The Truth About Investment Taxes (FT Press Delivers Elements)

THE BEST BOOKS S. Kay Bell THE TRUTH ABOUT |NVESTMENT |AXES FTPress Delivers elements The Truth About Investment Taxes S. Kay Bell “A person.
Table of contents

It also encourages landowners to sell or relinquish titles to locations that they are not using. This might cause some landowners, especially pure landowners, to resist high land value tax rates.


  1. A Cellists Life.
  2. A Teaching Discourse from the Inter-dimensional Light Network: The Real World;
  3. Navigation menu?
  4. Everyones Guide to Cancer Survivorship: A Road Map for Better Health!
  5. Growing Pains of a Hapless Househusband.
  6. Choose the subscription that is right for you.

Landowners often possess significant political influence, so this may explain the limited spread of land value taxes so far. A land value tax has progressive tax effects, in that it is paid by the owners of valuable land who tend to be the rich, and since the amount of land is fixed, the tax burden cannot be passed on as higher rents or lower wages to tenants, consumers or workers. Several practical issues are involved in the implementation of a land value tax. Most notably, it must be:. Levying a land value tax is straightforward, requiring only a valuation of the land and a title register.

Value assessment can be difficult in practice. In a United States Supreme Court opinion, Justice William Paterson said that leaving the valuation process up to assessors would cause bureaucratic complexities, as well as non-uniform assessments. Compared to modern day property tax evaluations, land valuations involve fewer variables and have smoother gradients than valuations that include improvements. This is due to variation of building style, quality and size between lots.

Modern statistical techniques have eased the process; in the s and s, multivariate analysis was introduced as an assessment means. A few sites of intermediate value are then identified and used as "landmark" values. Other values are filled in between the landmark values. The data is then collated in a database and linked to a unique property reference number, [28] "smoothed" and mapped using a geographic information system GIS.

Thus, even if the initial valuation is difficult, once the system is in use, successive valuations become easier. In the context of land value taxation as a single tax replacing all other taxes , some have argued that LVT alone cannot raise enough revenues. The Physiocrats argued that all taxes are ultimately at the expense of land rental values. Most modern LVT systems function alongside other taxes and thus only reduce their impact without removing them.

Land taxes that are higher than the rental surplus the full land rent for that time period would result in landowner abandonment. In some countries, LVT is impractical because of uncertainty regarding land titles and established land ownership and tenure. For instance a parcel of grazing land may be communally owned by village inhabitants and administered by village elders. The land in question would need to be held in a trust or similar body for taxation purposes.

If the government cannot accurately define ownership boundaries and ascertain the proper owners, it cannot know from whom to collect the tax. The lack of clear titles is found in many developing countries.

Make informed decisions with the FT.

LVT proponents argue that such owners can be made to identify themselves under penalty of losing the land. LVT removes financial incentives to hold unused land solely for price appreciation, making more land available for productive uses. Land value tax creates an incentive to convert these sites to more intensive private uses or into public purposes. The selling price of a good that is in fixed supply, such as land, decreases if it is taxed.

By contrast, the price of manufactured goods can rise in response to increased taxes, because the higher price reduces the number of units that are made. The price increase is how the maker passes along some part of the tax to consumers. Land tax incidence rests completely upon landlords, although business sectors that provide services to landlords are indirectly impacted.

In some economies, 80 percent of bank lending finances real estate, with a large portion of that for land.

Most read stories this hour

While owners cannot charge higher rent to compensate for LVT, removing other taxes may increase rents. Assuming constant demand, an increase in constructed space decreases the cost of improvements to land such as houses. Shifting property taxes from improvements to land encourages development.


  1. Land value tax;
  2. Pickup Games;
  3. Ten ways HMRC checks if you’re cheating.
  4. Related Topics.
  5. Operators Manual M60 Machine Gun Cartoon 1970, Plus 500 free US military manuals and US Army field m;

Such infill of underutilized urban space also combats sprawl. LVT is less vulnerable to tax evasion , since land cannot be concealed or moved overseas and titles are easily identified, as they are registered with the public. Transparency reduces tax evasion. Land acquires a scarcity value owing to the competing needs for space. The value of land generally owes nothing to the landowner and everything to the surroundings.

