Editing Land value tax (section)

=== Incidence ===
The selling price of a good that is fixed in supply, such as land, does not change if it is taxed. By contrast, the price of manufactured goods can rise in response to increased taxes, because the higher cost reduces the number of units that suppliers are willing to sell at the original price. The price increase is how the maker passes along some part of the tax to consumers.<ref name="reforms" /> However, if the revenue from LVT is used to reduce other taxes or to provide valuable public investment, it can cause land prices to rise as a result of higher productivity, by more than the amount that LVT removed.

Land [[tax incidence]] rests completely upon landlords, although business sectors that provide services to landlords are indirectly impacted. In some economies, 80 percent of bank lending finances real estate, with a large portion of that for land.<ref>{{cite web|last1=Hudson|first1=Michael|title=Productivity, The Miracle of Compound Interest and Poverty|date=23 April 2012|url=http://michael-hudson.com/2012/04/productivity-the-miracle-of-compound-interest-and-poverty/|access-date=19 May 2015}}</ref> Reduced demand for land speculation might reduce the amount of circulating bank credit.

While landowners are unlikely to be able to charge higher rents to compensate for LVT, removing other taxes may increase rents, as this may affect the demand for land.<ref>{{cite book |last=Ricardo |first=David |url=https://socialsciences.mcmaster.ca/~econ/ugcm/3ll3/ricardo/prin/index.html |title=On the Principles of Political Economy and Taxation |publisher=John Murray |year=1821 |location=London |archive-url=https://web.archive.org/web/20180810033506/https://socialsciences.mcmaster.ca/~econ/ugcm/3ll3/ricardo/prin/index.html |access-date=15 October 2018|archive-date=10 August 2018 }}</ref><ref>{{cite book | last = Samuelson | first = Paul | title = Economics | publisher = McGraw-Hill | location = New York | year = 1985 | isbn = 978-0070546851 | pages = [https://archive.org/details/economics00paul/page/603 603–605] | url-access = registration | url = https://archive.org/details/economics00paul/page/603 | edition = 12th }}</ref>