Andy Hull, a councilor just down the road from here in the London borough of Islington, is advocating a land tax (thanks, Liberal Conspiracy). This is one of those excellent old ideas that seem to disprove the maxim that inventing a better mousetrap will lead the world to your door – Hull cites Adam Smith, Tom Paine, David Ricardo, John Stuart Mill, Karl Marx, Henry George, David Lloyd George
and Winston Churchill in its favor, yet most places in the world have never had it. For a nice statement of the land tax’s virtues, see this piece by Martin Wolf, three years ago in the Financial Times.
Hull’s version is quite limited – he’s after commercial property and large landholdings, so he would exempt land under houses (exempting the building footprint only, or the entire residential plot? I couldn’t tell) worth less than £2 million (approx $3 million – is that the land value or land and improvements combined? again, if the answer’s there I missed it). He’d use it to replace taxes on commercial buildings and on the sale of real estate, but wouldn’t touch the present taxes on residential buildings. He limits the proposed tax in this way to reduce political opposition, but doesn’t say why replacing taxes on buildings with taxes on land values would be so unpopular with homeowners; simplicity and fairness both can be virtues in building political support for a proposal, and an across-the-board land tax replacing other property taxes would have those virtues. Still, it’s nice to see the idea (still) being floated.