The Land and Income Assessment Act, 1891 introduced a progressive land tax on the unimproved value of land.
Income tax for farmers was reintroduced in 1929 as a substitute for land tax and was initially imposed on large farms (unimproved value of land over 14,000 [pounds sterling], 1928-1929) and progressively for other farmers (unimproved value of land 7,500 [pounds sterling] or over, 1929-1931, and unimproved value of land 3,000 [pounds sterling] or over, 1931-1939).
The principal themes of George's theory were that the value of land and other non-man-made natural resources should, for ethical as well as economic reasons, be shared equally, and that this could be achieved by requiring those who held the legal titles to land to pay an annual tax based on the unimproved value of their land, that is, the market value of the land excluding the value of the improvements attributable to the landholder.
However, he approved of a system of land-value tax based on unimproved value as a source of revenue for local government--a system which he thought was 'within the range of practical politics' (II.
His aim was to tax the unimproved value, not the improvements made by the landholder.
Garran presumably intended this as a refutation of the right of all to an equal share of a natural resource, like water; but his argument failed to consider the distinction between rainfall as such, or its unimproved value, and the improved value of the water delivered to users after the expenditure on improvements of dams, and reticulation networks.
Duckworth was probably correct in referring to the passing of 'popular enthusiasm', but George's ideas have left a mark on Australian policies on land and tax--notably, in the incorporation of leasehold tenure in the constitution of the Australian Capital Territory; in the widespread adoption of unimproved value as the basis for rates and taxes on land for local and state government; and in attempts to impose betterment levies and developer contributions in urban development.
However, he also supported the 'full local option' for each local government district, leaving each to decide whether to tax the unimproved or the improved values, rather than making it compulsory to levy the tax on the unimproved values.
Experience in countries like Australia, where the calculation of unimproved values is a regular practice, shows that modern valuation procedures can establish this distinction with an acceptable degree of accuracy.