The state and local government

The first land taxers, as Iain Mclean notes, were the French ‘Physiocrats’ in the 1750s, followed by Tom Paine (Agrarian Justice, 1797) and the classical economist David Ricardo (On the Principles of Political Economy and Taxation, 1817).¹ The Jeffersonian individualist Henry George, in Progress and Poverty first published in 1879, argued that ‘the recognition of the common right to land involves no shock or dispossession, but is to be reached by the simple and easy method of abolishing all taxation save that upon land-values’.² George also maintained that all individuals and classes would benefit from his proposal ‘save perhaps the holders of government bonds or other securities bearing fixed rates of interest, which will probably depreciate in selling value, owing to the rise in the general rate of interest, though the income from them will remain the same’.³ Moreover, according to George

…to put all taxes on the value of land, while it would be largely to reduce all great fortunes, would in no case leave the rich man penniless. The Duke of Westminster, who owns a considerable part of the site of London, is probably the richest land owner in the world. To take all his ground rents by taxation would largely reduce his enormous income, but would still leave him his buildings and all the income from them, and doubtless much personal property in various other shapes. He would still have all he could by any possibility enjoy, and a much better state of society in which to enjoy it.⁴

In 2007 the present Duke of Westminster’s Grosvenor property company made a profit of £524 million: and in 2008 – due to the property downturn – a loss of £594 million. The write downs of £1.3 billion on the values of properties and investments included a £165.3m drop in the value of the Liverpool One retail park which opened in May 2008. Grosvenor said its net asset value – which measures the value of its properties minus the value of its liabilities – dropped 7.4 per cent to £2.8 billion.⁵ The Sunday Times 2008 Rich List ranked the Duke of Westminster with £7 billion the third richest person in Britain and the 51^st richest person in the world. The Duke of Westminster, according to The Sunday Times 2009 Rich List, was still the third richest person in Britain and the 46^th richest person in the world with £6.5 billion: because the richest 50 in the world were now worth only £605.9 billion – down £117.5 billion (16.2 per cent) compared to 2008.⁶ That is, the duke’s property assets had shrunk more slowly than others, losing £500m in value – a drop of 7 per cent since 2008.⁷ Moreover, at the beginning of January 2010 – with the top end of the London housing market in recovery mode – he was still the third richest person in Britain and his fortune had increased by £250 million to £6.75 billion.⁸

