for the
economy.
Post by professorchaos
Post by f***@msn.com
Post by professorchaos
So the volume of land changing hands would be smaller.
You shouldn't conclude your assumptions. Maybe you really meant
"unimproved land" but if you did you weren't considering a
land value tax but rather an unimproved land tax.
What happened to "A land value tax does not
tax improvements but only the land value." So if a land value tax
doesn't tax improvements what it is other than the unimproved value of
the land?
That doesn't mean improved land isn't taxed but that only the value
of
the land is taxed not the improvements.
Post by professorchaos
Post by f***@msn.com
Post by professorchaos
The sell of land is not the sell of a final good or service produced
that year. However, if in the long run the rise in fixed cost force some
people out of business that was profitable using then the tax would
decrease economic activity, if that land were sold for non-business
purposes like housing.
Given the local's need for equivalent revenues from either land value
tax or land and improvement value taxes, which would have less fixed
cost for businesses appropriately placed?
Depends on what rates were set on an unimproved value tax versus an
improved value tax. If my land is worth $10 base and $100 with
improvements than a 10% tax on the improved value = 100% on the
unimproved value. If you are comparing equal rates than I don't think I
have to answer that for you. Do I?
Certainly different land has different improvements on them. Suppose
there are two properties, one has land worth $10k and improvments
worth
$90k and the other has $90k land value and $10k improvements. If you
tax land and impovements at 5% you collect $5k in taxes from each
property. Now suppose you only tax the land value at 10%. You will
still collect $10k but the first will only pay $1k and the second $9k.
The effect is to reduce the tax on those improving it and increase the
tax on those not improving it. Do you think improving the land is a
bad thing?
Post by professorchaos
Post by f***@msn.com
Here's my way of thinking about your example: Suppose the land value
of a business was $200k and the tax was 10% or $20k per year. Now,
you want me to consider what would happen if that land were sold
for non-business purposes like housing.
No first consider what happens if before the tax your profit on your
business is $10 k per year. Now do you start to see the point?
I don't see any point. If the land will rent for $20k per year taxes
why would subsidizing a business that can't support it increase
economic
activity?
Post by professorchaos
Post by f***@msn.com
The land value wouldn't
decrease, nor would the tax so the goverment would still be getting
that $20k.
Of course it would the demand for land for would decrease while the
price rose.
Isn't the normal demand curve that way? The effect of the tax would
be a shift in the curve. I don't think you're addressing that but
something
else. Suppose, and I have no reason to suppose otherwise, the value
of
the land fell due to taxing land value only but not improvements.
Would
lower land values be good or bad for business?
Post by professorchaos
Why because the seller doesn't get the amount of the tax for
a year for the land but the buyer has to pay the tax per a year for the
land. It is part of the price the buyer has to pay to obtain and keep
the land. So the seller receives less than the buyer pays. The selling
price might drop but the actual price paid by the buyer rises. This is
the fallacy that governments used in the luxury tax. The belief
quantities would not change and prices would remain the same. This only
works if the elasticity of supply or the elasticity of demand is EXACTLY 0.
The land exists and the supply of land (not the supply on the market)
doesn't
change with the tax. If the current owner of high value land sees no
benefit
in owning it it will be placed on the market. Putting high value land
on
the market moves it from the hands of an owner who sees no benefit in
owning
it to an owner who sees benefit in owning it. That's good for
society.
Post by professorchaos
This is the same effect as if governments wanted consumers to keep
receipts and pay sales taxes on items bought. The market price would
decrease but consumers would pay more. If you tax the supplier market
price increases but sellers receive less than before, the same amount as
if you taxed the buyers.
I don't know about you but I tend to ignore the spred of the revenue
when I consider the price I will pay for good. It doesn't matter to
me how much money goes into the price of the goods sold and how much
goes into profit and how much goes into tax. If you increase the tax
then the supplier will see less profit at a given price so the supply
at a given price will decrease and the supply and demand curves cross
at a high price (as you said) but fewer will be buying.

If people would just steal the resources needed to produce goods the
price they could sell at would be lower. Do you think stealling is
good for society?

Governments collect taxes to support their activity. What they tax
depend upon the extent of social engineering involved. If one can
achieve the goals more cheaply by a properly designed tax then one
reduces government costs. Reducing govenrment costs is good for
business.
Post by professorchaos
Post by f***@msn.com
Do people typically move on to land whose value doesn't
support its utilization?
Define value. Do you mean price or a classic notion of use value?
I'll clarify. When I said "land whose value" I meant exchange price.
It seem to me that most people intend to make a profit in the
exchange,
that is their value in use exceeds the price they are willing to pay.
Post by professorchaos
Post by f***@msn.com
If resident housing is the best utilization,
You still do not understand taxes distort the decision and cause things
not to be utilized best unless elasticity of supply of elasticity of
demand are exactly 0.
I get back to this after the next.
Post by professorchaos
If a tax raises fixed cost enough to where a
business is not profitable then will not buy the land to use it for the
business.
Is that a bad thing? I don't think it is.

The issue isn't if taxes distort decisions but rather how alternative
taxes affect the decisions and what the best utilization is.
Post by professorchaos
Post by f***@msn.com
that is business isn't as willing to buy the land as people intending
to live on the land,
Oh yeah, that is why whole neighborhoods are sometimes bought by
business who want to build something in that location.
Stick with one thought and don't distort my words. You've taken these
out of context and responded as if they stood on their own. Here are
those words in narrow context:

If resident housing is the best utilization, that is business
isn't
as willing to buy the land as people intending to live on the
land,
then there is other land close by where business activity is
going on that supports the high resident land value.

