Re: Weirdsister and Georgism

Date: 2010-11-28 10:15 pm (UTC)
You could be as rich as Bill Gates and not pay a penny in taxes, so long as you rented. But why bother? If you were like a lot of rich people, you'd want a mansion in a fashionable neighborhood. You could rent it, or build it on leased ground, if you wished, and then you'd be paying land rent to someone who would then pay the tax office. You could do this, but it might be simpler to hold the land, and pay the tax office directly.

The tax on the land under a big house and yard in a good neighborhood is likely to be much more than the tax on a small lot in a poorer neighborhood. There are studies showing that a land-only tax is much more progressive than the usual land-and-buildings property tax.

Rents would probably not be much, much higher. Land rents already represent the advantage of particular plots of land, so taxes cannot be passed on to the tenant. Suppose you can raise 20 bushels of wheat on an acre of marginal land, available for free, but if you want to rent an acre of more fertile land where you can produce 30 bushels, you have to pay 10 bushels to the landlord. If a land value tax is now imposed, so the landlord has to pay 9 bushels in tax, he cannot charge you 19 bushels in rent. If he tries, you can go to the marginal land, and pay no tax or rent, instead.

The same principle applies to urban land, mineral loand, etc. Land value taxation redirects to public use what is in effect a private tax levied by landowners.

Most people anywhere near as rich as Bill Gates in fact got that way at least partly through owning valuable land or other special privileges, so let them pay the pubic for their enjoyment of those privileges. And let them not have to pay for what they contribute by their own efforts. If you make millions through sales of your CD's, then good for you; you should be free to keep it. If oil is discovered under your land, through no merit of your own, why should you get rich off the royalties?
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