Economists across the political spectrum are in near-universal agreement about one thing: Land Value Tax is the best tax there is. Nobody creates land, but everybody needs it, and there is fierce competition for good locations in populous city centers. The general problem with taxes is that when you tax something, you get less of it. So if you tax income, you get less labor. If you tax capital, you get less investment. If you tax buildings, you get less buildings. But if you tax land, you donât get any less land. (A land value tax shouldnât be confused with a property tax, which taxes land and the buildings that sit upon it; land value tax only taxes the land).
In fact, not taxing land is a perfect recipe for speculation and ever-inflating housing prices, which infect the rest of the economy and contribute to higher costs of living and general stagnation. Land Value Tax discourages people from buying land just to hold it out of use. Instead, it encourages denser building, which has been repeatedly shown to be better for both quality of life and for the environment.
