I Don’t Think the Word “Land” Means What You Think it Means…

Federated Farmers are unsurprisingly upset at the prospect of a land tax:

Federated Farmers’ Rangitikei-Manawatu president Gordon McKellar said a land-based tax would be “a pretty dumb idea”.

The projected profit for a typical 220 hectare Manawatu beef or sheep farm would be about $21,000 for the next financial year but a land tax on the same property could be as much as $24,000 if buildings were included.

If buildings were included, though, we’d be talking about a property tax rather than a land tax. The rationale is to tax something which we don’t need to worry about discouraging: you can’t make more land.

As I’ve said before, I would be very much in favour of replacing current taxes with land taxes, for both moral and economic reasons. Public choice concerns, as they often do, make things more complicated.

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