6. (2013 August) Good Press: Mankiw’s Treatment of LVT

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.”


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