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Land Value Tax - the Window Tax of our Age

Tax land: it can’t be hidden from the Revenue
Philippe Legrain
Taxing land values would be a fair way to help to plug the budget gap while stabilising — and even boosting — the economy.

Sorry, from behind Murdoch's Paywall, but you haven't missed much, yet another nasty demand to tax land based on jealousy and the desire to grab as much money for the government to waste as possible.
What these Land Tax fanatics fail to realise that land is a tool, it is the same as a scribblers typewriter or an accountant's calculator. It is a tool of the trade. The profits of the trade are already taxed. Why should one sort of tool be taxed when others aren't?
Unproductive assets such as jewellery and show off watches would be a fairer target, why not suggest those?

The land under your des res may not be a tool but was paid for from taxed income and is no way different from the tiles or windows of your house. Why not tax them? At least the number of windows is easier to verify. Or has that idea already been tried and shown to fail?

Let us have no more of this nonsense, as I said talk of Land Value Taxes only encourages more taxation rather than substitution of taxes. It is driven by petty jealousy and wealth bashing of the most boring 1970s type. Enough.

Comments

I don't see LVT as nonsense but I would be resistant to it for the mentality your excerpt displays - to fill a 'gap' in revenues.

In theory LVT can encourage efficient use of land but it is simply too tasty a morsel in these straitened times. If commentators had been arguing so vociferously for it in the 'good' times my Spidey-senses wouldn't be tingling now. It is intellectual dishonesty. The economy didn't falter due to a lack of LVT so LVT cannot be the solution. Fix the problems of spending too much and borrowing too much first and once the economy is back on its feet *then* think about LVT.

I don't agree, obviously.

No serious LVT proponent has ever suggested it purely as an additional tax, although we have different preferences as to which taxes are worst and should be replaced first. If it were to be introduced, then the only way to make it fly politically is to scrap e.g. council tax, business rates and SDLT at the very least. The fundamentalist land value taxers (the 'Single Taxers') say that ALL other taxes should be scrapped (which of course is a good way of capping state spending - there's only so much you can raise from LVT).

Further, you've got to realise that LVT is NOT double taxation of incomes; income tax is double taxation of land values (if you trade from a good location, you pay the location value to the landlord or the bank; and then you pay income tax to the government on the post-rent profits you made from trading from that good location etc).

If the purpose of 'taxation' is to take money from people and give it to others in exchange for nothing (and if we object to this state of affairs), then how is the state-regulated system of landownership any different? Without the state (and traditions, customs etc) to enforce the system of landownership, what would land be worth? Answer: nothing, ergo private landownership (in the absence) is a kind of privatised tax collection.

The fact that money goes straight from private hands to private hands (with the government as referee) is a mere detail (as opposed to publicly collected taxes on incomes etc, which go from private hands to the government, which then doles it out to private hands as it sees fit).

PS, Adam Smith, Ricardo, Paine, George, Friedman et al argued for it in good times as well as bad. As LVT would dampen property price bubbles and hence credit bubbles and hence financial recessions, with LVT there wouldn't be any bad times (or the bad times would be a lot less bad).

I was just about to ask what Mark Wadsworth would think of this.

Mr Wadsworth is nothing if predictable...keep beating that drum.

What a sad knee jerk response. The argument is how to raise funds for government services, from peoples work and inventiveness via income tax (dissincentivising these activities), or from rents via land tax. This debate has a rich history going back before Marx polarised things, Ricardo, Malthus, Smith and others. There are (Ricardo argued) three classes - capitalists , workers and aristocrats (landowners living on rent). The capitalist is the workers best friend, he competes for labour and thus increases the value (another interesting concept) of the workers time.

Lloyd George on land speculator windfalls by owners of the marshland near Limehouse:

Who made the golden swamp?, was it the Landlord? Was it his energy? was it his brains?... it was purely the combined effort of all the people engaged in the trade of the port of London, everyone except the Landlord - Landlords will have to contribute to the country on the basis of real value...

The proposed bill (backed by eminent socialists such as Churchill) was rejected by the Lords aristocrats. In Australia similar reform succeeded.

If I buy a plot of land (perhaps with a house/whatever on it) and the public pay for a good school to be run nearby, or a trunk road, or a nearby railway is maintained at public expense, should the public purse not benefit from the wealth I gained in landvalue ('rent') from this common expenditure?.

Fred Harrison's 'Ricardos Law' is well worth reading if you would like a completely different perspective on economics, rather than being stuck in the old left-right cliches. Harrison argues that boom and bust can be traced to the boom and bust of land prices that follows the absence of a proper tax on rent. He praises those pressing for 'equality', and then rubbishes trendy lefties who argue that disincentivising work with high tax is a good thing (one of Blairs gurus did this). I dont like Harrisons leftish standpoint, but the pre marxian ideas on tax, rent and value that he airs are intriguing.

Is it a coincidence that a new serf class of welfare dependents are being fostered by a ruling class (aristocracy), of leftists, the Benn dynasty, the Blairs, Tam Dalyell, Will Hutton and countless others who want to make money from property rather than work, industry and innovation - which they tax and demonise with their green scams. Aristocrats have always been mostly green. Witness HRH prince of Wales. The aristos want serfdom back and an end to industrialism and freedom for little people.

Didnt read Marks post. LVT was indeed meant to be the only tax to cover the costs of a necessarily small government. Or so Harrison relates. Important point. 'Knee jerk' WRT the original posts reaction to PVT was a bit rude, sorry.

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