Wednesday, 5 December 2012

Killer Arguments Against LVT, Not (286)

Spotted by Mitesh in The New Statesman:

The value of your property is not necessarily any indication of your wealth.(1)

OK properties in the Southern part of the UK attract higher values than those elsewhere, but the inhabitants have had to work much harder.(2)

The present [council] tax is very discriminatory against those in the South.(3) Many of us already pay twice as much council tax as similar properties in other areas. Many of us survive on similar salaries or incomes - especially those working in he public sector or pensioners.(4)

The average council tax is not much more than £1,000. A similar property, across the country can fall into any band from A to H the further South you travel the higher the band.(5)

Equally unfair is the suggestion of LVT. Most householders in the Southern half of the country would not be able to afford LVT.(6) Maybe thats the answer, we all move northward for cheaper living.(7) We all use the same services, so why not the same council tax?(8)

1) Correct. The rental value of land is not net wealth, it is a measure of the flow of wealth from non-landowners to landowners. Apart from this wealthfare, most landowners are not wealthy at all.

2) Lie. The main influence on house prices is the local average wage for doing run-of-the-mill jobs. People in "the south" do not work harder, they just get paid more, that's all.

3) Outright lie. If Council Tax were discriminatory against houses in the South, then they'd be cheaper than houses up North. Which they clearly aren't.

4) True. So what? Public sector salaries and old age pensions is just more wealthfare.

5) Yes, because Council Tax is a dim and distant poor second cousin of LVT.

6) What a load of f-ing bollocks. Rental values, and hence LVT, is dicated entirely by what people in any area are willing and able to pay. The article suggests replacing Council Tax bands with an annual 0.6% charge on current selling prices to raise the same amount of money. (which is less than what they pay in Northern Ireland, FFS).

7) Would "most" or "all" people move? Make up your mind, love. If she were correct (which she isn't), can she explain to me why millions of people and thousands of businesses are prepared to pay the higher rents to be located in or near London? Why don't they all move up North..? It's precisely because they can earn more money for the same effort, and that extra income goes straight into rents.

8) The services are our "citizen's dividend", that's how they spend tax money, not how they raise it. Or would she like old age pensions to be funded by a Poll Tax on, er, old age pensioners? Doesn't make sense, does it?

And she's lying anyway, does anybody in their right mind think that somebody living in a large plot in a nice area gets the same services, i.e. benefits from society, as somebody on a small plot in a crap area? of course not, and those extra benefits are what make up the rental value. And if she does think that they get the same benefits from society, she won't mind moving, will she?


The Cowboy Online said...

Not a killer argument AGAINST LVT, well okay, but then I've not seen a killer argument FOR LVT either.

Mark Wadsworth said...

TCO, what sort of reasons for LVT would you like? Each individual one is reason enough for doing it, and they all reinforce each other.

The moral arguments; the dry practical ones/adminstrative simplicty; the fact is is far less bad than VAT, NIC and income tax; the pro-economy/avoiding boom and bust reaonss; the environmental/town planning benefits; what?

I wasn't too fussed about LVT until I started doing KLNs, and I noticed every stupid twisted supposed "argument" against actually reminds me of another five reasons FOR which I hadn't even though of.

Derek said...

That's what happens when you start to look at LVT. I came across it in the 1980s when I was looking for the reasons why perfectly good buildings in the town centres go to rack and ruin and how to stop it. LVT can stop that sort of urban decay of course, but then I learned about its other good effects and I began to wonder why on earth we weren't using it already.

The Cowboy Online said...

Mark, I think - really - the killer argument against LVT doesn't exist, at least not as an argument but as a reason, and that's politicians and vested interests.

So much of what government does is simply extending reach and further complexities in tax codes and the like.

So, LVT, I really can't imagine there will ever be the political will to implement it.

Mark Wadsworth said...

TCO, except for Business Rates, which works pretty much as we would expect LVT to work.

Most of the prophesies of doom about what would happen if we had LVT can be batted aside by saying "Ah yes, but we already have quasi-LVT on commercial land and buildings, and [what you claim would happen] has not happened".

Mark Wadsworth said...

D, I started off being just a simplification campaigner, and it struck me that you could replace Council Tax, TV licence, Stamp Duty and Inheritance Tax with a flat tax on housing, the end result being that nobody is much better or worse off.

The amount of grief I got for that was incredible, but none of it made sense and that's what made me think that the LVTers were right.