Monthly News Digest -February

IN THE NEWS

The short life of Pennsylvania’s radical tax reform

The town of Altoona began trying out the land value tax in 2002 on the recommendation of the Center for the Study of Economics. From 2011, land value tax completely replaced taxes on buildings.

Nevertheless, five years later, land value tax advocates don’t have clear examples to point to of projects or investments in the city that would have been made without the tax system in place, and the reform has been undone.

The incentive created by the city’s land value tax was limited because the county and the school district imposed property taxes. Another major problem was that the tax system was so unusual that potential residents and businesses struggled to understand the potential benefits of moving to or investing in the city.

In some cases, businesses might have been turned off by the relatively high rate of tax on land, not understanding that there was no rate of tax on structures.

Britain has enough land to solve the housing crisis – it’s just being hoarded

The UK’s biggest house building firms are sitting on 600,000 plots of land that have planning consents – four times the number of new builds in the UK last year.

Land is often bought and sold many times over before construction goes ahead, and many owners have no intention of every building. The result is speculation and very expensive housing.

The average price of agricultural land in England is £21,000 per hectare, whereas land that has residential building consent is valued at close to £6 million per hectare.

Narendra Modi has made it extremely unappealing to be a landlord in India

The Modi government is introducing measures to encourage first-time home buyers, introducing tax incentives for self-occupied properties and rentals.

In the past, these tax incentives were capped for owner-occupied houses but not for rentals. Therefore, a landlord could book the loss they suffered on lower rent, which helped in reducing their overall taxable income. 

It is expected that this will bring new real estate to the market in turn bringing the prices down, which have already fallen by 30 percent after the demonetisation.

Mayor positive about a Land Value Tax trial

With the release of the London Finance Commission report, Assembly Member Tom Copley called for a Land Value Tax to replace the three basic property taxes: council tax, business rates and stamp duty land tax.

Copley said a Land Value Tax would discourage land banking, where developers sit on land waiting for its value to rise without building on it. This would incentivize the building of news homes quickly while raising much needed funds for investment.

Congress moves to give away national lands, discounting billions in revenue

Republican lawmakers have quietly laid the foundation to give away 640 million acres of national land to state governments. Critics fear this could eliminate mixed-use requirements, limit public access and turn over large portions for energy or property development.

The oil-rich Arctic National Wildlife Refuge could soon be up for sale. States with small budgets may be unable to invest in the management of these lands and decide to sell them off.

Areas at stake are managed by the Bureau of Land Management (BLM), National Forests and Federal Wildlife Refuges, and contribute to more than $600 billion each year in economic stimulus from recreation and 6.1m jobs.

Not Dirt-Cheap: 10 Cities Where Land Is Worth More Than the Home on It

A home for sale last year in San Francisco’s Sunset District came perilously close to redefining the very concept of a “fixer-upper.”

The place was not inhabitable in any way, and yet it sold for just under $1 million last February after just a short time on the market. In space-strapped San Francisco, the real value of real estate lies in the land.

Could Land Value Tax reduce the tax bill for 99% of us?

Calculated based on a total land value in England of £1.842 trillion, residential properties would pay 79.5 percent of the tax, businesses 15.5 percent and agriculture 4.8 percent. Current Council Tax is unfairly distributed because it uses property bands.

On this basis, the top 1% of property wealth owners would be liable for 54% of the residential part of the tax assuming the tax is introduced at a flat rate for all. Land Value Tax, unlike Council Tax, is not a residency tax it is an ownership tax, so people in rented accommodation do not pay the tax. 

Infrastructure Australia says tax land not property to capture value

Infrastructure Australia recommends that governments gradually get rid of stamp duties and tax land values over the long term, arguing it is the “fairest” way of raising money for new infrastructure.

A new train line that makes it faster for people to get to work will typically attract people to buy houses nearby, increasing land values. IA’s report said “there are serious challenges for any form of value capture based on property prices rather than underlying land values.”

Why Falling Home Prices Could Be a Good Thing

Instead of looking at homes as investments, what if we regarded them like a TV or a car or any other consumer good? They would be somewhat cheaper in most places, where population is growing slowly. But they would be profoundly cheaper in places like San Francisco. That was the conclusion of a recent paper by the economists Ed Glaeser of Harvard and Joe Gyourko at the Wharton School of the University of Pennsylvania.

The paper used construction industry data to determine how much a house should cost to build if land­ use regulation were drastically cut back. Since the cost of erecting a home varies little from state to state — land is the main variable in housing costs — their measure is the closest thing we have to a national home price.

SOCIAL MEDIA HIGHLIGHTS

We don’t necessarily endorse any of the viewpoints in these discussions on Facebook, but they are sure to make you think. Tell us your thoughts, and feel free to submit images that more accurately reflect some of the concepts generated by the Land Value Tax Facebook community.


Since most of the economic rent in the world is actually captured by the wealthy, Charles D Allison attempted to construct a more accurate image showing how the rich capture a greater proportion. Exactly how much and what the standards for some of these terms are is unclear. It is clear however that rent privatization is much more stratified than either of these conceptual images would indicate. So, if you can create a more accurate image, reply with it or tell us what else you would improve about this one.



TREND SPOTLIGHT

EarthSharing.org in January:

 Wikipedia interest in ‘Henry George’:

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