Killer Arguments Against LVT, Not (421)

A slightly more coherent one from the comments at Sackerson's:

Like most of our age, I can remember the introduction of poll tax. At the time council tax (rates) was going through the roof and had no bearing on demands or ability to pay.

Sadly the poll tax was equally badly implemented, yet if it had been implemented fairly it would have been a much fairer alternative and much better understood. The poor implementation and the "poll tax riots" by all those who never paid bugger all for the services they received scuppered the tax.

We are now faced with council tax that now that the brakes have been taken off go the same way as rates. What is basically wrong with council tax/rates is that only roughly 38% - and that was from the chief accountant in Suffolk twenty years ago - actually pay the tax; the reasons are all there to see but too long-winded to go into now, but in essence there was nothing wrong with the poll tax if it had been properly administered. After all this current tax is to pay for services enjoyed by all but less than half contribute!

The second half is incorrect. I don't know what the collection rates for Council Tax were twenty years ago, but unsurprisingly, collection rates are actually close to 100% and jsut about every home is liable for Council Tax.

He defeats his own argument in favour of a Poll Tax by saying that Domestic Rates had "no bearing on demands or ability to pay". A Poll Tax would have even less correlation with ability to pay. Most low income people own or rent lower value homes and smaller households own or rent smaller homes (or at least could choose to do so), so under Domestic Rates/LVT, the tax payable is nearly always affordable.

As we well know, riots aside, Poll Taxes are very difficult to enforce and collect, there's no way you can "implement it properly", let alone fairly. And they are antithetical to having a welfare system, before we try and collect a separate tax from low income people, it's much easier just to reduce their benefits/old age pension.

But the fundamental misconception is the idea that the government should charge for services provided to 'people' generally, especially if people are compelled to use those services or compelled to pay for something which they might not use. So charging individuals who choose to apply for a passport = OK, but if we had compulsory ID cards, then charging for them = not OK or charging people a fraction of the cost of upkeep of a local park (which they might or might not use) = not OK.

Nope.

The government (or 'the state' or 'society') is the ultimate arbiter on who owns which bits of land and provides the framework within which rents can arise in the first place. So it should charge for benefits accruing to land (or landowners). Who generates the rental value? Everybody and nobody, so to whom does it belong? Everybody and nobody, but short of throwing the proceeds into the North Sea, the government might as well spend it on things which benefit everybody (welfare payments, health, education, whatever), or which benefit the economy in general.

It's impossible to spend money in a way which benefits everybody equally because a lot of the benefits of 'good' government spending or action lead to higher rental values (roads benefit or burden some bits of land and leave most others unaffected). But that doesn't matter because that extra value can be recycled back into the system (and the owners of the burdened land get a tax cut to compensate them).