Land taxes have – unexpectedly – become a hot policy topic in the run-up to the election.

Land taxes were originally suggested by the economist and social reformer Henry George as a fairer alternative to income or business tax. The logic behind them is that land values are shaped by the activities of society as a whole, rather than the individual owner: they are boosted by public investments in transport and good schools, and by the productivity gains that arise from lots of workers and businesses interacting in cities. As a result, it’s only fair to take a small portion of that value back in tax.

Land taxes had their brief day in New Zealand during the 1870s, when they were applied to help fund public works and to break up large monopolistic rural landholdings. And now they may be back on the table: the Labour Party has proposed to set up a Tax Working Group to make recommendations to reform the tax system. This could potentially include land tax – but Labour leader Jacinda Ardern has been pushed to rule out taxing most residential properties:

Ms Ardern has always ruled out introducing a capital gains tax on the family home.

She’s now gone further, saying she’d instruct the working group to stay away from any policies which would affect the home or the land on which it is built.

“My message will be very clear to them – do not bring me any recommendation that includes the family home or the land that a family home sits on.”

To be clear: A land tax is a good idea. It would make our tax system fairer, while creating an incentive to use land efficiently rather than sit on it for capital gains. The last Tax Working Group set up by the incoming National Government recommended we adopt one – but National ruled it out, wrongly in my view.

But a land tax riddled with arbitrary exclusions would be at odds with the fundamental principles underpinning New Zealand’s overall tax code. It is unlikely to be efficient, or lead to all the benefits we would want to achieve.

To understand why, let’s start by taking a look at New Zealand’s goods and service tax (GST) system. Unlike most other countries, New Zealand’s got a really simple GST: all consumption gets taxed at the same rate. As NZ Initiative economist Eric Crampton explained in his great Outside the Asylum series, this simplicity means that we reduce opportunities to game the system – and reduce the uncertainty and litigation risk facing businesses:

New Zealand’s tax system is probably the best in the world, largely due to a strong commitment to the principle of sound taxation. Taxes are levied on a broad base at a low rate. Wellington tax wonks call it BBLR. And a good principle for public policy in New Zealand is not to break BBLR.

Consider the Goods and Services Tax (GST). It is a beautiful value-added tax applied cleanly and comprehensively across the tax system. But nobody in New Zealand appreciates it. Because nobody in New Zealand appreciates it, everybody wants to carve out a tax exemption for their favourite thing: fruits, vegetables, healthy foods generally, and feminine hygiene products are recent examples.

Here is what happens if you do that.

Australia runs a messy GST riddled with exemptions. Somebody decided groceries should not be subject to GST, but some snack foods should be. So bread is not taxed while crackers are. In 2010, Justice Sundberg of the Federal Court in Melbourne had to decide whether an oven-baked Italian flat bread, a mini-ciabatta, counted as a bread or a cracker for tax purposes.

The importer of the bread flew in Giampiero Muntoni to testify in court that the mini ciabatta was a bread, not a cracker. And Muntoni is far from a layperson in such matters. As Australia’s Centre for Independent Studies reported, Muntoni “holds an EU certificate that entitles him to certify whether a product is a bread or a non-bread item for value added tax purposes in Italy.”

Think about that. Italy’s value-added tax needs expert certified bread deciders. A certified profession dedicated to determining whether something is bread. The only conceivable reason such a profession can or should exist is to satisfy the requirements of a broken tax system.

Excluding owner-occupied homes from land tax would lead to similar onerous absurdities. It sounds like a good idea at first blush. But it would open up many New Zealand families to potentially intensive scrutiny of their private affairs.

To see why, consider a hypothetical but not unusual situation. Let’s say that a middle-aged couple owns and lives in a home in Auckland and also owns a bach in Napier, where they plan to retire. To start with, their affairs are simple: They pay land tax on the bach but not the home in Auckland.

But what happens when they transition to part-time work and start spending nine months a year on the beach in Napier, and the rest of their time back in Auckland working and spending time with friends? If they designate the bach as their main residence, they will have to pay more tax, as land values are higher in Auckland. That will create an incentive to avoid registering the Napier residence as their family home.

Of course, the Inland Revenue Department would probably see this as tax dodging. They would probably seek to avoid that by asking for a whole bunch of information, like flights, utility bills, credit card records, etc, and generally submitting middle-class families to the type of humiliating scrutiny that is ordinarily applied only to hapless single mothers on the DPB.

This is basically the regime we’re demanding if we exclude the family home from a land tax.

On the flip side, the more exclusions there are to a land tax, the fewer benefits we will derive from it.

In a recent interview with, University of Auckland economics lecturer Ryan Greenaway-McGrevy explained the whys and hows of land taxation.

A key part of the rationale for land taxes is that they are difficult to avoid, as there is a fixed quantity of land:

Greenaway-McGrevy says many taxes come with bad unintended consequences usually as people try to avoid paying them. This happens because tax influences peoples incentives and behaviours, often in counterproductive ways.

“We tax income, we tax work. That reduces the return for working and that could act as a disincentive for people to take on additional work,” says Greenaway-McGrevy.

“If we think about taxing capital through say a capital gains tax, that affects a person’s incentive to invest. And as a consequence they may invest less in new residential construction, they may invest less in businesses, less in companies. Arguably that would be a bad outcome.”

If you tax a particular activity it reduces the incentive to perform that activity, Greenaway-McGrevy adds.

“When it comes to land, however, the amount of land is fixed. So if you are going to tax landowners they can’t turn around and say ‘well we are going to react to that by making less land.’ So we’re not going to affect the total amount of land in the economy if we choose to tax it. So that’s one of the reasons why I favour it and a lot of other economists favour it [a land tax]. It’s a very efficient form of taxation. It’s one of the reasons why the Tax Working Group was in favour of it. Essentially because it minimises those bad unintended outcomes [and] it could also potentially result in some good unintended consequences.”

Excluding owner-occupied homes from land tax would undermine these advantages. While the quantity of land is fixed, the quantity of land that people have designated as their family home isn’t. If we poke a bunch of holes in the land tax bucket, people will respond by seeking ways to slither through those holes.

Realistically, it would be politically challenging to implement a land tax, even if you used the revenue to cut income and consumption taxes. Some people would benefit, but others would lose out. But if we’re going to have a proper discussion about tax reform, politicians have to be willing to consider all options, rather than arbitrarily ruling out ideas.

