Logic Fail

I'm struggling to identify any sort of "intellectual coherence", "logical consistency" or what we used to call "honesty" in Tory thinking, as evidenced here.

1. One the one hand, they say that 'the better off poor' should be eased out of social housing, basically by charging them higher rents, i.e. that if you are allocated a council house when you are down on your luck, and manage to get back on your feet, you get kicked out again.

2. That view sort-of-has-some-merit, but is only a sticking plaster because there ain't enough social housing. As we know, there ain't enough social housing because:

a) The Tories came up with the wizard wheeze of flogging off the nicer stuff to sitting tenants at half price (a policy which Labour continued with gay abandon).

b) They aren't building enough new stuff - and we note from the linked article that they intend to reduce the amount spent on building new council housing by more than half.

c) As it happens, part of the reason why there isn't enough money left to build more social housing is because they are spending it all on Housing Benefit to subsidise rents in the private sector, a large part of which is ex-council houses which the lucky tenants have since sold for massive profits to BTL landlords. So this was is a shit deal for potential social tenants as well as for the taxpayer; but a splendid deal for land speculators.

3. Returning to the Tories' flagship policy of flogging off the nicer council houses for less than half their value - and recent statements suggest that intend to continue with this - it was of course only the 'better off poor' who could take up this offer, so (even assuming they haven't since sold them to BTL landlords), it is exactly the people who the Tories now say shouldn't have 'a council house for life' who are in 'a council house for life' and who don't even have to pay rent any more, and seeing as council houses were sold off for about £20,000 on average in the 1980s, most of them won't be paying a mortgage any more either.

4. So the question is - do the Tories want to have 'the better off poor' in council housing or not? If 'yes', then their current policy is wrong; and if 'no', then their original policy was wrong. Or probably both are wrong anyway, just for slightly different reasons.

Or have I missed something?

Killer arguments against LVT, not (73)

Sobers is starting to ask the right questions in the comments to an earlier post:

I feel honour bound to break up this little LVT lovefest with some contrary views.

While I agree the State in effect guarantees private property ownership, I do not see that there is any necessary link between what the State does, and what it taxes. I can see no reason why the State cannot be funded by means other than LVT and still manage to enforce private property.

Well there's your answer.

A car factory funds itself by making cars. A plumber funds himself by fixing taps. Everyody does what he does best. So why doesn't 'The State' charge for the value of services it provides and in which it has a monopoly, i.e. protecting exclusive possession of land?

The State is involved in many things, should LVT fund them all? Why is it 'better' to fund the NHS from LVT than income tax or VAT?

Sobers is getting ahead of himself and is jumbling 'taxing' with 'spending'. I trust he's happy with the concept of the NHS charging patients for services, in which case why can't 'The State' charge landowners for services? Where's the big difference? Anyway, I'll deal with this point further down.

'The State' is not a thing in itself. It is merely a convenient way of people organising things. Most of us are happy to stick to the rules and we employ policemen, army and so on to protect us from those that don't. This is a mutually beneficial state of affairs and enables us to become wealthier, happier etc that if we all hand to stand guard 24/7 over 'our' land with a shotgun.

Going back to my car factory, the factory owner charges customers market rates for the cars he sells; he pays the workers market wages; and he keeps the profits for himself.

With land, it is people and the productive economy (with the government as referee or coordinator, i.e. to ensure that roads and railways and sewage works get built) which creates the value. Landowners are merely consumers of that value - so why should all the value created by 'The State' accrue to landowners (by massively undercharging them)? Remember that without people and a productive economy and a peaceful 'state', land would be worthless.

In Sobers' view, it is preferable for the car factory to provide their cars for below cost (or even free) so that all the value accrues to the lucky owners of cars (whoever they are); for the workers to be taxed on their wages (to pay for the roads, petrol and repairs for the car owners); and for the owner of the factory to go empty handed.

It is quite easy to explain why Land Value Tax is "less bad" than income tax, so by replacing income tax with LVT, we have sorted out 'the workers' (who thus pay rent on land they consume, and not rent on their own skill and efforts). The productive economy would not be affected by LVT, it would merely pay for the privilege of occupying more favourable locations (so hands back the extra income it receives from exercising that privilege and excluding competitors).

You are making the arbitrary link that the State makes private property possible, therefore the property should be taxed to fund the State, in its entirety. This makes no logical sense to me.

OK, we've dealt with the position of the 'consumers' and the 'workers' in my car/land analogy, we now have to deal with the 'owner'.

