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For those unfamiliar with Georgism and LVT (land value tax):
Georgism, also called in modern times Geoism,[2][3] and known historically as the single tax movement, is an economic ideology holding that, although people should own the value they produce themselves, the economic rent derived from land—including from all natural resources, the commons, and urban locations—should belong equally to all members of society.[4][5][6] Developed from the writings of American economist and social reformer Henry George, the Georgist paradigm seeks solutions to social and ecological problems, based on principles of land rights and public finance which attempt to integrate economic efficiency with social justice.[7][8]
Georgism is concerned with the distribution of economic rent caused by land ownership, natural monopolies, pollution rights, and control of the commons, including title of ownership for natural resources and other contrived privileges (e.g., intellectual property). Any natural resource which is inherently limited in supply can generate economic rent, but the classical and most significant example of land monopoly involves the extraction of common ground rent from valuable urban locations. Georgists argue that taxing economic rent is efficient, fair, and equitable. The main Georgist policy recommendation is a tax assessed on land value, arguing that revenues from a land value tax (LVT) can be used to reduce or eliminate existing taxes (such as on income, trade, or purchases) that are unfair and inefficient. Some Georgists also advocate for the return of surplus public revenue to the people by means of a basic income or citizen’s dividend.
And although LVT is the most central proposed policy of Georgism, Georgists also advocate for carbon taxes (and other taxes on negative externalities), severance taxes on finite natural resources like oil or minerals, intellectual property (IP) reform, and eliminating barriers to entry. (It should be noted that Georgists want to replace bad/inefficient taxes like sales, income, and property taxes with LVT, externality (aka Pigouvian), and severance taxes.)
As for why LVT? In short, it’s just a really good tax. Progressive, widely regarded by economists as “the perfect tax”, incentivizes efficient use of land, discourages speculation and rent-seeking, economically efficient, and hard to evade. Plus, critically regarding landlords, land value taxes can’t be passed on to tenants, both in economic theory and in observed practice.
In fact, it’s so well-regarded a tax that it’s been referred to as the “perfect tax”, and is supported by economists of all ideological stripes, from free-market libertarians like Milton Friedman — who famously described it as the “least bad tax” — to social democrats and Keynesians like Joseph Stiglitz. It’s simply a really good policy that I don’t think is talked about nearly enough.
Even a quite milquetoast land value tax, such as in the Australian Capital Territory, has been shown to reduce speculation and improve affordability:
It reveals that much of the anticipated future tax obligations appear to have been already capitalised into lower land prices. Additionally, the tax transition may have also deterred speculative buyers from the housing market, adding even further to the recent pattern of low and stable property prices in the Territory. Because of the price effect of the land tax, a typical new home buyer in the Territory will save between $1,000 and $2,200 per year on mortgage repayments.
More resources:
Hell yeah, I wrote a post on reddit about this very topic a while back. I’ll copy it below:
https://en.wikipedia.org/wiki/Henry_George_theorem
Essentially, the idea is that building things like metro lines and light rail increases neighboring land values. Instead of letting those increased land values be captured by private landholders, we can capture it with a hefty land value tax (which is a terrific tax for a whole host of reasons, particularly for urbanists). And as Nobel laureate Joseph Stiglitz and others have shown, a strong enough LVT is capable of funding that public transit entirely. I.e., no fares, no ticketing, just transit paying for itself via its own increase in nearby land values.
It gets even better when you consider that ticketing and fare collection incurs not-insignificant costs for transit systems. It means more labor, more enforcement, and more construction costs. For example, new underground metro lines are very expensive in large part because tunneling is expensive. If you can dig less by not having to build large rooms for ticketing and turnstiles, you can save money on metro construction. Plus, free transit is great for increasing ridership, and it’s doubly great for low-income folks.
Further, LVT heavily disincentivizes parking lots and low-density development on valuable land, so you’d heavily discourage park-and-rides and heavily encourage transit-oriented development.
Oh, interesting, so it has been widely communicated common-sense for half a century already.
I wonder why all governments seem to ignore those well-known economic ideas that have no downside except for not insanely benefiting the ultra-rich. (In fact, they seem to ignore all of those.)
I think about this a lot, too. So many of our current problems we know excellent solutions for. After all, millions and millions of experts around the world have studied these problems and have proposed (and often converged upon) solutions. And yet actually implementing them politically is such an uphill battle.
You answered your own question: They don’t insanely benefit the ultra-rich.
If we don’t give the ultra-rich all the money, the economy will suffer, and the only thing everyone in power can agree on is that we need to protect the status quo of the economy at all costs.