Tax the Land
The conservative Heartland Foundation argues that taxing land -- not the buildings or improvements, but the land itself -- to fund transit makes sense, since proximity to transit increases land values:
As dozens of studies across the globe have shown, the benefits of transit show up as increased land values. Land served by public transportation is worth more than land not served. The amount varies, of course, depending on the quality of service, type of development, general standard of living, etc., but the effect is large.
A study published in 1997 for RTA, "The Effect of CTA and Metra Stations on Residential Property Values," by Gruen Gruen & Associates, implies that just the existing rail system adds land value in excess of $1.6 billion a year.
Another study, published in Regional Science and Urban Economics in 1995, considered land prices before and after construction of CTA's Orange Line and calculated the line added 17.4 percent to land values.
But we've known that since the Union Pacific days, haven't we?
(via The Overhead Wire)
- Frank's blog
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Wow- searching my memory- help me out, someone, I want to say Herbert George- anyway, 100 years ago this was a popular/populist theory of taxation- that all taxes should be on land, and this would prevent the formation of a landed oligarchy as well as helping the great mass of people, who then, and perhaps today, did not own any land.
Naturally, companies like Weyerhauser, Anaconda, and Standard Oil were very much against this idea. So it's somewhat surprising seeing it come out of the Heartland Foundation.
The basic idea seems to make sense, but it might not be necessary to make any big changes in how we assess and tax land already, which, seen from the property-owner's viewpoint, seems to capture increased values pretty steadily as matters stand.
Henry George actually :)
I run the Henry George Foundation/USA here in Philadelphia. there are branches all over the world. what's interesting about your comments on the Heartland Institute backing the idea of Land Value Capture (LVC) is that the Labour Mayor of London "Red" Ken Livingstone is pushing for the same program under very different auspices indeed. Here is a different take but a same conclusion form a left-ish colleague of mine, the Vice-Chair of London Transport.
http://sustento.org.nz/wp-content/uploads/2007/11/transport-urban-sprawl...
http://www.labourland.org/downloads/papers/jle-main-report.pdf
Also, a colleague of mine, Jeff Smith put together a good bibliography of LVC for the Victoria Transport Policy Institute in B.C. http://www.vtpi.org/smith.pdf
You also might find it fun to look at www.washingtonlandvaluetax.org (the data is from early 2007). We put up King County so people could map the effects of a land value tax if used as a reform of the real property tax. There's a calculator and a mapping device. It's different from LVC, but uses the same philosophy: if community creates land values through infrastructure creation and investment the community has the right to collect those values back, in the form of a fee or tax. The plan certainly ties cost to benefit more than, say, a sales tax, to build a highway.
Great webpage, and I will follow it avidly.