It is quite clear who owns the car factory (the entrepreneur, the shareholders etc) and in a normal world, they receive the net profits or dividends. Would these shareholder tell their sales teams to drop the prices they charge as they are happy to do without profits? Methinks not.

But who is 'the owner' of 'The State'? Surely it is all of us, whether 'land owners' or not (and most of us are, to some extent). So if each of us owns a 1/62 million share of the ownership of 'The State' and 'The State' has the power of charging for the value that we all create (either in our capacity as productive workers, law abiding citizens or as voters) why should it not do so and dish out the 'profits' as a Citizen's Dividend?

At a push I can see that perhaps land should be taxed to the extent it costs the State to run the Land Registry etc. But why should land taxes pay for education, health, defence, social security?

We've covered defence already (on which we spend tuppence ha'penny, it's the foreign wars and macho posturing that cost the big bucks).

A Citizen's Dividend is an admirable replacement for the welfare state.

Of course, the government is pretty useless at running things in which it does not have a monopoly, such as education and so on, and we'd do far better to accept that education is a merit good, and dish out a certain amount of cash as 'education vouchers' (and pay a slightly lower Citizen's Dividend) or we would go the whole hog and just pay out a full Citizen's Dividend and leave it up to people to decide for themselves (personally I prefer the former option).

The same goes for the NHS. It is up to citizens to decide, democratically, whether they would rather have a lightly lower Citizen's Dividend and for the government to provide a basic level of healthcare, or whether they would rather take a higher Citizen's Dividend and take their chances with insurance companies and competing providers (or any combination of the above, whereby we recognise that health is a merit good and subsidise it with health vouchers).

Fun Online Polls: Tuition Fees & Price Comparison Websites

The results for last week's Fun Online Polls were as follows:

What is the best way of funding university degrees?
Tuition fees. 66%
General taxation. 28%
Other. Please specify. 6%

What is the least bad way of making university degrees affordable? (multiple choices allowed)
Low interest loans to students. 48%
Allowing students to claim the same benefits as other unemployed. 28%
A cap on tuition fees. 8%
Expecting employers to pay better salaries to graduates. 10%
A graduate tax. 8%
Other. Please specify. 20%

So that's that settled then. We could have saved Lord Browne all the bother.

PS - I'm a bit disappointed that "allowing students to claim the same benefits as other unemployed" was relatively unpopular. For a start, a full student grant is pretty much the same in cash terms as Jobseeker's Allowance at 18 - 24 year old rates. The unemployed can claim Council Tax Benefit and students can claim Council Tax exemptions, so that more or less cancels out (the landlord just hikes the rent by the amount of Council Tax which the occupants would otherwise be paying).

The big differences are:
i. The unemployed can claim Housing Benefit but students only get low-interest loans.
ii. If students can go out and work part time, they lose little or none of their grant, but the unemployed lose most of their benefits if they find a part time job.
iii. Benefits are means tested on the basis of the household in which the unemployed person lives; student grants are means-tested on the basis of their parents' income, even if they no longer live with them.

I see absolutely no reason why one group should be treated more or less favourably than the other, and seeing as ultimately the differences aren't that huge, I see no reason why they shouldn't both get the same, i.e. a Citizen's Income (how high or low that should be is a separate debate).

I won't mind too much having to shell out tuition fees when the times comes, but the idea that my kids will get less from the government if they are studying that if they are just hanging about is rather galling.

Just sayin', is all.
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Out of interest, which is your favourite financial price comparison website? Do not deduct marks for how annoying their television advertising is!

Vote here or use the widget in the sidebar.

"Woman trampled by cows at North Yorkshire farm"

Spotted by JuliaM at the BBC:

A woman was seriously injured when she was trampled by a herd of cattle as she walked her dog in North Yorkshire.

The 48-year-old woman suffered broken ribs and a collapsed lung in the incident at the entrance to Dry Close Farm, Redmire, near Leyburn, on Sunday. A police spokesman said: "She'd managed to drag herself on to a cattle grid to get out of the way of the cows."

She was taken by air ambulance to James Cook Hospital in Middlesbrough where her condition was described as stable.

Animal related violence in this morning's Metro

Page 10:

Have you ever been attacked by an animal? Yes by a cow. I was in Cornwall, walking through a field on the way to the campsite we were staying on. I was carrying a duvet over my shoulder and this one cow went for me. It was charging at me and the only thing I could think to do was lie down. My mum started screaming: "Get up! What are you doing? It’s going to trample on you!"

