Milton Friedman talks about property taxes
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- เผยแพร่เมื่อ 21 ส.ค. 2024
- Land Value Taxation is endorsed by Milton Friedman.
Can someone help me find the year this is recorded? (November 1978 is my guess, www.cooperative...)
Source: • Milton Friedman - Is t...
Update 20200528:
from the Hoover Institution: Friedman, Milton. "Is Tax Reform Possible?" Milton Friedman Speaks. Address given at the Americanism Educational League 51st Anniversary Dinner, Pasadena, CA, February 6, 1978.
Milton is talking about *LVT* Land Value Tax.
Yes. A georgist property tax on the unimproved value of land.
Also Georgist citizen's dividend* is awesome
@@shzarmai The only tax that can unite the entire political spectrum from right wing capitalists to left wing Marxists and as the brainchild of a progressive.
People constantly misinterpret Friedman's statement on property tax. He is talking about the UNIMPROVED value of LAND. It is not a tax for merely owning a home, it is a tax on the valuable rate above any improvements you have made to that property. Most of the value increase of property has come from public and private investment in the area around your property and the increased scarcity of property in your area. The point of a fair tax is to target wealth that has been generated idly. That is, not through one's labour. If you sit on a property for 20 years and see its value rise by 50%, purely through the passage of time, to claim that additional wealth as your property is one of the worst kinds of entitlement I can think of.
No wealth is generated idly. It is impossible for there to be wealth generated without labor. That aside, much (if not most) of that so called increase in property value is inflation. The house (or other real property) isn't worth more. The money is worth less. Someone wrote a paper on this. The compared things like the ratio of things that hold value well like the ratio of the price of an ounce of gold to a barrel of crude oil. This is quite constant, especially when you averaged over the year to account for seasonal fluctuations.
This gets into the biggest problem for those of us who work for our wages instead of owning businesses, farms or other real estate. Much is said about the growing gap between rich and poor. This, more than any other one thing, it caused by inflation. Those of us who are working every day manage to pay our mortgage or rent, groceries, utilities and maybe a car payment. We might have a little saved but the value of this money decreases due to the effects of inflation. Rich people have land and durable goods in their businesses that hold their value. This is how the gap between the wealthy and the poor grows.
You're fucking wrong, see Ricardo's law of rent. Literally every economist since Adam Smith supports land value tax.
th-cam.com/video/yyv1xYDWAxk/w-d-xo.html
We are not talking about inflation, often values of land is caused by just speculation.
Property tax > sales tax > income tax.
Income tax is worst tax of them all
@@Koushi82 Baboom! You understand taxes lol congrats. Most idiots think sales tax is the most xD lmao Americans are lucky it's that low.
He’s describing the existing Singapore Tax Policy thats resulted in a booming economy, brilliant infrastructure & high home ownership rate.
Singapore got that Tax from Henry George who popularized the idea in America in the 1800s. The movement was very popular until the red scare which caused people to believe that any sort of collectivism was bad which harmed Georgism
Why no one who comments on the video did not understand what Friedman said about: the state only would collect an unimproved land tax. Only this tax and no other ones. That was the original Henry George idea.
Depends on what you consider as "improvement". What if someone buys land to create a nature preserve, it might be considered by some as "unimprovement" and be subject to tax. Completely ridiculous.
@@Patrick-sg7cm well not really. A nature reserve might be considered a charitable endeavour with ways of making a profit from possible tourism which would help improve the nature reserve.
I’d be interested to know how to calculate a land tax if it isn’t related to the property that is on it.
@@tcskips Property tax assessors already do this for the property tax based on market data. They value the land and the improvements built on it separately. For example, some municipalities in Pennsylvania tax land at a higher rate than improvements. This is a move towards the land value tax, but isn’t fully one. The issue is that the full taxation of land rents, as Georgists advocate, causes sale prices of land to drop to zero. This makes it more like a usage fee and it makes the market mechanism much harder. You can’t bid for it, as the value of improvements will affect the bids. I’ve seen some ideas for how to tackle it, but none have been completely convincing.
@@1080lights can you explain more? Are you saying no one would want to buy land under a LVT?
Income tax is a slave tax. You work for 4 months out of a year for the government.
Not only was he a brilliant man, he was also a great communicator
If only Milton Friedman had championed this proposal to tax the unimproved value of land in conjunction with simplification of the individual income tax. Where I part with him is in the imposition of a flat rate of tax on incomes above the basic exemption. The reason for this that the higher the income the greater the portion thereof that is gained by speculation and passive investment. Once the full unimproved value of land in all its forms is publicly collected, the rates of taxation on income could then be dramatically reduced. Once all income is earned by producing goods or providing services the income tax itself might be eliminated.
