Preface and Acknowledgements to the Third Edition - LandValue Taxation Around the World

Robert V. Andelson

THIS BOOK IS the maiden volume of the American Journal of Economics and Sociology Monograph Series. As such, it represents the first fruit of a long-range venture undertaken in cooperation with Blackwell Publishers, a venture that is anticipated to become a source of credit to both parties. Needless to say, I find it immensely gratifying that such a rare distinction has been accorded a book of which it is my privilege to be editor.

Readers will no doubt wonder why a third edition of LandValue Taxation Around the World was brought out only three years after the second--especially in view of the forty-two year interval before the second edition followed the first. Several reasons entered into this decision:

1. New research (undertaken by scholars sponsored by the Lincoln Institute of Land Policy) convinced me that Colombia, Mexico, and Great Britain, three countries that had not been covered in the second edition, had experienced significant land-value taxation through "betterment levies" of one sort or another, i.e., efforts to recoup values created by public works or public structuring of development opportunities. I had deliberately omitted Great Britain from the second edition because the chapter devoted to it in the first edition was primarily an account, not of actual experience with land-value taxation, but of unsuccessful efforts to get it implemented. While that chapter did touch on some betterment levies instituted by the Labour Government in the late 1940s and early 1950s, they were of brief duration, and did not strike me as being very relevant. Since the time of that account, Britain's experience with such levies has been quite extensive, and is worth recording as a cautionary tale, if nothing more . The authors of the new studies to which I have alluded have adapted them for inclusion in the present work.

2. In the second edition, Estonia and Nicaragua were dealt with, not in individual chapters, but as passages in the Introduction. This time, the Estonian situation had developed to a point where I considered it deserving of a short chapter.

The case of Nicaragua is quite different. The agricultural land tax enacted there in June of 1996 was repealed in March of 1999 by an almost unanimous vote of the National Assembly, with the major factions in agreement that it placed too great a burden on small farmers. This conclusion is quite likely accurate, since, even though extremely modest in the aggregate, the tax bore heavily on owners of useable but less desirable acreage that happened to be located in relatively fertile and settled regions. In point of fact, it was a land tax but not a land value tax except in the broadest sense of the term, because, instead of being based on the actual market value per acre of each holding, it was based upon the division of the country unto zones within which all tillable acreage was arbitrarily assumed to be of the same value. A Managua resident, Paul A. Martin, comments that the repeal came at a time when the government was on the upswing with new taxes on productive activities as dictated by the IMF-World Bank restructuring plan, imposed as a condition for further debt maintenance. In a recent letter to me, he writes: "Like many poor countries today, Nicaragua largely ignores rents as a public revenue source. A very small portion of land rent is collected in urban property tax. The Free Trade Zone laws create artificial tax-free conditions which allow private landowners to collect land rent at a maximum, while wages are paid at the competitive minimum."

3. When the second edition appeared, it contained news that legislation providing for land-value taxation in Greater Gape Town had been adopted and would be implemented beginning in July of 1998. This exercise of local option has since been abandoned in the face of a uniform system to be imposed by the Central Government upon the whole nation, a system that will also force the abandonment of land-value taxation in the majority of South African cities, where it has been operating successfully for many decades

It should not be assumed that the present edition differs from the second one only in terms of the items enumerated above. Actually, but two chapters (one of them devoted to ancient times) have escaped revision altogether, and many, including the editor's

Introduction, have been updated and/or otherwise altered quite substantially.

On February 28, 1998, an unsigned article, datelined Tallinn, appeared in The Economist. It spoke slightingly of Henry George, the ideological godfather of modern land-value taxation, as a "nineteenth century economic crank," and "probably the only tax theorist in history whose beliefs have become an object of cult devotion." It also stated that "other countries are following Estonia down the Georgist path. Slovenia has a land tax already, and Latvia and the Czech Republic are both planning one." But the anonymous author hastened to add that none of the countries mentioned "are embracing George with unequivocal enthusiasm."

