"The case for a land value tax is overwhelming" is the headline of an article in the Financial Times, but you can't read it because it's behind a paywall*.
However, most of us on here will have a pretty good idea what it says and the interesting bit is that it is in the Financial Times in the first place
*hence the "Not" in the title, in case anyone was wondering.
Saturday, 11 February 2023
Killer Arguments for LVT, Not
My latest blogpost: Killer Arguments for LVT, NotTweet this! Posted by Bayard at 17:41
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5 comments:
Yeah. But will the FT make the case that LVT must replace pretty well ALL other taxes?
S, are you able to answer L's question?
The article references this summary which you can read
https://cepr.org/voxeu/columns/post-corona-balanced-budget-fiscal-stimulus-case-shifting-taxes-land
This is the full paper
https://cepr.org/publications/dp16652
Summary
The post-Corona economic environment puts a premium on finding fiscal means to stimulate the economy while continuing to finance current levels of expenditures and debt. We develop and carefully calibrate a model of the US economy to show that an increase in the tax rate on the value of land, balanced by decreases in the tax rates on the incomes of capital and labor, can meet this need. We find that the US share of land in total nonfinancial assets is more than 50%, so that the tax base is very large. This is corroborated by very high quality OECD data for other industrialized economies that, almost without exception, find land shares of between 40% and 60%. Our baseline proposed tax reform is an increase in the tax rate on the asset value of land from its current 0.55% to 5.55%, accompanied by reductions in tax rates on capital and labor incomes of 28 and 10 percentage points, respectively. In a representative household model, this increases welfare by 3.4% of steady state consumption, and increases output by almost 15% relative to trend. In an economy with separate groups of workers, capitalists and landlords, the output gain is the same, while the welfare gain increases to 6.4% on average across the three groups. Welfare and output gains for a wealth tax that raises the same revenue, and which increases the tax rates on capital and land equally, are only half as large as the baseline. Welfare and output gains for an optimal tax reform, under the assumption that the tax rate on the value of land is capped at 20%, are approximately twice as large as the baseline. This reform raises 55% of all tax revenue through land taxes, with the remaining 45% raised through consumption taxes, while all income taxes are abolished.
Shiney
"The post-Corona economic environment puts a premium on finding fiscal means to stimulate the economy while continuing to finance current levels of expenditures and debt"
Oh great. Just peachey. They just don't get it do they. LVT is to raise more tax for them to spend.
What a crock.
L, so it really is a Killer Argument For LVT, Not.
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