User:Adam/LVT
From Libertarian Wiki
The Land Value Tax (LVT) is a reformed property tax which untaxes improvements on the land (such as buildings) and only taxes the value of the land itself, known in economics as rent. It is advocated by Georgists and geolibertarians, for both ideological and utilitarian reasons, as a source of government revenue. Unlike other taxes, an ideally implement LVT should not distort decisions about the allocation of resources in the free market. This is especially appealing in contrast to other taxes which reduce the natural incentive for investment and hard-work.
In contrast to a system of absolute private land ownership, the LVT is expected to eliminate land speculation, where land is held out of use in the hope that be sold for a higher price in the future.
In the context of a severely limited government, LVT would be sufficient to fund a Citizen's Dividend (CD), an annual payment made to each citizen, similar to the Alaska Permanent Trust Fund.
by itself is claimed to have several benefits including elimination of land speculation, reduction or elimination unemployment, increase wages, encourage productivity, . It is also seen by geolibertarians as upholding an equal right to land, which they consider to be consistent with the principle of self-ownership.
Benefits
The primary effect of the tax would be to end land speculation, where land is held out of use in order to accumulate in value. This would increase wages and reduce unemployment by encouraging landowners to put their land to more productive use, which would increase the demand for labor. It would free up more land for those who need it, which would reduce the urban sprawl that currently harms the environment and leaves cities strapped for revenue.
Aside the benefits of ending land speculation, the Land Value Tax is also seen as the most fair system of taxation. It taxes unearned income from land rent, rather than earned income from labor and capital. It is cheap and efficient to administer, since land is an asset that cannot be hidden. It does not affect the price of consumption goods or harm productivity. And finally, the burden of the tax falls directly on the landowner, and cannot be shifted to others.
As long as the tax is less than the rental value of the land, the only market effect of the land tax is lower the sale price of land, since the buyers will be less willing to buy land when enjoyment of its use will require continual payments to the government (rather than to the previous owner or the bank with interest). When combined with a citizen's dividend, the maximal land tax produces a strong incentive to reduce government waste, as such waste immediately affects each citizen at an equal dollar amount. More stringent limitations on government activity is imposed by using the land tax as a single tax. The government has a clear limit placed on its revenues. It should not be able to borrow money, as expenditures should be low enough that any unforseen expenses can be funded by a reduction of the citizen's dividend that year (which will essentially act as a flat tax on every citizen, meeting any reduction with strong political opposition unless the people are convinced that the sacrifice is necessary.)
