Joshua Vincent, of the Henry George Foundation in Philadelphia, is a keen observer of the scene, particularly of Philadelphia's scene. This week he had an article in The Bulletin in that city, and he comes up with what I think is an interesting observation:
... on the revenue side we still depend too much on the taxation of action.
He continues,
The fact is Philadelphia relies on tax revenue from two things - labor
and capital - that can be hidden, can vanish or can flee. Both are
being whipsawed by forces beyond Philadelphia's control. There are few
places to hide, especially from high tax rates on those two things.
Another Way
If all options are indeed on the table, then we'd suggest that the city can come together and ask that revenues be raised from the one resource that is barely nicked by taxation: land values.
The idea of a tax on land values is not new. In fact, in 1693, it was the first tax of Philadelphia. The idea of taxing land and reducing other taxes to attract scarce development capital and workers started with William Penn, was further developed by Ben Franklin and Thomas Paine and perfected as a message of economic justice by Henry George, Philadelphians all.
The pedigree is impeccable; the theory is accepted by nearly all economists -- liberal and conservative -- and implementation quite doable, much like in hundreds of cities all over the world - and in Pennsylvania - big and small. In Allentown in the late 1990s, a coalition of Democrats, Republicans, workers and businesspeople (one of the leaders was noted conservative Pat Toomey) put a tax on land values on the ballot, where it passed by a 2 to 1 margin.
By reforming the property tax, we can create a tax on land value that's stable, efficient and progressive. ...
By removing the tax on buildings and improvements, the tax penalty for construction is removed without blowing holes in the budget.
The Henry George Foundation of America is able to provide comprehensive data, which prove that a land value tax, applied even with the current assessments would provide tax relief for homeowners in the most at-risk parts of the city, while providing a mechanism for revenue streams that can flow even in recessionary periods. For example, instead of 82.64 mills on land and buildings, we could bring in the same revenue with 54.22 mills on houses and other buildings and 173.68 on land values. It works where used, and Philadelphia cannot ignore an idea that can help us through hard times and beyond.
If business and citizen could discover a place where that rewards growth without favor or subsidy, we could see an inflow of wealth even in hard times. Why? As a city, we are locationally one of the most advantaged places in the US. With recession a long-term threat, people and firms in high-tax places like New York will seek an amenable outlet for their activities. Why not Philadelphia?
Economic Justice And Common Sense
To fill our budget hole, and then some, the city must recognize that there is community-created value, and privately-created value. Land values are the textbook case of community-created value. The more desirable we think a site is, the higher its value. We, the community need to keep that value for the services we need. Land values can pay for what our community wants.
If all options are indeed on the table, then we'd suggest that the city can come together and ask that revenues be raised from the one resource that is barely nicked by taxation: land values.
The idea of a tax on land values is not new. In fact, in 1693, it was the first tax of Philadelphia. The idea of taxing land and reducing other taxes to attract scarce development capital and workers started with William Penn, was further developed by Ben Franklin and Thomas Paine and perfected as a message of economic justice by Henry George, Philadelphians all.
The pedigree is impeccable; the theory is accepted by nearly all economists -- liberal and conservative -- and implementation quite doable, much like in hundreds of cities all over the world - and in Pennsylvania - big and small. In Allentown in the late 1990s, a coalition of Democrats, Republicans, workers and businesspeople (one of the leaders was noted conservative Pat Toomey) put a tax on land values on the ballot, where it passed by a 2 to 1 margin.
By reforming the property tax, we can create a tax on land value that's stable, efficient and progressive. ...
By removing the tax on buildings and improvements, the tax penalty for construction is removed without blowing holes in the budget.
The Henry George Foundation of America is able to provide comprehensive data, which prove that a land value tax, applied even with the current assessments would provide tax relief for homeowners in the most at-risk parts of the city, while providing a mechanism for revenue streams that can flow even in recessionary periods. For example, instead of 82.64 mills on land and buildings, we could bring in the same revenue with 54.22 mills on houses and other buildings and 173.68 on land values. It works where used, and Philadelphia cannot ignore an idea that can help us through hard times and beyond.
If business and citizen could discover a place where that rewards growth without favor or subsidy, we could see an inflow of wealth even in hard times. Why? As a city, we are locationally one of the most advantaged places in the US. With recession a long-term threat, people and firms in high-tax places like New York will seek an amenable outlet for their activities. Why not Philadelphia?
Economic Justice And Common Sense
To fill our budget hole, and then some, the city must recognize that there is community-created value, and privately-created value. Land values are the textbook case of community-created value. The more desirable we think a site is, the higher its value. We, the community need to keep that value for the services we need. Land values can pay for what our community wants.
He concludes,
So, let's agree that everyone is right: advocates for city services,
the Mayor and the tax reformers. We have to cut taxes on workers and
production. We have to provide revenue so that essential programs are
not cut; indeed many ought to be increased. The old dueling assumptions
that our choices are either high taxes or low services are untenable as
our society faces what is likely to be a long twilight period of little
economic activity.
If all options are on the table, then the land value tax deserves a seat at that table.
The gulf between "either/or" has to be bridged. We suggest a land bridge.
If all options are on the table, then the land value tax deserves a seat at that table.
The gulf between "either/or" has to be bridged. We suggest a land bridge.
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