In the 19th Century, American economist, Henry George proposed the idea of the Land Value Tax and he immediately got opposition from “mainstream” economist because it is pro-community. That opposition continues today, modern economist are the high priest of a political system that is pro-wealth and pro-elitist. They prefer privatization and the exhaustion of all the natural resources. Land is a natural resource because unlike manufacturing more cannot be produced.
One of the easiest ways to generate income for public programs is the Land Value Tax.
Traditional forms of revenue generation are not doing the trick. They are unreliable and not very equitable. Plus the taxes are on the backs of those that can least afford it. This proposal does not stifle the free markets, labor or production. For those reasons the Land Value Tax (LVT) is more than capable of funding government and its programs while not penalizing the people.
Taxes penalize the people, the workers, tax codes reward people for avoiding their tax obligations. The only way to make a government self-sufficient is the LVT. At present the only answers are taxes such as payroll, excise, sales, but the truth is that all taxes and tax schemes that are proposed then passed have done little to help the financial health of a state.
When the LVT is used then most other taxes can be eliminated altogether. It will revive the housing sector, the production sector and the consumer sector. For when the people have more cash on hand they will spend it, something that is not going to happen if there is an increase in taxes. And the increase will do little to bail out the government from a monetary meltdown.
The benefits to the community are numerous, among them are: 1) economic–the LVT encourages land to be put on the market at lower prices–will lead to an end to land speculation, 2)–social–the tax revenue will benefit the whole society from education to public works, 3)–logistics–the tax is not easily evaded and easily collected.
The best answer to reviving a community, city or state is to impliment the LVT. Without it there will be constant shortfalls in revenue which will mean more cuts to services to the community. Then other taxes will need to be raised to make up for the shortfalls. The LVT can and will avoid any of this suffering.
A few questions about your proposal:
Are you proposing the tax as a federal or state tax?
How do you see this tax as being different from existing property taxes?
Do you see the revenues generated by this tax as being more or less than those generated by the current tax system which it would replace?
A land-value tax would shift the financial burden imposed by taxes from those earning and spending money to those owning land. How do you see this as being a stimulus to the housing industry?
Since most tax burdens are passed through to consumers, how would implementing a land-value tax effect inner-city renters in apartments occupying high-value real-estate?
Thanks in advance four your thoughts on these issues.
Thanks for your visit Bill…I appreciate your participation.
1–the LVT can be earmarked for local or federal government.
2–it is still a property tax only the land value is taxed, not the improvements. The tax would be higher but on the same hand other taxes can be eliminated.
3–I see it generating more because it could and will eliminate land speculation which holds land out of the market with little or no tax paid. It also be easy to access and collect and it could not be avoided as it is today.
4–Taxes on commodities are usually passed on to the consumer in higher prices. What is to stop landowners from doing the same thing? That is, can a landowner increase the rent charged to tenants so as to pay the land value tax and still collect the same net rent as before?
Remember: land is not produced by labor. It is fixed in quantity and its price is a monopoly price (all the traffic will bear). A tax on labor products increases the cost of those products and this is reflected in the price. If the new price meets consumer resistance, the supply of that product is checked.
But a tax on land does not affect either its cost of production (it is not produced) or its supply (which is fixed). Thus its price is not increased (for it is already all the traffic will bear), and the tax falls directly on the owner. The rent of land is determined by the margin of production and it is a certain amount whether taxed or untaxed. A tax on land is simply a division of the rent between the owner and the community.
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