Monday, 19 August 2019

Killer Arguments Against LVT, Not (467)

The Daily Express rehashed the garden tax nonsense three days ago, we've done that.

The facts, as reported, are as follows:

"In June, the Labour Party leader unveiled recommendations to introduce a “progressive property tax” - which could see council tax replaced by one based on current house prices."

Which seems pretty uncontroversial to me, it's not far off a modest Land Value Tax.

The Conservative Party calculated the average home would pay £374 a year more than they currently pay in council tax each year.

They are shit at maths. If it replaces Council Tax, by definition, the average bill won't change. The median bill will drop significantly; bills on more expensive homes will go up.

They include this lengthy quote:

Matthew Lesh, head of research at the Adam Smith Institute think tank, told Express.co.uk:

“Labour has completely misunderstood the nature of the housing crisis. Their proposals are nothing more than an attack on private ownership and development of land, of families having a stake in society and an asset that they can call their own.

“It would result in fewer people having the opportunity to own their own home, not so-called ‘Land for the Many’. Labour’s plans would wreak havoc on the housing market. 
Time and again we’ve seen when the state tries to control a market it leads to shortage and lower quality — but Corbyn has never learned.

“Young people want to own their own home, not rent from the state the rest of their lives. Rent controls too would cripple the market, which has failed everywhere in the world it has been tried.


So far, so blah, what's his suggestion..?

“There is merit in reforming the council tax system, that is based on outdated 1991 valuations, but this means creating a single, regularly updated land value tax that replaces council tax, business rates and stamp duty in a revenue neutral manner. This is sensible tax reform that sadly Labour is undermining by putting it in the terms of class warfare.

Splendid suggestion, much better than Labour's of course. Chuck in Inheritance Tax as well to show that it's not a jealousy surcharge, it's just a service charge. The more taxes you roll into LVT, the better IMHO.

But why did the Daily Express include this part of the quote? If Labour proposed exactly that, they'd promptly dismiss it as a "garden tax" and we're back to Square One. Quite clearly, average annual bills would be higher than Council Tax bills alone, because it would include an element of SDLT and IHT, although the tax on the median home would be about the same as Council Tax.

The rest of the article is the usual garbage of no interest to the intelligent reader. Attack on wealth, negative equity, Poor Widows, landlords passing on the tax etc.

Probably true

From The Daily Mail:

Parenthood makes people happier - but only after their offspring have moved out.

That's according to research from Germany's Heidelberg University which examined data from a recent European survey.

It asked 55,000 people about their emotional well-being and found happiness is more common among those aged 50 or above who have independent children.

Specifically, they were less likely to be depressed and have more financial stability than their childless peers.


In two years, I will be able to confirm to confirm the veracity of this or otherwise.

Last time I posted something along these lines, A K Haart commented that the joy is short lived - after a few years, your children dump their children on you.

Sunday, 18 August 2019

Common sense tells us that effect of gravity moves at the speed of light

This appears to be an open question; it wasn't until 2002 that they were fairly sure and very recently (2017) that they established that, "assuming a delay of zero to ten seconds, the difference between the speeds of gravitational and electromagnetic waves, vGW − vEM, is constrained to between −3×10−15 and +7×10−16 times the speed of light."

I would have thought it was easier to apply common sense.

The light we see from the sun arrives from where the sun was 8 minutes 20 seconds ago (assuming for simplicity the earth is stationary and the sun moves round it).

If you measure the direction in which the earth is being pulled by the sun, you'd establish that it is being pulled towards where the sun was 8 minutes 20 seconds ago.

The light meter and gravity meter will be pointing in exactly the same direction; if not, there'd be all sorts of apparent weird wobbles (which would make measuring distances and so on a lot easier, as it happens).

And well done to these chaps, while we're on the topic. Instead of chasing non-existent Dark Matter, they are actually measuring and observing exciting stuff that actually happens.

Thursday, 15 August 2019

Remainer MPs - couldn't organise a piss-up in a brewery

First write down what you know:

a) My general impression is that a majority of MPs, however slim, are Remainers.

b) We know that the Tories are by far and away the largest party, and with the support of the DUP they have a majority of 1.

c) Jeremy Corbyn thinks that if he can trigger a vote of no confidence, that he will somehow end up as PM. Most Remainer MPs have told him to get stuffed.

Therefore the only workable plan (from a Remainer MP point of view) is to trigger a vote of no confidence. Johnson would clearly lose it, as it would only require a few Tory MPs (i.e. Remainers) to vote against him (let's assume all non-Tory/DUP MPs vote against him) and then MPs have the opportunity to choose a new PM. Those are the rules.

The chosen new PM has to tick two boxes:

a) A Remainer.

b) A Tory (they are the largest party etc).

Remainer MPs - even non-Tory Remainers - would be daft not to vote for him/her, as the alternative is leaving Johnson in place; let's rule out Corbyn as PM, that's not happening. Half of his own MPs wouldn't vote for him. The Lib Dems, SNP et al are all saying "Ooh, avoiding a cliff edge Brexit is the most important issue facing this country today". Well, either it is or it isn't, but if it is, then hold your noses and vote for a Tory.

Tory MPs - even Leavers - would be daft not to vote for him/her, as the alternative would probably be a General Election, which most of them don't want to risk.

Wednesday, 14 August 2019

"Twenty fags a day no worse than city living"

From The Metro:

SMOKING a packet of cigarettes a day is no worse for the health than air pollution that city dwellers are exposed to, a shock report warns.

Breathing in fumes from traffic, planes, power plants and industry on a long-term, regular basis is causing growing numbers of urban non-smokers to develop chronic lung disease, experts say.