And to think it’s taken 9 or so years for it to gain even the slightest amount of mainstream attention again. If only George himself were here.
@@wildfire9280 Nine years have come and gone since I posted that comment. With each year I learn just how difficult it is to change the course of history, even when the change would solve humanity's most troublesome problems.
You just proved the argument for *more* income tax...
*Why would a government NOT tax the most profitable source of revenue?*
The solution isn't just "hurr durr, find the least bad tax", it's also forcing accountability in public spending and reducing government as much as possible
@@jacobblanton5179 Henry George's argument was that if rent from all sources was captured, no other public revenue would be needed. Equally important, without periods of economic boom and bust and without poverty, there would be few calls for more government than was necessary for justice and full employment.
@@nthpersonuntil they decide to raise the rent..like always happens.
Excellent, I read the text of this years ago but it's nice to have a video as well.
I created a shorter clip for all those that value time.
I think taxation on property should only apply over a certain threshold. Many cities make it illegal for people to sleep rough or being homeless. This means everyone must have a house. But not everyone can afford one. Therefore there should be a minimal amount of housing that should be tax-exempt. A small house or a small piece of land should be tax free, because the state forces you to possess that since it is illegal to be homeless. So you only start paying property taxes when your property exceeds the amount of land and housing that is minimally required to lead a normal life. If you have a mansion and 6 houses you should pay big money for it because you are probably turning a profit on it and reducing the supply of housing for other people. Income taxes should be completely eliminated and replaced with a single VAT/consumption tax.
Um... Ever heard of rent?
All you need to do to fix the housing market is fix zoning laws and building codes that prevent new land from being used and new houses from being built
What defines this minimum? What amount of land is to be deemed "excessive"? And if someone is turning a profit, then it can be presumed that they are renting out those properties and would be in fact creating housing opportunities.
The idea that homelessness is a problem of people not having houses is absurd and myopic.
There already exist programs to get the homeless off the street. Most homeless people don't participate in them. They don't WANT to, for a variety of reasons. Drug addiction, alcohol abuse, mental illness, and some simply prefer living on the streets.
What you're saying is kind of like saying the solution to poverty is just to give poor people money. It's so simplistic and naive.
@@SeraphsWitness what the hell are you talking about? you can find 1000s of vids of people here on youtube who live in their cars because they lost everything because of medical bills or because they lost their job. No one is saying to give free money to people, just for the state not to take it from those who cannot even provide for themselves. Taxation is already bad when you can afford it, imagine the absurdity of the state charging you taxes while at the same time telling you you need to apply for social programs, just stop taxing the hell out of people in the first place, OR make it legal for people to live like gypsies
". . . it is the value of the improvement, only, and not the earth itself, that is individual property. Every proprietor, therefore, of cultivated lands, owes to the community a ground-rent (for I know of no better term to express the idea) for the land which he holds. . . There could be no such thing as landed property originally. Man did not make the earth, and, though he had a natural right to occupy it, he had no right to locate as his property in perpetuity any part of it; neither did the Creator of the earth open a land-office, from whence the first title-deeds should issue."
-Thomas Paine (Agrarian Justice)
Researching your link, I get the following from the Hoover Institution:
Friedman, Milton. "Is Tax Reform Possible?" Milton Friedman Speaks. Address given at the Americanism Educational League 51st Anniversary Dinner, Pasadena, CA, February 6, 1978.
Thanks!
Does anyone know if Milton Friendman elaborated more on property tax? As far as where the line should be drown? I greatly struggle with property tax. It is almost a forced way to push people to make money.
Milton Friedman advocated for a land-value tax, which is more different than a property tax since the value of your home is not factored in how much taxes you pay, it just taxes the overall unimproved value of the land.
Ergo, the people who would suffer the most in this tax system are people that buy up land and choose to do nothing with it - basically treating it like an investment.
@@nickzakrath7080 - Thank You for your reply. I will look up his Land-Value tax idea. I like what you have written.
I am of the opinion that a one time tax is ok (commercial tax), but an annual tax on property against private family home is not good for freedom. I do not know how to properly articulate my thought.
Thank you for your help.
Property tax is wrong because it is a rental cost on your property. It means you don’t completely own the land. It can be taken away when you don’t pay the tax.
What happens if a business owner refuses to submit to a compulsory sales tax audit? Do tax officials simply shrug their shoulders and walk away? Or do men with guns eventually show up and confiscate his business -- i.e. his "property"?
