HOW should you tax wealthy homeowners? Britain's opposition Labour party thinks it has an answer: an annual mansion tax on homes worth over £2m. Meanwhile the Scottish government plans to reform taxes on house sales. Yet in the discussion over property taxes a favourite proposal of economists—a tax on the unimproved value of land—has been absent from the debate. Throughout history, economists have advocated such a tax. Adam Smith said "nothing [could] be more reasonable". Milton Friedman said it was "least bad tax". Yet there are only a handful of real-world examples of land value taxes (LVT). Why are they so popular yet so rare?
