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| "Most economists consider that land market price relativities are best left undisturbed (by government action). ... What we have therefore is a significant contrast with economic orthodoxy by a professional economist." -- Alan Ecob. "The market does not ensure that cities stop growing beyond an optimum size. Taxing site rents would help to eradicate the underlying tendency to urban sprawl, because those rents are invariably higher in cities than in rural areas. This would encourage more intensive and productive use of urban land." -- Frank Stilwell. Economics Course at Centre for Thomistic Studies, John Young. "Good Government," February 1998 |
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I commence with the realization that most economists consider that land market price relativities are best left undisturbed (by government action) so as to best reflect undistorted buyer preference (for example) the advantages of metropolitan living as compared with out in the Simpson desert.
Consequently, Mr Stilwell's perception of pronounced metropolitan bias as giving rise to inflated land values in cities like Sydney really caught my attention.
His proposed remedies of:
1. Restrictive zoning in metropolitan areas (p.3) and
2. Penal land taxes on metropolitan real estate to produce a 'powerful incentive for decentralization and regional development' (p.6) of rural areas appear also to be very strong medicine.
What we have therefore is a significant contrast with economic orthodoxy by a professional economist. No doubt Mr Stilwell has a rational basis for this contrasting view. Would not the readers of Good Government be most interested in it?
Alan Ecob
This is most obvious in the major urban areas. Their further expansion generates persistent problems of congestion, excessive travel times, environmental degradation and growing socio-economic inequalities.
The market does not ensure that cities stop growing beyond an optimum size. Taxing site rents would help to eradicate the underlying tendency to urban sprawl, because those rents are invariably higher in cities than in rural areas. This would encourage more intensive and productive use of urban land. It would not constitute discrimination against urban landowners, simply a recognition that urban land is capable of generating higher income for its owners.
Taxing that surplus would reduce land speculation, relieve the burden of other taxes and promote more balanced regional development.
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FOR THOMISTIC STUDIES John Young will give a course based on his book The Natural Economy Beginning on February 23 [another term to begin July 27, 1998], each talk will be from 6 pm until 7 pm, on Monday nights for four terms The fee is $30 per term The venue: St Andrew's House, Level 8, 474 Kent Street, Sydney (near Town Hall Station) Further information can be obtained from John Young, telephone (02) 9858 4703 |
