"Carl Sagan testifying before Congress in 1985 on climate change"

The video below popped on YouTube. Watch carefully from 3 mins 20 seconds or so, this is where he launched (or re-launched) the Big Climate Lie.

Note how Sagan constantly refers to "Earth's surface", not mentioning clouds. By implication, he is including clouds when considering solar radiation absorbed (or else his calculation wouldn't give the answer of about 30 degrees), so the obvious next question would be "Do clouds and cloud free ocean/land surface, in total, radiate upwards the same amount as they absorb in solar radiation?", as a reality check if nothing else, to which the answer is a resounding "Yes."

If the answer were "No", then this would raise a lot of questions - maybe there is a positive (or a negative) Greenhouse Effect? if so, what causes it?

Sagan neatly sidesteps this obvious question, and at 4 mins 20, launches into an alternative reality where clouds don't exist, and the solar radiation absorbed by clouds and oceans/land is all directly absorbed by the land/oceans. If it were, it would be a lot cooler - he is mathematically correct in saying that land/oceans would be about 30 degrees cooler than they are (the accepted figure nowadays is 33 degrees). James Hansen explained the calculation in more detail in 1988, three years later.

[Enjoy the cutaway shots of Al Gore with dollar signs rolling in front of his eyes.]

At 4 mins 30 Sagan concludes, "And why is it too low... it's too low because something was left out of the calculation. What was left out of the calculation..?"

An attentive listener would have screamed, "The clouds, you moron!", but nope.

Sagan of course trots out his preferred answer: "The Greenhouse Effect" and then waffles on about CO2 trapping heat and all that nonsense.

Usual Labour bullshit vs usual Tory bullshit

From The Guardian:

Sadiq Khan will make a campaign for wide-ranging rent control the key plank of his 2020 re-election bid, asking the government to give the London mayoralty the power to combat soaring rents in the capital.

That is the most staggeringly meaningless promise ever, and one on which he cannot actually deliver. Even if he wins and asks the government to give him the statutory power to regulate rents, they will simply refuse.

This reminds me of his meaningless fares-freeze pledge, He simply had no authority to do so. Rrom The Guardian:

Tony Travers, local government expert and director of the LSE’s Greater London Group, said the announcement by Khan came down to an issue of trust and how the average person would interpret his pledge.

“The words he used at the time made it very hard to understand the commitment only applied effectively to pay-as-you-go and cash fares on TfL-only services,” he said. “It’s inevitably going to be interpreted as not quite what was [advertised] on the tin.”

Even if Khan had such powers, he's in the pocket of the land mafia, so wouldn't actually use them.

Moving on...

“London is in the middle of a desperate housing crisis that has been generations in the making,” Khan said. “I am doing everything in my power to tackle it – including building record numbers of new social homes – but I have long been frustrated by my lack of powers to help private renters.”

That is a straight lie. New construction is even lower under Sadiq than under Johnson, and in such pitiful amounts that it can't possibly have any impact on anything.

The Tories could have scored a few open goals, but decide to make themselves look stupid by playing the Missing Homes Conundrum instead:

The housing secretary, James Brokenshire, has argued that the controls would lead to poorer housing standards with landlords unable to afford to maintain properties and could also have a dramatic effect on housing supply, with landlords choosing to sell up rather than have their rental income reduced.

Jeez. Landlord sells, tenant buys, supply of rental housing and demand for rental housing goes down in step. Twenty years ago, the number of private rented homes was half what it is today; were rents higher or lower?

Tesco boss - wrong facts, wrong logic.

Emailed in by Shiney, from the BBC:

The boss of Britain's biggest supermarket has blamed the collapse of some retailers partly on the expense of business rates.

Dave Lewis, Tesco chief executive, said the charges that firms must pay on their buildings played a "large part" in sending some retailers to the wall... He questioned whether raising business rates was resulting in an "uneven playing field" for some firms...

"Are we allowing it to stay competitive, or are we by stealth lowering corporation tax and increasing business rates to a place which is creating an uneven playing field and forcing people to think about how it is they avoid that cost and find other routes to the market?" he asked.

The Tesco boss said business rates was the biggest tax his company paid, adding up to more than £700m a year.

The last claim is a straight lie. To put that figure in context, it is a smidge more than 1% of Tesco's annual turnover of around £60 billion.

If he could be bothered to look at his own company's accounts for the years when VAT was reduced from 17.5% to 15%, then increased to 17.5% and then to 20%, he would know that Tesco bears about two-thirds of the VAT it pays every year.

He knows better than I do how much of Tesco's turnover is VAT-able items (basically anything except basic food), but sure as heck the VAT born by Tesco is several times as much as the £700 million Business Rates it pays.

He's wrong in logic as well.

- For premises which Tesco rents, the Business Rates is just part of the rent bill. As we know, Business Rates are supposed to be a certain percentage of the total rental value, although some individual valuations are miles out, so by definition, the official rent bill is at least twice as much as the Business Rates Tesco pays on its rented premises.