Page 12:

The park service says Robert H. Boardman, of Port Angeles, was hurt Saturday as he hiked near Klahhane Ridge in Washington's Olympic National Parkand died hours later at a Port Angeles hospital.

Officials did not provide any specifics on the man's injuries, but said that an early investigation indicates they were the result of an encounter with a goat. Rangers tracked down and killed the animal, which will be analyzed by a veterinary pathologist.

On page 26 was another goat story, which I can only track down at the Irish Independent:

An argument over sacrificing goats during a Hindu festival triggered a stampede that killed 10 people yesterday in a packed temple in northern India.

More than 40,000 people, many inebriated, had taken their goats to the Tildiha village temple in Bihar state to offer sacrifice and prayers to the goddess Durga on the last day of the 10-day Navratri festival.

The district spokesman said some 30,000 goats were sacrificed at the temple on Saturday.

Bonfire of the quangos: death cap edition...

You'd think that the bureaucrats at the Food Standards Agency would be firmly in boffin mode and keeping their heads down, but no. Today it's reported they are warning us to be careful when picking wild food and opining that children should not be allowed to pick blackberries without adult supervision.

"A spokeswoman for the FSA said figures from the Health Protection Agency showed its National Poison Information Service – used by doctors and patients – dealt with 209 enquiries relating to mushrooms this year, compared to 123 in the whole of last year."

An interesting justification for this kind of thing, and one that I'd suggest doesn't really stand up to scrutiny. For example let's look at two recent instances of mushroom poisoning in the UK (which incidentally is very rare, very few people eat death caps these days surprisingly enough).

Exhibit one: Mrs Tuckey, who ate the death caps her niece picked for her in the Isle of Wight Botanical Gardens:

'Mike Tuckey told the Newport hearing: 'I knew they had picked some mushrooms and I told my wife she was not to eat them. She told me the ones they had picked were the same as ones she had picked a few days earlier so I said it was OK.' Mrs Tuckey, known as Juny, cooked the mushrooms and had half a plateful, while her niece had three or four.

So her husband explicitly told her not to eat the death caps, but she was having none of it and gobbled up half a plateful of them. Would a government health warning have made any difference here?

He added: 'The paramedics were asking what she had eaten and I asked her about the mushrooms. 'Juny said it was the sausages. 'I think that was because she thought I would be angry after initially telling her not to eat the mushrooms.' Paramedics decided Mrs Tuckey was suffering from food poisoning ...

Then she lied about eating the death caps to the paramedics, and now she is dead.

Exhibit 2: 12 year old Lucy Adock, who ate two death caps raw, after finding them whilst out riding her bike.

The schoolgirl added: ‘When I go out on my bike I always look out for blackberries, wild plums and mushrooms.' [her Mother added] ‘She knows quite a bit about mushrooms as we live out in the countryside but this time had forgotten to take her mushroom book with her.’

Thankfully Lucy survived and made a full recovery. But come on, she can't have known that much about mushrooms if she goes around eating death caps! But her Mother was obviously of the view her little angel knew enough about them not to eat raw death caps whilst out on her bike. Would a government health warning have changed her mind?

REGULATORY NOTICE: DEATH CAPS CAN CAUSE A SLOW AND PAINFUL DEATH. IF YOU THINK YOU MAY HAVE EATEN DEATH CAPS CALL 999 AND DON'T BLAME THE SAUSAGES, NO MATTER HOW ANGRY YOU THINK YOUR PARTNER MIGHT BE.

Sudoku Puzzle

How does my little girl who is not yet eight years old manage to grind out the 'easy' and 'medium' Sudoku puzzles from The Metro in half an hour?

Postcodes in the UK

From The Cabinet Office:

Each Postcode consists of two parts.

The first part is the Outward Postcode, or Outcode. This is separated by a single space from the second part which is the Inward Postcode, or Incode.The Outward Postcode enables mail to be sent to the correct local area for delivery. This part of the code contains the area and the district to which the mail is to be delivered.

The Inward Postcode is used to sort the mail at the local area delivery office. It consists of a numeric character followed by two alphabetic characters. The numeric character identifies the sector within the postal district. The alphabetic characters then define one or more properties within the sector.

An example Postcode is PO1 3AX.

- PO refers to the Postcode Area of Portsmouth. There are 124 Postcode Areas in the UK.

