Imagine two plots of land in the heart of a big city, side by side, the exact same size. On one stands a gleaming fifty-story tower full of offices and apartments and shops. On the other sits a zero-story parking lot.
Now ask yourself: which owner pays more in taxes?
The tower owner does. We tax the building, so the more you build, the more you owe. The parking lot owner, who built almost nothing, pays almost nothing, even though the dirt beneath that asphalt is worth a fortune precisely because it sits in the middle of a thriving city that everyone else built up around it. So the parking lot just sits there. Year after year. The owner pays their small tax, and watches the land’s value climb—value they did nothing to create, mind you—waiting to sell for a huge windfall.
I think that’s pretty perverse, and a land value tax (LVT) is built to fix it.
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Thank you for that excellent article.
I have one skeptical remark, though.
Converting a parking lot into a 20-story parking structure will generate more income for the owner, but also more pollution, noise, traffic jams and accidents for the inhabitants of that area.
Not every business that creates income, does create a benefit for the common good.
Maybe just having a garden in a city center might be more valuable for the people (even if it is private) than more “business”.
The same with the “construction booms” mentioned. Nowadays construction comes with enormous use of scarce resources and ecological damage.
Still, LVT is clearly a very good idea, just some arguments are less compelling than they may seem.
Also worth reading is:
Will Glovinsky
Basic income’s appeal today is similar to its roots in 18th‑century England – it’s a way to compensate people for a common good taken for private gainhttps://theconversation.com/basic-incomes-appeal-today-is-similar-to-its-roots-in-18th-century-england-its-a-way-to-compensate-people-for-a-common-good-taken-for-private-gain-276950