From MonyeWeek:
At a seminar for clients of a wealth management company this week I was asked what I would do about the lack of supply of housing in the UK. Many of the attendees are worried about their children – given how expensive houses are, and how few of them there are about, how will they ever get a place of their own?
I'm not sure I approached the question with that much sympathy. Why? Because many of the people who make up part of the cause of the problem, such as it is (I'm not convinced there is a shortage of housing in the UK), were sitting right in front of me.
There are around a million empty houses in the UK – around 300,000 of which are holiday homes. There are probably many hundreds of thousands more being lived in by people who just don't need all of them – one elderly couple in a four-bedroom house for example.
So when they wonder what the government is going to do about the problem, they are looking at the wrong thing. They should be asking what they [themselves] are going to do about it. If the affluent all moved out of their big houses into small houses and put their second homes on the market, supply would rise and house prices would fall in a flash. Problem solved.
I can't see anyone doing this voluntarily – it isn't the kind of solution my audience were looking for. However, if everyone agrees that the supply of housing is too low and that Something Must Be Done, then it seems entirely reasonable to chuck a few property taxes into the mix...
An extra benefit would be that all these taxes would get the non-doms who are currently knocking around in vast London houses and paying not a penny in tax towards the upkeep of the infrastructure around them.
I'm not suggesting we do this (although if we dumped stamp, IHT and the 50% rate, and the government looked to be attempting to live within its means, I wouldn't be against it) but it would be a pretty quick way to get the UK's affluent to solve a problem that both bothers them and which they have at least in part caused...
I left the following comment:
You unfortunately made the mistake of confusing "land value tax" with "wealth tax".
Nearly all existing taxes are on "wealth" or "wealth creation" (from income tax to inheritance tax), but a tax on land is not a tax on wealth, because land (as distinct from buildings) is not wealth, it is merely a legal mechanism whereby land owners can collect wealth from non-land owners, or enjoy wealth created by society in general and nobody in particular (roads, railways, good state school, a nice view etc).
Land is no more wealth than the legal entitlement to welfare or pensions, these are not wealth in themselves and are merely a claim on other people's wealth (via redistributed income tax etc).
As an acid test, with proper wealth taxes (income tax, inheritance tax) there is never a problem with 'ability to pay'. Now, the excuse that they always use for not having LVT is that poor widows in mansions wouldn't be able to afford it, well of course not, because these poor widows aren't wealthy, they are just lucky.
Thursday, 6 October 2011
Editor of MoneyWeek takes first tentative steps over to The Dark Side...
Subscribe to:
Post Comments (Atom)
24 comments:
Finally!! An admission that pure LVT is the abolition of private property.
"Land is no more wealth than the legal entitlement to welfare or pensions, these are not wealth in themselves and are merely a claim on other people's wealth (via redistributed income tax etc"
Why can a citizen of the UK not sell his right to £60/week JSA for the rest of his life for a capital sum? Because he doesn't own it. The right to it is in the gift of others (the State) and can be withdrawn, increased or decreased as the State sees fit.
So by equating ownership of land with the right to benefits you show your true attitude to private property, simple as that.
S, are you going to launch into this crap about "land is just an asset like any other" again when you know perfectly well it is different?
And can you also stop this crap about LVT being "abolition of private property" because private property is your income, your cash in the bank, your car, buildings, furniture etc, none of which ought to be taxed because they are truly PRIVATE property, as opposed to land which is a share in PUBLIC property.
Finally, stop bleating on about "my true attitude" to anything, I have said exactly what I think there is no more or less to it than that, there is no hidden agenda, there is a perfectly public manifesto.
Private land is Public land because I say so ... f off
M, yup, and it's comments like yours which remind me how stupid/corrupt most people are.
M, where did I say that?
"Finally!! An admission that pure LVT is the abolition of private property."
What private property? From Wikipedia "In English common law, the Crown has radical title or the allodium of all land in England, meaning that it is the ultimate "owner" of all land." You don't own your land, you own a tenancy in "fee simple", or "freehold". The fact is that currently, your landlord, the Crown, is not charging any rent. However, should the Crown decide to do so, that does not alter your other rights as a freeholder under common law, so I can't see what is being abolished here. It's not "nationalisation of land" either, because the ultimate title to the land already belongs to the state.
Mark my comment may in itself be "basic" but it does it's job.
If you spent as much time trying to propose a solution to the real problem the "State" and it's function with society then great.
However I all I see you do is pontificate about how to redistribute other people wealth because you feel "everyone" is entitled.
Sorry .. simple .. go out and earn it and if you purchase land .. so be it ... get over yourself
Your jealousy shines through ..
M, I do plenty of posts explaining that the state is far too big, sticks its nose in too much, collects too much tax on the wrong things etc. Further, the main function of the state is channelling wealth to land owners, if you hadn't noticed. Funny how you Home-Owner-Ists applaud them for this, eh?
And you genuinely don't have a clue, as your personal insults reveal. I did very well out of the house price bubble, thank you very much. Why don't you try sending personal insults to Martin Wolf of the FT, Fred Harrison, Merryn S-W and others who would like taxes to be shifted from incomes to land rents?
