I'm not sure whether CityUnslicker meant it as a spoof or not, but here goes:
but I need to rent land from the government by dint of tax obligation I never own any really.(1) What happens when the government decides to raise taxes by 100%? (2)
Taxes always go up, they go up always, forever (3), as politicians know the answer to getting votes is spending other peoples money.(4)
By taxing land you have created the ultimate, never-ending, tax raising machine.
Poverty for all.(5)
1) Do I own my own body? Yes, because nobody else does. I still have to pay for stuff to keep myself alive like food, clothes, warmth and shelter. I own my own car, I still have to pay for petrol, repairs, insurance and so on. If I want to own land, I pay the current owner for the value of the improvements he has added (or which he has paid for) and I pay the 'community' for the value which I derive from them; be it favourable access to other stuff (schools, job, shops, a nice view) and as compensation for them respecting my exclusive possession. It's no different to an interest-only, non-redeemable, variable-rate, non-recourse mortgage (there can never be nequity on it, you can always walk away scot-free), which sounds a more attractive proposition than making people and businesses pay tax on the value of their output, earnings and profits.
2) They wouldn't. You might as well argue against income tax on the basis that the rate could be increased to more than 100%. In fact, if you add together VAT and PAYE, the overall effective rate is sometimes more than 100% of profits which can be made and those businesses go bankrupt. It's just that few people realise this.
Conversely, the government does set the rents on a lot of land (Crown Estate and social housing) and clearly they do not set it above market rates, in fact the Home-Owner-Ists are always wailing that social rents are too low. Similarly, the politicians don't like increasing in-your-face taxes like council tax, Business Rates or LVT, so the chances are that they'd never collect anywhere near 100% LVT.
3) Land rents as a share of GDP tend to go up as the economy becomes more developed, that's a simple fact. So ideally, LVT would go up as land rents go up. History shows that taxes on land rents have always lagged increases in land rents, so if anything the problem is in the other direction, that the government would be too cowardly to raise enough tax.
4) Aha, nice Homey contradiction there: does he seriously claim that the government would piss off 100% of voters by increasing their LVT in order to buy the votes of a far smaller number of voters - who will always wail more about their LVT having gone up than they'll say thanks for the extra handouts? This trick only works with stealth taxes; so the government hikes stealth taxes like VAT and National Insurance in order to be able to freeze a more visible tax like Council Tax.
In any event, LVT does not mean suspension of democracy. The old vested landowning and banking interests in the Tory Party (or behind New Labour) will always agitate for lower land taxes and higher stealth taxes on income; and the diehards in Old Labour will always agitate for higher taxes on income or private wealth (they have perenially missed the point of LVT). It's up to those who are in the productive sector to compaign for low taxes on income, sensible taxes on land values and having as much as possible of the proceeds dished out as a Citizen's Income/Personal Allowance (call it what you will).
5) The man doesn't have any grasp of maths.
As a general rule, and you can check the maths in as much detail as you like, this is quite simply true: under a full-on LVT system with a corresponding system of a "Citizen's Income" or "Universal LVT Credits" (one of the main reasons for having LVT is so that every member of society benefits equally from the existence of the nation-state and the resulting land values), the average-size household in a median-value home would pay plus/minus nothing in LVT minus Credits - regardless of how much they earn (income tax etc having been abolished). And neither will they be paying net ground rent or interest on a mortgage into private hands.
You can't make the median household any better off than this. It's mathematically impossible. So if there's no poverty for those in the middle, where exactly is it?
Those people who are happy to pay to live in above average houses would pay - entirely voluntarily - for the core-functions of the state and for the modest net distribution to those households in below-median value housing, i.e. those households whose CI/Credit entitlement exceeds their LVT bill. If they were no LVT, then land prices would be correspondingly higher, and what you save in LVT you just pay in higher mortgage payments. These people are also considerably better off than now (no income tax etc).
That is as close to a tax-free society as you can ever get; if the above-average rents/taxes weren't collected by the government and spent on stuff which benefits us all, then they would be collected privately and spent on consuming stuff created by the productive economy for nothing in return.
Thinking ahead
1 hour ago
9 comments:
"As a general rule, and you can check the maths in as much detail as you like, this is quite simply true: under a full-on LVT system with a corresponding system of a "Citizen's Income" or "Universal LVT Credits', the average-size household in a median-value home would pay plus/minus nothing in LVT minus Credits - regardless of how much they earn (income tax etc having been abolished)."
Oh dear, you're doing it again.
Mr Slicker offered an opinion about LVT and you seek to refute it by your proposal of LVT plus a universal hand-out.
It goes without saying that the argument "this proposal will cost people money" can be answered by "the proposal will not cost people money if we give them the money they would otherwise lose".
In fact it accepts the very criticism made - if the criticism were not valid there would be no point mentioning the hand-out.
I really don't know why you persist in this blatantly dishonest form of argument.
Compare like with like or accept criticisms and say your plan includes a method of ameliorating them, but don't compare apples and oranges while pretending they are the same.
TFB, oh dear you're doing it again, blatant lying that is.
CU said that LVT was automatically "poverty for all" which is a downright lie. You now appear to be agreeing with him.
