How to Give 75% of Allentown School Tax Payers a Tax Cut

Here is a chart from the Lehigh County website, comparing millage rates for different taxing bodies in Allentown:

Notice how in the first group, the millage rate for city land is higher than the millage rate for city buildings.

When Allentown started charging different rates for land and buildings, three out of four property owners received a tax cut.

People who don’t consume a lot of land – think working class neighborhoods with a higher building-to-land ratio, modest lawn, etc – saw their taxes go down. The minority of people who own properties with lots of unimproved land saw their taxes go up. It’s a nice revenue-neutral progressive tax cut.

Don’t take my word for it. Let’s hear it from Pat Toomey, recommending the  land value tax to Lebanon, PA:

It’s too bad that the Allentown School District didn’t adopt the land value tax when the city of Allentown did, since school taxes are the biggest local tax for most people, but it’s never too late!

All the district has to do is split the real estate tax into land and buildings. Copy Allentown’s spread, and 75% of ASD taxpayers will see their taxes reduced.

I bet BASD and EASD taxpayers think they could use a tax break too. Most Democrats would probably agree that we should make federal taxes more progressive, but aren’t as active about pushing for progressive taxation in local government. That’s too bad. It’s not preordained that local taxes have to be regressive, and it’s probably easier to get stuff like this done at the local level than it will be to let the Bush tax cuts expire.


  1. 50% of the country already pays no Federal tax, and you want to make it even more progressive?

    On the point here, I see where you’re going but I still struggle with penalizing someone who owns a vacant lot and is smartly not building anything commercial right now because there are no tenants. Why penalize someone who doesn’t want to go bankrupt?

    • Jon Geeting says:

      The federal tax and transfer system is somewhat progressive, but state and local taxes are overwhelmingly regressive. The net distribution of the tax burden in America is only slightly progressive. I’m not the kind of liberal who thinks only rich people should pay taxes. I would like to see a broader tax base, but I would also like to see a more steeply progressive distribution of the tax burden.

      I think Toomey’s point about LVT is basically right even if you’re uncomfortable with the idea. You don’t want to punish people for improving their properties. The worst case scenario with a property tax that’s too high is that people let their properties go to shit or move away. Worst case scenario with a land value tax that’s too high is not bankruptcy – it’s that the landowner sells the land to somebody else. Not nearly as bad.


  1. […] and land value.Taxing building value discourages investment, but taxing land value encourages it. Just ask Pat Toomey, who helped bring the land value tax to Allentown. The land value tax is a tax on waiting to build, […]

  2. […] the land value tax back in 1996, and started taxing land values at 5 times the rate for structures, 75% of city property owners got a tax cut. Not because total revenue dropped, but because the tax burden shifted to people who own lots of […]

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