When choice sites are put to their highest and best use, the owners of the property benefit immediately. But equally important, unless we are truly a nation of individualists, is that the entire community benefits from intense use of centrally located properties. Can we count the ways?

1. The community benefits because well-developed downtown sites usually have office, retail or residential space, each of which meets market demand. Everyone needs a place to live, and many people — though certainly not all of us, at various phases in our lives — would prefer to live close to our work, to cultural amenities, to goods and services we depend on. We'd rather walk than drive, and we appreciate the benefits of living in the center of things.

2. The community benefits because most of us need places to work. For many kinds of jobs, particularly specialized ones, we need either to be with others who are doing the same kind of work, and/or accessible to our customers, and only a centrally located site can provide that effectively.

3. The community benefits because some of us want to open our own businesses. It might be the first of its kind, supplying a good or service not yet being provided to that market, or it might be a second, or fifth, or tenth or fiftieth, the presence of which helps to keep prices down for the consumer, as vendors compete to meet consumer preferences.

4. The community benefits when land is put to its highest and best use because for many pieces of land, housing is the highest and best use.

5. The community benefits when land is put to its highest and best use because centrally located land, well used, prevents or retards the development of agricultural and wilderness land on the fringes. Existing infrastructure is fully used, and there is no need to extend infrastructure into sparsely populated areas not yet served. Rural land is preserved.

We are land creatures, even in the computer age. We all need land, to live on and to work on, and when prime land is used at less than its highest and best use, we are forced to use more time, use more fuel, create more pollution, to get from good paying work to affordable land

H.G. Brown: Significant Paragraphs from Henry George's Progress & Poverty: 10. Effect of Remedy Upon Wealth Production (in the unabridged P&P: Part IX — Effects of the Remedy: Chapter 1 — Of the effect upon the production of wealth)

The elder Mirabeau, we are told, ranked the proposition of Quesnay, to substitute one single tax on rent (the impôt unique) for all other taxes, as a discovery equal in utility to the invention of writing or the substitution of the use of money for barter.

To whosoever will think over the matter, this saying will appear an evidence of penetration rather than of extravagance. The advantages which would be gained by substituting for the numerous taxes by which the public revenues are now raised, a single tax levied upon the value of land, will appear more and more important the more they are considered. ...

And will not the community gain by thus refusing to kill the goose that lays the golden eggs; by thus refraining from muzzling the ox that treadeth out the corn; by thus leaving to industry, and thrift, and skill, their natural reward, full and unimpaired? For there is to the community also a natural reward. The law of society is, each for all, as well as all for each. No one can keep to himself the good he may do, any more than he can keep the bad. Every productive enterprise, besides its return to those who undertake it, yields collateral advantages to others. If a man plant a fruit tree, his gain is that he gathers the fruit in its time and season. But in addition to his gain, there is a gain to the whole community. Others than the owner are benefited by the increased supply of fruit; the birds which it shelters fly far and wide; the rain which it helps to attract falls not alone on his field; and, even to the eye which rests upon it from a distance, it brings a sense of beauty. And so with everything else. The building of a house, a factory, a ship, or a railroad, benefits others besides those who get the direct profits.

Well may the community leave to the individual producer all that prompts him to exertion; well may it let the laborer have the full reward of his labor, and the capitalist the full return of his capital. For the more that labor and capital produce, the greater grows the common wealth in which all may share. And in the value or rent of land is this general gain expressed in a definite and concrete form. Here is a fund which the state may take while leaving to labor and capital their full reward. With increased activity of production this would commensurately increase.

And to shift the burden of taxation from production and exchange to the value or rent of land would not merely be to give new stimulus to the production of wealth; it would be to open new opportunities. For under this system no one would care to hold land unless to use it, and land now withheld from use would everywhere be thrown open to improvement.

The selling price of land would fall; land speculation would receive its death blow; land monopolization would no longer pay.* Millions and millions of acres from which settlers are now shut out by high prices would be abandoned by their present owners or sold to settlers upon nominal terms. And this not merely on the frontiers, but within what are now considered well settled districts.

