Land Tax rears its head at last

Yesterday Arthur Grimes, the Reserve Bank Chairman, raised the possibility of a Land Tax to help lower Income Tax as well as a rise on GST.

I’m stunned. It’s rare that proposals like these ever see the light of day and even then receive due merit and attention. It’s a fabulous idea as those who have been advocating this for many years an attest to. It’s good to see it has been picked up on some local blogs.

The concept of taxing resources and consumption as opposed to labour is extremely sound and progressive. This approach has major benefits in several areas: social, economic and environmental.

It does not penalise work, it promotes it.

It is easy to collect and probably easier to monitor.

It focuses attention on consumption and management of resources which we know will be a challenge in the future.

It promotes the efficient allocation of land. A common tactic in many cities has been to sit on vacant land in order to drive rents higher. A Land Tax may deter this type of hoarding.

Whilst it is unlikely to make much headway now it is hopefully the start of a bigger debate on how we should raise revenue for the government.

Sooner or later people may realise that the government can simply raise revenue by issuing interest free money but that’s probably for another day

Any land tax reformers out there please make yourself known.