Marx and Engels never met George who stayed at the London home of Henry Hyndman – a founder of the British Social Democratic Federation – in 1882: when Hyndman ‘hoped, quite mistakenly as it afterwards appeared, to convert him to the truth as it is in Socialist economics’.⁹ Marx – whom George regarded as ‘a most superficial thinker, entangled in an inexact and vicious terminology’ and as ‘the prince of muddleheads’¹⁰ – dismissed Progress and Poverty as ‘the capitalist's last ditch.’¹¹ For, as Marx wrote in a letter to his friend Friedrich Sorge dated 20 June 1881:
Theoretically the man [Henry George] is utterly backward! He understands nothing about the nature of surplus value and so wanders about in speculations which follow the English model but have now been superseded even among the English, about the different portions of surplus value to which independent existence is attributed – about the relations of profit, rent, interest, etc. His fundamental dogma is that everything would be all right if ground rent were paid to the state. (You will find payment of this kind among the transitional measures included in The Communist Manifesto too.). This idea originally belonged to the bourgeois economists; it was first put forward (apart from a similar demand at the end of the eighteenth century) by the earliest radical followers of Ricardo, soon after his death. I said of it in 1847, in my work against Proudhon….This is a frank expression of the hatred which the industrial capitalist dedicates to the landed proprietor…¹²
In The Manifesto, the first three of the 10 ‘transitional measures’ are: 1. Abolition of property in land and application of all rents of land to public purposes. 2. A heavy progressive or graduated income tax. 3. Abolition of all rights of inheritance.¹³ The ‘first person to turn this desideratum’ into ‘a socialist panacea’, according to Marx, was Colins’:
….his few remaining followers…have praised Henry George….they leave wage labour and therefore capitalist production in existence and try to bamboozle themselves or the world into believing that if ground rent were transformed into a state tax all the evils of capitalist production would disappear of themselves. The whole thing is therefore simply an attempt, decked out with socialism, to save capitalist domination and indeed to establish it afresh on an even wider basis than its present one.¹⁴
Marx – in his speech on free trade to the Democratic Association of Brussels on 9 January 1848 – also attacked the view that breaking the monopoly of the English landed aristocracy would benefit workers by cheapening food:
The English workers have very well understood the significance of the struggle between the landlords and the industrial capitalists. They know very well that the price of bread was to be reduced in order to reduce wages, and that industrial profit would rise by as much as rent fell. Ricardo, the apostle of the English free-traders, the most eminent economist of our century, entirely agrees with the workers upon this point. In his celebrated work on political economy, he says: ‘If instead of growing our own corn...we discover a new market from which we can supply ourselves... at a cheaper price, wages will fall and profits rise. The fall in the price of agricultural produce reduces the wages, not only of the labourer employed in cultivating the soil, but also of all those employed in commerce or manufacture.’¹⁵
Hence Marx’s views on both George and free trade were determined by his theory of rent, which – as Matthew Edel reminds us
is a deduction from surplus value received by the capitalists. In a capitalist system, the landlord does not receive earnings directly from the purchase of labour power and the sale of his product. He does not thus directly benefit from the creation of new value by labour! But by owning the land necessary for production, the landlord can obtain funds in return for its use.¹⁶
Marx distinguished between differential rent (where the revenues paid to landowners come directly out of the capitalists’ surplus value without affecting prices), absolute rent (where the owners of natural resources of even the lowest quality can then demand payment for their use) and monopoly rent (where the landlords limit capital investment in land-using activities; and the rent may be passed on in higher prices). Monopoly of land is thus a problem for capitalists, who – Marx suggested – might take to the sort of scheme suggested by George, nationalising the land or taxing rents and use the proceeds for the benefit of their own class:
The radical bourgeois (with an eye moreover to the suppression of all other taxes) therefore goes forward theoretically to a refutation of the private ownership of the land, which, in the form of state property, he would like to turn into the common property of the bourgeois class, of capital.  But in practice he lacks the courage, since an attack on one form of property – a form of the private ownership of a condition of labour – might cast considerable doubts on the other form.  Besides, the bourgeois has himself become an owner of land.¹⁷
Such ‘bourgeois’ views are still articulated by theorists and different fractions of capital today. For example, Nicholas Tideman et al argue that: 'The excess burden of taxes can be reduced by shifting taxes from labour and capital onto land and by replacing progressive taxes with proportional taxes'; and they use 'a dynamic general equilibrium model to develop estimates of the magnitudes of reduction in excess burden that can be achieved in the United States by (1) incrementally shifting revenue from five broad-based taxes to land, (2) replacing the current progressive income tax with a flat tax, and (3) shifting as much taxation as possible to land'.¹⁸ And they conclude that:
Significant increases in the efficiency of the U.S. economy could be attained by flattening the income tax and by shifting taxes from labour and capital to land. In the short run, the greatest increase in after-tax wages is achieved by shifting taxes from wages to land. In the long run, the greatest increase in wages is achieved by shifting taxes from capital to land. Uncertainty about the value of land and current land efficiency creates significant uncertainty about the magnitude of the efficiency gains that might be achieved. But even if pessimistic estimates of parameter values are used, the potential gains start at 6.6 per cent of NDP (Net Domestic Product P.L.) per year and rise to 9.9 per cent of NDP per year after 30 years. ¹⁹
The British Retail Consortium – whose members include Aldi, Amazon.co.uk, Argos Ltd, Asda Stores Ltd, Boots UK Limited, B&Q, Burger King Limited, Comet Group plc, Currys, Debenhams plc, Dixons.co.uk, Halfords plc, Harrods Ltd, HMV, Homebase Ltd, Iceland Foods, J Sainsbury plc, John Lewis Partnership, Marks & Spencer Group plc, McDonald’s Restaurants Ltd, Mothercare plc, NCP, PC World, Somerfield Stores Limited, Staples UK Ltd, Tesco plc, W H Smith plc, Waitrose Ltd, Waterstone’s and Wickes²⁰ – in their submission to the 2007 Lyons Inquiry argued that:
Land Value Tax (LVT) has a number of advantages. These include not distorting behaviour in the same way as taxes on income and profits do, LVT’s potential effectiveness in incentivising the efficient use of land (as all land would incur a charge even when it was not being used for productive activity) and taxing land values could also enable local governments to profit from some of the increase in value as a result of a prosperous local economy.²¹
Conversely, the Confederation of British Industry – whose members include finance, industrial capitalists and some of the big retailers who are also members of the BRC – made no reference to LVT in its submission to Lyons: which opposed ‘any increase in business tax at this time, and in particular in those taxes on business which bear no relation to profitability, of which rates are one example (alongside others, such as employers’ national insurance contributions).’²²

