Comparing Land-Value Taxes To Property Taxes

A geolibertarian collection of ground rent would indeed be somewhat like a property tax, with some crucial differences:

1. The “tax” would only be on site value, never on improvements or structures or any other product of labor.
2. The “tax” would be zero on land at the margin of production — think Ted Kaczynski’s shack in the woods. Ground rent is the excess product/benefit from a site compared to unused sites.
3. The tax basis could be self-assessed. Your basis is what you’d be willing to sell for, and if given a real offer for that much, you either sell or raise your tax basis.
4. The “tax” could be deferred until you transfer ownership of the site, so nobody is ever taxed off the land they hold. When a site that is in arrears is attempted to be sold, it would be forfeited for auction if an attempted sale would not cover the back taxes plus interest (no penalties). Thus you can hold your land as long as you want, but you can’t reap a speculative profit from the accumulated ground rent (site value) created by surrounding development.
5. As I mentioned, an alternative way to encourage paying the “tax” is to deny the landholder, to the extent feasible, the benefits of the community goods and services that create the ground rent (i.e. extra site value) in the first place.

Land value “taxes”, along with pollution fees and resource depletion fees, are the only kind of “taxes” I know of that are arguably not force-initiating. I’m curious what kind of taxes a minarchist Constitutional republic would collect, and how minarchists would defend them from charges of force-initiation.

Land-value taxes are defended as the least harmful kind of tax by LP founder David Nolan and by many prominent libertarian economists: Friedman, Buchanan, Solow, Modigliani, Samuelson, Simon, Tobin, Vickrey, Cowan. This is because land-value taxes

• have no deadweight loss, unlike taxes on exchanges/income/production
• are trivial and non-intrusive to assess and collect: no need for tax forms, IRS, audits, or even site visits
• are naturally local, and so encourage Tiebout Sorting (voting with your feet)
• can only extract the extra value actually created by public services, creating pressure to defund public services that do not actually add value in the free market for land.

LVT were also advocated by many famous classical liberals:

• Adam Smith
• Thomas Jefferson
• Tom Paine
• William Penn
• Ben Franklin
• Frederic Bastiat
• John Stuart Mill
• David Ricardo
• Henry George
• John Locke
• William Lloyd Garrison
• John Dewey
• Lysander Spooner
• Benjamin Tucker
• Robert LeFevre
• Frank Chodorov
• Albert J. Nock