Land Value Taxation (LVT) is rational taxation of immovable property (land). LVT can be a major tool for strengthening the development market in cities, reduce taxes for productive citizens and businesses and provide a progressive fair and equitable source of public revenue.
What is LVT? LVT is an alternative version of the real property tax, used in 20 cities, school districts and counties in the United States, as well as most municipalities and states in Australia and New Zealand.
Traditionally, property tax rates fall equally upon land value and building value. LVT shifts the greater share of property tax revenue from buildings (both a product of private capital and private labor) to the assessed value of land (a public good created by public and community investment).
LVT is a bridge between fiscal reform and a blueprint for a better society.
First used as a fiscal reform, this strategy is offered to society as a mechanism by which the economic rent of land can be collected via the tax system, in exchange for reducing or eliminating all other forms of taxation.
LVT may be a reform of the property tax, but can quickly be deployed as not only a source for all government revenue, but as a powerful tool to undo centuries of deadweight loss that retards personal and community benefit and prosperity.
LVT is not just a form of the property tax; it is a workable alternative to the mistaken belief by the left and the right that justice or prosperity must always come with a cost: theft from someone, from productive activity, from“someone else.”
What has LVT done for public policy goals?
- Direct Infill - frees lots to build
Compact - produce more efficient, consolidated units
Density - incentive to build upward
Affordable Housing - lower incomes qualify for loan
Distinctive Communities - improve a home without tax increase
Mixed Use, Walkable - density draws stores, retail, entrepreneurial activity
LVT Jurisdictions 2013 millage rates Pennsylvania Department of Community and Economic Development
What are the Issues that face our world today that LVT implementation could ameliorate? One of our colleagues, a retired banker and current essayist Ed Dodson, gives us situational and historical context:
"In my writing and classroom teaching on the economy, I have consistently made the case that our economic system is inherently unstable, subject to the cycles of boom-to-bust. Four decades of financial deregulation have exacerbated the problem so that the depth and duration of recessions grow increasingly worse.
I put this analysis into a series of six videos now available on YouTube. The videos are chronological , from the 1970s on. Given the apprehension with which we view the present, at least view the sixth video in the series."
Taxation of labor and capital in urban areas is one of the driving forces leading to the contraction of our cities.
The Center gathers and disseminates articles, studies monographs on the subject of taxation. We suggest implementation where appropriate but do not support political candidates or become involved in the electoral process.
The Center for the Study of Economics is a 501 (c) 3 non-profit educational foundation established in 1980. Our mission is to assist governments in evaluating current property tax