Tuesday, 8 July 2014

Reader's Letter Of The Day

From the Evening Standard (8 July 2014, page 44):

Tony Travers is absolutely right (July 7) - London's land wealth could easily generate the revenue to fund all local services.

Rents are hugely in excess of building costs so councils could grant planning permission for built-to-let in exchange for [an] equity stake in each project, a common arrangement in parts of the EU.

Raising council tax to make London self-sufficient would also end the injustice of making the working poor in the rest of the UK subsidise Tube travel and (via housing benefit) rental receipts of the country's wealthiest landowners.

Joe Momberg, Young People's Party.


Lola said...

reading Travers piece and one or tow of his papers, it seems to me that there is some psychological block that people get to when pursuing the land tax arguments. They take it so far, then stop. If only they could learn to keep going we might have a debate.

Plus, as ever, politicos and journos and lots of profs. see land taxes as adding to state tax revenues. They cannot also make the leap to replacement of taxes by land taxes. There is an inherent assumption that only the state can ''correct' society and to do this it has the right to take wealth from us.

It baffles me.

Mark Wadsworth said...

L, Tony has history on this.

A couple of years ago he wrote a report for Boris saying "London should take control of its council tax, SDLT, business rates and replace it with its own system of taxing land and buildings.

"We might we raise more from this than from current CT SDLT BR in which case, we are happy for our Whitehall central grant to be reduced accordingly".

By implication, he must have meant "replace with LVT" but he didn't actually say it.

mombers said...

I got edited somewhat - here's what I sent:
"Tony Travers is absolutely right - London's immense land wealth could easily generate enough revenue to fund all local services without subsidy from the rest of the country. Rents are hugely in excess of building costs so councils could grant planning permission for build to let in exchange for a minority equity stake in each project. Such arrangements are common in the hugely successful rental sectors in parts of Continental Europe. Council tax and business rates could also be raised to a level that makes London completely self sufficient. This could put a stop to the counter productive practice of making the working poor and struggling businesses in other parts of the country chip in to a pot to provide freebies like the London Underground and Housing Benefit to the wealthiest landowners in the world."
Thanks for posting Mark - you beat me to it

Ben Jamin' said...

@ Mombers

This eminently sensible suggestion has been written off by politicians as being Marxist.

Landowners being entitled to the full windfall from any changes in planning permission.

This being a fair return on their capital investment (risky business being a landowner). All part of the free market old boy.

Mark Wadsworth said...

M, he always edits down the reader's letters. Sometimes for the better, sometimes for the worse - but he knows his readers better than we do.

BJ, indeed. People like Joe, me, and the hardworking taxpayer in the rest of the country should stop whining - if they think being a landowner in London is so easy, why don't they step up to the plate, take out a colossal mortgage and join the hallowed club?

Hugh Small said...

My Conservative MP says he thinks the idea of Land Tax interesting but 'worries about the effect on property rights'. The fact that all USA municipalities have it, along with most other developed countries, is something that neither he nor the Land Tax supporters seem to know. Do they think our wacky, regressive Council Tax and overcentralised government is anything but a worldwide laughing stock?
Hugh Small

Mark Wadsworth said...

HS, yes, because the Homeys have a complete perverse way of classifying "private" and "national-public" property.

Your earned income and the things you buy with it are clearly private property and therefore should not be taxed, or only as lightly as possible.

The rental value of land is generated by whole societies or nations, therefore it belongs to the whole of society or nation.

So collecting tax (or user charges or ground rents etc) from land values is much more just and equitable than collecting tax from people's earning and spending.