The economics of property taxation is not very well understood by politicians. The optimum amount of revenue to be raised by the taxation of property is the aggregate potential annual rental value of all locations. All property improvements ought to be exempt from the tax base. What will this do? It will reward every owner of land who improves the land held to its highest, best use. Such owners of business property will not be penalized for constructing new facilities or renovating old ones. Far more revenue will come from those owners of land who leave it vacant or underdeveloped, giving them a strong financial incentive to make improvements to generate revenue -- or sell to someone who will.
The economics of property taxation is not very well understood by politicians. The optimum amount of revenue to be raised by the taxation of property is the aggregate potential annual rental value of all locations. All property improvements ought to be exempt from the tax base. What will this do? It will reward every owner of land who improves the land held to its highest, best use. Such owners of business property will not be penalized for constructing new facilities or renovating old ones. Far more revenue will come from those owners of land who leave it vacant or underdeveloped, giving them a strong financial incentive to make improvements to generate revenue -- or sell to someone who will.