Equally importantly, political journalists need to wean themselves off their pointless ‘gotcha’ game about taxing the family home. When they do so, they reveal a fundamental misunderstanding of the “broad base, low rates” concept underpinning NZ’s tax system, and an inability to think about the perverse consequences of exclusions. That undermines our ability to have a proper democratic discussion about tax policies.

What do you think about land taxes?

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  1. If we were starting from the beginning nobody would even suggest taxing income from work. We would have land taxes, sales taxes, carbon taxes and excise. But the idea that taxing someone for doing more work or taxing someone for getting more skills would never make the start line. It is completely daft to think we have income tax because William Pitt the younger wanted money for weapons to kill French people.

    1. I don’t know that we wouldn’t tax income at all, but we would certainly tax lower levels of income at a much lower rate.

    2. And yet, work is the main source of people’s income and it has been a practice for a very long time to contribute a proportion of one’s income for social services that provide care for orphans, the sick, poor, aged. It was called the church’s tithe. Since the enlightenment much of that role has moved over to the state and I think it is sensible that everyone should pay it because everyone benefits from it – and when you need help, you get it.

    3. Yes certainly an interesting thought, perhaps work towards having a flat income tax rate & more welfare type distribution for lower income households. In someways I like the idea of a higher GST as this is good easy win for more tax take from tourists. A central government land tax would funnel $ to local councils effectively to off set rates. If our housing costs are then a lot lower the low & middle income earners are effectively better off whether they rent or own. My 2c worth.

  2. Land tax with no exemptions is a great idea. Use the proceeds from the land tax to fund a tax-free income tax threshold for individuals.

    As automation and robotics becomes more prolific in the workforce, fewer people will earn income. Income Tax will need to be replaced with taxes on capital as the government’s key source of revenue.

    1. Automation has been prolific in the workplace for a long time and it doesn’t appear to have impacted on overall incomes much, so I’m not sure it’s going to have that much impact on future overall incomes either.

      1. Agree. Farming used to consume 97% of our labour resource in the western world, now it consumes 3%. The difference is automation. Everyone found new jobs as fast as automation could eliminate the old ones. It happens without us even noticing… suddenly “poodle stylist” or some other thing we can’t even currently imagine becomes a viable job and someone does it.

  3. Agree in principle. I’d just like to see the income tax bands raised at the same time (the new land tax being offset by less PAYE). Not sure my retired parents would be fond of a land tax though – I presume there would be a way of deferring payments?

    1. I think retirees would be the biggest losers from this as they would go from having paid previous higher rates of income tax to paying a land tax once they retire. It would take 40 odd years for this inequity to be ironed out.

    2. The best way to do this would be to phase the land tax in slowly over (say) a one to two decade period. For instance, start out with a low tax of (say) 0.05% of land value and gradually ramp it up to 1%.

      That would mean that we start getting the benefits of the tax immediately without putting people into immediate financial stress.

  4. Great post Peter. To be clear, land taxes tend to be supported by economists across the spectrum, from left wing to right wing, for the reasons you state. They’re less distortionary than other taxes – in fact they actually encourage better use of land – and hard to avoid. So they’ll come up time and again when tax working groups get set up. They’ll also come up when groups start talking about how to encourage housing development, intensification etc (e.g. the Productivity Commission).

    This is why I’m so surprised that the New Zealand Initiative are always eerily quiet on land taxes. They don’t really say they support it, or that they oppose it. I can’t really find much that Eric Crampton has said on it, and Jason Krupp seems to dismiss it as an unimportant side issue in, and says it’s “not the answer” in When Krupp has talked about them, he’s tended to spin them as being something that’s only aimed at creating more housing, rather than being an efficient kind of tax: something that could add to total govt revenue, or if you’re more right wing, allow for cuts to the more distortionary income and company taxes.

    Land taxes are also strangely absent from NZI’s research agenda, as if they’ve agreed internally that they’re just going to ignore them completely. It’s hard to avoid thinking that some of NZI’s backers are just very anti land tax, and so NZI have decided to avoid talking about them as a result. That’s a pity.

    Land taxes seem to be politically unpopular, and that’s a pity too. There’s plenty of room for them in NZ’s supposedly low-rate, broad-base tax system. So we get compromises like Labour’s “exclude the family home” position.

    My view is that on balance, a land tax which “excludes the family home”, whatever that means, is probably better than not having a land tax at all, but by far the best system would be to have it apply to all land.

    1. Actually, scratch that, I’m wrong, sort of. Seems like Eric Crampton, writing on his personal blog, does like the idea of a land tax, if it’s “revenue neutral” overall: and more recently on Labour’s tax working group plans at

      But Jason Krupp, writing as a spokesperson for New Zealand Initiative, has argued against them.

      I’d certainly support Eric over Jason on this, and hope that New Zealand Initiative can change its official position on the issue in the future.

    2. “in fact they actually encourage better use of land”

      Not strictly correct. They will discourage low-intensity land use. Not the same thing. You seem to be implying that high-intensity land use is, ipso facto, “better” land use.

      1. Not entirely true. They will discourage low intensity land use in high value areas, however in areas with lower values low intensity uses would still be viable.

        1. Depends on the baseline. For most it will be the status quo so how does the imposition of a land tax on the guy along the road from me that has planted vines encourage better land use? What does better mean? More profitable? (they are not producing anything yet). What actions do you think he should take as a result of this tax? Pull them out and plant cannabis? Grow houses on the land? Both are illegal.

        2. Not exactly sure what you mean by growing houses being illegal but I’ll assume you mean the land is not zoned for housing? In that case the land will likely be worth less than nearby land that is zoned for housing therefore they would pay less tax, meaning the vines would likely still be viable.

          Better land use to me might mean the owner of a sprawling section in Epsom looking to develop more intensive housing on their property thus housing more people in desirable parts of the city.

        3. “nearby land that is zoned for housing”

          What nearby land would that be? Most of NZ is not zoned for housing and sprawling sections in urban areas are a miniscule proportion of the country’s land.

          If better use of land is shorthand for more intensive housing then the imposition of a land tax should be accompanied by the removal of all restrictions on building on all land…after all, we want the most productive use of that land, do we not?

        4. Can you give me a bit more detail about this land that is being used to grow vines?

          Are they getting a poor return off it relative to it’s market value? Is that because the land is not good for growing vines or because there are more productive legal activities being undertaken on the neighbouring land?

          If none of these I can’t see why a land tax would be a concern.

