Again, from here:
Ian B starts really lashing out: "The biggest philosophical problem I have with the Georgist tax, or any tax on owned property, is that it's a tax on, well, something you already have but which may not be earning any money (1). Adam Smith remarked that the home produces nothing, and income is required to sustain it (2). The LVT presumes that every landowner is a rentier, but that isn't true of the private individual who owns a plot of land and simply lives on it. And I would have thought that to most libertarians, the idea of one's property as one's own is a very core idea...(3)
You may as well charge every woman a prostitution tax, regardless of whether she does so or not, since every woman's body has an assessable market value on that basis.(4)
(1) I'm a tenant, I pay rent to live in a nice house, of course that house isn't earning me any money (in cash terms), I'm paying for what it's worth. If you buy a house to live in and pay interest to the bank, the house isn't earning you any money either. So what? A business will pay to occupy premises from which it can trade profitably, so the location is earning it extra money, as it happens, but all that extra money is siphoned off as rent.
(2) Adam Smith also explained why a tax on 'the ground rent of houses' (i.e. Land Value Tax) was the least-bad tax. Funny how Ian B doesn't mention that.
(3) OK, so you live on your little plot of land, bothering nobody. But you still benefit from the fact that we have police and fire brigade and so on, is it unfair to make you pay for it? If you don't like paying into the general pool for having mains water, electricity etc, for being close to shops, place of work, nice views etc, then by all means, buy yourself a couple of hundred of square yards of agricultural land in the middle of nowhere, pitch a caravan, dig yourself a latrine and grow your own vegetables. The LVT on that plot would be in the order of £5 or £10 per year, i.e. not even worth assessing and collecting.
(4) Nope. Morals aside, if a government did that, women would just all move abroad. Landowners are also free to move abroad, of course, but they can't take their land with them.
Saturday, 20 June 2009
Killer arguments against LVT, not. (4)
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2 comments:
You rent the house or you rent the money to buy the house. Once you've paid off the mortgage the rent is the opportunity cost of the capital locked up the house, the income from which you could have used to rent a house.
Personally I'd rather pay LVT and not pay any tax on income or production at all. I could then choose to live in a high LVT area or a low LVT area. This would introduce necessary tax competition between local government as the one that did the most for the least would be where you'd want to live.
Or have I missed something?
L, you have missed something, actually:
"the one that did the most for the least would be where you'd want to live"
It may where you want to live, but as property prices would rise in low-LVT areas, the gains would be one-off capital gains to those who owned property at the time the rate was reduced, and not to people who rented there or moved there in future.
Your net income would not benefit from moving there once rates had been cut, indeed, your net income might be lower in those areas because lower LVT -> lower Citizen's Dividend.
Look at property prices in tax havens like Monaco - they are extortionately expensive because they include the value of all the income tax etc that you save by not living in France.
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