Incentive Taxation Blog

How to mend the Property Tax

05/14/2012 12:43:00

Assaults on the property tax have been commonplace in the US (and Australia,New Zealand, etc.) in the past few decades. We think that the property has a lot wrong with it; but its a situation that calls for a scalpel not an atom bomb. Here are some basic alternative solutions, including the land value tax as a way to abolish the tax on buildings.

Four Ameliorations for Assessment Increases or Tax Increases: an Analysis

William Batt, Ph.D., Joshua Vincent, ED

Center for the Study of Economics, Philadelphia, PA

With the introduction of new assessments or property tax increases, and the resulting disquiet amongst citizens and property owners, jurisdictions must explore tools to ameliorate property tax/valuation “sticker shock.”

The following précis explores these alternatives to allow for the refund or forgiveness of real property tax liability of certain low income, disabled, infirm or senior citizens. The measure would apply relief from tax burdens attributable to real property tax rate increases or increases in the assessed value of the low-income senior citizen's homestead (i.e., primary dwelling).

What relief measures to employ is the focus of this synopsis. Each state has a different system, and this guide to property taxes in the 50 states is an invaluable tool to research conditions where you are.

A. Comparative National Use of Property Tax Relief Measures

Four property tax relief mechanisms have been instituted nationally for selected groups of homeowners. These relief measures apply variously to elderly and to low income households, and less often to disabled and veterans. Sometimes they are employed as a local option.

The Homestead exemption was adopted by legislative design in several states during the 1960s and 70s, and now exists in all states but Missouri and North Dakota in some form;

The Circuit Breaker is available in 34 states and provides reimbursement to localities by the states for revenue forgiven.

The Property Tax Freeze, has come out of property tax revolts in a few states largely due to public initiatives in the 1980s and 90s.

The Deferral option again arises from legislative design in 25 states and has the highest employment as a local option.

The 2002 NCSL (National Conference of State Legislatures) study, reports that Pennsylvania authorizes some localities to opt for Homestead Exemption or Credit, and for Property Tax Deferral. The Circuit Breaker is available statewide.

As applied in Pennsylvania, the local option homestead exemption may be no larger than one-half of the median assessed value of homestead property.

B. How sound are each of these measures from the standpoint of textbook tax principles?

The commonly cited principles of sound tax theory: Neutrality, Efficiency, Equity, Administrability, Simplicity, Stability.

The only tax that has no downside effects and comports perfectly with these principles is a is a tax that is "inelastic" or has fixed supply. That means commodities like land sites, air, water, and other natural resources. Both Mark Twain and Will Rogers said "Buy land; they ain't makin' it anymore."

One should also consider land use configurations and environmental impacts, and this is particularly important with respect to the real property tax.

Recall also that the property tax is really two taxes with various different dynamics -- a tax on land values and a tax on improvements. The former has no harmful effects and actually fosters constructive behavior. The tax on improvements has many detrimental impacts.

Recall also that buildings depreciate in value, just like cars, computers or refrigerators. Only land appreciates in value. So the rise in market value of real estate (beyond inflation) is due to the increase in land values.

The productivity of a community's total enterprise is reflected in its land values by what is called economic rent.

Taxing land values stabilizes real estate prices (i.e., insulates them from bubbles), even as it encourages the efficient use of locations by maintaining commensurate carrying costs.

Why is a tax on land value good? It is totally:

Neutral with respect to its influence upon behavioral choices,

Efficient insofar as there is no “excess burden” (a fancy word for productivity loss and economic drag).

Equitably progressive insofar only individuals or households that own land pay any tax at all, and because middle class homeowners for the most part own only modest parcels under their houses or farms where land is cheap.

Administrable because it's totally transparent, not likely subject to challenge, and can't be take it to an off-shore tax haven.

Simple to understand, by all members of the community, and

Stable, so that it doesn't impact on budget designs very much.

