And still they come...
Anon in the comments to the previous post:
Doesn't LVT just encourage building of highrise flats because the sale price that can be charged for them (which is already unjustifiably high IMO) could be increased even further due to the fact they would have to pay less LVT than an equivalently sized bungalow?
I started thinking about this when I saw what looks like weird council tax rebanding of a house converted into 2 flats. The end of terrace house on the left is band C. The ground floor flat on the right is band D. The first floor flat on the right is band D.
front; back
LVT would presumably charge each flat only half as much as the end of terrace. The conclusion would seem to be that highrise flats pay relatively little under LVT and bungalows pay an awful lot. Surely not politically viable to price people out of their bungalows into highrise flats even if they are executive flats.
To which I responded:
Correct.
But aren't people always wailing about The Hallowed Greenbelt and how if another square inch of it is lost, then we must all surely starve?
So why not reward those people who use the least land and punish those who use most?
Or is this just the usual NIMBY-Home-Owner-Ist hypocrisy at work, whereby rezoning parts of the HGB for residential is evil; but owning a lot of land that has been rezoned for residential in the past is a noble and honourable thing?
Blimey - he's off again
21 minutes ago
17 comments:
The real killer argument against LVT is that you have argued for the tax on 109 occasions, will you go for the 1000 posts. It aint gonna happen because people aspire to owning and making a nest egg to enjoy for themselves or to leave to their offspring. We have been indoctrinated as in, our home is our castle, safe as houses,building societies, no place like home. Just saying.
PW: "It ain't gonna happen because people aspire to owning and making a nest egg to enjoy for themselves or to leave to their offspring..."
Exactly - but can you not spot the sheer unmitigated contradictions inherent in that one short statement?
That 'nest egg' can only be used once - to (a) live rent free, (b) as a 'pension' (via mortgage equity withdrawal) or (c) to leave to your children.
(a) and (b) are mutually exclusive, of course.
And while the Homeys say that house price rises are good because then there's (c) something 'to leave to your children' then are you not robbing them of their own money in order to appear generous when you give some back to them?
To wit, if you want your children to be able to afford a house, wouldn't it be better all round for houses just to be cheaper in the first place?
I'm sure most young people would rather be able to afford a house NOW rather than living in a flat until their parents die, only to find out they MEWed it all.
"We have been indoctrinated as in, our home is our castle, safe as houses,building societies, no place like home. Just saying."
Key word: 'indoctrinated'. On closer inspection, it's all lies, isn't it? The banks and building societies are not 'safe as houses' precisely because people in some countries bought the illusion that 'rising house prices = rising wealth'.
The only valid argument against LVT, AFAICS, is that the taxpayer ends up with a liability which they might have no income to meet. Setting aside the fact that this happens in other ways (non-PAYE income tax, mortgage payments, rent payments), this argument can be simply demolished by the gov't giving a 100% tax rebate to those who can prove they have no income. It's a bit pointless, after all, for the state to dish out unemployment benefit with one hand and take it back again with LVT with the other.
B, the flip side of the Georgist tax system is the Citizen's Income*, which by definition will be +/- the same as the LVT bill for a median household (you get the health and education vouchers on top of that).
So if you aren't confident about what your income will be in future, make sure you buy a house where the LVT bill is = or < your likely Citizen's Income and you are truly a net nil taxpayer.
It's only if you want to live in a large house or expensive area that you are a net taxpayer, and if you fall on hard times and want to be a net welfare claimant, then move over and make room for somebody who'll be paying your welfare for you.
* The Citizen's Income would still have a lot of merit even if funded out of flat income tax, it's certainly better than existing welfare system.
"The only valid argument against LVT, AFAICS, is that the taxpayer ends up with a liability which they might have no income to meet."
That depends on their location of course. The North would become an effective tax haven, the south less so.
This liability will always exist even if there was no LVT, in fact in net terms the liability would reduce as the speculative froth that drives up house prices would be removed.
M, I appreciate that, but the number of people with nil income living in large houses with no mortgage would be so vanishingly small that it's hardly worth the state making them move. Like the answer to the Poor Widow Bogey, really. Everyone else would have to pay a tiny bit more, but it would be miles cheaper than taking out insurance. Thus the state can appear to be generous without it actually costing very much.
CD: "This liability will always exist even if there was no LVT..."
Exactly. But the Homeys then say "But the house does not generate cash income" to which the reply it "But it would do if you sub-let it."
B,"The number of people with nil income living in large houses with no mortgage would be so vanishingly small that it's hardly worth the state making them move."
Sure, give them exemptions, discounts, deferment option or a higher state pension and/or make everybody else pay a higher rate, that's just details.
It's still not clear what these people with no income are supposed to do when they want to buy food or something, of course...
"It's still not clear what these people with no income are supposed to do when they want to buy food or something, of course..."
Same as what they have always done, run up debts or sell stuff, but the difference being that they are not selling stuff to pay tax, they are selling stuff to buy food and while there is no practical difference between the two, there's a big political difference.
I’m new to LVT, but find it interesting, maybe because I’m interested in contrarian ideas anyway.
My question is (and my apologies if you’ve answered it a million times already) – how likely is it that LVT will ever be used? Opposition from vested interests would surely be huge and enormously well-funded.
AKH, how likely?
We've been heading steadily in the wrong direction for centuries so the answer to that, right now and in all honesty, is "nil".
Did you notice that the Lib-Cons merrily hiked VAT and National Insurance rates to try and increase revenues from £180 billion to £200 billion a year, but then gave themselves a pat on the back for 'freezing' Council Tax (which only raises £25-billion odd in the first place)?
That's how organised and well-funded the vested interests are.
Mark,
Thanks. To my innocent mind, LVT sounds simple and fair and so is presumably doomed. It's surprising (or maybe not) how often complexity benefits crooks and charlatans.
AKH, glad you find it interesting. I am only aware of one case where it has been used in its pure form, albeit without the citizen's dividend component. And that is the German colony of Kiaochow between 1898 and 1914. The tax did exactly what was claimed for it.
However there have been a lot of approximations to it. Successful partial implementations include Meiji Japan, Hong Kong and early 20th C San Francisco (which used it to recover from a devastating earthquake/fire in 1906 without external aid. One wonders what would have happened if the same remedy had been applied to New Orleans in 1995 or Haiti more recently). Google can be used to find more examples.
Oops. I meant 2005 not 1995. How time flies!
> you get the health and education vouchers on top of that
No you shouldn't.
AKH/D, there are examples much closer to home, such as Business Rates in the UK; Domestic Rates in Northern Ireland; fuel duty; 3G licence auctions; Schedule A tax/Domestic Rates in mainland GB in the past and so on.
AC1, well you do in my manifesto, so there. I see no harm in earmarking some of people's CD to pay for borderline public-merit goods. As long as it's less than the full cost, then no harm done.
Not sure I see the public good in lowering the quality (as subsidy does) of Education.
Far better to have a loan system funded by people being able to defer their CD (in effect get a multiple of their citizens dividend) on a time deferred = extra CD time.
AC1, look, let's assume a child's CD would be £5,000 a year, IMHO it is better to split that into (say) £1,750 cash and £3,250 education voucher.
The cash cost of education is rather more than £3,250 per year, so 'responsible' parents end up spending the 'correct' amount (whatever that may be) and the children of 'irresponsible' parents at least get some sort of education.
In cash flow terms, this is the same as a loan to be repaid in future by a lower CD only without the administrative faff.
And a soft loan would probably distort things or inflate prices in a far greater measure - see e.g. tuition fees.
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