Why is income from land ‘unearned’ income?
Some say it’s an investment, and the investors deserve a return, just like someone who has bought shares or has money in the bank. A return of a certain percentage from investments in productive activities is fine. After all the investor has provided risk capital to some enterprise which is going to produce some product for public consumption, and the returns to the investor simply reflect the level of risk and an inflation factor. We have no problems with that. But if you buy a site this year, be it in the CBD or the outer suburbs, and hang on to it for ten years waiting for community funded infrastructure and pressure of artificially created land shortage, or rezoning to push up the price, then such profits as may arise in excess of those due to inflation, belong to the community. How could anyone dispute this?
