Deadweight Loss

Deadweight loss is the economic value destroyed when a tax discourages people from working, building, or trading. Taxes on wages and sales create deadweight loss because they make productive activity less worthwhile.

A land value tax is unusual in causing almost none: since the supply of land is fixed, taxing its value doesn’t reduce how much land exists or discourage its use. Economists across the spectrum regard it as one of the most efficient taxes available.