Two traditional KLNs can be dealt with in one fell swoop:
1. "If you tax something, you get less of it."
2. "Weak form LVT, i.e. rent/price controls, means that the quality and quantity of housing for rent or sale goes down."
1. This is clearly true if we are taxing things with elastic supply (labour, capital, enterprise) but clearly the amount of physical land is entirely unchanged by a tax on it, and whether you like it or not, the UK population has more than enough physical surface area for its population.
LVT is of course primarily a tax on urban land, which makes up 10% of the surface area but 99% of the total value, where the value of land depends on the efforts of the whole community (private sector, public sector, everybody).
2. Yes, this is also true, but let's imagine the 'government' as a corporation in its own right, owned equally by all citizens, which is in the business of providing 'public goods' for the benefit of all its citizens.
Those public goods push up the value of land, so if you cap the amount of money the government can collect from land values, this reduces the quality and quantity of 'public goods' available. For sure, these can be paid for out of taxes on earnings and capital, but this is a second best solution for obvious reasons (depresses overall wealth and ends up transferring wealth from providers of labor and capital to land owners).
So we can merge the two statements into one longer statement, which ends up being an argument for LVT and against taxation of earnings, capital etc.
Debate Magazine
