Land Value Tax
Innovative taxation methods are required for raising public revenue in a fairer way. It can be argued that taxing income (business and individuals) act as an disincentive to work. One of the more innovative and fairer ideas being discussed is the taxation of ‘Land’ instead of ‘Income’.
The Campaign Group LAND VALUE TAX describes this as follows.
- Land Value Taxation is a method of raising public revenue by means of an annual charge on the rental value of land.
- Although described as a tax, it is not really a tax at all, but a payment for benefits received. It would replace, not add to, existing taxes.
- Properly applied, Land Value Tax would support a whole range of social and economic initiatives, including housing, transport and other infrastructural investments. It is an elementary fiscal measure that would go far towards correcting fundamental economic and social ills.
- The value of every parcel of land in Britain would be assessed regularly and the land value tax levied as a percentage of those assessed values.
- “Land” means the site alone, not counting any improvements. The value of buildings, crops, drainage or any other works which people have erected or carried out on each plot of land would be ignored, but it would be assumed that all neighbouring properties were developed as at the time of the valuation; other things being equal, a vacant site in a row of houses would be assessed at the same value as the adjacent sites occupied by houses.
- The valuation would be based on market evidence, in accordance with the optimum use of the land within the planning regulations. If the current planning restrictions on the use were altered, the site would be reassessed.
- A NATURAL SOURCE OF PUBLIC REVENUE.
- A STRONGER ECONOMY.
- MARGINAL AREAS REVITALISED.
- A MORE EFFICIENT LAND MARKET.
- LESS URBAN SPRAWL.
- LESS BUREAUCRACY.
- NO AVOIDANCE OR EVASION.
- AN END TO BOOM-SLUMP CYCLES.
- IMPOSSIBLE TO PASS ON IN HIGHER PRICES, LOWER WAGES OR HIGHER RENTS.
- AN ESTABLISHED AND PROVEN SYSTEM.
Is it fair…
Land (unlike goods and services) has no cost of production. If an ample supply of land of equal desirability were available everywhere, there would be nothing to pay for its use. In reality land acquires a scarcity value owing to the competing needs of the community for living, working and leisure space. Thus land value owes nothing to individual effort and everything to the community at large. It belongs justly and uniquely to the community. Conversely, the reward for individual effort can belong only to the one who earns it, to spend, save or give away as he or she may see fit.
Because of differences in positional advantages, fertility or natural resources, some locations are more desirable than others. Demand for access to these features gives land its rental value. Land Value Taxation, being assessed on these values, is fair in its incidence.