tag:blogger.com,1999:blog-1141932539860553199.post8046970313440042034..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: Killer Arguments Against LVT, Not (285)Mark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger20125tag:blogger.com,1999:blog-1141932539860553199.post-83494241439779722522012-12-06T10:19:02.272+00:002012-12-06T10:19:02.272+00:00JJ, that's too cryptic for me. I can't see...JJ, that's too cryptic for me. I can't see your comment, can you reproduce here?<br /><br />In any case, they have no "real argument", all their "arguments" are based on lies or stupidity.<br /><br />Plus, it doesn't really matter, does it? The Homeys and Faux Libs tell a lie, and you disprove it with logic backed up with hard facts (if in doubt, refer them to Business Rates or old Domestic Rates) but they never, ever, ever, say "Ah well, you make a good point, but what about..." they just completely ignore your counter-arguments and dream up another complete lie anyway.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-75375853921158727762012-12-06T09:53:59.205+00:002012-12-06T09:53:59.205+00:00I looked at http://markwadsworth.blogspot.co.uk/20...I looked at http://markwadsworth.blogspot.co.uk/2012/02/killer-arguments-against-lvt-not-194.html but I don't think you're engaging with their real argument. <br /><br />I've left a comment over there. James Jameshttps://www.blogger.com/profile/10487916621748348915noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-29432802358184919852012-12-04T12:40:04.972+00:002012-12-04T12:40:04.972+00:00OTOH, thanks, good example.
We know that these ag...OTOH, thanks, good example.<br /><br />We know that these agencies are all benefitting from each others' presence (so location value fair game for LVT, that value certainly was not created by and so does not belong to the landlords).<br /><br />But what if all these agencies merged? They could then argue "we are only benefitting from ourselves" but that is then also not true - they are benefitting from having a cartel-monopoly in that area and newcomers are excluded (so their location value is still fair game for LVT).Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-162369582546107892012-12-04T11:51:39.038+00:002012-12-04T11:51:39.038+00:00MW, I like the concept of agglomeration. There is...MW, I like the concept of agglomeration. There is a fascinating example of it on the corner of Putney High Street and Upper Richmond Road where in closely packed shops there is Townends, Foxtons, Winkworth, Warren, Gascoigne-Pees, Douglas Gordon, Lauristons, Hamptons, Alan Fuller, James Anderson, Chesterton, Barnard Marcus and Kinleigh Folkard & Hayward<br />http://tinyurl.com/c56fvuqontheotherhandhttps://www.blogger.com/profile/10454686192480043984noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-85961325295205411012012-12-03T07:34:52.894+00:002012-12-03T07:34:52.894+00:00BJ, call it subsidy, call it introductory special ...BJ, call it subsidy, call it introductory special offer, but the first rule is also subject to the override <i>"Florida can just haggle for a price, which Disney then compares with what the Sahara or anywhere else is offering."</i><br /><br />The Sahara is a lot further than 500 km away.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-8820006541195940382012-12-02T22:58:24.321+00:002012-12-02T22:58:24.321+00:00Sounds like a subsidy to me. No other theme parks ...Sounds like a subsidy to me. No other theme parks may set up next to them, but there will be plenty of other entertainment outlets all over the usa competing for the same dollar. <br /><br />Just how far would you measure this surrounding margin? 500 metres? 5km? 500 km? <br /><br />benjhttps://www.blogger.com/profile/11544297406005346095noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-45133929843987161772012-12-02T17:53:37.653+00:002012-12-02T17:53:37.653+00:00BJ, FF's solution is not so daft when Disney f...BJ, FF's solution is not so daft when Disney first sets up. <br /><br />They can start from a low tax base, and it is difficult to quantify the location value element (even though we know there is one - sunshine, close to audience, good air and road links). Although with something on that scale, Florida can just haggle for a price, which Disney then compares with what the Sahara or anywhere else is offering.<br /><br />But then as soon as other theme parks set up, they will know (internally) exactly how much extra they are prepared to pay to be in Florida, and the state of Florida can haggle them up to that amount.<br /><br />Once the competition have shown their hand, we then know the correct amount for Disney. They are no longer taxed at the same rate as surrounding fruit growers but at the same rate as surrounding theme parks.<br /><br />Obviously, if Disney made a big mistake and the theme park does not take off, there'll be no other theme parks wanting to set up, so no market comparatives and they continue to get taxed at fruit grower rates.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-88224202691610669952012-12-02T17:25:17.939+00:002012-12-02T17:25:17.939+00:00Fred Foldvarys solution is pretty daft. So what if...Fred Foldvarys solution is pretty daft. So what if it's the owners change of use that increases the value of land? It's the unimproved portion i.e unearned income that LVT mops up. You only have to ask yourself what if Disney had located in the middle of the Sahara instead of Florida? benjhttps://www.blogger.com/profile/11544297406005346095noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-14091079383707737062012-12-02T12:16:34.756+00:002012-12-02T12:16:34.756+00:00Kj, we are as usual in complete agreement.
