Wednesday, 2 May 2018

Killer Arguments Against LVT, Not (440)

I did some calculations for the Labour Land Campaign a couple of years ago showing that if we replaced all existing taxes related to housing, private wealth etc with a fiscally neutral Land Value Tax, it would work out at about 0.7% of what each house is worth.

Unsurprisingly, if you can be bothered to look at actual numbers, most people's lifetime bills would not change much; it's just that taxes imposed at random intervals (SDLT, CGT, IHT) would be replaced with a small additional annual amount, it's all swings and roundabouts.

Tory head office got hold of the workings somehow, with entirely predictable results.

Squeal, piggies, squeal.

4 comments:

Lola said...

I completely fail to understand why people prefer to have all their earnings taxed and all spending VATted and all the rest of the ludicrous complexity of the current tax code to paying one simple tax payment each month. I mean I know why the gummint and the bureaucrats hate it - they would have nowhere to hide, no stealth taxes.

Mike W said...

My understanding was that LLC model would start at 3%, with the aim of going to 4/5% in the longer run.

But,

'...where land values have risen excessively, LVT set even at that concessionary rate could mean that the outlay for households might considerably exceed that currently paid in Council Tax. In order for households not to receive a bill greatly exceeding their current Council Tax bill in those localities, therefore, it is proposed that the rate of LVT be set by each local authority such that the LVT collected the same amount of revenue as that currently collected by Council Tax from owner-occupied households in their local area. In other words, initially, the rate of LVT would be different for each local authority,such that the 0.85 per cent figure given above would represent merely the average. The figure is given here simply to illustrate the order of magnitude of the rate of LVT required. The detailed calculations would have to be carried out by each local authority,which would also require treating the rented sector separately from the owner-occupied sector


Chuck in LVT Lite and that's Labour's first goal sorted.

PS Mark, more obviously, congratulations for getting attacked by Daily Mail :)

Mark Wadsworth said...

L, brainwashing.

MW, the LLC puts out lots of different suggestions, there is no overall cohesive policy.

mombers said...

"Homeowners in council tax Band D properties could see 43 per cent price hike"
Average VAT per household has risen by 42% over the same time as the council tax freeze so perfect way to restore equilibrium, no?