Saturday, 25 January 2014

Killer Arguments Against LVT, Not (314)

Here's another one which keeps coming up and which I have now added to The List.

"Over sixty per cent of voters are home owners and turkeys don't vote for Xmas"

This is a non-argument.

Even if were a valid objection, you might as well point out that considerably more than 60% of people have income on which they have to pay income tax and/or employment income on which they have to pay National Insurance; that nearly everybody buys goods and services subject to VAT etc.

If 'the tyranny of the majority' were an important factor in designing a tax system, then we would find that the only taxes levied would be those only ever borne by a minority (for example alcohol, tobacco and gambling duty, possibly corporation tax and Business Rates).

And as a matter of fact, for most households (certainly for most working age households) their earnings as a share of total national earnings is much higher than the value of their home as share of total land wealth, so shifting taxes from the former to the latter will reduce the tax bills for most households (quite dramatically, as it happens).

Those who would see their net income fall would mainly be members of The One Per Cent whose entire income consists of monopoly income (land rents, mortgage interest, the value of banking licences etc). Everybody else, and the productive economy as a whole, wins.

So if we did have 'the tyranny of the majority', Land Value Tax would be the way forward!


The Stigler said...

and it's not even all of The One Percent. Someone like Bernard Matthews who had a great big place out in the wilds of Norfolk would be better off. And that's fine by me as that's productive, real job-creating wealth.

I've said it before - everyone in politics knows that income tax is broken because everyone in politics recognises that you have to throw tax breaks to video game companies, car makers and film productions* because they're in competition.

*if you're filming and require a specific location, the reverse is true. The New York government know they have the only statue of liberty, so will charge you rent for the rights to film near it.

Mark Wadsworth said...

TS, proper businessmen and industrialists, or football, film and pop stars don't count as The One Per Cent, assuming they are not living off state subsidies or state guarantees.

The Stigler said...


I thought the one percent referred to wealth?

DBC Reed said...

In practice the Homeownerist paties (all of them bar a very small one) have made a nice little earner out of corralling the 60% and making them accept falls in real wages in return for an unearned capital gains in the value of their houses.Not recognising the tyranny of the 60% + massive corporate and institutional backing will not help.We need an idiot friendly slogan like "You can have high house prices and good wages but not both"

Mark Wadsworth said...

TS, read my original post careful, you will see that I caveated it. I did not refer to ALL wealthy people I referred to a certain sub-category thereof :-)

DBC, the Homeys have cornered the market in idiot-friendly slogans.

But yours is very good but it should be "or" not "and", surely?.

Mark Wadsworth said...

DBC, and as you point out, it is the Homey Parties, corporates and institutions pushing for high taxes on income and low wages, not the 60% themselves.

I don't think a sane person would vote for that unless they'd been severely brainwashed for several centuries (which we Brits have been).

Bayard said...

A better Killer Argument would be "LVT would hit hardest the One Per Cent who run this country and turkeys don't vote for Christmas".

Mark Wadsworth said...

B, that's another good riposte.

Physiocrat said...

Britain is run by, and for the benefit of, the handful of people who own most of it. Once this is understood, everything that happens is explicable as rational behaviour.

Bayard said...

P, all countries are run this way and always have been since the dawn of time.