        5. Here we go again. Valuing good growing land in the same broad brushstroke as brownfields sites doesn’t work. It’s a finite resource, being squandered worldwide, and just because NZ has a good share of it doesn’t mean we have any right to be building on it. Rural-urban boundary, soils-based taxation, whatever … the result has to be that good growing land is not built on. The current ‘returns’ are absolutely irrelevant as they are based on a market that is dominated by produce from destructive agricultural practics and subsidised by fossil carbon.

        6. Heidi – agree, any land tax should not replace zoning and should be joined by taxes on carbon and environmental restrictions such as stocking numbers.

          I think land taxes would well allocating land within urban areas and within rural areas, however I agree they break down a bit when comparing the two, unless there are other restrictions in place.

        7. Each morning I set off down my driveway, past the clementine, orange and satsuma tress, past the big avocado trees and out to the road. I look out across hundreds of hectares of potato plants (remembering, of course to check left and right before proceeding). I ask myself:

          “what IS this better land use that a land tax will encourage (and how)?”.

          Perhaps I should ask my esteemed colleagues on Greater Auckland, so…can one of you that embraces the “better land use” mantra pull your head out of your urban arse and give me an answer? Some sort of cogent rational response as to what is a better use for land than growing your food?


        8. MFD, I think you’re looking at your own situation and extrapolating to an inappropriate degree.

          The reality is that a land tax wouldn’t affect most land uses, most of the time. Just like the last GST increase didn’t change the amount of food that most people buy. Most decisions will not change that much.

          However, *some* land use decisions that might be influenced by a land tax will change. They won’t necessarily change immediately, and they won’t necessarily change drastically.

          The main thing that *will* change, as I noted below, is that land values will tend to drop to offset the tax.

        9. MFD – It may well be the best use of that land. But if someone is farming dairy on that land for example because they always have, even though the payout may not be as good (fictitious example!) a land tax may be the spur to plant some Avocados to get a better return of it.

        10. ” I think you’re looking at your own situation and extrapolating to an inappropriate degree.”

          I think you are mistaken and as I know what I think and you only think that you know what I think, I think that what I think trumps what you think that I think.

          “The reality is that a land tax wouldn’t affect most land uses, most of the time.”

          I concur completely, so we agree that, in general, a land tax will *not* encourage better land use…so why do we keep reading the claims that it will?

        11. “Are they getting a poor return off it relative to it’s market value?”

          They are getting zero return. That’s the thing about tree and vine crops; it takes years from planting to getting a yield.

        12. “That’s the thing about tree and vine crops; it takes years from planting to getting a yield.”

          That’s the thing about banks: they will lend you money against expected future income.

          Horticulturalists *already* have to borrow to buy the land, plant the vines, buy the equipment, and capitalise the interest on up-front expenditures while waiting for a crop. There’s clearly an existing financial mechanism to do that. Why would you think that it wouldn’t work to pay tax in the interim years?

          And while we’re on the tax subject, businesses can also write off operating losses. If a farm is spending money and not earning revenue while waiting for vines to grow, they can write off those losses to cancel out their current land tax obligations. (Although this would require land tax to be administered by IRD.)

        13. ““The reality is that a land tax wouldn’t affect most land uses, most of the time.”
          I concur completely, so we agree that, in general, a land tax will *not* encourage better land use…so why do we keep reading the claims that it will?”

          We keep reading those claims because most does not mean the same as all.

      2. I don’t think this is an argument against land tax.

        It’s true that some low-intensity land uses are “better” than some high-intensity land uses. For instance, my local park doesn’t earn a lot of revenue for its owners (ie the people of Auckland), but it profits us in other ways. Arguably more so than, say, setting up a petrol station on the site, which would earn us some money but also make the neighbourhood less attractive.

        However, the absence of land tax won’t help us preserve socially beneficial low-density land uses in the longer term. That’s because *increasing land values* also create an incentive to develop land more intensively. For instance, if land values in my neighbourhood rise to even more excessive levels, then Council will eventually consider selling off some of the slivers of land that it owns in the neighbourhood – an underutilised pocket park, say. Private owners will have even more of an incentive to do this as land changes hands.

        As economists have repeatedly shown, land taxes would increase the annual cost of owning land (and return said revenue to the public, either to lower other taxes or improve services). But they would *also* result in a reduction in land values. The net effect on the long-run cost to own land would be neutral.

        Finally, if there are some low-intensity land uses that provide social benefits, I would *strongly* prefer that we encourage them through either explicit subsidies (pay people to grow aesthetically pleasing crops?) or appropriate regulatory mechanisms (eg well-designed zoning codes). That way we can get the efficiency and fairness benefits of land tax while valuing the *specific* things that are good for us.

        1. But wouldn’t a capital gains tax at the moment of realisation (selling off the slivers of land, private owners changing hands) do the same without penalising those who would like to keep the same chunk of land in family hands for eternity?

  5. One of the things that gets me about a land tax is what it will do to Council rates. It will probably increase some of the affordability pressures through the mis-match of income to property value (and therefore tax/rates), meaning Councils have more pressure to reduce rates. That may lead to further underinvestment in infrastructure. So, IMHO, a land tax also needs to be met by introducing alternative revenue sources for Councils.

  6. “If we think about taxing capital through say a capital gains tax”

    A capital gains tax is not a tax on capital. When I was working in Virginia they had an annual tax on the book value of manufacturing equipment. That was a capital tax. If Greenaway-McGrevy can’t get that right his credibility is somewhat dubious.

    My main concern re a land tax is the effect it would have on long term agricultural investment such as horticulture and silviculture. Take avocados for example. It takes 7 years after planting the trees before they start fruiting. A land tax would be applicable irrespective of the profitability of the business. It will serve to discourage rural land-based investments with no short-term returns. What it will encourage is land-intensive agriculture and horticulture; feedlots using imported feed, for example, crops that are heavily fertilised and sprayed with pesticides in order to increase yield.

    1. I think a land tax would probably be a relatively small expense relative to the cost of say purchasing the land that also has to be covered while waiting for the 1st crop of Avocados. The problem you describe is one that already exists.

      Same applies to your comment about land-intensive agriculture and horticulture, there are already significant fixed costs associated with owning land that naturally pushes owners to get the best return from it.

      1. “I think a land tax would probably be a relatively small expense…”

        Why do you think that? When GST was introduced it was 10%. It was later raised to 12.5% and then to 15%.