C. Tax Relief measures can violate these principles in varying degrees.

The productivity of a community's total enterprise is reflected in its land values by what is called economic rent.

All taxes come out of economic rent. If the rent is not recaptured in taxes, it is reflected instead in the market values of land sites.

Giving property tax relief will result in more economic rent flowing through some sites more than others, raising their market prices. This affects tax neutrality and tax efficiency.

Real property taxes are not on people; they are on locations (though people pay them).

Giving property tax relief to some locations and not to others distorts land use choices. This happens either by altering either choices or times of use. Ideally all sites should be taxed at the same rate and none should be exempted.

Property tax relief measures are instituted at the State level, and assessments and tax rates vary greatly by locality. This creates inequities by regions of the state.

D. How administrable are property tax relief measures?

The neutrality, efficiency and fairness of the relief depend on accurate assessment of property parcels and upon maintaining the integrity of the formulas employed. The factors of the formulas typically get out of date quickly and then distort the programs of relief.

Property tax relief formulas frequently need to be adjusted and updated, and this makes them subject to political influence.

E. Comparing the four relief measures, which one is best?

Homestead and Circuit Breaker instruments quickly become out of date and distorted.

Assessment freezes and tax rate freezes both corrupt the tax regime.

All three foregoing measures all cost the government in revenue forgone.

All three foregoing measures often rely on homeowner initiative to be eligible.

All three foregoing measures are difficult to understand and enforce.

The Deferral provision has the following advantages:

It does not alter the market value of the parcel, as the tax will ultimately be paid.

It does not affect the use of sites, because the titleholder has no incentive to alter use.

It is self-selecting for households desirous of employing the option, reflective of real income circumstances rather than arbitrary factors such as age.

Local governments are not deprived of revenue, even if it may be delayed.

It is fair to other homeowners in the community.

The program is simple to understand. The Deferral program assures what it is primarily intended for: security for elderly or low income households as long as they wish to reside at that site.

Flint Michigan: a bold Mayor with a bold idea.

05/09/2012 15:47:00

Flint's Dayne Walling - a Mayor open to ideas and opportunities for his city

The story of Flint Michigan need not be retold here. The story of Flint is the story of many Rustbelt cities from Troy New York to St. Louis Missouri. Existing for decades as a city with good jobs for all that wanted one, a city that rewarded enterprise and hard work. The downturn of the US automobile industry was recently (But chimerically) reversed by pumping billions of taxpayer dollars to Chrysler and General Motors, yet has had little effect on the city itself. With all this,Flint could have given up, but it appears they are looking for ways to bring their community back together to heal it, and make it whole again.

Economic collapse is quickly followed by societal collapse. Like Camden New Jersey or Reading Pennsylvania, Flint is dangerous on many levels. Flint needs stable municipal revenues to help combat these problems.

Second term Mayor Dayne Walling has decided to do something very rare: look at new ideas. In this recent column from the Bridge, a locally based newspaper reporting on Central Michigan, Mayor Walling proposes several sensible ideas to help Michigan cities, not least of which is the land value tax. To do this, Michigan will need a new approach to property assessment and tax law,because Proposal A limits values to something called "taxable value" which is skewed the property tax and it's valuations out of all relation to market value. Yet, current tax reform bills would provide tax relief to nonresidential property, with no clear revenue replacement for cities that need tax dollars just to survive and operate. Tax reform has to be for everybody.

We wish Mayor Walling luck and give him our support.

An interesting video journey through Flint shows both a grim reality and the potential for rebirth. Underneath each shattered and abandoned building, is the land. In Flint as elsewhere, land and its value can serve as a resource while the city finds a new way.

Flint Michigan is Much More than a Michael Moore Movie.

