Killer Arguments Against LVT, Not (467)

The Daily Express rehashed the garden tax nonsense three days ago, we've done that.

The facts, as reported, are as follows:

"In June, the Labour Party leader unveiled recommendations to introduce a “progressive property tax” - which could see council tax replaced by one based on current house prices."

Which seems pretty uncontroversial to me, it's not far off a modest Land Value Tax.

The Conservative Party calculated the average home would pay £374 a year more than they currently pay in council tax each year.

They are shit at maths. If it replaces Council Tax, by definition, the average bill won't change. The median bill will drop significantly; bills on more expensive homes will go up.

They include this lengthy quote:

Matthew Lesh, head of research at the Adam Smith Institute think tank, told Express.co.uk:

“Labour has completely misunderstood the nature of the housing crisis. Their proposals are nothing more than an attack on private ownership and development of land, of families having a stake in society and an asset that they can call their own.

“It would result in fewer people having the opportunity to own their own home, not so-called ‘Land for the Many’. Labour’s plans would wreak havoc on the housing market. Time and again we’ve seen when the state tries to control a market it leads to shortage and lower quality — but Corbyn has never learned.

“Young people want to own their own home, not rent from the state the rest of their lives. Rent controls too would cripple the market, which has failed everywhere in the world it has been tried.

So far, so blah, what's his suggestion..?

“There is merit in reforming the council tax system, that is based on outdated 1991 valuations, but this means creating a single, regularly updated land value tax that replaces council tax, business rates and stamp duty in a revenue neutral manner. This is sensible tax reform that sadly Labour is undermining by putting it in the terms of class warfare.

Splendid suggestion, much better than Labour's of course. Chuck in Inheritance Tax as well to show that it's not a jealousy surcharge, it's just a service charge. The more taxes you roll into LVT, the better IMHO.

But why did the Daily Express include this part of the quote? If Labour proposed exactly that, they'd promptly dismiss it as a "garden tax" and we're back to Square One. Quite clearly, average annual bills would be higher than Council Tax bills alone, because it would include an element of SDLT and IHT, although the tax on the median home would be about the same as Council Tax.

The rest of the article is the usual garbage of no interest to the intelligent reader. Attack on wealth, negative equity, Poor Widows, landlords passing on the tax etc.

Daily Express on top form

The Daily Express does satire

From The Daily Express:

Experts predict a 30 per cent rise [in the cost of buying a house] over the next two years as home-hunters take advantage of the Help To Buy scheme. It would send the price of an average home to £300,000 by the end of 2015 – a huge leap from the current figure of £233,000.

The scheme, announced in the March Budget, is designed to help people who ­cannot afford the large down payments ­demanded by commercial lenders to invest in property. Buyers will only need a five per cent deposit.

Industry expert Dominik Lipnicki said the move was “very much good news”. He added: “There is no doubt this will help to push up house prices. There is going to be a rise in house prices anyway but with more people now able to get on to the ladder this is set to rise even further.”

He said the increase will come as a relief to “mortgage prisoners” struggling with negative equity.

“The biggest issue we have is people who may have bought at the height of the market and have seen the value of their ­property decrease,” said Mr Lipnicki, director of financial advisers Your Mortgage Decisions. These ‘mortgage prisoners’ have not been able to re-mortgage their homes, but will be able to now. They can also look at their mortgage options. Any upward move in house prices is definitely good news for many people.”

H/t Khards at HPC.

No. None of us, actually.

From The Sun

TODAY Lady Thatcher will be laid to rest after a magnificent funeral of the sort few of us get to see in a lifetime.
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The Daily Express is on top form as well. Their front page is emblazoned with the headline

4,000 POLICE GUARD MAGGIE COFFIN

And next to it is a photo of MADDIE:

"Hard working pensioners"

I sometimes use this oxymoron as a joke, but over at The Daily Express they actually expect to be taken seriously:
The phrase is sadly lacking from the online version of the story:

UP to 100,000 pensioners have been forced to sell their homes to pay for ­medical care that should have been free.

Huge numbers of senior ­citizens in nursing homes had been entitled to have their bills met by the NHS. But because of blunders by ­officials they missed out and were forced to quit properties they had worked a lifetime to buy (1) in order to cover costs.

1) That's a huge great lie, isn't it? It's fair to assume that most people who are now pensioners bought their houses when they were still cheap and paid off the bulk of their mortgage within ten years or so, once you take inflation into account.

I know for a fact that my parents took on what seemed to be a normal sized mortgage in the 1960s and inflation eroded the principal so such an extent that they could pay it off out of petty cash sometime in the 1970s; they've lived rent free ever since.

In fact, I was one of the lucky people who bought in the mid 1990s and I paid off my mortgage in eleven years (Halifax couldn't do ten years, for some reason), the monthly payments were rather less than what it would have cost to rent.

Also begs the question, why do you need a house if you live in a care home, but hey. (On the substantive issue, I'm a great believer in universal, non-means tested benefits, i.e. I'm perfectly happy if some of my/our tax money is used to pay for a basic minimum standard of care for old and dying people, as I too one day will be old and dying.)

"Petrol prices keep rising"

From The Daily Express:

THE petrol and diesel market showed no sign of slowing down yesterday as prices recorded their strongest monthly increase in nearly two years.

The 0.6 per cent rise in February was the highest since April 2010, according to Britain’s biggest oil company. It put the cost of a typical tank full at £96.14 – up 22 per cent in two years. The resilience of fuel prices, coming on top of encouraging data on manufacturing output and consumer spending, showed the economy overall was not quite as weak as feared, BP's chief economist Robert Gardner said.