- PO1 refers to a Postcode District within the Postcode Area of Portsmouth. There are approximately 2,900 Postcode Districts.

- PO1 3 refers to the Postcode Sector. There are approximately 9,650 Postcode Sectors.

- The AX completes the Postcode. The last two letters define the 'Unit Postcode' which identifies one or more small user delivery points or an individual Large User. There are approximately 1.71 million Unit Postcodes in the UK.

i.e. each postcode sector contains about three thousand addresses.

Converting miles per gallon (mpg) to litres per hundred kilometres (l/100 km)

There are a couple of online converters e.g. here, but actually it's simpler than that. The magic number is 282.5 (or 235.2 if you're in the USA).*

So if you know mpg and want to know l/100 km, you divided 281 by mpg, and vice versa. For example 28 mpg = 10 l/100 km.

* Remember that the two fractions are 'other way up', i.e. high mpg = good fuel economy, but low l/100 km = good fuel economy:

One imperial gallon = 4.5461 litres
One mile = 1.609344 kilometres
4.5461 divided by 1.609344 = 2.825 and times by 100 = 282.5

One US gallon = 3.7854 liters
One liter = 1 litre
One mile = 1.609344 kilometres
3.7854 divided by 1.609344 = 235.2

Killer arguments against LVT, not (72)

Returning to The Fat Bigot's opinion:

"Is it right that taxation policy should force people to move from a home they could previously afford? This is illustrated most acutely by those on modest incomes who own a "high-value" property.. The existing tax arrangements allow them to retain their home whereas LVT makes it unaffordable so they are forced to sell and move to something cheaper."

1. Let's gloss over the obvious retort: "Is it 'right' that income tax policy; artificially low interest rates; bank bail outs; light taxation of property income and gains; and NIMBYism 'force' younger people to live in much smaller homes than they would otherwise be able to afford?" and just do the numbers for the example he mentions - as we'll see, their incomes would have to be very modest and their property value very high before there is any noticeable impact.

2. The break even point is about seven, i.e. the rule of thumb is that if we replaced all taxes (apart from petrol, fags and booze duty) with LVT, those owner-occupier households whose homes are currently worth more than seven times their gross income would be worse off on a static basis; and those whose homes are currently worth less than seven times their gross incomes would be better off.

3. To illustrate this, let's pick a "high value property" in the eighth decile by value, which is worth £300,000 (so is almost certainly in London or the South East) and has a normal sized garden for homes in that area. It's occupied by a married couple in their fifties whose children have left home and who have paid off the mortgage. Under the LVT/CI system, the LVT would be 8% x £300,000 = £24,000* and they would get £70 a week each in Citizen's Income, so their net tax bill is £16,720 a year.

NB, I have decided to cave in on the Old Widow point and all these calculations assume that pensioners' main residences would be exempt from LVT, subject to certain caveats.

4. £16,720 a year sounds like a lot of money, and as their home-to-income ratio (£300,000 divided by £39,000) is well over seven, we'd expect them to be a bit worse off. The question is by how much? How does £16,720 compare with the tax they are currently paying?

5. What does TFB consider to be "modest incomes"'? Let's go with what the NSO says: "Median earnings of full-time male employees were £531 per week in April 2009; for women the median was £426" (remembering that the median is less than the mathematical average). Hubby would be on £28,000, and let's assume wife works 2.5 days a week and earns £11,000.

6. Using the magic fag packet, the income tax and NIC on their salaries is £11,770. They pay £1,600 in Council Tax and TV licence and £3,000 in VAT (total VAT divided by 27 million households). That adds up to £16,370 so they would indeed have to pay £350 a year more in tax under LVT/CI.

7. That's a quarter as much as the bullet that the Lib-Cons expected higher rate taxpayers with two children to bite (a measure which gives us plenty of losers and no winners), so doesn't seem unreasonable when weighted against the huge number of people who will be better off after the transition to LVT/CI. I don't think having to make cut backs of £7 a week out of a disposable income of £428 - or for the women to be 'forced' to work an extra four days a year - is going to have this particular couple on the barricades, is it?

* Before I get grief from the purists, the tax would of course NOT be expressed as a percentage of anything, it would officially be "£60 per square yard" for homes in the area under consideration, assuming the average residential plot in their area is 400 sq yards. Further, however the initial rates are calculated, as long as the Citizen's Income is more than enough to cover the costs of the bricks and mortar, insurance, repairs, utility bills, then by definition, the balance must be a tax on the location rent.