There ...Kj, we are as usual in complete agreement.<br /><br />There is a name for this effect, it is called "agglomeration". That is why in towns, you find all the restaurants close together in one street, all the clothes shops together in another street, and so on. <br /><br />You might think "But if you have a clothes shop and there are lots of other clothes shops in the area, surely they take away your business?"<br /><br />Wrong - because if somebody wants to buy "clothes", they will go to the street where all the clothes shops are, and you have a good chance that they will come into your shop.<br /><br />If you have your clothes shop somewhere else (like on the street with all the restaurants), you will get <i>fewer</i> customers.<br /><br />So each clothes shop benefits from all the other clothes shops, and collectively there is a big benefit which relates purely to the location value. It is of course far more sensible to tax the small part of their income which relates to the location value than to tax all of their income (if the taxman doesn't take it, the landlord will).Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-791176732189211742012-12-02T11:30:18.727+00:002012-12-02T11:30:18.727+00:00True, but LVT ectracts the full value of public &q...True, but LVT ectracts the full value of public "externalities" that are "free", but private externalities that are paid for by users, are just a bonus, like someone building a theme-park. Disney builds hotels, access roads etc. to raise the value of the theme park itself (and vice versa I suppose), and they expect to earn this back by entrance-fees/hotel stays. If the other theme parks around benefit from Disney's actions, and are taxed on that, that's just spillovers, noone looses from that.<br /><br />KjKjhttps://www.blogger.com/profile/13530243002915410700noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-29709608183032864012012-12-01T20:56:29.053+00:002012-12-01T20:56:29.053+00:00Kj, agreed, but...
"even when the benefactor...Kj, agreed, but...<br /><br /><i>"even when the benefactor and the improver is the same individual/corporation."</i><br /><br />You could just as well say:<br /><br /><i>"even when the benefactor and the improver are two different individuals/corporations"</i><br /><br />If the improver notices what is going on, he can then tell the benefactor that the benefactor has to start paying towards the cost and so on.<br /><br />For example, when you pay for public fire brigade or public rubbish collection, what you are really paying for is for the fire brigade to put out a fire in your neighbour's house which might damage your house (if you set fire to your own house you are fucked anyway); you are paying for your neighbour's rubbish to be taken away, because if you didn't, then you'd be infested with rats and smells.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-17780805315105784682012-12-01T19:27:54.599+00:002012-12-01T19:27:54.599+00:00This has been covered by Foldvary if I remember it...This has been covered by Foldvary if I remember it correctly. What you do is assess the value of Disneyland's land based on the surrounding land values, you totally ignore the actually land in question, hence if everything around Disneyland is orange-fields, Disneyland get taxed as orange fields, if everything around is other theme-parks, hotels etc., which it happens to be, you tax it like that. Another thing is that Disneyland also is it's own "improvement district" (does it's own water, drainage-etc.", so any rental value would be deducted in the assessment for these costs.<br />The faux-lib argument in the start is exactly right, LVT can (also) be a tax on private externalities, and so what? Private externalities are post-profit spillovers from improvements, someone has made them with the intention of earning it back through direct revenues, noone is hurt by collecting these spillovers, even when the benefactor and the improver is the same individual/corporation.Kjhttps://www.blogger.com/profile/13530243002915410700noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-6551241391440789372012-12-01T18:22:46.729+00:002012-12-01T18:22:46.729+00:00BJ, exactly.
