some benefits of the georgist policy

["Cprakash" <Cprakash@goplay.com>]

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Dear Abhijeet,

the land value or the unimproved land value which is sought to be
taxed, is actually the rent paid out to the landlord forever,
capitalised to a present value taking the inflation rate into
account. Now in the case you suggested that since all landowners are
being taxed, they will raise the rents. That is true, but their
tendency to raise the rents will be limited by the market. I do not
mean other landwoners, i mean LAND itself. The tendency of the
consumers of land will be to move out to a place with relatively
cheaper land. The tendency of the rent will be to reduce to the state
where the only rent paid to a builder will be the charge for his
construction, i.e the 40 lakhs, i.e land will be almost valueless.
                             This proposal will, i agree be very
heavy to those people who own large tracts of land now. It will
discourage land speculation and allow for a more gradual and
integrated development of cities instead of the incessant
urbanisation we see today. It is also, a FAIR proposal of taxation,
since it taxes something that cannot be hidden, is not made by your
own effort - hence will not discourage production and does not
penalise enterprise. I do not propose to add land tax as another to
our list of burdens, but to replace our entire list of burdens with
land tax. The regulation mechanism to monitor land tax is very snall
when compared to the present mechanisms. With increasing complexity
in the world with the advent of the internet, this is a fair and
simple way to finance a minimal government. Also, another proposal in
a related website was to give all citizens of a country a CITIZENS
DIVIDEND when the rent is more than sufficient to finance the
activities of the state. This will ensure that the benefits that the
concentration of people are bestowing to the community are shared by
all of the community.

c.prakash

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