Economic Effects
The value of the land (and many other macro-economic quantities too) can be expressed using two independent concepts:
- The value, or, strictly speaking, the price, of a particular site of land is what a fair exchange brings in terms of money during an agreed trade or transaction between two parties, one of whom is the landowner. (This definition is conditional on no LVT being applied, because when it does apply, the exchange value is affected.)
- The land value of the site is also directly related to its demandable ground-rent, which is its potential for use in either production or residential capacities. The capitalization of this rent gives the land value too. Land which is not useful has no value and is called marginal land, as explained by British economist David Ricardo in 1816.
Read more about this topic: Land Value Tax
Famous quotes containing the words economic and/or effects:
“The economic dependence of woman and her apparently indestructible illusion that marriage will release her from loneliness and work and worry are potent factors in immunizing her from common sense in dealing with men at work.”
—Mary Barnett Gilson (1877–?)
“Trade and commerce, if they were not made of India-rubber, would never manage to bounce over the obstacles which legislators are continually putting in their way; and, if one were to judge these men wholly by the effects of their actions and not partly by their intentions, they would deserve to be classed and punished with those mischievous persons who put obstructions on the railroads.”
—Henry David Thoreau (1817–1862)