A tactic which the Home-Owner-Ists often adopt is basically to go completely hysterical and focus on one or two hardship cases. The BBC did this recently with regards to the new Greek 'property' tax, wheeling out a couple of Poor Widows with unemployed children, one of who has a mother with cancer.
The Fat Bigot then took it to extremes with this comment:
Mr Wadsworth, the more you comment on your beloved LVT the more statist (1) and oppressive (2) your position becomes.
The facts as reported - and you cite no basis on which they should be disputed - are: (i) these two people live in a small apartment, (ii) they have no rent or home-purchase loan to pay, (iii) one is beyond the age at which it is reasonable to expect her to work for a living, (iv) the other is a student, (v) they need little income to live and receive what they require mainly from relatives. (3)
Clearly they are prime candidates for a tax (4) in the eyes of those who consider ownership of a tiny bit of real estate (5) to be an evil (6) that should be punished. (7)
Ho hum.
1) The very concept of land 'ownership' is statist. You can't have land 'ownership' without a state and you can't have a state without land 'ownership'.
2) Land ownership in itself, or the right of individuals to exclusive possession of specific bits is not oppressive in the slightest. What is oppressive is the Home-Owner-Ist dream of being able to occupy land rent free and tax free, benefitting from everybody else's efforts while you do so, and then being able to cash in to the tune of tens or hundreds of thousands of pounds when you sell up. The flip side of this dream is the young person's nightmare that they are excluded from land without compensation, and if they want to 'get on the ladder' they have to pay ransom of tens or hundreds of thousands of pounds, with as much again in mortgage interest.
So call LVT 'oppressive' if you will, but not having LVT and having income tax instead is twice as oppressive.
3) Let's take those facts as a given - the BBC only had to find a couple of hardship cases out of millions of Greek households, but let me add that all the hardship cases mentioned depended on other people's taxes, whether pensions or student grants, and expensive cancer treatment. If these people truly live in such small apartments, then by definition their property tax will be minimal, and certainly a lot less than all the benefits they receive. Problem is, they want it both, they want to live in the nice houses tax free and get stuff paid for by everybody else.
4) No they are not 'prime candidates' for the tax. Adam Smith didn't recommend LVT with the sole intention of prising Poor Widows out of their mansions. Anybody who really thinks that this is the whole point of LVT reads the Daily Mail too much. Winston Churchill got bored dealing with the Poor Widow Bogey a century ago, suffice to say, the rougher corners of LVT (i.e. the Poor Deserving Widows In Small Apartments Who Can't Afford It) can be rounded off with exemptions, discounts, deferments, higher state pension, whatever.
5) Under a full-on LVT system, everybody would own "a tiny bit of real estate" from birth and as of right, because they would receive a Citizen's Income or Citizen's Pension funded out of the LVT collected. If they choose to occupy an average size/value plot of land, then the CI they receive and the tax they pay nets off to +/- nothing each year, mortgage free, hassle free.
6) People having exclusive possession of land is not evil in the slightest, I rent a house and a garden and I want to have exclusive possession of it. What is 'evil' is the system whereby the state taxes incomes (which is theft), doesn't tax land 'ownership' (which is theft) and at the same time subsidises land 'ownership' with the money raised income tax (yet more theft). Why not make the punishment fit the crime and replace taxes on income with LVT?
7) Remind me - taxes on income, output and profits are not 'punishment' of individual efforts because..?
More to the point, LVT is just a tax on consumption of common resources, a bit like fuel duty. So The Fat Bigot could just as well find a few elderly widows on meagre state pensions, who only occasionally use their Fiat Pandas to visit their Sick Relatives and then rail against fuel duty along the following lines:
"Clearly they are prime candidates for a tax in the eyes of those who consider ownership of occasional use of a small car to be an evil that should be punished. "
The point is that fuel duty only costs those elderly and deserving widows a few pounds a week, a tiny fraction of the meagre pensions they receive, which are partly funded out of the £40+ billion collected in taxes on fuel* (fuel duty and VAT), of which only a quarter of which is spent on road maintenance. And if we can afford to pay £40+ billion a year in taxes on fuel and have the government's profit spent on other stuff, who's to say we can't afford to pay £300+ billion in taxes on the rental value of land (assuming £300+ billion of other taxes were scrapped)?
