Founderís Plan Benefits
There is no doubt in my mind that the (land) tax law has been a good thing for Pittsburgh. It has discouraged the holding of vacant land for speculation and provides an incentive for building improvements.... It is particularly beneficial to the home owners.
-- Pennsylvania Governor David L. Lawrence
The Founders' Plan
for property tax reform
The Foundersí Plan gives relief to all elderly residents. It does not give those with property more relief than those who rent, or give those with more property more relief than those with less.
Shifts to sales tax would actually cost many elderly people more than they are paying now. Elderly renters would not save a dime in property taxes or rents to offset sales tax increases.
Shifting to income tax only saves money for those home owners who retire before or shortly after the time the shift occurs. Young people in many municipalities will pay about twice as much in income tax as they could ever save in property tax.
The Foundersí Plan benefits home owners and renters alike. Other proposals decrease burdens on property owners by dumping those burdens on renters. Besides being horribly regressive, such policies induce renters to settle in other states, as they own nothing that they canít take with them.
The Foundersí Plan needs no state funding and is the only plan that local jurisdictions could try without making irreversible commitments. Communities are much more careful with their own tax money than with state money, and state funding leads to state control.
Land value tax shifts the burden to commercial property, wealthier neighborhoods and absentee owners, saving money for home owners in poor and middle-income neighborhoods. It coincides naturally with ability to pay, but sales and income taxes do not.
States that had cut property taxes saw rampant speculation and boom-bust cycles with wild swings in home prices. The Foundersí Plan protects those who deserve protection without turning homes into tax shelters for speculators.
Property tax is about the only tax slumlords and speculators pay. Other proposals cut their taxes at the expense of residents. Only the Foundersí Plan relieves residents at the expense of slumlords.
Wherever property tax has been curtailed, housing prices shot up so much that housing became less affordable. Switching to land value tax puts underused land on the market, increasing the housing supply and thereby lowering housing costs.
High sales taxes drive businesses across state lines, especially from border communities like Philadelphia, Chester, Easton, Erie, Sharon and New Castle. High income tax drives wealthier residents away. The Foundersí Plan actually attracts people and businesses.
Land value tax promotes redevelopment of urban and inner suburban areas, reduces sprawl, and keeps prices within the reach of ordinary home buyers. Replacing property tax with sales and income taxes leads speculators to gobble up homes as tax shelters, making them too expensive for ordinary citizens to buy.
William Penn, Ben Franklin, Thomas Jefferson, Tom Paine and many others called for shifts to land value tax to prevent rich aristocrats from grabbing up all the land as they had done in Europe. They recognized that land value tax would enable ordinary people to get land.
The Articles of Confederation, enacted by the signers the Declaration of Independence, called for even the federal government to be funded from land value tax.
When Tom Paine called for a per capita grant to the elderly from a land value tax, just as Saving Communities is calling for today, he wrote, "it is a right, and not a charity, that I am pleading for."
From Abraham Lincoln to Martin Luther King, from William F. Buckley to Ralph Nader, important leaders from across the political spectrum have endorsed shifting from property tax to land value tax. So have modern economists like Paul Samuelson, Milton Friedman, Arthur Laffer and Herb Simon. Shifting to land value tax is without question the most endorsed property tax reform in history.
Twenty Pennsylvania taxing jurisdictions have partly shifted their property taxes off improvements (buildings) and onto land values. Most home owners in each jurisdiction pay less, particularly in poorer neighborhoods, and each jurisdiction saw increased construction while the rest of Pennsylvania has continued to decline.
Each person aged 65 or over would get a per capita grant from local tax revenues. If tax rates have to be raised slightly, younger residents will still pay less than if sales or income taxes replace residential property taxes. (Proposed by Tom Paine.)
Other Founders' Plan Pages