        What do you think the effect of a land tax will be on existing avocado growers? It is a tax that is unrelated to profit and will look very much like an expense to them. What will it do to the price of local avocados? it will make them more expensive with respect to imported ones. Is this a good thing? Sure, land prices are significant for farmers, orchardists etc. so why exacerbate those costs?

        1. ‘Why do you think that?’

          It would have to be a pretty big land tax to have a material impact on the already large costs of investing in growing produce that has a long lead in time and a land tax would probably lower the cost of land a bit meaning the overall cost difference may not be much at all for someone starting out.

          ‘What do you think the effect of a land tax will be on existing avocado growers?’

          It would depend on how much company tax they were paying if we assume the company tax rate is reduced or removed with the introduction of a land tax.

        2. Rather than speculating, let’s do the maths on this.

          According to MPI’s 2015 pipfruit monitoring report, a typical orchard may occupy a total of 40 hectares of land. In Hawkes Bay, MPI estimates that orchard would earn pre-tax profits of ~$650,000. In Nelson, pre-tax profits are estimated at ~$250,000.

          Now let’s take a look at the impact of a land value tax levied at 0.5% of land value.

          According to horticultural land currently sells for an average of around $130,000 per hectare in Hawkes Bay and $165,000 per hectare in Nelson.

          So you’re looking at a land tax of around $26,000 in Hawkes Bay and $33,000 in Nelson. That’s around 4% of pre-tax profits in Hawkes Bay and 13% in Nelson.

          In terms of impacts on prices – the Hawkes Bay orchard is estimated to produce 148,000 tray carton equivalents of apples, against 123,000 for the Nelson orchard. That’s the equivalent of around 2.6 million kg of apples and 2.2 million kg of apples, respectively.

          So if the farmers wanted to recoup the cost of the land tax from consumers, they would have to put up prices by a grand total of 1-2 cents per kilogram.

          This is not the economic apocalypse you make it out to be. And, again, land prices would drop to offset the tax, meaning that the net impact on people seeking to set up farms would be even smaller.

        3. Thanks for the link – good find. I fear that you have, however, cherry-picked the apple figures. The Tax Working Group proposed a 1% land tax so why are you using 0.5%? Why do you choose the most profitable year for your analysis when the 2 previous years were considerably less profitable?

          Let’s go back and do the maths but this time with the 1% tax and the mean profit for the years reported rather than that for the best year:

          The land tax becomes $52k in Hawkes Bay and $66k in Nelson and the respective profits before tax are $485k and $267k or 10.7% of profit and 24.7% of profit respectively. In order to mitigate that tax the Nelson orchardist would have to increase the price of those apples accordingly…but apples in NZ are primarily destined for the export market so the price cannot be increased because of competition from the likes of Chile.

          Conclusion: a 1% land tax will make apple growing in NZ substantially less profitable (and growing almost everything else). Let’s go back to the economist in the video and reflect on his tax/incentivising musings. Do we really want to disincentivise agriculture?

          As you point out, making agriculture less profitable will reduce demand for agricultural land and drive the price down benefitting new entrants. Let’s go back to our apple orchards and hypothesize that those Hawkes Bay and Nelson orchardists throw in the towel and sell off their orchards to new owners, let’s say schoolteachers . Hey presto, the orchards are restored to profitability! HTF did that happen?

          Let’s now propose a more sensible approach whereby orchardist A sells his 40 ha orchard to orchardist B at a knock-down price. Orchardist B sells his 40 ha orchard to orchardist A for a similar knockdown price. Both then lease their orchards to the other. By a miracle of modern economics the orchards are restored to profitability even though nothing has really changed. Can’t game a land tax? I am not so sure.

          Let’s turn our attention now to agricultural land value in the Auckland region, in particular those “valuable” Pukekohe soils: $250k/ha. A hypothetical 40 ha apple orchard in that area would attract a land tax of $100 k per year but it is highly unlikely that the apple yield will be any better than in Hawkes Bay or Nelson. Result; plummeting land values in land surrounding the Auckland urban area that is not zoned for residential building…but all it would take for that land to increase wildly in value is a change in the zoning. Result; speculation and land banking on the basis of higher holding cost but much, much bigger potential capital gain.

        4. I picked 0.5% following my comments above that you’d have a gradual ramp-up to land tax rates, rather than whacking them all in at once. So if you went to 1% over a 20 year period, you might hit 0.5% in year 10. Regardless, the maths are very transparent so feel free to recalculate with whatever set of numbers you choose.

          “Let’s go back to our apple orchards and hypothesize that those Hawkes Bay and Nelson orchardists throw in the towel and sell off their orchards to new owners, let’s say schoolteachers . Hey presto, the orchards are restored to profitability!”

          Yes, that’s exactly the point. Land values adjust down, and orchard profitability remains the same in the long run. This *will* have some impacts on the distribution of wealth. People who have recently borrowed large to buy expensive land will lose out, and people who want to start farming (but are worried about the big bank loans required) will win. The *net effect* on incentives to farm is probably very little.

          “Result; plummeting land values in land surrounding the Auckland urban area that is not zoned for residential building…but all it would take for that land to increase wildly in value is a change in the zoning. Result; speculation and land banking on the basis of higher holding cost but much, much bigger potential capital gain.”

          The situation you describe – pressure on horticultural land from residential development – is already happening.

          A land tax might add to that, a bit, but it could also *reduce* it by encouraging redevelopment of vacant or underutilised lots in the existing city boundaries, which would take some of the growth pressure off the fringe.

          Not to be too critical, but I think you’re having an emotional response to imagined negative consequences rather than thinking through outcomes in a logical way.

        5. I think that’s a bit harsh, Peter. MFD sees a world in which land care and food growing have not been catered for by an indirect approach to planning via economic mechanisms. You are proposing a different economic mechanism, one that _could_ lead in a substantive way to further desecrate land – the ecological base on which we rely.

          I have enjoyed reading both of your arguments and number crunching. I think there is merit in a land tax. But I think what you could take from MFD’s input is that an economic mechanism is only as good as the accompanying planning rules. And that perhaps they need to be presented together.

        6. Emotional response? Read carefully, Peter. My tongue is firmly in my cheek. I enjoy reasoned debate and I enjoy venturing into the patently absurd from time to time in order to illustrate a point, ergo I am enjoying this.

