Sunday, 21 July 2019

MX5 NC/Mk III remodelled

The third gen were objectively good cars which looked fine from most angles, but the headlights are too small, too high up and too close together, especially if viewed from the front, and the front wheel arches are much too conspicuous.

This is easily fixed with Excel and iPhoto.

BEFORE (image from MX5 City, o/t, I have ordered a couple of used parts from them, excellent service)


This makes it look a bit S2000-ish, but that car had its own (unfixable IMHO) styling issues which are avoided here.

The curve of the front bumper could do with flattening off a bit so that it doesn't protrude so much, but I think that's a pedestrian safety thing, plus I can't fix that with Excel and iPhoto.

Saturday, 20 July 2019

Gloriously missing the point about housing supply and demand in London

Shaun Bailey in City AM:

We need a bold new approach to tackle London’s housing crisis...

Since 2000, London has added over two million people, but has built fewer than 400,000 properties. Add in the surge of foreign money into our housing stock, plus more people living on their own, and you have an expensive – and exclusionary – mix.

The only way out of our current mess is to build, but politicians have promised to do that for years. While some have done better than others, every single one of them has failed to meet London’s actual needs.

The lack of self-awareness is staggering.

Those two million extra people moved to London from somewhere else, quite voluntarily, mainly attracted by the higher wages. For a given supply of housing, people will continue to move there until rents have risen to a level where the higher wages are cancelled out by higher rents.

If housing supply increases, rents might fall, very briefly. People who were previously deterred by the higher rents will move to London. Rents will increase to their previous level, probably within days or weeks.

Fair play to the lad, he seems to be recommending that London builds a lot more council housing for fixed rents. Let's assume they give priority to people who already live in London, this frees up private rented accommodation and people from elsewhere will move in to them, it makes no difference to the new arrivals.

The "unlimited supply of high-income tenants" conundrum

Jamie Ratcliff (on Twitter), links to the BBC article about changes to Section 21 (i.e. reinstating the original pre-1996 position):

The Residential Landlords Association (RLA) said its survey of 6,400 landlords suggested that 84% of its members would be more selective, picking tenants on higher incomes and leaving those earning less to fight over fewer properties. Landlords could even decide to let fewer homes to tenants with pets, as they would be considered as carrying a higher risk of causing damage.

and points out the obvious flaw in their logic:

It's interesting that landlords groups seem to think there are unlimited numbers of dual-income households ready to take the place of low income tenants (& tenants with pets).

I suppose this is the flip side to the Disappearing Homes Conundrum. Common sense tells us that landlords will always prefer higher income tenants to lower income tenants, whatever the rules are. Lower income tenants have always been at the back of the queue. Do they seriously expect us to believe that so far they have been turning away higher income tenants?

Friday, 19 July 2019

The Disappearing Homes Conundrum

... is trotted out again by the National Landlords Association:

The NLA is opposed to the abolition of Section 21

To highlight the short-sightedness of this policy to Government, we’re launching a postcard campaign to tell the Prime Minister directly the impact this will have on the market...

Without Section 21, many landlords will leave the market. This will have a negative impact, both for landlords – many of whom have invested in property as a pension alternative – and for tenants, who will face lower supply, higher rents and increased personal and credit referencing requirements.

Richard Lambert, CEO of the NLA, says:

“Landlords currently have little choice but to use Section 21. They have no confidence in the ability or the capacity of the courts to deal with possession claims quickly and surely, regardless of the strength of the landlord’s case. England’s model of tenancy was always intended to operate in a sector where Section 21 exists. This change makes the fixed term meaningless, and so creates a new system of indefinite tenancies by the back door."

I wouldn't call it "by the back door", this is exactly what is intended. Indirectly, it is the government's aim to prise some landlords out of the market, because one fewer potential Labour-voting tenant means one more potential Tory-voting owner-occupier*. It will be the higher earning tenants who make the leap, so the average income of - and rent paid by - the remaining smaller pool of tenants will be lower, not higher. Which is the opposite of what The Disappearing Homes Conundrum predicts.

* There is an upper limit to Home-Owner-Ism in a democracy as you need a majority of households to be owner-occupiers to vote for this bullshit. Without this natural brake, the ultimate stage of Home-Owner-Ism would be a handful of people owning all the housing and everybody else would be paying them rent.

Thursday, 18 July 2019

Daily Mail On Top Form

From The Daily Mail:

The son of a murdered civil servant branded her sex-obsessed killer an 'evil being' as he faced him down in court today.

Kasim Lewis, 32, bound and gagged Catherine Burke, 55, in her £700,000 home in Muswell Hill, north London, before stabbing her to death in November 2017.

He was given a minimum 40-year life sentence this afternoon.

