Principles of tax policy - Treasury Contents

Written evidence submitted by Michael Learoyd


I have been interested in the principles of political economy for very many years and all my studies and observations lead me to the principal conclusion set out below.

This memorandum puts forward very briefly the fundamental principle that should be adopted by any honest government.


Tax as a charge that is collected for the service of government and official authorities should be what is created by the community as a whole. It should not be taken from those to whom it rightfully belongs unless it is given as a gift.

The tax which I refer to and which is created by the community has been identified as Economic Rent. It is the only resource which government can be entitled to use as a first resource. It is further referred to as LVT (Land Value Taxation) or LV (Location Value). It was spoken of as a Single Tax in the works of Henry George.

This Single Tax which embodies the principle of Economic Rent is the only legitimate source of government revenue. Efforts should be made by government authorities to identify and quantify this legitimate resource that is created by the community as a whole. As this value in some measure resides in the value of land, all land should be valued and the rent collected from the user of the land. At present this value goes to the users of the land but in truth it does not belong to them.

The challenge to the government and this committee is to take up the quantifying of this value in Economic Rent and collect it for the legitimate purposes appropriate to government.

It may seem to be a very radical change but it is very simple and would be the most simple tax to collect as it would be unavoidable. Once the principle is clear to all or at least a fundamental majority, it could be moved towards in the certain knowledge that it is just, the only just tax, the only first source of revenue for government.

There is of course much more that could be said, but I wish to raise before this committee that this must be their principal area of study, the understanding of Economic Rent (as that which the community creates and is the principal source of revenue for government responsibilities).

January 2011

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