Top international economists give Detroit's Land Value tax proposal high marks
- Economists at Harvard, Princeton, Yale, Stanford, Columbia, MIT and others weigh in through University of Chicago’s Kent A. Clark Center for Global Markets survey
- Majority of those polled – including 4 Nobel Laureates - agree or strongly agree the plan would give a "substantial boost" to the city's economic growth
- Detroit homeowners would see an average 17% property tax reduction under LVT
A significant majority of top international economists recently polled by the University of Chicago's Kent A. Clark Center for Global Markets agree that Detroit's proposed Land Value Tax would boost the city's economy and encourage development of long-vacant land in the city.
The Land Value Tax, proposed by Mayor Mike Duggan, would incentivize development of long-vacant land by implementing a lower tax rate for properties that are “improved” by having occupied buildings on them, while vacant land and buildings would be taxed at a higher rate. The result would be an average 17% property tax cut for 97% of Detroit homeowners.
When asked whether shifting the burden of property taxes towards land and away from improvements, as proposed by Detroit’s proposed Land Value Tax, 83% of the 41 leading economists who participated in the poll agreed or strongly agreed with a high level of confidence that such a proposal would give a substantial boost to local economic growth in the next 10 years.
The poll was conducted November 2 and included economists from Harvard, Princeton, Yale, Stanford, Columbia, MIT and others who hail from the United States, Great Britain, Brazil, India, Finland and other nations.
Four Nobel Laureates who responded to the poll agreed or strongly agreed with the premise that the LVT would boost development and the city’s economy. They are: Angus Deaton (UK), Oliver Hart (UK), Bengt Holmstrom (Finland) and Eric Maskin (US).
“Economists don’t often agree on municipal tax policy, so it was encouraging to see how broad the support was among these leading economists,” said Detroit’s Chief Financial Officer, Jay Rising. “We believe this is the right approach for Detroit homeowners to lower their property taxes and to incentivize new development on vacant land.”
Legislation sponsored by State Rep. Stephanie Young (D-Detroit), is expected to be voted on in the House of Representatives in early 2024. As legislators consider the bills, Detroit homeowners can see for themselves how their property tax bill would be impacted by using the city’s LVT Estimator Tool, which is available on the city’s website at www.detroitmi.gov.
Detroit homeowners can enter their address to find out what the impact of the Land Value Tax would be on their property tax bill. The estimator is accessible on the front of the City of Detroit website at https://detroitmi.gov