Letter: A tax on land

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Sir: If Lord Plant ("Memo to Mr Blair: we need to talk about raising taxes", 1 September) is attracted to "unevadable" taxes, that is very welcome. Land rental accounts for some 20 per cent of national income, is hardly taxed at all and yet could provide a substantial proportion of public revenue. In several other countries it already does.

Land values arise as a result of the efforts of the community at large, through public and private investment and demand for land and its products. Landowners, as distinct from producers, contribute nothing yet retain the entire surplus of wealth that the rest of us create.

Unlike almost all other taxes, a land tax cannot add to the cost of production. Indeed, provided it is levied irrespective of whether the owner chooses to realise the site's inherent value, it can act as a great stimulant to wealth creation. For a land tax to work, it has to be levied like traditional property rates, as an Owner's Land Charge. It should also be accompanied by reductions in other taxes.

As Jonathon Porritt, former director of Friends of the Earth, recently said: "Any sub-optimal use of land is a breech of the ethical duty we owe to future generations."