Monday, 6 September 2010

Killer arguments against LVT, not (65)

Let's dip back in to The Motherlode Of Shite over at the Guardian, and start with Comment One:

I think (1) that once a house has been bought and paid for, it belongs to the family. No-one should be able to take it away, or force its sale (2). Sadly, tax demands upon death mean that thousands of homes and families are sold down the river every day. Tax, tax, tax... (3)

When is real free enterprise going to free us from the private tax burden (4) which hits us all AFTER we have paid income tax? (5) One tax, income tax. The rest is baloney, theft and outright skulduggery! (6)


1) Think what you like, that's hardly evidence or an argument.

2) Why do people keep whining on about 'taking away'? What's income tax if it isn't 'taking away? Why do people keep whining about 'forced sales'? What about the silent army of the priced out generation who are 'forced' to occupy much smaller properties than their incomes or energy would otherwise justify? Don't forget that for every seller there is a buyer. If we introduced LVT and some people sold (whether 'forced' or otherwise), by definition other people would be buying and these new owners would be paying the LVT voluntarily and entirely of their own volition (in the same way as they take on the mortgage repayments voluntarily etc).

So the only 'forces' being exerted would be:

a) Political force - the restrictions on the quantity of available housing (and roads, power stations, factories etc), and it sure ain't the priced out generation campaigning against new developments, and

b) Market forces - people with the highest incomes will be able to afford to live in the nicest houses (if they so wish) and they (and lower income people who prefer to spend money on living somewhere nice to spending it on new cars, holidays, private school fees, whatever) would also be paying (entirely voluntarily) the bulk of the tax. That's hardly a radical departure from the status quo in terms of 'who lives where', is it?

3) I am instinctively a small government, low tax kind of chap. But let's not focus all our energies on publicly collected taxes (those are conceptually easy to get rid of) and instead think about privately collected taxes, being taxes on state protected monopolies, of which land ownership is the main example (there are plenty of others, most of which are best addressed by simply scrapping the barriers to entry or the compulsion to pay for something you don't need).

4) To reiterate, 'free enterprise' could do a lot to 'free' the priced out generation from the 'privately collected tax burden' imposed by the Home-Owner-Ists; first time buyers could quite easily afford to pay to have a new house built, it's paying as much again for the land value (and then as much again again in mortgage interest over twenty five years) that's crippling them.

5) How about getting rid of income tax (and VAT, National insurance, corporation tax, the lot) and having a single layer of tax? LVT would ideally neither be before nor after income tax; it would be instead of.

6) Complete in as many words as you like: "Income tax is not baloney, theft and outright skulduggery because..."

Particularly galling is the fact that a large part of income tax receipts are spent by the government on exactly those things that enhance land and rental values, so potential first time buyers are running up a down escalator; they're paying publicly collected taxes to the government with one hand and then paying privately collected taxes to their landlords with the other in order to be able to enjoy the benefit of the stuff which they paid for with their income taxes in the first place. And what little they have left over is scraped together as a deposit in order to get them into debt slavery (yet more privatised tax collection by the bank) for the next couple of decades.

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