- The Business Rates on the premises Tesco which *thinks* it owns is just rent on that part of the premises which it doesn't own and never owned.

The point is that Business Rates (which have existed for over four centuries - so it's not like businesses are unaware of them) reduce the selling price of commercial premises by an equal and opposite amount, thus saving the purchaser a chunk of change up front. The government claws back the under-value via Business Rates, so the total cost to an owner-occupier is much the same with or without Business Rates.

(Clearly, the downside with Business Rates is that it is calculated on the total rental value including the occupant's own improvements. Which is absolutely no different to normal land law - if a tenant pays for improvements, legally they belong to the landlord and he can increase the rent accordingly, unless the rental agreement says otherwise.)

Economic Myths: Business rate hike may force UK's shops to raise prices

The Guardian repeats the usual bleating from the owners of retail premises:

An analysis by Paul Turner-Mitchell, a business rates expert, and the property agent CVS has found that the business rates for 485,435 retail premises in England, which account for more than a quarter of all properties liable for rates, will rise from £7.7bn a year to £8.2bn over the next five years.

Mark Rigby, the chief executive of CVS, said: “The retail sector is facing a significant shift in structural dynamics, with most reporting challenging conditions ahead.

“Add to the mix the already ‘lethal cocktail’ of increased operating costs from the national living wage and apprenticeship levy, and a near half a billion pounds increase in business rates per year for the next five years is simply unsustainable. Something will have to give – whether that’s store closures or even higher prices at the till.”

They fail to make a distinction between marginal costs (i.e. the cost of each extra unit) and fixed costs. The profit-maximising price/output level is dictated by marginal costs, not fixed costs. Here's the relevant article from Economics Help and here's the diagram:


The article does not mention fixed costs at all. Clearly, the National Living Wage and the apprenticeship levy increase unit costs, so these might result in lower output/higher prices. In economic terms, those things are very bad indeed (whatever their political/social appeal).

But changes in fixed costs like Business Rates won't make a difference to prices, unless they are so high as to wipe out profits altogether; in which case
a) shops will threaten to shut; either landlords concede on the rent to balance out the BR increase or they don't care and shops go out of business
b) in which case landlords are stuck paying the Business Rates themselves with no rental income to cover it
c) local average rents will fall, Business Rates will fall and the shop will become viable again.
d) owner-occupier businesses (our much loved 'small local shops') are usually much less profitable (before rent) than tenant businesses, who have to make the rent each month, and can't be insulated with rent reductions. Well so what? Get with it or get it rented out.

And anybody who has travelled outside his home town knows that freely transportable goods sell for the same price all across the UK - despite the huge disparity in Business Rates. Why would anybody think that this will suddenly change?

It is only goods and services consumed at point of purchase (restaurants, pubs, cinemas etc) whose price includes a location rent element where there is any noticeable different in price between expensive areas and cheap areas; assuming that those businesses are already charging the profit maximising price, why would anybody think this will suddenly change?

Killer Arguments Against LVT, Not (406)

Emailed in by Physiocrat, from the comments in an article on FT Adviser headed "The pound’s longer, sharper Brexit shock":

Paris azawak said:

@ Physiocrat @ RiskAdjustedReturn

I have attempted to follow this bizarre thread in which Physiocrat puts forward an ultra-liberalist hypothesis in which all taxes would be abolished overnight except for a simple land tax…

This is his first Big Mistake, as Mike W points out in the comments:

I only require that the 'last great project of political economy' (actual phrase which caused the problem), itself conforms to Popper's dictum of 'piecemeal' observable, testable, one bit at a time, implementation. With no bloody revolution or bloody reactionary counter thrust.

But let's read the rest of the drivel anyway, just for fun:

… Would this not simply result in a return to the known ills of completely unbridled capitalism:

(i) the brutal, irresponsible chaos of disproportionately concentrated wealth into the hands of an increasingly small number (a proliferation of Murdochs, Gates, post-soviet oligarchs, etc, behaving like capricious feudal barons as the rest struggle as vassals once did);

(ii) an immediate widening of the disparity between rich and poor (ie the rich get richer and richer, the poor get poorer and fall behind, are excluded, abusively "exploited", resulting in a surge in social decay and moral injustice (refer Dickens) which costs far more to cure than to prevent (exclusion, poverty, declining health, homelessness, poor education, exclusion, discrimination, delinquent behaviour, crime, &c);

(iii) the decline of infrastructures (especially less "profitable" ones) that taxes pay for in response to specific needs and situations as they evolve and in accordance with government policy as they develop according to evolving democratic majority choices in the interest of the common good.

No company or person enjoys paying taxes.

