A tax on land will distort economic incentives unless the tax applies only to raw (unimproved) land.

Name: A tax on land will distort economic incentives unless the tax applies only to raw (unimproved) land.
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Question

Quizplus · Accepted Answer

A tax on land that applies to all land, including improved land, can lead to disincentives to improve the land or put it to productive use, as the tax burden would increase with improvements. Taxing only raw land can avoid this distortion as it does not penalize improvements.

A Tax on Land Will Distort Economic Incentives Unless the Tax