... writing in today's FT:
Whereas taxing work is wasteful - less is produced and no tax is raised on the lost output - land is in fixed supply so a tax on it is less harmful (and impossible to avoid). Shifting the tax burden from labour to land would therefore boost economic growth, according to an OECD study.
Taxing land values could also limit property bubbles, which divert funds from productive investment in booms and then cause terrible busts - without discouraging development (unlike property taxes), mobility (unlike stamp duty) or investment (unlike interest rate rises).
It would also be fair. Whatever the merits of capitalism, there is nothing intrinsically desirable about the initial distribution of property rights. Britain's history is such that land is distributed more unequally than in Brazil. There, 1 per cent of the population owns 49 per cent of the land; here, 0.3 per cent owns 69 per cent.
Land appreciates not through landowners' striving, but that of others. As talented and industrious people have flocked to London, the value of the 300 acres of fields - now Mayfair and Belgravia - passed down to successive Dukes of Westminster over three centuries, has skyrocketed to an estimated £6.5bn. Better, surely, to tax that windfall rather than the work of those who generated it? A land tax would also pay for much-needed infrastructure investments that raise surrounding land values.
'nuff said.
H/t Charles Bazlinton.
Friday 9 April 2010
Philipe Legrain...
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29 comments:
I have been persuaded of the merits of an LVT by your posts on the subject, but knowing that Legrain also supports it makes me believe that it is a bad idea.
R, what does he propose that you oppose (starting with the article linked to?). I'd never heard of him before, to be honest.
Hi Mark,
I favour of LVT in general. But an interesting question here - how would a LVT system deals with attemps to artificially surpress land values? e.g. if I am not using a farm land, I can sell a small strip around it to a friend that restrict access to the land. Without access, the value of the land is very little. The value of the access strip is of course very little on its own as well.
Alternatively, I can put a convenant in that says no houses bigger than 10 cm is allowed to be built here. Until that convenant is removed, the land value is minimal and hence the rental value is minimal.
Of course, we can then have all those anti avoidance things, which than makes LVT as complicated as the income tax ?
Anon, if in doubt, apply commonsense:
" if I am not using a farm land, I can sell a small strip around it to a friend that restrict access to the land. Without access, the value of the land is very little. "
Very true. But UK farmland is worth about £5,000 an acre, as opposed to residential land which is worth £0.5 to £1 million an acre. Agricultural land only makes up a small percentage of total UK land values anyway. So I'd exempt farmland as a quid pro quo for scrapping agricultural land subsidies.
(In your specific example, the ransom value of the strip would be equal to the bulk of the original value of the stranded land, so that's just shoving the tax burden around but not removing it).
"I can put a convenant in that says no houses bigger than 10 cm is allowed to be built here. Until that convenant is removed, the land value is minimal and hence the rental value is minimal."
Correct, and you are free to do so. I have covered covenants before - to be binding, the covenant would have to be in favour of the local planning authority. So the only way to get it lifted again in future would be to pay a whacking great fee, which would claw back most of the tax that had been evaded in the meantime.
Legrain is best known for his enthusiastic support for open borders and denouncing anyone who disagrees with him as being stupid and xenophobic.
His attitude to the EU is pretty similar.
I just find him incredibly smug, even when he's right (as he appears to be here).
R, now I've found his blog, he does appear to be a text-book Leftie in many other respects. I particularly liked this post 'on the benefits of immigration':
... the majority of the 40 finalists in the 2010 Intel Science Talent Search, which, through a national contest, identifies and honors the top math and science high school students in America, based on their solutions to scientific problems... hailed from immigrant families, largely from Asia.
Using US English, maybe they were from 'Asia', but under British English, no they bloody well weren't. They were from China.
China is a completely different country to the one that we Brits have been trained to politely refer to as 'Asia' i.e. Pakistan. Even the Indians don't like being called 'Asians' because they are, er, Indians.
Hi Mark,
I think it is uncertain if the random strip itself has any open market value. It may have some value to those restricted by random strip if they want to do something with it, but otherwise, has little value to anyone else.
Can you please elaborate on this:
"the covenant would have to be in favour of the local planning authority" - what does this means?
And if a landowner refused to pay the LVT and the land is enforced against, does the state have the power to remove all covenants?
What if a convenant says no agent of the state is ever allowed to step on the land ?