Engels – in his ‘Preface’ to the American edition of The Condition of the Working-Class in England written in January 1887 – discussed Marx’s arguments regarding George in the context of current developments in the American labour movement:
In New York the Central Labour Union, last November, chose for its standard-bearer Henry George, and consequently its temporary electoral platform has been largely imbued with his principles. In the great cities of the North-West the electoral battle was fought upon a rather indefinite labour platform, and the influence of Henry George’s theories was scarcely, if at all, visible. And while in these great centres of population and of industry the new class movement came to a political head, we find all over the country two wide-spread labour organizations: the “Knights of Labour” and the “Socialist Labour Party,” of which only the latter has a platform in harmony with the modern European standpoint...²³
Engels then summarises the differences between George and Marx:

If Henry George declares land-monopolization to be the sole cause of poverty and misery, he naturally finds the remedy in the resumption of the land by society at large….Modern Socialists, as represented by Marx, demand that it should be held and worked in common and for common account, and the same with all other means of social production, mines, railways, factories, etc….what Henry George demands, leaves the present mode of social production untouched, and has, in fact, been anticipated by the extreme section of Riparian bourgeois economists who, too, demanded the confiscation of the rent of land by the State.²⁴

Subsequently – as Michael Hudson points out – George became more sectarian.²⁵ By 1888, George's most important political ally, Father McGlynn – who had been excommunicated from the Catholic Church for his support of George – felt obliged to expel him from the United Labour Party, of which George was the original leader in the aftermath of his 1886 New York City campaign. The party soon fell apart.²⁶ George's aloof behavior as a politician also contrasts with that of Marx, who spent much of his time with associates organising groups to create a following. When the German-American iron maker Michael Flurscheim arranged for George to co-chair the Land Reform Conference in Paris in 1889, for example, George spent most of his time in his hotel room rather than working with the delegates to promote his ideas.²⁷ In 1924, Upton Sinclair observed that the narrow focus of the Single Taxers became their political undoing by blocking what seemed to be a natural alliance with other reformers.²⁸ When confronted with criticisms of monopoly capital or finance capital, George replied that this was not what he meant by capital. His point of reference was small businessmen working with their own tools and savings. Claiming that to tax capital would discourage the incentive to invest in productive activity, he viewed capital as aiming to produce wealth, not to aggrandise itself by predatory, exploitative practices (apart from monopolies). He denounced privilege as threatening this middle-class vision, but socialists replied that special privilege and insider control was the essence of the capital they were talking about.²⁹ As Hudson concludes:

One looks in vain for followers of George with prestigious economic credentials such as…the Marxists, Keynesians, monetarist Chicago School or post-Keynesians….and the problem may be traced back to George himself….By turning the Henry George Schools into a funnel into the anti-tax ideology of Ayn Rand and Ludwig von Mises, George's followers have walked into an effective political wall….Georgists have deemed the analysis of finance and Wall Street to be a socialist concern, and emulate George's own conflation of physical and financial capital. There has been no attempt even to trace the incidence of land-price gains (‘capital’ gains), and many Georgists view such gains as legitimate returns to capital rather than as financial capitalizations of land rent bid up on credit….The failure to place land rent and other forms of economic rent in its macroeconomic setting has blocked a serious discussion of land-value taxation from academia and congressional law making, and hence from playing the popular role that it did in George's own day.³⁰
Hence theoretically, as Michael Wyatt argues, ‘George was a critic of accumulation of wealth in land’, as were Marx and Engels, but
saw the private ownership of the unearned, socially generated value of land as the main source of this accumulated surplus value. Marx, by contrast, recognised the source of surplus value in the exploitation of labour, and saw surplus value reflected in private accumulation of socially generated values in all forms of capital, not merely land. George avoids attributing surplus value to non-landed capital by defining capital in a very narrow way; most of what is generally thought of today as capital assets by non-Marxist and Marxist economists is not considered capital in George’s definition. Oriented to the goal of a decentralised economy based on self-employment, George ignored the normal results of the evolution of capitalist competition towards concentration of private ownership of improvements with small business generally losing out in the absence of the regulation of markets, capital access, and scale.³¹
David Harvey and monopoly rent

