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So as a Georgist (follower of Henry George), I believe most form of taxation is immoral and economically inefficient except the land value tax (not to be confused with property taxes) and other pigovian taxes. However, I'm also a pragmatic person and therefore, it may not be possible to fund an entire government through these taxes alone as most Georgists believe.

That is why I want to ask how much revenue would an 100% land value tax be able to generate for the Indian government, assuming no changes in the current levels of the government.

I do realise such a tax would be difficult to practically implement due to poor land records in India but nevertheless, I'm interested to know if it is feasible in theory.

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    $\begingroup$ $0, because all land becomes instantly worthless? $\endgroup$
    – user253751
    Feb 23 at 9:15
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    $\begingroup$ @user253751 The value of a site remains the same at 100% LVT. The price someone would pay to own a site would be $0 at 100% LVT but the rent someone would pay to use the site remains the same whether rent is paid to a private owner or the government in the form of 100% LVT. $\endgroup$
    – sba222
    Feb 23 at 22:20
  • $\begingroup$ @sba222 then who determines the value? Usually the value is the sale price. $\endgroup$
    – user253751
    Feb 24 at 8:25
  • $\begingroup$ @user253751 Please see the comments under my answer below. $\endgroup$
    – sba222
    Feb 24 at 8:44
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Technincally, even if it's a stylized fact that has been subject to a lot of criticism (and, to me, very righteously), the Laffer curve indicates that a 100% tax rate on land would generate zero revenue, since there would be no incentive for the owner to use productively. In that case I think that Laffer's intuition of a zero revenue on a 100% tax rate is quite correct...

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In Australia, Prosper compiled a survey of all economic rents and came to the conclusion that the Australian government could effectively be funded with rents alone.

This is without taking into account that abolishing taxes will further increase the value of economic rents, i.e. in the absence of taxation firms and households will have more net income to pay for economic rents (land, carbon, licences, fees) which further increases government revenues.

Mason Gaffney (2009) argues that all taxes come out of rents (ATCOR). According to this a tax reduction would increase rents by at least the same amount. This would imply that a government funded with taxes could just as well be funded with rents. See my question about ATCOR here.

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    $\begingroup$ The point of 100% LVT is to tax all rents from land. $\endgroup$
    – sba222
    Feb 23 at 22:02
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    $\begingroup$ What is your definition of land value if not the PV of land rents? $\endgroup$
    – sba222
    Feb 23 at 22:22
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    $\begingroup$ Gaffney writes: If future rent is to be heavily taxed, there will be less current value and less appreciation. One might think that increments would thus be destroyed, but economic value does not disappear without a trace. It is conserved, like matter and energy. The value is rather transferred to the public. The right to levy future taxes has a present value, too. $\endgroup$
    – sba222
    Feb 24 at 6:52
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    $\begingroup$ What else other than present or future rents does land value include in your view? Expectations about future rents may be subjective but they remain expectations about rents. In fact, taxing current rents avoids subjective land valuation being carried out by the government. $\endgroup$
    – sba222
    Feb 24 at 7:11
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    $\begingroup$ @user253751 The rent someone would be willing to pay for using a site is independent of whether LVT is 0% or 100%. It's just a matter of who receives the rent. However, the price someone would be willing pay for owning the site's future land rents will be $0 at 100% LVT since all future land rents will be taxed. $\endgroup$
    – sba222
    Feb 24 at 8:55

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