Land values are sustained by government spending

Taxation is the price of a civilised society; civilised society and public services create land values; so let's fund public services out of 'service charges' on land values

The UK government, like governments in most developed countries, spends a lot of money on public services i.e. defence, law and order, transport, education, healthcare and protecting the environment. We don't need to argue the merits of these things (they are to some extent 'necessary evils'), the fact that every developed country does this to a greater or lesser degree gives us a clue that a country that didn't do so would fall behind or even fail.

Politically, nearly everybody is in favour of the government doing these things in some form. In a democratic society, a government that skimped too much would be voted out of office. If a dictatorship or Communist country skimped too much, there would ultimately be a revolution or an invasion by a stronger neighbour.

All of these things:
a) provide the conditions in which land values can arise in the first place. Try buying, selling or renting land in a war zone; or imagine what would happen to land values in the UK if they shut down the entire police force and released all prisoners, and/ or
b) make land in some areas more desirable. Think catchment areas of good state schools or business hubs in areas with the best universities (Oxford, Cambridge, London); areas with an unspoiled view; areas with good transport links or cheap/good public transport.

There are second order effects as well. The government can only do baseline stuff which enables capitalism and the free markets to thrive. Mass education makes it easier for businesses to succeed without having to pay (directly) for their employees' basic skills; the road system enables people to get to work and goods to be transported; so 'high achievers' sit on top of a pyramid of state-educated workers who arrived by road or public transport, and 'high achievers' buy homes in the nicest areas (pushing up prices of the land in those areas). Businesses tend to concentrate themselves geographically (shops in the town centre; banks in the City of London; manufacturing in the Midlands) and the places with the most successful businesses have the highest prices and rents.

Governments don't have any money of their own, so they have to collect taxes (or else the spending would lead to hyper-inflation). At present, in the UK (as in most countries), the bulk of taxes are collected from private sector output and employment. Although superficially, public services are supposed to benefit everybody and the whole economy, ultimately, all the spending (apart from pure corruption and waste) goes into higher land values.

However much you earn and however much tax you pay, if you want to get something back from our civilised society you have to buy or rent a home (or business premises) somewhere. Try being homeless for a while and see what the government will do for you - pretty much nothing. The price or rent you pay is merely paying for your share in the civilised society that you actually already paid for in taxes. So people who buy or rent a home are paying twice over.

On the other side are the landowners (landlords or people selling a home or business premises). The value of their land is sustained by government spending (which the productive economy is forced to pay for in taxes). So they are renting out or selling something which everybody but them paid for (private landlords in the UK collect twice as much in Housing Benefit as they pay in income tax).

So the system is rigged, it is a massive ongoing transfer of wealth from the productive economy to landowners. (Clearly, there are a lot of working age, owner-occupier households; they are being bribed with their own money - they complain about the taxes they pay but celebrate increases in house prices). It seems much fairer to pay for public services with a straightforward service charge proportional to the value of the benefits which each plot of land receives, i.e. a Land Value Tax. We don't even need to call it 'Land Value Tax', we can call it 'Public Services Tax', and break down tax bills into X% for law and order, Y% for road maintenance and public transport, Z% for education etc.

The flip-side is that taxes on output and employment can be reduced significantly. Ideally the tax shift would continue until
- the transfers of wealth from the productive economy to simple landowners (i.e. the selling price of land), and/or
- taxes on output and earnings (as distinct from monopoly income),
are reduced to £nil.