The Home-Owner-Ists have been busy churning out propaganda to protect their own vested interests for years*, which the Land Value Taxers do their best to counter-act with logic and examples, so far to little avail.
What worries me is that the Home-Owner-Ists don't just churn out propaganda, they appear to have a counter-insurgency element which knows perfectly well all the arguments in favour of taxing land values rather than incomes; of liberalising planning laws; of building more council housing or indeed ending the bank bail outs. This element does not usually mention 'Land Value Tax' by name, but it certainly gets its retaliation in first.
Exhibit One
From John Redwood's blog yesterday:
The third [idea for dealing with windfall planning gains] is that the wider nation should pocket the gain, through moving to a system of land nationalisation, where everyone just rents their property from the state and the state collects all the rents and therefore benefits from new construction. Effectively land values are abolished as no-one is allowed to be a freeholder apart from the state.
It was nice to see the usual suspects, Lola, Steven_L, DCB Reed, Derek, and Steven W pile in over there. To debunk Redwood's twisted logic and lies, let's apply it to taxation of normal incomes and output:
The third [idea for dealing with employment income and business profits] is that the wider nation should pocket the gain, through moving to a system of taxation of incomes and output, where everyone just rents their own time and effort from the state and the state collects all the rents and therefore benefits from new business activity. Effectively, effort and enterprise are nationalised as no-one is allowed to be a free man apart from the state.
No serious Land Value Taxer has ever said land would be 'nationalised' or that people would 'rent their properties from the state'. They would merely pay tax or ground rent for the value of the state protecting their exclusive right to occupy whatever bit of land they wish to occupy - what that person or his predecessors have chosen to build on that site or what they do in that building is entirely up to him.
It's no different to owning a caravan or tent and paying the farmer a daily charge for the pitch when you're there on holiday - you own the caravan, and you pay him for the right to exclusive occupation of that pitch while you are there.
Or does somebody think it is better if, for the few days or weeks that you are on holiday with your caravan or tent, that you pay the farmer up to 50% of your income, time-apportioned to that time period? Wouldn't that mean that lower income people pay less than higher income people? What motivation does the farmer have to improve the facilities if the rents he can collect are decided by somebody else? Isn't price rationing the best form of rationing?
No doubt somebody will whine and say "But it's my land". Fine. The physical land is fairly irrelevant - what is relevant is the value of all the local amenities.
To continue the analogy, what if the farmer sold off little caravan sized 'freehold' patches to campers? Who'd pay for the facilities to be maintained in future? What do you do if the owner of the plot next door decides to dump a load of rubbish on his pitch? Who'd chuck him off? Within weeks or months the place would be in chaos.
Anyway, all Land Value Taxers agree that some or all other taxes should be replaced (we differ hotly on which ones and in which order, of course). I've never met one yet who said otherwise. Even the Labour Land Campaign has a list of other taxes which they'd like to reduce or phase out.
* Stuff like "House prices can only go up"; "Your house is your main asset", "Rising house prices make us wealthier", "An ever expanding banking sector is the driver of the UK economy", "We can't build any more houses because of food security", "We have to protect vulnerable homeowners from the spectre of repossession", "We have to keep house prices high or else the banks will go bust" and "We have to bail out the banks to keep house prices up", "We have to keep house prices up to protect hard working homeowners from the spectre of negative equity", "Council Tax is unfair because it does not relate to ability to pay" and so on, which is all lies and half-truths.
Hilarious
54 minutes ago
9 comments:
John R's "third idea" is a classic straw man and really doesn't warrant debunking. All you need to do is to point out that he's not talking about LVT. To go on about LVT rather reinforces the idea that he is.
I actually agree with his conclusions: there is no good reason why the decision of a bureaucrat should benefit an individual and many why it shouldn't, corruption being the main one. So the question is, should it be the state (i.e. no-one) or should it be "the community" (i.e. everyone else who is most likely to be affected by the decision)?
B, he very much is talking about LVT (albeit slightly out of context). And 'the state' is not no-one, 'the state' does stuff on behalf of 'the community'.
What JR was proposing is basically to give NIMBYs part ownership of neighbouring fields. How is that not 'theft'?