* The fact that a tax on the rental value of land cannot be shifted by landowners to tenants, though recognized by all competent economists, is sometimes a stumbling block to persons untrained in economics. The reason such a tax cannot be shifted is that it cannot limit the supply of land. Landowners are presumably, before the tax is laid, charging all the rent they can get. There is nothing in a tax on the rental value of land to make tenants willing to pay more or to make land more difficult to hire. On the contrary, more land will be on the market, because of such a tax, rather than less, since the tax puts a heavy penalty on holding land out of use and unimproved for mere speculation. The competition of former vacant land speculators to get their land used will make land cheaper to rent rather than more expensive. And since only the net rent remaining after the tax is subtracted is capitalized into salable value, land will be very much cheaper to buy. H.G.B.

And it must be remembered that this would apply, not merely to agricultural land, but to all land. Mineral land would be thrown open to use, just as agricultural land; and in the heart of a city no one could afford to keep land from its most profitable use, or on the outskirts to demand more for it than the use to which it could at the time be put would warrant. Everywhere that land had attained a value, taxation, instead of operating, as now, as a fine upon improvement, would operate to force improvement. Whoever planted an orchard, or sowed a field, or built a house, or erected a manufactory, no matter how costly, would have no more to pay in taxes than if he kept so much land idle.

• The monopolist of agricultural land would be taxed as much as though his land were covered with houses and barns, with crops and with stock.
• The owner of a vacant city lot would have to pay as much for the privilege of keeping other people off of it until he wanted to use it, as his neighbor who has a fine house upon his lot.
• It would cost as much to keep a row of tumble-down shanties upon valuable land as though it were covered with a grand hotel or a pile of great warehouses filled with costly goods.

Thus, the bonus that wherever labor is most productive must now be paid before labor can be exerted would disappear.

• The farmer would not have to pay out half his means, or mortgage his labor for years, in order to obtain land to cultivate;
• the builder of a city homestead would not have to lay out as much for a small lot as for the house he puts upon it*;
• the company that proposed to erect a manufactory would not have to expend a great part of its capital for a site.
• And what would be paid from year to year to the state would be in lieu of all the taxes now levied upon improvements, machinery, and stock.

  *Many persons, and among them some professional economists, have never succeeded in getting a thorough comprehension of this point. Thus, the editor has heard the objection advanced that the greater cheapness of land is no advantage to the poor man who is trying to save enough from his earnings to buy a piece of land; for, it is said, the higher taxes on the land after it is acquired, offset the lower purchase price. What such objectors do not see is that even if the lower price of land does no more than balance the higher tax on it, (and this overlooks, for one thing, the discouragement to speculation in land), the reduction or removal of other taxes is all clear gain. It is easier to save in proportion as earnings and commodities are relieved of taxation. It is easier to buy land, because its selling price is lower, if the land is taxed. And although the land, after its purchase, continues to be taxed, not only can this tax be fully paid out of the annual interest on the saving in the purchase price, but also there is to be reckoned the saving in taxes on buildings and other improvements and in whatever other taxes are thus rendered unnecessary. H.G.B. ... read the whole chapter

Henry George: Why The Landowner Cannot Shift The Tax on Land Values (1887)

