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Taxation is legalized theft

For convenience, land rent is sometimes called a tax, because it is money paid to society. But land rent is not really a tax, it is rent - payment for something (land value) that is borrowed from its rightful owner (everyone):

As noted elsewhere on this site, taxation means taking money by force, on the false pretense that this theft is necessary for a just society. But this does not change the fact that theft is theft. Theft is bad for the economy. Theft is bad for everyone.

If we have land rent, there is no need for any other taxes.

“But I don’t pay tax!”

Some people on low incomes don’t pay any direct income tax, and their housing taxes may be subsidized. They may think that a tax free economy has nothing to offer them. But everyone pays tax, even the poorest members of society. In Britain for example, we pay 15% VAT (sales tax) on most things. If we have a car we pay car tax plus very high tax on fuel. If we have a TV we pay a TV license (another tax). And most important, we pay more for our ordinary goods and services because businesses have to pay taxes on nearly everything they do, and they increase their prices accordingly. So everyone pays tax.

Land rent would not cost more than at present

Consider the size of the typical mortgage. Much (often most) of the value of a property is because of its location, not the building itself. This gives an idea of the amount of money available for land rent - a vast amount, more than enough for genuine government needs.

Does this mean that householders would pay the same mortgage as now, plus an extra mortgage for land rent? No. With land rent, house prices go down by an amount equivalent to land rent, so the total combined cost stays the same. This is because the price of land depends on the expected profit people can make from that land. If the profit goes down (because of adding land rent) then people will pay less for that land.

Of course, landowners would like to hold buyers to ransom, forcing them to pay the same old inflated rates. But they cannot, for three reasons. First, more land comes onto the market as speculators sell, so buyers can simply go elsewhere. Second, as buyers hear that prices are going down, they will wait until the price stops falling before they buy. Third, buyers can afford to wait longer than sellers. Sellers have to pay land rent every month, so they will lose any war of attrition. As a result, prices will quickly drop to the new equilibrium, where land price plus land rent equals roughly the same as people used to pay for mortgagees.

Obviously a sudden halving in land prices would cause problems for landowners. So land rent needs to be introduced in stages. But the reward, after the adjustment, is a more stable economy than before. (See the discussion of boom and bust cycles in the page about wealth.) h.

Land rent would cost less than at present

Actually, the total cost of mortgage plus land rent would be even less than mortgage alone. This is because, as land speculators sell their land, the total amount of land increases. When supply increases but demand goes down (because of no land speculation) the price goes down. But the government would still get the same total value because it would now gain income from land that is at present underused.

Add the fact that land rent creates wealth, in particular by bringing more land into productive use, and we can see that government revenues go up while the typical person pays much less. Once again,  everyone wins

Governments do not need other taxes

Land rent provides a great income for government. But if a government wants more money, it is free to earn that money like anyone else - by offering goods and services that individuals wish to pay for. But each individual must be free to say no, otherwise the extra charges are just theft.

Government has a unique size, so they have economies of scale. The state has a unique stability (usually existing for hundreds of years) so a government can capitalize on trust that other businesses do not have. So governments can offer services like roads, policing, etc., more efficiently than other businesses. This allows them to earn any extra money they want, in fair competition with others. There is no need to steal money through taxation. Governments can fairly earn all the extra money they need.

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