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Land Value Tax

Land Value Taxation (LVT) is the policy of raising state revenues by charging each land owner a portion of the assessed site-only value of the land.

The tax is often argued to be justified for economic reasons because if it is implemented properly, it should not distort market mechanisms. It is also argued to be justified for reasons of fairness by asserting that the tax is equivalent to a fee for protection of land ownership , which is the primary activity of any state. It is also justified from the premise that the natural world is the common property of all persons, and therefore the LVT is not really a tax, it is simply the collection of rent on behalf or the proper owners (the community). A consequence of this argument is that land should be taxed to the maximal extent and all proceeds should be equally distributed to each citizen as a Citizen's Dividend. This logic was used by Thomas Paine in his classic call for a Social Security system funded by an inheritance tax on landed property. The Alaska Permanent Fund, which uses oil revenues to pay a small yearly dividend to each resident, is roughly based upon these same principles.

The most influential advocate of the LVT was the political economist and activist Henry George. Many contemporary American advocacy groups trace their heritage back to his thoughts and writings.

See Also: carbon tax

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