Eight Ways to Enact Land Value Taxation
GroundSwell, September 2012]
We must admit that we Georgists have made very little political
progress since Henry Georges time, even though he was 100% right
philosophically. I think it is because we dont realize how
absolutely necessary it is for us to apply the single Tax gradually.
It is most unlikely ever to be adopted all at once, although ethically
and economically it should be.
In fact, the only LVT victories we ever have had in the U.S. have
been because of gradual implementation. It will most unlikely be
Fortunately, there are 8 easy ways to start Single Taxifying the
nation and the world. These 8 ways primarily refer to cities, our
easiest first target, but the states and federal government can also
be graduallyLVTd. Here are the 8 ways. Your comments are
(1) Assess Land Closer to Market Value Than Buildings. Often the
reverse is true, in violation of the law (and of ethics and
(2) Establish a Two-Rate Property Tax. Levy a higher tax rate on land
assessments than on building assessments using these formulas (but
never exceed political acceptability).
(a) PBTR (proposed building tax rate) = 80% x CBTR (current building
tax rate); a percentage other than 80% can be used (go faster if you
(b) PLTR (proposed land tax rate) = CBTR PBTR, x BA/LA, + CLTR
(current land tax rate); BA is total building assessments and LA is
total land assessments.
(3) Levy 3 Rates A higher rate on residential land, lower rate
on residential buildings and a third rate on commercial and industrial
properties thats where our opposition is likely to come
from; revenue neutrality must always be achieved. Set the third rate
first (probably at what is is now), then decrease the tax rate on
building assessments by no more than 20% per year while raising the
land tax rate in order to maintain revenue-neutrality.
(4) Grant a $15,000 property tax reduction to all Building
Assessments; maintain revenue neutrality (very important) by
increasing the property tax rate, preferably on land only, in the
years following, suggest building-tax reductions of 15%, 20%, 20%,
30%. These reductions, if revenue-neutral, would lower property taxes
for most voters; all non-land-owning renters (both residential and
office) will also pay less space rent (ask why).
(5) Establish a Separate Tax on Land Assessments Only for funding a
current or new expense instead of either the current property tax or
another disliked tax. Most voters and actual production will then get
tax reductions (be sure to prove that beforehand).
(6) Tax-Exempt New Construction and Renovation (not the Underlying
Land); achieve revenue neutrality by raising the property-tax rate on
land assessments. Be sure to publicize the likely increase in building
permits issues and the lower taxes for most voters.
(7) Apply #1-#6 Above in a Particular Ward or Other Section of a
City. Then compare its economic growth to that of the rest of the city
(as measured by building permits issued).
(8) Gradually Fund a Popular Project (maybe ecological, that sells
these days) with #1-#7 above.
Then you absolutely must prove to the Council that taxing land
assessments always lowers the taxes of most voters and booms the
economy. Be sure to ask how to do that.
A Peer Review is an exact replication of the empirical research
performed by someone who is at least as qualified as the original
researcher, the intention being to determine if the research was
By 1995, I had induced 15 localities (now more) to tax buildings less
than land while maintaining complete revenue neutrality and found that
construction thereupon increased despite a searing depression in the
U.S. steel industry in the 1980s and 1990s. Also important: most
taxpayers paid lower taxes.
My findings were fully peer-reviewed and verified by economics
professor Nicolas Tideman. See his peer review in the Journal of Urban
Economics (3/00, pp. 216-247). He concluded: The results say
that in all four categories of construction, an increase in the
effective tax differential (i.e., taxing land more than buildings) is
associated with an increase in the average value per permit. In the
case of r4sidential housing, a 1% increase in the effective tax
differential is associated with a 12% increase in the average value
From a perspective of economic theory, it is not at all
surprising that when taxes are taken off of buildings, people build
more valuable buildings. But it is nice to see the numbers.