A nonviolent response from the government could be to stop protecting people who hasn't paid for the protection service the government provides. Simply say "I will not defend you unless you pay for the protection service. It is voluntary to use this service." Like it works in this scenario:
th-cam.com/video/8kPyrq6SEL0/w-d-xo.html
Probably the same as when you don’t pay for your taxes
It’s fucked up
@@BenjaminGustafssonYou just described the Mafia
I have always been a huge Friedman fan, but this is one of the very few subjects upon which I disagree. The problem with property tax is not that it must be paid in a large lump sum, it is that it is a tax levied against something which has already been bought and sold, and which is therefore not in active play commercially -- much like unrealized capital gains. The case for higher sales tax (and particularly a high luxury tax) at the cost of elimination of property tax is a strong one. I am disappointed that Friedman did not see it this way.
Milton Friedman advocating for Georgism? What is he some sorta socialist
Georgism is certainly not socialism. Many georgists, in fact, a fervently in favor of private enterprise
+C. Lee
+Freitag T15
I'm pretty sure he's being sarcastic. Sadly, there are many right-wingers that think this way
Adam Smith argued much the same case for the taxation of the rent of land as did Henry George.
@@nthperson Adam Smith was employed by his local lord though, so was forbidden from mentioning it. This idea would work around that fail: www.lvcs.co.uk
@@Robin-Smith Smith is pretty clear in 'Wealth of Nations' even though he did not support Turgot's broader argument that rent should be the only source of public revenue. One reason Smith might not have felt pressure to defend the private appropriation of rent is that his book would not have been read by the general public. Few such books were affordable to any but the relatively well off.
Tyvm milton freidman agrees with me
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How can you ever own your property if you never stop paying for it?
Savvy Savages You never paid for the property in the first place. You paid for the location.
plus.google.com/+BenjaminGustafsson/posts/VMbob5tiivi
Then why are you being taxed for something you didn't pay for?
Because I didn't pay for it (closeness to schools, jobs, customers). If everyone had paid for the services and benefits they receive from their surroundings we wouldn't need taxes.
Allodial title !!
Replying to a very old comment but it struck me as extremely bizarre. Of course the property owner paid for the location; the previous owner had to be convinced to give up the same location. If someone valued the location of a property even higher, they would bid the property even higher and they would be the ones who bought it. "If everyone had paid for the services and benefits they receive from their surroundings"
His flat rate income is his Negative Income Tax which he explains in his book "Capitalism and Freedom" and the Welfare State episode of Free to Choose.
BOY that man was a nervous wreck lmao look at him shifting and jittering lol
"but if you wanted to reduce the unpopularity of the property tax, the way to do it would simply be to provide for an effective method whereby it could be withheld at source, in small payments and that would eliminate a large part of the objection to it."
Perhaps a lump sum tax when you buy or sell property and that's it.
Don't most people pay their property taxes in installments through their mortgage escrow?
It’s based on the value of the property and not the value of the land.
*A flat rate tax is NOT a fair tax.*
Because it would mean the bigger you are, economically, the less in % of your output you would be paying in EFFECTIVE tax rate context, aka something you could turn around to give you a competitive edge to squeeze out your competitors in an anti competitive manner until your field of bis became ether a oligopoly or monopoly.
Progressive taxation prevents this (Edit: Lowers the impact, you need other regulation also, but that is a separate subject). While also enabling those at the middle and down, aka the majority and most likely "you" as well, to pay a overall lower tax rate. Which also benefits the domestic economy because MORE people will have a higher level of buying power than they otherwise would have, which in turn aids in RETAINING domestic demand for supply, which drives bis!
To put it another way. What sells more toilet paper? A rich guy with a tax cut or progressive taxation that allows 2 million more people to also afford it... Yeah, rich people dont wipe their A anymore just because they had a huge tax cut and the same goes for most other commodities.
Lastly, if you had a realistic flat tax rate, aka one that would balance the budget of the government and not be a "make believe rate" that resulted in a none functioning nation that would be self annihilate or absorbed by other etc. "You", aka one among the majority again, would guaranteed by paying MORE in taxes than you do now. Because that is the flip side of NOT having progressive taxation. The middle and down pay MORE!
Would Friedman be considered a geolibertarian for this?
Eh, kinda. The problem is he doesn't agree with the advocacy of the LVT because of the difficulty in getting political support for implementation. He believes it's the 'best' tax, but not necessarily the most politically feasible.