But while the Taxation of Land Values cannot raise rents, it would, especially in a country like this, where there is so much valuable land unused, tend strongly to lower them. In all our cities, and through all the country, there is much land which is not used, or not put to its best use, because it is held at high prices by men who do not want to, or who cannot, use it themselves, but who are holding it in expectation of profiting by the increased value which the growth of population will give to it in the future. Now the effect of the Taxation of Land Values would be to compel these men to seek tenants or purchasers. Land upon which there is no taxation even a poor man can easily hold for higher prices, for land eats nothing. But put heavy taxation upon it, and even a rich man will be driven to seek purchasers or tenants, and to get them he will have to put down the price he asks, instead of putting it up; for it is by asking less, not by asking more, that those who have anything they are forced to dispose of must seek customers. Rather than continue to pay heavy taxes upon land yielding him nothing, and from the future increase in value of which he could have no expectation of profit, since increase in value would mean increased taxes, he would be glad to give it away or let it revert to the State. Thus the dogs in the manger, who all over the country are withholding land that they cannot use themselves from men who would be glad to use it, would be forced to let go their grasp. To tax Land Values up to anything like their full amount would be to utterly destroy speculative values, and to diminish all rents into which this speculative element enters. And how groundless it is to think that landlords who have tenants could shift a tax on Land Values upon their tenants can be readily seen from the effect upon landlords who have no tenants. It is when tenants seek for land, not when landlords seek for tenants, that rent goes up.

To put the matter in a form in which it can be easily understood, let us take two cases. The one, a country where the available land is all in use, and the competition of tenants has carried rents to a point at which the tenant pays the landlord all he can possibly earn save just enough to barely live. The other, a country where all the available land is not in use and the rent that the landlord can get from the tenant is limited by the terms on which the tenant can get access to unused land. How, in either case, if the tax were imposed upon Land Values (or rent), could the landlord compel the tenant to pay it?  ... read the whole article

Charles B. Fillebrown: A Catechism of Natural Taxation, from Principles of Natural Taxation (1917)

Q50. How could the landowner escape the alleged burden of an increase in his land tax?
A. Simply by assuming the legitimate role of a model landlord, by putting his land to suitable use, in providing for tenants at lowest possible price the best accommodations and facilities appropriate to the situation that money can buy.

Q52. In old cities, it is not nearly all the land in use?
A. About one half the area of New York and Chicago is classed by the assessors as vacant. In Boston the proportion is: occupied, 45 percent; vacant, 43 percent; marsh, 12 percent. ... read the whole article

Mason Gaffney: Economics in Support of Environmentalism

Growing barley is a worthy goal (especially if you enjoy a little beer). So is growing corn. It would be great to raise as much of each as anyone wants, but the Earth has its limits. A choice and a decision are required. People invented (or stumbled into) the discipline of economics to help with such hard choices, and to console ourselves that we are doing the right thing. The hardest choices are those regarding land use, because there is just so much. We can build more houses, cars, and boats, write more music and drama, spawn and educate more people, but we cannot make another Hudson Valley.

Barley grows on cheap land, and the demand is limited, so the best barley land is used for growing corn. Economics reconciles the competing demands and rationalizes the outcome. It defines the "highest and best use" of land as that yielding the highest net gain, the excess of revenues over costs. Economists include non-cash "service flows" among "revenues," although they bear watching: sometimes they forget. Thus, economics shows how the market sorts and arranges land uses, giving us a corn belt, a wheat belt, and a cotton belt. Economists pride themselves on this achievement. (Some preen themselves too much, as we will see, and pride goeth before a fall.)

By the same logic, irrigated crops take land from dry-farmed crops; orchards take land from irrigated row crops; housing takes land from orchards and groves; commerce takes land from housing.

Sometimes the rich take land from the poor, provoking sympathy, strong rhetoric, and occasionally effective rear-guard resistance to such changes. Actually, a well-oiled market is often quite democratic. People of moderate income, by crowding, can outcompete those of high income for the same land, as when a Sears or Wal-mart takes the best commercial sites from a Nordstroms or Broadway; or when an old estate is subdivided into five lots per acre. This, too, provokes negative rhetoric, but developers know how to make hay out of this, and mincemeat of their opposition. At this point developers become populists and accuse preservationists and environmentalists of snobbery and elitism. We need an answer for that one if environmentalists are going to command enough popular support to win, and hold the gains. Of this, more later.

