10. Land Banking

Land banking, also known as land hoarding, is nothing new but has become a more noticeable issue in recent years due to the increasing housing problem, which is seen as largely a matter of supply. House builders complain of the lack of access to––or the excessive cost of–– building sites, as the main reason for their inability to deliver the houses required. The theory is that building is restricted by the high cost of land acquisition––which is reflected in the final price, hence the high house prices.                 Continue reading

11. Other Economic Rent Collection Methods

  1.  Economic Rent Collected in Advance

As mentioned 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. This economic rent varies according to the productivity on each site, and is known by economists as a ‘differential rent’.                     Continue reading

12. Typical Objections to LVT

These are some of the routine objections raised by opponents of LVT:

  1. LVT is a form of wealth confiscation.
  2. The ‘Poor Widow’ objection.
  3. Separate valuation of land would be too difficult.

The following are my responses:                          Continue reading

13. Obstacles to Implementing LVT

There would be several formidable obstacles to the adoption of LVT.

  1. Resistance from landowners and speculators.
  2. General resistance to ‘wealth taxes’.
  3. Lack of Understanding of the principles of LVT.
  4. Political resistance.
  5. Academic resistance.

1.  Resistance From Landowners and Speculators

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

14 The Single Tax Issue

Amongst economists who know about the land value tax, the term is often synonymous with ‘The Single Tax’, for that was seen as the 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.                 Continue reading

15 Which Taxes?

In Part 1, on basic principles, I suggest that it is better to impose taxes on existing wealth rather than the wealth-creation process, and also that in general direct taxes are more honest than indirect taxes (often described as stealth taxes). This chapter brings these strands together under the question of which taxes might be eliminated, reduced or maintained within a system where LVT plays a significant part.

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16. Welfare

Apart from the funding of public services, a great deal of taxation is related to the funding of benefits that come under the heading of welfare, designed basically to help those on low incomes, or in economic distress for whatever reason. Table 5 below shows 14 different forms of current benefits (including the state pension). Some of these are aimed at the actual alleviation of poverty. Others are allowances available to all income groups.         Continue reading

17. 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, and need to be explained.  The items covered are:

  1. Wealth,   2. Land,    3. Property / Real Estate,  4. Earnings,   5. Wages,   6. Money,  7. Capital,  8. Economic Rent,  9. Rentier

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18. 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