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Flint, Michigan: Urban Decay in the USA

Abandoned and vandalized homes and businesses. July 2009

Canberra: Decision to reinstate land value tax on track

05/08/2012 16:40:00

Canberra Plan 1900s

Canberra Today

In the early part of the 20th century, a rising and confident Australia decided to create a national capital. It was to be a planned city, and surprisingly enough an American named Walter Burley Griffin won the competition to design Canberra. The Griffin design was linked theoretically and contextually to the first stirrings of modern planning and to the visionary land economics of the classical economists.

In the case of Griffin, it was his commitment and enthusiasm to good economic sense and economic justice learned through his lifelong reading of the American economist Henry George.

When arriving in Australia, Griffin set to work and also joined company with many land value tax advocates in the organization Prosper Australia, still vibrant today. The role of these Australians, Griffin and some other Americans led to the execution of the plan to make Canberra a leasehold rather than a freehold district.

Over the years, the land value tax system has been weakened in the ACT, but the Territory Assembly has recently recommended that land rent be collected in place of other forms of tax, and it looks like, finally, it is a go (with a 10-20 year implementation, much like in Altoona.! We will report further as the process moves towards its conclusion.

Philadelphia faces a true Rubicon: the time for reassessment is now.

05/07/2012 15:39:00

Philadelphia Pennsylvania like most cities, counties and states have had to deal with tight budgets for nearly half a decade. For many reasons, not least of which are legacy expenses, revenue requirements will be increasing even as economies at the local and regional level still react sluggishly as the great recession of 2008 begins its ebb tide.

A complicating factor in Philadelphia's fiscal struggle is the reality that it's tax system is nearly unique in United States as the Washington DC Department of Finance annual tax comparison report so clearly demonstrates. Since the 1930s, Philadelphia depended on mobile subjects of taxation such as retail sales, wages and business. At the time it made sense, as business and citizens were tied much more closely to the urban center then today. Of course, those planes, trains, and automobiles have literally left their stations.

For decades Philadelphia has been trying to get out from under this terrible tax system which is generally acknowledged to have cost the city billions in wealth and hundreds of thousands of jobs and citizens.

After much debate, dozens of reports and commissions and studies, Philadelphia is still approximately the second highest taxed city in the United States. Interestingly, the higher the income in Philadelphia the tax burden jobs a bit lower. That puts Philadelphia and the company of cities like Bridgeport, Detroit, Louisville and Birmingham. That's a problem in a city that has far more gifts and attractions than its peers.

It has long been known that the best alternative to Philadelphia's tax system is to rely more heavily on property taxes with a corresponding reduction in other taxes. The problem getting from here to there is that real estate values have been hideously inaccurate for decades.

There is no consistency to values, and therefore no consistency the tax bills. The past half decade has seen efforts to reassess the entire city based on 100% of market value (as opposed to fractional assessments).

Unlike nearly every other jurisdiction in the US and across the world, Philadelphia has had an administratively and politically difficult time getting values and to place. This year's budget season is no different.

The administration under Mayor Michael Nutter is proposing applying something called the actual value initiative (AVI) which would have a revaluation in place by September 2012. But there's a rub. A budget must be set by July 1, 2012. The Nutter administration wishes to have instead of a property tax ordinance a revenue target goal for both the city and the school district (providing an extra $90 million for the Philadelphia school district in the process). Of course, that's usually not the way things are done.

This is standard practice, which is simplicity itself:

Budget Revenue Need ÷ Values = Tax Rate

Tax Rate X Values = Revenue

Will it be possible for AVI to be implemented? Even with some of the practical difficulties, the answer must be yes. Some call a reassessment without a tax rate in place a backdoor tax increase. It is entirely possible the more revenue will be raised with a revaluation down the line. Yet, the city government has raised property taxes officially in the past few years twice, along with the sales tax increase. Either way, tax bills went up.

AVI is meant to provide a fair, equitable and above all accurate system of values. Without accurate values, the City of Philadelphia will continue to stumble along in the long-term dependent on economy killing and job killing taxes. The property tax – made more efficient and fair by a land value tax – is the only alternative.