Other worthy goals that conflict are open space and water conservation. A major problem in an arid land is that much wide open space guzzles up water. Conserving open space and conserving water conflict directly. Green grass uses more water per acre than almost any farm crop except rice (and rice returns part of it downstream). In cities most water is used not for swimming pools or toilets or washing machines, but for sprinkling lawns. Cemeteries, golf courses, horse-pastures, parks, freeway banks, and the spacious tax-exempt grounds of institutions are the greatest water junkies outside of farming itself, which of course takes much more than all cities.

Something has to give. Thus far it has been wetlands that gave. Once, perhaps, we had too much wetland, but that was long ago. We cannot accommodate all those uses, and save wetlands too, just by having restaurants stop serving water, or putting bricks in toilet tanks. Those are just token or "Goo-Goo" measures for parlor reformers; they distract us from real problems, and substitute for real solutions. What is the highest and best use of water? Wetlands, maybe; more golf courses, maybe not. But we need a rule to gauge "highest and best use." Is it the market? Read on.

Mason Gaffney:  The Taxable Capacity of Land

 In other cases, industries occupy land of high value that is wrongly assessed low simply because industry occupies it, and it has not been subdivided. What has subdivision to do with it? The bias of assessors is to value industrial "acreage" low, relative to improved "lots," even though they lie cheek by jowl. It is a kind of wholesale discount for owners of "raw" (undivided) tracts.

 For example, in West Allis, Wisconsin, the southwest corner of the Allis-Chalmers plant occupies the northeast corner of the 100% location, the most valuable commercial site in town. That land, with the same retail potential as the other three corners, is assessed as raw industrial acreage, as though it were in the boonies, with no recognition of its high location value for retail/office use. To make a land tax work, the assessor must be reinstructed to value that land at its highest and best use rather than as ordinary raw acreage. Exempting buildings would create the necessary pressure, thus solving the very problem that otherwise might be taken as a point against it. As noted earlier, the U.S. Census of Governments gives us no data on this point. You, however, can find it easily enough: tax assessments are public records, and you know your own town. ...

Land comprises all natural resources, not just ‘terra firma.’ It is the universe minus man’s products. Even the simplest of human activities, sleep, requires each of us to occupy exclusively a space, a location, preferably a bed in a home of our own. But that word ‘own’ conjures emotions and political postures. ...

The Nobel-winning economist William Vickrey said that the property tax is actually two different taxes (Vickrey 1991). That is because buildings are capital, not land, in the economic sense – even if, in most legal codes, there is no distinction between land and improvements made to it which are all lumped together as ‘landed property’ or real estate. Buildings and other improvements to land all depreciate over time unless further capital is expended. Eventually the market value of such improvements may become negative, owing to the costs that would need to be incurred by someone wishing to redevelop the site for an alternative use. But that does not necessarily take away the rental value of the site.

Much urban blight is caused by these so-called ‘brown field’ vacant and under-used sites. However they are often in valuable locations, with good transport connections. It may be that owners are speculating that land prices will rise and enable them to sell at greater profit in the future than now, or it may be that there is genuinely no market for sites in a particular location unless the cost of remediation is subsidised as a form of public investment. Such investment, according to Vickrey and other followers of Henry George, can be entirely funded from LVT. In a lecture given in 1991, first published last year, Vickrey claimed:

“Cities have the capacity to be fully self-financing without dependence on either federal assistance or on general taxes that are unrelated to benefits received.”

The proviso, according to Vickrey, is to replace the tax on buildings with a tax on land value alone – LVT:-

“The property tax combines one of the best and one of the worst taxes we have. The portion that falls on sites or land values is the only major tax that is reasonably free of distortionary effects and is not intolerably regressive”.