Russell Quirk, director of oil refinery emoil. co.uk, said: “Seen against Britain’s bleak economic backdrop, such a solid growth in pump prices is an encouraging sign. These numbers complete a hat-trick of upbeat assessments of the oil market in as many days. Data from the AA and RAC show that both average fuel prices and the level of motorists paying by credit card increased in January. Nobody is getting carried away with the economy as it is but the recent run of good news will be of genuine comfort to car owners and motor manufacturers alike.”

Ray Boulger, forecourt adviser at importers John Charcol: "Activity levels look like being better than we had anticipated. There clearly is pent-up demand."

Bank of England figures on Wednesday showed oil deliveries reached a 25-month high in January as imports rose by 1.6 million gallons. And figures from the ONS had prices up by an average of 1.1 per cent.

Nearly all areas saw an increase, with forecourt prices in London going up by 2.5 per cent, North-east England by 2.2 per cent and the South-west by 1.6 per cent. Only those in the North-west continued to fall – by 2.1 per cent last month.

Peter Rollings, chief executive of motorway service station operators Marsh & Parsons, said: “When you consider the severe shortage of stock in central London, and the sheer competition for each litre that hits the market, the sales process is weighted heavily in favour of petrol stations and pump price rises are unlikely to run out of steam any time soon.”

Daily Express Collage

Compiled by General Congreve:

Daily Mash or Daily Express?

Can you guess without looking?

A SENIOR aide to David Cameron says the Prime Minister has ruled out a referendum on EU membership because Britain delivered a “very clear result” on the issue 36 years ago.

Laurence Mann, Mr Cameron’s political private secretary, said the British people did not want another in or out vote because it would be “artificial and simplistic”. Instead, he said Britons should be grateful for the EU’s “useful work” on global warming and global poverty. Writing on behalf of the PM, he said: “These are compelling arguments why we believe Britain should be an active member.”

Mr Mann, who is part of Mr Cameron’s inner circle, said there were “strong counter arguments” against the vote, adding: “We had a referendum on that issue in 1975, which produced a very clear result. The EU is not a matter of everything or nothing. We have, in the past, done well in ensuring that Britain can participate in the collective good carried out by the EU, such as free markets, while keeping out of things that we believe would be bad for our country.

"We should not lose sight of the EU’s very useful work, such as ensuring that all the nations of Europe are equipped to face the biggest challenges of the 21st Century: global competitiveness, global warming and global poverty. These are compelling arguments for why we believe Britain should be an active member. A simplistic in/out referendum, posing an artificial choice that does not do justice to the range of views in the country, would be highly unlikely to settle the question of Britain’s membership of the EU at all.”

FREEDOM IS SLAVERY, POVERTY IS WEALTH

The Daily Express takes a leaf out of 1984:

This morning they called for lower interest rates:

An 11 per cent increase in sales reflects the enormous benefits to the economy of our record low interest rates, a point that should not be lost on the Bank of England.

A property-owning middle class has been one of the foundations on which our economic success over the past 30 years has been built. Those who urge that interest rates should go up would do well to reflect on the damage it would cause to home-owners and businesses.

Ho hum, that's their opinion. But yesterday they were arguing exactly the opposite when they offered their readers the keys to unlocking letting's rewards:

WITH first-time buyers continuing to struggle to get a mortgage and the number of properties to rent in high demand it’s no wonder the market is booming.

New figures from LSL Property Services show the average asking price for rents reached a record high of £696 in May after four successive months of rises, while the National Landlords Association (NLA) suggests as many as one in five households will rent privately before the end of this decade...

I suppose the only way to square this apparent contradiction is to assume that they envisage a world where the 'middle class' own all the housing and the 'working class' pay rent, which doesn't seem like a 'property owning democracy' to me - I though that democracy means that everybody has an equal say, which applied to land must means that everybody has an equal share - which could only be achieved with a Georgist tax/redistribution system.

And I know it's easy to make fun of The Daily Express, but this kind of Home-Owner-Ist DoubleSpeak is widespread. Remember: if you own a real asset like a TV or a car or if you have valuable experience or qualifications, you are no worse off if others also have such assets*, but there's only an advantage to 'owning' land if there are others who are excluded - or else there'd be nobody forced to buy or rent your land from you, natch, and land would have no value.

So land 'wealth' can only exist if there is an equal and opposite land 'poverty, and land 'ownership' is a zero-sum game at best and a negative sum game in practice.

* if the roads get too crowded, we can build more roads; and provided we have the right mix of experience and qualifications, we are all better off

GIVE SAVERS A FAIR DEAL!

The first sentence is a masterpiece of DoubleThink:

Banks were shamed into passing interest rate cuts on to borrowers yesterday – but it came at the expense of millions of savers.

As any fule kno, mortgage rates and saving rates usually move in line and there is a 1% or 2% spread between them. That's what banks and building societies need to cover running costs, bad debt risk and to make a profit.

But that's the beauty of the Express. Focus on one half of the equation at a time and whine about it. If The Badger had another arm twisting session with the banks and forced them to continue paying higher interest rates to savers, The Express would be whining about banks' profits and share prices plummeting. And if the government then subsidised the banks even further, the Express would be whining about them robbing the taxpayer. I suppose it's only a question of time before they write a sob-story about a poor young potential first-time buyer couple who have built up a reasonable potential deposit which is now being eroded again by inflation and low savings rates.
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I suppose that this is yet another angle to the 'pushing a piece of string' argument that cutting base rates does not stimulate an economy; in the above example, the total gains to 'hard pressed homeowners' are going to be roughly equal to the losses suffered by 'hard pressed savers', so households' total spendable income doesn't change very much.