Many critics of statist privilege have pointed to the "land monopoly" as the primary government intervention that channels wealth from the poor to the rich; however, discussion of the land issue is conspicuously absent from Dean Baker's excellent critique of statist privilege, The Conservative Nanny State.
Baker repeatedly brought up probelms that can be adressed by land value taxation, and even indirectly described how land value taxation solves one of those problems, but never directly addressed the issue.
I first asked myself "What about the land tax?" while reading the section about takings, in which Baker summarizes the situation as:
"There is a long list of actions that the government routinely undertakes that can substantially increase the value of the land in a specific area. In none of these cases does the government demand a check from landowners demanding compensation for the increase in their property value.7 What the nanny state conservatives apparently want is a world in which the government must pay them any time they get harmed by its actions, but they get to keep the dividends of any benefits they derive from the government’s action."
Notice the side-note (marked with the superscript 7). Baker uses this side-note to admit that changes in property-tax assessment values do result in land-owners paying a fee to the government when the government increases their land values. But Baker argues that this is fair because the land-owners also have a reduced fee when government action decreases land values; however, he never proposes land value taxation as a way for the government (and the community in general) to internalize the full costs and benefits of its actions.
Baker indirectly approaches land-tax arguments again in his section on taxation, entitled Taxes: It's Not Your Money. He argues that taxes should be thought of "as a fee that people are required to pay in exchange for the benefits of government services....similar to condominium fees or assessments for sewage and sanitation by a community association." However, he ignores the complete disconnect between the assessment of this "fee" and the benefits resulting from government services. Does a person with a higher income necessarily benefit more from public education, the fire department, or any other government program? While a person with a high income may be taking advantage of government-funded infrastructure, the connection is weak. In contrast,the connection between government-funded infrastructure and land values is strong, if for no other reason than that the supply of land is fixed and the price of land will increase as disposable income increases.
Baker even discusses wealth-transfer programs such as the Earned Income Tax Credit. Are we to think of these programs as public services provided by the government (which increases the income of taxpayers) or are we to think of them as benefits provided to the working poor for their own sake? While the EITC may help create conditions where a person can increase his pre-tax income, I think these programs are primarily about helping the working poor for their own sake. Unfortunately, there's no particular moral rationale for these programs, except for pure charity (which should be voluntary). However, if we were considering a Citizen's Dividend funded by land value taxation, then there is a moral rationale for both the tax and the distribution: the tax tax is compensation from the land-owner to the community for ownership of a resource with natural and community-created value; the dividend is simply the government distributing its excess revenues evenly among the people.
Finally, Baker discusses how much difficulty the government faces while assessing and collecting income taxes. I believe that this problem is inherent to the income tax, which is an arbitrary tax and depends on individuals revealing information to the government when it is against their interests. Land values, in contrast, are objective and public. When assessments are frequent and transparent, the collection of land value taxes is trivial compared to any other tax.
With The Conservative Nanny State, Baker provides a thorough and concise overview of how the government places costs on the poor and concentrates wealth in the hands of an elite few. While he didn't discuss land value taxation directly, he set the stage for a discussion of it. I expect that this free e-book will spur a national conversation about these political privileges, and I hope this discussion will also include the land tax.