However, what taxpayers get in return for their fleeting contribute is a very great deal more in return than the sums they contribute since they benefit from the vast heritage or legacy of all that has been constructed and developed by decade upon decade of taxpayers (heath sector, educational sector, law and order, transport and communications, government and public buildings ... the list is endless).

The only possible way to levy tax fairly in order to maintain and develop the vast EU wide infrastructures that make the existence of dynamic, modern and efficient trade, services and consumer markets possible is good governance, fair regulation and taxation based on means-testing.

A land tax is haphazard by comparison and relatively easy to distort and circumnavigate (eg as pointed out, foreign companies such as Google generate unprecedented wealth without owning physical land in the markets they derive profits from through a virtual, immediate and monopolistic electronic Platform).

For the same reason, VAT is relatively unfair since it is a flat tax on consumption regardless of means. The poor pay the same VAT as the rich for the product.

Tax should be levied on income/revenue and not exclusively on land ownership as suggested, because

(a) land value varies constantly according to market fluctuation and is impossible to estimate exactly

(b) in an imperfect world [income tax] is:
(i) means-tested;
(ii) proportionate and therefore sustainable;
(iii) supportive of the market whose infrastructure has made its generation possible;
(iv) adaptable according to specific and ever-evolving governmental policies aimed to protect society in the interest of the common good, and so as to avoid the higher social and Financial cost of exclusion and social decay;
(v) ethical, civilizing and therefore progressive,

A land tax would be regressive and mark a return to the Dark Age:

Indeed, history teaches us that in the middle ages, land taxes concentrated power and wealth into increasingly power dynasties who possessed entire fiefdoms and kingdoms; charity was dispensed patronisingly and randomly according to whim or the success of petitioning peasants and vassals.

Not much means-testing there. Just medieval madness, machiavellan machination and civil strife all round (refer Shakespeare).

RiskAdjustedReturn is entirely correct above, it seems to me when he state in a post above that:
"Someone has to pay for the infrastructure that makes the building viable for habitation."

Well that settles it then, doesn't it?

Another hatchet job on Citizen's income

From the BBC:

Why are so many on the left now arguing that the state should pay everyone a universal basic income?

Imagine this. You can sit back, relax, turn on the telly, put your feet up. And the government will pay you for it without any of that tedious job-seeking and signing on business.

It sounds like a fantasy. But it's an only slightly exaggerated version of the big idea animating many on the left of British politics, and which has just been adopted by Unite, the country's biggest trade union...

It's not a "slightly exaggerated version" it is a crass misrepresentation. No serious proponent would set the CI rate at anything much higher than current unemployment benefit (i.e. £ not much per week).

We know that most people are prepared to waive their dole money in exchange for a wage and some people on the dole decide that the extra they could earn is not worth the hassle. With a CI, those in work would continue working, and some of those currently on the dole would start working as they would not be penalised by losing their dole money. For the no-hopers, not much changes. Simples.

And there are other objections. Labour MP Jon Cruddas sees the embrace of universal basic income as "absolutely deadly" for his party.

"Part of the thing about the basic income is that it assumes that the working class will disappear, right?" he asks. "Now if you disrespect them to that degree, is it any wonder that they'll go walkabout?"

Mr Cruddas warns that a left-wing embrace of the policy would constitute an electoral gift to UKIP, dismissing it as "a form of futurology which owes more to Arthur C Clarke than it does to Karl Marx".

"It imports a sort of passive citizenship with no sense of contribution. It doesn't contest the sphere of production, and it just retreats into a hyper-consumption."

None of that makes any sense, it's just Westminster bubble-speak. Nobody "assumes that the working class will disappear". And WTF does "contest the sphere of production" or "retreat into hyper-consumption" mean? A small weekly payment towards the cost of basic essentials for the lowest paid and a modest tax rebate for those in work is hardly fuelling "hyper-consumption"... right?

And the CI idea was in UKIP's 2010 manifesto, I know because I wrote it myself and even did a ten minute speech at a UKIP conference which was received far more warmly than I would have expected. I bet it disappeared long ago though.

The lies are coming thick and fast now...

David Cameron, in The Telegraph:

So much is at stake on Thursday. And so rarely will we ever make a decision of such magnitude. And here’s the thing: it’s irreversible.

There is no turning back if we leave. If we choose to go out of the EU, we will go out – with all of the consequences that will have for everyone in Britain.

That's the whole point, isn't it, if there is a slim Brexit majority on Thursday, then it is unlikely to lead to an actual Brexit.

It's just a way of giving TPTB a good kick up the arse and temporarily delaying things, giving our pol's a stronger hand in the next round of negotiations.

The outcome of the referendum is not binding on the UK government, anybody who thinks otherwise is deluded and people like Cameron who know it isn't but pretend it is are just lying.

I am sorry, but there's no polite way to put this, but...

...they are lying again. Headline and Article.

Heir to Blair indeed.

