Colander, David wrote:
> It is also very hard to clearly distinguish site value from the structure value in practice, and thus as a practical matter, the Georgian proposals can be difficult to implement, and will cause problems. But in some cases the proprosals make sense as long as one recognizes the limitations.
>   

David, upon what criterion do you judge that the proposals "make sense?" 
That owners of materials that are more inelastic in supply should be 
taxed heavier than owners of materials that are less so? As I understand 
the Georgian proposal, the assumption is not about degrees of 
inelasticity. The proposal is based on the assumption of land's zero 
elasticity of supply. Do you understand Georgism differently?

Also to what extent do you think that elasticity of supply depends on 
time. Your discussion of the patent seems to suggest that you may be 
disregarding the fact that, over time in a real market economy, 
entrepreneurs react to taxes (and other new costs) by developing new 
means of supply and of using existing resources like land. Supply that 
may be inelastic in the short run turns out to be elastic in the long 
run. Does this means that the Ramsey proposal is impractical in the 
sense that long run elasticities cannot be measured?

Finally, on your discussion of having the government negotiate land 
leases, don't you think this is a bit optimistic? Are governments 
ordinarily good (and honest) negotiators? Now if you had said that the 
government should auction a new lease to the highest bidder, government 
inefficiency and corruption would not be a problem. But an auction might 
raise other issues.

Pat Gunning