          “I picked 0.5% following my comments above that you’d have a gradual ramp-up to land tax rates”

          So if we are not going to deal with the steady-state land tax condition perhaps we should also consider the revenue ramp-up for those meta-orchards. An apple tree takes 5 to 8 years to produce so we might want to revise those profit figures down by a large margin. Alternatively we could be sensible and analyse the steady-state tax and steady-state fruit production scenario…just so we are comparing apples with apples.

          “Yes, that’s exactly the point. Land values adjust down, and orchard profitability remains the same in the long run”

          You really think that schoolteachers would do as good a job at producing apples as experienced orchardists? I was poking fun…but let’s get a bit more serious. Let’s suppose that those Nelson meta-orchardists own their orchards freehold and are not forced to sell as a result of the 24.7% decrease in their mean profit. How does a notional decrease in their land value balance out the increase in cost? They have already paid for the land. You use the term “in the long run”. In the long run we are all dead…and the death of the agricultural incumbents (and the subsequent sale of the land) is likely to be what it will take for the effect of the land tax to be balanced out by the lower land cost. It’s going to be a hard sell….

          But let’s go back to absurdities and look at one of your claims viewed through the lens of rural/agricultural land:

          “The logic behind them is that land values are shaped by the activities of society as a whole, rather than the individual owner: they are boosted by public investments in transport and good schools, and by the productivity gains that arise from lots of workers and businesses interacting in cities”.

          Good schools? Lots of workers and businesses? Productivity gains? Maybe you should get out of the city more.

          Ok. Fun time over. I am genuinely taken aback as to the potential impact of a 1% land tax on the profitability of those orchards. Maybe they are not typical of NZ agricultural operations but no analysis of land tax wrt NZ that I have heard or read has considered the effect on agriculture. Climate change is going to make it a physically more risky business (particularly crops that take years to mature) and a tax that is imposed irrespective of the financial performance of these businesses will increase the financial risk which is already sizeable given the cyclic nature of international prices. Maybe the result would be a move towards big companies that can spread the risk geographically owning and operating agriculture in NZ. As we all know (except for Mr E F Schumacher), big companies are better than small companies.

        7. Ah, now people are quoting the writers I know. And I think your tongue is still in your cheek, Mr Small Business Owner.

          Question to you all: With this land tax at 1%, what sort of reduction in income tax would be reasonable – to still provide the increase in tax that society needs but to somewhat offset the land tax? And how would the accompanying reduction in income tax affect these Meta Orchards? Would this allay MFD’s concerns?

          No-one should grow 40 hectares of apples, btw…

        8. Oooh, and here’s a question for MFD: In said tax regime of land tax plus reduced income tax, an orchardist could plant apples and wait for the harvest to start in several years, paying land tax all the while and wishing for income to start.

          Or the orchardist could try to get some immediate income as well, aiming for a staggered income flow. Say, short term income: globe artichokes, and honey; medium term income: peaches, dried figs, hazelnuts; longer term income: apples; home consumption: pumpkins, milk and meat.

          Wodja reckon, MFD, could the change in tax regime lead to a better mixed use of the land?

        9. Hard to generalise, Heidi. From an Auckland perspective and a spray-free perspective I wouldn’t be looking at peaches; too prone to fungal diseases (brown rot) in the humid climate. You also have to consider that trees compete for light and growers compete for income. I have neighbours who specialise in figs and also artichokes.I think I would be looking at winter vegetables to take advantage of the deciduous trees; leeks, maybe, or brussels sprouts. Neither seem particularly popular but that’s because traditionally they have not been cooked well. My mother, for example, should have been prosecuted for the way she cooked vegetables; boil the life out of them, throw away the good stuff and feed us the corpses.

          A few decades ago kiwifruit orchards were co-planted with tamarillo. As the kiwifruit matured the tamarillo was pulled out. Not sure if that still happens. Must ask my kiwifruit-growing neighbour.

          Woke up this morning to the sounds of eastern rosellas and kingfishers. The rosellas are after the remnant clementines (the small ones we can’t sell). They had better be quick; pruning starts today!

        10. Peter, I’ve thought about the land tax + lower income tax scenario for horticulturalists, and have decided, nah – the additional need to be getting an immediate income (in this case to help pay the land tax) has always led to more land misuse (with chemicals, heavy machinery). It wouldn’t be in the environment’s interest at all, I think.

          I’ve also extended this to the idea of a wealth/asset tax. If a company director has a choice of taking extra income or investing in new plant, and there is an asset tax + lower income tax regime, the director would choose to take the income. I think there would be a lowered incentive to invest in the company.

          MFD, good talk at the Tree Crops conference last year (in Franklin – were you there?) about tamarillos… I doubt anyone is planting them with the psyllid problem. Commercially they are heavily sprayed now, it seems, so if you’re wanting spray-free, it’d have to be part of a very diverse polyculture.

          Brussels sprouts and jerusalem artichokes have been the “scramble to get first” winter veges for my kids – despite my brussels sprouts being rather small – ’tis a bit warm here for them.

  7. It’s unfortunate that the only party advocating for a land tax is TOP. Labour probably wants a capital gains tax which is actually very different maybe National could be convinced of the merits of a land tax but not now. A land tax is much more streamlined and efficient. However, I think it would be better if we focus on the structure of tax then worry about the rates later or what to do with the revenue generated. I think we can get greater agreement on structure before the spending options.
    It is true there will be winners and losers if we introduced a land tax. However, there are winners and losers right now in the tax system. A land tax will help to dampen demand for housing and perhaps lead some people to invest in the productive sector of the economy.

  8. I think the solution to it is to introduce universal land tax based on land value. At the same time remove tax on building itself.

    That will make normal house owners pay roughly the same rate as previously.

    With additional benefits:
    It also discouraged land banking as high value but low utilised land will have higher holding cost.

    It also encourages high density town house and apartments living as the rate will be lower as a result.

    For large section old house they also encourage owners to subdivide and upgrade the building to provide housing supply as well ad improving housing quality.

  9. Maybe asset taxes are a good idea – I get the efficiency argument and also the equity argument, but why limit it to one class of asset?

    Should wealthy renters pay less tax on their assets than less wealthy families struggling to pay off their first home? It just doesn’t feel right to me. It’s hard enough to strive for your first home without another layer of taxes making it even tougher. The wealthy might have millions in shares, trusts, deposits, overseas properties etc and none of it captured by the asset tax.

