Objection: LVT would hurt farmers and rural landowners
The worry that a land value tax would crush farmers who own large acreages — and why low rural land values mean the opposite is generally true.
The Objection
Farmers own large areas of land. Wouldn't a tax on land value fall crushingly on agriculture, driving farmers off the land?
The Response
Generally not — and often the reverse:
- It's value, not acreage. LVT taxes land value, not area. Most farmland has low per-acre value compared to urban land. A farmer's hundreds of rural acres may carry less taxable land value than a single downtown lot. The tax burden tracks value, which for agriculture is modest.
- Replacing worse taxes helps farmers. If LVT replaces taxes on income, sales, equipment, and buildings (ATCOR logic), farmers — who buy lots of taxed inputs and improvements — can come out ahead.
- It targets the right problem. Where farmland does carry high value, it is usually urban-fringe land held speculatively for future development — exactly the idle, appreciating land LVT is meant to bring into use. Genuine working farms far from development are lightly affected.
- Improvements untaxed. Barns, irrigation, and equipment — the farmer's own investment — are not taxed under LVT, unlike a conventional property tax.
Limits and Caveats
The response holds for genuine working farmland far from development, but three honest qualifications remain. First, the burden is small only where land value is low: farms on the urban fringe carry high development (hope) value, and there LVT bills can be substantial — which is by design (it discourages holding fringe land idle for appreciation), but it is a real cost to a working farmer who happens to sit in a growth path and does not intend to sell. Second, farming is a cash-flow-thin, asset-heavy business, so even a modest annual land bill can bind in a bad year; the same deferral, circuit-breaker, and current-use-valuation tools that answer the asset-rich, cash-poor objection are what keep the farm case humane, and they are design choices, not automatic. Third, the "farmers come out ahead" claim depends on the ATCOR assumption that LVT actually replaces input and income taxes rather than being layered on top — a political condition, not a guarantee. The Mirrlees Review and Dye & England both support the low-burden conclusion for ordinary farmland while treating current-use valuation of high-value fringe land as a design question that has to be got right.
Net Assessment
The fear rests on confusing acreage with value. Because farmland value per acre is low and improvements go untaxed, working farmers are among the least burdened — while speculative holders of high-value fringe land are appropriately affected.
See Also
- Duncan Pickard — a working Scottish farmer whose book Lie of the Land makes the practitioner's case that LVT, not the current subsidy system, is the fairer deal for farmers
- Land Value Tax · ATCOR · Speculative Vacancy
- Response evidence: Mirrlees Review — its treatment of the agricultural/development value gap supports the low-farm-burden response · Plummer (2010) — the cross-class burden shift toward commercial land, utilities, and vacant lots is consistent with working farmland (low land-value share) bearing little added burden
Sources
- Discussion of agricultural incidence in Dye & England (2010), Lincoln Institute — used for the point that farmland's low site value makes farm LVT bills modest, and that the tax falls on land value (not output), so it does not burden active farming the way the objection assumes.