If restrictive convenants are removed by the state, then what is the value of the land? If removing those convenants forcibly by the state increase the value of the land, will the surplus value of the land after being sold at auction revert to the landowner ?
While in favour, I suspect LVT isn't exactly going to be clear cut...
Anon:
"Can you please elaborate on this:
"the covenant would have to be in favour of the local planning authority" - what does this mean?"
It means what I said. If the covenant says 'nobody may build on this land ever until the owner gives permission', then that is not a covenant; a covenant has to be enforceable by a third party.
Remember that the whole logic behind NIMBYism is to prevent local farmers developing their land - the farmer's loss is the NIMBYs' gain (because of scarcity value), of course, and it is the NIMBYs who control the local planning authority.
So it is then a 'you cut. I choose' battle between local farmer and local NIMBY. Either the farmer pays a bit more because there is planning potential (and the NIMBYs pay a bit less) or the farmer sacrifices some planning potential to the NIMBYs so the farmer pays less and the NIMBYs pay more.
"And if a landowner refused to pay the LVT and the land is enforced against, does the state have the power to remove all covenants?"
Yes of course. You cannot contract with yourself. That's basic contract law.
"What if a convenant says no agent of the state is ever allowed to step on the land?"
In that case, game set and match to gypsies, poachers and squatters! Remember that police officers are agents of the state - so if said owner rings 999 to say that his family are under attack, the local police will just shrug it off.
"If restrictive convenants are removed by the state, then what is the value of the land?"
The new value of the land would be whatever the state can sell it for.
"If removing those convenants forcibly by the state increase the value of the land, will the surplus value of the land after being sold at auction revert to the landowner?"
That's the wrong question.
If the rule is 'No it wouldn't', then the landowner would make bloody sure to keep up with tax payments, so the issue does not arise.
If the rule is 'Yes it would', then at least we are back to a 'You cut, I choose' position (think about it).
"I suspect LVT isn't exactly going to be clear cut..."
It is blindingly simple.
I prefer permanent market LVT systems. As they solve allow people to self value, and prevent under-value.
Hi Mark,
Thanks for the respond.
OK - so what is the open market Land Value of a land where husband sells the land to wife and put in a convenant stating that the land shall only be lived on by a family of 3, 1 son under 10 and 2 dogs and believe in communism (which exactly matches their situation).
Anon, as I said, provided the covenant is in favour of, and enforceable by, the local planning authority, you can do what you want. So as soon as the boy turns 11 the family get thrown out.
And if they want to move they will struggle to sell it for very much - because the purchaser will have to buy the house with depressed value and then negotiate separately with the planning authority to have the covenant lifted, and pay for the privilege.
This is all red herrings anyway, as the only sensible way of valuing land is to average out lots of sales over a defined area (a council ward or a postcode sector or whatever) over the past X months or years and apply the resulting value to all land in that area on a per square yard basis, so even if you manage to devalue your own house by £100,000, if that's averaged out with 3,000 other houses, you only get your tax down by a small percentage of £3.
... or we do what AC1 always suggests, which is how they deal with marginal situations for LVT purposes in Taiwan.
Thanks Mark. Sounds good.
How about automatically removing restrictive convenant that affects land value on implementation of LVT by state decree ?
How do you average the cost of the land? From what I see in UK, land in one street about 3 mile from a bad area can cost maybe 3x - 5x more or so from a bad area.
You got a link / article regarding how Taiwan deals with marginal cases?
Anon, "How about automatically removing restrictive convenant that affects land value on implementation of LVT by state decree?"
That sounds very risky to me, most covenants are there for a good reason. Plus, don't forget that 99% of 'restrictive covenants' are imposed by the state on behalf of local NIMBYs, i.e. planning restrictions.
"How do you average the cost of the land? From what I see in UK, land in one street about 3 mile from a bad area can cost maybe 3x - 5x more or so from a bad area."
Correct - there is a trade off between averaging over larger area with lots of sales every year (so more reliable average but wider discrepancies therefrom within the area) and averaging over smaller areas (so in theory more accurate but more prone to fluctuations). I reckon postcode sectors (i.e. the first letter/number combination plus the first number of the second part) with about 3,000 properties in each is 'about right'. In any event, property prices will always adjust so that the total price paid by a subsequent purchaser for mortgage+tax will be 'about right'.
As to Taiwan, try this.
Thanks again Mark.
