Wednesday, 16 May 2018

Killer Arguments Against LVT Not (441)

Here's a synthesis of a couple of wailing and bleating emails I've been sent recently, it's all boilerplate stuff:

Why go after little landlords like me? I've only got two buy-to-lets which I need for security in my old age (1). Would you rather I be a burden on the state?(2) If you want to get more tax, why not go after the big targets - home builders who own enough land with planning permission to build a million homes? (3) What about companies like Facebook or Google who make billions and don't pay a penny in tax?(4)"

Arrant nonsense if you actually think about it for two seconds.

1. Two is plenty. The trajectory is that one-third of households will be landlords with two buy-to-lets each and the other two-thirds of households will be their tenants. What security will the tenants have in their old age?

2. Old age pensioners get a state pension, and quite rightly so, it's a good template for a Citizen's Income. Are they all 'burden on the state'? I've not heard many people dare say it out loud or many landlords offer to waive their state pension entitlement. In any event, what happens when all those tenants retire and two-thirds of pensioners need housing benefit to keep their landlords in clover? Isn't that going to be a colossal 'burden on the state'? Landlords are already collecting nigh on £10 billion a year in Housing Benefit (twice as much as they pay in income tax).

(This segues into the Poor Widows in Mansions, who will be priced out of their homes and become a burden on the state. Glossing over the roll-up and defer option for that minority, if getting money from the taxpayer is a burden, then anybody who collects an old age pension without wanting to pay their fair share of LVT is also a burden on the rest of society).

3. At present, the home builders aka land bankers own land with planning permission for a bit less than a million homes, and I agree that politically, they are an easy target. But the UK's private landlords own five million actual homes - the land and the finished building. The total value of the land bankers' land is a tiny fraction of the total value of the landlords' land and buildings. Who's the bigger target here?

4. UK landlords collected gross £50 billion in rent last year, the banks took half in interest, minus bits and pieces, leaving them with £14 billion in net rental income. (Skip back a step - two-thirds of landlords' net rental income is taxpayer-funded Housing Benefit!). Facebook made worldwide profits of £4 billion-odd. Even we could identify (and tax) the UK element of Facebook's profits, it'll only be a hundred million or so. UK landlords' net rental income dwarfs Facebook's UK profits by a factor of a hundred-to-one. Ditto Google, Apple, Amazon and the rest of them. Who's the bigger - or easier - target here?


5 comments:

ThomasBHall said...

Quite

ontheotherhand said...

Beautiful

Mark Wadsworth said...

TBH, thanks.

OTOH, thanks.

Lola said...

And Facebook does not 'pay tax'. Like all businesses it 'collects tax'. Sigh.

mombers said...

Well your dear reader can always vote Labour if they are not pleased with the Tories' deafness to his/her tiny violin...