Killer arguments against LVT, not (10)

From a much earlier thread, this:

Hmm, so with this Land Value Tax, what we're saying here is that we nationalise all the land in the UK, and charge people rent to stay on it, and if they can't pay that rent we evict them. That's libertarians who believe in private property doing that, is it?

Nope, wrong on all counts.

1. On a purely practical level, land usage in the UK is incredibly strictly regulated, in terms of planning permission for what you can and can't build, or what type of business you can carry on from which premises. But most property owners are quite happy with this state of affairs, because these restrictions artificially inflate the overall value of their properties.

Now, don't forget that artificial monopolies create losers as well as winners, and that the losses usually outweigh the gains. Those who lose out from this strict rationing are primarily those who have to pay artificially high rents or artificially high prices, as well as farmers with land to spare around urban areas (who can't sell) and the construction industry generally, i.e. a fairly amorphous group who do not make common cause and who are thus largely ignored.

So land-use restrictions privatise the gains (made by an easily identifiable group) while socialising (or "nationalising") the losses, i.e. spreading them out among a far wider group, in other words, it is a straight transfer of wealth, i.e. redistribution, but rather than being redistribution from rich to poor (for which I can see good arguments), it is a fairly random transfer of wealth from people who don't own property to people who do; or from people who buy at the peak of the market to those who sell at the peak of the market (i.e. me, if truth be told). Ho hum.

2. Taxing something is not the same as nationalising it. People seem to accept that they have to pay income tax on their earnings, which is an average marginal rate of at least forty per cent in the UK. Is that "nationalising labour"? No, of course not, it's "taxing incomes". I'd suggest that "nationalising labour" would be, instead of asking people to pay income tax, we would force people to work for the state for two or three days a week. 

You don't need to be a genius to work out that taxing private incomes and then using the money to finance whatever it is that the state does is vastly preferable to forcing people to devote two or three days a week to tasks allocated by the state. Similarly, although the state has to own or control certain small areas of land, we are far better off if most land is privately-owned, because private owners are far more likely to put that land to its most efficient use. So the whole idea of land value taxation is that land is not nationalised.

3. Isn't land-ownership also the "privatisation" of publicly created value? Let's not harp on about the Enclosure Acts, which was privatisation of something that was hitherto publicly owned. Even if there were no state-enforced restrictions on land use, land/location values (in particular for urban land) are very much a function of what other people do (or don't do); if there are local shops, places of work, schools, parks, railway stations etc, then the value of the location is obviously much higher than somewhere stuck between a gasworks and sewage works at the edge of nowhere.

So when you rent or buy property, you are paying for convenient access to stuff that doesn't belong to the owner/vendor; it is only the convenient access, i.e. the state-protected monopoly position, that belongs to the owner (in the literal sense). Now, if the state has to raise taxes from something, is it not better to levy taxes on these publicly created values, because such a tax does not deter society in general from having shops, places of work, schools etc, as it is like rent (in fact it isn't "like rent", it is rent), unlike a tax on privately created values, in other words, income and capital generated by individual efforts, seeing as of how taxes on income and capital actively deter, discourage and hinder true wealth creation.

4. "...and charge people rent to stay on it, and if they can't pay that rent we evict them.". Yes, Land Value Tax is rent. Rents and taxes are in fact the same thing, it is just that rents are paid to private individuals and taxes are paid to the state; in either case, the rent or tax is only paid because the state enforces it.

Further, evicting people is one of the core functions of the state. Normal tenants pay rent to be able to occupy a property, and if they don't, they get evicted. Most tenants save up a deposit and buy a place with a mortgage. If they don't keep up with the mortgage payments, then the bank forecloses and the state evicts them. Sure, there is a balance between the 'property rights' of the property owner and the bank; in most cases, the bank has the upper hand (probably rightly in most cases, maybe not so in others) but in a dispute between bank and borrower, can either of them honestly day that they have created the land value? I doubt it, somehow - it's like two fleas arguing over who owns the dog.

5. "That's libertarians who believe in private property doing that, is it?"

The ultimate conclusion of all this is that the single-taxers aka Geo-Libertarians are right. The deal is, you pay less income tax (or even better none at all), and you just pay Land Value Tax (which of necessity would only ever raise half as much tax as currently burdens the UK economy, if even that) for exclusive access to (i.e. "ownership of") land, and in exchange the state protects your title to the land, pays for the roads, the police, refuse collection and so on (in the absence of which most land would be worthless, unless you had a private army to defend it, in which case you are de facto the state, and so on).

The faux-libertarians seldom refuse to commit to what they think the 'least bad' tax is, but when pressed, they usually mumble something about a low, flat income tax or a sales tax. I fail to see how taxing incomes or turnover is not depriving people of their own private property (the fruits of their skills, labour, capital investment etc).

How can anybody in his right mind claim that income or sales tax (which genuinely does deprive people of their own 'property') is somehow morally superior to Land Value Tax (which is more akin to a user charge)? In any event, "private property" is not a uniquely libertarian idea, it's fairly fundamental to most societies or cultures.

Answers on a postcard.