Example of Two Tiered Tax in Operation
and the Results It Produces

Illustration:

Two huge apartment complexes are in the North side of town and one is in the South. The city is planning an immense park with a 15 million dollar investment - with a pool, a concert area, tennis court and more.

Each owner realizes he can get one million dollars a year more in rent if the park is on his side. Each owner "Plays Games" to motivate the powers that be to put the park on his side, encouraging corruption.

Results to the winner: He collects $1 million in rent, pays, for example, $400,000 in taxes, gaining $600,000. If he wanted to sell it to someone satisfied with a 10% return it would now sell for six million dollars more.

If the land tax is increased and the building tax is decreased it would keep the price of land in moderation, and its savings could be put into additional building. It would help avoid the speculation bubble which has been historically and periodically the cause of our recessions and depressions.

With this new situation - misused and underused land would either be used or sold to someone who would build or remodel and would reduce sprawl with its negative environmental complications.

While taxes increase the price of all products and services it's very interesting to note that the title value in this case is reduced. It would be interesting to reflect on this condition and its significance. Bear in mind that the rental value is the market value of infrastructure services plus the convenience of the location (none of which is created by the title holder). This does not include that rent paid for the use of a building. Recognition that the rent is the third factor in the distribution of wealth (in addition to wages and interest), merits profound consideration when balancing the budget. This has a strong possibility for reducing substantially income taxes and sales taxes.

This simplifies procedures that reduce the complexity, the planning, time and cost for both the taxpayer and the government.