3 ms·
Why is it one of the "healthiest" forms of taxation? And, why does the fixed supply make it healthy? That sounds completely unrelated. Can you explain?
by AnimalMuppet 3y ago
Why is it one of the "healthiest" forms of taxation? And, why does the fixed supply make it healthy? That sounds completely unrelated. Can you explain?
- lbarrow 3y agoWhen you tax something, you get less of it. By reducing the supply of a good, taxes deter otherwise mutually beneficial transactions from happening; the loss of mutual benefit from a tax (or other policy) is called "deadweight loss". Land value taxes have a special property in that land owners cannot respond to the tax by producing less land; the supply of land is fixed. This means LVTs do not generate deadweight loss, which makes them very efficient: https://en.wikipedia.org/wiki/Land_value_tax#Efficiency https://en.wikipedia.org/wiki/Land_value_tax#Efficiency