I chose this hypothetical because you talked about how by taxing land
value some of it would be moved into resident housing rather than
other businesses and that this would reduce economic activity (where
you appear to exclude the rental value of owner occupied property from
economic activity.)
professorchaos
2007-09-02 00:48:27 UTC
Permalink
Post by f***@msn.com
So be it. The tax has to be paid. A business that could get free
labor and was breaking even would go out of business if it had to
pay for labor. Why single out taxes?
If labor rates go up it is due to changes in supply of demand for labor.
Incentives change they are not distorted. Markets, if efficient
beforehand, will remain efficient. A tax on an efficient market distorts
incentives rather than changing them. It causes a wedge between what
buyers pay and what sellers receive. The value to the buyer exceeds the
cost to the seller, excluding the tax, meaning that providing more units
is beneficial. If labor demand or labor supply changes then the new
equilibrium is a point where the value of the buyer is equal to the cost
of the seller. Providing more goods would imply the cost would greater
than the value to the buyer. With a tax it says the new result is one
where the market can benefit from more trades. When supply or demand
causes a change in the cost markets will adjust to where the value to
buyer of the last good equals the cost to the seller.
Post by f***@msn.com
Post by professorchaos
Post by f***@msn.com
What do you think determines
land value if not the desire of people to use it?
Use it for what purpose? Building houses on it means it is not for used
for economic activity once the house is sold. Building a park or some
nice landscaping is not business activity.
Surely you don't exclude rent for enjoyment from economic activity.
Why would it be rented. Rents are part of national income but not part
of the expenditures approach to GDP because they are not something
produced.
Post by f***@msn.com
Do you exclude hotels from "economic activity"? If you do not then
would you exclude appartment rent from economic activity?
I never said I would. There is a market for it. I said if someone owns
their own home and does not rent it it does not show in the expenditures
approach to GDP. Although it does show up in national income.
Post by f***@msn.com
If you
do not then why do you exclude rent value of owned property from
economic activity? You make it sound like owning is bad for the
economy.
It is if the most efficient use of the land is for renting or putting in
a business that produces or sales but the tax prohibits people for doing
so because of the rise in fixed cost.
Post by f***@msn.com
Post by professorchaos
Sell to whom for what purpose is the question. If you sell it to someone
who wants to build a personal residence or erect a statue or a moment
economic activity ceases once the building is done. You have gone from
land where economic activity was occurring to land where no economic
activity is occurring.
It's just accounting. The rent value of the land should still be
included
in economic activity
In National income not in what is produced each year.
Post by f***@msn.com
Post by professorchaos
Post by f***@msn.com
Given the local's need for equivalent revenues from either land value
tax or land and improvement value taxes, which would have less fixed
cost for businesses appropriately placed?
Depends on what rates were set on an unimproved value tax versus an
improved value tax. If my land is worth $10 base and $100 with
improvements than a 10% tax on the improved value = 100% on the
unimproved value. If you are comparing equal rates than I don't think I
have to answer that for you. Do I?
Certainly different land has different improvements on them. Suppose
there are two properties, one has land worth $10k and improvments
worth
$90k and the other has $90k land value and $10k improvements. If you
tax land and impovements at 5% you collect $5k in taxes from each
property. Now suppose you only tax the land value at 10%. You will
still collect $10k but the first will only pay $1k and the second $9k.
Your point is? What I just said was is that you can not say a tax on
unimproved land will collect more or less revenue than one on improved
value it depends on how you set the rates.
Post by f***@msn.com
The effect is to reduce the tax on those improving it and increase the
tax on those not improving it. Do you think improving the land is a
bad thing?
What does this have to do with anything? I have stated over and over
again that a tax only on the unimproved value does not distort the
incentive for an owner to build on his land. It distorts incentives in
the land market which could stop people from buying land for business
purposes because the tax raises fixed cost. No if I own the land and I
am decided to add on to structures unimproved land taxes do not affect
my decision. If I am contemplating buying land to put in an ice cream
factory it does. I have to figure in the amount of tax I have to pay
because I own the land when I decide if I will buy or not.
Post by f***@msn.com
Post by professorchaos
No first consider what happens if before the tax your profit on your
business is $10 k per year. Now do you start to see the point?
I don't see any point. If the land will rent for $20k per year taxes
why would subsidizing a business that can't support it increase
economic
activity?
How do you know it will rent for $20k. That is the point. If the
business that would buy the land can only net $10k before the tax no one
will rent or buy the property from you because it would mean a loss to
use the property. It could cause land to remain fallow because the tax
causes long run profits to be below zero. The owner has to close down
his business and then looses the property to the state for not paying
taxes or he sells it a lower price to compensate so that another
business can make an after tax profit or someone who will buy a home
will buy it.
Post by f***@msn.com
Post by professorchaos
Post by f***@msn.com
The land value wouldn't
decrease, nor would the tax so the goverment would still be getting
that $20k.
Of course it would the demand for land for would decrease while the
price rose.
Isn't the normal demand curve that way? The effect of the tax would
be a shift in the curve. I don't think you're addressing that but
something
else.
No that is exactly what I am adressing. Market prices fall while the
price for the land that buyers pay (including the tax) rises. That is
how taxes work. The buyer pays the seller less than he pays because part
of the price goes to the government. No this isn't a sales tax but to
the buyer the tax liability is part of the price they have to pay for
the land.

Suppose, and I have no reason to suppose otherwise, the value
Post by f***@msn.com
of
the land fell due to taxing land value only but not improvements.
Would
lower land values be good or bad for business?
It would not matter because the price paid would still be higher. Just
because the market price for Blue Bell is $1.00 for a quart of ice cream
does not mean I pay a $1.00 for the quart if the government requires me
to pay them 8% for having the ice cream. My cost is $1.08 even though
market price is $1.00. You ignoring that although market price does not
include tax you still have to pay it. That tax represents a fix cost
that must be met in order to operate. No what ifs can get around the
fact that if you don't meet fixed cost you go out of business. Raising
taxes on land or implementing a land tax when it was not there before
raises fixed cost which is not good for business. The drop in price on
the market for land only mitigates this some. Unless the supply of land
is exactly 0 or the demand for land is perfectly elastic and the sellers
bear the entire the tax. Then the decrease in price of land would
exactly compensate for the tax because sellers can not pass on the tax
to buyer.
Post by f***@msn.com
The land exists and the supply of land (not the supply on the market)
doesn't
change with the tax.
Supply on the market is the only thing that matters when looking at the
effects of a tax on a market.
Post by f***@msn.com
If the current owner of high value land sees no
benefit
in owning it it will be placed on the market.
The point is that he saw benefit before the tax distorted his
incentives. The markets haven't changed in other areas. The business
that involved high value land is not as profitable as it was before
because the government is taking a cut of the profits.
Post by f***@msn.com
Putting high value land
on
the market moves it from the hands of an owner who sees no benefit in
owning
it to an owner who sees benefit in owning it.
On the contrary, it moves the land from an owner who saw a greater
benefit in the land and had placed a higher value on the land to someone
who saw less value and did not buy it before the tax.
Post by f***@msn.com
That's good for
society.
No it is not. It shifts land from those who have the highest value on
the land prior to the tax to those who did not see as much value on the
land prior to the tax.
Post by f***@msn.com
Post by professorchaos
This is the same effect as if governments wanted consumers to keep
receipts and pay sales taxes on items bought. The market price would
decrease but consumers would pay more. If you tax the supplier market
price increases but sellers receive less than before, the same amount as
if you taxed the buyers.
I don't know about you but I tend to ignore the spred of the revenue
when I consider the price I will pay for good.
That is important why?
Post by f***@msn.com
It doesn't matter to
me how much money goes into the price of the goods sold and how much
goes into profit and how much goes into tax.
Of course not but when after paying the tax and your price is higher it
affects your purchase. Lets take a VAT. Tax is included you may not care
how much is VAT and how much the seller gets but you still buy less when
VAT increases and your price increases. The same goes for land. You have
to pay more for owning the land, you include that in your price and you
buy less when the tax goes up. Have you bought a house? Was the amount
of property tax you would have to pay part of your decision as to if you
would buy or not?
Post by f***@msn.com
If you increase the tax
then the supplier will see less profit at a given price so the supply
at a given price will decrease and the supply and demand curves cross
at a high price (as you said) but fewer will be buying.
This ignores the fact that there are now two prices. The price the
seller recieves, the lower one, which takes out the portion of the price
that is tax and the price the buyer pays which includes taxes paid. The
difference between the price the buyer pays and the seller receives is
the tax. When we speak of how much tax the buyer pays we mean how much
of a higher total price he pays in the end. If the supply curve is
vertical he pays zero tax because the end price stays the same but the
market price drops by the amount of the tax and the market price is what
the seller receives.

