About LVC Calculator
The purpose of this calculator - for now - is to illustrate with rough estimates the taxable capacity of land for a particular city or locality. As data improves, results improve.
This calculator is most useful if land value records are kept by city administrators who have accurately assessed and recorded the current value of all land parcels.
If this is not the case, then the city needs to conduct a broad-scope land evaluation using the guidelines for estimating land value found at this link.
Remember this caveat: Without up-to-date and accurate land value assessments, the amount of value that can be captured from land will be inaccurate and will not correctly present the amount of public revenue that can be collected via land value capture.
Here is a best practices model for an advanced land valuation and record system: go here
These pre-existing calculators exist in a context of reliable data, accurately measuring the shift of land value capture/taxation for the Maryland page, and quantifying the progressive aspects of land value capture to remove tax incidence from those with low or fixed incomes
LVC is often administered as a "tax" shift and not an additional tax burden. A "revenue neutral" – revenue remaining constant - shift to LVC can be beneficial because this approach harnesses incentives for both production and fair distribution of wealth.
Cities and localities which levy taxes on wage income, sales, houses and other buildings (i.e., wealth production) can also use this calculator to determine how much they can shift the tax burden away from production and onto the "unearned income" of "land rent." To do this, simply enter the revenue needed from the existing tax as the amount to be collected.
Most often, the taxable capacity of land is such that LVC can yield more than local government needs to fulfill its basic responsibilities for the provisioning of basic services for all. For more information, see The Taxable Capacity of Land, The Taxable Surplus of Land: Measuring, Guarding and Gathering It, and Adequacy of Land as a Tax Base.
Other potential sources of revenue that compliment the land value capture approach and harness incentives for efficient and equitable land and natural resource use, fair wealth distribution and/or environmental improvements include:
- congestion charges and street parking
- water withdrawals from surface and underground sources
- taxing air and water pollution by levying "effluent charges", hydrocarbons, minerals extraction and timber cutting and wild fish catches, electromagnetic spectrum use, billboards, telecom relay sites, slots in the geosynchronous orbit; mooring boats, leases on public lands, aircraft landing "slots" and "gates".
LVC is best administered at least initially as a tax shift, not an increase in the tax burden. Land rent is estimated to be 10% of current land value. Thus if you calculate 2% LVC for year one, 4% for year two, 6% for year three, 8% for year four, and 10% for year five, you will arrive at full land rent capture with greatly reduced or eliminated taxation of taxes on wages and production.
Most taxation levied by central government fall on wage income, value-added, or sales. LVC should be coordinated with movements to reduce these taxes and further decentralize and enhance government capacity at the local level.
After the full shift to land value capture, public finance administration is simplified with no fiscal expense for assessing houses and other buildings or to track wage income or sales taxes. Tax administration could be the monitoring and posting of land values (such as on the Web), and to collect the land rent at regular intervals.
This is a model for a transparent, efficient, and fair public finance system which harnesses strong incentives for wealth production, fair wealth distribution and good land site utilization.