I do not have time to fisk the whole nonsense, so let's consider what would happen to the GBP if (when?) we exit.  We should note that Cameron/Osborne comments are pure speculation.  The numbers they cite are just fiction. (In lots of ways this sort of lunatic economic soothsaying is what has got us into this mess in the first place.)

Initially there will be uncertainty in the currency markets. (Personally I think that a lot of that is already in the price.).  The markets will then take time to work out what is going on.  I don't think that that will take long - financial markets being among the most efficient markets. The markets will quickly  realise that we are off the hook for all our contingent liabilities to the EU.  These are both massive and we have the true quantum deliberately hidden from us.  They will also realise that the government's finances have been materially improved by about £9 Bn per annum.  (I concede that there is a lot of uncertainty as to just how much the EU costs us).  This will mean that we can repay our international debts quicker.  Although it will take longer (the quangoistas will fight like Hell to hang onto their power and fat entitlements - I fully expect them to argue that 'now we have left the EU we need more regulation') the deadweight costs of EU created regulatory burden will be removed from the 55% of our international trade that does not go to the EU and all of it from the 90% of our GDP which is internal.  Production costs in the UK will fall. (If the Government had any clue what is was doing it could immediately cut taxes on production and hence create a low tax economy which in turn would immediately cancel out the  4% to 5% external tariff on exports to the EU. Next and crucially we will be able to return to proper supervision of our banks. (As you know I hold that Bank of England is largely incompetent at this and the FCA / PRA totally useless), but we could start to address the structure of bank capital outside the constraints of the EU's agenda that is to keep itself and the Euro in being come what may, mostly by printing money. The City would profit from this.  I also fully expect us to quickly become the largest offshore financial centre on the planet. (As part of this I also fully expect London land prices to carry on rising - but 'we' know how to address this, don't 'we')

Overall I expect GBP to rise in relative price.

Which is good because we'll be able to buy Mercedes cheaper.  Question,  What will Mercedes do with all those lovely GBP's?  Where can they spend them?

Cameron / Osborne whole scare mongering meme is based entirely on ill thought out speculation and deceit.

What a load of Cobblers

Here, I quote:

"IMF Report: Brexit risks 'severe and permanent damage' to the world economy."

That really is the most stupid headline I have read for a long time. Patently it is absolute nonsense.

Did the 1930's depression create 'severe and permanent damage to the world economy'? No.

Did the rampant inflation of the Weimar Republic and (arguably) the consequential rise of Hitler create 'severe and permanent damage to the world economy'? No.

Did WW2 create 'severe and permanent damage to the world economy'? No.

Did the collapse of the Soviet Empire create 'severe and permanent damage to the world economy'? No.

Did the American Revolution (and its 'AMEXIT' from the first British Empire) create 'severe and permanent damage to the world economy'? No. In fact arguably the exact reverse. AMEXIT, together with implementing the recommendations of The Wealth of Nations (published at the same time - 1776), laissez faire and the repeal the Corn Laws ushering in an extended period of free trade, set the world on the greatest period of wealth creation (for everyone) in history, so far.

The IMF are liars. End of.

Either they are terrible at maths or they are terrible liars.

Exhibit One

From The Evening Standard:

Zac Goldsmith claims Sadiq Khan would fund fares freeze with 59% rise in council tax

The row between the mayoral candidates over transport fares intensified today as Zac Goldsmith claimed his Labour rival would be forced to increase council tax by £175 a year for families to pay for a freeze.

Woah! Average Council Tax in London is £1,050 a year, slightly lower than the rest of the country (despite rental values and local per capita spending being about twice as high). That looks more like 17% to me…

Tory analysis of the figures suggests Mr Khan would have to increase City Hall’s council tax by 59 per cent — £175 a year for a typical household.

Sneaky! Technically, a London Council Tax bill is split into £850 for the local borough and a precept of £300 for the LGA (not many people notice this). £175 divided by £300 is of course something like 59%.

It's not even clear where the £175 comes from. TfL fare income is £3.8 billion a year (page 118 of their annual report, the other half of their budget is subsidies from the taxpayer), so if the normal price increase is 3% a year, a freeze means that TfL is foregoing £114 million a year, divided by 3.5 million homes = an average increase in Council Tax of £33 for each year that the freeze is in place.

Which seems like a perfectly sensible way of doing it to me, especially if the Council Tax increases were focused on Zones 1 and 2, who benefit most from TfL but pay the least towards it in fares, and especially if this meant that general taxpayer subsidies to TfL were reduced.
-------------------
Exhibit Two

From The Nuffield Foundation (who are otherwise decent chaps):

Public sector employers, such as the NHS and schools, will need to find more than £3 billion a year from 2016–17 to pay higher National Insurance contributions.

Aren't we always told that National Insurance is there to pay for the NHS?* Total NIC revenues are around £110 billion, the NHS costs a bit more than that, so it's not far off. A tax is not a real cost to the NHS, because the NHS is taxpayer funded (a point which Lola has made about a million times).

