The student news site of Skyline College.

The Skyline View

Filed under Opinions

A tax we should all agree on

Hang on for a minute...we're trying to find some more stories you might like.


Email This Story






Taxes suck. They really do. Trust me, I’m just as unhappy as you when I look at my paycheck and see that I actually earned X but I’m only being paid Y because Uncle Sam took it from me and there’s nothing I can do about it because, well, he’s America and I’m just a guy who sometimes puts his underwear on backwards.

In practical terms, we do it because not only the law demands we do but also because we know (or hope) it goes to making improvements in schools, roads, hospitals, our military and a myriad of other taxpayer funded institutions. However, the tax code of today is too complicated, ineffective and unfair to wholly serve its ideals. Want to hear about a tax that doesn’t suck? It’s called the land value tax, or LVT.

Now I know it doesn’t sound sexy but bear with me here folks. Real estate is all about location and most values in land increase from the activity of the outside world. Landowners profit off unearned income from proximity to good transit links, customers, supplies and other businesses. You can make huge amounts of profit just by sitting on your butt if you own valuable land. So why not tax this?

Economists have long expressed their love for the land value tax from Adam Smith who said “nothing could be more reasonable” to Milton Friedman who referred to it as the “least bad tax.” Yet none more so than Henry George whose 1879 work Progress and Poverty argued that a land value tax should replace all other forms of taxation thus allowing labor and capital to operate freely thus ending unemployment, inflation, poverty and inequality.

Most modern economists do not go this far but still support the idea strongly. The wonderful thing about the LVT is that nothing you do can affect the tax because it is entirely dependent on the value of the land itself. If you improve the structure of a building or add an extra story the LVT won’t raise like it would with a property tax, and if you make more money doing whatever you do with the land, the LVT won’t raise like it would with an income tax. The tax burden on you would only increase if the value of the land itself increased, which occurs when the local economy becomes more vibrant and productive, thereby attracting more people to work and live there.

If you are a landlord you will be able to charge more for people to live in your building and if you are a business owner it will increase sales and income thus allowing you the purchasing power to keep up with higher LVT payments. This would not totally solve gentrification in neighborhoods like the Mission or West Oakland, but there’s no doubt it could help tremendously.

Furthermore, the LVT would shift the tax burden from the individual to the productivity of the local economy itself. It would incentivise good economic behavior like development, improving or hiring more people instead of jacking up rents while you’re landlord turns into a fatter, less charming Rockefeller. It could even help alleviate urban sprawl by encouraging people to build up, which would certainly be a popular aspect amongst environmentalists. The LVT could help limit urban blight and land hoarding because it would encourage development since land value would be predicated upon economic productivity.

The tax could raise huge amounts of revenue that would allow for us to roll back and reform much of the present day tax code but more importantly that revenue could go toward a more generous social safety net in regards to things like Medicare or food stamps and perhaps even a universal basic income.

The land value tax seems like such a no brainer but those in Sacramento and Washington are unlikely to pass a LVT bill anytime soon. Big time real estate owners and developers have been getting rich off the status quo and have funded many a politician to ensure things stay as they are so don’t expect a LVT tomorrow. However, if we the public show enough support for the land value tax and demand our voices be heard the status quo will have to chang-ahhh who am I kidding? They’ll never pass this, it makes too much sense!

Update: The article has been updated with the correct writer name. 2:36 p.m. 12/9/2016

4 Comments

4 Responses to “A tax we should all agree on”

  1. Anthony Werner on December 8th, 2016 8:49 am

    Hello Sarah,,

    I read your article with interest. It was drawn to my attention by a Google alert.

    I have a small publishing company, Shepheard-Walwyn Publishers, and one of the areas we publish in is books based on the philosophy of Henry George. We have a special website devoted to it http://www.ethicaleconomics.org.uk Most of the books in the list are available in the USA via our distributor, Independent Publishers Group (IPG), in Chicago.

    The author of one of our recent titles, ‘From Here to Prosperity’ is based in California, near San Francisco, I believe. I will forward your piece to him. You might be interested in him writing an opinion piece or giving a talk. Here’s a link to his book on our website http://www.shepheard-walwyn.co.uk/product/from-here-to-prosperity/ There is a facility beside the book cover to view sample pages.

    Best wishes

    Anthony Werner

  2. Wyn Achenbaum on December 9th, 2016 8:15 am

    Well said! “Progress and Poverty” is available online at schalkenbach.org, both in its unabridged California-written original and in a fine modern abridgment by Bob Drake. Drake’s audio of the latter is at hgchicago.org.

    There are numerous websites devoted to Henry George’s ideas: henrygeorge.org, wealthandwant.com, lvtfan.typepad.com, earthsharing.org, henrygeorgeacademy.org and answersanswers.com are a few starting points.

    Some relevant books include Walt Rybeck’s “Re-Solving the Economic Puzzle,”and “The Mason Gaffney Reader: Essays toward Solving the Unsolvable.” And Henry George’s book “Social Problems” is a very readable collection of essays, also online. All worth exploring.

  3. Bill Batt on December 9th, 2016 8:52 am

    Congratulations on digging through lots of nonsensical public discourse to really express sound thoughts. As a retired academic that has been involved in the movement for a quarter century and who serves on four nonprofit boards supportive of Georgist economics and LVT, let me also add that we could really use a skillful and effective journalist.

    I assume that you’re in school now, but if at some point you are in a position to join forces with our network, by all means do. Best wishes. B.

  4. Edward J. Dodson on December 9th, 2016 9:54 am

    Sarah Marasigan is right about the potential justice and economic benefits of moving to a system of public revenue that captures location rents via “land value taxation.” A small group of people (myself included) have struggled to bring this perspective into the public dialogue for many decades. The people of California actually came very close to adopting the measure via voter referendum back in the early part of the 20th century. Ever since then the major landed interests have gained more and more power over the political agenda.

    What is certain is that the structure of our nation’s land markets and our tax system has reached the point of irrationality that the generation of young people entering your adult years will struggle harder and harder for a decent living. The concentration of income and wealth that now exists is evidence that we have devolved into a “rentier” dominated society, in which rent-seeking privileges claim a larger and larger percentage of what is produced by others.

    The young must enter the battle for just law. The few must become many, picking up and holding the torch that fell and almost went out when Henry George died in 1897.

    Edward J. Dodson, M.L.A.
    Director
    School of Cooperative Individualism
    http://www.cooperative-individualism.org

Hang on for a minute...we're trying to find some more stories you might like.


Email This Story






The student news site of Skyline College.
A tax we should all agree on