The Problem With 100% Land Value Taxes


A popular tax among neoliberals is a land-value tax. This is a tax on the value of land minus the value of any improvements. The most common critiques of the tax are about the practical difficulty of measuring land value, but I think there are deeper conceptual problems that remain even if you assume perfect measurement.

The basic case for LVT is that the value of land is an economic rent, meaning it is a “payment to a factor of production in excess of what is required to keep that factor in its present use”.  Because land will not go away if it is taxed, it would therefore be efficient to tax away 100% of the value of the land. This would exclude the value of improvements like buildings, which would allow property owners a return on capital for the improvements they make, but no excess returns due to increases in the value of the land.


A simple guide to land value tax

Dominic Frisby. A simple guide to land value tax
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