* Cognitive dissonance being what it is, pensioners also claim that they have paid for their current state pensions (just under £100 billion a year) with their past NI contributions. When challenged, they refuse to accept that National Insurance is not a magical tax which can be spent four times over (for both the NHS and other people's pensions in the past, as well as the current cost of the NHS with a surplus built up being used to pay current pensions). I have actually seen pensioner propaganda saying that pensions are too low because their past NI contributions were squandered on something else, meaning it is spent five times over or some such accounting bullshit.

Reader's Letter Of The Day

From CityAM:

Cameron constantly refers to "Paying down our deficit".

How do you pay down a deficit? You reduce a deficit and pay down* a debt.

@CJCHowarth

* In this country you "pay off a debt", but hey, his point stands.

No wonder Scottish retailers are struggling...

... they don't do maths.

From some some special pleading by the Scottish Retail Consortium aka Scottish Commercial Landlords Consortium:

3. The retail industry contributes around £2 billion in taxes per year in Scotland across the top five taxes of VAT, income tax, national insurance, business rates and corporation tax. Of the £2 billion, retail contributed close to £700 million in business rates...

5. In 2005, business rates made up around one-third of all taxes borne by retailers. By 2014 this had grown to nearly 50 per cent.

Have I missed something or are they deliberately lying?

They sat they pay £2,000 million in taxes, of which £700 million is Business Rates. That means Business Rates make up about 35 per cent of their total tax bill, not 50 per cent. So the share has gone up from "around one-third" to about 35 per cent, in other words "not at all".

And I find it baffling that they focus so much on Business Rates. Their single largest tax bill is going to be VAT. Total UK VAT receipts are over £100 billion a year; total Business Rates receipts under £30 billion. And if it's not VAT, then it will be PAYE. Business Rates will be a distant third and corporation tax will be an even more distant fourth.

Or put it another way, even their £2 billion total is highly suspect. According to this, total UK retail sales alone are about £350 bn a year, £58 billion of that is VAT (paid directly to the government or paid indirectly as input tax which their suppliers pay to the government). Scale that down for Scotland and that's about £5 billion. Even if we politely ignore input VAT, the total they pay directly will be more than half of that, call it £3 billion?

Either way, we have to assume that they pay about four times as much in VAT as they do in Business Rates.

(H/t Thomas Hall and Lola).

True cost of Labour's pension tax raid: the square root of fuck all.

The Telegraph is still pumping out the line that Gordon Brown's Pension Raid has cost the "taxpayer" a cumulative £100 billion since 1997.

Bollocks.

Rounded to the nearest £ billion or per cent...

Back in 1996-97

The mainstream corporation tax rate was 33% and the ACT credit which pension funds could reclaim was 1/4 of the cash dividend received.

* Total UK plc profits (say) £80 bn, corp tax payable £26 bn = post-tax profits £54 bn.
* Half of the £54 bn post-corp tax profits paid out as dividends.
* Half of retained profits and half of dividends belong to/paid to pension funds.
* Pension funds suffered £13 bn corp tax indirectly (half of £26 bn) and reclaimed £3 bn ACT (1/4 of the £13 bn cash dividends they received) = net direct and indirect tax bill £10 bn.
* Average tax rate 25% (£10 bn divided by half of £80 bn).

1997-98

Mainstream corporation tax rate 31%.

* Total UK plc profits (say) £80 billion, corp tax payable £25 billion.
* Pension funds suffer half of that corporation tax = net indirect tax bill £12 bn.
* Average tax rate 30% (£12 bn divided by half of £80 bn)

So yes, initially this was a modest increase in their overall tax rate and a modest increase in their overall direct and indirect corporation tax bill of £2 or £3 bn.

2015-16

The mainstream corporation tax rate is 20%, half paid out as dividends and half belongs to pension funds.

* Total UK plc profits (say) £160 bn, corp tax payable £32 bn.
* Pension funds suffer half that corporation tax = net indirect tax bill £16 bn.
* Average tax rate 20% (£16 billion divided by half of £160 bn).

This is now lower than the overall average rate they were suffering pre-raid.

In summary

You can reasonably argue that pension funds 'lost' £2 or £3 bn in 1997-98 compared to 1996-97 but in the meantime, they are 'winning' about £4 bn a year i.e. instead of paying overall rate 25% on their half of £160 bn, they are only paying 20% overall rate.

I'm not sure when the break-even year was, but all things considered, the losses and gains net off to a very small figure, nowhere near an overall loss of £100 bn and quite possibly a small overall gain. If you want the Excel formula, it is "=FA^0.5".

And of course, pension funds are not "the taxpayer". Everybody else is clearly miles ahead of the game as his overall indirect corporation tax bill is now 13% lower than eighteen years ago.