The Center for the Study of Economics has studied the Philadelphia property tax and the assessments upon which they are based for more than a decade. Last week, on May 2, 2012, we provided the following testimony acknowledging the technical issues arising from AVI. The bumps in the road will be no different than a reassessment where the values are provided long in advance of the budget season (witness Allegheny County earlier this year). All told, individual deficiencies in property values can be fixed down the road. AVI as a whole must be given a chance to get off the ground.

Eliminating the property tax? It must not happen, but we’ll see what happens.

04/20/2012 11:49:00

Independence? Perhaps, but not likely

Recently, an active and conservative member of the Republican Party in central Pennsylvania sent UrbanTools a copy of something called the "Property Tax Independence Act" (PTIA) with the interesting subtitle of "Liberty Equality and Prosperity". The legislation – more accurately a proposal for a constitutional amendment in the state of Pennsylvania – Is given a seemingly official sobriquet of “House Bill 1776.”

As yet, this is not an actual bill however. Moves to eliminate the property tax have been common in recent decades in Pennsylvania and elsewhere. As a rule, actual elimination has almost never been accomplished. Some putative tax relief bills and constitutional amendments (such as Proposition 13) have been passed with often mixed – to – disastrous results. In fact, passionate defenders of Proposition 13 are taking on the tone of bitter-enders who see the writing on the wall.

Yet, UrbanTools has always researched and helped implement programs that reduce the pressures of taxation on all strata of society from poor to prosperous. We also believe that a functioning market system augmented by a stable revenue system to fund government in the end is the best option for government, particularly state and local governments, as federal aid dries up never to return.

The Commonwealth of Pennsylvania is indeed a relatively high-tax state: the nonpartisan Tax Foundation has consistently placed Pennsylvania in the top 10 of state and local tax burden from 2003 to 2009 (last year available). However, blaming the property tax, while popular and certainly reflexive, does not stand up to scrutiny. Again, using Tax Foundation figures the property tax is a source of state and local revenue is 29.9%. That places Pennsylvania right in the middle of the pack at 22nd-highest, and significantly below the national median of 32.4%.

Property taxes are a manifestation of local control

One of the great unrevealed facts about property taxes are they are a local tax, and if people vote, they can raise or lower them. This April, 2012, the town of Medford voted a higher local levy above the set tax cap. That’s called democracy, and it couldn’t happen in most places. A Pennsylvania state legislator or County Commissioner from an area close to a state border like Maryland's is seeing growth from inflow, and greatly increased spending that is contrary to decades of tradition. We shouldn't be surprised. Yet, most Pennsylvanians live in rural areas with one big town usually serving as the county seat. It might surprise a citizen of Blair County for example, that the property tax burden in that county comes in at 1,089 out of the nation’s 1,823 counties. Yes the property tax is a bargain in Blair, Elk, Cameron and many other counties in Pennsylvania.

Eliminating the property tax will launch these affordable places into uncertainty with a statewide system that will surely not be one-size-fits-all. Looking at every tax is key to understanding the relative lack of competitiveness that Pennsylvania has. The Pennsylvania income tax is flat and wage-based , it captures revenue even the poorest Pennsylvanians, boosting the state’s ranking to number 16 in the US. The figures also take into account ubiquitous presence of the local earned income tax – again a wage tax – that that is paid in addition to the state levy.

The Spirit of 76?

The PTIA puts the blame squarely on Pennsylvania's troubles on the property tax. Other far more harmful taxes are essentially ignored. In fact, the solution proffered to the property tax as it exists is to increase sales taxes first and foremost. The accompanying documentation offered to support the PTIA claims that among other things that cross-border sales jumping will not occur because neighboring sales taxes are higher than Pennsylvania which is 6% statewide. The document does not count local levies, as it does for localities in New York State, thus excluding taxes like Philadelphia’s extra 2% sales tax. As it stands, Pennsylvania 6% rate is higher than Ohio's 5.5%, the same as Maryland's 6%, New York's state rate of 4%, and who can forget Delaware's sales tax of zero (certainly not shoppers in the six County Southeast Pennsylvania area). The PTIA bill would have to raise about $24 billion a year to replace the school property tax.