Killer Arguments Against LVT, Not (465)

I received an email from a drone at Tory propaganda unit, it's a classic of the genre, and illustrates the sort of crap we have to put up with:

Anyone who thinks there is a simple solution is either a conman or particularly dumb (see also MMT).

Firstly, if you introduce LVT, you need to abolish all planning laws.

It heavily penalises everyone who has scrimped and saved for a house.

Further it discriminates heavily against manufacturing (you need more space to actually make stuff).

This is why no country in the world has introduced this idiot idea save Taiwan, where predictably it has been a disaster.

There is a "simplish" solution: tax at Scandinavian levels - 25% VAT, 30% basic with little to no personal allowance. It is proven. Unfortunately it is bloody hard work and involves sacrifices

Additional KLN says it was "disaster" in Taiwan: This is why no country in the world has implemented it to any serious degree except Taiwan, where it has predictably been a complete disaster. There are no easy, elegant solutions, only hard ones.


I emailed back, "You and I both know perfectly well that every single one of your claims is either untrue, irrelevant or both. Why do you bother?"

To which he replied: "Mark, this is a prank. I am a satanist and a bit of a weird person. Stop worrying about LVT or if you do worry, try to become an adviser to Corbyn. Maybe be the devil for a short period of time?"

Well, he had me fooled.
Henry Law from LVTC received a similar load of crap by email:

I started reading and found my blood pressure starting to rise as I detest the bigoted, naive and simplistic viewpoint that is typical of socialism/marxism/whatever or from anyone of a left-wing bent. It’s pointless trying to explain the holes. Socialism - the race to the bottom, the champion of mediocrity, the stifling of enterprise.

And just for the record, my wife and I grafted all our working lives. Neither of us had a silver spoon in our mouths or a rich daddy. What we’ve got is down to our own hard work. So if we can do, why can’t the feckless and the idle ? We like where we live but on limited income. So why force us to sell our home to pay some land tax? Why should we defer it until the house is sold ? I’ll tell you why.

Not because we want our children to inherit because we decided long ago that much of the ills in our society (and the world for that matter) is down to too many people.

Not because we want to keep our money to pay for care as neither of us intends to get to that state of decrepitude and be an eternal drain on the NHS. We’ll find a way to depart this earth somehow.

But because we have researched carefully and are leaving our estate to selected charities. I’m damned if any of that money should go towards yet another pointless, resource draining Govt ‘initiative’.

Please - don’t bother to reply.

Please - don’t send me any more socialist bile.

OK, so he'd like "everybody else" to pay extra tax to fund his landowner benefits, and he would like to gift the net present value of those benefits to "selected charities". That's called "spending other people's money".

Why does he think that other people are happy to pay for the "pointless, resource draining government initiative" of subsidising landowners?

Wednesday, 17 July 2019

Killer Arguments Against LVT, Not (464)

From Bristol Live, a fairly favourable write up about a local Green councillor's proposal to replace Council Tax with LVT.

He is top man and makes some good points:

As a result, said Mr Stevens, tenants will end up with more money in their pockets, which could improve the local economy as people visit shops more frequently. Describing the overall impact, Mr Stevens said: “The tenant is better off and the landowner is worse off and the shopkeeper is better off and the owner-occupier is about the same.”

Another advantage that LVT enjoys over council tax, according to Mr Stevens, is that it takes into account ‘unfair enrichment’ - which is when a property’s values are affected by state spending. An example, said Mr Stevens, was the establishment of Redland Green School in north Bristol.

“Local property values jumped because it meant you didn’t need to send your children to private school and that enrichment is caused by the state investment - but the taxpayer bears the cost and people living nearby get the benefit,” said the councillor. If LVT were implemented, public investment which raises the value of a site would end up benefiting the community through higher tax receipts, proponents of the tax argue.

In a further endorsement of LVT, Mr Stevens emphasised how easy it is to collect. He said: “Wealth tax is very easy to avoid, as has been proven in a number of countries, but land tax you can’t avoid because the land is here - you can’t tow the land offshore. So even if your company is offshore you still need to pay Land Value Tax.”

There's a rather bizarre KLN in the comments:

Stevens says that council tax is regressive and should be replaced by the 'progressive' LVT. Whilst it is true that council tax is regressive it is by no means clear that LVT is progressive, as half the population (those who own land) will pay all of the tax and tenants (council and private) will, by very definition, be exempt. Progressive taxation means everyone pays something (however small) towards services and facilities. It's an important principle.

That's pretty much the opposite of 'progressive' means!!

'Progressive', in a tax technical sense, simply means that people with more [of something] pay a higher rate of tax than people who have less [of that thing]. So income tax is 'progressive' (20% then 40% then 45%) and Employer's Employee's NIC is 'regressive' (12% then 2%). The ultimate in regressive taxes is a Poll Tax, which is what he is alluding to.