If you tax the seller by statute the market price is the price with tax
included and unless supply is perfectly inelastic the market price will
rise. If you tax the buyer the market price excludes the tax and will
drop from the previous price. In the end you get the same price that the
buyer pays and the same price the seller receives regardless of whom you
tax but the market price rises when sellers are taxed and drops when
buyers are taxed. When buyers are taxed they pay more than the market
price because they have to pay the tax. When sellers are taxed they
receive less than market price because they have to pay the tax.
Post by f***@msn.com
I'll clarify. When I said "land whose value" I meant exchange price.
It seem to me that most people intend to make a profit in the
exchange,
that is their value in use exceeds the price they are willing to pay.
Well yes it must be that way for any good. If you value a coca-cola at
$.50 and it cost $1 you will not buy it. Taxes distort that valuation.
If the price before were $.50 and after tax it is a $.75 I do not buy
when I would have bought without the tax. The dead weight loss comes
when the cost of production of coca-cola is $.45 and the tax makes it
sell for $.75. There would be a social gain of $.05 cents from me buying
that coke that cost $.45 but the trade is not made due to the tax. Now
only people who value cokes at $.75 are buying them but the cost of
production is only $.45. In land this means that people who have a
pre-tax value of $500 per an acre may have to sell at $450 an acre
because the tax means the buyer has to pay $50 a year. The buyer will
not buy at $500 if he values the land at $500 because his cost is now $550.
Post by f***@msn.com
Post by professorchaos
If a tax raises fixed cost enough to where a
business is not profitable then will not buy the land to use it for the
business.
Is that a bad thing? I don't think it is.
Yes it is if the land sits fallow because no one can make a profit from
using. It is bad if it is eventually seized by the state because of
non-tax payment after a firm went out of business. It is bad because it
changes market distributions and distorts incentives. Before business
that utilized less land were equally profitable now business that
utilize less land are more profitable so owners shift businesses. This
is a distortion of incentives and inefficient.
Post by f***@msn.com
The issue isn't if taxes distort decisions but rather how alternative
taxes affect the decisions and what the best utilization is.
You have not once spoke of an alternative tax to have that discussion
you have to compare it to something. All taxes except lump sum taxes
distort decisions. Certainly there is room to discuss which distorts
less. However, this discussion started with a claim by Roy that land
taxes do not distort incentives. I simply argue they do. I have even
said the distortion is likely less than other taxes but it still exist.
f***@msn.com
2007-09-02 15:17:54 UTC
Permalink
This exchange is getting long in the tooth. We have a fundamental
disagreement.
Post by professorchaos
Post by f***@msn.com
So be it. The tax has to be paid. A business that could get free
labor and was breaking even would go out of business if it had to
pay for labor. Why single out taxes?
If labor rates go up it is due to changes in supply of demand for labor.
Incentives change they are not distorted. Markets, if efficient
beforehand, will remain efficient.
Is a market that has a negative externality efficient if the
costs are not recovered in the exchange? I think not. For
instance, those engaged in slave trade would by your account
have their market distorted by the outright outlawing of owning
slaves and that would certainly be less efficient as far as the
buyer and seller of slaves are concerned.
Post by professorchaos
A tax on an efficient market distorts
incentives rather than changing them.
First you must prove the market efficient then you can draw the
conclusion.
Post by professorchaos
It causes a wedge between what buyers pay and what sellers receive.
I have been to auctions where the bid is for choice and to auctions
where the bid is for lot. After the Goodwill Games in Seattle I
wanted
one of the chairs. For several rounds the bid was for choice. All
the chairs were identical (or near identical) with little wear.
It didn't take me long to figure out that most of us only wanted
one or two chairs so the best was to just have a low bid and let
everyone have it at that price but people kept bidding higher and
higher then take one chair. The bidding would start again. By the
time the top bids started getting rational the auctioneer switched
to lot. Only dealers could afford to buy the lot and the winner
got an exceptional deal on seventy or so chairs. I was one of the
couple dozen who still wanted one or two chairs. I tried buying from
the winner at the last choice price but he would not sell. The
auctioneer gave us no warning that he was going to switch. The effect
was the seller may have gotten less than top dollar but it's hard to
tell. The lot buyer may have not paid as much for the remaining
chairs had we been allowed to buy at the last choice price. What is
clear is that the dealer intended to make money off the resale of
the chairs.