The plan would have to increase the sales tax rate by a least several percentage points. Pennsylvania would become less competitive and certainly would be hardest on small businesses, which have to do their commerce inside Pennsylvania cities, towns, and boroughs. Among the goods taxed under this program would be food, textbooks, flags, courses and services like trucking, funeral parlors, TV cable veterinarians etc. You get the picture.

Other States’ Property Taxes

An underpinning of the argument to eliminate the property tax is that people are leaving Pennsylvania as we speak because of property taxes. There are a lot of reasons people are leaving Pennsylvania, but it's not likely the property taxes are one of them. Again, let's go back to the assumption that regional tax competition is a reality. It is absolutely true that New Jersey has very high property taxes that cause real distress, especially in the face of very high income tax, sales, and corporate taxes. New Jersey is almost an outlier when it comes to all kinds of taxes on investment and work.

Yet, when one looks nationally at states that rely on one tax more than others, differences begin to appear. For example, several states that dodged the Great Recession - like Texas, New Hampshire, Nebraska, etc -have historically high property taxes coupled with minimal to no income tax. States that have been historically poor such as New Mexico, Louisiana, and Mississippi have relied to a far greater degree on local and state sales taxes. Long story short, they have lousy schools, lousy health and are not great places to live.

Income taxes

The proposal also proposes swapping out locally controlled/collected taxes which citizens can affect municipal level to a brand-new statewide personal income tax. The rate is not indicated, yet even a modest one or two point increase on income tax - a keystone of socialist philosophy for over 100 years – will put Pennsylvania, already top-heavy with retirees who pay no income tax, into Connecticut, California and Ohio territory when it comes to high income tax rates. Another view The PTIA offers a 10 point rationale for changing the Pennsylvania Constitution. Let's look at them one by one.

"Achieve true homeownership" The idea here is that you really don't own your own home because if you don't pay your property taxes you lose it. Very true, but a non sequitur. If I do not pay my income tax, which would increase under the PTIA plan, I bet I go to jail. That's true of all taxes not just the property tax. It also applies to the real world of free markets: if I decide I don't want to pay my mortgage or the loan on my car, those are confiscated by the lenders who have taken a risk on me. Are the proponents of this bill going to start suggesting that you really don't own your house or car unless we can eliminate the debt you assumed? This could go to some very strange places.

"Stabilize school funding” the two taxes chosen for PTIA the income tax in the sales tax are the first revenue sources to disappear during a recessionary time. It's true in Pennsylvania and elsewhere. The property tax (p.6) is without question stable. Is this salient quote from the state Department of taxation in Minnesota indicates: “The three major sources of revenue are the state income tax, sales tax and property tax. The income tax is the most unstable and unpredictable. The sales tax is relatively unstable because it exempts several major categories of personal spending, such as clothing and most services. The property tax is the most stable.”

"Help prevent foreclosures" We agree with the authors that residential property taxes during times of financial stress can exacerbate foreclosure numbers; our constructive ideas will show how the specter of foreclosure can be reduced. However, taxes as a component of the mortgage are usually quite minimal. Of course, a higher income tax reduces the amount of mortgage one can make to the bank, so the property tax per se is not a direct factor in the foreclosure crisis: unemployment was.

"Restore plummeting real estate values" Ask a Pennsylvanian in a town like Sharon if the reason real estate values have dropped is because of property taxes, or because the town has lost about half of its population. The decline of Pennsylvania's manufacturing base has pushed our youth and families to states like Texas and Florida, not taxes. Replacing the property tax would likely produce a capitalization effect for investment properties, which would pay more to convert single-family homes and rental properties. Most Pennsylvanians would not say that's a good thing. We also suggest that increases in state income tax rates will have a more direct effect on reducing property values.

