The Opportunities Party has hung out its shingle for the 2023 election announcing a policy of $6.35 billion in income tax cuts, paid for by a land tax on residential housing, and welfare debt write-offs.
This is an excellent policy. I have long advocated a tax swap with income tax and land tax.
The rule of thumb is that anything you tax, you reduce. So:
- A tax on income reduces labour
- A tax on capital reduces investment
- A tax on goods and services reduces consumption
This is why the best tax system is broad based and low rate – to minimise distortions.
But a tax on land is a bit different, as land is a finite amount. So a tax on land won't reduce the amount of land available – it will instead encourage land owners to get a better economic return from the land.
So TOPs policy will see people rewarded more for working more, and discourage people from land banking. I support it.