2 thoughts on “Solving the housing crisis: the economics of Ronald Coase might have some answers”

  1. Posted 14/12/2015 at 21:31 | Permalink

    Land taxation can achieve this by placing a cost on NIMBY.

    Land taxation taxes land value, not buildings, so it encourages people who hold empty or undeveloped land to put it to its best use.

    Unlike taxes on goods, land is not produced in a factory, so the supply of land will not drop if land tax is applied – land supply is fixed. It is also impossible to avoid – it cannot be hidden offshore tax havens.

    Land tax places a cost on NIMBY because is NIMBYs success in blocking development in their area, their land value goes up and they are hit with more land tax. That seems entirely fair.

    Land tax can capture the increase in value from large transportation projects, such as CrossRail, which is essentially taxpayer funds being thrown at private landowners to boost their private property’s value through no effort of their own.

    Land Tax also has the approval of Economist Milton Friedman. In this video, Milton Friedman talks about the virtue of land value taxation. https://www.youtube.com/watch?v=yS7Jb58hcsc

    The IEA should support the levying of a progressive land value tax on all land in the UK, and use the revenue to reduce other taxes such as company and income taxes.

  2. Posted 17/12/2015 at 06:33 | Permalink

    If Ronald Coase is considered one of the Greatest and Most Original of our Economists of our age … then why was he never awarded an OBE? He was nominated several times for that honor and was passed over every year. As he lived to 102 years, there was ample time from his receiving the Nobel Prize in 1991 until his death in 2013 for that award to have been offered to him. Just wondering ….

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