Taxing Land Values and Taxing Building Values

Abstract

T HE very title suggests to the writer of this article that in economics certain traditions have come down to us without any critical examination. Sometimes these traditions may amount to an obsession. The late Allyn A. Young, not long before his death, speaking about the Ricardian theory of rent, remarked how long it has taken economists to overcome this obsession. is no credit to the economists that so many things have passed from one generation of writers to another without critical examination. Now is a good time to smash some of these traditions. There are those who still think that it is possible to lay down one general rule for taxing land values and another rule for taxing building values. They believe it possible to establish a formula which will be generally applicable. Those who hold to views of this kind have failed to grasp the ideas of relativity and of evolution which were brought forward by the historical school of Germany more than two generations ago. Even in reputable writers, we find such expressions as: Tax land to bring it into use. is also often said: It is well to lessen the tax on buildings so as to encourage building. Examine these two statements somewhat critically. There are all kinds of land. What will apply to one kind of land will most certainly not apply to another kind of land; also, what will apply at one time and place will not apply at another time and place. EFFECT OF TAXATION ON FORESTS