LVT supporters claim that the value of land depends on the community. In religious terms, it has been claimed that land is God's gift to mankind. Everyone knows that the Fathers of the Church laid down the duty of the rich toward the poor in no uncertain terms. You have been appropriating things that are meant to be for the common use of everyone.

The earth belongs to everyone, not to the rich. In addition, the Church maintains that political authority has the right and duty to regulate, including the right to tax, the legitimate exercise of the right to ownership for the sake of the common good. LVT considers the effect on land value of location, and of improvements made to neighbouring land, such as proximity to roads and public works. LVT is the purest implementation of the public finance principle known as value capture. A public works project can increase land values and thus increase LVT revenues. Arguably, public improvements should be paid for by the landowners who benefit from them.

LVT generally is a progressive tax, with those of greater means paying more, [7] [45] in that land ownership is correlated to incomes [46] and landlords cannot shift the tax burden onto tenants. LVT generally reduces economic inequality , removes incentives to misuse real estate, and reduces the vulnerability of economies to property bubbles and their collapse.

Land value taxation began after the introduction of agriculture. It was originally based on crop yield. This early version of the tax required simply sharing the yield at the time of the harvest , on a yearly basis. Aryan sages of ancient India claimed that land should be held in common and that unfarmed land should produce the same tax as productive land. Apastamba said "If any person holding land does not exert himself and hence bears no produce, he shall, if rich, be made to pay what ought to have been produced".

Mencius [50] was a Chinese philosopher around BCE who advocated for the elimination of taxes and tariffs, to be replaced by the public collection of urban land rent: During the Middle-Ages, in the West, the first regular and permanent land tax system was based on a unit of land known as the hide. The hide was originally an amount of land sufficient to support a household, but later became subject to a land tax known as "geld". The physiocrats were a group of economists who believed that the wealth of nations was derived solely from the value of land agriculture or land development.

Before the Industrial Revolution , this was approximately correct. Physiocracy is one of the "early modern" schools of economics. Physiocrats called for the abolition of all existing taxes, completely free trade and a single tax on land. The Physiocrats were highly influential in the early history of land value taxation in the United States. A participant in the Radical movement , Thomas Paine contended in his Agrarian Justice pamphlet that all citizens should be paid 15 pounds at age 21 "as a compensation in part for the loss of his or her natural inheritance by the introduction of the system of landed property.

It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds. Thomas Spence advocated a similar proposal except that the land rent would be distributed equally each year regardless of age. Adam Smith, in his book The Wealth of Nations , first rigorously analyzed the effects of a land value tax, pointing out how it would not hurt economic activity, and how it would not raise land rents. Ground-rents are a still more proper subject of taxation than the rent of houses.

A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground. More or less can be got for it according as the competitors happen to be richer or poorer, or can afford to gratify their fancy for a particular spot of ground at a greater or smaller expense. In every country the greatest number of rich competitors is in the capital, and it is there accordingly that the highest ground-rents are always to be found.

As the wealth of those competitors would in no respect be increased by a tax upon ground-rents, they would not probably be disposed to pay more for the use of the ground. Whether the tax was to be advanced by the inhabitant, or by the owner of the ground, would be of little importance. The more the inhabitant was obliged to pay for the tax, the less he would incline to pay for the ground; so that the final payment of the tax would fall altogether upon the owner of the ground-rent.

Henry George 2 September — 29 October was perhaps the most famous advocate of recovering land rents for public purposes. An American journalist , politician and political economist , he advocated a " Single Tax " on land that would eliminate the need for all other taxes. In his best-selling work Progress and Poverty , Henry George argued that because the value of land depends on natural qualities combined with the economic activity of communities, including public investments, the economic rent of land was the best source of tax revenue.

Its relevance to public finance is underpinned by the Henry George theorem. A land value tax was implemented beginning in By initial problems with valuation and rural opposition had been overcome and rapid industrialisation began. David Lloyd George and H. Asquith proposed "to free the land that from this very hour is shackled with the chains of feudalism.

