with comment by Georgist Tom Gihring.

UPDATE: Comments on the NY TImes article by the staff of the Robert Schalkenbach Foundation: https://schalkenbach.org/rsf-responds-to-the-new-york-times-article-titled-the-georgists-are-out-there-and-they-want-to-tax-your-land/

A major and in-depth article on Georgist Land Value Taxation – focusing on Detroit – has been published today in the New York Times.

Several of our leading lights, past and present – like Common Ground members Mark Mollineaux and Mike Curtis – are quoted, and Henry George is discussed at length (though the author incorrectly states the Georgist movement took off in the 1890s, when it was a decade before that; there are similarly snarky comments that obscure the otherwise very good research).

The article is here (this link is long because it’s the unlocked version without a paywall): https://www.nytimes.com/2023/11/12/business/georgism-land-tax-housing.html?unlocked_article_code=1.90w.4wgx.BU4dMvopuvRT&smid=url-share

There are nearly 200 comments as of this writing so the Times will probably shut down the comments option in a day or so.

I made several comment answers to previous comments here:

https://www.nytimes.com/2023/11/12/business/georgism-land-tax-housing.html#commentsContainer&permid=129110268:129111948, https://www.nytimes.com/2023/11/12/business/georgism-land-tax-housing.html#commentsContainer&permid=129110360:129111727, https://www.nytimes.com/2023/11/12/business/georgism-land-tax-housing.html#commentsContainer&permid=129110364:129111581, https://www.nytimes.com/2023/11/12/business/georgism-land-tax-housing.html#commentsContainer&permid=129110504:129111515, https://www.nytimes.com/2023/11/12/business/georgism-land-tax-housing.html#commentsContainer&permid=129109873:129111348, https://www.nytimes.com/2023/11/12/business/georgism-land-tax-housing.html#commentsContainer&permid=129110673:129111008, https://www.nytimes.com/2023/11/12/business/georgism-land-tax-housing.html#commentsContainer&permid=129108811:129111200, https://www.nytimes.com/2023/11/12/business/georgism-land-tax-housing.html#commentsContainer&permid=129110330:129111802

Tom Gihring’s Response to the recent NY Times Story:

Real estate reporter Conor Dougherty’s Times article, though rather sardonic in tone, has helped to raise public awareness of land taxation as a possible solution to cities’ ills, like property abandonment, land speculation, and unaffordable housing prices. Nevertheless, there were a few particulars that he glossed over or overlooked.

First, as Dougherty states: “Young and old, Georgists come across as both radical and refreshingly pragmatic. They are interested in a specific problem: the cost of land and housing.” Yes, and the principal focus for solving this is property tax reform. There are established organizations, both young and venerable that are widely recognized, but maybe not by the author, such as: Robert Schalkenbach Foundation, Center for Property Tax Reform, Common Ground USA and its seven regional chapters across the country, Henry George Foundation-UK, Henry George Foundation-Canada, Prosper Australia, Labour Land Campaign-UK, Earth Sharing Canada, Coalition for Economic Justice-UK, and the largest venerable organization with operations reaching across the globe:

The Lincoln Institute of Land Policy traces its origins to John C. Lincoln, a Cleveland industrialist and investor who was intrigued by Henry George’s ideas about land ownership and taxation. In 1946 he established the Lincoln Foundation to support other institutions in the teaching, research, and publication of information about George’s work.

George’s “pure” theory was that if all taxes were replaced with a single land-value tax, it would end poverty and recessions for good. All the organizations listed above know that this fundamentalist version of Georgism, like the fundamentalist version of anything, is plainly unrealistic. Contemporary Georgists may be enthusiasts, but they are pragmatic, and they do not constitute a cult.

Consequently, the most favored realistic version of the land value tax (LVT) currently being promoted is the split-rate tax, where a higher tax rate is applied to land assessments and a lower rate to improvements – something less than a 100% land tax. The Detroit rendering of this concept is a variation whereby a uniform portion of each property’s total value is exempted from taxation, then the lost revenue is replaced by a tax on each property’s land assessment. Similar variations are being crafted to conform to states’ constitutional limitations on unequal (differential rate) taxation. Thus far, only one state, Pennsylvania, allows local jurisdictions to adopt a split-rate tax.

Dougherty states that despite all the agreement about LVT being the perfect tax, there are just a handful of examples of this policy in action. Well, that is just not accurate. Let’s be clear, the taxation of land value is a global movement. Over many years, several countries have implemented versions of land taxation, including Taiwan, New South Wales in Australia, Denmark, Estonia, Spain, Switzerland, Japan, Moldova, Slovak Republic, Hungary, Romania, and Russia. Other nations such as Hong Kong and Singapore use a land lease system, and others a land capital gains system. Another option is to raise the land tax rate to a high level, above revenue neutral. With the excess revenue the U.S. state of Alaska issues an annual Permanent Fund Dividend, in this case seeded by the state’s revenue from mineral resources, particularly petroleum. Every eligible Alaskan resident (including children) receives a dividend check.

Several state legislators in the United States have recently introduced LVT bills, including Connecticut, Virginia, Minnesota, California, and Oregon. Those jurisdictions that have adopted LVT experienced significant in-fill and redevelopment, along with other positive incentive effects. Pennsylvania has the most extensive record of the split-rate LVT. A widely cited study of LVT use in Pittsburgh, first introduced in 1913, showed that building construction there surged ahead of other Rust Belt cities. Taxing land at a rate five times higher than buildings compelled the owners of vacant sites to construct buildings and to move up the timing of construction. Harrisburg, once one of the most distressed cities in the nation, adopted this approach in 1975. Subsequently, 5,200 vacant properties were restored, and taxable businesses rose from 1,908 to 5,900. Since Harrisburg taxed land at six times the rate of buildings, the city has jumped from bottom to the top group of American cities. Former mayor Reed said: “Without hesitation we can commend the importance and benefit of the land value tax policy. It has worked in Harrisburg and in other communities where it has existed.”

Back to mayor Duggan’s motivating issue: that “tens of thousands of Detroit properties were bought by absentee landlords and faceless LLCs”. This has become a national phenomenon. In Seattle, recent upgrading in the once redlined Central District became a lucrative investment opportunity for large corporations motivated by profit and poised to extract significant wealth from a building boom.

Portland didn’t used to be the kind of market where big, national pension funds came hunting for real estate. But it has become one of the high-cost cities whose housing problems stem from a lack of supply. Wall Street private equity firms are scooping up single-family rentals by the hundreds. With increased competition from institutional investors, individual families are finding it’s not as easy these days to enter the housing market. Changing from land as an undertaxed resource and distorting markets in destructive ways, to a highly taxed resource will help release vacant and underutilized sites for new housing development. A high land tax will also dampen land price inflation, making housing more affordable. And finally, let us bear in mind that LVT is not a novel tax, it is not a new tax; it is an alternative to a flawed tax system, transforming it into a fair and equitable system.

We are pleased that the Times piece has elevated the prominence of land value taxation as a viable property tax reform option. Hopefully legislators in the Northwest U.S. will feel emboldened, as does mayor Duggan in Detroit.

The article is some of the most serious mainstream writing to come along in a few years and deserves a serious read and follow-up.

Please comment or if comments are closed, link to the article for your chapters and advocacy efforts.