Tuesday, April 25, 2006
Charge Landowners a Windfall Profits Tax?
Portland's regional planning agency, Metro, wants to charge landowners a "windfall profits tax" when it expands the urban-growth boundary, making land available for development.
Let's see how this works. First Metro draws the urban-growth boundary, depressing the value of land excluded from the boundary. Then it expands the boundary, restoring that value. Then it taxes landowners for the increased value.
"It's based on the increased value created by government action creating a windfall for some property owners," says Robert Liberty, former director of 1000 Friends of Oregon and now a member of the Metro council. Of course, Liberty was totally opposed to paying landowners compensation when government regulation depressed the value of their property. Now he sees the windfall profits tax as a fair response to Measure 37, which requires such compensation.
Such a tax might makes sense if government action really did increase the value of someone's property. For example, it might make sense to create a special service district that taxes local landowners for roads and other improvements made that enhance land values in the district.
But Liberty's idea smacks of Mafia thugs destroying people's businesses and then expecting "protection money" from businessowners whose businesses they allow to continue. Let's hope this idea dies a quick death.
Let's see how this works. First Metro draws the urban-growth boundary, depressing the value of land excluded from the boundary. Then it expands the boundary, restoring that value. Then it taxes landowners for the increased value.
"It's based on the increased value created by government action creating a windfall for some property owners," says Robert Liberty, former director of 1000 Friends of Oregon and now a member of the Metro council. Of course, Liberty was totally opposed to paying landowners compensation when government regulation depressed the value of their property. Now he sees the windfall profits tax as a fair response to Measure 37, which requires such compensation.
Such a tax might makes sense if government action really did increase the value of someone's property. For example, it might make sense to create a special service district that taxes local landowners for roads and other improvements made that enhance land values in the district.
But Liberty's idea smacks of Mafia thugs destroying people's businesses and then expecting "protection money" from businessowners whose businesses they allow to continue. Let's hope this idea dies a quick death.
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