Killer Arguments Against LVT, Not (364)

We've heard this one a million times: "Ooh but what about the farmers, they'll all go bankrupt?". You can sort of forgive this when the man in the street says it, because he doesn't know that in the UK, 99% of the land value is the five or ten per cent of surface area which is urban/developed land, the three-quarters which is used for farming or forestry has such a negligible rental value (£5 - £50 an acre, net of subsidies) that it is barely worth taxing. What we ought to do first is get rid of the negative LVT i.e. farmland subsidies and then see how things pan out.

But here is an estate agent raising the eternal question "Is he deliberately lying or is he really stupid?":

Many commentators have advocated changing the current tax system which is linked to land and land ownership, to a new system similar to land value or wealth tax in other EU states. While the Scottish Government’s consultation highlights sustainability, it does not give enough consideration to the financial sustainability of our food production industry and how important that industry is in supporting our growing population.

The introduction of a Land Value Tax would require a revaluation of all property assets with some form of exemptions or banding. With most of our rural land involved in producing food we anticipate most of this tax burden will fall on farming families and be a further burden on the cost of food production.

None of that tax - or at most 1% of it - would fall on farmland. And a tax on rental values does not affect selling prices - it is selling prices which dictate the rental value, not the other way round. Price of wheat goes up, value of arable land goes up and vice versa.

The forestry sector would also be hampered as the land tax would be a major disincentive to planting schemes, when the Scottish Government is already 50% behind on their planting targets for commercial forestry.

Bollocks, it is the very lowest value land which is used for forestry i.e. steeper slopes, places in the middle of nowhere, places without much natural irrigation etc, which have a rental value of £5 per acre per year, tens of pennies per tree per year, with each tree increasing in value by 50p - £1 per year. Even with a tax of £5 per acre, forestry would still be profitable i.e. worth doing.

There is also a real risk that making structural changes to the way that land can be owned will lead to plummeting land values.

Withdrawing the farmland subsidies would do this, so what? And the LVT makes no difference to 'the way that land can be owned', in the same way as income tax doesn't affect your career choice much.

Given that much of the banking crisis was linked to the destabilisation of the commercial property world, politicians need to think carefully about the consequences of destabilising values within the agricultural sector.

No it wasn't. It was the bubble and subsequent bust in residential land prices which caused it. Surely he knows that? So keep prices low and you will not get any more busts. In any event, he is conflating farmland with commercial i.e. urban land.

Family farming businesses may find themselves unable to secure a working capital overdraft...

He must be aware that the price of UK farmland has trebled over the last ten years, were farmers not able to get working capital overdrafts until ten years ago? And why can't farmers do like other businesses and fund themselves out of retained profits? What about tenant farmers, what about new entrants?

... and any knock on effect on the financial sector would have widespread consequences for those far beyond the agricultural sector.

Nobody move or the puppy gets it.

If you're going to make up statistics, at least make up plausible ones, you twats...

From The Guardian:

From 2003-13 – a decade which saw the introduction of a ban on smoking in public places and a rise in cigarette prices – the proportion of all deaths in the 35+ age group estimated to be caused by smoking fell from 19% to 17%...

Fewer than one in five people over 16 smoked in 2013, the lowest proportion since recording started in the 1940s. More than a quarter smoked in 2003...

So if just under a fifth of all adults smoke, and just under a fifth die from smoking, that means that all smokers die from smoking, yes?

Nope:

The British Heart Foundation said tobacco products still killed about half the people who used them and doubled a person’s chance of having a heart attack or stroke.

Unlike non-smokers, who live forever, presumably, placing absolutely zero cost on the social security system or the NHS or anything whatsoever.

Moving on:

The number of prescriptions for treating smoking dependency dropped from a peak of 2.6m in 2010-11 to 1.8m in 2013-14. Cheeseman [policy director at Ash] recognised rising use of e-cigarettes might be a factor, but said people who found quitting smoking most difficult would benefit from properly structured, evidence-based support from the NHS.

When a lot (i.e. all) of the evidence shows that smokers who start vaping tend to smoke a lot less - which is the whole bloody point of vaping - and very, very few non-smokers start vaping.

Mike Hobday [The British Heart Foundation's] director of policy, said: “These figures show current strategies to help people quit smoking aren’t going far enough... The government urgently needs a new strategy to help people stop smoking. With tobacco companies continually raising their prices...

Cigarette prices are dictated largely by the amount of duty on them; the cost net of taxes is around 50p wherever you go in Europe.

... this needs to include an annual levy on these companies to fund tobacco control and stop smoking services to help support people to quit.”

Actual tobacco company profits are a few per cent of the total tax already imposed on a packet of cigarettes.

Chris Woodhall, senior policy adviser at Cancer Research UK, said: “We want to see a tobacco-free country within the next 20 years – where fewer than five per cent of adults smoke. Falling smoking rates among adults and children show that we’re moving in the right direction, but we must do more to realise this ambitious public health goal.”

