Much as I
applaud the Single Tax idea of Henry George for having great ethical principles
at heart, I find that its introduction is simply not practical. Apart from use
of the word “Tax”, which in any case no politician wants to propose, we must
eliminate the offense that our proposals for LVT causes to landlords. Obviously
they will strongly oppose the proposal for having to pay a new tax (or anything
else we might like to call it). The problem then is not to have to fight them,
nor try to convince them on moral grounds, but how to make them want to pay for
land access rights or revenues.

To achieve this there should be introduced a gradual change in the way that land is being
owned, which should be introduced by new laws. Whenever a site or prospect of
land is being offered for sale (possibly with its buildings, etc.,) and
whenever ownership of such a site is being transferred between family members
(and on which an inheritance-tax would normally be paid), the change is that
government automatically buys the land at its current normal nominal price.
This is done simultaneously when the buildings are sold in the usual way or
their ownership is being transferred. (The courts shall be empowered to settle
the land-value, if/when doubt is expressed–land-value maps being publicly
accessible.)

The previous landlords or their heirs will no longer have any political objection, since the
money from the land sale will greatly exceed the subsequent annual lease-fee
(see below) for access rights to this land. This change will also eliminate the
(hated) inheritance-tax. It is imagined that this process of land sales and
governmental purchases will be spread over at least 40 years.

Immediately when the site belongs to the government, this land must be offered for lease to
the new or bequeathed owner of any buildings thereon. The lease-fee should be
set according to normal amounts of rent for other similar sites, (and again the
courts should decide when there is disagreement.) The above “first refusal” for
this leasing offer is most necessary, because any buildings of practical use
and value on the site, will still be sold or bequeathed as items of durable
capital goods, as before.

However,access to the site and its buildings should be denied by the government until
the site is leased by someone who can then (and normally would) have purchased
(or been given) the building in the usual way. All taxes that are applied to
subsequent building developments should be abolished at this time.

A new owner would acquire the building property more cheaply than before, because it is now
without the price of the land under and around it. Such a buyer can then give
for hire (rent-out) any building for access and use, as if it were any other
item of durable capital goods. In the unlikely event of the leaser not owning
the buildings, his/her incoming land rent (from the building owner), shall not
exceed the out-going lease-fees by more than 2% (say). Should nobody initially
lease the site and its buildings (if any), because of there being no demand for
their use, the buildings may be pulled down by the next (eventual) leaser, who
will be free to re-develop the site (and would naturally want to do so).

The government should borrow the money for site purchase, or can even offer
national redeemable bonds to raise money for it. As the lease money begins to
flow to the government, it uses this to:

a) repay part of its loan for site purchase, which may be extended,

b) purchase more sites as and when they become available,

c) cover the interest on the loan and on the new bonds and their eventual redemption, and
eventually

d) reduce other kinds of taxation.

It will beappreciated that over the long term the lease fees are equivalent to LVT, but
due to the greed of landlords (who behave as if they were capitalists), their
income from land sales will satisfy them better than their being taxed.
Eventually nearly all the land would then be leased from the government.

Nationally leased land, in countries like Hong Kong, is close to 100%. This approach is
known to be most successful, for the rate of growth of prosperity. Also when
the previous landlords have more money to spend, most of it will be invested in
durable capital goods, making production costs lower as obsolescent durable
items are more easily replaced and so the national prosperity will grow also
from the government’s investment in land values.

This proposal is not land nationalization (at least no more than what currently
applies), since no additional regulations are placed on how the land is to be
used.

Because the selling of land is a natural process which is (if anything) encouraged by the
land returning to public benefit, the resulting lower priced buildings will
become more easy to sell and this will not place such a limitation on their
owners who wish to better develop the sites.

People’s Land Trust is just another species of Georgism. All Taxes Come out of Rents which ultimately settle in land prices. Marx was unable to see the distinction between land and capital. Henry George quite clearly saw this fundamental distinction.

When homeowners sink under negative equity the PLT will buy out their mortgage and take ownership of the land under their house at the same time.

Result!! Without the hugely difficult task of introducing Land Value Tax, financial exploitation and mortgaging is excluded, one house at a time.

Land Value and the revenue therefrom is vested in a mutual trust, which works to provide homes.

A brilliant yet eminently feasible way of cutting out the mortgage foreclosure route of Disaster Capitalism.

(Why didn’t I think of this? (see my blog at conall boyle.com)