Taxing buildings and work done to improve them discourages such work. Un-taxing them and taxing land more highly, irrespective of its actual state of development but based upon its highest and best immediate potential use, will encourage owners to maintain their sites and buildings in such a way as to maximise their income. A remote site or one with conservation or other restrictions will have a low site value, hence attract low taxes, whereas a high value city centre derelict site will very soon be redeveloped. The extra property tax revenue from extending the tax base to sites that are currently under-taxed (because the tax is based primarily on building/rental value not site/owner value), ensures public infrastructure projects can be funded without resource to general taxes or excessive borrowing on the financial markets.  Read the whole article

To some people this may be counter-intuitive. It may not be obvious that increasing taxes on a parcel of land will foster its improvement. Consider, however, the possibility that there are two parcels of land in roughly the same location and of equal size. You own a vacant parcel and another next to it has a twenty-story building. If only the land-value is taxed you will be paying the same tax revenue as your neighbor. What are you likely to do with your parcel? If you are rational, you will either build a twenty-story building or else sell the land to someone who will. In this way improvements tend to be clustered in high-land-value areas except where it is prohibited, perhaps for a park.  ... read the whole article

To secure that end, property rights are instituted among men, deriving their just standing from the consent of the unpropertied.

Whenever any form of property becomes destructive of that end, it is the right of the people to alter or to abolish it, and to institute new principles most likely to effect their safety and happiness.

Consent of the unpropertied?

That means property must work for the benefit of all, not just those who own property.

But abolish property!?

That is a red flag indeed, but note I said alter or abolish, and it is our own Declaration of Independence I am paraphrasing.

Like Jefferson, I generally prefer alter to abolish: 'abolishing' something is nihilistic until we know what we want to replace it with.

The point is, we have many degrees of freedom as citizens; we are not bound body and soul by decisions made, or allegedly made, in the past. ... Read the whole article

Mason Gaffney: The Taxable Surplus of Land: Measuring, Guarding and Gathering It

Nic Tideman: Land Taxation and Efficient Land Speculation

Of course, land will not be transferred by those who have the right to use it unless some payment is made. The possibility of payments for transferring the right to use land raises the specter of land speculators receiving large undeserved profits while holding economic development hostage. Is land speculation an unavoidable concomitant of a market economy?

It is important to understand first that withholding land from development can be a productive activity. Land that is developed prematurely will not be improved to the extent that is efficient when the land is ripe for development, because that later development would require the sacrifice of the earlier, inefficient improvements. To insure that resources are not wasted on premature development of land, it must be possible for those who make development decisions to profit from making them well. This perspective on land speculation was developed by Richard T. Ely (1920). ... read the whole article

Fred E. Foldvary — The Ultimate Tax Reform: Public Revenue from Land Rent

Another error made even by academic economists is to confuse the supply of land for a particular use, such as housing, with the overall supply of land. Of course the supply for a particular use can vary, since, for example, we can convert farmland to housing land. But the total area available for all uses does not change, and that is the relevant supply.

The relevance for taxation is that if a plot of land used for a factory is taxed, the owner will not suddenly want to convert it into a farm unless its use as a factory was suboptimal. If the plot was already being used to maximize the rent, taxing it will not change the use. Taxing the site will also not make the boundary lines move to the west. Taxing the site will also not affect the demand by tenants to use the site. ... read the whole document

Charles T. Root — Not a Single Tax! (1925)

To explain: Every community has an indefeasible original right to the land on which it exists, and to all the natural, unmodified properties and advantages of that particular area of the earth's surface. To this land in its natural state, undrained, unfenced, unfertilized, unplanted and unoccupied, including its waters, its contents and its location, every individual in the community (which may consist of any political unit selected) has an equal right, while all the individuals together have a joint right to the value for use which society has conferred upon these natural advantages.

This value for use is known as "Land Value," or by the not particularly descriptive but generally adopted name of "Economic Rent."

Briefly defined the land value or economic rent of any piece of ground is the largest annual amount voluntarily offered for the exclusive use of that ground, or of an equivalent parcel, independent of improvements thereon. Every holder or user of land pays economic rent, but he now pays most of it to the wrong party. The aggregate economic rent of the territory occupied by any political unit is, as has been stated above, always sufficient, usually more than sufficient, for the legitimate expenses of the government of that unit. As also stated above, the economic rent belongs to the community, and not to individual landowners.

