joshua vincent, executive director center for the study of economics 7488 oxford avenue philadelphia...
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Joshua Vincent, Executive Director
Center for the Study of Economics 7488 Oxford AvenuePhiladelphia PA 19111Email: [email protected]
Land value tax: Funding community from the public commons, feasibility and
practical applications
What is land value tax (LVT)?
Used in communities in Pennsylvania
Has Lowered TaxesHas helped Growth in Urban areas
What is land value tax (LVT)?
Current Methods of LVT
The need for a BID is often caused by vacant or blighted lots. LVT in a BID puts burden on owners that cause the problem.
• Pittsburgh Downtown PartnershipBusiness
Improvement District
• $1.4 MPrimary Revenue Source: Land
Value
• Street & Walk Cleaning• Lot MaintenanceOperational
Purpose
Parks and Greenways provide public benefit to proximate landowners.For example, the Kansas City, MO Parks and Boulevards levy collects from those beneficiaries yet, benefit has a cost.
• Parks and Boulevards System, planned and built 1890s - 1940s
Kansas City, MO
• Boulevard Tax that is currently $1.00/ft, and generates $600,000
Revenue: Land Value
• Parkway Maintenance Tax levied on Land-Only, generates $6.6 million a year
Purpose: Maintenance of the City Plan
Current Methods of LVT
Sharing the commons from LVT
• Berkshire County MA: Stark Division of Poverty and WealthRegional
Tax Base Sharing
• A regional LVT shares benefits created by state and local investmentRevenue:
Land Value
• Wealthier towns pay their fair share but are not dragged down economically
Purpose: Broad-based Economic Benefit
The Commons and the Wealth Gap, a Case Study: Connecticut’s Congressional District 4
Income and population
Urban poverty
Unemployment
Property wealth
The Commons Wealth – to be distributed with justice, equity and efficiency, and annually
The Commons Wealth in the Global South, a Model launched: Namibia
Agricultural (Commercial) Land Reform Act, Act No. 6 of 1995 and the Land Valuation and Taxation Regulations. Intent:
Discourage multiple ownership of farms (through the application of a progressive rate of tax)
Encourage redistribution/diversification of ownership;
Encourage the efficient utilization of commercial agricultural land
Relieve poverty through resettlement and decongestion of communal areas
Raise revenue for the Land Acquisition & Development Fund (LADF) to facilitate & accelerate land acquisition, distribution and development process.
Namibia: A Promising Start
SOUTHERN AFRICA: Namibian land tax may serve as modelThe Oxford Analytica Daily Brief ® - October 2006
Successful implementation of a land tax in Namibia and the collection of better-than-expected revenues have confounded critics, including some white farmers, who argued that it would be too costly and complicated to implement or administer effectively.
This has important consequences for South Africa, where land taxes could provide a compromise between slow-paced market reforms and controversial compulsory acquisitions.
Namibia: a Viable Future
“….the government raised N$230 million which compliments allocations from finance towards land acquisition.” 11/4/13
The Namibian government aims to redistribute at least 15 million hectares of commercial farmland from previously advantaged white farmers to previously disadvantaged black farmers by 2020.
At the end of 2012, 7.5 million hectares of commercial farmland had been redistributed, which represents a 50 percent success rate.
Hon. Alpheus !Naruseb Lands and Resettlement Minister:
Models for progress towards prosperity
• Foreseeable barriers and known unknowns:1. Lack of education2. Lack of political will3. Necessity to synthesize sometimes conflicting
philosophies4. Identifying opposition5. Most Important: Lack of Information
The building blocks of information, a local to global project
• What will this project look like? Think of the Data Tree: Trunk
The building blocks of information, a local to global project
• Think of the Data Tree: Branches
The building blocks of information, a local to global project
• Think of the Data Tree: Leaves
Purpose of the project: Rent Sharing
• Good data = Good Policy
• In this illustration, relatively high tax burdens do not neatly correlate to ability to pay: Generally poor and postindustrial areas cannot pay for essential services that the community needs.
Purpose of the project: Rent Sharing
• In the Northeast United States, wage incomes are low relative to property tax burdens.
• A new approach is needed
Purpose of the project: participation in helping the world find a way out of the poverty trap.• New
approaches are needed worldwide.
• Collection of publicly created economic rent can provide opportunities for not just a few…from my town to your town