Land Value Tax in the WSJ

I enjoyed the big WSJ piece on the land value tax, even though they got some of their facts wrong. It really captures the frustration of being a champion of this really good idea that hasn’t found a natural home in either political party:

In Cambridge, Mass., a George-inspired group called the Lincoln Institute of Land Policy funded a CD set of Mr. George’s writings. And it distributes materials explaining the land value tax, as well as other tools that help municipalities raise revenues.

But the organization’s chief, Greg Ingram, a former World Bank executive who taught economics at Harvard, is skeptical. Land taxes alone, he calculates, would account for just 5% to 10% of the GDP—not enough to save the economy.

“If you think Georgism is going to be the singular solution to all our problems,” he says, “you’re going to be disappointed.”

Not overselling it is key. I don’t think anybody thinks there’s a “singular solution to all our problems.” But for the specific problems of rent inflation and high taxes on building improvements, land taxes are a sensible solution. It’s merely a good practical idea for cities hoping to make more efficient use of limited downtown land and transportation infrastructure.

As to political strategy, what needs to happen is for the land value tax to hitch onto the growing Streetsblog transportation/urbanism corner of American politics, and try to become as central to that platform as ideas like market pricing for parking and road congestion. These ideas are ascendant in Democratic and Northeastern Republican politics, particularly at the city level. If LVT becomes less fringy, and more central within the smart growth issue space, it’s only a matter of time before it finds a politician to champion it in a larger city. I think there’s an opportunity to persuade Bill Peduto and his supporters on City Council to bring back LVT in Pittsburgh, and also to inject LVT and tax reform into the 2015 Philadelphia elections.

Comments

  1. Rich says:

    Why not just take this totally partisan? I mean, do we believe the northeastern GOP is even relevant at this point? They really can’t win a national nomination without selling out their entire term in office, and so it’s a dead end direction for the politicians of their party. Isn’t the only hope here in the Democratic Party?

    • Jon Geeting says:

      Yeah, I struggle to understand the smart growth political strategy sometimes. They have had some champions on the Republican side like Michael Bloomberg (though that’s a weird case), Mick Cornett, Governor Mitt Romney, private citizen Pat Toomey, and then locally Republicans like Ron Beitler and Percy Dougherty are identified with this stuff too. So advocates have been trying not to polarize the issue too much and alienate center-right politicians. If you look at how political issues are born though, lining up with one political party or another is usually the best way to go. If it turns out to be popular enough, eventually the other party will embrace it too just to take it off the table, like the conservatives did with the Civil Rights Act, and like we’re now seeing with the slow conservative climb-down on marriage equality.

  2. Nate Blair says:

    You probably should Google “ATCOR: All Taxes Come Out of Rent”.
    It is an economic fact recognized even by John Locke.

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