In order for Henry George's single tax on land not to distort economic incentives,the tax would have to be on
A) improvements to land.
B) land used for commercial purposes.
C) land used for residential purposes.
D) raw land.

Question

Quizplus · Accepted Answer

Henry George's single tax on land is intended to capture the unearned benefits of natural resource rents that accrue to landowners due to factors beyond their control, such as location and natural resources. Taxing improvements, commercial or residential land use would distort incentives to invest in property improvements or develop land for economic use. A tax on raw land, on the other hand, would encourage efficient use and discourage land speculation or holding for unearned gains. Therefore, the best choice is raw land.

In Order for Henry George's Single Tax on Land Not