Strengthening Local Taxation: Land Value Taxes and Land Value Capture in the Commonwealth of Virginia

Summary: The continuing revenue stresses of COVID-19 and declining downtowns have forced states and localities to explore new sources of public revenue that do not hamper economic growth nor unduly burden taxpayers. Because local governments are the primary originators of tax law and policies, this panel will discuss land value-based taxation and revenue policies.

Tax policy must examine more than how much we tax but what we tax. Public finance economists believe publicly created land value (i.e., transportation projects, zoning, and planning) is a stable and substantial source of continued revenue streams. Governmental collection of land values and site value uplifts can reduce or replace inefficient and economy-killing reliance on sales, business, income, and other taxes on private investment and activity.

This panel will discuss the basics of land value taxation, where used, and how best to define and quantify immediate and likely effects on the tax base. Three speakers (one also serving as moderator) have all had substantial experience in research and legislative work in implementing and administrating these programs.

Using examples of research in Virginia cities and pending adoption, we will help the audience navigate the possibilities and challenges of harnessing land values for public purposes.