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The house is the result of labor put into its construction and its value will change with time usually firstly rising and then falling as it becomes old and obsolete. The land can never do this, but its value does grow when the surroundings become developed, due to both the community and the nation contributing (by paying taxes) to improvements in the infrastructure of the region. This extra value is not caused by the land owner and as a result he has no moral rights to it. Yet the laws of land ownership confer on him this right and the ability to exploit land value increases when a site has been purchased and later sold after the region has been further developed as well as the charging of rent for the right for its access.

Such land ownership can actually harm the rest of the community because its non-use will make it harder to find a suitable site nearby and the greater competition for it and the resulting cost in rent or in purchase price will rise. To benefit from these changes is unethical because the advantage being taken is at the cost of others including taxpayers and would-be entrepreneurs, who will find it too costly when sites of land are unused and speculated and monopolized in this way.

A fairer way of organizing land tenure is to collect a revenue for its ownership, whether it is used or otherwise. This is the economic rent taken as if it were a tax. It is sometimes called Land Value Tax although strictly it does nothing to slow down national progress as other forms of taxation do. It actually is an incentive to more progress because it encourages land owners who do not properly use their land to sell it to somebody who will make full use of it, and who can then afford to pay the revenue. (Past such tenants would call this money rent or lease and give it to the land-property owner.)

So this claim for the introduction of a Land Value Tax is justified. Actually it affects the economy in 17 different ways which are summarized below:

17 Aspects of LVT Affecting Government, Land Owners, Communities and Ethics

Four Aspects for Government:
1. LVT, adds to the national income as do other taxation systems, but it replaces them.
2. The cost of collecting the LVT is less than for all of the production-related taxes–tax avoidance becomes impossible because the sites are visible to all.
3. Consumers pay less for their purchases due to lower production costs (see below). This creates greater satisfaction with the management of national affairs.
4. The national economy stabilizes—it no longer experiences the 18 year business boom/bust cycle, due to periodic speculation in land values (see below).

Six Aspects Affecting Land Owners:
5. LVT is progressive–owners of the most potentially productive sites pay the most tax.
6. The land owner pays his LVT regardless of how his site is used. A large proportion of the ground-rent from tenants becomes the LVT, with the result that land has less sales-value but a significant “rental”-value (even when it is not used).
7. LVT stops speculation in land prices and the withholding of land from proper use is not worthwhile.
8. The introduction of LVT initially reduces the sales price of sites, even though their rental value can still grow over a longer term. As more sites become available, the competition for them is less fierce.
9. With LVT, land owners are unable to pass the tax on to their tenants as rent hikes, due to the reduced competition for access to the additional sites that come into use.
10. With LVT, land prices will initially drop. Speculators in land values will want to foreclose on their mortgages and withdraw their money for reinvestment. Therefore LVT should be introduced gradually, to allow these speculators sufficient time to transfer their money to company-shares etc., and simultaneously to meet the increased demand for produce (see below).

Three Aspects Regarding Communities:
11. With LVT, there is an incentive to use land for production or residence, rather than it being unused.
12. With LVT, greater working opportunities exist due to cheaper land and a greater number of available sites. Consumer goods become cheaper too, because entrepreneurs have less difficulty in starting-up their businesses and because they pay less ground-rent–demand grows, unemployment decreases.
13. Investment money is withdrawn from land and placed in durable capital goods. This means more advances in technology and cheaper goods too.

Four Aspects About Ethics:
14. The collection of taxes from productive effort and commerce is socially unjust. LVT replaces this extortion by gathering the surplus rental income, which comes without any exertion from the land owner or by the banks– LVT is a natural system of national income-gathering.
15. Bribery and corruption on information about land cease. Before, this was due to the leaking of news of municipal plans for housing and industrial development, causing shock-waves in local land prices (and municipal workers’ and lawyers’ bank balances).
16. The improved use of the more central land reduces the environmental damage due to a) unused sites being dumping-grounds, and b) the smaller amount of fossil-fuel use, when traveling between home and workplace.
17. Because the LVT eliminates the advantage that landlords currently hold over our society, LVT provides a greater equality of opportunity to earn a living. Entrepreneurs can operate in a natural way– to provide more jobs. Then earnings will correspond to the value that the labor puts into the product or service. Consequently, after LVT has been properly introduced it will eliminate poverty and improve business ethics.

Let us understand and teach what is implied by property ownership.

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