"Boost the sagging housing market" Yes, a straight reduction in property taxes in a vacuum would likely make an area like a neighborhood or block cheaper. This proposal is not in a vacuum; its tax swap from fixed immobile assets to very mobile assets such as sales and wages and other forms of tax on work and investment.

"Attract businesses to Pennsylvania" low taxation on investment capital indeed would attract business, particularly from high tax states like New York and New Jersey. Yet the tax penalty on increasing sales and use taxes as well as a tax penalty of a higher state income tax will contribute more drag than lift to the economy.

"Generate jobs for Pennsylvanians" if the property tax is the second-largest fixed cost for Pennsylvania business owners, as asserted in the piece, then it would have to be explained why job creation throughout the Great Recession (and before) has occurred in Texas more than any other state. Again, Texas is number one in property taxes as a percentage of property value. Higher income taxes in geographically defined area have been demonstrated time and again to reduce the amount of employment in that area. In other words, Pennsylvania may run the risk of job loss like Philadelphia over the past five decades.

"Create a massive stimulus for Pennsylvania" It is unclear how a stimulus can be created by swapping out one tax for another tax (or taxes) without addressing the expenditure side. The literature on the PTIA produced thus far indicates a revenue swap, with savings going to a very small subset of property owner: the vacant lot or speculative landowner. All others will simply be paying the hidden tax of the sales and use tax, or alternatively state income tax. The money that is not in the pockets of property owners cannot create a stimulus much less help small to medium businesses that were going to be groaning under a higher sales and use tax. The numbers don't work.

"Increase personal wealth" See above for most of the answer, but Americans traditionally have not considered a home purchase to be an investment. Only recently, did free and easy credit, skilled marketing by mortgage lenders and the federal government’s quasi-official agencies feed a delusion that one's home is also one's casino. Home purchase ought to be a relatively expensive matter relating to the goal of shelter for one's family.

"Stop costly reassessments” This supposed benefit of the PTIA is irrelevant and confusing for several reasons: most counties in Pennsylvania have resisted revaluation for decades. When revaluation does occur, it is with years- long lags, thereby increasing the expense. Most states and counties across the United States revalue on a fairly consistent basis, with little ongoing cost. A free market solution to assessments is of course to use Realtors and property insurance databases, which will continue valuing land and buildings, as no logical market can operate without this information.

An experiment: North Dakota

The sponsors of HB 1776 point to the one state that is considering eliminating its property tax. North Dakota is one of the most sparsely populated and agricultural states in the USA. That state is indeed considering a change to its constitution to eliminate the property tax. Many in that state are cautioning against a simple (or simplistic) solution. The obvious buffer to eliminate the property tax now is the fact that North Dakota's coffers are now swollen with revenues from gas, oil and other natural resources. That won't last forever. Once that party is over, North Dakota will then have to find revenue streams to pay for the basics. In all the euphoria in Fargo, no one mentions that once property taxes outlawed/proscribed by the constitution then the citizens will become subject to other statewide income taxes, sales taxes, just like HB 1776. It is hard to imagine the free-thinking North Dakotans would really want more centralized and remote control of their live and business. It seems hard to imagine that in most of Pennsylvania. the In a sense, perhaps North Dakota should go ahead and do this, so that other states and see what happens. In our federal system, the states are indeed the laboratories of future policy. Holding up North Dakota has several difficulties in any case. The differences between North Dakota and Pennsylvania are extreme. There is no natural – or Commonwealth – resource tax in Pennsylvania, not even the commonly accepted severance tax. The population of Pennsylvania and the infrastructure that exists within is many magnitudes larger and expensive than North Dakota's. This is apples and kumquats.