* Bonus points to the first idiot who says "Old age pensions are funded out of National Insurance". National Insurance is just another kind of income tax, it all goes in the pot and gets spent on whatever the government wants to spend it on.
A small change of theme
1 hour ago
9 comments:
I really don't understand why people are so against LVT.
We must have tax.
Surely it is reasonable to debate on how we tax?
GO, thanks for support.
"The flip side of this dream is the young person's nightmare that they are excluded from land without compensation"
Yes, and it's funny how this large real problem is not set against the small and resolvable problem of those few people who would undoubtedly be compensated anyway during transition to LVT.
Yet there is no talk of compensating young people for carrying on as we are and thereby leaving unresolved the unfair way they are treated.
If the figures you have quoted in your defence of LVT in various posts are true, then it would appear to be a no brainer, but... I dislike the idea of introducing a new tax, how do we know we can TRUST the politicians to abolish or at leat reduce the existing taxes? More likely, they would just spend even MORE!
Where's the anger on poor widows and student's behalf when it comes to VAT?
-Kj
People get very confused about 'freehold'. A UK freehold is just a perpetual free leasehold from the Crown. If you die with no beneficiaries and no relatives the 'freehold' reverts to the State. Why then is LVT such an issue?
Intriguingly MW LVT notional rate of 8% is almost exactly the same as the traditional yield to calculate on a property investment - 12 years purchase. I admit that recent lunacy has pushed yields down to 6% - 15 YP - but, trust me, it won't last. So there seems to be a very satisfying symmetry to MW's calculations.
Anon@19:29 wrote: but... I dislike the idea of introducing a new tax
Then have no fear: this is not a new tax. In fact it is an old tax, a variant of which was used in the UK from the late 17th to the early 19th century. The new taxes are income tax, NI, VAT, corporation tax, etc. And we wholeheartedly agree with your dislike for the new taxes. Let's get rid of them and replace them with an old faithful which served this country well.
AKH, true, but the Homeys have a response prepared: "We saved up to buy a house when we were young, why is this such a problem for today's young people?"
Anon 19.29, see what Derek says. Further, LVT is an in-your-face tax, people will know how much they are paying and so any government which wants to introduce it would have to demonstrably reduce other taxes by more than £1 for every £1 LVT raised.
Kj, to be fair, there is a tiny bit of anger from the Labour party who say that VAT is a regressive tax.
L, to be honest, the 8% figure is just required tax take divided by the total value of UK land and buildings to give an approximation. In other words, if I'd done the calculations ten years ago, the figure would have been 12%, and if prices rise even further the figure might up at 5%.
5) is very biblical talk. Leviticus 25:23. The land shall not be sold permanently. LVT is essentially a permanently rotating jubilee for a super advanced society. Actually Hong Kong is even more biblical. Leases there come up about every 50 years. when the land is restored to the common pool like a jubilee. So you always have a chance to redeem land if you can win the bid. Diff is no redemption during the lease which is poor.
What do you mean by profits? Can you use a term that is not so confusing please.
Derek, LVT was about in the bible of the Israelites. Called a tithe then. It was about 10% of GDP. Levites(tax collecters) received it but could not own land and provided sort of public services. They eventually were corrupted and started collecting new taxes, like a poll tax(census), and just like today became the most hated people in the world. Eventually their economy collapsed.
Exactly the samehappened later in Rome, before in Confuscian China.
Sigh! Its a natural law, there is no escaping it. TFB etc would be not very popular with Moses. They know its wrong but misdirect the people anyway. The lowest kind.
I suspect Moses would be the first to buy MW a pint. A prophet or foreteller. (:
MW apologies for my error yesterday.
Post a Comment