Marx’s concept of monopoly rent is pivotal in David Harvey’s analyses.³² ‘All rent’, according to Harvey, ‘is based on the monopoly power of private owners of certain portions of the globe’; and monopoly rent ‘arises because social actors can realize an enhanced income stream over an extended time by virtue of their exclusive control over some directly or indirectly tradable item which is in some crucial respects unique and non-replicable’.³³ He distinguishes two situations in which the category of monopoly rent ‘comes to the fore’: ‘The first arises because social actors control some special quality resource, commodity or location which, in relation to a certain kind of activity, enables them to extract monopoly rents from those desiring to use it’.³⁴ For example, as Marx argues, the vineyard producing wine of extraordinary quality that can be sold at a monopoly price. In this circumstance ‘the monopoly price creates the rent’.³⁵ The ‘locational version’ would be centrality (for the commercial capitalist) relative to, say, the transport and communications network or ‘proximity (for the hotel chain) to some highly concentrated activity (such as a financial centre)’.³⁶ The commercial capitalist and the hotelier are willing to pay a premium for the land because of accessibility. ‘These are the indirect cases of monopoly rent. It is not the land, resource or location of unique qualities which is traded’, as Harvey emphasises, ‘but the commodity or service produced through their use’.³⁷ In the second case, the land or resource is directly traded upon (as when vineyards or prime real estate sites are sold to multinational capitalists and financiers for speculative purposes):
Scarcity can be created by withholding the land or resource from current uses and speculating on future values. Monopoly rent of this sort can be extended to ownership of works of art (such as a Rodin or a Picasso) which can be (and increasingly are) bought and sold as investments. It is the uniqueness of the Picasso or the site which here forms the basis for the monopoly price.³⁸

Harvey also shows that ‘it is a categorical error to view globalisation as a causal force in relation to local development’, which

derives from the habit of ignoring the category of landed capital and the considerable importance of long-term investments in the built environment which are by definition geographically immobile (except in the relative accessibility sense). Such investments, particularly when they are of a speculative sort, invariably call for even further waves of investments if the first wave is to prove profitable (to fill the convention centre we need the hotels which require better transport and communications, which calls for an expansion of the convention centre...). So there is an element of circular and cumulative causation at work in the dynamics of metropolitan area investments…³⁹

For example, the pivot for the Docklands redevelopment in London and the financial viability of Canary Wharf is further public and private investment. This is what urban growth machines are often all about: ‘the orchestration of investment process dynamics and the provision of key public investments at the right place and time to promote success in inter-urban and inter-regional competition’.⁴⁰ Moreover, ‘this would not be as attractive as it is were it not for the ways in which monopoly rents might also be captured’. For example, a ‘well-known strategy of developers...is to reserve the choicest and most rentable piece of land in some development in order to extract monopoly rent from it after the rest of the project is realized. Savvy governments with the requisite powers can engage in the same practices’.⁴¹ Moreover, the government of Hong Kong is largely financed by controlled sales of public domain land for development at very high monopoly prices. This converts, in turn, into monopoly rents on properties which makes Hong Kong very attractive to international financial investment capital working through property markets. Hence, as Harvey concludes:

Urban governance of this sort is mostly oriented to constructing patterns of local investments not only in physical infrastructures such as transport and communications, port facilities, sewage and water, but also in the social infrastructures of education, technology and science, social control, culture and living quality. The aim is to create sufficient synergy within the urbanization process for monopoly rents to be created and realized by both private interests and state powers. Not all such efforts are successful, of course, but even the unsuccessful examples can partly or largely be understood in terms of their failure to realize monopoly rents. ⁴²

Assessing the crisis of state monopoly capitalism in 2008, Harvey points out that:

Throughout capitalist history, some of the surplus value has been taxed, and in social-democratic phases the proportion at the state’s disposal rose significantly. The neoliberal project over the last thirty years has been oriented towards privatizing that control.⁴³
Data for all OECD countries show, however, that the state’s portion of gross output has been roughly constant since the 1970s.⁴⁴ Hence:
The main achievement of the neoliberal assault, then, has been to prevent the public share from expanding as it did in the 1960s. Neoliberalism has also created new systems of governance that integrate state and corporate interests, and through the application of money power, it has ensured that the dis­bursement of the surplus through the state apparatus favours corporate capital and the upper classes in shaping the urban process. Raising the proportion of the surplus held by the state will only have a positive impact if the state itself is brought back under democratic control.⁴⁵
Yet, as Harvey further notes, the right to the city is increasingly falling into the hands of private or quasi-private interests. For example, the billionaire mayor, Michael Bloomberg, is reshaping the city along lines favourable to developers, Wall Street and transnational capitalist-class elements, and promoting the city as an optimal location for high-value busi­nesses and a fantastic destination for tourists. He is, in effect, turning Manhattan into one vast gated community for the rich. In Mexico City, Carlos Slim had the downtown streets re-cobbled to suit the tourist gaze. Not only affluent individuals exercise direct power. In the town of New Haven, strapped for resources for urban reinvestment, it is Yale, one of the wealthiest universities in the world, that is redesigning much of the urban fabric to suit its needs. Johns Hopkins is doing the same for East Baltimore, and Columbia University plans to do so for areas of New York, sparking neighbourhood resistance movements in both cases. ‘The right to the city, as it is now constituted, is too narrowly confined, restricted in most cases to a small political and economic elite who are in a position to shape cities more and more after their own desires’.⁴⁶

