Ted Gwartney is one of the most well-respected tax assessors in the United States and, in fact, the world.
After graduating from California State University San Diego in 1964, Gwartney worked as an assessor in Southfield, Michigan and then Hartford, Connecticut. From there he helped transform the way that British Columbia assesses land in their province, as well as advising Russia and other former Soviet Republics.
After then working as a commercial appraiser and serving as the Executive Director of the Robert Schalkenbach Foundation, Gwartney returned to Connecticut to become the assessor for both Bridgeport and Greenwich.
Commenting on Connecticut's current budget crisis during his interview on PRIMO NUTMEG #105, Gwartney explained why instituting a land value tax (LVT) at a local level would solve economic woes in Connecticut's poorest cities:
"The ideal is to do assessments as frequently as possible. And the second the second ideal is to raise as much revenue from the land as compared to the land and the buildings. And there are provisions now under state law in Connecticut where cities can collect a higher rent, a higher tax amount, from the land than from the buildings.
"This has been successfully done in many cities in Pennsylvania and other parts of the country that have adopted a land value tax; however, it's new for Connecticut. But I know that there's interest in Bridgeport and some of the other cities for at least considering raising more revenue from land and less from buildings.
"For example, what they did in New York City in the 1920s is they did away with the assessment of new buildings. When a new building was built, they would only pay taxes on the land, not the building. They had the biggest building boom in New York City in the 1920s and early '30s in the history of the city. The same could be done in Hartford, Bridgeport, or any other city in Connecticut. And the legislation is now in place so it's just a matter of the city deciding to do it."
Gwartney conceded that discussing taxes in Connecticut is a sensitive issue. At the same time, he added that taxpayers would benefit from a land value tax:
"I can confirm what people think about being over-taxed in Connecticut is true. Having lived there nearly 20 years, I agree that the taxes in Connecticut are extremely high. And the property taxes are extremely high in Connecticut. Not only that, but all of the other taxes are extremely high. So I think that there definitely are problems there.
"When we talk about a land tax, what we're talking about doing is not raising taxes; we're talking about eliminating building taxes so that you're only going to pay taxes on the land. If you do it on a straight trade-off basis, you would raise the tax rate on land and lower it on buildings. That would give you the same revenue.
"Theoretically, when you start raising more revenue from land, you have more businesses growing and you have more economic activity happening, which then tends to have a bigger base to spread your tax burden on, which would eventually help you to reduce your taxes. And I think that's the whole idea that we live with: wanting to see taxes not increase, but actually reduce over time.
"This has been successfully done and people have been able to see that taxes can come down by raising revenue from a positive, philosophically-correct manner and reducing the taxes on income and sales and those things that we tend to hit too hard on right now."
Gwartney also noted that Connecticut's practice of property taxes on automobiles is something that also needs to be done abolished:
"And certainly automobiles is ridiculous. I think that there is a movement, has been a movement for a long time to do away with the auto tax and just have it like a license fee, as opposed to valuing it. Many assessors think that it's wrong to be taxing cars just like houses. And I'm in that same camp."
On the subject of Connecticut's state budget crisis, Gwartney recommended natural resource and land taxation in conjunction with monetary measures:
"Basically, I think that revenue at all levels -- certainly the state and the local municipal level -- should first be raised from land fees. I don't call them 'taxes.' I call them 'fees.' Certainly the state should be collecting as much revenue from natural resource fees and land fees as is can collect..."
"And then the monetary policies. We have the State of North Dakota that set up the state Bank of North Dakota that has been successful in producing something that represents sound monetary policy and the ability to help finance local policies within their state. I think that Connecticut can do the same thing, look at setting up a state banking system and producing revenue. Kind of a radical idea, but it's been successful to produce revenue based upon a currency at the state level."
After discussing some of the challenges that he previously faced in pushing for a land value tax in the towns of Hartford, Bridgeport and Greenwich, Gwartney concluded that its really the wealthy who favor not implementing these policies:
"I've accepted the fact that we're going to have income taxes and sales taxes and I'm going to pay a much higher share than wealthy people pay because wealthy people have figured out how to avoid paying taxes and it's only the poor people and the average people like me who have to pay these income and sales taxes."