A good balance between failing to adequately describe it and going beyond the readers’ attention span. British, but comprehensible.
The March ’08 issue (pdf) of the Center for the Study of Economics’ Incentive Taxation newsletter has a couple of positive notes.
Washington, PA, a split-rate city for decades, solved a budget deficit by raising the tax on land to 82.63 mills, while taxing buildings at a rate of only 3.5 mills. Thus the added tax burden goes mainly to people who are leaving land idle, and doesn’t discourage productive construction or investment.
And in New London, CT., the Re-New London Council recommends a land tax because of its benefits to, among other things, housing affordability. Had such a policy been in place over past decades, perhaps the Kelo case would never have happened.
A new report prepared by a consultant for the National Association of Homebuilders reviews dozens of strategies which have been proposed or used to promote affordable housing. It points out that an increased tax rate on land values, balanced with decreased taxation of improvements, reduces real estate taxes for most homeowners, while encouraging owners of vacant or underused land to get their land developed, often increasing the supply of housing.
The report also notes that it costs virtually nothing to tax land at a higher rate than improvements. Examples cited include Harrisburg and Allentown, PA. Information is from Josh Vincent of the Center for the Study of Economics.
In Illinois, the Cook County Board could pursue a similar strategy using existing authority to tax land and improvements as two different classes of real estate. As previously discussed here, the Assessor could take a big step in this direction by just valuing vacant land as prescribed by existing laws and ordinances.