TITLE:
The Effect on Growth of a Tax Shift between Land Value Taxes and Income Taxes in Denmark
AUTHORS:
Philip Allan, Gohar Hovsepyan
KEYWORDS:
Land Value Tax, Income Tax, Economic Policy, Political Economy, Tax Policy, Economic Growth
JOURNAL NAME:
Modern Economy,
Vol.10 No.8,
August
7,
2019
ABSTRACT: A land value tax (LVT) is different from a property
tax in that it only taxes the underlying land, not the structure built on top
of it. LVT is recognized by economists across the political spectrum, as the
only tax raising significant revenue
which theoretically does not diminish economic activity (and even increases it).
This is in part because land is fixed and
supply, and cannot be moved when taxed. An LVT instead encourages development of the land. This paper maps the ratio of
LVT to other taxes in Denmark over time,
and assesses its effect on economic growth. We can conclude that just as in
theory, empirical evidence in the case of Denmark also shows positive results
with regards to economic growth.