That’s entirely a question of data availability. The analysis is easy, putting the dataset together is the issue. Data quality, availability, and information necessary for sales validation varies wildly by state.
Great article! Has anyone ever looked at doing a flat land tax whereby all properties are taxed the same with an opt out for rural parcels via some sort of lease auction system?
It depends on how “flat” you mean. Totally flat land tax (as in a strict land area tax) would actually be a quite perversely bad policy, massively undertaxing the most valuable locations and overtaxing marginal locations.
But locally flat land tax is actually surprisingly good:
This is a helpful distinction, and I agree that a strict flat land charge would behave very differently from a value-based land tax at the local level.
Where I think the analysis becomes more ambiguous is around what it means to “overtax” marginal land in a system that explicitly separates ownership from use. If ownership is conditional on bearing the flat land tax charge, but land that cannot bear the charge simply reverts to public ownership and is then made available through lease, the result is less about overtaxing productive activity and more about filtering which parcels justify exclusive private title. Truly marginal land would not be taxed in practice—it would transition into a lease regime, where it could still be used productively without requiring the user to carry the capitalized cost of ownership.
In that sense, the system is not taxing production at all. It is taxing the right to exclude others indefinitely from a fixed portion of physical space. What remains untaxed is initiative—labor, investment, and improvement—which are arguably the most socially beneficial forms of economic activity. This was the core intuition behind George’s critique of income taxation: when value arises from effort, risk-taking, or coordination, taxing that value tends to suppress the very behavior that drives economic growth.
A flat area-based charge pushes this logic one step further by removing the need to continuously estimate and contest “value,” which is inherently subjective and administratively costly. Instead of attempting to assess and tax imputed location value, the system allows the market to sort ownership organically. Parcels that can sustain exclusive ownership remain privately held; parcels that cannot still remain usable, but without requiring speculative capitalization or leverage.
This is obviously a more blunt instrument than a value-based land tax, and the transition would be disruptive. But the administrative simplicity and the shift away from taxing productive initiative toward taxing exclusive control over space may produce second-order effects—lower housing costs, higher take-home income, and reduced barriers to productive land use—that are difficult to achieve within valuation-dependent systems.
I’d be curious whether you think the ownership-versus-use distinction changes the “overtaxing marginal land” concern, or whether you see other failure modes in that type of structure.
The simple issue is that land smack dab in the city center is worth exponentially more than rural farmland. If you don't at least coarsely capture that distinction, you get massive incentive distortions at both ends with a literal universal flat land tax.
I think this gets at the core philosophical difference between a valuation-based system and a legibility-based system.
You’re absolutely right that urban land is currently worth exponentially more than rural land. But that “worth” is itself the product of enormous cumulative human effort—public infrastructure, private investment, entrepreneurship, and dense coordination over decades. A value-based land tax attempts to continuously measure and recapture that emergent value, which implicitly places a recurring charge on the very success of those efforts. Over time, that can function as a tax on the outcome of productive coordination itself.
A flat area-based charge takes a different approach. It does not attempt to estimate or recapture value. Instead, it sets a fixed cost for exclusive ownership and allows the market to determine organically which parcels justify private title at that cost. High-productivity urban land would almost certainly remain privately owned because it can sustain the charge easily. But critically, the system would stop continuously re-taxing the incremental value created through initiative, investment, and coordination in those areas.
This has important second-order effects, particularly on cost of living. A substantial portion of urban land value today reflects capitalized expectations about future scarcity and tax treatment. By introducing a fixed, non-escalating charge, you compress that capitalization. The effect is less a subsidy to cities and more a reduction in speculative land pricing, which could meaningfully lower the structural cost of housing and entry into productive urban environments.
On the rural side, I think the ownership versus use distinction matters a great deal. Under a flat federal land charge at a meaningful level, much marginal rural land would likely transition out of private ownership and into a lease-based regime. But this does not eliminate productive use—it removes the requirement that access to land be mediated through large upfront capital purchases or leverage. A farmer or rancher could lease land at low cost and keep 100% of the value generated through production, without facing federal income or payroll taxes and without servicing debt tied to inflated land values.
In that sense, the system shifts the federal burden away from taxing initiative and toward taxing exclusive, permanent control over scarce physical space. It is less concerned with precisely calibrating tax liability to estimated land value, and more concerned with eliminating the need to continuously observe, assess, and tax productive activity.
That tradeoff certainly introduces bluntness, but it also removes a great deal of administrative complexity and changes the incentive structure in ways that may favor production over capitalization.
I suspect the key question is whether the precision gained through valuation outweighs the complexity and incentive effects it introduces, or whether a simpler system that taxes ownership but not initiative produces better long-run outcomes despite being less finely calibrated.
Ultimately it's simply a gradient, depending on how big your 'area' is. Is an area a single block? Is it an entire city? Is it the entire state?
To the degree it approaches a single universal rate literally everywhere, it is a bad system with bad incentives. But if the areas are small enough, then, as I outlined in the article I linked, it can work surprisingly well.
Curious — how sweeping is your data analysis? Could you do the whole country?
