Federal taxation of land would be preferable to income taxation
October 3, 2016 12:00 AM
Some real estate developers exploit the fact that the value of a plot of urban residential land can increase greatly. An article by Kate Giammarise in the Sept. 26 Post-Gazette told the sad story of a woman who paid for expensive repairs of a house while mistakenly believing that she was transitioning from tenant to owner (“Rent to Own: The Worst of Both Worlds”).
Unlike a house, which depreciates, the land containing it usually increases in value, especially in relation to the declining value of the dollar. A remedy would be a federal government tax on the value of land. The taxation cost of land would lower the purchase price and make more properties available to buy. Taxation of land is now limited to local governments and is too low. This is a reason the majority of national wealth is now owned by a small percentage of the population.
The 16th Amendment to the U.S. Constitution, ratified in 1913, begins, “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived ... .” I propose a new amendment that would also give Congress the power to lay and collect taxes on the unimproved value of land, exempting the value of buildings and other improvements. I believe the president and Congress would soon realize that taxation of mostly wealthy owners of valuable land is preferable to taxation of earnings and other income.
HERBERT BARRY III Oakland
The writer is professor emeritus, University of Pittsburgh.
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