Real Property Tax Reform
I have been very busy with tax season, so I have not had time to update the blog. So I am republishing an article writen by LPO Chair Jason Hallmark from his blog "Yearning to Breathe Free". Visit his blog here.
The Columbus Dispatch published an article today on Libertarian Gubernatorial Candidate Bill Peirce entitled “Grounds for Change”. The article discusses Peirce’s support for reforming the property tax system.
Granted, I’ve only recently began studying the “Land Tax”, as originally theorized by Henry George. But from what I’ve learned, there are some pretty encouraging implications in such a system, especially when it comes to urban “blight”.
Many proponents of eminent domain cite the need for cities to seize property from private owners in order to facilitate and stimulate “economic growth”. Often, one might find large areas of run-down, dilapidated buildings, unkept slums, and other unsightly properties. As the argument goes, allowing government the power to take property in order to clean things up is the only way to combat such things. But by reforming property taxes to exclude the value of buildings, taxing only the land value would alter the incentives that are built in to the system.
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.
The fundamental question of any taxation system revolves around what sorts of activity will be rewarded, and what will be punished. For example, the income tax punishes work and savings; sales taxes punish consumption; and the current property taxes discourage investment, and reward negligent property owners.It seems to me, reforming property taxes to tax only the value of the land would result in greater incentives to invest in and upgrade one’s property. It may even help reduce urban sprawl. In the end, there would less need for a munipalities to assert eminent domain, as the free market would be taking care of itself.
In any event, this is an idea worth looking into.
The Columbus Dispatch published an article today on Libertarian Gubernatorial Candidate Bill Peirce entitled “Grounds for Change”. The article discusses Peirce’s support for reforming the property tax system.
Granted, I’ve only recently began studying the “Land Tax”, as originally theorized by Henry George. But from what I’ve learned, there are some pretty encouraging implications in such a system, especially when it comes to urban “blight”.
Many proponents of eminent domain cite the need for cities to seize property from private owners in order to facilitate and stimulate “economic growth”. Often, one might find large areas of run-down, dilapidated buildings, unkept slums, and other unsightly properties. As the argument goes, allowing government the power to take property in order to clean things up is the only way to combat such things. But by reforming property taxes to exclude the value of buildings, taxing only the land value would alter the incentives that are built in to the system.
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.
The fundamental question of any taxation system revolves around what sorts of activity will be rewarded, and what will be punished. For example, the income tax punishes work and savings; sales taxes punish consumption; and the current property taxes discourage investment, and reward negligent property owners.It seems to me, reforming property taxes to tax only the value of the land would result in greater incentives to invest in and upgrade one’s property. It may even help reduce urban sprawl. In the end, there would less need for a munipalities to assert eminent domain, as the free market would be taking care of itself.
In any event, this is an idea worth looking into.
posted by CincinnatiLibertarian at 11:17 PM
0 Comments:
Post a Comment
<< Home