That’s entirely a question of data availability. The analysis is easy, putting the dataset together is the issue. Data quality, availability, and information necessary for sales validation varies wildly by state.
But if I had the data? Sure!
I can see why a federal cadastral system would be helpful.
Great article! Has anyone ever looked at doing a flat land tax whereby all properties are taxed the same with an opt out for rural parcels via some sort of lease auction system?
It depends on how “flat” you mean. Totally flat land tax (as in a strict land area tax) would actually be a quite perversely bad policy, massively undertaxing the most valuable locations and overtaxing marginal locations.
But locally flat land tax is actually surprisingly good:
https://progressandpoverty.substack.com/p/valuing-land-the-simplest-viable
This is a helpful distinction, and I agree that a strict flat land charge would behave very differently from a value-based land tax at the local level.
Where I think the analysis becomes more ambiguous is around what it means to “overtax” marginal land in a system that explicitly separates ownership from use. If ownership is conditional on bearing the flat land tax charge, but land that cannot bear the charge simply reverts to public ownership and is then made available through lease, the result is less about overtaxing productive activity and more about filtering which parcels justify exclusive private title. Truly marginal land would not be taxed in practice—it would transition into a lease regime, where it could still be used productively without requiring the user to carry the capitalized cost of ownership.
In that sense, the system is not taxing production at all. It is taxing the right to exclude others indefinitely from a fixed portion of physical space. What remains untaxed is initiative—labor, investment, and improvement—which are arguably the most socially beneficial forms of economic activity. This was the core intuition behind George’s critique of income taxation: when value arises from effort, risk-taking, or coordination, taxing that value tends to suppress the very behavior that drives economic growth.
A flat area-based charge pushes this logic one step further by removing the need to continuously estimate and contest “value,” which is inherently subjective and administratively costly. Instead of attempting to assess and tax imputed location value, the system allows the market to sort ownership organically. Parcels that can sustain exclusive ownership remain privately held; parcels that cannot still remain usable, but without requiring speculative capitalization or leverage.
This is obviously a more blunt instrument than a value-based land tax, and the transition would be disruptive. But the administrative simplicity and the shift away from taxing productive initiative toward taxing exclusive control over space may produce second-order effects—lower housing costs, higher take-home income, and reduced barriers to productive land use—that are difficult to achieve within valuation-dependent systems.
I’d be curious whether you think the ownership-versus-use distinction changes the “overtaxing marginal land” concern, or whether you see other failure modes in that type of structure.
The simple issue is that land smack dab in the city center is worth exponentially more than rural farmland. If you don't at least coarsely capture that distinction, you get massive incentive distortions at both ends with a literal universal flat land tax.
I think this gets at the core philosophical difference between a valuation-based system and a legibility-based system.
You’re absolutely right that urban land is currently worth exponentially more than rural land. But that “worth” is itself the product of enormous cumulative human effort—public infrastructure, private investment, entrepreneurship, and dense coordination over decades. A value-based land tax attempts to continuously measure and recapture that emergent value, which implicitly places a recurring charge on the very success of those efforts. Over time, that can function as a tax on the outcome of productive coordination itself.
A flat area-based charge takes a different approach. It does not attempt to estimate or recapture value. Instead, it sets a fixed cost for exclusive ownership and allows the market to determine organically which parcels justify private title at that cost. High-productivity urban land would almost certainly remain privately owned because it can sustain the charge easily. But critically, the system would stop continuously re-taxing the incremental value created through initiative, investment, and coordination in those areas.
This has important second-order effects, particularly on cost of living. A substantial portion of urban land value today reflects capitalized expectations about future scarcity and tax treatment. By introducing a fixed, non-escalating charge, you compress that capitalization. The effect is less a subsidy to cities and more a reduction in speculative land pricing, which could meaningfully lower the structural cost of housing and entry into productive urban environments.
On the rural side, I think the ownership versus use distinction matters a great deal. Under a flat federal land charge at a meaningful level, much marginal rural land would likely transition out of private ownership and into a lease-based regime. But this does not eliminate productive use—it removes the requirement that access to land be mediated through large upfront capital purchases or leverage. A farmer or rancher could lease land at low cost and keep 100% of the value generated through production, without facing federal income or payroll taxes and without servicing debt tied to inflated land values.
In that sense, the system shifts the federal burden away from taxing initiative and toward taxing exclusive, permanent control over scarce physical space. It is less concerned with precisely calibrating tax liability to estimated land value, and more concerned with eliminating the need to continuously observe, assess, and tax productive activity.
That tradeoff certainly introduces bluntness, but it also removes a great deal of administrative complexity and changes the incentive structure in ways that may favor production over capitalization.
I suspect the key question is whether the precision gained through valuation outweighs the complexity and incentive effects it introduces, or whether a simpler system that taxes ownership but not initiative produces better long-run outcomes despite being less finely calibrated.
Ultimately it's simply a gradient, depending on how big your 'area' is. Is an area a single block? Is it an entire city? Is it the entire state?
To the degree it approaches a single universal rate literally everywhere, it is a bad system with bad incentives. But if the areas are small enough, then, as I outlined in the article I linked, it can work surprisingly well.
What is the scale of the "area" you had in mind?