For those who are not familiar with the work of Henry George (1839-1897), he is best known as the paper of today’s book. Progress and povertyOriginally published in 1879, it became a bestseller in the late 1880s and 1890s. He insisted on land tax in a more fair and efficient way.
Modern take has A Henry George Foundation Today, the website provides an overview of the proposal for the UK land tax. [land value taxation] It is a national tax tax collected nationwide, which was decided nationwide, which was paid by a free holder for the public market value of all land without exception. ” Land value taxes are not the same as property tax, and the value or land of housing or commercial buildings includes an improved land for agriculture or recreational purposes.
When George wrote in the late 19th century, it was owned by a large amount of land in England, rich or rich or both. They could prevent this land from being developed, thus limiting the cities of the city or industry. By extinguishing the unprecedented land sold in the public market, there will be incentives to sell some of the land. Moreover, if the government builds a railway connection through a specific area, the value of uneven land near the railway will rise.
Of course, land tax will work somewhat different today. However, you can imagine a situation where the suburban has a very limited zone designation, which is one house per acre. But if you can develop a land with 16 small houses or apartment buildings in the acre, the property can be taxed not only the value of a single house of property, but also the value of the basic land.
I will not try here to insist on the case of the land tax here. Instead, I will point out historical episodes that show practical difficulties. Samuel Watling “Failure of land value tax ” (In progress, March 13, 2025, No. 18).
In 1900, the British government was mainly funded by income tax paid to military and public officials. About one -four of the income tax was delivered to the local government, which was in charge of “poverty relief, police, education and hygiene.” Today, the central government, which we call it “unpaid orders,” has passed a law that provides a specific level of poverty relief, police, education (5-12 years) and hygiene, but does not support sufficient funds.
In this era, the British government was able to use property tax as an option. The main use of property was to rent land for housing or business. Therefore, taxes on property were taxes for rental income. According to Watling, “3/4 of funding for local government activities such as poverty relief, police, education and hygiene came from rental income tax.The city rent was added to about 10 %of GDP at that time, so one -quarter of the economy was in charge of funding of local authority. In the case of the cities that are greatly delivered to the tenant, this tax has been raised for the public service to be provided.
In the prediction of Henry George, the land tax can solve this problem and solve it in a wide way. WATLING explains:
However, this limit improvement, which reduces dissatisfaction with land improvement and provides more funds to urban councils, is only part of the reason why liberal George scholars prefer land value tax. George promised his followers a lack of utopia.. George argued that competition will reduce labor and capital revenue to a minimum level because all production requires land, so that all remaining economic surpluses will be accumulated as land rents. Therefore, he concluded that land rent alone captures the total surplus value of society, so that all government activities can be funded. He argued that the entire social surplus would cross the land value, which would end poverty as well as all the money that the government needed, and to create a harmonious society that all human beings could fully satisfy their natural needs and needs.
The incident happened. WATLING provides details. For my purpose, the key fact is that in 1911, the Liberal Party provided a task of enacting land taxes and giving values to a given property. This may be valued based on value compared to a given rent or compared to similar property nearby. For properties that provided profits from mining, this calculation was reasonably simple. But if the land was more complete or developed at all, the land tax was a more difficult calculation according to what the value of the land was. WATLING:
There was a valuable real estate in this country, and the land and structure were traded together for most of these real estate, which means that there is no clear market evaluation of the land. In addition, according to Georgist theory, taxes had to be credited to the owner to improve the land. But this meant calculating many hypotheses, including buildings, structural values and values contributed from piping, railroad access and other infrastructure contributions. This process was beyond the government’s ability. In August 1910, the Liberal Party sent 15.5 million copies of the infamous ‘form 4’, and the owner had to submit certain details on the use and employment of income and property. We also had to estimate the site value itself. If the document is not returned, a fine of £ 50 is imposed at about 7,500 pounds.
Pushback was extreme. There was a lawsuit until one of the three land (there were multiple) was completely invalidated. Except for the tax compliance costs imposed on land owners, the cost of the tax implementation government was significantly larger than the increase in additional income. Moreover, the promise of land tax would encourage the use of low -utilization lands, but instead, the owner and potential construction company of the land lacked funds for construction by imposing immediate costs for not used. The proportion of the building fell rather than rising.
Perhaps this could be solved over time, but in this case, in this case, in this case, at the end of World War I. World War I. In 1922, the Liberal Party lost an appetite for pursuing land taxes in 1922, and in 1922 the difficulties for local governments to raise funds continued to this day. Especially for land taxes, we point out:
[T]He is a pure land value tax. Countries that raise significant amounts of taxes on land, such as Japan and the United States, do so through taxes on their property. The land value introduced in Australia and New Zealand has been abolished. Denmark’s land value tax is a trivial ground for the system that accounts for less than 2 % of the total revenue.
Henry George was writing in the context of his time and place at the end of the 1800s. It can be argued that pure land can be a reasonable approach in that era and place. It is more difficult to create an event in other times and places and proving property taxes and using them as practical alternatives.
