unearned increment

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Unearned Increment

Appreciation in the value of real estate without any improvement undertaken by the owner. For example, a parcel of land may become more valuable if a university is built nearby and the parcel becomes desirable for developers. The term originated in the 18th century as part of a proposal to tax the added value. See also: Unearned Income, Property Tax.

unearned increment

The amount by which land increases in value because of generally improving conditions in the area,not because of any particular efforts by the property owner.The concept is important to a social theory made popular in the late 1800s by American journalist Henry George, but which still maintains broad appeal.Proponents,often called “Georgists”support the return of the unearned increment to society,in the form of large taxes on that portion of the increase in value of real estate.The concept is diametrically opposed to the current system of long-term capital gains tax breaks,which allow a property owner to retain more of the unearned increment,not less.

References in periodicals archive ?

But Garland recognised that it would be difficult to impose a land-gains tax retrospectively on the unearned increments received by previous owners.

Despite his criticisms of George's personal traits and of various aspects of the single tax, Garland was as convinced as George of the justice of government appropriation through taxation of the unearned increments resulting from community influences--such as the development of public utilities and the concentration of population:

The forgotten man: J.M. 'Pete' Garland

Producerism therefore demanded more than just political reform; it demanded an economy that re-emphasised production over consumption and exchange, a return to universal human labour and the abolition of unearned increment.

Consciousness of class? Australia's 'producing classes', 1840-50

It is incumbent upon all who are concerned for the well-being of their fellows to give close attention to this question of taxing away the unearned increment of land.

According to Forsyth, Garran's most important fallacy consisted of mixing up improvements on land with the unearned increment of land.

He said that if the taxation of the unearned increment was adopted as a principle, then it would be logically inconsistent to argue for exemptions: 'there is obviously no justification on principle for any exemption at all', and any argument for exempting small properties would be a 'political dodge' to bribe the small holders into acquiescence (IV.

But George was not prepared to adjust his policy to deal with the situation where government had already received at least some of the expected unearned increment in the purchase price paid by private individuals.

Henry George and the Australian Economic Association: on land ownership and land taxation