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. When the houses are built the high cost of land acquisition is contained in the final price, hence the high house prices, of which a large proportion is the cost of the site. Continue reading
- Economic Rent Collected 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. This rent varies in accordance with Ricardo’s law, which 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). Continue reading
These are some of the routine objections raised by opponents of LVT:
- LVT is a form of wealth confiscation.
- The ‘Poor Widow’ objection.
- Separate valuation of land would be too difficult.
The following are my responses: Continue reading
It is suggested that the most formidable obstacles in any move to introduce LVT would be:
- Resistance from landowners and speculators.
- General resistance to ‘wealth taxes’.
- Lack of Understanding of the principles of LVT.
- Political resistance.
- Academic resistance.
1. Resistance from Landowners and Speculators Continue reading
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
In the preceding item it is suggested that some taxes should be eliminated or reduced and others maintained. In item1.03 on basic principles, it is suggested 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 item brings these strands together under the question of which taxes might be maintained under a system where LVT is the principle tax? Continue reading
Apart from the funding of public services a great deal of taxation is related to the funding of schemes and benefits that come under the heading of welfare, designed basically to help those on low incomes. The list below shows 14 different forms of benefit (including the state pension). Some of these are aimed at the alleviation of actual poverty, others are allowances available to all income groups; it is quite difficult to know where poor relief ends and welfare begins, or indeed how to define welfare. Continue reading
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:
- Wealth, 2. Land, 3. Property / Real Estate, 4. Earnings, 5. Wages, 6. Money, 7. Capital, 8. Economic Rent, 9. Rentier
‘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