Tobacco free = fewer than five per cent smoke?

FFS.

Nigel Farage on top form

Emailed in by MBK from The Sunday Times:

What aspect of the tax system would you change?

I would scrap inheritance tax. The very rich don’t pay it, anyway. But if your mum and dad own a semi-detached house in south London and get killed in a car crash, the first thing you have to do, even before you finish grieving, is sell your house to pay the tax.

Ahem.

Paying by instalments on a house

If you plan to sell the house, you only need to find 10 per cent of the Inheritance Tax due by the six-month deadline...

If you plan to keep the house and live in it, you may prefer to pay by instalments because you only need to find 10 per cent of the Inheritance Tax each year (plus the interest), rather than having to pay all of it up front in one lump sum.

So there is no pressure to sell and it's still a lot cheaper than renting or paying a mortgage. I'd rather pay up to 4% in IHT each year for ten years than pay a mortgage for 25 years or pay rent for ever.

The missing homes conundrum; outright lies

Labour's timid ideas about modest rent controls/tenant protection have provoked the usual Homey backlash.

Top of the list of counter-arguments is the missing homes conundrum:

Labour was accused on Wednesday night of attempting to introduce rent controls like those blamed for damaging the property sector during the 1960s and 1970s.

The Conservatives said the policy had been tried unsuccessfully by Socialist governments in Venezuela and Vietnam, and would result in low quality accommodation and fewer homes being rented out.

What damage to the 'property sector'? We were building a lot more houses than now and a lot of people were buying them for affordable amounts. Rent controls simply made housing more attractive to owner-occupiers than to landlords, which is why the number of households renting privately fell from 90% to 10% between 1900 and 1990.

Unlike the author of The Telegraph article above, the Tory housing minister couldn't even be bothered to look up rent controls on Wikipedia comes out with this:

Conservative housing minister Brandon Lewis dismissed the plans, claiming only building more homes would lead to affordable rents. 'Rent controls never work - they force up rents and destroy investment in housing leading to fewer homes to rent and poorer quality accommodation,' he said.

For sure, the quality of rented accommodation might go down, but so what?

People are happy to put up with a few years of slumming it when they leave home, get their first job, go to Uni etc. What's really important here is reversing the decline in owner-occupation rates. Among the 24-35 age group, owner-occupation rates have collapsed from a two-thirds fifteen years ago to only one-third today.

To round this off, more bollocks from the end of the first article:

Grant Shapps, the Tory Party chairman, said: “Evidence from Britain and around the world conclusively demonstrates that rent controls lead to poorer quality accommodation, fewer homes being rented and ultimately higher rents – hurting those most in need.”

He is just making this up as he goes along. There is no real life evidence for any of this. We could present counter-evidence from Germany, which does have implicit and explicit rent controls and much better quality housing.

Sam Bowman of the Adam Smith Institute said: "Rent control is a stunningly bad idea that could devastate Britain’s cities and clobber renters. To paraphrase the socialist economist Assar Lindbeck: the only thing worse for cities than rent control is bombing them."

Rent controls do not 'clobber renters', they turn them into owner-occupiers, which I thought we all agreed was A Good Thing? Further, cities recover surprisingly quickly after being bombed or struck by an earthquake, provided the economic conditions are right. Even by his own admission, rent controls have a lot less impact than that.

Simon Walker, Director General of the Institute of Directors, said: "Basic economics tells us that if you artificially hold down the price of something, you get less of it in the market. This is as true for housing as it is for anything else. At a time when we appreciate there is a housing shortage, this policy is particularly short-sighted."

"Basic economics" tells us that there will indeed be less to rent, but the amount of housing is fixed, and there is no shortage in an absolute sense, so when landlords try to sell up, prices will fall to a level which former tenants can afford. Sorted.

(Obviously, shifting to LVT would sort this out much better, but that's not under discussion here).

"Tory housing minister Brandon Lewis said"

From The Daily Express*:

"Thanks to our long-term economic plan, house building in England is at its highest level since 2007.

"Our schemes are helping hundreds of families every month to buy their own home and we will go further by allowing new homes to be built specifically for young first-time buyers.

"Our Government-backed schemes will help a million more people become homeowners in the next Parliament.

"Our long-term economic plan is getting Britain building again and is helping people achieve their dreams of home ownership – the biggest threat to this is Ed Miliband in government."
--------------------------------------------
The English Housing Survey said:

2009-10
25 to 34 age group
Owner-occupiers - 47%
Private renters - 36%

2013-14
25 to 24 age group
Owner-occupiers - 36%
Private renters - 48%

To me that looks like a catastrophic fall in owner-occupation rates with a corresponding catastrophic increase in private renting. Clearly Mr Lewis knows something we don't.

The fact that the rot set in under New Labour is a separate topic, the 2013-14 survey tells us that the figures for 2003-04 were::
25 to 34 age group
Owner-occupiers - 59%
Private tenants - 21%

* Emailed in by MBK who knows I love this shit.

