Public Spending, Land Taxes and Economic Growth: An Empirical Analysis of the Adequacy of Land as a Tax Base

Abstract . Site value taxation is often cited as desirable on efficiency grounds, but is all too often dismissed for alleged lack of revenue potential. This paper empirically tests the revenue adequacy of site value taxation. Revenue adequacy in this study is defined as the ability of the tax base to keep pace with community expenditure needs. The paper concludes that communities with higher than average rates of capital growth and with a relatively constrained land area will find land taxes when subsituted for present property taxes, quite adequate for future as well as present needs.