Sorry..got another question - how do you deal with houses with large garden and expensive flats
For example, those £100m+ flat overseaing hyde park won't use that much land per unit) but it would be a social outrage if their LVT bill is less than an old lady house with a large garden.
I understand LVT disregard the building value, but just imagine what kind of headlines it would be in the press..
Anon. Residential land near Hyde Park is worth (say) £100 million per acre, or £20,000 per square yard. If you have a 200 sq yard flat in a ten-storey block, your share of the land value is £400,000. Further up the road in Hamsptead, a million pound house with an OK garden might have a land value of £600,000, so would pay a bit more.
So what? A lot of people yap on about 'evil property developers concreting over the greenbelt', so why shouldn't we reward people who occupy a smaller amount of land with a lower tax bill?
As to little old ladies, as I have always said, they can roll up the tax to be repaid on death, whether they live in a mansion in Hampstead or a flat overlooking Hyde Park. Which is why Inheritance Tax would have to be scrapped as a quid pro quo, of course.
Being more realistic about it, they have a flat property value tax in Northern Ireland (values updated as at 1 January 2005) and business premises across the UK are subject to a flattish property value tax called 'Business Rates', it is all perfectly do-able on an administrative level.
Thanks again Mark.
I understand the roll up point and think it is good. But that is not my question. I am not so convince with the last reply though.
My question is how do you deal with headline like: "Old lady pays £10000 LVT but Russian Oligrach in Hyde Park £xxm gated development pays just £8000 LVT"?
Don't think the public will buy the idea that just because they use less 'land', they would pay less.
The business rates take into account building value so HSBC £1bn HQ with many stories will pay a lot of busines rate. Under LVT, the many stories bank HQ may pay less than the current business rate system as they build UPwards and don't take that much land.
Thanks in advance for your respond.
Anon, again you are getting too far ahead.
As I have always said, for a start, and just to get the ball rolling, we could replace Council Tax, SDLT, IHT, VAT on domestic fuel, TV licence fee, capital gains tax, Insurance Premium Tax etc with a flat 1% tax on averaged out property/land values. In which case the Oligarch would pay more that the metaphorical little old lady.
"Don't think the public will buy the idea that just because they use less 'land', they would pay less."
Yes they would. Anybody who occupies less land or lower value land would be better off than now, and people like the Duke of Westminster would be worse off.
Once we have got the ball rolling, and because incomes are distributed far more evenly than land values (as income is based on personal skills/effort and the value of land that anybody owns is largely dictate by historical or hereditary accident, or, to be honest, downright corruption), shifting from taxing income and effort to taxing land values would always have more individual winners than losers (as well as benefitting the economy as a whole).
Your Business Rates misses the point - land values are a function of how generous planning permission is (relative to other areas), and building densities/building height are a function of how generous planning permission is. So whether you tax the land value or the building value comes to much the same thing.
Hi Mark,
Thanks for your respond.
>again you are getting too far >ahead.
OK - you guys want to sell a newish system to the public (and me). It is only reasonable to expect that you have thought through most of the consequences of LVT. Is that fair ?
Again, I am for LVT in principle, but suspect that LVT will not start will not be a one page legislation and as vested interest inserts their exemption clause, it will be just slightly less thick then current income tax legislation.
>Income distributed more evently >than land values
This would have been through in old world. In this make once/sing once/invent once sell forever world, I would be grateful if you can provide data to support this assertion.
Your point on planning is interesting as planning permissions arbitrarily increase/decrease the actual value of land. High density is by density are more efficient use of land but yet it will attract higher LVT and yet LVT is supposed to encourage efficient land use ?
For LVT to work, it would have to be solely based on land value that is created through its surrounding infrastructures/people and not by arbitrary planning consents. However, when this occur, an anomaly will occur where high value high rise development will pay a fairly low LVT (per unit) compared to a victorian terrace next to it. This might be what LVT set to achieve but I can't see British society accepting that.
Further to this, for averaging, what happen to those residential/shops next to Canary Wharf building? If you going to take into account value added by the planning paper, then the HSBC building will perhaps have a land value of £500m. If the residential/shops half a mile away (Poplar High Street) etc have to 'share' these sort of LVT, it would be unaffordable.
So, if LVT is implemented as individual plot/property taxation then we already have something of that sort called council tax (the banding needs to be widen) or business rate.
