I. Taxing Land as Ethics
II. What is Land?
III. The simple efficiency argument for taxing land
IV. Taxing Land is Better Than Neutral
V. Measuring the Economic Gains from Shifting Taxes to Land
VI. The Ethical Case for Taxing Land
VII. Answer to Arguments against Taxing Land
An additional ethical reason for recognizing equal rights to
opportunities is that it may be necessary to secure world peace.
Nations have arisen through violence. While the world condemns
violence among nations, it has persistently acquiesced to regimes
established by violence. The greater the natural resources of a
nation, the greater is the attraction to potential tyrants of the
possibility of taking over the nation. If the world is able to
establish an understanding, backed up by the threat of economic
boycotts, that nations have an obligation to share the value of natural
opportunities in proportion to population, and that people are free to
leave nations that they find unacceptable, then the return to violent
appropriation of power will be removed. As long as we accept the
continued exercise of disproportionate power over natural opportunities
by those who acquired that power through violence, we will have
difficulty persuading potential usurpers of power that we will not
accept their conquests. Read the whole article
Nic Tideman: The Shape of a World
Inspired by Henry George
How would the world look if its
political institutions were
shaped by the conception of social justice advanced by Henry
Mason Gaffney: Rent Seeking
and Global Conflict
Mason Gaffney: Rent, Taxation, Dissipation and
I. The issue
II. Sources of rent
III. Dissipation of rent before the fisc takes it: what and how?
A. Dissipation means waste and
destruction or suppression.
IV. Dissipating rent via public spending
B. How rent is dissipated.
C. Open access followed by tenure: rent-seeking institutions.
A. Taxes and lease provisions
need not twist incentives.
B. Public spending of tax proceeds may dissipate rent.
C. History of recognition of this spending effect
D. Successful compromises with the principle.
1. Barriers to immigration or
E. Less successful compromises with the principle
2. Selling voters on the benefits of immigration
1. Public works.
2. Subsidized public works in tandem with exclusionary zoning
3. Hocking the revenues
A. Socialize rent at the
B. Limit benefits to citizens per se (not to landowners per se).
C. A social dividend to citizens is the obvious route.
D. Return rents to local school districts in inverse proportion to
local tax base per capita (the Colin Clark principle).
E. Promote James Madison and Neville Chamberlain to elder statesmen emeritus.
Offset rights to pollute are
doubly effective in dissipating rent. By generating a nuisance and
lowering the value of surrounding land, a polluter is rewarded by
receiving a valuable vested right to continue the nuisance in
perpetuity, or sell it.
Internationally, rent-seeking via warfare, or big-stick
policies threatening warfare, may be seen to dissipate rent when we
deduct the public cost from the private gain. Read
the whole article
Nic Tideman: Applications of Land
Value Taxation to Problems of Environmental Protection, Congestion, Efficient
Population, and Economic Growth
John Locke did not advocate land value taxation. Writing in about 1690, he
said that there was so much unclaimed land in America that no one could properly
complain about the private appropriation of
land in Europe.3 Writing nearly 200 year
later, when it was becoming impossible for people to appropriate good unclaimed
land in America, Henry George said:
If we are all here by the equal permission of the creator, we are
all here with an equal title to the enjoyment of his bounty -- with an equal
right to the use of all that nature so impartially offers. This is a right
which is natural and inalienable; it is a right which vests in every human
being as he enters the world, and which during his continuance in the world
can be limited only by the equal rights of others. There is in nature no such
thing as a fee simple in land. There is on earth no power which can rightfully
make a grant of exclusive ownership in land. If all existing men were to unite
to grant away their equal rights, they could not grant away the right of those
who follow them.4
George preceded this argument with a psychological and linguistic one. He
said that our conception of property, of a right of exclusive possession, is
based on the idea that each person has a right to his or her productive powers,
and therefore to what he or she produces. Since no one produced land, no one
can properly claim to own it.5
This psychological and linguistic argument is not entirely convincing. It
seems clear that humans, like other species, have an impulse toward the appropriation
and defense of territory. Natural selection has worked in favor of those who
are skilled in appropriating natural opportunities and deterring others from
encroaching on them. It seems possible that, as a way of limiting violence,
humans have merged an idea of ownership based on production with an idea of
ownership based on the ability to appropriate territory and deter encroachment.
If this is the social and biological reality, then there is a different argument
for treating natural opportunities as everyone's common heritage. Realizing
that we are participants in a game of territorial appropriation and its extension
into the politics of special interest legislation and other manifestation of
privilege, we should also realize that substantial gains are possible from
ending the game of encroachment and appropriation. We might aspire to end the
waste of effort on all forms of rent-seeking and on defense against rent-seeking.
But our efforts to end the game have been based primarily on enshrining the
status quo: The last successful appropriator gets to keep what
has been appropriated. This deference to power might be considered simply realistic.
However, it has a high cost. The practice of legitimating successful
past appropriations -- as when the world declines to challenge Indonesia's
1976 annexation of East Timor, or when any number of dictators become recognized
as the rightful heads of nations -- induces selfish egoists to calculate
that if they can grab something and hang on to it long enough for the expected
to subside, then it will be regarded as just as legitimately theirs as North
America is regarded as the legitimate property of the descendants of European
settlers rather than the previously occupying natives. (And of course, in
many cases those previously occupying natives had forcibly displaced earlier
A statement of the form, "No appropriation before year X will be questioned,
but all aggressive appropriations after year X will be overturned," is not
credible. Year X keeps getting moved, and successful aggression pays.
Much more credible is a statement of the form, "We will share equally the
value of natural opportunities that might be appropriated." This is
the potential of land value taxation: to provide a framework in which the
of natural opportunities will be shared equally, both as an expression
of the idea that all persons have equal rights to natural opportunities,
as a formula whose potential to remove the motive for future aggression
is greater than that of enshrining the status quo of any particular year.
in addition, land value taxation is one way of achieving allocative efficiency
with respect to a wide variety of public issues.
Land value taxation is usually thought of as a possible source of revenue
for local governments. But the ethical principle
that supports it is most coherent when the principal is applied on a global
basis: All persons in the world have equal rights to natural opportunities.
This does not mean that all persons in the world have equal rights to all
land rent. To the extent that the rent of land arises as a result of the
of infrastructure, that rent is the natural income of the polity that provided
the infrastructure, and the logical source for financing it. What all persons
in the world have equal rights to is the "pre-development" rental value of
land, the rental value that land would have to the potential developer of
a new community if there were no community and no infrastructure. To
motivate the application of land value taxation to other areas of economic
life, I will
assume that there is a global agreement that, because all persons have equal
rights to natural opportunities, there will be transfers among nations to
equalize per capita pre-development rent. The principle behind this agreement
extended to other issues. ... read the whole article