Land taxes can recoup government expenditure on public infrastructure

This is the first of a series of posts providing extra information for an article in The Conversation about land taxes.

The World Bank produced a report in 2008 titled Unlocking Land Values for Financing Urban Infrastructure. This report assesses and summarises many studies showing that well targeted infrastructure spending results in land value increases greater than the costs. Usually the majority of the increased value goes to private land owners. The critical social justice question here is why should a small proportion of lucky land owners receive large windfall gains for infrastructure paid for by all tax payers? If you just happen to live close to a new train station on an extended line your land value will increase dramatically through no effort or action of your own.

In addition to suburban public transport infrastructure, high speed regional rail in Australia could fall into the category of self-funding (or at least partially self-funding) infrastructure investment as it would make commuting for work into capital cities from regional centres more feasible and therefore lift land prices in those regional centres. This we would help address overcrowding, road congestion and housing affordability in major cities.

For a primer on land value capture for infrastructure and a list of links to other resources head over to the Prosper Australia site.

This entry was posted in Economic theory, Inequality and tagged . Bookmark the permalink.

One Response to Land taxes can recoup government expenditure on public infrastructure

  1. Pingback: New article in The Conversation about land taxes | Warwick J. S. Smith

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