No. He said that although he agreed with Henry George in many respects, he was not a Georgist.
Taxation is theft. It is about the involuntary redistribution of wealth which is merely a subtle way of saying theft.
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It’s the membership fee of country. Stop trying to live in an country for free you filthy commie.
Civics really needs to be taught in school as this just feels like theft. What are property taxes used for vs what rates are used for?
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Those taxes go to the pockets of politicians.
It’s just organized crime is all it is
That’s what he means
Most property taxes go to schools
People mostly blame the banks and their sub prime and exotic financing for all the foreclosures, especially back in 2008. I have to believe that property taxes also played a role. It's quite a significant expenditure but it's usually only noticed by people who don't escrow. I didn't grasp how large of a tax it really is until finally paying off my mortgage. Holy cow, taxes and insurance now are about the same as principal and interest!
The sub prime bubble happened because banks gave out loans they KNEW people couldnt afford. Then in turn ALSO securitized the loans into bonds packages (a group of loans, sold to speculators, similar to stocks in function) they bet against the customers in the bonds security market (similar to stock market, but for debt). In short, the banks setup their customers to fail because they had a financial interests in customers NOT being able to pay their debt.
In USA, which had done what Friedman supported, aka deregulated banking, such was LEGAL.
@@Lobos222 yes, like I said "exotic financing" was mostly responsible for the crash of 2008. Negative amortization, interest only, ARM and such. Most of these borrowers weren't getting 30 year fixed rates.
@@Lobos222 property taxes played a significant role too.
@@jasonpatrickries No, you are ignoring the highway, by focusing on the pot holes.
To use an analogy, did Saddam Hussein lose against the US because hes main battle tanks were 60s era tech or because hes whole military was outdated? One could say that their 60s era tanks "Had an impact" as well, but THAT would DEFLECT from the MAIN cause!
@@Lobos222 I guess we have to agree to disagree. I'll try and follow up in a couple years after we find out who is right.
Look up the grace commission report
Dead on. No withholding for property tax means we knowingly pay it. I would also say because it is a wealth tax. We are paying a tax on something we already own. Not income or an item received during the tax year.
Need to get rid of land tax IF owner occupied.
Milton Friedman has passed away now, but he's totally wrong about the property tax. People buy property and spend their lives to secure their future, but Property Tax says that you don't own your land. Let's take Mr. Friedman's house away from him and see how he feels. The other part of taking property tax is that the government can raise the value of your property to a point to where you can no longer pay the taxes, then the government sells everything that you own and throws you into the street. This is a crime against humanity itself. Let's take the property of the Judges who sign TAKE NOTICES and see how fast that they scream. Taxing property is a crime, it is theft, it is extortion and it means that you own nothing, you just rent what you have. Oh, Milton Friedman is a moron and doesn't know the truth, he has money in his pocket and he doesn't see what the rest of the country is doing when they get their tax notices. Now we have had 70,000 manufactures that have left the country. So where is the tax money going to come from. Sorry, if you lost your job because your company moved overseas, you are going to lose your property. Property TAX is a crime and we need to put the people who are pushing the property tax in jail. Sorry, that means the judges and politicians too, they are against the intent of the Constitution and against every American because they can just, as a whim, raise your taxes so high that they take everything. C. Jeff Dyrek, Disabled Vet.
Correction. Land tax says that you don't have to pay as much for the land when you buy it (because you know that you always have to pay the land tax). This means: You don't have to pay interest on a massive mortgage. Actually, you pay less (interest + land tax) when the land is taxed. And the manufacturers don't have to be taxed. They don't leave when they are free from paying taxes. Less unemployment. Less taxes.
I disagree with you about the property tax. Property tax is the most discriminating law in the nation. It's not the big checks that people have to pay out, it's the fact that Property Tax only penalizes the people who are disabled, who lose their jobs, who have extreme medical bills or those whose whose lose a spouse to name a few. Property Tax adds a 3% interest penalty every six months increasing the interest 3% every six months until the rates are usury rates. These laws make it harder for a person to pay the tax and makes it easier for a tax buyer to TAKE your property for about ten percent of the real value. The Constitution says that the states may levy a income tax, but no other taxes are mentioned. About property, the Constitution says that the government may take your property under eminent domain, however, the government must have a reason to take the property, to build a military plant, a new highway or other type of public project. Once the decision to take your property has been made, the government must use due process to take your property, due process means that they must take you to court in front of a jury. Then the government, once it has decided to take your property, needs to pay you a fair market value for the property. Now that your house has been sold, the property has to go to public domain. In other words, a rental company cannot buy your property and then use it as rental property, the property MUST go to PUBLIC DOMAIN. These rules were put in the Constitution just so that Extortionist cannot take your property. That's right, property tax is extortion.
