I've been banging the drum rather loudly on the blog I edit for a change that I think will soften the blow significantly for many Philly homeowners. The move would have another salutary effect - it would likely lead owners of vacant land and abandoned properties to develop and improve them so they can pay their
suddenly much higher tax bills. The move is to shift the property tax burden to the land itself rather than the improvements on it.
Here's my most recent commmentary
calling for a move in this direction.
The "single tax" on the value of land alone was first proposed by social reformer Henry George in his book Progress and Poverty,
published in the 1880s. The statement on the state historical marker in front of his birthplace on 10th Street below Pine puts the case succinctly: "Tax socially produced land values, not labor and capital, he argued."
The logic is simple. Rises in the value of land are not the result of any effort expended by the land owner. Therefore, the land owner is not necessarily entitled to enjoy the profit therefrom, for he did nothing to earn it. Income from labor and investments, on the other hand, do reflect individual effort and should accrue to those who made that effort.
His proposal has drawn admirers on both Left and Right since the book was first written. Conservatives like it because it encourages individual thrift and effort; liberals, because it counters the tendency for wealth to accumulate in a landowning class. (For instance, the liberal website Keystone Politics
has picked up every one of my pro-land-value-tax AVI commentaries and excerpted or elaborated on it.)
No political entity has yet adopted the "single tax" in its purest form; taxes on income, capital and consumption persist in every industrialized society. But a number of cities in the Anglo-American world have shifted to a land-only property tax system or a near neighbor, a "split rate" regime that taxes land far more heavily than improvements. (I argued for this in my most recent commentary as a half-measure that would cushion the blow of AVI.) Virtually every city that adopted a land-value-based property tax system has experienced a rise in development activity in its wake. I see no reason why it wouldn't do the same here - and it would likely keep those hard-won new Philadelphians from decamping.