It seems to me that an "efficient" market isn't a very useful
concept. The whole point of a trade is to exchange value somewhere
between the parties value in use of the items exchanged where
both parties come out ahead. There is almost always a wedge
between value in use and value in trade. Usually the less urgent
trader gets the better of the deal.
Post by professorchaos
The value to the buyer exceeds the
cost to the seller, excluding the tax, meaning that providing more units
is beneficial. If labor demand or labor supply changes then the new
equilibrium is a point where the value of the buyer is equal to the cost
of the seller.
What is the cost of labor to the seller of labor?
Post by professorchaos
Providing more goods would imply the cost would greater
than the value to the buyer. With a tax it says the new result is one
where the market can benefit from more trades. When supply or demand
causes a change in the cost markets will adjust to where the value to
buyer of the last good equals the cost to the seller.
And that is true when a tax is applied as well when you consider the
tax just another item in the costs of goods sold. But you fade in
and out of context, all of the various contexts that have been
established
under this subject line. There ar too many for me.
professorchaos
2007-09-02 17:56:51 UTC
Permalink
Post by f***@msn.com
Is a market that has a negative externality efficient if the
costs are not recovered in the exchange? I think not.
Are you speaking hypothetically or can you show a negative externality
in occurs in any of the examples given. Where is the externality.?
Post by f***@msn.com
For
instance, those engaged in slave trade would by your account
have their market distorted by the outright outlawing of owning
slaves and that would certainly be less efficient as far as the
buyer and seller of slaves are concerned.
No the market would not exist and there is no thing as less efficient.
Efficient means 0 dead weight loss and something is efficient or it is
not efficient. Let me state this again for the 10 millionth time.
Efficiency implies nothing about equity nor if the moral judgment of the
people of a nation think the market should exist. For instance the drug
market can be analyzed. Economist can note that if drugs were legalized
that putting high taxes on them would decrease first time user and lead
to less addicts. Does that mean it should be done? That is for
governments and individuals to decide.
Post by f***@msn.com
Post by professorchaos
A tax on an efficient market distorts
incentives rather than changing them.
First you must prove the market efficient then you can draw the
conclusion.
Again where is the externality? If the market has an externality a tax
could make things worse if the externality is positive. Until an
externality is presented we must assume there is not one.
Post by f***@msn.com
Post by professorchaos
It causes a wedge between what buyers pay and what sellers receive.
I have been to auctions where the bid is for choice and to auctions
where the bid is for lot.
What does this have to do with taxes putting a wedge between what buyers
pay and what sellers receive?
Post by f***@msn.com
I tried buying from
the winner at the last choice price but he would not sell.
He had a higher value placed on the chair then you did.
Post by f***@msn.com
The
auctioneer gave us no warning that he was going to switch. The effect
was the seller may have gotten less than top dollar but it's hard to
tell. The lot buyer may have not paid as much for the remaining
chairs had we been allowed to buy at the last choice price. What is
clear is that the dealer intended to make money off the resale of
the chairs.
So what does this have to do with anything? The chairs went to the buyer
that placed the highest value on them. His value was higher because he
saw profit in them. I can't explain why the auctioneer changed without
warning or whether or not this was even a truly efficient allocation.
You nor I have any idea of what the demand curve here was. Now what
does this have to do with taxation or the fact a tax drives a wedge
between buyers and sellers?
Post by f***@msn.com
It seems to me that an "efficient" market isn't a very useful
concept.
That is because you do not understand it.
Post by f***@msn.com
The whole point of a trade is to exchange value somewhere
between the parties value in use of the items exchanged where
both parties come out ahead.
Or at least break even.
Post by f***@msn.com
There is almost always a wedge
between value in use and value in trade.
Sorry not biting on hokey mystical arguments about use value. Modern
economics knows this is convoluted and can not be tested. There is no
wedge between what the buyer pays and how much money the seller receives
without a tax. Marx, Smith, and Ricardo all argued that the value of the
good was not the price and it had little to do with market price. They
argued and argued about what is truly value with no consensus. That is
why modern economist see value to the buyer as the price the buyer is
willing to pay. In a competitive market, the value of the buyer of the
last good sold will exactly equal the cost to the seller. Because demand
curves can not slope upward this means providing more goods would mean
the last good cost more than the buyer is willing to pay decreasing
total surplus. Providing less means more surplus can be gained from
providing additional goods. Efficiency occurs when total surplus is
maximized.
Post by f***@msn.com
Usually the less urgent
trader gets the better of the deal.
Is the urgent trader the trade that is occurring at equilibrium? No.
That is why total surplus is not zero. Trades can and will made above or
below the equilibrium price as long as the value to the buyer exceeds
the cost to the seller (in produced goods). The equilibrium price is
where prices stop changing.
Post by f***@msn.com
Post by professorchaos
The value to the buyer exceeds the
cost to the seller, excluding the tax, meaning that providing more units
is beneficial. If labor demand or labor supply changes then the new
equilibrium is a point where the value of the buyer is equal to the cost
of the seller.
What is the cost of labor to the seller of labor?
Foregone leisure. There is a tradeoff between labor and leisure. The
wage represents the cost of consuming leisure, you do not make money
sitting on your butt watching TV. Cost do not have to be monetary.
Post by f***@msn.com
Post by professorchaos
Providing more goods would imply the cost would greater
than the value to the buyer. With a tax it says the new result is one
where the market can benefit from more trades. When supply or demand
causes a change in the cost markets will adjust to where the value to
buyer of the last good equals the cost to the seller.
And that is true when a tax is applied as well when you consider the
tax just another item in the costs of goods sold.
No it is not true. Lets say that ice cream cones sell for $4.50 in a
competitive market with no externalities. At equilibrium the value to
the buyers (given by the demand curve) exactly equals the cost to the
seller (given by the supply curve). So when the last snow cone is sold
the buyers values it at $4.50 and it cost the seller $4.50 to make it.
The buyer pays $4.50 the seller receives $4.50. There are people who buy
at $4.50 who have a higher value on the ice cream than $4.50 and if the
supply curve is not flat and slopes upward then the cost of the cones
are less than $4.50 to the left of the equilibrium. Total surplus in
this case is the sum of the value to the buyer - cost to the seller for
each unit.

Now lets say that a $.50 tax occurs in the market. The new price is
$4.75. The buyer pays $4.75 but the seller only $4.25. Now it is
profitable to produce that same ice cream cone that cost $4.50.
Furthermore what is the value to the buyer of the ice cream cone? $4.75
What is the cost of the cone $4.25. The value of the buyer of the last
unit is not equal to the cost to the seller. Society is better off if
ice cream is priced at $4.50 and the value to the buyer equals the cost
to the seller. In this case people who would bought at $4.26 through
$4.50 will no longer buy and the seller is not willing to produce the
cones. There are trades that could occur with the tax that will no
longer occur given current values to buyers and cost to sellers. In this
case Total surplus is Value to the buyer - price paid + price received -
cost to the seller + tax revenue. This is the same formula as before but
price paid was equal to price received with no tax and there was no tax
revenue. When the price paid is > price received this decreases total
surplus. The tax revenue does not make up for the loss and total surplus
is smaller after the tax. The tax revenue does not make up for the loss
because fewer trades occur.

Now lets say demand increases the price to $4.75. Fewer trades still
occur but given the supply and demand curve after the shift they are no
other trades that could be made. The value to buyer of $4.75 is exactly
equal to the cost of $4.75 at this point and it would decreases surplus
to sell more units because the value to the buyer would be less than cost.

