A good one is to deliberately misunderstand it, argue against what you claim it to be and then resolutely refuse to give ground. Over at a Faisal Islam's Channel 4 economics blog:
adrian clarke: Meg and Carol, I am trying to get my head round this LVT without success. If i start from the end and work back , i will pose some questions...
The tax is based on land values. Who determines those land values? Is all land of an equal value irrespective of its location. Clearly the landlord needs investment within that land to produce an income to pay the tax. If so that tax must be passed on, either in rental or production to meet that payment. How does a farmer, within a rural community pay the same value for land as in one of the large urban conurbation?
To which Carol Wilcox responded "Adrian, your question “Is all land of an equal value irrespective of its location” shows that you have not understood anything about LVT and are therefore not worth debating with. Sorry."
That's the short answer :-) The long answer is that there is a staggering difference between the lowest and highest land/location values in the UK. If you imagine a rental value of one penny per square yard per year to be equivalent to one second in time, then you can picture these differences as follows:
A grouse moor in Scotland - about half a second
Average residential land in England - about three quarters of an hour
Retail premises in Bond Street, London - about a week.
If you can imagine how much longer a week is than half a second (about a million times as long!), then that is roughly how many times as valuable the most expensive location is compared to the cheapest one. That is one of the first things you have to grasp about land values in any developed country.
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Workings:
A 9-acre grouse moor in Scotland was bought/sold for £5,000,000 a year or two ago (page 5 of this), that works out at selling price of 11.48 pence per square yard, so the rental value will be five per cent of that, call it half a penny per square yard per year.
You can rent an average semi-detached for about £10,000 a year, an average residential plot is 400 sq yards, so that's 2,500 pence per square yard per year. One hour is 3,600 seconds.
The most expensive rents in England are on Bond Street, about £500 per square foot per year for the ground floor retail premises = 450,000 pence per square yard per year, plus maybe a third as much again for the upper floors = 600,000 pence per square yard per year. A week is 604,800 seconds.
Diminished
1 hour ago
7 comments:
"you have not understood anything about LVT and are therefore not worth debating with. Sorry."
Looks like Carol Wilcox didn't explain her ideas properly.
FC, I would say she (and others on that thread) did try to answer all his questions and he stuck to his Plan A of simply not listening.
Yup, Carol was right. What on earth was the guy doing commenting on an economics blog when his knowledge of economics appears to be confined to "I hate taxes. They're bad." ?
Kudos to Dave Wetzel for carrying on with efforts to explain. But he's in the position of someone trying to explain calculus to a person who's never learned algebra. On a loser before he starts.
I especially liked this little gem:
adrian clarke "Meg , i am afraid i do not understand your explanation .As i understand it LVT is a tax on all land.
Presumably paid by the land owner.
From previous blogs it is going to replace all other taxes and at the same time reduce the deficit..From what you say it is only the land that is going to be taxed, not the property on it . If that is the case , the cost of land is going to have to rise to unbelievable levels , making everything on that land that much more expensive .
As i have said earlier , it will ruin agriculture, and rental values would have to rise to unsustainable levels .Property prices too would rise .Unless you can give me a clearer explanation , i can see why no party has adopted it"
I can think of two without having to check around the t'internet for a memory prompt.
D, that's what puzzles me. LVT is incredibly simple, I don't see what there isn't to understand.
SW, that whole excerpt could be unpicked bit by bit. He says it will 'ruin agriculture', well no it won't. If an average farmer or ag worker works a hundred acres and pays an average of £5,000 income tax/VAT/NIC/Council Tax a year and the whole shooting match were replaced with LVT of £50/acre/year, what difference would it make? None.
Derek, Having a formal qualification in economics usually means one has been brainwashed at UNI.
Its not they do not understand it. Its that they have not even thought about it yet, no matter how simple. They are as astonished at the simplicity of our claim as we are at their ignorance. They have been taught that big issues can only be complex.
MW Land values are a little wider than that but its in the ball park. I have it at about a million times from bottom to top. £400/acre in wales farms to £400,000,000 in grosvenor sq.
Also FYI, I did a rough calc ages ago that in general urban land is 1000 times more valuable than rural. So city land of 1 acre woulsachyed be the same value as 1000 acres of rural land, on the whole.
RS, yes, I also worked out a million to one (see calculations above) but residential suburban to farmland is, ball park, a hundred to one.
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