    There are interesting variations possible if it goes ahead, for example there could be a threshold, like with income tax. Take the Auckland/Napier example. If the land tax were set nationally at a fixed amount per square metre, then that couple would pay tax on their land over and above the threshold amount (which might be say 250m per person). Land tax doesn’t have to be subject to the ebb and flow of market value.

    1. The wealthy renters would be contributing towards the land tax through their rent, and it’s likely the businesses they own shares in will be paying land tax as well. If they are living in a tiny house in the bush somewhere with all their money tied up in companies that don’t need land or under the mattress then all power to them.

      I think a land tax would need a value component, otherwise farms would be paying an enormous amount of tax compared with a residential property. A typical farm paddock alone is maybe 50 times the size of a decent residential section.

      1. Yeah, renters will essentially end up paying the land tax indirectly. Or some share of it, anyway. It’s the same with council rates: the landlord pays the bill, but seeks to recoup that through the rent they charge. Also see GST: the retailer is the one paying it, but we as the end consumers feel like it’s on us (which it is, really)

        1. As it’s not a cost of production (land is fixed in supply), land tax is not passed on the tenants.

          Also, note that one has to pay the land tax whether or not they find tenants, whereas GST is payable only if one manages to sell his goods or services.

          Current rates can be passed on the tenants because they fall on buildings (improvements) and not just land.

        2. A landlord passes on whatever costs they want when they set the rent whether it is a cost of production or not. This would usually be what they deem an acceptable return on investment once rates, land taxes and other expenses are accounted for.

        3. A simple explanaition why landlords cannot pass the land tax on their tenants:

          “Suppose, for simplicity, your taxing jurisdiction has three properties. A nice apartment building, a nasty apartment building, and a vacant lot. Under property tax, the nice apartment building pays a high tax, the nasty apartment building pays a medium tax, and the vacant lot pays a low tax.

          Now, we replace property tax with land tax. The nice apartment building gets a tax cut, the nasty apartment building pays the same as before, and the vacant lot pays a tax increase.

          How then, does the vacant lot owner pass on his tax increase? He can’t, and he can’t afford to sit on that lot, either. So he either builds or sells to someone who will build. (After all, who else would buy such a tax liablity?)

          Now you have two nice apartment buildings and a nasty apartment building, but the same number of residents as before. To attract residents from the other nice building, and from adjoining municipalities, the owner of the new building must charge lower rents than were being charged by the owner of the original nice building.

          In response, the owner of the original nice building must lower his rents as well. Now you have two nice buildings with lower rents. People in the old nasty building were living there because that was all they could afford. However, now that the nice buildings have lower rents, some of them can move. To prevent this the owner of the nasty building must also lower his rents.”


        4. What is this property tax you mention? As far as I’m aware NZ has no property taxes, if you talking about rates there is no suggestion these would be replaced by a land tax, it would be in addition.

          That is an extremely simplistic view you have taken even without your imaginary property tax. While it may be true for the day after the tax is implemented, it does not take into account any wider market changes that sit outside these three properties you mention.

  10. A land tax takes full effect immediately, whereas increases to capital gains tax (either the actual % or to what it applies to beyond the existing two year bright line test) would take several years before it generated a steady tax stream.

    The difference in tax between urban and rural land would provide great incentive for land bankers to develop as boundaries were adjusted.

    A land tax encourages a compact city by encouraging efficient use of urban land, potentially with higher rates for areas zoned for higher density.

    1. Plus you can ease in the land tax gradually – say ratchet it up by 0.1% every year until you reach the desired target.

  11. With reference to the picture accompanying the article, the land banker has done one useful thing which is to enable the previous landowner to liquidate their asset in order to put their capital to some better use. At the time of introduction of a land tax (which generally I would support) the liquidity impact might be worth pondering. (I’m no expert, just pondering).

  12. Good piece. Nicholas Smith and I have recently written about land taxes for Newsroom ( We note similar advantages, but also argue that for the land tax to be politically and morally attractive, it needs to exclude a simple, universal per capita exemption (available to both landlords and tenants). This is different to “family home” or “equity level” exemptions.

    1. That’s a much better idea than a family home exemption and would definitely merit exploration.

      Question, though – a quick read of your proposal suggests that it would be similar to a rebateable tax-free band, but more administratively complex for renters. How exactly would you structure the exemption?

      1. It would actually be rather easy to implement and manage from the admin pov. In part because everyone gets exactly the same amount and in part because we already have a pretty well-developed system for registering tenancy arrangements. We wanted to write more about the idea and its implementation, but obviously newsrooms doesn’t offer enough room for more in-depth analysis. Let me know if you want to explore the idea further. 🙂

  13. While I largely agree, one key part that worries me is how do you value land? Is sloping land worth less than flat land? Is bush land worth less than clear land? Is a section with an existing house in the middle (not subdividable) worth less than a section with a house at the front (subdividable).

  14. The difference between land taxes and GST is that GST is, sadly, a regressive tax. So I think the argument is much greater for GST exclusions (or perhaps offsetting subsidies if that makes the bookkeeping easier?) than for land tax exclusions.

    1. I used to agree with that statement more than I do now. I’m increasingly inclined towards the view that you should set up the tax system to avoid shenanigans. Which means a simple system in most cases.

      I don’t think it’s really possible to look at an individual tax in isolation and get a good idea of its progressivity / regressivity. You have to look at the overall tax and benefit picture.

      Interestingly, the countries that use public policy most extensively to reduce inequality do so mainly by having highly progressive social welfare programmes, rather than highly progressive taxes.

      Take a look at Figure 6 in this report, for instance. Sweden and Norway’s tax systems are slightly less progressive than the US (in terms of reducing the Gini coefficient). That reflects the fact that they have much higher GST and high income taxes across the board. But the Nordic benefit systems reduces Gini coefficient massively, while the US benefits system doesn’t have much of an effect.

      Or take a look at Figure 5 in this report, which shows that (a) highly unequal countries tend to redistribute more via taxes and that (b) countries with high tax takes overall (often to fund extensive welfare systems and public services) tend to have less progressive tax systems. For instance, Sweden has a less progressive tax system than NZ, but it also has a much lower Gini coefficient!

      1. Heidi, one way to look at it is that taxes should be efficient, insofar as they don’t cost much to collect — either directly (admin costs) or indirectly (disincentives leading to shennanigans).

        Then, once you know the distribution of people’s after tax incomes, you can design policies to redistribute tax revenue to achieve the post-transfer distribution that is deemed desirable (e.g. based on the population’s political values).