It is absolutely correct that the property tax as constructed is a lousy tax. In Pennsylvania, the property tax falls disproportionately on what people do with their own dimes and their own time. The property tax is actually two taxes as it is a tax on land values and a tax on building values. The tax on land values is the only tax that collects what a community creates. What do we mean by that? It means that with every police department, fire department and yes good schools, land values increase. No individual and no company increases land values on the ground.

Where we can all Agree

This is the one case where all of us create land value. The original meaning of Commonwealth essentially said that this place is here for you to make a living, to be a success, to be happy, and to be legally secure in what you have earned with your labor and capital. The other part of the property tax, the tax on buildings and structures is as corrosive to prosperity and freedom is the worst income tax, business tax or sales tax. As we all know, when you buy a house or fix it up, or build one from scratch your tax liability increases significantly. On that we can all agree.

That's why Pennsylvania has the Keystone opportunity zone, which is a confused, privileged and preferential way to get out from under a bad tax system. What Pennsylvania needs is to chart a careful yet daring course to a place that encourages economic growth, maintains a reasonable level of government at the most local level possible, and leaves people alone.

We'd suggest that instead of trading one bad tax for a basket of bad taxes, that Pennsylvania expand on its use of the land value tax, so that we are more like nations that encourage freedom and prosperity like Australia, Singapore and Hong Kong. The land value tax is already used in 20 cities and school districts in the state of Pennsylvania. In some cities annual property taxes have been reduced for some homeowners by up to 80%, without resorting to other, higher taxes. Instead revenue is provided by land value, an immobile source of revenue which is created by local effort, services and community.

India discovers vacant land may be a bad thing

04/09/2012 16:32:00

The past 15 years have been very kind to India and its emerging new economy. The past few years however have not been so nice. One problem have been the traditionally sclerotic planning and development authorities who have been sluggish in releasing land for development, along with the overall mistrust of the free flow of capital and labor, dependent on the classic mid-20th century model of Fabian socialism.

Recently, the Indian government reasserted its heavy hand by overturning the previously independent Indian judiciary by putting a tax on international partnerships and acquisitions retroactively to 1962. Naturally, the backlash has been fierce and rapid.

Another factor that is slowing down India's formerly explosive growth particularly in urban areas is a familiar bugaboo of old-time land speculators, who have held the land out of use since the end of the Raj in 1947.

In response to the unreleased potential of urban land in India, the national Planning Commission has decided to do something about valuable vacant lands sitting fallow. The Times of India reports that a vacant land tax ought to be instituted.

That's good as far as it goes, but the tax rate will only be .5% of vacant land value, and will also tie public utilities into fee-for-service rather than the rental value of the land. One ray of hope? The comments on the webpage understand the role of land in the future of India.

Land Value Tax on the Radio Friday March 30

03/28/2012 14:18:00

Dr. Herbert Barry of Pittsburgh, an UrbanTools Director has shown his adeptness in outreach to all forms of media, including print and now radio. Please call in to the radio show on Friday March 30, to participate in this broadcast.

I will be interviewed on a radio show, on Friday 30 March 2012, 10:00 to 10:30 AM (Eastern time). Listeners can access it at the phone number 1-424-220-1873. The title I chose for the program is "How to remedy our maladaptive sources of government revenue." I designated Common Ground-USA as the organization to be promoted by this program[Dr. Barry is chair of the Pittsburgh, PA chapter].

Beginning shortly before the broadcast, and for several following days,the auditory program will be available at the internet website http://www.ashfordradio.com when Studio C is clicked near the top of the screen. This can be useful for listeners who do not have an alternative phone to use for asking a question during the half hour program.

I believe this is a worthwhile communication to try, even if it is my only action in this manner to publicize Henry George's proposals. I will argue that taxes on earnings and sales should be abolished and be replaced by a higher tax on owners of real estate. I hope to have the opportunity also to explain the advantages of taxing the value of land instead of the value
of buildings on the plot of land.