Further, these averaging of land value encourages NIMBYism to prevent any high value development from occuring as that inflates their LVT bill (through averaging). On the contrary, if incumbents can ensure that their surrodings are not well developed than their own, then the will ensure their LVT bill stays lower.
So, for LVT to work, I see that anti avoidance provisions will need to be included(including interferences to people rights to contract/put in convenant to devalue land value as you stated that any such convenant must be in favour of the state [planning authority] to be valid)
Also, have you guys thought of how LVT will be passed through via rents? Hong Kong probably have something closest to LVT and that does not lead to more event distribution of land. Surplus income from low income tax are then flowed into the small numbers of monopoly developer's hand (so, how does that lead to more 'equal' income distribution?)
From what I know, taxation on monopolies does not work (including those Tobin tax), as it will just be passed on and monopolies have the pricing power to do that (i.e. Duke of Westminster would have the power to pass the tax on to anyone who wants to be in London prime areas)
Thanks again.
Anon, "Income distributed more evently >than land values. I would be grateful if you can provide data to support this assertion"
See here. Commonsense tells you the same thing.
"High density is more efficient use of land but yet it will attract higher LVT and yet LVT is supposed to encourage efficient land use?"
Correct. Within any smaller area, the tax per sq yard is the same whatever you build on it. Of course LVT should go hand in hand with liberalising planning laws, separate issue.
"an anomaly will occur where high value high rise development will pay a fairly low LVT (per unit) compared to a victorian terrace next to it. This might be what LVT set to achieve but I can't see British society accepting that."
Why is that an anomaly? 'British society' seems happy to accept the Big Fat Lie that this country is 'full' and that we may not build on another square inch, so why shouldn't the people who do the decent thing and live in blocks of flats get a smaller tax bill as a reward?
Re residential/shops half a mile away from Canaray Wharf (Poplar High Street), remember that the famous building, One Canada Square, has its own postcode sector E14 5.. and Poplar High St is in postcode sector E15 0.. So the problem does not arise.
"Also, have you guys thought of how LVT will be passed through via rents?"
Yes. The total occupation costs (rent paid to landlord plus taxes on occupier like Business Rates or Council Tax) are a known, fixed figure. if you reduce the taxes then the rents that the landlord charges go up and vice versa. If the landlord is liable for LVT, then rents would go up by the amount that Business Rates or Council Tax go down. It's Ricardo's Law of Rent and there is a wealth of emprirical evidence to support it.
"Hong Kong probably have something closest to LVT"
Myth, I'm afraid. What HK does is sell long leaseholds, which are a great source of govt revenue but as we know, a long leasehold acts much like a freehold in many respects.
"taxation on monopolies does not work (including those Tobin tax), as it will just be passed on and monopolies have the pricing power to do that"
Myth. Think about the licence fee for radio spectrum or 3G licences. The government charges for those or auctions them off. Do you imagine that radio stations would reduce their advertising charges or that mobil companies would reduce their call charges if they did not have to pay these taxes?
As they are local monopolies, they are already charging the most that the market will bear (unless they are stupid). If they are already charging as much as possible, how can they charge more?
Hi Mark,
Thanks for your respond.
>Of course LVT should go hand in >hand with liberalising planning laws,
Yes and it seemed to me that LVT does not make sense with current planning law. Surely location/infrastructure wise, land at Poplar high street isn't any less vaulable then those at Canada Square and land at hyde park isn't any less valuable than those at the houses surrounding it.
Planning system arbitrarily sets land price and arbitrarily sets LVT. With that, I don't think LVT will be able to 'encourage' efficient land use.
When vested interest pile in, certain land use, e.g. say, museum will be exempted then a Mayfair empty building will suddenly becomes a museum that opens for 1 hour a week (or whatever needed to get the exemption).
I suspect the spectrum prices are fed into the cost of the mobile networks as spectrum amortisation cost abd that sets a floor prices for the services. Not so sure if it had 'no effect'.
As for local monopolies charging as much as they can - surely we live in the real world. If the landlord likes a tenant's look, his rent might be a bit lower, but LVT will get passed on. As LVT hits all landlords and all landlords pass this on, it will become a common cost to all tenants. Tenants can generally pass on common cost to the consumers as UK residence aren't exactly have all their income committed to essentials and the tenant most probably can raise price. (and London residence isn't going to drive out of London to get a meal, haircut etc).