Tories and Labour - both deliciously wrong on tax, as usual.

From City AM:

Labour and the Conservatives will today lock horns over the levels of tax imposed on companies, as business takes centre stage in the fiercely contested General Election campaign.

Real policy differences or Indian Bicycle Marketing?

Labour will announce today that, if elected, the party’s first Budget will cut business rates, in a move they say will be worth an average of £400 for 1.5m small businesses.

Pandering to the landowners. Boo.

During a visit to a small business, Balls will say: “Under the Tories, higher business rates have cost firms an average of £1,500 a year and are an ever bigger part of their tax burden. So instead of another corporation tax cut for large comp­anies which helps fewer than one in 10 firms, we will cut and then freeze business rates for small firms instead.”

What the Tories have proposed, quite sensibly, is to have a flat rate of corporation tax of 20% for all limited companies, instead of 20% for small ones and 21% for large ones.

Yet the Tories argue that such a move would equate to a one per cent rise in corporation tax, as it would mean reversing a cut from 21 per cent to 20 per cent that will come into force tomorrow.

No, keeping the rate at 21% is not a rise, it is simply not a reduction.

Treasury minister David Gauke said: “You have it now in black and white – Ed Miliband and Ed Balls will whack up corporation tax in their first budget. This would be the first time corporation tax has risen in over 40 years.”

Keeping the rate the same is not exactly "whacking up" corporation tax, is it? Sticking 2.5% on VAT or 2% on National Insurance, that's closer to "whacking" and that was the Lib Cons who did that (the fact that Labour would probably have done it had they won in 2010 is neither here nor).

But he is lying.

My trusty tax tables tell me that until 2006 or so, Labour experimented with corporation tax rates of 0% and 10% for very small companies and 19% for small/medium sized companies (a stupid idea if there ever was one).

Nonetheless and despite that bloody great lie, the Tories win this one on points. Cutting and simplifying corporation tax is clearly better than reducing business rates. But no mention of the biggest taxes on business (rather than on 'business owners') which are VAT and NIC.

What we need with business rates is a revaluation, which is due to happen in 2017 and which will solve a lot of problems...

BNP Paribas Real Estate predicts that following the 2017 re-evaluation, the Uniform Business Rate – the multiplier used to calculate rate payers’ bills – will rise to a record 50p in the pound England, earning the government £26bn. It named retailers in Leeds and Bristol as likely winners from the next revaluation, with their bills likely to fall by 40 and 20 per cent respectively.

Mayfair and other prime West End offices are also set to benefit with no change in their rental values since the peak in 2008. However, retailers on Bond Street and Oxford Street face rises of 60 and 40 per cent. Offices in King’s Cross face a 79 per cent rise in rents.

"It can't be tax avoidance if no tax was avoided."

Ha!

From the BBC:

Mr Miliband has confirmed his mother Marion set up a deed of variation after the death of his father Ralph... the deed allowed ownership of the house to be split between Mrs Miliband and her sons [rather than going to Mrs M outright]. The paper quoted experts suggesting such arrangements could be used to reduce tax liabilities.

Mr Miliband later sold his share to brother David who also bought the rest of the property from his mother. But a Labour spokesman said: "Ed paid 40% capital gains tax when the house was sold in 2004/05. It can't be tax avoidance if no tax was avoided."

This is taxation for idiots. The rate is one thing, the tax base is another.

Inheritance Tax and Capital Gains Tax (at the time) were both 40%.

The difference is that Inheritance Tax is payable on the full value you inherit and CGT is only payable on the increase in value between when you inherit it and when you sell it.

So, by a circuitous route*, the sons ended up saving IHT of 40% x whatever the IHT nil rate band was at the time (£200,000, probably) when Mrs M died.

For Dave, who moved into the house, that was an absolute saving (future capital gains are exempt).

For Ed, the increase in value between when he inherited and when he sold to Dave was taxable at 40%. So he paid 40% on some of his ultimate proceeds but not on all of it, which he would have done without the deed of variation (40% IHT on value at date of death and 40% on future increase in value).
---------------------------------
* The circuitous route...

The original deed did not reduce the IHT bill on Ralph's death but was (almost certainly) done in order to use up his nil rate band. Most transfers to widow or widower are exempt anyway, but his sons inherited a share of the house worth as much as the nil rate band was at the time, with no IHT. This is then their base cost to deduct from a future sale to calculate the capital gain (if any).

So when Mrs M shuffled off, the value of her estate was correspondingly lower and so the amount of IHT which the sons had to pay when they inherited from her was less than it would have been without the deed of variation.

While this is bog standard IHT planning, the whole thing is now redundant because if the deceased did not use up his/her IHT nil rate band with transfers to other relatives, the unused bit goes to the surviving spouse, so it can be used when he/she dies.