Macroeconomic Case for a Land Value Tax Reform in Ireland

Abstract

The present study shows that LVT satisfies the set of main criteria for reforming existent system of property taxation in Ireland, including the following considerations of tax system efficiency: Improve macroeconomic stability and support economic growth with specific focus on higher value-added development activities and provision of quality housing, commercial property and infrastructure consistent with creation of sustainable high quality employment, skills acquisition and investment in human and productive physical capital; increase efficiency of resource allocation, as pertaining to development and property; reduce adverse impacts of property taxation on economic and social inequality, inclusive of addressing the issues of social exclusion support environmental sustainability of development and enhance social capital; simplify the tax system and make it more transparent and reduce incentives for corruption, operations of grey markets and tax evasion; introduce change gradually so as to avoid disruption of existent contractual arrangements and not cause dramatic shifts in economic expectations; allow and encourage coordination of tax policies with other reforms; achieve political feasibility without creating a single narrow interest constituency.

Keywords: property tax, land value tax, site value tax, public investment, public infrastructure

JEL Classification: E62, H21, H24, H71, P43, R53