        So a regressive tax system only matters insofar as it needs to be (more than) compensated by progressive transfers. The latter is where NZ falls down IMO, more so than taxation.

    2. +1 to everything here. GST in our current environment contributes to a regressive taxation system. However, I definitely feel that a $20,000 tax free income offset by land tax would be far better for everyone than GST exemptions.

  15. Just posting to see if I’m still subject to moderation before embarking on a longer post

    Editor: Comments that are not abusive or in violation of our user guidelines will be approved.

  16. I think all the economists are agreed that the right answer is a broad land tax with no ecexmptions at a low rate. The problem is politics. To me the political solution is to either introduce it at a very low rate, get the principle accepted, then gradually increase it. Or, introduce it in a revenue neutral way, say in place of rates, with the revenue going to Councils. That way we still remove the current distortions.

  17. Land Tax – interesting concept. One thing: when I get my rates bill, it has a place for it to list land value, and a place for it to list capital improvements value. However, because i live in an apartment, when it comes to area of land, it simply lists Zero. So my rates are based on the capital improvements i.e. the value of the apartment itself. I presume that this is common with other people?

    My question is: does this mean that if I officially have Zero land area, would i pay zero land tax?

    1. Is the land leasehold? Or does the body corporate own the land and pay the rates on it? In either case you’ll be paying something – lease or rates – through your bc fees.

      Or there could be some other system I’m unaware of…

  18. TOP is proposing a wealth tax, not a land tax. It is designed to target unproductive capital which is mostly sitting in housing/land because of the ridiculous tax advantages they accrue. If your capital is producing a reasonable return (say 5%) then you don’t get taxed. If if produces no return(ie the family home), you pay the wealth tax of 1.5% of the CV or whatever. If the bank owns most your house, you wont pay much at all. HOWEVER, all TOP policies are designed to be tax neutral. Their argument is that income earners have too much tax burden so all the wealth tax collected goes straight to income tax cuts. The vast majority of the population would be better off. The people who get a bit screwed are retired folk who own their own home in full.

    For the record I live with my parents, own a rental and am working towards a second rental. I will continue to do this as long as stupid government has it’s head in the sand giving me huge capital gains without paying any tax on it. You have to be stupid not to invest in property if you were lucky enough to get in early.

    For the record I will be voting for TOP on saturday.

    1. “You have to be stupid not to invest in property if you were lucky enough to get in early.”

      My husband and I made the conscious decision that we would not, that wealth creation for ourselves at the expense of others being able to afford their home was not worth it. Yes, it means we are reliant on salaries, not income from property. But we can look our children in the eye and say, well, we weren’t part of that.

      I generally like the TOP tax policies, with the tax neutral part being the downside. But hey … investing in our people seems to have a bad smell…

      1. Quite right, Heidi. My wife and I have also made the decision that making huge untaxed gains at the expense of others is unethical. Instead we create wealth through work and pay tax on it. We primarily invest in our children. If that makes us stupid then I wear that badge with pride.

        1. Having just realised that I don’t have my favourite freesias this year because I weeded them out thinking they were oxalis, I think Ari’s probably right, and I am stupid. But perhaps stupidity was always associated with people who grow their own food. The calm trusting wisdom that all will be well in the end seems to have skipped me by though…

        2. Altogether now: Freesia jolly good fellow, freesia jolly good fellow….

          Ours are looking good. I can send a photo.

          And now some quotes for you:

          “After Nicholas hung up the phone, he watched his mother carry buckets and garden tools across the couch grass toward a bed that would, come spring, be brightly ablaze as tropical coral with colorful arctotis, impatiens, and petunias. Katherine dug with hard chopping strokes, pulling out wandering jew and oxalis, tossing the uprooted weeds into a black pot beside her.
          The garden will be beautiful, he thought. But how do the weeds feel about it? Sacrifices must be made.”
          ― Stephen M. Irwin, The Dead Path

          “Lilacs on a bush are better than orchids. And dandelions and devil grass are better! Why? Because they bend you over and turn you away from all the people and the town for a little while and sweat you and get you down where you remember you got a nose again. And when you’re all to yourself that way, you’re really yourself for a little while; you get to thinking things through, alone. Gardening is the handiest excuse for being a philosopher. Nobody guesses, nobody accuses, nobody knows, but there you are, Plato in the peonies, Socrates force-growing his own hemlock. A man toting a sack of blood manure across his lawn is kin to Atlas letting the world spin easy on his shoulder.”
          ― Ray Bradbury, Dandelion Wine

        3. Ah, MFD, you couldn’t have chosen a better day to write these quotes – I feel like you’ve given me a bouquet of flowers. Thanks.

          Sad day, news of a third acquaintance’s death this year. All three aged 45 to 50. All three from modern-day, preventable causes. This one leaving three distraught kids. I’m heading out to the garden now for some philosophising.

  19. Peter, your arguments are convincing and I can see that it is very clean on an economic efficiency model but what about the value of gardens to facilitate children’s play and wellbeing, to enjoy gardening, places for bees to pollinate and birds to nest, being a place to absorb water and prevent flooding? Don’t rates serve the same purpose as a land tax but in a more equitable nuanced way and more able to respond to unforeseen circumstances? To avoid land being wasted why not simply ban landbanking within urban boundaries – that a property has to be used by the owner for at least 6 months of the year or it must be rented out?

    1. Rates work in a fundamentally different way on two levels:

      1. They are set at a fixed level by council and allocated among all the properties in a city based on property values (plus some other things). So when property values go up, rates don’t increase in tandem – meaning that rates don’t do much to take the edge off property price appreciation.

      2. In Auckland and most other NZ councils, they are set based on total property value, rather than land value alone, meaning that people can avoid them by leaving land underdeveloped. As you note, this contributes to some bad things (reduced incentives to develop faster when land is rezoned) and some good things (land set aside for recreational uses).

      However, as noted above, I don’t think that land taxes would result in the extermination of gardens and residential yards. For one thing, zoning codes require about half of every lot to be set aside in landscaped areas. For another, individual owners will generally see the benefit of having a garden or a backyard, meaning that they’ll continue to provide them.

      With regards to your proposal to ban “landbanking” – I think this would be an intrusive administrative nightmare, and very difficult to enforce.

    2. “what about the value of gardens to facilitate children’s play and wellbeing, to enjoy gardening”
      Do they? I’m not convinced, and no one seems to be able to find research.

