Thursday, 1 September 2016

Reader's Letter Of The Day

It's nothing new or exciting, what is worthy of note is that he smuggled it into the Daily Telegraph readers' letters:

SIR – Tom Welsh (Comment, August 30) is quite right to say that updating our infrastructure doesn’t mean taxpayers should foot the bill.

Well-planned infrastructure improvements result in higher land values, which, if properly exploited, are nearly always sufficient to pay for them. Thus the public receives back the higher value created by public expenditure, and the Government does not have to borrow or levy taxes to fund the projects.

We need infrastructure investment. We don’t want it to be a burden on taxpayers. If we take advantage of the increased land value created by improvements, we can plan with confidence, knowing the costs will be met free of public debt.

Michael J Hawes, Newark-on-Trent, Nottinghamshire

Of course the Homeys will argue that making landowners pay for the benefits society bestows upon them is a tax; actually it's a user charge. And on a cash flow basis, the government would run up a debt to pay for the infrastructure and repay it out of the future user charges. But hey.


Ben Jamin' said...


And if they were really clever homeys they'd say that

"as capital improvements (as per the example in the letter) create higher land values, a land tax would discourage anyone from making those improvements to their property (bought out of earned and taxed income).

This is why we have a property owning democracy, and why confiscatory LVT is the worse form of extreme Marxism.

Please don't bother to reply, your are clearly a fanatic":)

Mark Wadsworth said...

BJ, the extra gain/benefit to an individual making an improvement on his own plot of land is far greater than that improvement's impact on overall land values in an area (consider a new kitchen, new drive, loft conversion).

It is only Really Big Things like roads, hospitals, schools, parks etc that make any measurable difference.

Ben Jamin' said...

What if I built my own my own town/city? Including "Really Big Things like roads, hospitals, schools, parks etc". I built it so well, people flocked to it, for which I charge them rent, which they are more than happy to pay. That land was worthless before. Now you want to arbitrary confiscate value that I've created. And god knows how you think you'd separate the land from capital on a city of which I own the whole plot.

Seriously, what you are suggesting is worse than Communism.


Bayard said...

"Of course the Homeys will argue that making landowners pay for the benefits society bestows upon them is a tax; actually it's a user charge."

However, the argument that landowners shouldn't pay for the uplift in the value of their land caused by public expenditure on infrastructure is easily defeated by pointing out that, logically, the converse should then also be true, that landowners should receive no compensation for a decrease in the value of their land caused by an infrastructure project.

Mark Wadsworth said...

BJ, that's a traditional KLN. Where did you get the land from in the first place? If you built your lovely town and only a few people moved there, what would it be worth? Empty hospitals, schools with no teachers, shops with no customers. It is the people moving there who create the value

Mark Wadsworth said...

BJ, in fact, it is on the KLN blog here.

B, good one. But Homeys can believe two opposites - no LVT on gains but compensation for losses, they like both.