Cities skylines low land value full#
How will you self-assess? As long as the value of your land is public information, you cannot safely self-assess at anything less than its full value of $1M. Now suppose you own a vacant lot with oil underneath the present value of the oil minus the cost of extraction equals $1M. Clever Georgists propose a regime where property owners self-assess the value of their property, subject to the constraint that owners must sell their property to anyone who offers that self-assessed value. I can explain our argument with a simple example.
This is no trivial problem: Imagine the long-run effect on the world’s oil supply if companies stopped looking for new sources of oil. If we actually imposed a 100% tax on the unimproved value of land, any incentive to search would disappear. Namely: A tax on the unimproved value of land distorts the incentive to search for new land and better uses of existing land. My co-author Zachary Gochenour and I have a new working paper arguing that the Single Tax suffers from a much more fundamental flaw. Economists’ main objections to Georgism are merely that (a) it is difficult to implement in practice, and (b) politically impossible. Many modern tax economists, most notably Joseph Stiglitz, conclude that George’s logic was sound: Since the unimproved value of land is perfectly inelastic, even an expropriatory tax is non-distortionary. Economist Henry George famously advocated a 100% (or near 100%) “ Single Tax” on the unimproved value of land.
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