That's the second time this week...

.. that City AM publishes an article which mentions LVT in a positive light:

First Homes is a flawed solution to three very different problems

Stamp duty land tax also gums up the market, making people reluctant to sell even when their homes are no longer suitable for them. Like anything in life, when there is a lot of demand for a good that’s in short supply, the cost goes up... Stamp duty should also be scrapped and replaced with a land value tax to increase the rate of house moving.

Sadiq Khan’s rent control pledge is a minefield of unintended consequences:

If any current or future mayor really wants to reduce rents in London, they could do two things: bang the heads of local authority planning departments together to encourage more planning permission, and lobby Westminster to allow local authorities to receive more of the income from development.

A land value tax, for example, would mean any increase in land value when planning permission is issued would be retained locally, incentivising the issue of more permits.

Wonders never cease.

I was pleasantly surprised to see this in City AM...

... especially as most of the article is the usual Home-Owner-Ist drivel.

From City AM, the concluding paragraph is:

If politicians want to smooth out this distorted [housing] market, they should make moving house as easy as possible for everyone.

Scrapping stamp duty completely and making up the difference elsewhere – whether with more progressive council tax bands or a new land tax – is the only way to get the market moving again, regardless of Brexit.

Economic Myths: Immigration and economic growth

City AM is a cheer leader for landlords and banks (it's the newspaper equivalent of the Taxpayers' Alliance). It has consistently been in favour of liberal immigration policies for foreign workers, which gives us a bit of a clue a to who benefits most from immigration of foreign workers. NB, I am heartily agnostic on the issue and have no strong view one way or another.

But, like the right wingers who insist that reductions in tax rates always lead to higher tax revenues overall, they have jumped the shark with this:

Economists have repeatedly warned that a government can either have economic growth or it can have net migration reduced to the tens of thousands.

It cannot have both.

Woah, woah, woah! If that were true, then overall global GDP growth would always be zero. It would increase in immigration countries and fall in emigration countries in equal and opposite measure. That is clearly not the case, and I doubt that any serious economist has ever said anything quite as stupid as that.

Lies, damn lies and... City AM.

City AM finally jumps the shark (bottom of front page):

High property taxes put British businesses at a competitive disadvantage, despite the UK’s low corporation tax rate, said Jim Hubbard, policy advisor at the [British Retail Consortium].*

For every £1 a business pays in corporation tax, it must pay £2.30 in business rates.

That is a humungous lie, even by City AM's standards.

According to the UK government:

Total UK corporation tax liabilities 2015-16, £43.7 billion.

Total English Business Rates liabilities, 2015-16 £23.1 billion, round up to £26 billion for whole of UK.

If we also include about £10 billion in income tax paid by owners of unincorporated businesses, on average, UK businesses pay about 50p in business rates for every £1 of tax on net profits (corporation tax and income tax), less than a quarter of City AM's figure.

* The first part is clearly hokum as well. Ignoring the tax incidence point, UK retailers are not competing in any realistic way with non-UK retailers. The only reason some UK people go on shopping trips to France etc is because of lower alcohol and tobacco duties over there; business rates have absolutely no effect on the price paid by the end consumer.

Business Rates do make a marginal difference to the viability of heavy industry in low-value areas, but that's all part of the general Home-Owner-Ist plan.

... but some are more equal than others.

Putting their usual left/right spin on the same press release.

The BBC:

New research by the Institute for Fiscal Studies has found that one in five low-paid men aged 25 to 55 now work part-time.

While 95% of top-earning men normally work full-time, 20% of the lowest paid now work part-time. That means wage inequality for men has risen over two decades, but for women the opposite is the case.

City AM:

Inequality in net household incomes has declined over the last 20 years according to a new report from the Institute for Fiscal Studies – the second set of figures this week to reveal a narrowing gap between Brits at the top and bottom of the scale.

Published this morning, the IFS numbers record household incomes calculated after benefits and taxes, and reveal steadily falling inequality.

The key to this is the weasel wording in the seoond paragraph, "after benefits and taxes".

Wonders never cease - LVT gets a favourable mention in City AM.

Faux Libertarian Ryan Bourne in the devoutly Home-Owner-Ist City AM:

Forget populist executive pay curbs: Prime Minister May should embrace these six policies to revitalise growth

1) Overhaul property taxation: the government should abolish both council tax and stamp duty entirely and replace them with a single tax on the 'consumption' of property - i.e. a tax on imputed rent. it is well known among economists that taxes on transactions like stamp duty are highly damaging and we have already seen the high top rates significantly slow transactions since April.

[and]

5) Agricultural liberalisation: exiting the EU Common Agricultural Policy gives us the opportunity to reassess agrilcultural policy. The UK should gradually phase out all subsidies, as new Zealand did, opening up the sector to global competition. This improved agricultural productivity in that country significantly. Combined with a policy of unilateral free trade, it would deliver substantially lower food prices for consumers too.

Spot on. LVT good; negative LVT like CAP subsidies bad in equal and opposite measure. I'd rather give farmers and farm workers an income tax/NIC exemption.