Wishing to make this book as complete as possible (although it does not pretend to be exhaustive), I asked Walt Rybeck, a veteran investigative journalist, to follow up the claims about Slovenia, Latvia, and the Czech Republic. The minister of finance of Slovenia, which supposedly already had adopted a land tax, told him that he saw no prospect there for either a pure or a modified one for the foreseeable future. Latvian officials reported that in their country the debate is about how, not whether, to tax buildings. The situation in the Czech Republic was less clear, but, judging from what the director of the property tax department of the Finance Ministry told Rybeck, not even a two-rate property tax was being considered there. So much for the factual accuracy of The Economist's correspondent, who presumed to belittle the great American thinker and his following! One might have expected better of such a highly regarded journal.

As I have said, this book does not pretend to be exhaustive. Had it been possible to make it so, the result would have so overloaded it with encyclopedic trivia as to interfere with its usefulness for the purpose for which it was intended. For example, in 1974, George E. Lent published an article [1] listing Greece and Iraq among the nations with special taxes on unimproved land, and Ecuador, Paraguay, Peru, Senegal, Switzerland, and Turkey among the nations with higher urban tax rates on land than on improvements. While in the context of his study it was entirely appropriate for Lent to list these nations, I did not include them in this survey because I was either unable to obtain relevant current information about them, or had reason to suspect that the magnitudes involved were too insignificant to warrant the effort that might have been required to get it.

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My introduction to the second edition included the following passage, which is equally applicable here:

I have been painfully conscious of the fact that editorial responsibility has...fallen solely upon me, whereas the [first] edition had the benefit of a Board of Editors consisting of four of the most eminent authorities in the field (Harry Gunnison Brown, Harold S. Buttenheim, Philip H. Cornick, and Glenn E. Hoover), as well as of the inestimable services of the Robert Schalkenbach Foundation's late executive secretary, V. G. Peterson (Violetta G. Graham). It is my hope that readers will bear this fact in mind as they encounter, as I am sure they will, defects that have escaped my notice.

More than a score of authors have contributed to this volume. As might therefore be expected, its chapters exhibit considerable variety. Some concentrate narrowly upon the bare facts of property tax policy and legislation, often with statistics but little evaluative comment. Others delve into historical background, illuminate relevant cultural and political factors, and express personal opinions with abandon. To the extent that I have felt it necessary, I have not hesitated to invoke my editorial prerogative to enforce a measure of consistency as to style and content. Yet, insofar as possible in my judgment, I have allowed each author to approach his topic in his own way.

As in the [first] edition, the work of all contributors has been compensated only by the satisfaction derived from involvement in a worthy project. To quote what was stated there, "they deserve the gratitude of all who believe in the just distribution of man's heritage."

It may be noted that toward the end of the first paragraph of the above extract, I alluded to my expectation that readers would encounter errors that had escaped my notice. Pat Aller and Walt Rybeck were among those who not only encountered but also directed my attention to such errors, some of which were corrected in later printings and others in this later edition. I thank them. It also gives me pleasure to acknowledge help from Michael Hudson, Fred Harrison, Cathleen Johnson, Bryan Kavanagh, Paul Martin, Erika McEntarfer, and Walt Rybeck, who provided invaluable research assistance; from Martim Smolka, Pekka Virtanen, and Joan Youngman, who put me in touch with new contributors; from Alan Blackwood, Beverly Childress, Ken Easterday, Rodney Jordan, Tom Petee, and Roy Washburn, who compensated for the primitive level of my computer expertise; from Polly Cleveland, who oversaw the transcription of corrections and additions to the master disk, as well as the updating of the Index; and to Nic Tideman, who prov ided unfailing support whenever needed out of his discretionary fund as president of the Robert Schalkenbach Foundation. I wish to express my gratitude for the exemplary patience and understanding of the series editor, Larry Moss. Finally, to the many others whose names should doubtless be included in this roster but were inadvertently omitted, I offer both sincere thanks and abject apologies.

Professor Andelson (philosophy, Auburn University) is president of the International Union for Land-Value Taxation and Free Trade, and vicepresident of the Robert Schalkenbach Foundation. In addition to serving as the editor, he is author of the Introduction (pp. xix-xlii), of Chapter 18, "Abu Dhabi" (pp. 315-326), and co-author (with Prof. Yamasaki) of Chapter 21, "Japan" (pp. 353-363).

Note

(1.) George E. Lent, "The Urban Property Tax in Developing Countries," Finanzarchiv 33(1974), pp. 70-72.

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