OECD to Northern Europe: Raise Your Property Taxes!

The Organization for Economic Co-operation and Development is calling on Germany to raise its property taxes dramatically and reduce taxes on labor. The group, whose membership is made up of 34 of the world's leading market economies, also made similar recommendations for Denmark, Norway, and the UK over the past month.

For Germany, the organization recommended tripling its property taxes, while reducing its wage taxes and social security contributions, which currently make up 64% of total tax revenue, compared with the OECD average of 52%. Property taxes, meanwhile, amount to only 1% of total revenue collected, against an OECD average of 3%.

The OECD also advised Denmark to cut income taxes and increase property taxes and called on Norway to raise its property taxes and eliminate its mortgage interest deduction.

The International Monetary Fund also made a similar recommendation to Norway.

The OECD has been a strong proponent recently of land value taxes, which date back to Adam Smith but were most vigorously promoted by 19th century economist Henry George. He promoted a land value tax which is assessed on the unimproved value of underlying land, not penalizing intensive development like many property taxes today.

Whole article: http://www.ibtimes.com/articles/300101/20120216/oecd-property-taxes-germ...