3 ms·

I don't actually see a legitimate rebuttal to argument #2 (passing the tax on). In the article, the author simply says "...no, because land is special in that i

I don't actually see a legitimate rebuttal to argument #2 (passing the tax on). In the article, the author simply says "...no, because land is special in that it is scarce and nobody can make any more of it." It's not clear to me that this is an argument against the proposition that the tax will be passed on. Indeed, you could argue that it makes it more likely, since the scarcity of land gives the landowner more economic leverage (ie, if you don't like our rents, go try to buy your own land). There may very well be a sound economic argument that explains why the tax wouldn't just raise rents, but I don't see it in this article.

BirdieNZ 5y ago
I believe the next article in the series will explain it, but you can search google for "tax incidence land value tax" to find an explanation as to why. The short answer is that if you pass on the lvt to the tenant that means you just increased the land rent, so the land value goes up and then the land valye tax goes up. You can't repeat that into perpetuity because the tenant is already paying as much as they can afford (in aggregate). So you lose your tenant if you try to pass it onto them.