While there are practical limitations to LVT, all taxes have limitations. LVT is simply the “least bad” of many alternatives. Imagine a future of semi-sovereign charter cities. They raise revenue primarily via LVT with no deadweight loss, no burden on incomes, and affordable housing.
Further, with LVT, the incentives are properly aligned…to raise more revenue, the government must raise land values (not tax rates). Doing so requires policies that make the charter city a place people and businesses want to be in. How cool is that?
Instead of extracting wealth, the goal becomes to create more and more of it.
While there are practical limitations to LVT, all taxes have limitations. LVT is simply the “least bad” of many alternatives. Imagine a future of semi-sovereign charter cities. They raise revenue primarily via LVT with no deadweight loss, no burden on incomes, and affordable housing.
Further, with LVT, the incentives are properly aligned…to raise more revenue, the government must raise land values (not tax rates). Doing so requires policies that make the charter city a place people and businesses want to be in. How cool is that?
Instead of extracting wealth, the goal becomes to create more and more of it.