Moreover, at the same time as billions of dollars were being given to the banks, some two million people have been or are about to be made homeless by foreclosures:

Many city neighbourhoods and even whole peri-urban communities in the US have been boarded up and vandalised, wrecked by the predatory lending practices of the financial institutions. This population is due no bonuses. Indeed, since foreclosure means debt forgiveness, which is regarded as income in the United States, many of those evicted face a hefty income-tax bill for money they never had in their possession. This asymmetry cannot be construed as anything less than a massive form of class confrontation. A ‘Financial Katrina’ is unfolding, which conveniently (for the developers) threatens to wipe out low-income neighbourhoods on potentially high-value land in many inner-city areas far more effectively and speedily than could be achieved through emi­nent domain.⁴⁷

Harvey concludes that we have yet, however, to see a coherent opposition to these develop­ments in the twenty-first century. In the United States, there have been calls for much of the bail-out for financial institutions to be diverted into a Reconstruction Bank, which would help prevent foreclosures and fund efforts at neighbour­hood revitalisation and infrastructural renewal at municipal level:

The urban crisis that is affecting millions would then be prioritized over the needs of big investors and financiers. Unfortunately the social move­ments are not strong enough or sufficiently mobilized to force through this solution. Nor have these movements yet converged on the singular aim of gaining greater control over the uses of the surplus – let alone over the conditions of its production.⁴⁸
Meanwhile – although he argues that at this point in history the struggle has to be global and ‘predominantly with finance capital, for that is the scale at which urbanization processes now work’ – Harvey also recognises that ‘the political task of organizing such a confronta­tion is difficult if not daunting’.⁴⁹ Nevertheless, he still maintains that ‘the opportunities are multiple’ because history shows

…crises repeatedly erupt around urbanization both locally and globally, and because the metropolis is now the point of massive collision – dare we call it class struggle? – over the accumulation by dispossession visited upon the least well-off and the developmental drive that seeks to colonize space for the affluent.⁵⁰

Hence one step towards unifying these struggles is

….the right to the city as both working slogan and political ideal, precisely because it focuses on the question of who commands the necessary connection between urbanization and surplus production and use. The democratization of that right, and the construction of a broad social movement to enforce its will is imperative if the dispossessed are to take back the control which they have for so long been denied, and if they are to institute new modes of urbanization.⁵¹

LVT should therefore be a central demand in all national and local campaigning to reclaim the right to the city and the rest of local government. For, as Carol Wilcox contends, in both the United States and Britain
infrastructure renewal should be funded by a land value tax because needful public investment in infrastructure always feeds straight into increased land values. Land cannot be hidden in a tax haven. And one of the main beneficiaries of the land price bubble has been the banks in the form of excessive mortgage repayments. 100 per cent collection of land rent (LVT) would prevent such a bubble from ever being inflated again.⁵²
International comparisons

The height of the United States land movement was from 1910-1920 when a graded land tax was introduced in Pittsburg and Scranton, Pennsylvania and Houston, Texas. However, the Houston experiment ended when it was found to violate the tax uniformity clause in the state constitution. Similar clauses in most other state constitutions prevented the introduction of LVT except in Hawaii in the 1960s – where it was part of a comprehensive land-use control programme and land is not assessed, as envisioned by the Georgists, at highest and best use value – and in 10 additional Pennsylvania cities. Though LVT experiments were more successful in other countries. For example, in Australia and New Zealand LVT was introduced at the beginning of the twentieth century due to anti-monopoly movements similar to those in the US that sought to break up large concentrations of landownership. In these two cases, LVT was introduced with steeply progressive tax rates (based on the value of the landowner’s total landholdings in Australia) to break up large landholdings and redistribute wealth, rather than with the intent of controlling urban sprawl, stimulating construction or controlling land speculation. Hence by the end of World War 11 LVT – due to progressive taxation – did in fact break up large landholdings. But LVT in most low income countries – where it has largely been imposed on the basis of acreage rather than value – has not been effective as a major source of revenue or wealth redistribution. For example, Tanzania and Zambia phased out LVT, and a number of countries which started out using LVT eventually had to supplement it with a tax on improvements.⁵³

