LVT has never been introduced in Britain, although the idea has been discussed at both central and local government level, and on several occasions almost been implemented. An early history may be traced and summarised chronologically through the following events and publications:
1662. Publication of The Treatise on Taxes and Contributions by William Petty (1623–87), economist, scientist and philosopher, in which he mentions Land Taxe as a means of raising revenue.
1692. Amongst a package of other taxes on personal estate, movable goods and income from public office, a Land Tax was introduced (which astonishingly endured until 1963). Initially this tax was based on annual rental values, but after the first valuation no more were carried out. From 1698, quotas based on acreages at the 1692 values were established for each county and remained fixed thereafter. Consequently the amount collected diminished progressively from 35% of total revenue at the start to 17% in the 1790s and 11% by the 1820s. By 1733 that part of the tax on personal income and moveable goods had proved too difficult to collect and was largely abandoned, so the tax became almost entirely based on the revenue from land. The tax became gradually overshadowed by other taxes but continued into the 20th century, eventually raising no more than the cost of collection. It was finally abolished in 1963.1
1758. Publication of Tableau Economique by François Quesnay (1694–1774), French economist, physician to Louis 15th and co-founder of the Physiocrats. The Physiocrats considered that all wealth was derived from the agrarian production of land and proposed a single tax on land only.
1775. Lecture on land reform delivered to the Newcastle Philosophical Society by Thomas Spence (1750–1814), pamphleteer and revolutionary. In his lecture he proposes the formation of parish corporations, which would collect the economic rent of land in place of all other tolls and taxes.
1776. Publication of The Wealth of Nations by Adam Smith (1723–90), Political economist and philosopher. Smith is generally considered to be the father of classical economics. In his book he advocates the taxing of ground rents.
1781. Publication of An Essay on the Right of Property in Land by William Ogilvie, (1736–1819), Scottish landowner and classical scholar. In his treatise Ogilvie states ‘the gross amount of property in land is the fittest subject of taxation.’
1796. Publication of Agrarian Justice by Thomas Paine (1737–1809), political theorist and revolutionary. In his pamphlet he wrote, ‘Every proprietor owes to the community a ground rent for the land which he holds.’
1817. Publication of On the Principles of Political Economy and Taxation by David Ricardo (1772–1823). Ricardo is credited with identifying the principle of the Economic Rent, or the Law of Rent.
1848. Publication of The Principles of Political Economy by John Stuart Mill (1806–73), political economist and philosopher. In Book 5, Chapter 2, he describes the benefits landlords gain from rents in which ‘They grow richer, as it were in their sleep, without working, risking or economising.’
1879. Publication of Progress and Poverty by Henry George (1839–97), American economist and social philosopher. In his book George finally pulls together all the threads and comprehensively explains an economic system based on land value taxation, which will become the definitive work and will give rise to a worldwide movement.
1891. After the publication of his book, George’s ideas were adopted by the British Liberal party whose policies were formulated and declared each year by the National Liberal Foundation. This was a precursor to the manifestos adopted later by all parties, and an acknowledgement that party members should be allowed to influence policies. Meeting in Newcastle in 1891, the Liberals published their Newcastle Programme, which included rating reform and a ‘just taxation of land values and ground rents.’ This was the first declaration of LVT as a policy by any British political party.2
Smith, Ricardo and Mill were the founders of what came to be known as classical economics, in which land was considered an essential factor of production along with labour and capital and the phenomenon of economic rent was acknowledged. In the late 19th and early 20th century the neoclassical school of economics arose, in which land became considered as a part of capital, and so the significance of land became obscured. This neoclassical school still dominates current economic theory, but is now being challenged by many independent free-thinking economists.3
References:
(1) National Archives talk by Mark Pearsal:
http://www.nationalarchives.gov.uk/documents/land-tax.mp3
(2) https://liberalhistory.org.uk/history/the-newcastle-programme/
(3) Refer to LVT supporters listed on: https://landvaluetaxguide.com/category/supporters/