Land Value Taxation 101

The Taxing Question of Land

Directed by Yoni Higsmith

2014

Film Review

The Taxing Question of Land is a British documentary about Land Value Taxation (LVT), a concept first proposed by American Henry George in 1879 (see Progress and Poverty: a Suppressed Economic Classic).

The filmmakers use simple animated infographics to argue that LVT is an ideal solution to a global debt-based economic crisis, especially as nothing else has worked. I tend to agree, provided LVT is combined with a return to sovereign money.* So long as bankers retain the power to create money out of thin air, they will always tilt any taxation scheme in their own favor.

The basic definition of Land Value Taxation is a tax that captures a percentage of land value on an annual basis to cover public expenditures. In his 1879 book Progress and Poverty, Henry George’s main argument for Land Value Taxation is that it restores the Commons. This film focuses mainly on secondary arguments that revolve around fairness and economic equality.

The filmmakers point out that a property’s increasing value nearly always depends on its proximity to public services (ie schools, water mains, sewers, roads, public transport) paid for by taxpayers – making it utterly reasonable that taxpayers should claim a share of this increased land value. They describe LVT as a “tax shift,” rather than a new tax, as it would reduce and/or eliminate most other taxes.

They also argue

• That unlike income, corporate and sales taxes, LVT wouldn’t suppress production and jobs.
• That intelligently implemented LVT would eliminate the need for government borrowing (and debt) because it would raise sufficient revenue to cover all government services.
• That LVT would eliminate tax avoidance because unlike other wealth, land is impossible way to hide.
• It offers and fair and painless way to reduce wealth inequality as the rich start to share the cost of paying for public services.

They go on to list a number of jurisdictions (New South Wales, Hong Kong, Estonia, Singapore, Taiwan, Pennsylvania and Mexicali) that have significantly reduced other taxes by establishing an LVT.

LVT is also unique in its bipartisan appeal. In Britain, it has adherents belonging to the Greens, Liberal Democrat, Labour and Conservative Party. Conservatives like it because it simplifies the tax system.

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*In a sovereign money system, the public (as opposed to private banks) maintains the sole right of issuing and regulating money. See An IMF Proposal to Ban Banks from Creating Money