On the other hand, the result of every utilization or enhancement of the natural advantages of land (such as farm profits, the rent and selling value of buildings and other improvements), when accomplished by an individual, belongs wholly to that individual, and should never, and need never, be taken from him by taxation. ...

In his third five years the boom continues, and the community grows so fast that before the close of that period one corner of our friend's farm finds itself near the middle of a flourishing town. Five acres of it are needed for a public park, and five acres adjoining are wanted to cut up into building lots. As building lots, this part of the land will command a voluntary offer of a hundred dollars per year per acre of economic rent; and this fact establishes the land-value of the adjoining five acres needed for park purposes.

In this situation what shall our farmer do?

He has two courses open to him. If he doesn't want to relinquish his land, and can afford to withhold it from further improvement, he can pay the hundred dollars per acre per year of economic rent which these ten acres will now command, and keep his farm intact. If this appears to him too costly a luxury, he can signify his willingness to sell to the town the five acres wanted for the park, and the other five to individual builders. ...
Let us roughly restate the proposition: All members of the community having a joint right to the income which the social advantages of the land will command, they are all partners in this income.

Therefore, when one of their number wishes to take for his private use a parcel of this land, he should buy out his partners, i.e., the rest of the community, by paying regularly into the common treasury the economic rent of that parcel, instead of paying, as at present, the purchase price, i.e., the right to collect the economic rent, in a lump, to some other individual who has no more original right to it than himself.

But before this time the reader, unless he has given previous attention to the subject, is full of objections to the above doctrine: "How about the law?" he is asking. "Hasn't a man the right to buy a piece of land as cheaply as he can, to do what he pleases with it, and hold on to it till he gets ready to sell?" The answer is that at present he certainly has this statutory right, which has been so long and so universally recognized that most people suppose it to be not only a legal, but a real or equitable right. A shrewd man, foreseeing the direction of growth of population in a city, for example, can buy a well-located block at a moderate figure from some less far-seeing owner, can let it grow up to weeds, fence it off against all comers and give it no further attention except to pay the very small tax usually imposed upon vacant land.

Meantime the increasing community builds up all around it with homes, banks, stores, churches, schools, paving and lighting the streets, giving police and fire protection, etc., and at last comes to need this block so urgently that the owner is fairly begged to sell it, at three or ten or fifty times what it cost him. Quite often the purchaser at this enormous advance is the very community which has through its presence and the expenditure of its taxes created practically the whole value of the land in question!

It was said above that an individual has a statutory right to pursue this very common course. That was an error. The statement should have been that he has a statutory wrong; for no disinterested person can follow the course of land speculation as almost universally practiced, without feeling its rank injustice. ...

An illustration has already been given of the case of a piece of farm land. Let us take an example in a large city. Let us take a corner lot centrally located in New York City, the title to which lot is held by, say, Mr. John William Rhinelastor. This lot was a part of an old Dutch farm, and is an heirloom. It did not cost the present owner anything, nor his father nor his grandfather. There is a little old building on it, which has always been rented at a figure ten times as large as the taxes imposed, so that the owner has been handsomely subsidized each year for storing his title-deeds during a period of the city's growth in which the increase in population and the expenditure of public money in that neighborhood have raised the value of this corner location to, say, two hundred times its early value. ...

But — and right here is one of the prime advantages of the abolition of taxation — Mr. Rhinelastor, in order to get satisfactory return from his land, must improve it. Unless he is satisfied with a small income from it, to wit, the proportion of the economic rent which the community chooses to leave in his hands, he must put upon his land the best building the location will warrant. The rents of this building will be his in their entirety, not one dollar of them being taken from him by taxation. If he is not prepared or not willing to do this he would probably find it more profitable, before he leaves the country, to sell the land to some one of the many persons who are eager to build upon it. It will always be salable, although not by any means at present figures.

