Reader's Letter Of The Day

From the FT:

Sir, Martin Wolf’s comment on mansions tax, while 49 per cent on target, misses the point that the rise and fall of property prices is a rise and fall in land values (Why Cable’s mansions tax is right, September 25).

A tax on land values recoups the benefits of infrastructure improvements and investments that are reflected in the increased economic and other benefits that accrue to the land owners. A little reflection on why property prices are higher where there is a good local authority school reveals that it is the land value component that is higher, not the bricks and mortar.

The 1909 “People’s budget” of Lloyd George, supported by Winston Churchill, was the first intelligent approach to taxing land values, understanding that land was not equivalent to cash or other investments, but a private advantage that did not contribute to national wealth but benefited financially from the growth of population and the improvement of infrastructure...

Jack Bovill, London WC1, UK.