Preface and Acknowledgements to the Third Edition

Abstract

THIS BOOK IS the maiden volume of the American Journal of Economics and Sociology Monograph Series. As such, it represents the first fruit of a long-range venture undertaken in cooperation with Blackwell Publishers, a venture that is anticipated to become a source of credit to both parties. Needless to say, I find it immensely gratifying that such a rare distinction has been accorded a book of which it is my privilege to be editor. Readers will no doubt wonder why a third edition of LandValue Taxation Around the World was brought out only three years after the second--especially in view of the forty-two year interval before the second edition followed the first. Several reasons entered into this decision: 1. New research (undertaken by scholars sponsored by the Lincoln Institute of Land Policy) convinced me that Colombia, Mexico, and Great Britain, three countries that had not been covered in the second edition, had experienced significant land-value taxation through of one sort or another, i.e., efforts to recoup values created by public works or public structuring of development opportunities. I had deliberately omitted Great Britain from the second edition because the chapter devoted to it in the first edition was primarily an account, not of actual experience with land-value taxation, but of unsuccessful efforts to get it implemented. While that chapter did touch on some betterment levies instituted by the Labour Government in the late 1940s and early 1950s, they were of brief duration, and did not strike me as being very relevant. Since the time of that account, Britain's experience with such levies has been quite extensive, and is worth recording as a cautionary tale, if nothing more . The authors of the new studies to which I have alluded have adapted them for inclusion in the present work. 2. In the second edition, Estonia and Nicaragua were dealt with, not in individual chapters, but as passages in the Introduction. This time, the Estonian situation had developed to a point where I considered it deserving of a short chapter. The case of Nicaragua is quite different. The agricultural land tax enacted there in June of 1996 was repealed in March of 1999 by an almost unanimous vote of the National Assembly, with the major factions in agreement that it placed too great a burden on small farmers. This conclusion is quite likely accurate, since, even though extremely modest in the aggregate, the tax bore heavily on owners of useable but less desirable acreage that happened to be located in relatively fertile and settled regions. In point of fact, it was a land tax but not a land value tax except in the broadest sense of the term, because, instead of being based on the actual market value per acre of each holding, it was based upon the division of the country unto zones within which all tillable acreage was arbitrarily assumed to be of the same value. A Managua resident, Paul A. Martin, comments that the repeal came at a time when the government was on the upswing with new taxes on productive activities as dictated by the IMF-World Bank restructuring plan, imposed as a condition for further debt maintenance. In a recent letter to me, he writes: Like many poor countries today, Nicaragua largely ignores rents as a public revenue source. A very small portion of land rent is collected in urban property tax. The Free Trade Zone laws create artificial tax-free conditions which allow private landowners to collect land rent at a maximum, while wages are paid at the competitive minimum. 3. When the second edition appeared, it contained news that legislation providing for land-value taxation in Greater Gape Town had been adopted and would be implemented beginning in July of 1998. This exercise of local option has since been abandoned in the face of a uniform system to be imposed by the Central Government upon the whole nation, a system that will also force the abandonment of land-value taxation in the majority of South African cities, where it has been operating successfully for many decades It should not be assumed that the present edition differs from the second one only in terms of the items enumerated above. …