How does a land value tax work in predominantly rural areas?

In spring 2019, we dedicated a week of content to discuss the land value tax: a tax that is assessed on the value of a piece of land, rather than the value of the buildings that sit on it. Under a land tax, you are effectively taxed on the value of your location, which is mostly a result of what is nearby.

On the contrary, in most American cities, property taxes are assessed on both land and buildings (“improvements”). Taxing improvement value acts as a disincentive to put land to productive use—since by increasing the value of your building, you will also increase your tax liability—and encourages land speculation. Taxing only land, or mostly land, helps resolve these issues.

However, that doesn't mean land value tax isn't the right choice for everyone—especially rural area. In this video, Strong Towns president and founder Chuck Marohn discusses why a land value tax wouldn't work in rural areas, including: 

  • Why the ratio between public and private investment should guide taxing system
  • Why land value tax is most optimal in urban and suburban areas
  • Which taxing system is best for rural areas

Want to learn more about land value tax? Download our land value tax eBook, You Get What You Tax For, here: https://www.strongtowns.org/lvt-ebook.

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