Re-solving the Economic Puzzle w/ Walt Rybeck

03/21/2012 18:49:00

Walt Rybeck, Director, Center for Public Dialogue, calls for correcting the public policies that make slum ownership, land speculation, and other forms of parasitic and exploitive behavior more profitable than honest labor and productive enterprise.

His latest book, Re-solving the Economic Puzzle, provides accounts of places in the United States and elsewhere that are applying the proposed reform are presented, proving that it is politically feasible, and offers an ethical cleansing of the economy so that all people can enjoy all the fruits of their efforts.

Want to know more? If you reside in the Washington D.C. area, drop by

When: April 2, 2012

Where:Busboys and Poets

1025 5th St NW, between K and L

Washington D.C.

Time: 6:30PM

as Walt will be discussing his book and looking forward to meeting those interested in learning more.

Saving your City: a Talk on Land Value Tax in Troy, NY

03/07/2012 16:16:00

From the Collar City: You are Invited to a discussion on a new way to tax

Can your town use a new approach to in finance, planning and its relationships with citizens?

Property taxes are both the main source of revenue for local governments, and at the same time the most unpopular. Economically, property taxes as they are currently structured, reward blight and disinvestment, while discouraging real estate markets from operating in more urbanized areas. One tool used by dozens of cities in the US in hundreds of cities elsewhere is the land value tax is the land value tax. What is the land value tax (LVT)? LVT reduces the tax rate on all buildings, and is implemented in a revenue neutral manner by increasing the tax rate instead on land values.

LVT has two effects: it lessens the impact of ever-increasing taxes on neighborhoods. It makes the holding of vacant or blighted land harder for speculators. LVT would remove much of the problems with current unfair assessments, and can help transition to the new assessments.

Much of New York's state tax system also serves as a disincentive for growth. Yet, towns and cities can benefit from a restructuring of their property tax in a revenue neutral manner, yet in a way that rewards those who "do" for the city. CSE provided a convincing study of LVT in 1996. The city passed on the project, assuming times would get better. Sixteen years later, it seems that much still needs to be done.

An overview of this program which is been used to great success in older towns in Pennsylvania will be presented on Monday, March 12 at the Oakwood Community Center, 313 Tenth Street, Troy, NY 12180 starting at 7 PM.

For more info: http://rcpc.swapspace.com/2012-03-12-vincent/flyer.html

The cost of blight is too large to ignore, and the old standbys are not working (Here's a Troy-specific piece) or the funding is gone for good. Give us a listen next Monday!

Taiwan to reform property values, will help revenue and tax transparency.

02/22/2012 17:30:00

Abandoning outdated land values will harmonize Taiwan's many species of land and property taxes...

Christina Liu, Taiwanese Finance Minister

(photo: CW)

The tax policies of Taiwan has always made it a successful outlier, one of the few Asian Tigers to prosper right after World War II, and doing well until the recent global slump. A lynchpin of that policy is value-based land taxation. Even though the agricultural land tax is moribund (since 1985), it has been argued that the goal of that tax, to free up large estates (in the manner Denmark's land value tax) has been largely achieved.

Now, the land tax will revive in importance, as "assessed" values - i.e. outdated and low values, will be modernized, thanks to the efforts of Christina Liu, the new Finance Minister. As this Finance Ministry spreadsheet shows, land taxes in all its form make up the larger portion of local taxes and nearly 20% of all taxes at all levels of government.

The Taiwanese Land Value Tax is also evidently a fun tax to pay:

You need Flash Player in order to view this.

Film regarding the collection and payment of the 2009 Land Value Tax

The KMT government has shown that innovative and flexible use of land value taxes can lead to a fairer and prosperous economy. Perhaps their sister democracies will take note of this idea inspired by Sun Yat-Sen who said:

"The land tax as the only means of supporting the government is an infinitely just, reasonable, and equitably-distributed tax, and on it we will found our new system."

Taipei at Night