29 years of puffing on 20 cigarettes daily was found to do no more damage than just a decade of city living...

A government spokesperson said last night: ‘We might have been exaggerating the dangers of smoking a bit recently, which is why we will be easing off on the smokers and meddling elsewhere instead.’


Tuesday, 13 August 2019

Please sir, may we have some more?

From City AM:

Taxi drivers have slammed plans to close off key locations in the City of London to traffic during the summer, saying they amount to a “PR gimmick”.

Key City hotspots, including St Mary Axe and Chancery Lane, will be closed for days in August and September to allow workers to enjoy traffic-free lunch breaks, the City of London Corporation announced today.


Yes, it is a bit of a gimmick, but let them try it.

People might prefer it or they might hate it. Some businesses will benefit, others will lose out. There's only one way to find out.

Here's the fun bit:

Steve McNamara, general secretary of the Licensed Taxi Drivers’ Association, said:

“While the taxi trade agrees strongly with the need to tackle London’s toxic air, one off stunts like car-free days won’t do much to cut pollution in the long-term.

“Instead of PR gimmicks, the City of London Corporation should make a real contribution to improving air quality by installing more rapid charge points for the 2000 London cabbies who are out picking up passengers in zero emissions capable taxis.

"There are currently only two rapid charge points available to cabbies within the richest Square Mile in the world. This is totally absurd and we need to see many more installed to encourage more cabbies to make the switch to electric.”


The cabbies much prefer the carrot to the stick, especially if somebody else is paying for the carrot.

Monday, 12 August 2019

"Ecological grief"

From The Guardian:

The climate crisis is causing unprecedented levels of stress and anxiety to people in Greenland who are struggling to reconcile the traumatic impact of global heating with their traditional way of life...

According to its lead author, Kelton Minor... “The Arctic is a bellwether for the unequal impact of global warming on social and economic systems. As countries struggle to limit future risks and overall warming to 1.5C [an increase of 2.7F], many Arctic and Greenlandic residents are already living in regional climates that have changed by more than this, in less than a lifetime."


Okay.

First it was the polar bears, but it turned out that their numbers were stable or rising, so then the new poster boys of climate change were people on low lying Pacific islands, but it turned out that some islands were just sinking (returning whence they came), rather than the sea level actually  rising.

So now they've gone on the opposite tack again.

Funny how climate change only affects remote and small populations, where the man in the street has no way of verifying this one way or another.

Saturday, 10 August 2019

The Holy Trinity

I have finally snapped...

Wednesday, 7 August 2019

Von Thünen's Law of Rent - it's all about lack of supply... NOT!

In an idle moment, I googled "average disposable income UK regions wages rent", the first relevant result was in This is Money:

The survey compared average city salaries against local rent and other standard monthly outgoings for 30 UK cities, calculating the disposable income of city residents after deducting tax, bills and other necessary general outgoings such as travel and food.

It discovered that the average British person gets to keep £1,083 per month after expenses and tax with the average monthly wage coming in at £2,073, while the average essential outgoings, such as rent, travel and food, total £990...

Despite Londoners' earning the highest wage, they also, unsurprisingly, have the most bills and so feature much lower on the overall list. Their disposable income is £1,095, only £12 above the UK average in the study. Their monthly outgoings of £1,629 are also over £350 more than any other city.

Hull is the city with the lowest outgoings of any city in the UK at just £767 per month. However, residents have a lower monthly wage of £1,816 which means their disposable income is £1,049, below the study’s UK average.


Which is exactly what you'd expect from Von Thünen's law (or even just a basic understanding of human nature). The lowest wage area sets the baseline. In areas with higher wages, the extra wages go into higher rent (other fixed costs are pretty much the same everywhere).

The equilibrium is reached when few people are willing to move because the rent saved is matched by lower wages; or the higher wages are matched by higher rent, which is what we observe in real life.

For sure, there are outliers - the survey mentions Derby with the highest disposable income after rent (£1,456) and Brighton with the lowest (£751). This can't be explained by the basic analysis, but boils down to the fact that Derby is considered boring (no idea if it is, but perceptions matter) and Brighton is considered fun, hip and fashionable, plus has nicer weather and a beach.

To paraphrase W C Fields, "people would rather be dead in Brighton that live in Derby" and they are prepared to pay £700 a month for the pleasure.

Here is their chart which is quite striking (blue dots = wages, red does = rent plus other fixed costs):


-------------------------------------------
So the next time somebody says that rents are high in London because of "lack of supply", refer them to this.

You do not need to adjust for "lack of supply", all you need to know is average wages. You subtract £1,800 (average wages in lowest wage areas), which gives you location rent. Add on about £400 for cost/value of bricks and mortar and that tells you local average rents.

To estimate house prices in an area, you multiply location rent by the inverse of mortgage interest rates (currently about 40) and add on the cost/value of the bricks and mortar.

Tuesday, 6 August 2019

Well, what a surprise!

From The BBC:

Cabinet minister Michael Gove says the EU "seem to be refusing to negotiate with the UK" over a new Brexit deal.

Mr Gove, who is responsible for no-deal planning, said he was "deeply saddened" that Brussels was, in his words, saying "no, we don't want to talk".

It comes after the EU said UK demands to remove the Irish backstop from Theresa May's deal were unacceptable.


I'm surprised that Gove seems to be surprised by this.

The EU have at least been consistent all along - either take our crappy and humiliating deal or we will do our best to ruin you. Either way, this will be a lesson to anybody country which ever considers leaving.