Abstract

Edward Shepherd

There is a strong theoretical case for a recurrent tax that is levied on landowners based on the value of unimproved land. The key arguments are that such a land value tax would be a) efficient because it would provide a broad and easily identifiable tax base; b) just because it would be correlated with wealth and could be used as a means of redistribution; c) un-distortive because it would not disincentivise improvements in the way that a tax on buildings can; and d) beneficial for development by creating an economic incentive to bring forward under-utilised land if it is valued based on its highest and best use.