International Experiences
1. California, 1890s. The state government passed the 1887 Wright Act which allowed communities to irrigate districts and pay for them by taxing the resultant rise in land value.
In ten years, the Central Valley was transformed into over 7,000 independent farms. Over the next few decades, those tree-less, semi-arid plains became the "bread basket of America", one of the most productive areas on the planet. Thanks to site rental.
2. New York City, 1920s. After World War I, many New Yorkers suffered from lack of housing. To solve the problem, Governor Al Smith persuaded the New York legislature to pass a law allowing New York City for the next ten years to tax land but not the buildings on it.
New construction more than tripled providing more housing, and lower cost apartments, there were more jobs and higher wages for construction workers, and more business for merchants who sold goods to the employed workers.
Economic good times in New York came to an end, though, when owners in 1928 began to anticipate the expiration of the tax-shift law and building ground to stand-still. Some claim this was the predecessor to the Great Depression. ("How New York Solved Its Housing Crisis", Charles Johnson Post, 1931, Schalkenbach Fdn, Mason Gaffney, 2001)
3. Taiwan, 1950s. In old Formosa hunger afflicted the majority of people; less than 20 families monopolized the entire island. A follower of Sun Yat-sen, the Nationalist Chiang taxed farm land according to its value. Landowners sold off their excess to farmers at prices the peasants could afford.
From 1950 to 1970 hunger was ended and Taiwan set world records with growth rates of 10% per annum in their GDP and 20% in their industry. (Fred Harrison, Power in the Land)
4. Denmark 1950s-1960s. In 1954 the land taxation commission declared that they would support a gradual change from income tax to land tax. This result had an interesting effect on the fortunes of the DJP, which got nine seats at the election in 1957. It entered into government responsibility by forming a coalition with the Social Democrats and the Radical Liberals.
Anticipating a higher rate on land, investors switched from land speculation to real enterprise. One year later, inflation had gone from 5% to under 1%; bank interest dropped from 6.25% to 5%. By 1960, 100,000 unemployed in a country of just five million had found jobs and at higher wages, the highest widespread pay raise ever in Danish history. (The New York Times editorial, "Big Lesson From A Small Nation", 1960 October 2)
In the next election landowners went on a PR offensive; the Justice Party lost its seats, the land rate lost its boost, and investors again became land speculators. Quickly inflation climbed back up to 5% and by 1964 reached 8%. Land prices began to sky-rocket, from 1960 to 1981 increasing 19-fold while prices of goods and services went up merely fourfold.
5. Melbourne, 1970s. Around Melbourne, some towns tax land alone. Dr. Ken Lusht, visiting from Penn State, found they have 50% more built value per acre than those that tax both land and buildings. Between 1974 and 1984 (last year the government released these statistics), coinciding with some recession years, the number of businesses in the towns taxing property decreased by 20% while in the towns taxing only land it increased by more than 10%. (Phil Anderson, Economic Indicator Services, Melbourne, Australia)
6. Russia, 1990s. As the Soviet Union turned to a market economy under Gorbachev, some thirty of the top economists in the United States pleaded with the President to retain land and natural resources as a source of public revenue. Unfortunately before Gorbachev could give this proposal proper consideration, the Soviet Union distintegrated and Boris Yelstin took over Russia, selling off most of the land and natural resources. The economic and social impoverishment of such an action are self-evident.
