Systematically recognizes land as a critical factor of production—separate from labor and capital—and thereby properly sets the stage for an in-depth analysis of what causes various social ailments such as wealth inequality, poverty, or the destruction of the environment.
Martin Adams addresses one of the very real practical concerns that will occur when communities approach collection of the full potential annual rental value of locations: the selling price of land parcels will fall, theoretically to zero. At some point, governments must make the switch to rental values as the tax base. As important, Martin believes, is that the public acceptance of community land contributions overcomes the existing psychological bias that has fostered “private land ownership as opposed to community land stewardship.
The basic principle recognized by land value taxation is this: land value accrues cumulatively, in a process generated by the community as a whole; as such, that value belongs to the community; it is only the building value that is created by private capital investment, and as such, belongs to the owner. Hence it is just for the public sector to appropriate land rent through taxation.