Of course, the LVT rise will be offseted by Business rates decreases as you have mentioned. However, this is likely to lead to reduction in the (LVT - business rate) bill of some pretty posh shops and increases the (LVT - business rate bill) of the more ordinary shops (effect of averaging, and that building cost are not taken into account).
The end result of this looks like:- Landlord OK, Consumer pays more, posh restuarant makes more profit, mum/pap restuarant cost increases. Perhaps LVT objective is to ensure those low value shops to shut (to ensure higher value land use), but that won't go down very well would it ?
Looks like the real issue is land ownership monopoly. Business monopoly are dealt with via anti (competition/trust) laws, perhaps LVT is a blunt tool here with quite abit of side effects?
Forgot to say thank you for your previous reply.
Anothe interesting comparision - if US has levied a petroleum tax rather than enforcing the anti-trust act against Standard oil, would Standard Oil power be affected or would the cost just got passed down ?
Anon: "It seemed to me that LVT does not make sense with current planning law."
LVT makes just as much sense with or without planning law. 99% of the value of any plot of land depends on how much planning you can get for it, multiplied by location/infrastructure.
So if you have an acre of central London that is restricted to use as a park with no building permission, it is nigh worthless to the owner (see Tulk v Moxhay).
Similarly, if you have an acre of farmland in the middle of East Anglia or in the middle of the Scottish Highlands with planning for a ten-storey office block, that is also nigh worthless, because no infrastructure.
Further, the extra value of flats overlooking Hyde Park (compared to others that don't) is largely down to the fact that Hyde Park is a public space with lots of grass and trees on which (presumably) nothing will ever be built. The land value surrounding the park depends on the commercial value of Hyde Park being restricted to near zero (apart from restaurants round the boating lake) via planning laws.
"Surely location/infrastructure wise, land at Poplar high street isn't any less vaulable then those at Canada Square and land at hyde park isn't any less valuable than those at the houses surrounding it."
There is a huge difference between location/infrastructure between PHS and CS, and the difference in value is easily measured by comparing rental values or capital values. That's why people prefer to build gleaming tower blocks at the latter and not the former.
"I don't think LVT will be able to 'encourage' efficient land use."
In the short term, no, but in the short term it would very much encourage efficient use of existing buildings. Nothing would be left vacant for long and low-profit owner-occupier businesses would make way for higher-profit tenants. The proverbial widow in the large 'family home' would make way for a young family and so on.
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"I suspect the spectrum prices are fed into the cost of the mobile networks as spectrum amortisation cost abd that sets a floor prices for the services."
Nope. The people bidding for the networks worked out how much total income they would get from offering the quasi-monopoly services; deducted the actual cost of setting up the masts, the satellites, the computer systems etc; deducted a reasonable profit margin/margin of error and the resulting net figure was what they bid for the spectrum rights.
Had the government given away the spectrum rights for free via a lottery, then the total income would not have changed, the cash costs would not have changed, and the £20 billion would have been extra profit for the operators.
Compare that with landing rights at UK airports, which were given to BA* and so on largely for free - a large part of the profits of airlines consists of a return on the rental value of these slots - some of the more valuable ones (from Heathrow to New York, let's say) were being bought and sold between airlines for about £10 million each before the recession.
Ticket prices would not change one bit whether the airline got the slots for free or whether it paid £10 million for the slot. That is borne out in logic and in practice.
* OK, BA is stupendously badly run and is currently making losses, different topic.
Hi Mark,
Thanks again for your respond.
However, regarding the business passing on cost issues, I beg to differ.
Firstly, I was close to those bidding for the spectrum and the company Director's ended bidding far higher for the spectrum than the business case originally allowed (stock market would have punished those who did not get the spectrum). In the after math, obviously they then got into trouble and tried to get the money back. Most of these operators have an internal benchmark of cost per minute and they don't tend to sell below that rate. The financing/amortisation cost of the 3G would have been part of that equation. Perhaps some of the 3G cost have been passed on to vendor (i.e. lower vendor profit), but more likely than not, some of those goes to the consumers. When the cost based a common, and it is a fairly highly value added thingy, consuemr isn't going to stop using mobile because call price is now 2p higher across all networks.
As for lending slot case, I think Ryan Air or easyjet complained about this. Has the slot been allocated by beauty contests, some of those nice slot would be taken by budget airline and hence the corresponding ticket price.
So, now if the state decided to tax the landing slot on an annual basis, say 10% of the capital cost of the slot, I doubt ticket price will stay the same. Those are prime slots, and the operator knows it. A business man who needs to be in new york by certain time will still fly that slot even if the cost is now £50 higher.