Recent comparative studies of LVT have shown more than 700 cities worldwide now apply it, including cities in Australia, Eastern Europe and the American State of Pennsylvania.⁵⁴ Advocates of LVT have, in the past, frequently referred to Denmark and New Zealand as examples of its potential success. However, both countries have recently removed the major forms of LVT and retain less radical property taxation.⁵⁵ For example, as Dominic Maxwell and Anthony Vigor note:
New Zealand’s national land tax was removed in1991 due to a combination of practical issues and political expediency….1989 saw a significant, but short-lived, increase in commercial land values (especially in Auckland and Wellington). The routine land value assessment that informed the tax rate setting occurred during this peak. The tax levied the next year - during a more modest land value period - was therefore based on these inflated prices and provoked a backlash which the incumbent Labour Government reacted to by removing the tax (and increased taxes on goods and services).⁵⁶
The four attempts at development land taxation (DLT) in Britain since World War Two – 1947-1953, 1967-1971, 1974 1975-1985 – according to Dave Wetzel failed because they were avoided by not developing. Keeping land out of use destroys the potential for jobs on it and creates an artificial shortage – driving up prices, business start-up and expansion costs for the benefit of landowners to the disbenefit of the rest of us. If development on the most suitable land is hindered then prices increase and urban sprawl onto cheaper land is encouraged. This adds to costs and unemployment. Moreover, as Wetzel also asks
why tax only planning gain when ALL land values arise from nature's gifts and the community's actions? And why tax less than one per cent of British land that comes up for development each year and not 100 per cent of all land?⁵⁷
In addition, without LVT the land market and development fluctuates wildly. For, as the Co-operative Party notes: ‘The last 200 years have seen regular 15-20 cycles of economic growth and recession that have brought rapid uplift in land values, and ended in their implosion.’⁵⁸ And any possible income from DLT, as shown by Ireland's current financial problems, is exasperated by their reliance on stamp duty collected on property transactions. That is, just because the title of a tax includes the words “land tax” does not make it compatible with LVT. Therefore, following Wetzel, the term “annual land value tax” is used in this study.⁵⁹

LVT proponents stress its ongoing success in South Africa, some Caribbean states, Western Canada, Hong Kong and Singapore where all and most land, respectively, is publicly owned and therefore rent flows directly to the state.⁶⁰ Apartheid South Africa, according to Godfrey Dunkley was

among the world leaders in collecting municipal or local government revenue from the capital value of land. Looking at the country as a whole, some 70 per cent of city revenue has been collected by site-value rating where there is no revenue collected from improvements. For the remainder, a larger portion has come from land values than from improvements, with only two major cities collecting an equal percentage from both land and improvements, i.e. flat rating.⁶¹
However, as Jeffery Smith points out: ‘After apartheid ended, the new black government reverted to the conventional property tax, assuming (mistakenly) that it would increase their take from wealthier neighbourhoods.’⁶²

David Sjoquist’s analysis indicates that in 1957 Jamaica converted its property tax from one based on the capital value of land and all improvements to one based on just the unimproved value of land (i.e., to a land value tax). In 2002, Jamaica revalued all parcels, the first revaluation in nine years. In response to the six-fold increase in property values, Jamaica reduced the property tax rates of its progressive-rate structure and added a set of property tax caps.⁶³ He found that in 2003 ‘the caps resulted in a total property tax liability that was about 25 per cent below what the liability would have been in the absence of the caps’.⁶⁴ Sjoquist therefore concluded that the property tax caps should be eliminated because:
A progressive-rate structure provides an incentive to subdivide property for purely tax purposes….the progressive-rate structure provides a disincentive to hold large tracts of land, thereby encouraging the breakup of large parcels, and discourages the assembly of large tracts….To prevent this form of tax evasion, the government must monitor such requests to make sure that the subdivision involves the sale of subdivided parcels.⁶⁵

