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I form a company with some like-minded people and we create our own private
city on a site where previously there was nothing (except perhaps a river,
sufficient water for a lake). We invest 10Billion on basic infrastructure, and people build and improve
their own houses. The local economy flourishes - without a local town council
appointed by the sovereign government. If the land is in one big block (ie owned by one company) the land taxes are
based on the unimproved value - the value it was purchased for (with CPI and
similar adjustments). If the individual blocks are sold to separate households and other
businesses, the 'unimproved' value of each block increases by several orders of
magnitude. Where has the extra value come from? The infrastructure built on
the other blocks. The 'unimproved value' of a block of land is based on the
value of the improvements made by others to their land. What an odd tax - to be taxed on someone else's effort!
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