Tuesday, 12 July 2016

Wonders never cease - LVT gets a favourable mention in City AM.

Faux Libertarian Ryan Bourne in the devoutly Home-Owner-Ist City AM:

Forget populist executive pay curbs: Prime Minister May should embrace these six policies to revitalise growth

1) Overhaul property taxation: the government should abolish both council tax and stamp duty entirely and replace them with a single tax on the 'consumption' of property - i.e. a tax on imputed rent. it is well known among economists that taxes on transactions like stamp duty are highly damaging and we have already seen the high top rates significantly slow transactions since April.


5) Agricultural liberalisation: exiting the EU Common Agricultural Policy gives us the opportunity to reassess agrilcultural policy. The UK should gradually phase out all subsidies, as new Zealand did, opening up the sector to global competition. This improved agricultural productivity in that country significantly. Combined with a policy of unilateral free trade, it would deliver substantially lower food prices for consumers too.

Spot on. LVT good; negative LVT like CAP subsidies bad in equal and opposite measure. I'd rather give farmers and farm workers an income tax/NIC exemption.

Suggestion 2 is bollocks though - abolishing corporation tax. UK businesses pay three times as much VAT as they do corporation tax; reducing VAT (which we could now do, hooray) benefits the economy in general, small businesses, workers and consumers. Abolishing corporation tax only benefits large and especially multi-national businesses, at present it is only 20%, which is internationally competitive and ties in with income tax, so no urgency there whatsoever.


Ben Jamin' said...

Bigger surprise was Bourne favouring a carbon tax over cap and trade.

Cap and trade is usually the Faux-Libs wet dream.

Ben Jamin' said...


How exactly is a tax on rents/imputed rents better than a straight tax on selling prices?

They'd be more stable, but unless they really raised a lot of revenue I can't see a big practical difference. Not if they are just replacing CT/SDLT.

Mark Wadsworth said...

B a bit better is always a bit better!