To be fair, I wasn't implying that it was Georgian or not, simply referring to whether or not it could be construed as being related to income (i.e. the more income you have, the more you make improvements).
> This would help to better distribution of wealth because it would make it difficult for rich people to get richer by just buying and selling (or renting in this case) without providing additional value.
I can't disagree with this more. Typically, real-estate investors bridge a temporal problem between a selling user today, and a buying user tomorrow. If there were no such investors, selling users would be inhibited from realizing the value of their property until another suitable user was ready to purchase the land. This could create a complete standstill in some markets, and cause lots of property owner-users to face major issues in hard economic times, when selling their property could get them well over it. There is an entire section of town where live (Houston, EaDo) where this temporal bridging allowed a lot of industrial users to move out of the city to less expensive locales, and then eventually that area to turn into more residential and mixed-use because the industrial users were able to sell it at a reasonable price when they needed to, and the investors took the risk of holding on to the property for years (in some cases decades) until the market demanded more value for the area.
There are many that would argue (myself included) that the taking of risk by the investor to capitalize the user-seller today, even if there is no existing user-buyer, is providing additional value in the market. Without going into meta-discussion here, much of the underpinnings of our entire system are based on the recognition of value in resolving these sorts of temporal problems.
Moreover, making it more difficult to rent property will do more harm to the poorest amongst us, who can least afford to outright buy it. Most of the rental houses I've seen available are not owned by extremely wealthy people (for good reason: rental houses are generally poor performers in regards to ROI), but instead by middle-class families, who choose to rent out a house rather than sell it. There are, yes, rental blocks of apartments - but I would argue these are the kind of activity you want, most of the large ones I know of are owned by REITs, who tend to pool a large amount of money from a large amount of people (mostly institutional ownership, and IRS rules limit the individual ownership in a REIT) to purchase, develop, and then operate land. If there is no possibility to continue to rent land once developed, then what purpose is there to develop it?
The state I live in is Texas.
If you want to create better distribution of wealth, preventing people from investing in real-estate seems like a very rough and roundabout way of achieving this. Why not address the low-hanging fruit first, like incentives from the government. Here's one I'd start with: extend the time to hold on capital gains (and while we're at it, take a good look at carried interest and washing rules for tax-loss harvesting!), and give a refundable tax credit for putting money in qualified college savings accounts.
The government could serve as the temporal bridge between a selling owner and the future buyer. At the least it could simply stop collecting the tax once the owner stops using it even if a buyer hasn't been found yet. The government could even guarantee the immediate purchase of the land. I don't think this would be risky for the goverment because this taxation system, I think, would help to keep a fair value on the land.
It would still be possible to continue renting land once developed, but people that want to do that should think about ways to provide an added value that they can charge for. The real-estate business would certainly change with this new taxation.
I agree that there may be small changes that could help to create a better distribution of health, but I don't think they would be so effective. Besides, things like what you suggest, even if helpful, they complicate the government even more, with more laws, more incentives (which I think distort the reality, sometimes causing more problems than solving them), and another aspect that I like of Georgism is that it simplifies things a lot (there would be only a single tax).
> This would help to better distribution of wealth because it would make it difficult for rich people to get richer by just buying and selling (or renting in this case) without providing additional value.
I can't disagree with this more. Typically, real-estate investors bridge a temporal problem between a selling user today, and a buying user tomorrow. If there were no such investors, selling users would be inhibited from realizing the value of their property until another suitable user was ready to purchase the land. This could create a complete standstill in some markets, and cause lots of property owner-users to face major issues in hard economic times, when selling their property could get them well over it. There is an entire section of town where live (Houston, EaDo) where this temporal bridging allowed a lot of industrial users to move out of the city to less expensive locales, and then eventually that area to turn into more residential and mixed-use because the industrial users were able to sell it at a reasonable price when they needed to, and the investors took the risk of holding on to the property for years (in some cases decades) until the market demanded more value for the area.
There are many that would argue (myself included) that the taking of risk by the investor to capitalize the user-seller today, even if there is no existing user-buyer, is providing additional value in the market. Without going into meta-discussion here, much of the underpinnings of our entire system are based on the recognition of value in resolving these sorts of temporal problems.
Moreover, making it more difficult to rent property will do more harm to the poorest amongst us, who can least afford to outright buy it. Most of the rental houses I've seen available are not owned by extremely wealthy people (for good reason: rental houses are generally poor performers in regards to ROI), but instead by middle-class families, who choose to rent out a house rather than sell it. There are, yes, rental blocks of apartments - but I would argue these are the kind of activity you want, most of the large ones I know of are owned by REITs, who tend to pool a large amount of money from a large amount of people (mostly institutional ownership, and IRS rules limit the individual ownership in a REIT) to purchase, develop, and then operate land. If there is no possibility to continue to rent land once developed, then what purpose is there to develop it?
The state I live in is Texas.
If you want to create better distribution of wealth, preventing people from investing in real-estate seems like a very rough and roundabout way of achieving this. Why not address the low-hanging fruit first, like incentives from the government. Here's one I'd start with: extend the time to hold on capital gains (and while we're at it, take a good look at carried interest and washing rules for tax-loss harvesting!), and give a refundable tax credit for putting money in qualified college savings accounts.