A tax on pure economic rent, such as Henry George advocated, would not tend to distort resource use in the short run.

Question

Quizplus · Accepted Answer

A tax on pure economic rent would not affect the behavior of producers in the short run since it is not related to their production decisions but rather to the value of the land or other natural resources. Therefore, it would not cause market distortions in the short term.

A Tax on Pure Economic Rent, Such as Henry George