Tech companies continue to pour into the San Francisco bay area, pushing up housing prices. This has sparked many aggressive protests. Noah Smith, an assistant professor of finance at Stony Brook University, understands how LVT would accommodate existing residents and the wave of incoming entrepreneurs alike.
“What San Francisco needs now is a Henry George Tax. The policy would bring rents down, and thus encourage tech companies and their brilliant employees to keep moving into the city, to keep interacting and mixing and generating the ideas that make the tech world go. At the same time, it would raise the money the city needs to build better trains, run more bus lines, and build more public housing that will benefit the poor and middle class of San Francisco. And it would do it all in a way that seems much more fair than other kinds of taxation.”
Harvard professor Edward Glaeser has written an article praising New York City Mayor Bill de Blasio for implementing a higher tax on vacant land. Glaeser also discusses the significance of Henry George.
Jesse Myerson makes the case for five reforms that young people should be fighting for. His description of land value taxation was among the top five reforms and was quite well done.
“The most mainstream way of flipping the script is a simple land-value tax. By targeting wealthy real estate owners and their free rides, we can fight inequality and poverty directly, make disastrous asset price bubbles impossible and curb Wall Street’s hideous bloat. There are cooler ideas out there, too: Municipalities themselves can be big-time landowners, and groups can even create large-scale community land trusts so that the land is held in common. In any case, we have to stop letting rich people pretend they privately own what nature provided everyone.”
Little to say, the article went viral when Charles Cooke of the National Review tweeted the article, inspiring a slew of vitriol. This was a case in which negative attention for Myerson may have been positive attention for Georgists. Feel free to judge the other reforms for yourself.
How Much Money Could a Land Value Tax Raise?
By Ashok Rao
Ashok Rao, a student at the University of Pennsylvania, concludes that a significant portion if not all public revenue could be generated via the land value tax. He cites fellow Georgist Steve Cord’s paper in The American Journal of Economics and Sociology, entitled “How Much Revenue Would a Full Land Value Tax Yield.”
Link to Rao’s article: http://slate.me/1eujV0q
How a levy based on location values could be the perfect tax
By Merryn Somerset Webb
The following article lauds the land value tax as “In theory, not just an excellent tax but the best of all possible taxes.” There were some dubious statements in the article about the effect of the tax on banking and what various groups think of LVT, but we still appreciate the positive attention.
The article was written in response to fellow Georgist Nicholas D Rosen’s article:
LVT and Real Estate Boom and Bust
See Josh Vincent’s article below. Since the article was released, Bill de Blasio has been nominated as the democratic candidate in the NYC mayoral race.
“I have called for a change to the tax treatment for vacant land — from the lower residential rate to the higher rate for commercial property — to discourage long-term speculation that leaves lots vacant in our neighborhoods, and to encourage the construction of more affordable places to live.”
Mason Gaffney and Polly Cleveland teamed up recently to write an article for the Huffington Post discussing the history of the property tax in Detroit.
“The Georgist Progressive movement supported cheap mass transit on trolley cars. With fixed costs funded by property taxes, fares stayed low. Property taxes also paid for public education, public health, public parks, water, sanitation, welfare — all the public services that make a big city livable, and its small industries viable. Property tax rates of 2.5 percent of market value were normal; there were no sales taxes, business taxes, or income taxes. Detroit’s private sector was a big collection of small machine shops, little businesses and services. That’s what attracted Henry Ford, the Dodge brothers and other young tinkerers to Detroit. In one of history’s ironies, trolley cars nursed the auto industry that later rose up to slay them.
In 1897 Pingree became governor. He centralized the assessment of property taxes, and had the State Board of Tax Commissioners revalue all property. They found so much untaxed land, especially railroad holdings, that they actually lowered tax rates even as they raised more taxes.”
The article can be read here:
Cameron K Murray in a recent article had this to say about professor Mankiw’s treatment of LVT:
“Mankiw’s Principles of Economics, the most widely used introductory economics textbook, can be held high as an iconic symbol of what is wrong with the economics profession…
To get down into a little more detail, in what should be an important chapter in Mankiw’s textbook on the effects of taxes on markets, he simply rehashes a handful of nonsense myths about taxation – the Laffer curve, the French being taxed into low work hours, land taxes being unable to raise enough revenue for government and so forth.
One interesting point is his statement that taxing land values are impractical because the value of land is inseparable from building improvements therefore such taxes will be distortionary. This might seem a minor issue in the much bigger issues covered in the almost 900 page tome, but it concerns the most fundamental issues economists are meant to understand – where value comes from, and how best to raise taxes.”
“A pure land tax, one without regard to how land is used or what is built on it, is the best sort.”
An article published late last month in The Economist praised the land tax. Even though the term “land tax” was used, land value tax was implicit as part of a more general discussion on ad valorem property taxes. Such an endorsement in the most popular economics magazine in the world is an exciting development. Click here to read the full article.