Over at Liberal Conspiracy:
287. Celebrity super-twat Richard Carey digs out a tedious old quote "The notion that it is a simple matter to distinguish between the yield of natural agents and that of improvements is fanciful and confusing…. The objective classification of land and capital as natural and artificial agents is a task that always must transcend the human power of discrimination."
WTF is he talking about? If you take two physically similar buildings on similar sized plots but in different locations, any difference between the total rental value is purely down to the "location" element. It's as simple as that, all you need to do is find the cheapest such building in actual use to serve as the nil-tax baseline and all rental value above that is the basis for the LVT assessments. FFS.
A slightly more original one from a proper leftie this time, I've not seen this one in this specific form before:
288. lihfkydljhnl: The really interesting thing though is that, as the ONS showed just the other day, it is the lower 50% of the population whose assets are predominantly held as land and other immovable property – the top 50% hold their assets in pension funds and other paper investments. A land tax would therefore disproportionaly hit the poorer 50%.
That's deliberately distorting facts of course, but in quite a clever way at least (or possibly this person is just really stupid and actually believes it. I can't tell from this distance):
a. The poorest thirty per cent own no land whatsoever, in fact they own negative land because they have to pay rent. They would be entirely unaffected by LVT, whether it's a replacement tax or not.
b. The next twenty per cent might have the bulk of their assets in land and buildings and the top fifty per cent might have the bulk of their assets in other investments, but that is only in relative and not absolute terms. For example:
- poorer household owns land and buildings worth £100,000 and has cash savings £5,000.
- wealthier household owns land and buildings worth £1,000,000 and has cash savings and other investments worth £2,000,000.
Precisely who is going to be "hit" by LVT here?
c. The distribution of incomes is quite skewed, so for example, the top five per cent of earners earn as much as the bottom 50% of earners put together. But land ownership is far more skewed; the top one per cent own as much as the bottom 75% put together.
So on an "assets" basis, the bottom 50% would do well out of LVT; and the next 49% would do a lot better than The One Per Cent.
d. The far more important ratio is that between "earned income" and "value of land and buildings owned". For the bottom thirty per cent the figure is infinity; for a FTB couple it is about one (for example, annual income £40,000, net equity in house £40,000); the average working age household it is about a third or a fifth and for the landowners (and bankers) it is zero; they have no earned income at all but they own lots of land (directly or indirectly).
So a shift from taxing earned income to taxing the rental value of land/location (as defined above) would hugely benefit the bottom 50% overnight. Most of the next 49% will come out ahead as well, it is only the One Per Cent who stand to lose out.
Tuesday, 11 December 2012
Over at Liberal Conspiracy:
My latest blogpost: Killer Arguments Against LVT, Not (287, 288)Tweet this! Posted by Mark Wadsworth at 15:03