James Leroy Wilson's blog

Saturday, March 04, 2006

Peirce For Ohio Governor!

Both Libertarian Jason and The Progress Report call attention to postive coverage in the Columbus Dispatch on Ohio Libertarian gubernatorial candidate Bill Peirce's campaign for land value taxes. The article goes so far as to explain how it would work:
To make taxes fair, Peirce said, the state should abolish all tax incentives and allow market forces to dictate where construction goes.

Then, it should upend the property-tax system, which has valued buildings at roughly three times the value of land for the last century or more. In its place should go a system in which land makes up at least half of the taxable value of a property. The value of buildings, if taxed at all, would be radically reduced.

The result?

An end to tax policy that rewards owners of dilapidated and vacant properties with low tax bills and penalizes those who invest in their properties with higher tax bills.

Since buildings become less important to total value, property owners don’t pay higher taxes when they add a Florida room or build a 12-story office instead of a two-story.

Owners of vacant lots or dilapidated buildings see their taxes rise to the level of similar-size properties nearby. The tax increase motivates slumlords to invest enough to pay the higher bill or sell out.

When new buildings appear, surrounding land is worth more money, too. So as urban renewal beautifies neighborhoods, it raises their relative tax contribution. That means tax bills in other neighborhoods can come down.

Since land becomes the prominent basis for taxes, people save tax money if they buy smaller lots. That could help stop sprawl.

Does it really work like that?

Joshua Vincent, executive director of two Philadelphia groups dedicated to land-value tax, said it does.

He heads the Henry George Foundation of America, the lobbying arm of an international tax-reform movement, named for the 19th-century inventor of the land-value tax. Vincent also runs the Center for the Study of Economics, which conducts feasibility studies for communities considering the tax system.

"Everything we want, new buildings, improved buildings, is punished by taxation," Vincent said. "Land tax is the only way to tax without distorting anything."

No comments:

Post a Comment