This Land Is Our Land

Taxation is one of life’s great inevitables, a group which includes death, but not Mayo winning the Sam Maguire. The power of taxation throughout history is fascinating. It has been the catalyst for revolutions, the means by which societal goods are funded, and a driver of domestic and international economic policy. Taxes are ubiquitous, particularly in Ireland. We are a heavily taxed people. Income tax, carbon tax, and property tax are perhaps the most well-known, but there are a range of others, including all those fees, duties and charges, and lastly, that barrage of acronyms you may see on your payslip. Taxes are a good thing, unless you are a libertarian, of course. They are nominally used to fund the working of the government and public sector, as well as the utilities that we expect from a modern society, something I am sure most people can agree is a net positive. What we can disagree on, however, is the burden of taxation. More precisely, the areas of society where that burden is placed. I would argue that ordinary citizens bear too much of this tax burden, while those with the resources to pay more are not giving their fair share. This is a problem that Sinn Féin seeks to rectify. There are a broad range of views on how best to do this, such as wealth taxes. I would like to propose a target for taxation that will reduce inequality, increase economic efficiency, and strengthen our environmental policy: land.

A Land Value Tax (LVT), as the name suggests, is a tax on the value of land. Land here refers to all natural resources, such as geographic land, forestry, and mineral or fossil fuel deposits. It ignores the value of any buildings, machinery, or personal property to focus on the unimproved value of the land, which is what makes LVT different to a property tax. It discourages several harmful practices that the wealthy use to their heart’s content in the twenty-six counties, including land hoarding and price speculation, and delivers greater prosperity and equality for all. Without falling into the trap of appealing to authority, the LVT has been shown to be such a beneficial tax that many progressive economists refer to it as the ‘perfect tax’, and Milton Friedman, the hero of conservative economists and enemy of progressive taxation, grudgingly bestowed it with the honour of ‘the least bad tax’. High praise indeed, but if the champion of the economic policies that inform some of our own government’s thinking has no substantive argument against LVT, other than his own personal aversion to the concept of taxation, I feel it would be worth our while giving the concept some thought. In this spirit, I will now elaborate on the benefits of the LVT for the people of Ireland.

Celtic Tiger, Inflated Land Value

Ireland’s economic policy is one in which speculation and wealth hoarding are facilitated and encouraged, with both domestic robber barons and foreign vulture funds invited to this party. The LVT essentially puts an end to these practices. Speculation, in which a commodity, in this case land, is bought by the aforementioned in the hope that its value will increase down the line, is unworkable with the LVT. It is simply not worth holding on to the site, as the burden of the LVT will offset any gains the owner may hope to get through speculation. There are two options for a person who owns the land: put it to use immediately or sell it. When the value of the land is taxed, long derelict buildings suddenly open, as the incentive to keep them vacant is finally being punished. Furthermore, LVT effectively works as a wealth tax, as people who choose to hoard wealth in the form of land holdings are unable to avoid being taxed on it. One cannot transfer or hide a plot of land in an offshore bank account, or any other form of alchemical accounting, so if you choose to hoard land, you will have no choice but to pay the price.

A Fair Tax for a Fair Ireland

The economic value of land is not intrinsic to the land itself. Rather, it is generated as a result of the community’s working and development of a site. Members of a community come together to establish a business, housing co-operative, or some other sort of economic development, and the already wealthy landowner or landlord can claim the benefit of the wealth produced by the community’s development, purely by virtue of their name being on a legal document indicating ownership. The landlord claims this wealth in the form of rent, both housing and commercial. Their position as the landowner gives them a position of considerable power, as they can decide the value of rent as a way of extracting as much economic value out of the site as possible. Furthermore, they are incentivised to purchase more land for development, after which they can sit back and claim a share of the value derived from the site’s development, all while contributing the least amount of work to its success. It is relatively easy to observe this phenomenon in the economic policies of the twenty-six counties, in which large amounts of public land is sold for what is nominally called private development but is really a means for landowners to produce economically inefficient sites from which they can extract enormous financial gains. This is harmful for the community, who are effectively held hostage. They must pay the price set by the landowner, who has no incentive to provide a development which is beneficial to or serves the community. Taxing the value of land has the effect of de-commodifying it. Small, rural, and productive landowners, such as small farmers, stand to gain under a LVT, as their plots are significantly lower in value than urban sites, and they are disproportionately punished under our current taxation system, which focuses more on the buildings and improvement on the land, leaving them with an artificially inflated tax burden. 

Thus Far and No Further

In our battle against climate change and environmental degradation, it is important that we use our taxation powers to encourage more sustainable and ecologically conscious development, while being aware of the need for a just transition towards this environmentally friendly world, so that those with the least impact on our environmental problems are not disproportionately punished. LVT is a tool to achieve this. It stands athwart the scourge of urban sprawl and encourages density, an issue which will become increasingly important as Irish society continues to grow. To illustrate this with an example, instead of building a large car park to hold commuters from a newly built estate in the suburbs, a landowner would be more likely to construct a housing development. Under the aegis of effective legislation to protect the rights of citizens, watch as our stock of housing increases and prices fall. There would be no incentive to inflate the price, as the landowner would be taxed even further. While this is happening, sprawling developments outside urban areas will largely cease to be an issue, as developments of large housing with low density is replaced with developments of highly dense housing with more units. This would allow us to preserve and increase our wild areas, which will help our environmental agenda.

Agus Sin É

The concept of LVT was popularised by a late 19th century journalist and economic theorist named Henry George in his book Progress and Poverty, where he outlines how the tax works to create a more just and equal society in terms far more eloquent than I can. His theories form the economic ideology of Georgism, an alternative to Capitalism and Marxism, which helped to inspire the United States’ Progressive movement of the early 20th century. Adherents to Georgism see different ways of sharing the money captured by LVT, with some arguing for Universal Basic Income or Utilities, while others go so far as to call for the abolishment of all other forms of taxation.

The Land Value Tax would allow us to develop a fairer taxation system. It could replace the Local Property Tax as a way of funding our local authorities in a way that does not punish those with the least amount to pay, but rather makes wealthy land-hoarders and vulture funds the focus of the burden. As we in Sinn Féin look toward a united and equal Republic, LVT would help us to reshape our view of land, from one of commodification, to one of a resource from which the benefits derived thereof are given back to the community. I am reminded of a quote by Franklin D. Roosevelt, who described taxes as the “dues that we pay for the privileges of membership in an organised society”. Is it not time that we call for a higher dues from wealthy landowners to make this society more liveable? 

Stephen Moriarty,

Traveller Officer for Ógra Shinn Féin