      “places for bees to pollinate and birds to nest”
      Bees and birds are better of if the city has 1/4 of the footprint, even if birds and bees can’t use any of it.

      “being a place to absorb water and prevent flooding?”
      We have planning rules that require this, which are the appropriate mechanism.

      1. I recommend you join Playcentre when Cabin Boy or Girl comes along… there you will find the good part of a century of research into children’s play and the importance of gardens, with links to both international and national research. If you choose kindergarten instead, talk to the teachers, as they too are well-grounded in this research and can probably lend you dozens of books on the subject. Children spending time in gardens is important for basic understanding of the physical world, and leads to better thinking in maths and science. It also is calming, reduces the stress that modern life is loading on children. There is also scientific research into the physical benefits of having soil on your skin. Ask “Gardens for Health” about the research into the importance of children growing their own food – it is a key concept in reducing poor lifestyle choices.

        None of this excludes denser living. It just requires planning to ensure every child has access to nature and gardens, in a manner that allows messy play.

        1. “I recommend you join Playcentre when Cabin Boy or Girl comes along… there you will find the good part of a century of research into children’s play and the importance of gardens, with links to both international and national research.”

          My partner is an early childhood teacher. I’m not arguing that access to these things isn’t developmentally important. I’m arguing that their is not evidence that a backyard is necessary, or even helpful to achieve this.

        2. You are lucky in your partner. 🙂 So you were saying you haven’t seen research into the importance of_private_ gardens for children? That makes more sense. I agree, many children would be far better served by a communal garden in a park than in an isolated private garden.

          Let’s not pretend this can be achieved without serious planning, though, to avoid the nature -poverty experienced by children in big cities worldwide. The higher rates of walking amongst cbd kids do not tell the full story.

          Proximity is critical for children. Unless this is directly planned for, I think Alex’s concern about gardens for children is valid. They will not be provided for by economic mechanisms like land taxes. Nothing wrong with land taxes; we just have to actually plan and invest in parks as well. The market will not provide. That’s my point. 🙂

        3. +1, we need to be way better at providing useful small parks. We have lots of ‘reserves’ (read grass monocultures) and lots of golf course (read privatized grass monocultures). We need some orchard, meadow, substainable agricultural, playground, and learn to cycle type parks. These could just be 2 sections joined together where land is not available.

      2. I am a beekeeper. Bees are far better provided for in the city. Rural areas are often deserts for bees; our modern agriculture does not provide much habitat, and native bush has periods of the year when it can be devoid of flowers, too.

        Again, none of this means we can’t live more densely; just that we need to have gardens amongst us.

  20. My brain says land tax = good, but my heart says land tax = bad

    I like capital gains taxes, because the tax happens at the point the gain is realised. If I inherited a chunk of land in Epsom with a villa on it, and I hold and sell it, I lose some of the gain as tax – because I got rid of the land for monetary gain.

    BUT… if I hold that land, then suddenly, I get taxed for my use of it. The land is now viewed solely in economic terms rather than as something that matters to me and my family and my descendants.

    I think a land tax is thus a VERY culturally positioned approach to taxation; not all of us view land from an economic perspective.

    1. Perhaps an asset tax (rather than a land tax) solves this? If you are taxed equally whether you retain your asset as land, or sell it and have cash in the bank or another investment, then it won’t influence your decision. What it will do, is spread the tax base to you, because you inherited.

      From the point of view of “imagine you could wake up tomorrow in someone else’s shoes – now plan a society in which you’d be happy to do so” this seems like a good move.

    2. If you value holding onto the land in perpetuity, presumably you’d be willing to pay the tax. Otherwise, do you really value it that much?

      My parents pay rates up north on a remaining sliver of my great-granddad’s farm. They’ve never earned any income from the land. But it’s worth it to them to hold in the family. I’ll probably end up paying those rates at some point, for similar reasons.

      That being said, there would be some significant practical and legal challenges around Maori land in customary ownership. Multiple owners, who tend to be cash-poor, and (rightfully in my view) have a strong desire to avoid further alienation of land. However, there are ways to make a land tax neutral for these owners, either by excluding them entirely or distributing the revenues from land tax in a way that compensated the Maori land owners for the added cost.

      I don’t think we should plan our entire tax policy around the minority of hard cases.

      1. But what if I *cannot* afford the tax? And why restrict those ownership loopholes to Maori – Maori are not the only people who have a spiritual link to their land (and thank god they do, because they set an example to others).

        Once my hands have been blackened with soil and my back has ached from the hoe, my land is no longer just a few dollars in a spreadsheet; it’s part of me and my family. Blood and soil.

        And I have no problem with rates (as services need to be paid for) nor with a capital gains tax at the point I decide that Mammon is the greatest god. But until then – no.

        1. Then u can rent out the house and so can now afford it. Still in your family’s ownership. U could even rent to a family member! Then the land tax is doing exactly what it is trying to accomplish: put land to good use and solving housing shortage.

        2. I don’t think you understand what “attachment to land” means.

          Imagine I inherit an Epsom house.

          Imagine I am 65 and have no income except National super.

          Imagine that through the sweat of my brow, and the strength of my sinews, I landscaped that land, gardened that land, had children on that land, and so on,

          I don’t want to rent it out. I can’t afford the land tax. Instead I am forced into selling it and alienated from my own soul.

          Better to have a capital gains tax, so if I do sell (and prove I am not soulfully attached), I pay tax.

        3. If you wanted to retain ownership of and live in the Epsom home, you could:

          a) rent out whatever house you were previously living in to pay land tax on both properties

          b) sell your previous house to cover land tax in perpetuity through interest earned

          c) use money that you were paying in rent on the house that you were previously living in to pay land tax on your new property tax

          In any of these cases, you are still financially better off as a result of the tax free gift from whoever gave you the house. In fact you are still making massive profit as a result of the tax free gift.

        4. Economics isn’t a morality play. Sometimes financial circumstances force people into making trade-offs they’d rather avoid.

          There’s nothing unique about land in this. People’s time and labour is far more intimate than land ownership, and yet many, many people spend a large chunk of their lives working in jobs that don’t fulfil them (or which actually contradict their values) because they need the money.

          Taxing land would give us a revenue source to lower income taxes and/or provide better/more universal benefits, which would reduce the need for people to work in jobs that don’t fulfil them.

          As I said above, it’s foolish to hold individual taxes to certain standards (eg strict progressivity) without considering the overall impact of tax and benefit policy.

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