(Actually, LVT based on land values could be designed to be progressive or regressive (i.e. with higher rates or lower rates on land over a certain value). IMHO, a flat rate of LVT is best, but this would still be 'progressive' in the wider sense.)

The fact that only half the population would be legally liable to pay the tax (those who own all the land) makes it a 'progressive' tax in the wider sense.

Householders who own their home and garden could, under this system, end up paying three times the amount they are now paying in council tax.

Sure, if it were a £ for £ replacement for Council Tax and applied at a flat rate, the tiny minority own homes worth three times as much as the average will be paying three times as much as they did under Council Tax. And more than half of owner-occupiers will pay less. So what? Those are the rules and this is neither an argument against or in favour.

Tenants will still pay the tax of course, it is included in their rent. Their landlord will collect the rent, pass on the LVT element to the council and keep the rest.

It's also nice to see the "tenants won't pay anything" KLN, I'm sure if I scroll through the comments, there'll be the "landlords will just pass on the tax" KLN, which is equal and opposite bollocks.
And then there's the tired old classic:

And how do they intend to tax the estimated 25% of land in England and Wales which the Land Registry say isn't actually registered? Because if it's not registered, they won't know where to send the bill...

Which is ably batted away by...

Send it to the new owners after that 25% of land has been publicly auctioned.

Although the actual answer is a bit more mundane.

The mythical 25% of land that is not registered is mainly low value farmland (not worth taxing), 99% of which is registered on a separate list for for landowner subsidies (if it were worth taxing - easiest is just get rid of the subsidies and busk it from there).

99% of urban land (which is 99% of all land by value) is very much registered. And that's never been a problem for Business Rates or Council Tax, why is it suddenly a problem now?

If tenants'occupants don't want to pay, they just have to tell the council who and where their landlord/the owner is. That covers 99% of the 1% of cases where the owner of urban land and buildings is not registered. So only a handful of cases will fall through all these cracks and have to be auctioned off.

Tuesday, 16 July 2019

Fun with Extinction Rebellion

From the BBC:

But those involved with Extinction Rebellion say the future of the planet depends on it.

"We have left it so late that we have to step up in a semi-miraculous way to deal with this situation," said co-founder Gail Bradbrook.

However, the group doesn't say what the solutions to tackle climate change should be.

Instead, it wants the government to create a "citizens' assembly", made up of randomly selected people representing a cross-section of society. Its members would decide how to solve the climate crisis, with advice from experts.

But who's going to choose the 'experts'?

Monday, 15 July 2019

Amazon Prime Days

They spent a lot of money advertising their Prime Days, which appear to be 15 and 16 July.

15 and 16 clearly aren't prime numbers, so that's a bad start.

If you write the date and month the English way, 157 and 167 are prime numbers (hooray, the world makes sense again) but if you write them the American way as 715 and 716 they are clearly not prime (bugger).

There are plenty of consecutive prime dates using the English format in January, March, July, September and November (apart from "2" and "5", all prime numbers end in 1,3,7 or 9).

But the only pairs of consecutive dates which are prime using the American format, are:
2/29 (in a leap year) - 3/1;
3/31 - 4/1.
12/31 - 1/1.

(You can't have consecutive primes in any calendar month using American format because one of them will be even, so you are restricted to the last day of a month with 29 or 31 days, followed by the first day of next month.)

I couldn't find any consecutive dates which are both prime using English format and American format.

Just sayin'.

Sunday, 14 July 2019

Economic Myths: Miller & Modigliani Theorem

The first part of the original M&M Theorem makes perfect sense:

The Modigliani-Miller theorem (M&M) states that the market value of a company is calculated using its earning power and the risk of its underlying assets and is independent of the way it finances investments or distributes dividends.

There are three methods a firm can choose to finance: borrowing, spending profits (versus handing them out to shareholders in the form of dividends), and straight issuance of shares. While complicated, the theorem in its simplest form is based on the idea that with certain assumptions in place, there is no difference between a firm financing itself with debt or equity.

So far so good. If the value of the business is more than the outstanding debts, then the shares have value; if the debts exceed the value, then the shares are nigh worthless. The total value of debts + shares remains roughly the same. The value of the bonds can't exceed value of the business and the value of the shares can't go lower than zero.

If you aren't sure whether to buy shares or bonds in a company, the best strategy is to have a mix. For example Mike Ashley/Sports Direct spent £150 million on acquiring 30% of the shares in Debenhams. Unfortunately for him, the debts ballooned to far more than the value of the business, so the lenders took over the business and his shares were wiped out (a kind of debt for equity swap).

