The ever reliable Sobers, still on top form:
Well now you're introducing an entirely different valuation system that involves fiddling with the size of each individual house/plot of land, meaning excessive bureaucracy again, appeals, tribunals etc etc.
If you're going down that route you might as well value every house individually and be done with it. Then everyone pays exactly in proportion to the value of their property, not the size of their garden.
Before we argue about vaguely defined principles and hypotheticals, let's look at the nice simple robust system I have explained time and again that would get us three-quarters of the way there. For sure, there are infinite tweaks we can introduce*, but let's look at the practicalities:
1. HM Revenue & Customs collect most taxes, administer Tax Credits and employ 200,000 people (71,000 civil servants directly plus probably twice as many again in back up stuff, outsourced functions to 'consultancies' etc). From personal experience, I would guess that the private sector employs five times as many people to prepare the income tax returns, the monthly and annual PAYE, the corporation tax returns, the VAT returns.
2. That's a million people doing something of no social value, or about three per cent of the working population - which of its own must reduce our GDP by about three per cent. And that's not including the dead weight costs - GDP would be about a third higher without VAT, National Insurance, income tax, corporation tax etc - that's £300 - £400 billion a year we are flushing down the toilet.
3. The whole problem repeats itself with the welfare system, so replacing the whole welfare state with a Citizen's Income (the flip side of Land Value Tax) would reduce running costs and fraud/error by about £10 billion and reduce the dead weight costs (i.e. those people who prefer to stay on the dole rather than go out to work) by another £100 billion.
4. As regards taxes and subsidies related to land and buildings, there are a whole load more civil servants working for e.g. Council Tax and Business rates administration and collection, Council Tax Benefits office, Capital Taxes Office (Inheritance tax), HM Land Registry, Valuation Office Agency (for Business Rates), Land Valuation and Housing Tribunals, TV licence fee collection, DEFRA to administration CAP subsidies, Local authority planning departments etc etc, and no doubt five times as many again in the private sector doing battle with them.
5. As I have explained, the ideal basic geographic unit for doing valuations is a postcode sector, there are 10,000 sectors with about 3,000 addresses in each. Even if it took one civil servant a whole year to arrive at some half way decent compromise for each sector, that's a one-off cost of ten thousand civil servants for one year only - in future years, a few thousand would be enough. Reality check: there are about 4,000 civil servants at the VOA alone, who regularly revalue each individual commercial building (or each office within a larger building) for Business Rates (about ten per cent of all addresses in the UK), which is far, far, too complicated, they could make do with a tenth as many
6. There is an irreducible minimum of 6,000 working for HM Land Registry, and it would be very easy to expand their duties slightly, so that they can update values as they go along (it all boils down to address, plot size and selling prices of land and buildings in that postcode sector), i.e. on an ongoing basis, ten thousand people could run the entire tax system, with half as many again to run the Citizen's Income scheme (which overlaps with people updating the electoral roll and the Registrar of births, marriages and deaths).
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* Here's another tweak - there are exemptions that relate to the plot itself and exemptions that relate to the individual who currently 'owns' the plot. If in the first year the valuer concedes that some houses are to be treated as having a plot size of 300 sq yards and not 400 sq yards because the houses on that street tend to sell for less than others in the sector, this could be treated as a 'personal' exemption rather than a site-specific one, and the exemption is only valid as long as the current owner(s) remain in it as their only and main residence.
The exemption will simply not apply to future purchasers, so when the house is next sold (or the current owners die), the next owner has to pay on the full 400 sq yards. This of course depresses the selling price accordingly, so the next owner is no worse off, and the previous owner has in effect merely deferred the tax he has to pay, and in future, valuations are even easier. And the people who stepped up to the oche and paid on the full 400 sq yards like gentlemen heave a sigh of relief, because mathematically, their tax bill goes down slightly each time an old exemption expires.
To remind you how this works in real life, I bought a 3-bed terrace which was in Band D for council tax, but I did a loft conversion to make it a 5-bed, and the council noted that after the next sale, it would be treated as Band E. So I got no tax increase as a result of the loft conversion, but the amount I eventually sold the house for was slightly lower than it would have been had it remained in Band D.
Other exemptions are high-level politically motivated ones, like giving exemptions, discounts or a deferment option to pensioners, Righteous organisations and so on. These can also be time-limited, i.e. a council can extend the exemptions for pensioners only to pensioners who have lived in the area for a minimum number of years. It's a beggar-thy-neighbour game, as any rational council will want to attract as many people as possible prepared to pay full whack, i.e. businesses and young people with a job.
If a local council is dominated by Muslim councillors and it exempts mosques, well that exemption only holds until and unless it is replaced by a new council with a majority of atheist or Christian councillors, who promptly exempt libraries and churches instead.
