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The time may be right for land-value taxes

The Economist, Aug 9th 2018.

ON A trip to New York in the late 1860s the journalist Henry George was puzzled. He found the rapidly growing city to be a place of unimaginable wealth. Yet it also contained deeper poverty than the less-developed West Coast. How could this be? George had an epiphany. Too much of the wealth of New York was being extracted by landowners, who did nothing to contribute to the development of the city, but could extract its riches via rents. The problem could be solved by a tax on land values. “[…]”

George’s subsequent masterpiece, “Progress and Poverty”, sold more copies in America in the 1890s than any other book except the Bible. It spawned campaigns for land-value taxation around the world. It also inspired a board game, “The Landlord’s Game”, a precursor to “Monopoly”. The game was designed to show how property markets naturally tend towards monopolies in which one player can extract all the rent. But an added feature, missing from subsequent versions, was a tax on the value of land—ie, a levy that, unlike a property tax, does not vary with the number of houses or hotels built on it. The tax made it impossible for any one player to win but instead made them rich in tandem, as the proceeds of the tax were distributed between them. “[…]”

 

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