What about the penalties involved around Property Tax. Well, first of all, they take your house and your property, throw your personal property in the street and leave you with no home and no place to go. What if you're sick or disabled or you have no money, This sure seems like cruel and unusual punishment for people who are sick. As soon as a person gets sick or disabled, the tax man is happy because they don't want your money, they want your property, there's big money in TAKING your property for pennies on the dollar. Just look on the web and see how many people are selling get rich courses all based on the misfortune of the disabled property owner.
Speaking about property owners, do we really own our property if it can be taken away for just a few thousand dollars. No! I have received a TAKE NOTICE and there was never even a letter to me that this was going to happen, NO DUE PROCESS of LAW. The letter said that This Property Has Been Sold. This is past tense. This means that I had no say so what-so-ever that my property was to be sold. This really means that the property did not belong to me ever, and does not belong to me now, even though I paid for it in full. This also really means that the buyer is responsible for the taxes on the property since the TAKE NOTICE says that the property HAS BEEN SOLD.
Tell me this, why do people buy property anyway. What I was taught in school is that the first third of your life you go to school so that you can get a good job. The second part of your life you work a regular job to pay for your house and secure your future. Once the house is paid off, this is the third part of your life. The house gets paid off and you have security in case that you have no other income. The Property Tax is totally against all of these ideas. Property Tax is Extortion.
When you take out a loan the contract says exactly what will happen if the loan goes into default. Property Tax never has a signature on any kind of contact and doesn't tell anyone that they will lose everything if they don't pay their taxes. The property tax code is EXTORTION. It insures that if you get sick that someone will be able to buy all of your property for pennies on the dollar. Property Tax is Theft. It is discrimination against the sick and disabled.
Just think, here in McDonough County the average tax is about $1600 per year. Did you know that at a single night time football game that the light bill is about that much? That's absolutely the truth. So to play a high school football game, they will take your house from you. Did you know that the average tax accessor makes between $50,000 to $90,000 dollars per year. Look at how many homes are taken away just to pay the accessor who is stealing your property.
The bottom line is that Property Tax is Extortion, Discrimination, Usury and just plain a criminal act that is against the Constitution and against every bit of morality that anyone can think of. Taking your property is against the law. C. Jeff Dyrek, Disabled Vet.
Thank you, I will watch this again.
It is the LVT tax (which I agree with him on).
I disagree with the income tax.
Would choose sales tax over income tax.
I am for a sales tax as you have said, and an internet sales tax too. With the sales tax, as opposed to an income tax, the people who spend a lot money, pay a lot of money. People who are consecrative, don't pay much tax at all. Property Tax is Extortion, if you can't pay it, they hurt you severely and leave you with absolutely nothing.
An LVT taxes the land you own ( think of it as a fee for exclusive use of your land) as apposed to the current property tax which also taxes improvements upon said land (such as your house.) Lastly, the constitution says very little about the rights of state and local governments outside amendments to it, the current property tax scheme would only be unconstitutional at the federal level.
@@mattbalfe2983 It is unconstitutional at the Federal level and the federal level is the supreme law of the land.
What a dance
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Eliminate the property tax, eliminate the federal department of education.
Education It’s obviously already been eliminated 😂
No income and property tax
I don’t remember signing any papers that say fork over about 10,000 $ a year against my will
Were you born at the age of 18? No, did your parents or legal guardians get a birth certificate that validates your citizenship and they accepted? Well, there is your "contract", smart A. Citizenship grants both rights AND responsibilities, one being paying your taxes. However, no one is forcing you to stay within the PRIVATE NATION OWNED BORDERS of your current nation. So if you dont like it, you are free to leave and live in some unclaimed part of the world without any "civilization stuff" you didnt "sign for" and there you can avoid paying income tax on caveman like foraging for food.
Property taxes is an absolute scam
It's not a property tax, it's a land value tax. Only the value of the land is taxed, the improvements themselves are not taxed.
@@BenjaminGustafssonJew
Why I'm leaving the us
How people got used to paying property taxes?
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People at the top always hold the people at the bottom to a double standard!
There is no such thing as a Great Thinker who says "we need taxes".
Apparently, there is such a thing because you just heard one 🤔
Unless you're an anarchist, how do you propose to fund government?
yeah, but a great pragmatist, now go fuck yourself
MLKJ was a dumbass right guys?
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Property tax is the worst
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