Wednesday, 15 October 2014

Killer Arguments Against LVT, Not (341)

Pinched from the Labour Land Campaign FAQs:

Today, discussions held with Treasury officials, politicians and academics frequently end with them saying they agree that an annual LVT is a good, sustainable, redistributive, fair and green tax but after the poll tax riots it would take a courageous government to introduce it!

The LLC respond thusly:

This is not a logical response and makes no sense to dismiss a tax that will not only benefit business, workers, the environment and the economy but help to rectify an injustice inflicted on people over centuries.

To describe this as "not a logical response" is an insult to not a logical responses.

The point about the Poll Tax riots was, if you give one million really wealthy households a high profile tax cut of £10,000 each and impose an in-your-face tax (or benefit cut) of £1,000 each on ten million poorer households, you get riots.

So doing the opposite i.e. scrapping the Poll Tax and reinstating Domestic Rates would have led to fewer riots. Keep going in the same direction and replace Domestic Rates with LVT, you'd get zero or a negative number of riots, if there is such a concept.

And the harsh fact is that wealthier people are relatively docile when it comes to tax hikes, especially when it comes to 'national' taxes. There were no 50% or 45% income tax riots. There were no riots when they took away child benefit from the top ten percent of earners. There were no riots when they hiked VAT by 5% or when they hiked National Insurance by 2%.*

So if we scrapped a shedload of bad taxes and replaced them with LVT, does anybody seriously think that Poor Widows will leave their mansions and throw their Zimmer frames through plate glass windows? Will merchant bankers in balaclavas be firebombing the nearest HMRC office or town hall? Will the Dukes of Cadogan and Westminster be looting their nearest Curry's or JD Sports?

And if it comes to it, for each Poor Widow, merchant banker or Duke, there are a hundred thousand people who'd be considerably better off each year, and I doubt that they would come out in sympathy.

* All these tax hikes were bad tax hikes; the Child Benefit cut was a bad benefit cut, that's not the point here.

18 comments:

Graeme said...

yes but suggest that IHT thresholds should increase and the grauniadarati will want to hang you...

Ben Jamin' said...

Negative riots? :) That's a great policy slogan. I'd vote for negative rioting.

1)Banks, landlords and the top 1% of households own more land by value than the rest of the 99% put together.

2)Anyone who currently pays more in tax than the rental value of land their property occupies is better off under LVT.

3)That translates as if your gross household income is 7% or more of home(s) value, you are better off under LVT.

4)If anyone who currently pays less in tax than the rental value of land they own, sell up and move abroad, we are all better off. We may loose a tax payer, but we gain more overall by a valuable location being freed up. We all take a collective step up the property ladder.

Kj said...

I think they know there won't be riots. What they mean is the support of the homeownerists will wane, which equals riots in their world.

Mark Wadsworth said...

G, but they wouldn't actually be rioting.

BJ, yup. We could offer them free taxis to the airport.

Kj, yes, but I have not just heard Homeys talking about riots, I have heard LVT supporters warn about riots. WTF.

Physiocrat said...

Academics and government officials must have a negative number of brain cells to come up with comments like that, yet they do it a lot of the time, and on just about any topic they get involved in.

Lola said...

Whaddawewant? Negative Riots!. Whendowewanthem? NOW!

Actually, I am already 'rioting' about the existing inequities - as in, I am 'veryangry' indeed. So getting to LVT would return me to my usual disposition of depressing (for others) cheerfulness.

Pablo said...

Labour Land Campaign disappeared a couple o weeks ago.

Mark Wadsworth said...

Phys, thanks for cross posting.

L, the only downside to an LVT only tax system is the lack of riots. We'd all be happy, complacently doing our steady reasonably well paid jobs and getting on with the neighbours.

P, no they did not! I am a paid up member thereof and they are still active. They rejigged their website recently but the url is the same.

Lola said...

Nw. Not entirely. I guarantee that I'd still find something to feel riotous about...

Ben Jamin' said...

Does negative rioting involve not getting out of bed?

Mark Wadsworth said...

L, as Bomber Harris said, "It has never been tried yet and we shall see."

BJ, no, negative rioting is getting out of bed and going to do a job that you actually don't mind doing, then on a weekend have a lie in, mow the lawn or have a barbecue etc.

DBC Reed said...

A bit of negative rioting may be necessary over the Lyon's (ITMA)
Report on Housing for the Labour Party. Has anybody had a look at it?

Mark Wadsworth said...

DBC, no, and I don't intend to. It appears to rest on the assumption that if only we built 200,000 new homes a year, all our problems would melt away.

DBC Reed said...

@MW
It's more subtle than that: he has a real go at channelling land value uplift into paying for infrastructure and does propose imposing council tax on unused land banked plots (but only after five years neglect).However instead of the simplicity of LVT he goes for the more complicated solutions such as garden cities and BIG SCHEMES involving local authorities etc .
There are some classic quotes such as p60 "In evidence to this review house builders have been clear that their business model relies on building and selling homes rather than speculating on land"( He then goes on to give details of builders accusing each other of doing just that before coming up with quotes that are diametrically opposed.)
There are a couple of beach heads in there.

Physiocrat said...

He knows all about LVT - the Campaign made a submission in 2005. He has no excuses.

DBC Reed said...

@P
Quite: his whole report is a very
elaborate method of putting land value uplift to public use without
the obvious LVT.
I used to have connexions with some nutters who ran huge horned gramophones from the modern era that did everything possible to avoid reproducing sound electronically. I had one that used an old fashioned needle, vibrations from which were only amplified acoustically while the turntable was powered by electricity ( the original clockwork had springs that were always breaking).
Michael Lyons is using the same kind of perverse set up.

Pablo said...

Going to: http://www.labourland.org/
I see the hosting co. msg. "There is no content here"
(and have done for the last fortnight).

Pablo said...

That's Comodo DNS for you: changing the DNS gets LLC fine!