Now, if owner-occupiers were econom...BJ, exactly. <br /><br />Now, if owner-occupiers were economically rational, they would factor in the notional cost of renting (that's what you are taught to do if you do cost accounting) and treat is as an expense and behave accordingly (i.e. decide what goods and services to sell at what prices).<br /><br />So all LVT does is turn notional costs into actual costs - the economically rational people won't behave any differently, and the twats will get a kick up the arse or will be "forced" to become landlords rather than running what is effectively a loss-making business.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-24050236160590715482012-12-01T17:50:27.828+00:002012-12-01T17:50:27.828+00:00Owner occupiers are in effect getting an unfair co...Owner occupiers are in effect getting an unfair competive advantage. A business that has to pay rent has a reduced margin when selling a comparable product. This increased margin for owner occupiers is really just economic rent and therefore another deadweight cost. LVT is just levelling the playing field.benjhttps://www.blogger.com/profile/11544297406005346095noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-76588825950691317722012-12-01T17:16:37.901+00:002012-12-01T17:16:37.901+00:00RA, well spotted. JJ emailed me two links to that ...RA, well spotted. JJ emailed me two links to that blog, I covered one of them here and was about to do the other one tomorrow, but as you have spotted, you already offered the other one up for ritual slaughter a while agao.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-23537369414412859622012-12-01T17:15:36.614+00:002012-12-01T17:15:36.614+00:00L, perhaps because location rent is paid for a val...L, perhaps because location rent is paid for a valuable service, permission to use a government-protected monopoly right, whereas the council just pisses the Business Rates up the wall on fripperies like street lighting, police, road maintenance and loads of other crap which doesn't benefit businesses at all?Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-23632685824906860652012-12-01T17:05:43.322+00:002012-12-01T17:05:43.322+00:00*Ahem*, see KLN 194 and check the dates.*Ahem*, see KLN 194 and check the dates.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-39986060060568265222012-12-01T16:37:36.997+00:002012-12-01T16:37:36.997+00:00An UDS was enticed into my town by rent free and B...An UDS was enticed into my town by rent free and BR free periods. It failed when rent and rates became due. And it moaned about BR - why wasn't it moaning about renLolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-2709199715996152432012-12-01T15:12:37.569+00:002012-12-01T15:12:37.569+00:00TS, yes, at a very large scale, there will always ...TS, yes, at a very large scale, there will always behind the scenes haggling and introductory special offers, but that has to be dealt with on a case by case basis and does not prove his point in the slightest. <br /><br />With LVT, the council is saying "You do not have to pay for any likely future profits until a) you have made them and b) your activities are such that they increase surrounding land values.<br /><br />Don't forget that if your "upmarket department store" draws more shoppers in so that more other shops open up, ultimately, the UDS benefits from spin off trade from shoppers visiting those other shops just as much as the other shops benefit from the UDS, so the UDS only pays incremental extra tax on the incremental extra future profits - it is no deterrent to opening up a shop NOW.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-49377480121857719922012-12-01T13:26:48.807+00:002012-12-01T13:26:48.807+00:00I do see his point, but we already do this sort of...I do see his point, but we already do this sort of thing, by giving exceptional business rents, and that's done as a local decision.<br /><br />For instance, it's quite common for upmarket department stores to get subsidies to move into town centres, because they bring more shoppers into your town who also come to your Costa, M&S and Ann Summers stores. No-one subsidises WH Smith because there's one in every town.Tim Almondhttps://www.blogger.com/profile/13369256383976094670noreply@blogger.com