Reader's Letter Of The Day

From today's FT:

Sir, There is indeed "a broader argument to be had about taxing property ownership more heavily" (Tactical taxation, editorial, December 2). As Adam Posen of the Monetary Policy Committee has advocated, we need an automatic stabiliser for the housing market (Call for housing duty to prick bubbles, December 2).

But why not for the whole land market that underlies all property price bubbles, including commercial property? An annual tax on land values reduces the capital value of land, while collecting revenue only from non-productive rises in land prices. Nor does it impinge on productive investment in other assets, such as house-building, factories and infrastructure.

Unlike taxes on labour, capital and sales, it pinpoints [sic] all asset bubbles dependent upon land prices. Subprime mortgages would be a thing of the past.

Brian Hodgkinson, Oxford.