Socializing Land Rent, Untaxing Production

By Alanna Hartzok

Abstract: This paper begins with a statement of considerable relevance to the topic from the founding document of UN-Habitat. Foundational terms and concepts are then defined, essential for comparing classical economics with the neoclassical brand and highly relevant to understanding the relationship of land and poverty. The concept of socializing land rent is traced to ancient times including the Vedic period, Biblical Leviticus and Talmudic writings, and China from 4000 years ago. Statements from the Physiocrats, Adam Smith and Karl Marx show the similarity of their perspectives concerning rent socialization as do those of many Nobel Prize winning economists. The Law of Rent is described and then Henry George’s understanding of the importance of socializing rent to secure a fair distribution of wealth. The sufficiency of rent as the taxable capacity of land for funding infrastructure and other public goods and services is set forth in both theory and with a number of examples in practice. Lastly, presented is a holistic integrated tax shift model for fully socializing rent while untaxing production that is being used as the basis for legislative tax reform proposals for the state of Vermont in the United States. Several charts and graphs are included.

Key words: The Law of Rent, wealth distribution, socializing rent, financing public goods, holistic integrated tax shift

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