A better world is possible - Global Commons Institute

Copyright Bruce Nixon 2010. All rights reserved. This electronic copy is provided free for personal, non-commercial use only.
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because land prices (rents) will fall, as will the admin overheads of operating under the current tax system.
The barrier to entry for many businesses is the sheer complexity and time-consuming nature of grappling
with tax law, off which an army of tax advisers feeds.
Advantages of LVT
Here are just some of the benefits of taxing publicly created land value instead of privately created goods
and services:
Reduced land acquisition costs, because owners lose money if they hold land out of its most
appropriate use. Rental values are unaffected at first, though they will likely rise later as LVT
increases prosperity.
Higher quality of built space, especially housing. Owners have every incentive to maintain and
improve their property, as the improvements needed for productive use (including accommodation)
are not taxed.
Less urban sprawl. Conurbations - collections of people going about their business - produce higher
land values than marginal land, which may have no value. Activities that need high-value land will
concentrate where good planning wants them. This makes public mass transit systems more efficient
and transport generally more sustainable. Hong Kong is a classic example: it has the highest
proportion of public revenue from land values anywhere.
Conservation land protected: whether for biodiversity, recreation or heritage, land whose use is
legally constrained will pay less tax. However, land accessible to public parks has a value premium
(e.g. Hyde Park), the tax on which pays for the park: 'beneficiary pays', is fundamental to LVT.
Minimal tax avoidance or evasion. Land cannot be hidden or moved. Failure to pay results in a
public debt attaching to the land title and diminishes its value by the amount of that debt - which
cannot be 'written off', since land cannot be destroyed (only buildings can!)
Higher employment levels and lower costs generally. The 'deadweight effect' of existing taxes bears
most heavily on the poor, whose consumption of essentials (shelter, clothing, food) is greatly affected by the
current system, which massively subsidises 'rent seeking' activity by landlords. For good reason, Henry
George's classic work on LVT was called Progress and Poverty – See Earth Rights Institute website.
The demise of what James Robertson calls 'the dependency culture': benefit payments of all kinds
would decline as the poor enjoyed more opportunities and lower living costs. Most supporters of LVT
would first abate income taxes on the poor, then phase out subsidies to landlords such as 'housing
benefit', which produces no houses and only benefits landlords!
Small businesses flourish, as compared to big business. Some 40% of the value of FTSE100 listed
companies recently consisted of real estate (i.e., mostly land value) assets - often unconnected with
the core business - while most small firms are tenants.
Why is LVT not used more often?
A recent study Land Value Taxation: Theory, Evidence and Practice edited by Richard Dye and Richard
England, listed several reasons:
Wealth, especially land wealth, accrues to the most powerful in any society. The rich resist LVT,
pleading that many of their number are 'cash poor' and 'cannot pay'. In fact, there is a strong
correlation between high lifetime income and high land wealth - very few cannot pay LVT, and these
can easily be accommodated in any transition. LVT is always affordable by definition: just let the
most productive user use the land, and collect the rent!
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