Now imagine for a moment the effect upon the appearance of a city and upon the comfort of its population which would result from the change of fiscal policy which this article proposes. At present, a tempting premium is placed upon keeping land unimproved or inadequately improved, while a heavy penalty is imposed upon improvement. Most land appreciates constantly. All buildings depreciate from the moment of completion. Yet the building is taxed equally with the land.

What incentive does such a system offer the speculative landowner to put up a commodious, well-lighted modern structure in place of the old ruin which now pays him so well? The old one cannot depreciate much more, and while paying a trifling tax because of its physical worthlessness, he is thereby enabled to collect and pocket the economic rent of the ground, which the community is continually rendering more valuable. The new building would absorb a large amount of capital, would begin to run down even before it could be occupied, and would be taxed to the limit. Why then is not the landlord justified in letting well enough alone, enjoying the growing economic rent, and waiting till he can get a fancy price for the right to collect it?

But reverse the conditions. Reclaim for the community its natural income, making it expensive either to keep needed land vacant or to withhold it from the ready and willing to improve it to the full extent of its possibilities. ... read the whole article

Frank Stilwell and Kirrily Jordan: The Political Economy of Land: Putting Henry George in His Place

Concerns about urban policies also raise questions about the current relevance of Georgist ideas. For example, it is pertinent to ask whether a more uniform land tax would encourage the more efficient utilisation of urban space. George argued that, in order to cover the costs of a higher rate of land tax, landowners would be forced to put their land to its most productive use, and could not afford to hold it idle. Here is a clear link with the modern concerns to discourage ‘urban sprawl’ and to promote ‘urban consolidation.’ To the extent that a higher land tax would encourage the development of more housing in existing urban areas, the pressures for housing development in outlying areas would be significantly reduced. This, in turn, could reduce the burgeoning demand for transport that is currently characteristic of large cities.

Land tax also impacts on the politics of peripheral urban expansion. Currently, the prospect of huge capital gains resulting from decisions by local governments to rezone land from rural to urban acts as an incentive for landowners on the fringes of built-up areas to lobby for changes that will allow increased development. Hence, landowners push for rights to subdivision, irrespective of whether or not there is actual demand (Day, 1995: 3). By creaming off the gains from windfall increases in land values, land tax obviates this bias towards relentless urban expansion.

However, the question remains: would a uniform land tax be sufficient to produce more efficient patterns of urban development? Or would there still be a need for direct land use controls? Land tax can certainly be a tool for discouraging the wasteful use of land. It tends to discourage people from purchasing excessive amounts of land or leaving it idle. However, it may also encourage the overdevelopment of land in order to produce the income stream necessary to pay the higher rate of tax.

Critics of urban consolidation such as Patrick Troy (1996) have examined the potential problems of such overdevelopment, including a range of environmental impacts such as altered hydrological processes. It seems to be an overly bold claim that a Georgist land tax alone would be sufficient to achieve optimal urban development patterns. Land use controls a necessary adjunct to land tax - in setting minimum requirements for green space, for example.

Local government planning controls are also important to prevent incompatibility of land uses, such the development of hazardous or unhealthy industrial activities adjacent to residential areas. Targeted decentralisation policies are a means of encouraging the further development of regional centres. Such policies can work in conjunction with land taxes to ease growth pressures in the larger cities, while addressing long-standing spatial, social and economic inequalities (Stilwell, 2000: 254-260). The desirability of promoting more decentralised regional development is consistent with a Georgist perspective, but not altogether compatible with the claim that land tax would facilitate urban consolidation. It seems clear that it ‘overburdens’ land tax to expect it alone to produce the best spatial outcomes, taking account of all the economic, social and environmental issues involved in urban and regional policy. The various other policy instruments – including regulations relating to green space, zoning, and the provision of public infrastructure to pave the way for decentralisation – are important complements to land taxation. In other words, land tax is best regarded as a necessary but not sufficient condition for more effective spatial policy. ... read the whole article