The Bentick–Mills Timing Critique (and the Tideman Rebuttal)

Summary

This page carries the development-timing critique of land-value-tax neutrality — the standard theoretical counter-evidence in the incidence and land-use literature, presented per the wiki's steelman rule.

• Bentick (1979), "The Impact of Taxation and Valuation Practices on the Timing and Efficiency of Land Use" (Journal of Political Economy 87(4), pp. 859–868): a land tax assessed on current market value (which capitalizes future development options) is not neutral — it biases landowners toward projects with short gestation periods, accelerating and distorting development timing at real resource cost.[1]
• Mills (1981), "The Non-Neutrality of Land Value Taxation" (National Tax Journal 34(1), pp. 125–129): the companion result — with endogenous land-market adjustments, a tax on land value is non-neutral toward development decisions.[2]

For the sprawl outcome the implication is pointed: a market-value-assessed land tax could hasten conversion at the urban fringe — the opposite of the anti-sprawl claim — which is why this page is wired as challenged_by there.

The Rebuttal — the Dispute Is About the Assessment Basis

Tideman (1982), "A Tax on Land Value Is Neutral" (National Tax Journal), replies that the Bentick–Mills distortion comes from taxing the capitalized value of development options, not from taxing land as such: a tax assessed on pre-development site value (what the land would be worth absent the owner's own development plans) restores neutrality.[3] Later theoretical work in the same exchange (Arnott's treatment of neutral property taxation, 2005) develops the same distinction. [VERIFY: exact Arnott citation and statement — noted in the literature exchange but not independently verified this session.]

The wiki's honest framing: both sides are right about different taxes. Real assessment regimes vary; where valuation includes development option value, the Bentick–Mills distortion is live (and, note, its timing bias reinforces the pro-density finding in Banzhaf & Lavery while complicating its welfare interpretation — their own timing-effect caveat). Where site value is assessed as the classical theory intends, neutrality survives. The practical question becomes an assessment-design question.

Bears On

• Outcome (challenges): LVT reduces urban sprawl — the timing channel can cut the other way
• Concept: Deadweight Loss — the neutrality claim this critique qualifies
• Objection (adjacent): Land cannot be assessed — where the dispute lands in practice

See Also

• Brueckner (1986) — the neutrality-side formal treatment
• Nicolaus Tideman — author of the rebuttal

Sources

1. Brian L. Bentick, "The Impact of Taxation and Valuation Practices on the Timing and Efficiency of Land Use," Journal of Political Economy 87(4), 1979, pp. 859–868. DOI — used for the timing non-neutrality result (C/E-claim).
2. David E. Mills, "The Non-Neutrality of Land Value Taxation," National Tax Journal 34(1), 1981, pp. 125–129. Publisher — used for the companion non-neutrality result (C/E-claim).
3. T. Nicolaus Tideman, "A Tax on Land Value Is Neutral," National Tax Journal,
4. PDF (cooperative-individualism) — used for the assessment-basis rebuttal (C-claim).