The Effects of Taxation on Sustainable Development

Abstract

This paper is about the adverse effects the current system of taxation in the UK has on sustainable development. It reveals that by primarily focusing on two of the three factors of production, namely, labour and capital, these taxes encourage speculation in land and the withholding of land from productive use. This, in turn, discourages urban regeneration and encourages urban sprawl with further damaging consequences for housing, jobs, the economy and the environment. Overall, it leads to the inefficient, ineffective and inequitable use of land, which is unsustainable. In contrast, if taxation were shifted towards land instead of labour and capital, the effect would be to create more efficient, more effective and more equitable environments. Importantly, it would encourage sustainable development, the creation of more affordable housing and improve urban regeneration and local economies. It would also help rather than hinder the aims and objectives of town planning.