Mark, ISTR you spending much time trying to debunk the idea that LVT is land nationalisation, (which is what JR was proposing), or have I got that wrong?
By "no-one" I meant "no-one more than anyone else".
I can't see how what JR suggests can be construed as "giving NIMBYs part ownership of neighbouring fields". Just because other people than the owner of land are benefiting from a bureaucrat's decision about said land, doesn't mean that they are being given any sort of ownership of that land. I don't own any part of my neighbour's fields, simply because I benefit from services paid for by the council tax he pays any more than I own part of your car because I drive on roads paid for by the road tax you pay.
As I have said before, under the present system, the community (village, civil parish, town) bears all the wider costs of a development and all the benefits accrue to the developer. How is that fair? Is it not an incitement to NIMBYism? Is it not, in some sense, theft? Why should not some of the benefits also accrue to the community?
It IS the nationalisation of land because the State gets to decide what the value of the land is, which is related to what use the land is put to. Thus if the State decides your land would be more productive (and therefore more valuable) in use X rather than use Y (which is what the 'owner' wishes to do) then it will levy LVT on use X, thus providing a hefty nudge to the landowner that they had better either start doing X, or sell up to someone who will.
Equally the 'benefit' a householder gains from a new amenity that is built locally (say a new railway is built (which would be decided by the State of course) and as a result of a new station close by house prices rise due to better access to London) is entirely illusionary until the house is sold. Thus you can be living in your house quite happily, paying your LVT at whatever rate, earning X, and BANG! A new station arrives, your house is worth 25% more. Your LVT goes up in proportion. Do you get any extra cash to pay it? No. Have you had any actual physical benefit from the 25% rise in your house price? No. Until you sell your house you get nothing. So surely it would make more sense to tax the capital gain when the house is sold, than the nominal rise in value? Why should a householder be forced to pay more, because of a development that they have no say in whether it happens or not, and they get no cash benefit from (until they sell up)?
As far as I'm concerned the whole basis of private property ownership is that you hold the land to the exclusion of all others, and are totally able to choose (without outside pressure) what you do with said land. (And yes I realise we have planning restrictions in this country - I regard them as anti private property ownership as well).
The whole basis of your LVT argument is that private property is guaranteed by the State therefore we should tax land to fund said State. I can see no logical reason why the State should be funded by any one particular method above all others - it is reasonable for the State to be funded from income taxes, value added taxes, import duties, indeed any of the taxation methods available.
He's put up another post here
I've entered a comment, which is currently awaiting moderation.
Sobers said:
"The whole basis of your LVT argument is that private property is guaranteed by the State therefore we should tax land to fund said State. I can see no logical reason why the State should be funded by any one particular method above all others - it is reasonable for the State to be funded from income taxes, value added taxes, import duties, indeed any of the taxation methods available."
Actually, if I understand correctly, the basis of the argument is that a tax based on LVT would keep house prices down, prevent windfall gains and not result in any reduction to economic activity - in other words, LVT causes positive economic conditions, whereas any other tax has negative repurcussions.
"Thus you can be living in your house quite happily, paying your LVT at whatever rate, earning X, and BANG! A new station arrives, your house is worth 25% more. Your LVT goes up in proportion. Do you get any extra cash to pay it? No. Have you had any actual physical benefit from the 25% rise in your house price? No."
I take it you never travel by train, then.
B, true. JR was proposing a kind of LVT, but he made it quite clear that the receipts would be paid to local homeowners in their private capacity, so it's merely redistribution from one class of landowning rent-seekers to another.
S, see subsequent post.
RA, yes of course, those are some of the purely economic arguments in favour of LVT, but Home-Owner-Ists see high house prices as A Good Thing, and when the bubble bursts and we go into recession, not a problem - we can always hike taxes on the productive sector to bail out banks, and rob savers to bail out borrowers etc.
B, I have commuted into Central London every day by Tube for ten years. And part of the reason why our rent is so high is because our house is near a Tube station.
"I take it you never travel by train, then."
That was addressed to the author of the remark quoted above, i.e. Sobers. Reminded me of Maggie T, who never travelled by train, either, unless she could use the Royal Train.
B, my bad, ta for clarification.
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