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Land Ownership Makes No Sense

15 Aug 2023

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Land Ownership Makes No Sense:

Modern appraisal methods have made Georgism more practical than ever. We can calculate the unimproved value of any given piece of land, and then tax unimproved value at close to 100 percent of its annual rental rate. This, called a land-value tax, is effectively equivalent to landlords “renting” the land from everyone else. In an example reported by The Wall Street Journal, a vacant lot in Austin, Texas, pays about half the property taxes per acre as the apartment building nearby. Under a land-value tax, both properties would pay the same amount in tax for using the same amount of land. The benefit of this system is that improving the land is incentivized, since it increases the landlord’s revenues but doesn’t increase their tax burden, while merely holding land for speculation is disincentivized, which frees it up for others.

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