Wealth and Want
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Nic Tideman:  Applications of Land Value Taxation to Problems of Environmental Protection, Congestion, Efficient Resource Use, Population, and Economic Growth
Justifications of Land Value Taxation
Land value taxation is sometimes justified on the ground that, unlike almost all other sources of public revenue, a tax on land value does not impose an excess burden on an economy. This argument can be found in the writings of the Physiocrats, Adam Smith, David Ricardo, and numerous modern writers. It is based on the fact that, with a properly administered tax on land value (unlike other taxes), it is not possible for a person to lower the tax that is due by being unproductive.

If people were concerned only with efficiency, this would be a fine reason to use land value taxation. But people are also concerned with issues of justice, or fairness. And so the question arises of whether taxing land values is fair. The fairness of taxing land values is generally defended on the basis of the postulate that natural opportunities are everyone's common heritage; collecting the value of exclusive use of these opportunities and using the proceeds for public purposes is a way of sharing the value of these opportunities while retaining the efficiency of private control of resources.

The idea that natural opportunities are everyone's common heritage is often defended with religious language. John Locke said:

Whether we consider natural reason, which tells us that men, being once born, have a right to their preservation, and consequently to meat and drink, and such other things as nature affords for their sustenance, or revelation, which gives us an account of those grants God made of the world to Adam, and to Noah, and his sons, 'tis very clear that God, as King David says, Psal. CXV. xvi. has given the Earth to the children of men, given it to mankind in common.

John Locke did not advocate land value taxation. Writing in about 1690, he said that there was so much unclaimed land in America that no one could properly complain about the private appropriation of land in Europe. Writing nearly 200 year later, when it was becoming impossible for people to appropriate good unclaimed land in America, Henry George said:

If we are all here by the equal permission of the creator, we are all here with an equal title to the enjoyment of his bounty -- with an equal right to the use of all that nature so impartially offers. This is a right which is natural and inalienable; it is a right which vests in every human being as he enters the world, and which during his continuance in the world can be limited only by the equal rights of others. There is in nature no such thing as a fee simple in land. There is on earth no power which can rightfully make a grant of exclusive ownership in land. If all existing men were to unite to grant away their equal rights, they could not grant away the right of those who follow them.  ... Read the entire article


Fred E. Foldvary — The Ultimate Tax Reform: Public Revenue from Land Rent

We still need to judge whether it is fair for only landowners to pay the taxes, rather than to spread the burden on all who get income or spend money or have wealth.

Natural-law philosophers such as John Locke have reasoned that all human beings have a natural ownership right to their labor and the products of that labor. The fundamental equality of humanity means it is fundamentally wrong for some to take away the labor done by others.31 That notion is almost universally recognized today with respect to slavery, and some folks are beginning to recognize that the current tax system—which taxes our earnings and taxes how we invest or spend those earnings—also violates man’s natural right to the fruits of his labor.

If taking the fruit of one’s labor is fundamentally unjust, how can a community raise the monies needed to build essential infrastructure and provide public services? Land value taxation takes into account not only the value of the land due to nature, such as soil and climate, but also the great increase in land values that result from population, commerce, security and other civic services, and public works—elements beyond the activity of the property owner. The windfall increase in the rental or land value of the land, contended Henry George and others, is a surplus that can be tapped by the community.32

Those suggesting positive consequences of shifting taxation to rent have been accused of exaggerating its beneficial effects.33 Freedom from punitive taxation is not a panacea, but the infliction of arbitrary costs on enterprise and the skewing of market signals such as prices and profits is indeed a universal and major cause of economic woes. It is not an exaggeration to propose that removing these would have many beneficial results, just as one’s health improves considerably if one stops taking poison. ... read the whole document




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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper