10. The Economic Rent in Advance

As explained in the basic principles of part 1 the economic rent of land arises inexorably and is collected by whoever is in control of the land, whether an individual or a government. One interpretation of Ricardo’s law of rent states:

‘The rent of land is determined by the excess of its product over that which the same application can secure from the least productive land in use’ (1).

In Ricardo’s time theories were based on an agrarian economy where fertility was the principal factor in determining productivity and the corresponding land value. In later years, with the urban growth of cities, productivity became more related to location within an agglomeration, but the principle of the economic rent still applied.      Continue reading

12. Obstacles to Implementing LVT

It is suggested that the most formidable obstacles in any move to introduce LVT would be:

  1. Resistance from landowners and speculators.
  2. General resistance to ‘wealth taxes’.
  3. Ignorance of the principles of LVT.
  1.  Resistance from landowners and speculators.

It is understandable that landowners would resist any system that would reduce the benefits they derive from the ownership of land through the collection of the economic rent. LVT would of course divert this collection away from landowners and towards the public purse.    Continue reading

13. The Single Tax Issue

Amongst economists who have actually heard of land value tax (and a surprising number haven’t), it is synonymous with the ‘Single Tax’, for that was seen as a main characteristic in the early days of its manifestation.  In his book, Progress and Poverty, Henry George proposed that the Land Value Tax should be the only tax.  This single tax idea has been identified with the LVT movement ever since, and is still insisted upon by the purists, but in recent years it has been questioned more and more.  The purists are those ‘Georgists’ who will not brook any modification of the original strictures set out by Henry George.       Continue reading

14. Definitions

The main purpose of this website is to communicate the ideas of LVT to those with no special knowledge of economics, and therefore I have used terms and meanings as they are generally understood in common usage.  However there are in certain cases definitions used by economists that differ, which need to be explained.  The items covered are:

  1. Wealth,   2. Land,    3. Property/Real Estate,  4. Earnings,   5. Wages,   6. Money,  7. Capital.

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15. Quotations

‘In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago’                                                                                      Milton Friedman (1912-2006):  American economist and Nobel laureate.

 

‘The economic case for a Land Value Tax is simple and almost undeniable. Why then do we not have one already? Why hasn’t it been adopted widely in the western world? Even more puzzling is that, right now, as western economies struggle with the global financial crisis, why isn’t this form of taxation being seriously considered as an alternative?’                                                                        Sir James Mirlees (1936-2018): Nobel economics Laureate.      Continue reading