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R. Plupsnup's avatar

> If the same total tax revenue is sustained, but the base is shifted from property value to land value, then land values will rise, not fall.

This is correct and is a basic illustration of a revenue-neutral tax-shift leading to higher capitalisation through ATCOR (All Taxes Come Out of Rent).

> Less tax revenue from developed homes will increase home values. An increase in home values, without any change to development/construction costs, means an increase in land values by the same amount, and hence by a greater proportion (as we saw earlier).

I can't see how you came to this conclusion—and this paragraph seems to be the main caveat behind the article. It seems this section is implying that the value of both land and improvements rise and fall together at the same rate, and shouldn't diverge at all. I think you've made a mistake here.

Edit: are you including land into "home values"? I figured you was just referring to improvements, but maybe I'm mistaken.

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Tadhg Stopford's avatar

? Did I miss something? A land tax could go on unimproved land. To tax speculation. That’s one sort of positive land tax. We could have more.

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