Canada introduced land value taxation in its four western provinces in 1903 in an effort to discourage speculation and encourage construction. Today, all the cities in these four provinces either exempt improvements when assessing property taxes, or tax improvements at a lower rate than land.⁶⁶ Various cities in western Canada taxes land values at a higher rate than improvements. In British Columbia, 54 of the 104 municipalities exempt improvements 50 per cent; 13 exempt them more than 50 per cent. In New Westminster, 86 per cent of the householders own their own property and land speculation has disappeared. Alberta requires its seven cities to exempt improvements 40 per cent from taxation. The province taxes land values to some extent, including a land-transfer tax called an "unearned increment tax". The province obtains considerable revenues from oil leases, rentals and royalties (a form of land rent, which has made possible a "Heritage Fund.") In Saskatchewan all but one of the cities and towns exempt improvement values 40 per cent; Regina 70 per cent. In rural municipalities land value taxation is the primary source of revenue. In Manitoba cities and towns exempt improvements one-third.⁶⁷

There are, as Sock-Yong Phang points out, many similarities between Hong Kong and Singapore. Both are ex-British colonies with the British legal and administrative and rating systems, densely populated with high property prices and the state owns all or most of the land. Hence:
Even though Singapore and Hong Kong depart from the method of land-value taxation that George advocated, they have accomplished to a significant degree the capture of land values for the public, along with the reduction of tax burdens upon industry – which together constitute George's key policy proposal. Hong Kong and Singapore capture economic rent primarily by nationalizing land and leasing it out…Also, the public leasehold system, where the government plays a major role in land use planning and resource allocation, works…because the public sector institutions in both cities are efficient and non-corrupt. These institutions in both cities benefit from adequate checks and balances, merit-based recruiting, and pay scales high enough to reduce the temptation to corruption.⁶⁸
There is no site-value taxation as such in Hong Kong. Owners of income-yielding land leases or buildings are charged a standard rate of 15 per cent on the annual rental income of their properties. Rates are levied on landed property (whether income-yielding or not) and are 5 per cent of the estimated annual rental value. Lease-owners of income-yielding landed property therefore have to pay both property taxes on the actual yield and rates on the annual value; however, rates may be deducted to arrive at “net assessable value" (actual rental yield minus rates paid and a 20 percent allowance for repairs and other outgoings on the balance). Government rent is payable from July 1, 1997, for all land leases granted on or after May 27, 1985, and on the extension of non-renewable leases. The rent is equivalent to 3 per cent of the rateable value. In 1996-97, the total receipts from property tax was HK $1.6 billion, while that from rates was HK $15.6 billion. The government also collected $9.3 billion, amounting to about 5 per cent of its total revenue, from investments and rents from government properties.⁶⁹ In early 1998, the new government announced a new housing strategy that included an annual supply of 85,000 flats from 1999, and a target of increasing the overall homeownership rate from 52 per cent to 70 per cent by 2007. Since all the land is state owned, the government does not have to purchase land from private landowners to build public housing for the lower income group. In addition, the government further subsidises the provision of public housing by providing grants and loans at concessionary interest rates to the housing authority. Subsidised housing has also had a significant impact on economic development through its initial dampening effect on the cost of living and wages.⁷⁰

Singapore remained a British colony until 1959 when it achieved internal self-government. Upon receiving its independence, the Singapore government was confronted with a host of political and economic problems. Rapid population growth, a severe housing shortage evidenced by chronic overcrowding in dilapidated buildings and squatter slums, and the need for employment creation topped the list of problems. The majority of the population then was comprised of low income and fairly recent immigrants; there were few large landowners. These factors aided in enabling the government to push through legislation for urban land reform. In 1960, the state owned 44 per cent of the land in Singapore. By 1985, the proportion of land under state ownership had increased to 76 per cent. This dramatic increase in the state's landholding was effected via land reclamation (reclaimed land automatically becomes state land), and, most importantly, eminent domain provisions that made it easy and cheap for the republic to reacquire land for development purposes. Legislation under the State Land Rules provides for state land to be leased for a term not exceeding 99 years. There is no site-value taxation as such in Singapore. A flat rate of 12 per cent on the annual rental income of commercial property has applied since 1 July 1996. There is a concessionary tax rate of four percent of the estimated annual rental value for owner-occupied residential properties. Unlike other East Asian countries such as South Korea, Taiwan, and Japan, there is no capital gains tax on private sector real estate transactions. The Singapore government has instead relied on the process of nationalization of land on a selective basis to effect the process of land-value capture. Singapore has a high ratio of non-tax revenue to GDP. The ratio is partly dependent on the volume of government land leases for the year. In 1994, revenue from government land leasing was S$8.7 billion, exceeding the income (corporate and personal) tax revenue of S$8.3 billion. Revenue collected by the Registry of Vehicles amounted to S$4.2 billion. (GDP in 1994 was S$105 billion). Eighty-six percent of the population resides in public housing. Public housing in the Singapore context refers to housing built by the state which is either rented or leased on a 99-year basis at subsidised prices to eligible households. The large public housing sector has served to cushion the impact of inevitably rising prices of land and housing on the cost of living in a rapidly growing economy where land is a scarce commodity. This in turn, as in Hong Kong, dampened wage increases.⁷¹

