I tried to keep the consistency with the other headings and was wondering whether that was the right or wrong choice. Didn't know how else to describe it, and Great Lakes is definitely better.
Thank you for this fabulous good news! We will inform our international network.- alanna hartzok, admin for the International Union for Land Value Taxation theIU.org and board member CommonGround USA.
Seems like a positive direction for sure. But how does it not negatively affect family farmers, who generally have substantial LAND but usually modest homes? They are already struggling financially and too many have been forced out by the predator class who cater to the giant land owners ((Sure, tax them!)
Hi Jon, for now, I focus efforts on urban areas for your precise reason, most farmland is a lot cheaper than urban areas but still “improvements” are done directly to the land so assessing the land value against improvement value becomes difficult. So farmers would see their tax bill increase if this tax shift were done with current assessments. I’d want urban cities to focus on the policy for now and to exclude any agriculture land within the boundaries, which is what I typically push for in my work
That's reassuring to some degree. I live in rural Maine, and my brothers and I would not react kindly to our hay fields being heavily taxed. We need actual POSITIVE incentives for farmers who are being squeezed off by mega-bucks investors. During my decades in Hawai'i, I saw former sugar and pineapple fields converted into tens of thousands of nearly back to back packed subdivisions. Yes the houses were needed, but at the expense of food? Not that those were the kind of organic sustainable food production I have in mind!
Jon - Thank you for your important question. I deeply researched this issue at the request of the Agriculture Committee of the Pennsylvania State Legislature when I was working for enabling legislation for the 1000 boroughs of PA. That research paper is in my book article #21 titled PA Farmers and the Split Rate Tax. I think you have my book The Earth Belongs to Everyone and you can find the pdf here: https://theiu.org/books/ The summary gives 10 points on how this tax shift to commons rent will support affordable land access for small farmers for regenerative agriculture. It is a key land rights and land reform policy and a way to break-up industrial, corporate agriculture.
While determining the potential impact of a shift from the traditional property tax to the split-rate tax on Pennsylvania farmers is a complex subject, in summary, there is a basis, in both theory and practice, for the following conclusions:
• Overall, as currently administered in most states, the property tax appears
to be regressive since farm owners with larger amounts of land value pay
disproportionately less in taxes than those with less valuable holdings.
• The excessive complexity of the property tax is an administrative shortcoming and must be remedied before the real property tax can become an effective instrument of land use policy.
• Smaller farms tend to have more buildings than larger ones but pay more
because of these improvements under the current system.
• Overtaxing buildings and under taxing land favors large farming operations that are not necessarily the most efficient.
• Lower property tax rates coincide with greater concentration of farm
ownership and higher land costs, which is a barrier to entry-level farmers.
• The property tax would be more progressive if changed to a pure land tax
that exempts buildings.
• The greater the shift of property taxes from buildings and onto land values
the more likely that the surplus land of larger, less efficient farms or speculative holdings would be released for affordable purchase by entry-level farmers.
• While preferential assessments and farm subsidies may not be helpful in
preserving farmland and, as currently administered, may be inequitable,
zoning, tax abatements, and improvements in assessment practices could
work in tandem with the split-rate tax shift, especially in urbanizing areas
with high land values.
• Urban sprawl and land speculation contribute to land price inflation,
which is a major barrier to entry-level farming. By encouraging infill development and redevelopment within already urbanized areas the split rate tax (lower rate on improvements, higher on land values) could decrease land cost pressures on farmers.
• Concentration in farm ownership has proceeded at an alarming pace for
the past several decades, making it essential to fundamentally reform our
system of taxation - then we can reward productive labor rather than land
speculation, efficiencies of scale and careful stewardship rather than impersonal big farm consolidations.
• Most farmers in rural areas of the state and particularly those with proportionately higher building-to-land ratios will save with a shift to the split-rate tax.
• Although some farms near urban areas may pay more with this tax reform, it may not be significantly more, and the overall improvements in
the economic climate of the locality which would result would be of benefit to the farming sector as well.
• Substantially shifting taxes from buildings and productivity and onto land
values could be a major stimulus for the revival of sustainable agriculture
in Pennsylvania and thus could help to alleviate poverty and other social
problems.
• Farmers in other parts of the world have actively supported Land value
based property taxes.
