This site demonstrates an economically sound and equitable tax practice used worldwide in hundreds of localities. True tax reform - rethinking the means and ends of taxation- is the goal. This site shows that the problems states face -- urban decay, underfunded schools, unchecked sprawl, rural poverty, and high taxes on good citizens -- can be ameliorated.
Welcome to an idea.
The idea is land value taxation (LVT). On this site, you can directly see how LVT would affect you and your community with our Property Tax Calculator.
LVT in a Nutshell
Briefly, LVT is a re-interpretation of the property tax. Taxes on structures and improvements are reduced or eliminated. Instead of taxing what people do, such as building, buying or fixing up a house, office or factory, LVT taxes only that part of the property that is created by the community: the land values, i.e., the sites that are used. In this way, initiative is rewarded while land banking and speculation is discouraged. LVT maintains needed revenues, while reducing market force distortions caused by taxation.
Unlike many ideas put forth to revitalize our cities to combat sprawl and/or to encourage social and economic justice, LVT has a track record. The Pennsylvania cities of Harrisburg, Allentown and Scranton have been phasing in LVT for years. In five other US states, pending legislation will permit cities, counties and states to enact LVT. This site provides data that explains how LVT works and why it should be adopted.
LVT in our State
Indiana has abrogated "Dillon's Rule". Tippencoe, et al., 784 N.E.2d 463 (2003) Consequently, local governments have broad inherent powers, so long as the state legislature or state constitution has not made a specific prohibition.
There have been no court cases, nor attorney general opinions, directly addressing land value taxation as a way for local governments to restore tax neutrality, reduce distortions, and achieve tax fairness and simplification.
For a more detailed and concrete explanation of how LVT works, please check out LVT Explained. Additionally, the Wikipedia entry for LVT might be of interest.