You know perfectly well that the Citizen's Income is a KEY PART of the LVT scheme, it is not "a way of ameliorating hardship".
Similarly, under income tax we have a welfare state, old age pensions, a personal allowance, tax breaks for various types of savings. Those are not KEY PARTS or the system, they are just sticking plasters.
Interestingly, I don't think there's a difference in practice to a malicious government that simply hands the entire LVT revenue to the minister's salary, to the endgame of Libertopia, where a small group ends up owning the valuable land, except in Libertopia it's supposed to be objectively true that that's the correct way to do things!
Some people are just anti-capitalist. They're just land subsidy junkies.
F, yes, I've made that point before. What's the difference between politicians collecting the rent and driving round in big cars or landowners/bankers collecting the rents and driving round in big cars?
In practice no difference, but in the former case at least the rent is on the table and in full view, and people will rightly say "Oi! Spend some of that money on us or else we'll vote in the other lot!"
SB, correct.
"You know perfectly well that the Citizen's Income is a KEY PART of the LVT scheme"
No it isn't. It's a key part of your LVT/CI scheme, but LVT as an idea has to make sense (and it does) without any form of CI. To insist in only presenting LVT as part of a LVT/CI combo is to devalue the idea of LVT as what you are saying is "LVT only works if there is a corresponding cut in government spending caused by the in-your-face nature of LVT and this allows a lot of the tax receipts to be dished out again as a CI". This is a bit like the old Polish joke "if we had some eggs, we could make a rum omlette, if we had some rum".
The point is that we'd all be a lot better off if government spending was cut to the point where a large amount of the tax receipts could be dished out as a CI under the present taxation system, but we wouldn't be as well off as we would be if the taxation system was changed to LVT. Also nearly all of us would be a lot better off if the tax base was changed to LVT only and everything else remained the same, the point being that the burden of taxation would fall on a different and quite small sector of the population.
I hate to agree with TFB, because I think he comments simply to wind you up, but in this, he has got a point. Every single one of CU's non-points can be refuted without mentioning CI, so why mention it?
B, nope.
1. Even under current rules, the bulk of government "spending" is redistribution - paying welfare and pensions or providing "free' NHS and state education. Mr CU himself claims that the aim of taxation is to spend it again on "stuff which people like", that appears to beyond contention.
2. One main argument for LVT is that everybody contributes towards the rental value of land, so the logical conclusion is that the bulk of the proceeds are dished out again (whether as CI or public services).
3. We could have LVT and simply adopt existing welfare system, pensions system, personal allowances and so on. As a matter of basic maths, these amount pretty much to a Citizen's Income.
4. Yes, we could shut down the entire welfare system and NHS and state education and pare the government to the bone so that it only spends 5% of GDP on truly core functions. In which case the LVT required would be minimal (keep Business rates and double Council Tax) but that just means that land rents would be collected privately (like in Victorian times).
5. So taking spending/redistribution and taxation as a coherent whole, LVT and CI is the way to go - with LVT/CI the median household truly pays NO TAX AT ALL - which is the general idea. With a small government and no CI, the median household still pays a lot of tax (double council tax plus mortgage repayments or interest).
6. As a separate issue, 30% or so of government spending is pure theft and waste of no benefit to the general population, we can't just turn a blind eye to this and any sensible tax reform has to ask "Why are we raising the tax in the first place?" If you are going to have bad taxes like income tax, NIC, VAT then it is even more important to reduce govt spending to the bare minimum - this is less important with LVT.
OK, Here goes:
-but I need to rent land from the government by dint of tax obligation I never own any really.(1)
What defines ownership? the ability to do what you like with your possession> Can you do this with a rented house, car, tool, boat etc, no. Can you do this with land on which you pay LVT, yes. So land subject to LVT is not rented.
- What happens when the government decides to raise taxes by 100%? (2)
The same as what happens when government decides to raise any set of taxes by 100%; riots, I expect. Of course, there is the implication that a government that introduces LVT will be liable to raise it by 100%, but that is false as it is no more likely for LVT than any other tax.
- Taxes always go up, they go up always, forever (3)
whatever form of taxation there is in place. Relevance of this point? Zero, I think.
- as politicians know the answer to getting votes is spending other peoples money.(4)
Yes, but you only get the people you didn't take the money from in the first place to vote for you. This is, actually, an argument for LVT, as the people who will lose out under LVT are numerically smaller than the people who will gain.
- Poverty for all.(5)
Since, in essence, all the government is doing via the taxation system is redistributing wealth, it is impossible, unless they start giving away really humungous amounts of money as foreign aid, to make everybody poorer.
There, all arguments refuted and not a single mention of CI. Happy, TFB?
B, excellent, I always over-intellectualise this stuff.
"but you only get the people you didn't take the money from in the first place to vote for you. "
Actually, it's worse than that. They bribe people with their own money by levying stealth taxes and then "giving" them something back, ie. they hiked VAT and NIC by about £25 billion a year, and then boasted about a "freeze" in Council Tax which is only £25 billion a year TO START WITH. For that sort of money, they could have SCRAPPED council tax.
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