So you see given current supply and demand taxes artificially reduce
trade and give us an alternative where surplus is higher that is no tax.
A shift in demand reduces trade but there is no way to increase surplus
after a shift in the curve. Could it mean less total surplus than before
the shift? Possibly, it is uncertain a rise in demand typically increase
producer surplus and lowers consumer surplus, but it is not inefficient
because given the current market there is no way to increase surplus
after a shift without shifting curves again. A tax says the outcome can
be improved given the current supply and demand curves.


But you fade in
Post by f***@msn.com
and out of context, all of the various contexts that have been
established
under this subject line. There ar too many for me.
All of this is in context as to whether or not a land tax affects land
sold or rental units rented. You have to understand how taxes work first
to understand how taxes affect a market.
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
Permalink
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.
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.
f***@msn.com
2007-09-05 04:34:10 UTC
Permalink
Post by professorchaos
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.
from http://en.wikipedia.org/wiki/Economic_efficiency

Economic efficiency is a general term for the value assigned
to a situation by some measure designed to reduce the amount
of waste or "friction" or other undesirable economic features
present. Economic efficiency is achieved when the cost of producing
a given output is as low as possible. Production of a unit of good
or services is termed economically efficient when that unit of good
or service is produced at the lowest possible cost. In current
usage,
the term microeconomic reform refers to any policy that promises to
increase economic efficiency (whether it does so or not).

Is this entry wrong? Can you point to a web page that defines
efficiency
the way you do?
professorchaos
2007-09-05 22:13:57 UTC
Permalink
Post by f***@msn.com
from http://en.wikipedia.org/wiki/Economic_efficiency
Wikipedia what a source. Do you realize anyone can go in and write an
article on wikipedia. I would not depend on it too much. Even my
historian and history buff friends who have often said if you read it
for what happened when it is ok but don't trust the analysis.
Post by f***@msn.com
Economic efficiency is a general term for the value assigned
to a situation by some measure designed to reduce the amount
of waste or "friction" or other undesirable economic features
present.
Wrong. Dead weight loss is a measure of waste or friction. Dead weight
loss has a numerical value. When can say the market losses $X in total
surplus after a tax. That is the measure of dead weight loss. We do this
by measuring total surplus, the area beneath the demand curve and above
price + the area above the supply curve and below price and comparing it
to Maximum total surplus. Maximum total surplus occurs when efficiency
is achieved and has a value. Bu that is not a measure of efficiency. It
is a measure of total surplus at the efficient point. Efficiency is not
a scale you can assign a value. So if I say that the market of corn has
a total surplus of $50 at the efficient point and the market for
soybeans has a total surplus of $100 at the efficient point it does not
imply that soybeans are more efficient than corn.

You see can measure total surplus and see if one outcome has more total
surplus than the other but that does not mean it is more efficient. If
the efficient solution says that total surplus is $50 and you find total
surplus is $40 due to pollution created by the production process than
the solution is inefficient and a dead weight loss of $10 occurs.
However, if we tax the producers and total surplus rise to $45 it is
still inefficient. The solution has more total surplus. It has less dead
weight loss ($5 now) but it is not more efficient. To say the tax is
more efficient implies that the solution without the tax is efficient
and the solution after the tax is efficient but more so. Saying more
efficient implies what you are talking about and its comparison are both
efficient. In this case they are clearly not.

Just like in physics or chemistry, economics has a set of unique terms
that precisely define things. For instance in connotation precision and
accuracy are almost the same thing. Not in physics. I still remember
that discussion in the first class of physics I ever took.

The person who wrote this has zero understanding of what efficiency is.
Post by f***@msn.com
Economic efficiency is achieved when the cost of producing
a given output is as low as possible.
Wrong again. This cost minimization is the criteria for efficiency. I
can minimize the cost of making 1 unit of gingerbread but if total
surplus of 1 unit of gingerbread sold is $10 and total surplus of 100
units of gingerbread sold is $50 then society is better off by producing
more. Efficiency occurs when the minimized cost of the last good sold is
equal to what the buyer of that good is willing to pay for the good.
Post by f***@msn.com
Production of a unit of good
or services is termed economically efficient when that unit of good
or service is produced at the lowest possible cost.
This is an accountant's definition of efficiency not an economist's
definition of efficiency. What is efficient to a CEO of a corporation is
not necessiarly efficient to society. If so monopolies would be
efficient if they produced each unit at minimum cost. No economist would
argue that.
Post by f***@msn.com
In current
usage,
the term microeconomic reform refers to any policy that promises to
increase economic efficiency (whether it does so or not).
I don't know about this. This might correct as to how politicians define
microeconomic reform but not as to how economist define economic reform.
Whomever, wrote this was not an economist.

This might help. Here is a discussion of efficiency written by an
economist. http://www.econlib.org/library/Enc/Efficiency.html

One of the more insightful paragraphs is "From this perspective a parcel
of land is used with maximum economic efficiency when it comes under the
control of the party who is willing (which implies able) to pay the
largest amount of money to obtain that control. The proof that a
particular resource is being used efficiently is that no one is willing
to pay more in order to divert it to some other use."

This also has a large bearing on the discussion of how an unimproved tax
land value tax can still be inefficient in the long run. If fixed cost
give a firm out of business and the land is sold for something else it
shows that the tax has distorted incentives. Someone is now willing to
pay more to divert the land to another use. So it is inefficient. Note
this will not occur only if the quantity supplied on the market does not
respond to price, that is the elasticity of supply is not 0.
Post by f***@msn.com
Is this entry wrong? Can you point to a web page that defines
efficiency
the way you do?
http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_15/PThy_Chap_15.html

"To understand Marshall's definition of an improvement, we consider a
change (the abolition of tariffs, a new tax, rent control, . . .) that
affects many people, making some worse off and others better off. In
principle we could price all of the gains and losses. We could ask each
person who was against the change how much money he would have to be
given so that on net the money plus the (undesirable) effect of the
change would leave him exactly as well off as before. Similarly we could
ask each gainer what would be the largest amount he would pay to get
that gain, if he had to. We could, assuming everyone was telling us the
truth, sum all of the gains and losses, reduced in this way to a common
measure. If the sum was a net gain, we would say that the change was a
Marshall improvement. If we had a situation where no further (Marshall)
improvement was possible, we would describe it as efficient."

Not my exact words but the concept is the same. Efficiency occurs when
there can be no gain in total surplus.