Stated succinctly, the split-rate tax is likely to impact Pennsylvania farmers and farmland as follows:
• Discourage speculation in land
• Reduce the price of land to equate with its value for production
• Enable new entrants to more easily obtain land
• Limit farm sizes to those of the most productive units
• Enable the reduction of taxation on earnings and capital
• Reduce interest rates as land became more affordable
• Prevent rural depopulation
• Discourage urban sprawl on farm land
• Encourage owner-occupation rather than absentee ownership
• Promote more responsible use of land.
Our evidence thus suggests that the split-rate tax policy approach, especially with a heavy reduction of millage rate on building values, would significantly enhance incentives for the continuation and expansion of a viable, efficient, and sustainable agriculture in Pennsylvania and anywhere else if used.
"Concentration in farm ownership has proceeded at an alarming pace for the past several decades, making it essential to fundamentally reform our system of taxation - then we can reward productive labor rather than land speculation, efficiencies of scale and careful stewardship rather than impersonal big farm consolidations. "
But I remain skeptical that ANY net increase in property tax on farmers, currently financially stressed, would be acceptable to family farmers! If the relative proportion changed, but the actual dollar amount would be guaranteed not to increase, that is another story. Show me a plan that maintains or even better, reduces family farm property tax and it will be embraced (although of course I cannot speak for the farm class generically). Here in Maine we have lots of these kinds of farms and a strong Maine Farmland Trust that helps maintain farmland in production. Try contacting them. The former head of it, John Piotti. moved on to become the head of the national American Farmland Trust. This is his life's work!
Yes this tax shift is to be implemented as revenue neutral. A form of the tax broke up a million acre land holding in California into 7000 small farms. it worked great until Bank of America had it axed by the Supreme Court. This is an example of why we need both land and banking reform - neither one should be the basis of profit, neither land nor money. Studies can be done to show who pays more and who pays less whenever land value tax is put in place. The long range goal is to remove taxes entirely from wage income and buildings - labor (earned income), and shift to land and resource only (the commons rent, an unearned income when privatized). People should also decide on how the funds are spent as in the participatory budgeting movement.
Fantastic! Keep up the good work - I really like that the younger generation endorsement and the cross political support
Great article, but I would describe Buffalo as in the Great Lakes region and not as East Coast.
I tried to keep the consistency with the other headings and was wondering whether that was the right or wrong choice. Didn't know how else to describe it, and Great Lakes is definitely better.
Outstanding article Greg
Wow! This should be mandatory reading for all LVT “initiates”!
You and Lars are doing exponentially more in a minute than the Fels Commission ever did in their entire existence.
This post deserves a “mega-like”
Thank you for this fabulous good news! We will inform our international network.- alanna hartzok, admin for the International Union for Land Value Taxation theIU.org and board member CommonGround USA.
Seems like a positive direction for sure. But how does it not negatively affect family farmers, who generally have substantial LAND but usually modest homes? They are already struggling financially and too many have been forced out by the predator class who cater to the giant land owners ((Sure, tax them!)
Hi Jon, for now, I focus efforts on urban areas for your precise reason, most farmland is a lot cheaper than urban areas but still “improvements” are done directly to the land so assessing the land value against improvement value becomes difficult. So farmers would see their tax bill increase if this tax shift were done with current assessments. I’d want urban cities to focus on the policy for now and to exclude any agriculture land within the boundaries, which is what I typically push for in my work
That's reassuring to some degree. I live in rural Maine, and my brothers and I would not react kindly to our hay fields being heavily taxed. We need actual POSITIVE incentives for farmers who are being squeezed off by mega-bucks investors. During my decades in Hawai'i, I saw former sugar and pineapple fields converted into tens of thousands of nearly back to back packed subdivisions. Yes the houses were needed, but at the expense of food? Not that those were the kind of organic sustainable food production I have in mind!
Jon - Thank you for your important question. I deeply researched this issue at the request of the Agriculture Committee of the Pennsylvania State Legislature when I was working for enabling legislation for the 1000 boroughs of PA. That research paper is in my book article #21 titled PA Farmers and the Split Rate Tax. I think you have my book The Earth Belongs to Everyone and you can find the pdf here: https://theiu.org/books/ The summary gives 10 points on how this tax shift to commons rent will support affordable land access for small farmers for regenerative agriculture. It is a key land rights and land reform policy and a way to break-up industrial, corporate agriculture.
Alanna, I appreciate your response. But, how about answering the question generically for those who don't have your book. I can look it up, however.
