Land Value Tax: A Smart, Equitable Solution to Local Challenges

Yes, it is unrealistic to pretend that the Single Land Tax (good taxation) can replace all current sources of revenue. But it can certainly replace some taxes necessary to cover public expenses. This argument not only makes the Land-value tax feasible but necessary.

The single tax raises money by taking a percentage of the annual yield of land value. This yield or rent results from assessing public investment and land-use regulations. It is only fair that landowners pay their fair share of public investment via taxation.

The land tax is a cost recovery mechanism and a financing mechanism for future infrastructure and services (value capture). If the Georgian contention is true, land rent belongs to the individual and the municipality to pay for old, current, or future investments.

Taxing only land means not taxing (punishing) investment and homeownership. George's replacement of a volatile sales-based tax will secure recurrent, stable, and more difficult-to-hide revenue; replacing a regressive income-based tax will give families a break and allow for more disposable income; and replacing, or splitting' an unfair property tax will increase the supply of housing, reduce blight and improve the housing stock.

1. Developing Affordable Housing. Current property taxes penalize improvements, like building homes, by increasing the tax burden on those who develop housing or renovate properties. This discourages the creation of affordable housing stock and pushes developers to seek higher-margin luxury projects instead.

LVT Advantage: By taxing only the value of the land—not the buildings or improvements on it—LVT incentivizes the development of underutilized land. Landowners are motivated to put land to its most productive use, which naturally supports housing development, including affordable options.

2. Supporting Local Businesses. Sales taxes disproportionately impact small businesses and discourage consumer spending by effectively increasing local goods and services prices. Over-reliance on sales taxes can also make municipalities financially vulnerable to economic downturns.

LVT Advantage: A land value tax removes the burden from sales and encourages better land use in commercial districts. When landowners are incentivized to develop or improve their properties, vibrant commercial zones with increased foot traffic emerge, benefitting local businesses without penalizing customers.

3. Financing Infrastructure (Lead Replacement Program). Funding critical infrastructure through volatile sales Tax or politically sensitive property taxes leads to budget uncertainty and inequity.

LVT Advantage: Land values rise due to public investments like improved infrastructure. LVT allows municipalities to capture the value created by public projects, ensuring those benefiting from infrastructure improvements contribute fairly. This creates a stable, predictable revenue stream that aligns directly with the costs of infrastructure maintenance and upgrades, including essential programs like lead replacement.

4. Bears NFL Property in Arlington Heights: Net Positive Fiscally. The Bear's property represents an opportunity to increase the tax base, but traditional tax incentives and abatements often result in a fiscal drain, where cities give away future revenue without ensuring equitable returns.

LVT Advantage: Taxing the land value ensures that the Bears and other large landholders pay their fair share, regardless of the structures they build. LVT can discourage speculative landholding, prompting timely and efficient development. Moreover, the city's investment in roads, transit, and utilities for the site will naturally boost the land's value, creating a value-capture mechanism to fund further public needs.

Why Land Value Tax Works for Net Positive Fiscally Efficiency: Unlike property or sales taxes, LVT is economically efficient, avoiding distortions in housing, commerce, and consumption.

Fairness: LVT ensures landowners contribute based on the value of the location and public services they enjoy. Sustainability: LVT generates a steady, predictable revenue stream that grows with the local economy.

By adopting an LVT framework, municipalities like Arlington Heights can address housing affordability, promote thriving local businesses, fund infrastructure sustainably, and ensure the Bears property is truly a "net positive" fiscally—for the city and its residents.