Part of the confusion that arises is the Paretto definition is used
rather than Marshal's definition. In Paretto's definition you can not
make anyone worse off and make an improvement. In Marshall's definition
the net gain only needs to be positive. In other word the sum of
consumer and producer surplus need be higher.

The difference is important. People can easily be confused into thinking
the elimination of a tariff is not Paretto efficient? Why because
elimination hurts domestic producers of the good while it benefits
consumers (lowering prices). However, if you we use Marhall's
definition, the tariff is not efficient. Why because total surplus is
not maximized. Without the tax tarrif they are consumers who would buy
the good and have a higher value to it then the cost of the good. This
means a net gain in total surplus. With the tarrif these trades are
barred and total surplus is decreased.

This is why efficency gets confusing. Pareto definition is often
misapplied to say making someone worse while making someone else better
off is inefficient. This is true if and only if you start at an
efficient solution. It is quite possible where a solution that involves
reducing consumer surplus and increasing producer surplus (a situation
were the country begins to export) is an efficient change. Why because
when exports were barred the producers were not getting all the surplus
they could and the producers were getting extra surplus.

If you look at this from the opposite change then you see that the
change is efficient. If trade exist you could not make consumers better
off without hurting producers. So in one instance, I make the statement
hurting one party leads to efficiency and in the other I make the
statement that hurting one party leads to inefficiency. Why the
confusion? Because of Pareto's definition.

If we use Marshal's definition, the one I am putting forth, there is no
confusion. It is simply about does total surplus increase or decrease
with the change. The fact that one party receives less surplus does not
make it inefficient if total surplus rises. Pareto doesn't disagree with
this if the change is from inefficiency to efficiency but his definition
makes the concept more confusing than it should be because it was
derived from a simplistic model.

The closest to the technical definition is at
http://www.unc.edu/depts/econ/byrns_web/Economicae/EconomicaeE.htm .

Although it is not a definition I find to be the clearest to non economist.

A much longer discussion is available in an online textbook
http://www.ingrimayne.com/econ/Efficiency/Overview11mi.html

"Efficiency is a relative term. It is vital that this point be
understood. Efficiency is never absolute; it is always relative to some
criterion. This can be seen when one asks if farms are more efficient in
the United States or China. The farming techniques in China are more
efficient than those in the United States when measured in terms of
output per unit of land, output per unit of fossil fuel, or output per
unit of machinery. The farms in the United States are far more efficient
in terms of output per man-hour. The statement that farms in one country
are more efficient than farms in another makes no sense unless the
criterion on which efficiency is measured is given.

The criterion for economic efficiency is value. A change that increases
value is an efficient change and any change that decreases value is an
inefficient change. A situation that is economically efficient may be
inefficient when judged on different criteria. An example may make this
concept clear."

As you see hear the author is arguing as I do against saying something
is more efficient because the measure is not clear. In the second
paragraph he sates as I do a change results in efficiency or does not.
The criterion is the key.

Another Source.
http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_15/PThy_Chap_15.html



The discussion of efficiency in this text is a little more technical
involving concepts of marginal utility rather than simple supply and
demand and may be a little harder to follow.
Richard Eich
2007-09-06 02:57:03 UTC
Permalink
Post by professorchaos
Post by f***@msn.com
from http://en.wikipedia.org/wiki/Economic_efficiency
Wikipedia what a source.
Yet you cite Wikipedia to back up your claim that we were already at
war with Iraq when Bush took office! Hypocritical asswipe.
professorchaos
2007-09-06 05:01:04 UTC
Permalink
Post by Richard Eich
Post by professorchaos
Post by f***@msn.com
from http://en.wikipedia.org/wiki/Economic_efficiency
Wikipedia what a source.
Yet you cite Wikipedia to back up your claim that we were already at
war with Iraq when Bush took office! Hypocritical asswipe.
The article had a citation for the quotation used that could be looked
up. It was not analysis. Wikipedia is quite good usually at collecting
quotations and saying X happened on Y date but often the analysis is way
off.

If you would not have snipped the bit after this statement you would see
I said the same thing earlier.

The article cited was not written had no citations and was wrong.
r***@telus.net
2007-09-06 19:05:18 UTC
Permalink
On Wed, 05 Sep 2007 17:13:57 -0500, professorchaos
Post by professorchaos
Post by f***@msn.com
from http://en.wikipedia.org/wiki/Economic_efficiency
Wikipedia what a source. Do you realize anyone can go in and write an
article on wikipedia. I would not depend on it too much. Even my
historian and history buff friends who have often said if you read it
for what happened when it is ok but don't trust the analysis.
IOW, because it proves you wrong, it doesn't count.
Post by professorchaos
This might help. Here is a discussion of efficiency written by an
economist. http://www.econlib.org/library/Enc/Efficiency.html
One of the more insightful paragraphs is "From this perspective a parcel
of land is used with maximum economic efficiency when it comes under the
control of the party who is willing (which implies able) to pay the
largest amount of money to obtain that control.
Note the phrase, "maximum economic efficiency." There cannot be
_maximum_ economic efficiency except by comparison with economic
efficiency that is less than maximum. Therefore, there are degrees of
economic efficiency. Therefore, the source that YOU cited -- YOUR OWN
SOURCE! -- proves you flat wrong. QED.
Post by professorchaos
This also has a large bearing on the discussion of how an unimproved tax
land value tax can still be inefficient in the long run. If fixed cost
give a firm out of business and the land is sold for something else it
shows that the tax has distorted incentives.
Or removed a distortion, stupid.
Post by professorchaos
Someone is now willing to
pay more to divert the land to another use. So it is inefficient.
Non sequitur, stupid.
Post by professorchaos
Note
this will not occur only if the quantity supplied on the market does not
respond to price, that is the elasticity of supply is not 0.
Wrong, stupid.
Post by professorchaos
Post by f***@msn.com
Is this entry wrong? Can you point to a web page that defines
efficiency the way you do?
http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_15/PThy_Chap_15.html
David Friedman?!?!? What a source!
Post by professorchaos
"To understand Marshall's definition of an improvement, we consider a
change (the abolition of tariffs, a new tax, rent control, . . .) that
affects many people, making some worse off and others better off. In
principle we could price all of the gains and losses. We could ask each
person who was against the change how much money he would have to be
given so that on net the money plus the (undesirable) effect of the
change would leave him exactly as well off as before. Similarly we could
ask each gainer what would be the largest amount he would pay to get
that gain, if he had to. We could, assuming everyone was telling us the
truth, sum all of the gains and losses, reduced in this way to a common
measure. If the sum was a net gain, we would say that the change was a
Marshall improvement. If we had a situation where no further (Marshall)
improvement was possible, we would describe it as efficient."
Not my exact words but the concept is the same. Efficiency occurs when
there can be no gain in total surplus.
Nowhere does Friedman -- even Friedman! -- support your false claim
that there cannot be degrees of efficiency.
Post by professorchaos
The closest to the technical definition is at
http://www.unc.edu/depts/econ/byrns_web/Economicae/EconomicaeE.htm .
Although it is not a definition I find to be the clearest to non economist.
Nowhere does it say there cannot be degrees of efficiency.
Post by professorchaos
A much longer discussion is available in an online textbook
http://www.ingrimayne.com/econ/Efficiency/Overview11mi.html
"Efficiency is a relative term. It is vital that this point be
understood. Efficiency is never absolute;
As usual, YOUR OWN SOURCE proves you flat, outright wrong.