Jon - here you go:
While determining the potential impact of a shift from the traditional property tax to the split-rate tax on Pennsylvania farmers is a complex subject, in summary, there is a basis, in both theory and practice, for the following conclusions:
• Overall, as currently administered in most states, the property tax appears
to be regressive since farm owners with larger amounts of land value pay
disproportionately less in taxes than those with less valuable holdings.
• The excessive complexity of the property tax is an administrative shortcoming and must be remedied before the real property tax can become an effective instrument of land use policy.
• Smaller farms tend to have more buildings than larger ones but pay more
because of these improvements under the current system.
• Overtaxing buildings and under taxing land favors large farming operations that are not necessarily the most efficient.
• Lower property tax rates coincide with greater concentration of farm
ownership and higher land costs, which is a barrier to entry-level farmers.
• The property tax would be more progressive if changed to a pure land tax
that exempts buildings.
• The greater the shift of property taxes from buildings and onto land values
the more likely that the surplus land of larger, less efficient farms or speculative holdings would be released for affordable purchase by entry-level farmers.
• While preferential assessments and farm subsidies may not be helpful in
preserving farmland and, as currently administered, may be inequitable,
zoning, tax abatements, and improvements in assessment practices could
work in tandem with the split-rate tax shift, especially in urbanizing areas
with high land values.
• Urban sprawl and land speculation contribute to land price inflation,
which is a major barrier to entry-level farming. By encouraging infill development and redevelopment within already urbanized areas the split rate tax (lower rate on improvements, higher on land values) could decrease land cost pressures on farmers.
• Concentration in farm ownership has proceeded at an alarming pace for
the past several decades, making it essential to fundamentally reform our
system of taxation - then we can reward productive labor rather than land
speculation, efficiencies of scale and careful stewardship rather than impersonal big farm consolidations.
• Most farmers in rural areas of the state and particularly those with proportionately higher building-to-land ratios will save with a shift to the split-rate tax.
• Although some farms near urban areas may pay more with this tax reform, it may not be significantly more, and the overall improvements in
the economic climate of the locality which would result would be of benefit to the farming sector as well.
• Substantially shifting taxes from buildings and productivity and onto land
values could be a major stimulus for the revival of sustainable agriculture
in Pennsylvania and thus could help to alleviate poverty and other social
problems.
• Farmers in other parts of the world have actively supported Land value
based property taxes.
Stated succinctly, the split-rate tax is likely to impact Pennsylvania farmers and farmland as follows:
• Discourage speculation in land
• Reduce the price of land to equate with its value for production
• Enable new entrants to more easily obtain land
• Limit farm sizes to those of the most productive units
• Enable the reduction of taxation on earnings and capital
• Reduce interest rates as land became more affordable
• Prevent rural depopulation
• Discourage urban sprawl on farm land
• Encourage owner-occupation rather than absentee ownership
• Promote more responsible use of land.
Our evidence thus suggests that the split-rate tax policy approach, especially with a heavy reduction of millage rate on building values, would significantly enhance incentives for the continuation and expansion of a viable, efficient, and sustainable agriculture in Pennsylvania and anywhere else if used.
This was the best part, in my view:
"Concentration in farm ownership has proceeded at an alarming pace for the past several decades, making it essential to fundamentally reform our system of taxation - then we can reward productive labor rather than land speculation, efficiencies of scale and careful stewardship rather than impersonal big farm consolidations. "
But I remain skeptical that ANY net increase in property tax on farmers, currently financially stressed, would be acceptable to family farmers! If the relative proportion changed, but the actual dollar amount would be guaranteed not to increase, that is another story. Show me a plan that maintains or even better, reduces family farm property tax and it will be embraced (although of course I cannot speak for the farm class generically). Here in Maine we have lots of these kinds of farms and a strong Maine Farmland Trust that helps maintain farmland in production. Try contacting them. The former head of it, John Piotti. moved on to become the head of the national American Farmland Trust. This is his life's work!
Yes this tax shift is to be implemented as revenue neutral. A form of the tax broke up a million acre land holding in California into 7000 small farms. it worked great until Bank of America had it axed by the Supreme Court. This is an example of why we need both land and banking reform - neither one should be the basis of profit, neither land nor money. Studies can be done to show who pays more and who pays less whenever land value tax is put in place. The long range goal is to remove taxes entirely from wage income and buildings - labor (earned income), and shift to land and resource only (the commons rent, an unearned income when privatized). People should also decide on how the funds are spent as in the participatory budgeting movement.