Economists have long agreed that capturing land rent is by far the most efficient revenue generation scheme for governments. So it's kind of surprising that basically all Western governments have chosen to take their revenue out of income, which is one of the least efficient places to take revenue. Revenue efficiency here meaning the ratio of value captured by the government to the amount of value destroyed. And it's not even close, land rent is in a league of its own when it comes to efficiency. The reason governments choose to tax income though is simply that it's easier to implement. Made even easier by forcing employers to collect the tax on their behalf.

But capturing land rent doesn't seem like it should be that hard. So let's try. Here are the minimal set of rules required to implement a land rent capturing system:

• Instead of owning land, people rent it from the public trust

• The amount of rent people pay is self-determined initially.

• If someone is willing to pay more rent than another person, they say so. If there are no improvements upon the land, then the usage entitlement is simply transferred along with the rental obligation at the new rate.

• If there are improvements then the new renter must purchase those improvements at a price the owner has previously declared when they added the improvements.

• If the challenger believes that the declared value is excessively high, then they can request an audit By putting the funds for the audit into an escrow.

• If the audit produces a value significantly lower than what the owner self-declared, then the owner is liable to pay the cost of the audit.

• If the audit comes in at or above the self-declared value, then the challenger is liable to pay for the audit And the money will be transferred from the escrow to the auditor.

• If the owner wants to remain on their property they have the option of matching the challenger's land rent proposal.

• If the owner disagrees with the auditor's valuation then they have the right to spend several months promoting the property in order to auction it at a hopefully higher value.

Notice here that owners are not incentivised to declare a price lower than their actual value because by doing so they open themselves up to the possibility of losing their property at below market rate. And neither are they incentivized to declare an excessively high price because then they are opening themselves up to the possibility of being forced to pay for an audit that ultimately corrects the price anyway.

Of course, a building is not simply the sum of its parts. And something built by a great architect might not be accurately valued by an auditor. Themselves not being a great architect it's possible that they might not appreciate the building as much as the owner does. However, in such a case, it's likely that the owner could prove the auditor's value to be low by marketing the property and holding an auction.

Likewise, if the challenger believes the auditor's value to be too high, then they can force an auction. Obviously, in this case, there would be no incentive to promote the property, but the could. If the auction value ends up being significantly different from what the auditors predicted, then they are liable for the auction fees.