Later in the same site:

"A change that increases value is an efficient change and any change
that decreases value is an inefficient change."

Got that, stupid, ignorant, lying garbage? An _increase_ in value is
efficient. Not just maximization of value.

That is clear, absolute, complete, total, unambiguous, permanent,
incontrovertible, indisputable, perfect, definitive, conclusive and
undeniable PROOF that __YOU_ARE_WRONG__.
Post by professorchaos
As you see hear the author is arguing as I do against saying something
is more efficient because the measure is not clear.
No, you are just lying again.
Post by professorchaos
In the second
paragraph he sates as I do a change results in efficiency or does not.
Another lie. He states that a change is efficient or not depending on
whether it _increases_ value, not whether it _maximizes_ value. YOUR
OWN SOURCE proves you flat, outright wrong, and you are just baldly
LYING about what it plainly says.
Post by professorchaos
Another Source.
http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_15/PThy_Chap_15.html
The discussion of efficiency in this text is a little more technical
involving concepts of marginal utility rather than simple supply and
demand and may be a little harder to follow.
What is not hard to follow is that there is not a credible source
anywhere that supports your claims. Not one.

-- Roy L
professorchaos
2007-09-06 23:52:15 UTC
Permalink
Post by r***@telus.net
On Wed, 05 Sep 2007 17:13:57 -0500, professorchaos
Post by professorchaos
Post by f***@msn.com
from http://en.wikipedia.org/wiki/Economic_efficiency
Wikipedia what a source. Do you realize anyone can go in and write an
article on wikipedia. I would not depend on it too much. Even my
historian and history buff friends who have often said if you read it
for what happened when it is ok but don't trust the analysis.
IOW, because it proves you wrong, it doesn't count.
Post by professorchaos
This might help. Here is a discussion of efficiency written by an
economist. http://www.econlib.org/library/Enc/Efficiency.html
One of the more insightful paragraphs is "From this perspective a parcel
of land is used with maximum economic efficiency when it comes under the
control of the party who is willing (which implies able) to pay the
largest amount of money to obtain that control.
Note the phrase, "maximum economic efficiency."
Which is used poorly.
Post by r***@telus.net
There cannot be
_maximum_ economic efficiency except by comparison with economic
efficiency that is less than maximum. Therefore, there are degrees of
economic efficiency. Therefore, the source that YOU cited -- YOUR OWN
SOURCE! -- proves you flat wrong. QED.
No I still have not seen you respond to how there can be degrees of
total surplus being maximized or how the condition that one person can
not be made better off without hurting another has any indication of
degrees to it. It is or it is not. Read what he said again. Despite
using maximum efficency, the definition used gives no room for degrees
of anything. Either no one will pay more for the land or someone will.
How you can have a degree there. It makes no sense to say that this
shows more of no one being willing to pay more for the land than that.
It is a criteria that is met or not met.
Post by r***@telus.net
Post by professorchaos
This also has a large bearing on the discussion of how an unimproved tax
land value tax can still be inefficient in the long run. If fixed cost
give a firm out of business and the land is sold for something else it
shows that the tax has distorted incentives.
Or removed a distortion, stupid.
The assumption is before the tax the market is efficient. Read what I
have said again. If there are distortions prior to the tax and the tax
causes land to shift hands to someone who before the tax was not willing
to pay more than the owner of the land it is inefficient.
Post by r***@telus.net
Post by professorchaos
Note
this will not occur only if the quantity supplied on the market does not
respond to price, that is the elasticity of supply is not 0.
Wrong, stupid.
Until Roy understands what quantity of supplied means or how
elasticities affect dead weight loss on the market I am not discussing
this with him. Roy only needs to pick up a textbook to confirm this
statement.
Post by r***@telus.net
Post by professorchaos
Post by f***@msn.com
Is this entry wrong? Can you point to a web page that defines
efficiency the way you do?
http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_15/PThy_Chap_15.html
David Friedman?!?!? What a source!
What is wrong with David Friedman? He is a former professor of economics
at UCLA. He has published in the JEP, journal of law and economics and
has other published work. If you don't like him the definition is still
Marshall's.
You may have him confused with a different David Friedman. His home page
reads "This is the home page of David Friedman. Not the Hawaiian artist
David Friedman, or the composer David Friedman, or the
fix-what's-wrong-with- government David Friedman (050) or the fifteen
year old David Friedman or the eighteen year old David Friedman or even
the economic journalist David Friedman " .

I think a former economics professor at UCLA knows something about
economics. Although I admit that this is curious given he does not list
anything but a MS in physics. He has to have other degrees considering
he is a professor of law. Accreditation would not let him teach if he
did not have the proper degrees.
Post by r***@telus.net
Post by professorchaos
"To understand Marshall's definition of an improvement, we consider a
change (the abolition of tariffs, a new tax, rent control, . . .) that
affects many people, making some worse off and others better off. In
principle we could price all of the gains and losses. We could ask each
person who was against the change how much money he would have to be
given so that on net the money plus the (undesirable) effect of the
change would leave him exactly as well off as before. Similarly we could
ask each gainer what would be the largest amount he would pay to get
that gain, if he had to. We could, assuming everyone was telling us the
truth, sum all of the gains and losses, reduced in this way to a common
measure. If the sum was a net gain, we would say that the change was a
Marshall improvement. If we had a situation where no further (Marshall)
improvement was possible, we would describe it as efficient."
Not my exact words but the concept is the same. Efficiency occurs when
there can be no gain in total surplus.
Nowhere does Friedman -- even Friedman! -- support your false claim
that there cannot be degrees of efficiency.
Of course it does. The definition of efficiency is maximization of total
surplus. How can you have degrees of maximization. We can discuss
improvements or less dead weight but not degrees of efficiency.