Suggestion 2 is bollocks though - abolishing corporation tax. UK businesses pay three times as much VAT as they do corporation tax; reducing VAT (which we could now do, hooray) benefits the economy in general, small businesses, workers and consumers. Abolishing corporation tax only benefits large and especially multi-national businesses, at present it is only 20%, which is internationally competitive and ties in with income tax, so no urgency there whatsoever.

Even the Homeys at CityAM must have realised how ridiculous it sounded...

From the paper version of City AM:

Between August and September, prices rose 0.8 per cent on a seasonally-adjusted basis, with first-time buyers found themselves paying an average of 4.3 per cent higher than in September last year.

It's an encouraging sign for the market, after figures over the summer suggested the chancellor's cooling measures - which included a hike to stamp duty and rules limiting how much mortgage customers can borrow - were beginning to take their toll.

They added a few extra words to the online version:

It's an encouraging sign for the market (or discouraging for buyers), after figures over the summer suggested the chancellor's cooling measures - which included a hike to stamp duty and rules limiting how much mortgage customers can borrow - were beginning to take their toll.

And how any sensible person can be opposed to limiting the amount of money banks can create when houses are bought and sold is a mystery to me.

Headline Of The Day

From City AM:

Dido - I will not raise white flag

Problem is, they have used this hilarious reference to the song "White Flag" by Dido at least once before, four years ago.

The internet never forgets.

Highly unusual to see these three sources saying much the same thing on the same day.

From City AM, normally a huge supporter of the rent seekers and the practices referred to in The Guardian article below:

The government is making its case for stepping up the Sino-British relationship by announcing £30bn worth of new trade and investment deals, despite escalating concerns that the UK steel industry is crumbling at the hands of Chinese manufacturers.

The Prime Minister announced the business deals, which the government says will create more than 3,900 jobs across the UK, one day after reports that [British steelmakers are to cut over 5,000 jobs in the face of Chinese steel dumping].

From The Guardian, actually hitting the spot for once:

Osborne is all for renationalisation – so long as the nation isn’t Britain

To secure EDF as a builder, Cameron guaranteed a fixed price for electricity from Hinkley of £92.50 per megawatt hour. That is around double the going rate for electricity on the wholesale markets, a price so high that equity analysts term it “financial insanity”.

Change your supplier as often as you like, you and everyone else in Britain will be paying for that de facto subsidy in your electricity bills for decades to come. Britons will in effect be paying more for their energy so that French households can pay less. Indeed, so generous are the terms of this deal that the government of Austria is currently taking Britain to court on the grounds that it’s handing out state aid to EDF.

Yes, you read that last sentence right: the UK stands accused of dispensing state aid – to another state. How many times have you read about some age-old manufacturer and thousands of jobs going down the swanee, while ministers wrung their hands over European state aid rules? Now we know that such rules can be tested – provided the recipient is headquartered not in Port Talbot, but Paris.

And finally, from The Daily Mash:

As thousands of redundancies in Redcar are followed by hundreds more in Scunthorpe, the business secretary said he wishes there was something he could do.

Sajid Javid continued: “Tragically, the industry has been hit by a perfect storm of being in the provinces, traditionally supporting Labour and not being financial services. Add that to us not wanting to do anything that might offend our new Chinese friends, and there’s absolutely nothing we are prepared to do.

“If only these plants manufactured something useful, like insurance derivatives supported by credit default swaps, then we’d gladly go billions into debt for them. But steel? What’s that even for?”

Reader's Letter Of The Day

It's not so much the content, that's all well-established and widely known, it's the fact that it was published in that most Home-Owner-Ist of rags, City AM (no link):

Every week there seems to be a new call for the "reform" (i.e. a reduction) of business rates.

But nobody seems to have realised that if business rates go down, the rent on the premises might simply be increased by the same amount. The only beneficiary of a reduction in business rates would then be commercial and retail property owners, not the businesses that rent the premises.

Much as I hate hidden taxes that disguise the size of the UK's bloated state from the average voter, this is one tax where the removal of it will do nothing for business competitiveness, and will simply require higher taxes elsewhere.

Ian Simes

Homeys close ranks!

Texted in just now by fellow Homey-watcher MBK, from City AM:

City A.M., London's most popular business newspaper, today announces that its editor, Allister Heath, is to leave the company.

Heath, 36, is to join the Daily Telegraph as deputy editor.

Mr Heath has already pre-submitted his next half a dozen articles, in which he confuses the proposed Mansion Tax with a tax on wealth or with Francois Hollande's 75% top income tax rate; points out that the UK has the highest take from property taxes; and explains away obscene bonuses in the City of London as being "performance related".

The Daily Telegraph board has grunted its tweedy approval and asked the idealistic young chap - ever so politely - whether he might refrain from suggesting that planning constraints might not be an unalloyed good.

He'll learn, the young chap, he'll learn. Give him enough money to pay the deposit on a five-bed detached in the Home Counties and he'll soon see the benefits of keeping planning laws just the way they we like them... as to his crazy notions about having further runways at Heathrow or Gatwick... he'll learn.