The Labour budget included a land value tax, but before it came into force it was repealed by the Conservative-dominated National Government that followed shortly after. An attempt at introducing site value taxation in the administrative County of London was made by the local authority under the leadership of Herbert Morrison in the —9 Parliament, called the London Rating Site Values Bill. Although it failed, it detailed legislation for the implementation of a system of land value taxation using annual value assessment. After , the Labour Party adopted the policy, against substantial opposition, of collecting "development value": This was one of the provisions of the Town and Country Planning Act , but it was repealed when the Labour government lost power in This idea influenced Marshall's pupil Arthur Pigou 's ideas on taxing negative externalities.

Paul Samuelson supported a land value tax. Pure land rent is in the nature of a 'surplus' which can be taxed heavily without distorting production incentives or efficiency. A land value tax can be called 'the useful tax on measured land surplus'. So the question is, which are the least bad taxes?

In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago. Michael Hudson is a proponent for taxing rent, especially land rent. It is what property owners and rentiers fear most of all, as land, subsoil resources and natural monopolies far exceed industrial capital in magnitude.


  • Drag-Free Drift: Leader Design and Presentation Techniques for Fly Fishing;
  • Newly closed funding enables Polymaker to accelerate its growth & global expansion - Polymaker!
  • Handbook of Differential Equations: Stationary Partial Differential Equations: 5.
  • ?
  • ;
  • Decisions?
  • Land value tax - Wikipedia.

    • What appears in the statistics at first glance as "profit" turns out upon examination to be Ricardian or "economic" rent. Paul Krugman agreed that a land value tax is efficient, however he disputed whether it should be considered a single tax, as he believed it would not be enough alone, excluding taxes on natural resource rents and other Georgist taxes, to fund a welfare state. But I would just say: Joseph Stiglitz , articulating the Henry George theorem wrote that, "Not only was Henry George correct that a tax on land is nondistortionary, but in an equilitarian society Land value taxes were common in Western Canada at the turn of the twentieth century.

    Land value tax systems are in use in multiple countries. Land taxes in Australia are levied by the states, and generally apply to land holdings only within a particular state. The exemption thresholds vary, as do the tax rates and other rules. In New South Wales , the state land tax exempts farmland and principal residences and there is a tax threshold. Determination of land value for tax purposes is the responsibility of the Valuer-General. The principal residence, primary production land and land used by a charity are exempt from land tax.

    By revenue, property taxes represent 4. The Henry Tax Review of commissioned by the federal government recommended that state governments replace stamp duty with land value tax. The review proposed multiple marginal rates and that most agricultural land would be in the lowest band with a rate of zero. Common property taxes include land value, which usually has a separate assessment.

    Thus, land value taxation already exists in many jurisdictions. Some jurisdictions have attempted to rely more heavily on it.

    Subscribe to read | Financial Times

    For example, the city of Altoona adopted a property tax that solely taxes land value in but repealed the tax in In the late 19th century George followers founded a single tax colony at Fairhope, Alabama. Although the colony, now a nonprofit corporation, still holds land in the area and collects a relatively small ground rent, the land is subject to state and local property taxes.

    Government rent in Hong Kong , formerly the crown rent, is levied in addition to Rates. Estonia levies a land value tax which is used to fund local municipalities. The rate is set by the Local Council within the limits of 0. It is one of the most important sources of funding for municipalities. Very few exemptions are considered on the land tax and even public institutions are subject to the land value tax.

    Land that is the site of a church is exempt, but other land held by religious institutions is not exempt.

    INVESTING TAXES EXPLAINED: Dividend Vs. Growth Investing

    It has also been used in Mexicali, Mexico. In the government of Ireland announced that it would introduce an LVT, beginning in Kenya's LVT history dates to at least , shortly after it achieved independence. Local governments must tax land value, but are required to seek approval from the central government for rates that exceed 4 percent.

    Buildings were not taxed in Kenya as of The central government is legally required to pay municipalities for the value of land it occupies. Choose the subscription that is right for you. For 4 weeks receive unlimited Premium digital access to the FT's trusted, award-winning business news. Join our subscribers with digital access to our essential news and opinion.

    Join over half a million subscribers with unrestricted digital access to all the essentials, plus premium deeper insights and analysis. All the benefits of Digital plus: Join our premium subscribers with unrestricted digital access plus the FT Newspaper delivered to your door. All the benefits of Premium plus: Learn more and compare subscriptions.

    Close Financial Times International Edition. Search the FT Search.