"If we had a situation where no further (Marshall)
Post by r***@telus.net
Post by professorchaos
improvement was possible, we would describe it as efficient." Where
does that allow for a degree of efficiency when the definition is that
no improvements can be made. Either no improvements can be made or can
not be. So you can not say that something is less efficient, it would
imply that the less efficient could be improved. By saying more
efficient you are saying that something else efficient can be improved.
If it can be improved it is not efficient.

Or you this dense or just this stubborn?
Post by r***@telus.net
Post by professorchaos
The closest to the technical definition is at
http://www.unc.edu/depts/econ/byrns_web/Economicae/EconomicaeE.htm .
Although it is not a definition I find to be the clearest to non economist.
Nowhere does it say there cannot be degrees of efficiency.
Read it again. If you understand it says that efficiency is an is or
isn't situation. "Economic (global) efficiency for society as a whole is
achieved when the society produces the combination of goods with the
highest attainable total value, given our limited resources. " Again
where you can have degrees when the definition is such?
Post by r***@telus.net
Post by professorchaos
A much longer discussion is available in an online textbook
http://www.ingrimayne.com/econ/Efficiency/Overview11mi.html
"Efficiency is a relative term. It is vital that this point be
understood. Efficiency is never absolute;
Taken out of context. Now lets read the rest of it. "Efficiency is never
absolute; it is always relative to some criterion. This can be seen when
one asks if farms are more efficient in the United States or China. The
farming techniques in China are more efficient than those in the United
States when measured in terms of output per unit of land, output per
unit of fossil fuel, or output per unit of machinery. The farms in the
United States are far more efficient in terms of output per man-hour.
The statement that farms in one country are more efficient than farms in
another makes no sense unless the criterion on which efficiency is
measured is given.

he criterion for economic efficiency is value. A change that increases
value is an efficient change and any change that decreases value is an
inefficient change. A situation that is economically efficient may be
inefficient when judged on different criteria. An example may make this
concept clear."

Note that what Roy quotes is that efficiency is meaningless unless the
criterion on which efficiency is measured is given. What the author
means by saying efficiency is not absolutely is that the criterion that
defines efficency must be defined. Yes you can argue that a farm that
uses fewer man hours to produce a unit of corn is more efficient but
that is the criterion for ECONOMIC EFFICIENCY. Note the use of the word
efficency here and the use of the PHRASE economic efficiency elsewhere.
The author is clearly stating the word efficiency is meaningless with a
criterion. Economic efficency says a criterion is met where there can be
no increase in value (surplus).

Again how to do you assign degrees to how something is maximized? The
definition given a few sentences after Roy's snip shows that given the
criterion economist use there can be no degrees.
Post by r***@telus.net
As usual, YOUR OWN SOURCE proves you flat, outright wrong.
Quite the contrary. If it is read and understood you see I am right. If
you stop reading and snip when you think you see something that
validates your point then I can't help you.
Post by r***@telus.net
"A change that increases value is an efficient change and any change
that decreases value is an inefficient change."
Got that,
Yes if something has not maximized value it is inefficient. If it has
maximized value it is efficient. Where is the statement of more
efficient? Do you see that here you > stupid, ignorant, lying garbage?
Post by r***@telus.net
An _increase_ in value is
efficient. Not just maximization of value.
Again where are the degrees? One that increases value more is still not
more efficient. Although this definition is not completely right. I
should have read it more careful. We can have a change that increases
value and still leads to another inefficient point. One that just has
less dead weight loss.
Post by r***@telus.net
That is clear, absolute, complete, total, unambiguous, permanent,
incontrovertible, indisputable, perfect, definitive, conclusive and
undeniable PROOF that __YOU_ARE_WRONG__.
Wow Karl. I surely don't see it that way. Again where have ANY of these
authors once said MORE EFFICIENT OR LESS EFFICIENT ANYWHERE IN THERE
DEFINITIONS OR THEIR DISCUSSION. The closest to that is the ill used
term efficiency is maximized.

If you understood what you were talking about you would understand
everyone of these definition is an is or isn't thing. There is no room
for degrees of efficency. Again if one situation can make no
improvements is it more efficient than another situation where no
improvement can be made? If a situation can make an improvement and
another can not make an improvement then is the situation less
efficient? No because saying it is less efficient says it is efficient
but less so. The situation that can make an improvement is not efficient.

Until Roy learns the English language I refuse to debate him.
Post by r***@telus.net
Post by professorchaos
As you see hear the author is arguing as I do against saying something
is more efficient because the measure is not clear.
No, you are just lying again.
On the contrary I can read and comprehend not just scan for a certain
phrase. AGAIN SHOW ME ONE QUOTATION WHERE ANY OF THESE SAY THE WORDS
MORE EFFICIENT. You can't. No one in economics uses that term.
Post by r***@telus.net
Post by professorchaos
In the second
paragraph he sates as I do a change results in efficiency or does not.
Another lie. He states that a change is efficient or not depending on
whether it _increases_ value, not whether it _maximizes_ value.
Either way it increases in value or it does not. This part of the
definition is misleading at best. I should have read more carefully.

I do however see what is getting at. If surplus is not maximized than
value can be increased, and by definition it is not efficient, so a
change that leads to efficiency increases value. Does it not?
Post by r***@telus.net
What is not hard to follow is that there is not a credible source
anywhere that supports your claims. Not one.
Anyone who can read and comprehend sees the argument I am making. I
still have yet to see you produce one quotation from an economist that
says more efficient. No serious economist would ever say that. You can't
find in anything I have posted. You can find the term on the internet
and even in the economist magazine which despite the name is not written
by economist. You can not find many, if any, academic economists or
practicing economists with a doctoral degree who will say more efficient
EVER.
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.

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?
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
Davinchi
2007-08-24 08:43:09 UTC
Permalink
What about it Rotten, have you ever actually pass a graduate
level economics class?
yes or no.
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.
f***@msn.com
2007-08-27 12:37:52 UTC
Permalink
Post by professorchaos
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.
In the late '70s or early '80s I learned it cost about $35,000 to kept
someone in jail for a year. I would go around and say I would gladly
agree to never violate the law if they paid me $34,000 a year.

Clearly the poor aren't getting as much from our society as the rich.
Life isn't fair but that's no excuse to act unfairly towards others.
"social" and "antisocial" behavior is defined by those who win by
everyone engaged in such behavior and the costs of this benefit should
be paid. There would be something very wrong if they poor weren't
being paid to accept social norms that run counter to their own
feelings of their own best interest.

If we would start sharing more information with each other rather
than seek advantage from private information our society would be
better served.
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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