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Albert “Al” Hartheimer is vice president of The Center for the Study of Economics and past adjunct lecturer in economics at Williams College. He has proposed state legislation, House 2767, to, over several years, phase out the property tax, reduce the state sales tax, and impose a land-value tax.
The land-value tax is a radical idea proposed more than century ago by Henry George. An American writer, politician and political economist, Henry George was the most influential proponent of the land-value tax.
The land-value tax is not to be confused with the property tax. The property tax is imposed on both the land and the buildings, while the land-value tax is imposed only on the land.
According to land-value-tax proponents, the property tax is regressive because it discourages development. However, the land-value tax is totally progressive.
These advocates also say the land-value tax is a quite healthy, sustainable way to go for everyone – not just property owners. When you tax property, you create an incentive for too many owners to land bank – that is, to not develop it until they are sure they will make money doing so. After all, development leads to higher property taxes.
Tax only the land – according to backers of the land-value-tax -- and just the opposite occurs. No financial incentive exists to bank your land. In fact, you have a financial incentive to develop your land because your taxes will not rise as you develop it.