Eleanor Craig’s review of the empirical evidence on Pittsburgh’s experience with land value taxes from 1976/2001 shows that – in the first fifteen years after the reduction of taxes on structures to one-fifth of that on land – the real value of building permits grew 70 per cent annually in the 1980s relative to the twenty-year period before the tax reform. The increased building activity was confined to the City. Conversely, the suburban Pittsburgh area, without the two-tier structure, saw a construction decline. In 2000, however, Pittsburgh had a countywide reassessment of all property. Voters thought that if they could get the property tax on land assessment reduced to the lower tax rate on buildings, they would end up with lower property tax liabilities. So the City Council removed the two rate graded tax system that had so successfully encouraged Pittsburgh’s redevelopment. Most residential and business property owners then had higher tax burdens: since by using a single rate on both the land and buildings, the tax rate on buildings had to increase to generate sufficient revenue. Predictably, construction activity fell. Comparing the two years before rescission with the two years after (2001/2002), pre-rescission construction spending was 21 per cent higher than post-rescission.⁷²

Following the bridge collapse in Minnesota in August 2007 and the accompanying press reports about inadequate maintenance of existing infrastructure, Jeffrey Chapman et al concluded that in Utah 'a land tax is administratively feasible and that it could generate significant revenue to help fund much-needed infrastructure'.⁷³ Moreover, two bills – one Assembly, one Senate – have been introduced permitting any city in Connecticut to enact land value taxation. A land value taxation pilot programme for the City of New London – promoted by local urban activists the Re-New London Council – was also signed off by the governor on 1 July 2009. This enabling (not mandatory) legislation allows cities throughout the state, at their discretion, to implement a land value tax whereby land would be taxed proportionately higher than building structures.⁷⁴
Recent developments in Britain

Marxists, as shown above, on both theoretical and empirical grounds oppose George’s proposal to abolish ‘all taxation save that upon land-values’. However, as shown in this section, socialist and other progressive advocates of LVT in Britain today also support additional forms of progressive taxation of income and wealth.

The Labour Land Campaign (LLC), formed in 1983, advocates ‘land reform within the Labour Movement’; and aims ‘to share land wealth through Land Value Taxation’.⁷⁵ LLC’s analysis of the first Labour Party manifestos, shows ‘initial recognition of the importance of the land issue and gradual amnesia’: for example, the 1906 Manifesto was the first land value taxation manifesto; the 1918 Manifesto saw ‘land nationalisation as a vital necessity’; and the 1924 Manifesto soft-pedalled LVT. Moreover, although Philip Snowden introduced a Land Value Tax in Labour’s 1931 budget, the National Government quickly abolished the tax; and by 1959 with Hugh Gaitskell as Leader the ‘nadir’ was reached when the Manifesto advocated selling council houses.⁷⁶

LLC’s President Dave Wetzel argues that:
To create man-made wealth – our food, clothes, homes, workplaces, transport etc we need three distinct factors of production: namely Labour – human mental and physical exertion, Capital – man-made wealth used to create more wealth and finally Land and Natural Resources. Without land and natural resources we can create nothing. The return to Labour is wages. And if I take your wages you become my slave. The return to Capital is interest or profit. If I defer spending my wages and instead buy tools, then surely I am entitled to a return on my capital. The return to Land and Natural resources is economic rent. So the question arises, who has the right, morally rather than legally, to enjoy this land value? In Western economies it is usually accepted that the owners of land have the right to collect the economic rent of land. But on what basis do these landowners make this claim? Did they build the planet with their own labour? Of course not! They and their ancestors have grabbed the land using strength, guile, cunningness, bribery and military conquest. They have then influenced governments to pass legislation that gives their ‘ownership’ the force of law.⁷⁷
Moreover, as Marx had argued in his Critique of the Gotha Programme (published in 1875, four years before Henry George’s Progress and Poverty):
Labour is not the source of all wealth. Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labour, which itself is only the manifestation of a force of nature, human labour power.⁷⁸