Landing and takeoff slots at close-in urban airports are scarce resources, made valuable because of the presence of a vibrant economy.  Yet in most places, these slots are sold from one airline to another, often with much appreciation.  These slots should be auctioned off, on a regular basis, as leases, with the airport authority receiving the funds and the public receiving any excess beyond the costs of providing services.  Such rights are not legitimately private property.

Bill Batt: Painless Taxation

Abstract
Real tax reform could do away with those taxes that are resented by the large proportion of our population. We could replace all taxes on wages and on interest by instead taxing economic rent. Rent is windfall income; it is income that arises not from the efforts of any person or corporation; it comes about as a surplus gain from common social enterprise. There is ample moral warrant for society to lay claim to that which it has created, as well as to that which no individual or party has earned. Analysis increasingly makes clear that economic rent in all its forms is far larger than official government figures indicate; in fact it is likely sufficient to supplant all current taxes on labor and capital (wages and interest) which are acknowledged to have so many negative effects. Recovering economic rent in all its manifestations by taxing its various bases actually can foster economic performance and yield other benefits that make it the natural source of revenue for governments. Such a tax is essentially painless. ...

The Possibility of Land (Rent) Taxation

The key to understanding how taxing various forms of land conform to sound tax theory comes with an appreciation of the importance of economic rent. Largely discarded in 20th century economic analysis, rent is the price for the use of land. Just as the price of labor is paid in wages and the price of capital is paid in interest, land rent is the unearned increment that attaches to land in the form of a surplus when its price is not paid by its users. All taxes, ultimately, come out of rent; however, by collecting revenue from other sources, the rent is left to settle in ever increasing encrustations on land sites, i.e., capitalized, ultimately raising their market price. In so doing, these land prices are distorted so that their optimal use is not secured.

Examples of such distortion are not difficult to identify. Consider, first of all, the use of locations in our urban environments, many of which are underused while prospective entrepreneurs are driven to second-best locations because titleholders opt to let the rent accrete and passively raise their market price. Land speculation is rife most of all in instances where there is a great disparity between the tax rate on these sites and the rate of rent appreciation. When the holding costs of ownership are nominal, there is no incentive for improving them or selling to others who will, and urban environments suffer as a result. Another example is rent that collects to the electromagnetic spectrum, making it attractive for owners of electronic media, communications networks and so on, to rely on returns to their investments even when the resource itself is sparsely used. So also with the time slots for take-offs and landings at airports. These opportunities are respected as private property, even while they gain in market value in response to the general traffic volume of the facility. This occurs regardless whether the particular airlines use their slots or not. London Mayor Ken Livingstone has proposed to tax the rent from Heathrow and Gatwick both for their revenue advantage and to assure their more optimal use.[7] One could go on, pointing to any number of instances where economic rent is available to be had for the support of public services in lieu of conventional taxes which we recognize as destructive in their effects.[8] It is not surprising that when pressed even conventional (neoclassical) economists are often willing to concede that the best possible tax of all is one placed on land rent.[9] ... read the whole article

Nic Tideman:  Applications of Land Value Taxation to Problems of Environmental Protection, Congestion, Efficient Resource Use, Population, and Economic Growth

Charging rent for parking is only a small step from charging rent for cars that are moving on city streets. The more cars there are on the streets, the slower everyone goes. The marginal cost of having one more car on the streets is the value of the extra travel time that everyone else endures because of the one additional car. In many places, the congestion cost of traffic is less than the cost of administering a system of congestion fees. But this is not the case everywhere. William Vickrey used to say that his estimate of the cost in additional delays of having one more car in midtown Manhattan in the middle of the day was about $20,000 per hour. He would go on to say that this did not imply that people should be charged $20,000 per hour for using the streets of midtown Manhattan. He had estimated marginal cost at the present level of usage. The efficient charge -- perhaps $25 per hour -- would reduce use of the streets so greatly that the marginal congestion cost of street usage would equal the price. Efficient congestion prices for using the streets of Manhattan (or Boston or other large cities) would not merely charge for ordinary usage but would also entail special charges for anyone who double-parked or parked in some other illegal way that created congestion. If we could keep track of the movements of vehicles, then for any vehicle that stood still ahead of backed-up vehicles that wanted to move, there would be a charge for the resulting congestion cost, which would be quite high. Companies making deliveries to downtown areas might decide that it was far better to make deliveries at night than to tie up the streets in the day.

Congestion charges also apply to bottlenecks such as bridges and tunnels. Whenever such a facility has cars backed up seeking to use it, efficiency is improved by applying a toll that reduces demand to capacity. The same output is produced, revenue is generated, and the waste of queuing is avoided.

The efficiency of congestion pricing would also apply to such public facilities as airports and parks. When airlines want to have more take-offs and landings than an airport can accommodate, it is efficient and just to allocate take-off and landing slots by price. Unfortunately, Congress, at the behest of airlines, has prohibited airports from doing this, requiring them instead to allocate take-off and landing slots by non-price means.

In Central Park in New York, there are fewer baseball fields than are demanded at a zero price. There is a private company that has the right and responsibility to organize the leagues that are allowed to use the fields. This company is able to charge fees that implicitly include the scarcity value of the fields. A recognition that the parks are the common heritage of everyone in the city would lead instead to a charge for using the ball fields that equated supply and demand.

There are also applications of congestion prices at an international level. For example, there may be congestion in geosynchronous orbits for satellites. If this should occur, then the just thing to do is to charge market-clearing rents for geo-synchronous orbits and share the proceeds among all nations in proportion to their populations.  ... Read the entire article