How a $9 B. Tunnel Could Make Jersey Homeowners Richer | The New York Observer.
Amazingly, neither the article nor the underlying study made any suggestion that the homeowners or the owners of commercial property enriched by this proposed new tunnel connecting New Jersey and Manhattan might logically be financed by a tax on the land value that the public investment would create.
Most worthwhile infrastructure projects will pay for themselves, but we're not in the habit of asking them to.
Instead, we finance them via taxes on labor and on sales, which most of us acknowledge are a burden on the economy, and then scratch our heads about why we have unemployment and poverty.
Oh, when will we ever learn?
The study the article references is called "The ARC Effect: How Better Transit Boosts Home Values and Local Economies." [ARC is the name for the proposed new Hudson River tunnel, called "Access to the Region's Core."] It didn't mention how it also boosts the value of the land under commercial properties. (The homes, incidentally, don't appreciate; it is the value of the sites on which they sit which are affected by the provision of public goods and services.)
The response I tried (repeatedly) to post went this way:
Amazingly, neither the article nor the underlying study made any suggestion that the homeowners or the owners of commercial property enriched by this proposed new tunnel connecting New Jersey and Manhattan might logically be financed by a tax on the land value that the public investment would create.
Most worthwhile infrastructure projects will pay for themselves, but we're not in the habit of asking them to.
Instead, we finance them via taxes on labor and on sales, which most of us acknowledge are a burden on the economy, and then scratch our heads about why we have unemployment and poverty.
Oh, when will we ever learn?
The study the article references is called "The ARC Effect: How Better Transit Boosts Home Values and Local Economies." [ARC is the name for the proposed new Hudson River tunnel, called "Access to the Region's Core."] It didn't mention how it also boosts the value of the land under commercial properties. (The homes, incidentally, don't appreciate; it is the value of the sites on which they sit which are affected by the provision of public goods and services.)
The response I tried (repeatedly) to post went this way:
Bingo!
So wouldn't the logical way to finance that provision of infrastructure be to collect some significant portion of the land value it creates?
Why on earth should we tax wages and sales to finance public goods like infrastructure, or services, or, indeed, ANY of the publicly-provided things which cause land to rise in value?
Unless, of course, special interests played some role, and Leona Helmsley was accurately describing tax structure (not referring to ad hoc tax evasion): "WE don't pay taxes. The little people pay taxes."
Look for Fred Harrison's paper on the Jubilee Line in London, called Wheels of Fortune: Self-Funding Infrastructure and the Free Market Case for a Land Tax. Here's the abstract:So wouldn't the logical way to finance that provision of infrastructure be to collect some significant portion of the land value it creates?
Why on earth should we tax wages and sales to finance public goods like infrastructure, or services, or, indeed, ANY of the publicly-provided things which cause land to rise in value?
Unless, of course, special interests played some role, and Leona Helmsley was accurately describing tax structure (not referring to ad hoc tax evasion): "WE don't pay taxes. The little people pay taxes."
It is often assumed that government intervention is required to bring to
fruition large scale infrastructure projects because the large initial
capital outlays such projects require must be funded from the public
purse. In Wheels of Fortune, Fred Harrison
shows that large scale infrastructure projects can be made self-funding
and hence completed without direct government involvement.
Infrastructure projects almost always bring about a large increase in the value of adjoining land. For example, it is estimated that the Jubilee Line extension increased adjoining land values by close to 3 billion BPS. When such infrastructure projects are funded by government they therefore involve a substantial transfer of wealth from a large number of taxpayers to a small number of property owners.
Harrison argues that a fairer and more efficient means to fund infrastructure projects is to capture and use the increases in land values that they bring.
This monograph sets out a free market case for a land tax or some form of levy on land as a means of achieving the goal of self-funding infrastructure and ensuring that those who receive the benefits of such projects meet the costs. It will be essential reading for those concerned with how large scale infrastructure projects can efficiently be completed and those interested in fairer and more efficient tax regimes.
Infrastructure projects almost always bring about a large increase in the value of adjoining land. For example, it is estimated that the Jubilee Line extension increased adjoining land values by close to 3 billion BPS. When such infrastructure projects are funded by government they therefore involve a substantial transfer of wealth from a large number of taxpayers to a small number of property owners.
Harrison argues that a fairer and more efficient means to fund infrastructure projects is to capture and use the increases in land values that they bring.
This monograph sets out a free market case for a land tax or some form of levy on land as a means of achieving the goal of self-funding infrastructure and ensuring that those who receive the benefits of such projects meet the costs. It will be essential reading for those concerned with how large scale infrastructure projects can efficiently be completed and those interested in fairer and more efficient tax regimes.
Which part of "fairer and more efficient" doesn't appeal to us?
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