Yes but no, I mean yes, maybe no ... Mr. Merryn Somerset West.
By your figures you're looking at about a million and a half homes in this country that are either empty or under occupied?
Yet nuLabor let in about two and half million nuEnglanders to the Land of Plenty.
So we're still a million homes short?
"If you spent as much time trying to propose a solution to the real problem the "State"..."
Ok, then, what's your theory as to what's wrong with this country? Do tell and let someone else have the chance to pick holes in it in an illiterate, perjorative and ill-informed way.
BB, NuLab has been out of office for about a year now, in case you hadn't noticed, so isn't it likely that that 1M figure is after the resettlement of the NuEnglanders has taken place, especially as it's very unlikely that they would have been put in the 300,000 holiday and second homes?
> because the ultimate title to the land already belongs to the state.
No it belongs to the crown. I think the CROWN should run the Citizens dividend, and the cost of government should be deducted from there.
At least someone in the media is daring to question the very existence of a housing shortage. I recently had a little go myself, perhaps abler pens could develop this theme:
http://theylaughedatnoah.blogspot.com/2011/09/what-housing-shortage.html
"land which is a share in PUBLIC property."
So what exactly is 'public property'? Who is it vested in? Who decides how it will be used and what to charge people for using it?
As for The Crown owning all land and just not charging us all rent, well I'll take my chance on that. I reckon given there's millions of property owners, and one monarch, good luck to him/her deciding they want to charge everyone rent for their own property.
Whereas the State consists of lots of people who think they are entitled to the efforts and wealth of others, with no recompense.
I can guess which of the two is more likely to want to steal from me.
Bayard: Yep, 'freehold' just means 'rent free' - the land still 'belongs' to the Crown.
Anon: Now that's an idea! Appeal over the head of Parliament and get HM to levy LVT and pass it onto Parliament - but only if they scrap all other taxes. HM is after all the 'sovereign'. The historic transfer of revenue raising powers from the Crown to Parliament must be reversed! Trouble is when Liz pops her clogs we get Charles, oo er!
Generally, I do not give a stuff whether land is personal wealth or not (personally I don't think it is). What I do give a stuff about is that private endeavour and by association my finite time on this mortal coil is taxed to bejeesus. And that LVT will discipline both the land speculator masquerading as a wealth creator and the politician masquerading as whatever takes their fancy before tea time on any given day. Oh, and it also stuffs the leaching bureaucrats.
BB, whatever the facts, your maths is wrong. If Nulab did indeed let in 2.5 million people (which is about 1 million households) and there are indeed 1.5 million empty houses, then before 1997 there must have been 2.5 million empty homes (unlikely but possible).
B, L, ta for back up, agreed.
S: "So what exactly is 'public property'?"
For example roads, parks, railways stations, a nice view, good state schools, taxpayer funded hospitals, the police etc.
Clearly, if you 'own' land in an area with good traffic connections to places you want to be (jobs, leisure and shopping opp's), a nice view, a good state school, good hospital, low crime rate etc it is worth a lot more than if it isn't. Therefore you benefit from and can rent out or sell at a huge profit access to all this 'public property'.
Or look at it this way: I manage to persuade the council to sell me the road and pavement in front of your house and I charge you £10,000 a year rent or toll for the right to walk or drive on either. Would you call that a fair charge for access to my land, or would you call it pure bloody extortion?
"I reckon given there's millions of property owners, and one monarch, good luck to him/her deciding they want to charge everyone rent for their own property."
One monarch with an army, an air force and a navy. How many tanks and fighter planes do you and your fellow landowners own then, Mr Sobers?
B, or we might point out that "... there are millions of workers, businessmen and investors, and one monarch, good luck to him/her deciding they want to help themselves to half of people's salaries, profits and dividends."
One of the fun things about the LVT is thing thing you do when a property doesn't pay it LVT...
Wall it off to cut off outside access to it.
Take the wall down when someone starts paying for it.
AC1
If a property doesn't pay its LVT but uses the money to buy an army, it becomes another State.
So, the article suggests setting a land / property tax at such a level that it forces people with high incomes to sell holiday homes and down-size their own living accommodation.
Unless the tax is levied only on those with high incomes, it will have to be set at a level that is oppressive to Mr & Mrs Ordinary if it is to have any chance of tearing properties "they don't need at all" from the income-rich.
AC1, agreed. And put a notice in the local newspapers that so-and-so is in arrears and that the police will not bother investigating any burglaries etc which happen at that address.
Anon, exactly.
TFB, look, firstly she didn't say that at all, and secondly, if you have an issue with what she ACTUALLY said, then why not leave a comment over there or send her an email calling her a raving communist?
Holiday homes are a particularly egregious example because they are almost always built in places where there is no shortage of land. Yes they drive up the price of local housing and drive it out of reach of locals but only because we are forbidden to build more. If the housing supply was not articifically limited holiday homes would be welcome - bringing money into the community without any added costs to local communities.
NC, agreed.
Holiday homes are fine, it's holiday home-owners who are also NIMBYs that spoil things.
Nonetheless, non-second home owners should be grateful if others own second homes, because the second-homers will be paying a double share of LVT (so lightening the tax burden further for people who are quite happy just owning where they live).
Post a Comment