Even if BA ticket price will stay the same (unlikely), Easyjet / RyanAir ticket price is guaranteed to go up (or they go to find some other airport).
Anyway, the 2 above cases dealt with one off capital cost. LVT is better compared to ongoing cost as the following:
(i) When the passenger duty tax was introduced, did the ticket price goes down by the same amount because the airline had charged the maximum the market would allow ? No it didn't.
(2) The broadband tax is now scarapped. If it had gone through, would it have been passed on? Yes, it would have been despite the economic model suggesting that the telcos must have 'charged the maximum the market could bear'.
(3) When VAT went up from 7.5% to 15%, (which became a common cost), did retailer held their price because they had charged whatever market could have beared? Of course not, price went up to take into account of the VAT.
(d) Has the petrol station charged what the market could bear? If it does, why is it that when fuel duty, input (crude) cost goes up, fuel price at pump goes up and people still buy fuel ?
By inference, if LVT is passed from landlord to tenants (e.g. restaurant/barber), would it be reasonable to expect that, some, if not all of these cost get passed on to the consumer. (And in the case of lower LVT bill vs the old business rate, prices stay the same).
Resource tax is a close cousin of LVT and I reckon Standard Oil will just pass the cost on had the Standard Oil monopoly was attacked via a resource tax.
Thank you for your time.
Hi Mark,
OK - see this one on US LVT
http://www.fredharrison.com/?p=25
and it proposes LVT on vacant land.
However, as it is now in the UK, as you said, a prime land in center London with no planning permission attracts little land value or LVT despite the land hogs important resources.
I got another example here - if a additional £10m LVT is levied on a water company (again, if the LVT is less than business rate, then water price may fall due to how water prices are regulated) one can pretty much sure that £10m will show up on water bills.
So, as I can see it, LVT isn't going to work very well without planning reforms. And on top of that, the land monopoly issue needs to be resolved at the same time or else LVT won't work.
So in conclusion, LVT is a good idea, but it not a simple tax as it triggers a lot of intended and unintended consequences.
thank you.
Anon, you're raising more non-issues:
"However, as it is now in the UK, as you said, a prime land in center London with no planning permission attracts little land value or LVT despite the land hogs important resources."
Most land in central London with no planning does not 'hog' resources, it is an important resource! - they are called parks or public spaces. Sure, the tax raised from them would be little or nothing, but they enhance the value of surrounding flats or offices by an equal and opposite amount (quite possibly by much more).
Other privately owned land with no public access and no planning has a depressed value, so what? All the planning authority has to do is to give the owner suitable planning permission, problem solved. There can't possibly be an actual or moral law against the state lifting restrictions on land use.
OK sorry - I did not make myself clear.
So how does LVT deals with (speculative) land banking (which remains as agricultural site which I undestand would be exempted from LVT), dereclict sites etc?
The low without planning permission value (or landowner just change brown field to stroage site to lower LVT while sitting on them) of the land attracts little LVT and hence little incentive to do anything with them (especially in this recession).
Anon, "... how does LVT deals with (speculative) land banking (which remains as agricultural site which I understand would be exempted from LVT), dereclict sites etc?"
In the medium term, what we have to do is end agricultural land subsidies aka CAP payments before we even think about taxing farm land. Even Adam Smith was in two minds about levying LVT on farmland as to a large extent farmers actually create the land value (by looking after their fields etc). So that is a red herring.
As to 'derelict sites' in urban areas, it is not 'the site' that is derelict, it is the buildings that are derelict. There is no reason why the tax should be any lower on those sites than on surrounding sites where the owner looks after the building and makes sure it is put to good use.
To expect otherwise would be as dumb as to expect the bank to waive mortgage interest on money borrowed to buy a site with a derelict building on it, or it would be as dumb as expecting the hotel owner to give you a discount for the time you spend sight seeing and not actually in your hotel room.
PS, or is that 'site seeing'?
PPS, in relative terms, even though farmland is about 85% of the UK surface area, it is only about 5% by value (and it only generates about 1% of GDP). It is, in the medium term, not worth the hassle trying to value it or tax it.
The tax point ought to arise as and when low-value farmland gets a £1 million per acre uplift by being given planning permission, which would be a useful source of funds for paying off the local NIMBYs.
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