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An Analysis of Value Capture Instruments
Author(s) -
Abelson Peter
Publication year - 2018
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/1759-3441.12234
Subject(s) - value capture , database transaction , land value , equity (law) , value (mathematics) , real property , investment (military) , transaction cost , property value , property tax , property (philosophy) , investment value , environmental economics , economics , microeconomics , natural resource economics , business , public economics , tax reform , value creation , commerce , finance , computer science , database , law , philosophy , real estate , epistemology , machine learning , politics , political science , profit (economics)
Value capture means capturing in some way the value of an investment in public infrastructure. Value capture methods include five forms of property‐related taxes: a tax on land value uplift, a broad‐based land tax, selective land tax, property taxes and transaction taxes. They may also include three forms of user charges: developer charges, consumer charges and sale of development rights. The paper assesses these options against three standard policy objectives of efficiency, equity and practicality. The paper finds that all three main forms of user charges meet these criteria. Special area land and property taxes may be appropriate in limited cases. Pure betterment taxes on land value uplift are rarely practical.