His better strategy would have been to spend less on shares and more on acquiring Debenhams debts pro rata (say 15% of each). If the business had done well, his shares go up in value and if it does badly, his shares are wiped out but he still ends up with 15% of the business in his capacity as lender.
What's nonsense is the related claim that the tax system encourages businesses to borrow money instead of issuing shares:

Third, the use of debt is less expensive than the use of equity because debt is generally subsidized by the state through the tax system –since debtors can deduct the interest payment associated with the use of debt. Therefore, the use of debt may reduce the firm´s cost of capital.

That's a generalisation across many countries' corporation tax systems, but whether it is true or not depends on the rates of tax applied to corporate profits (at corporate level) and dividend and interest income at shareholder/lender level.

(I started as a tax adviser in 1989 and had to advise clients on 'what is better for tax', the answer depended on the circumstances. I later did an accounting and finance degree, and the lecturer trotted out the M&M tax drivel and would simply not listen to reason and logic.)

IIRC and generalising a bit, Singapore and Hong Kong governments get so much money from land rent, land auctions, stamp duty and capital gains on land that they barely need to bother with taxing incomes. So companies pay 15% corporation tax and individuals pay 15% income tax. If an individual gets a dividend, it is treated as tax paid, so no further income tax due. If an individual receives interest income, it is taxed at 15% so it is as broad as it is long.
In the UK, we had a brief period in 2012 or thereabouts (before Osborne started messing things up again), when it simply did not make a difference for corporation tax/income tax (ignoring National Insurance, which clearly distorts things, the 45% additional rate and overseas stuff).

The rates were:
Corporation tax - 20%
Basic rate income tax - 20%
Higher rate income tax - 40%
Withholding tax on interest - 20%.

* If a basic rate taxpayer received a dividend, there was simply no more tax to pay (same as Singapore or HK) because the company had already paid 20%. (Ignore the bullshit with the 10% tax credit and the 10% nominal rate, it worked out at nil, unsurprisingly).
* If a basic rate taxpayer took a salary bonus, the employer took 20% income tax via PAYE and the employee had no more income tax to pay.
* If a basic rate taxpayer received an interest payment, the company paid over 20% withholding tax/income tax on a CT61 and the individual had no more tax to pay.

* If a higher rate taxpayer received a dividend, he had to pay 25% income tax on the dividend, so the overall rate was 40%. Remember - company earns £100, pays £20 corporation tax, pays £80 dividend, individual pays £20 income tax and nets £60. (Ignore the bullshit with the nominal 10% tax credit and the 32.5% nominal rate, it worked out at 25%).
* If a higher rate taxpayer took a salary bonus, the employer took 40% income tax via PAYE and the employee had no more tax to pay, net pay £60.
* If a higher rate taxpayer received an interest payment, the company paid over 20% withholding tax/income tax on a CT61 and the individual declared the gross amount and paid a further 20% of the gross amount, net interest £60.

Osborne and Hammond then busily messed up this state of affairs and now you have to do the three calculations each time to see 'what's best for tax'.
There are lots of other wrinkles...

* Pension funds can receive interest or rent truly tax-free, but receive dividend payments out of after-tax income. It would make more sense to tax all sources at a flat, lower rate, so that they get some refund of the corporation tax on dividends but pay some tax on interest and rental income.

* Some companies have large tax losses (R&D tax credits, Film Tax Credits etc) but have distributable commercial profits, so are advised to pay dividends so that shareholders get the (slightly) lower income tax rate that applies to dividends.

* Some companies don't have distributable commercial profits, so aren't allowed to pay dividends, but can still pay salary bonuses or interest.

In a perfect world, therefore, dividends, interest, rent and wages would be taxed exactly the same way i.e. there would simply be a flat withholding tax at the same rate on each when the company pays them out.

We used to do this for dividends (Advance Corporation Tax);
Banks used to withhold 20% income tax from deposit interest;
Non-banks still have to do it for interest payments (CT61s);
PAYE applies to wages;
CIS deductions apply to sub-contractors in the construction industry;
and tenants with non-resident landlords are supposed to, by default, pay 20% of the rent to HMRC and pay the landlord the balance of 80% (though most wriggle out of this).

You wouldn't even need to bother having special rules for foreigners and there would be no need to distinguish whether it's wages, rent, dividends, interest, sub-contractor payments etc. It could all be included on one return/reporting system and paid to HMRC in one payment. As a final flourish, dividends paid net of tax would be an allowable expense for corporation tax purposes.

Individuals who have to submit income tax returns (i.e. higher rate taxpayers) can then just enter all 'net of tax' payments in one box and pay the same tax rate on the lot, minus the credit for income tax withheld at source.

Here endeth.