What would the effects be on a nation implementing a land value tax?

And we can add Japan mid-'90s to the list. They had a real estate bubble which burst and stagnant growth since.

BlogImage_AsianTigers_051817.jpg

GDP per capita

https://www.stlouisfed.org/on-the-economy/2017/may/tigers-tiger-cubs-economic-growth

Notice how the blue line for Japan flattened out.
This stagnation can be more attributed to a stagnant population growth throughout the period and a rapid average aging of the population. Another factor is that their productivity growth is limited by technology as it has mainly stayed as productively possible. Sure the GDP per capita of Hong Kong and Singapore are high attributed by land value, but that doesn’t mean it’s population is as well off as Japan’s.
 
Mill is completely wrong. Suppose I have a stretch of land, and I have to pay tax on the value of it, and I rent it out-- I would just include the costs of taxation in the rent. Same way that a VAT isn't a tax on store-owners, but a tax on customers: the tax burden just gets included in the price. Land value tax will in practice just be an example of that same principle, but applied to rent instead of retail prices.

Land is a fixed supply and so rent cannot be passed on. Optimising for profit will still lead to the same prices.

VAT is not "passed on", maybe in America where you don't have taxes on prices but in the rest of the world the price is set at profit maximisation. That would be the same price regardless of whatever split the cost is. VAT is a tax on consumption not store owners anyway???

The only time you wouldn't see this effect is when firms are not maximising for profit. If they are forced to sell at cost for some weird reason then vat will force them to raise the price

Edit: I recommend reading economic criticisms of lvt and you'll see they focus on externalities, or difficulties of the tax. Not that in a world with 100%lvt all landlords would raise rent until they have no rentors...
 
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This stagnation [relative slow GDP growth in Japan] can be more attributed to a stagnant population growth throughout the period and a rapid average aging of the population. . .
I've heard people talk about the "East Asian Miracle" having multiple factors. It was and is current a period of rapid economic growth from 1960 to present in about eight countries at one point or another. Most of the countries except for Japan have continued to have solid economic growth. Some countries had a surge of population luckily at just about the right time they could absorb it.

In a 1996 article, Joseph Stiglitz talked about multiple factors such as governments playing a complementary role to markets. Thus, neither capitalism nor socialism, and just maybe, a genuine third system. He also talks about how these countries didn't let the financial market "casino economy" (my term) wag the tail of the overall economy. He talks about how these governments learned from regulatory efforts and got better over time, including paying civil workers a good wage. He really emphasizes multiple factors, multiple factors.
SOME LESSONS FROM THE EAST ASIAN MIRACLE
World Bank, Joseph Stiglitz, Aug. 1996
http://documents.worldbank.org/cura...8/pdf/765590JRN0WBRO00Box374378B00PUBLIC0.pdf
 
In the short term, Mill would have a point in his society. You have land, your agricultural product price is set by the market, agriculture tends to take a long time to make changes so its either leave the land or pay the tax. In the long term, I agree with you. What you would do is try to decrease your landholding, then use the cash from the sales to increase efficiency by irrigation and machinery, reduce labor costs and introduce agricultural products that have a higher profit per land size.

Every other plantation owner has to pay the tax too. That means that the market price goes up as every plantation owner will figure it into his costs forcing the price up. The only way it wouldn't is that if the US was a tiny cotton producer or the tax was so high that it would drive cotton planters bankrupt. The first is completely false and the latter is unlikely in the extreme.
 
Since nations have implemented LVT, without rocketing rents, it is possible to forecast the effect without seat of pants economics.

That largely depends on what you set the LVT to. You would expect "rocketing rents" only if the tax is very high and goes into effect very quickly.
 
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