Land Value Tax

Henry George was confused when he learned that rapidly growing cities with excessive wealth contain greater poverty than most less-developed places. His take was that too much wealth was going to landowners via rents and that the problem could be solved simply by putting a tax on land value. In "Progress and Poverty", George tried to explain why poverty exists even when there are tremendous amounts of wealth in cities. He saw how technological and social advances increased the value of land and how the amount of wealth demanded by owners increase by way of rent. As an alternative to this problem, he proposed a single tax on land. George argues that a land value tax would give landowners an incentive to use well located land in a productive way, thereby increasing demand for labor and creating wealth. This shift between owners and laborers would raise wages and ensure no one need suffer poverty. According to his theory, land value tax would end urban sprawl and reduce homelessness significantly.

Switching to land value taxation would require a major public education campaign and would face significant opposition. But as with all tax systems, the land value tax has its pros and cons.

Pros

• Property owners can typically anticipate lower tax bills with the land value tax
• A land value tax is based solely on the value of unimproved land
•  Investors have no incentive to allow land to sit idle
• Homeowners can invest in their properties and make improvements to them without worrying about an increased tax bite

Cons

• Fewer taxes paid by property owners means less revenue for municipalities and counties
• Investors may sell and unload highly taxed urban land through the land value tax
• Options for having control over taxation is significantly reduced
• Land value tax is typically higher than a traditional property tax

https://en.wikipedia.org/wiki/Land_value_tax

https://localhousingsolutions.org/housing-policy-library/land-value-taxation/

https://www.thebalancemoney.com/what-is-a-land-value-tax-5205929

 

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