Index

LVT News

-- extracts from THE GEORGIST NEWS, Volume Nine, Number One, July 1, 2006
http://www.georgist.com/

Euro Transport Ministers give a nod

From Dave Wetzel, Transport for London (TfL) [email protected]

The European Conference of Ministers of Transport discussed a "Report on CO2 Abatement Policies for the Transport Sector" at a meeting in Dublin on May 17th and 18th. The report of 232 pages, not yet officially published, discussed aspects of CO2 reduction. "The Ministers agreed to the thrust of the conclusions and recommendations." The report praises the work of TfL on Congestion Charging and draws attention to Location Benefit Levy. This is the first time that "Location Benefit Levy," an expression I coined, has been used in an official document. I believe it is a better description than "Land Value Tax," as it makes clear landowners pay a levy to recompense the community for the financial benefit they receive as their location becomes more valuable solely because of the community's actions.

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8. JLE Property Impact Study

From Dave Wetzel, [email protected]

PTEG published its report, Comprehensive Spending Review 2007: The case for transport in the city regions. "The report also points to a link between land and property values and transport infrastructure, stating that the most rigorous study of this type in the UK is of the Jubilee Line Extension, which recorded uplifts in property values of 2bn at Canary Wharf and 800m at Southwark." The report is available at:

http://www.pteg.net/NR/rdonlyres/7E742E26-8152-4250-8AD5-0CB93C24EE81/0/CSR2007TheCaseForTransport060620.pdf

GLA Economics is now also studying LVT in a meaningful way. This is not in isolation. At the UN Habitat's World forum in Vancouver in June, we learned that both the UN and the World Bank are now seriously considering Annual Land Value Tax as a tool to provide infrastructure, especially in the poorer communities of the world who otherwise are unable to fund basic services like water and sewerage treatment, let alone transportation.

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Great Britain's Financial Times (June 8) From Polly Cleveland [email protected]

"Increases in land values give not only a good indication of the benefits of infrastructure investments, but also provide an efficient and just way of financing their costs. It is efficient to tax these values because the tax would reduce the size of a windfall, while other taxes used to pay for infrastructure reduce effort, penalize the division of labor, or discourage capital accumulation. It is also just, because the chief beneficiaries [nearby landowners] would bear the cost."

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Wheels of Fortune reviewed by UK's IEA From Wyn Achenbaum [email protected]

Wheels of Fortune: Self-funding Infrastructure and the Free Market Case for a Land Tax is by Fred Harrison. Can large-scale infrastructure projects be brought to fruition only through government intervention to fund the initial capital outlay? Where infrastructure projects have been attempted without public money, such as in the construction of the Channel Tunnel, post-completion operating revenues have often been insufficient to repay the initial debt. The London Underground Jubilee Line extension increased land values by close to 3 billion around just two stations. When such projects are publicly funded, this represents a substantial transfer of wealth from taxpayers to local property owners. OTOH, Hong Kong, Japan and Singapore have utilized the value of land to fund the construction and maintenance of extremely efficient, modern transport systems that now operate successfully without taxpayers' money. It is estimated that for every 1 of tax raised by the government, as much as 2 of wealth is lost to the economy as a result of the opportunity cost of activities forgone. Reassigning the tax burden from capital and labor to land would enable many existing taxes to be abolished, would reduce the deadweight losses resulting from taxation, and would enable market mechanisms to more accurately reflect the costs and benefits of the provision of different goods and services.

http://www.iea.org.uk/files/upld-publication307pdf?.pdf

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The Globe and Mail of Toronto, June 20 From letter writer Wetzel Dave Vice Chair, Transport for London, London, UK [email protected]

If the Ontario Government really wants to contain urban sprawl "by encouraging new growth within existing built-up areas" (The Globe. Mail, June 17), then they should examine the example of Harrisburg in Pennsylvania, where an Annual Land Value Tax, called the Two-Tier Tax, has been adopted. The consequence of taxing site value in Harrisburg is an 85% reduction of empty sites and buildings with whole areas previously blighted now revitalized with the building and refurbishment of affordable business premises and homes. The resultant inward investment has increased the number of firms paying taxes to the city from 1900 to 9000 and led to a dramatic drop in unemployment, crime, and fires. The lesson is obvious: to contain urban sprawl and create prosperous communities, tax location value, which is created by all of us and do not tax buildings, wages, trade and enterprise!

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