What would be better than raising the minimum wage by $X/week? A punitive #VacancyTax / #VacantLandTax, which property owners are so keen to avoid that it reduces rents by $X/week. Why would this be better? Because:
(1) When you allow for income tax (and income-tested welfare, where applicable), a dollar saved is worth much more than a dollar earned.
(2) By definition, the benefit of lower rents, unlike the benefit of higher wages, isn’t competed away in higher rents. Indeed, if landlords know that wages have risen by $X/week, they may try to raise rents by the whole $X/week, not allowing for what is clawed back through the tax-welfare system.
(3) Nobody says lower rents would price workers out of a job! On the contrary, the scramble to avoid the vacancy tax would create jobs; and lower rents by themselves would create jobs, because jobs can’t exist unless (i) the employers can afford business accommodation, and (ii) the employees can afford housing within reach of their jobs, on wages that the employers can pay. (Note the implication that the tax should apply to both commercial and residential property.)
(4) Why should employers pay for a problem caused by land-hoarders?
(5) The economic activity driven by a vacancy tax would broaden the bases of other taxes, allowing their rates to be reduced, so that the rest of us would get lower taxes!
Gavin R. Putland,