How to Make a Perfect World:

Don't let governments steal.

Replace all taxation with ground rent. This leads to more money (even after paying the ground rent), a better environment, kinder, gentler laws, and ultimately a world based on love. This page shows why.

Adam Smith, the father of economics, said that governments should not tax work. They should charge rent on bare ground instead. The value of bare ground is created by society, through providing good laws, good neighbours, roads, parks, good schools, and so on. The bare ground is often worth far more than whatever is built on it. So governments can earn all the money they need by doing their own work.

One result of taxing land instead of work is faster economic growth (see below). If the economy grew by an extra two percent per year, in 35 years it would be twice as big as under our present system. So even if you are a land owner, even if half your income went to ground rent, you would be better off. And your wealth would keep on increasing, much faster than before.


List of benefits:

  1. Tax free work. Because only land will be taxed, not work.
  2. More jobs. Because without tax, marginal work that was not economic is now profitable.
  3. Better use of land. Because under-used land will be sold to those who can use it more productively. So, even more jobs.
  4. Better conditions. Because more jobs means businesses and governments will have a shortage of people. They have to treat workers well or they cannot compete.
  5. Lower prices (because of more jobs, and more use of land).
  6. Cheaper apartments (because building upwards is tax free).
  7. Less paperwork (a single rent instead of thousands of taxes).
  8. No tax avoidance (you can't hide land).
  9. Lower government costs (because more people are employed, so they need fewer benefits)
  10. A more stable economy (no land investment bubbles).
  11. Cheaper borrowing (due to a more stable economy).
  12. All the public works you need. Because if people want a road, it increases land values, and therefore pays for itself.
  13. Better information, because of more focus on land values. Land value measures everything that attracts people: beauty, good neighbours, etc. And unlike taxation, you only pay for land if you actually want it. At present, a government can always just raise taxes, and you have no choice but to pay. But if they raise land rent, you can use less land. And if nobody wants to pay then the land is unused, the government gets no money, and goes bankrupt. So government is forced to care deeply about everything that attracts people to land (beauty, good neighbours, etc). And rent is so simple that it becomes a statistician's dream: by comparing millions of plots of land, a statistician can determine the true value of good neighbours, beauty, etc.
  14. Better decisions everywhere, because of better information.
  15. Make deals with government. This is because ground rent is very easy to measure: you pay a single price, just as you do for normal goods and services. And if you don't like the price you can use less - as with normal goods and services. So you can make deals and get better government, just as with any other goods and services. This is not possible with taxation (unless you are a massive corporation) because there are too many taxes and they are too hard to avoid (unless you are a massive corporation who can move countries, employ armies of accountants, etc.) In short, ground rent gives each individual the same power as a giant multinational.
  16. Scientifically optimal government (because of better information and the ability to make deals: you can compare different groups who make different deals, and see the results, like in any scientific experiment).
  17. More trust (because of making deals: we can choose rules that suit us).
    A better environment
  18. More beautiful land (more desirable means more rent).
  19. More recycling (as natural resources cost more but everything else costs less).
  20. More investment in youth clubs, sports, and other social capital (good youth make a more attractive community, so increase rental values).
  21. You can live without "working". Imagine that you live in a small apartment: your ground rent is shared by a thousand other people, so you pay almost nothing to the government. Yet you benefit from lower prices, full employment and optimal government. So you can find something you enjoy, and only need to do it for a few hours per week to pay your tiny bills.
  22. Less and less crime. All crime has causes. As we get better information and better government we can learn those causes and thus end crime.
  23. No global poverty (this system is much more efficient, so it will spread around the world).
  24. Less and less war (as these principles spread between nations: why fight when you can get a much better life through trade?)
  25. No tyranny: because changing from tyranny to rent creates trillions of dollars. So tyrants (or other supporters) can be paid to give up power.
  26. Less inequality, due to fewer opportunities for unearned wealth.
  27. No evil corporations. With ground rent, no corporation can get special treatment: they can get no tax breaks because there is no tax (except on land). And they cannot get breaks on land because they have nothing to offer government in return. E.g. even if they employ plenty of people, those people do not pay tax, so why should government care? Corporations can still offer economies of scale, but only by offering genuine value, which is just as it should be.
  28. A world based on love: 'Love' means choosing whatever makes people happy. That is, the things that people pay rent for. As competition for rent increases, this means competition to make people happy. But without taxing work there is simply no other way to make money.


What Adam Smith said

"Ground-rents [...] are altogether owing to the good government of the sovereign, which, by protecting the industry either of the whole people, or of the inhabitants of some particular place, enables them to pay so much more than its real value for the ground which they build their houses upon. [...] Nothing can be more reasonable than that a fund, which owes its existence to the good government of the state should be taxed peculiarly, or should contribute something more than the greater part of other funds, towards the support of that government." (Adam Smith, The Wealth of Nations, Book 5, Chapter 2)

For more details search for 'Georgism', 'geoism', 'land value taxation', or 'the single tax'.





My attempts to save the world

I've had versions of this page online now since 2004. And from time to time I share it to get feedback. This is what I have learned:

Still, I hope that one day this page will reach somebody who understands it without needing a discussion. And that person wants to discuss it with others. I hope that, just maybe, that person is you.