Tuesday 27 October 2009

Home-Owner-Ism: a triumph of one-sided economics

In a thread over at HPC on high house prices in the South West, somebody came up with the tired old objections to liberalising planning laws and/or having Land Value Tax:

"What about increased road traffic (twice the homes, twice the traffic maybe?), increased demand for schools, supermarkets, medical centres, fire stations, transpot links, in fact all the infrastructure that comes with increased population? Build twice as many houses there and you'll allow even more people to have second homes. (LVT wont touch the rich)."

Of course, it's easy to win an argument if you only ever look at one side of the equation, most politicians are world champions at this. So I've taken that rant apart and inserted the other side of the equation for you:

"What about increased road traffic (twice the homes, twice the traffic maybe?)"

Same number of people in same number of houses? Why is that more traffic? And if people migrate there, then there'd be less traffic somewhere else.

"increased demand for schools, supermarkets, medical centres, fire stations, transpot links, in fact all the infrastructure that comes with increased population?"

Yeah, if there are more people, there'll be more people willing to work in schools, supermarkets etc, most of whom are low-ish paid - it's the teachers, checkout girls and nurses who are hardest hit by high house prices. And what's wrong with more infrastructure? One of the best things a govt can spend money on is transport infrastructure esp. railways in more densely populated areas.

"Build twice as many houses there and you'll allow even more people to have second homes"

So what? When have I ever slagged off second homers? Provided they pay the LVT and/or stop being NIMBYs I have no problem with them.

"LVT won't touch the rich."

What does "rich" have to do with it? LVT is about reducing income tax (which will benefit high income people) and increasing taxes on land ownership (to compensate society for the external costs thereof), with all the benefits that brings. It's quite conceivable that a premier league footballer is hugely better off if we had flat income tax on his £10 million salary and flat 1% property tax on his £1 million mansion, so what? Those are the rules

3 comments:

AntiCitizenOne said...

I'd have a zero % tax on his income (after all it him running on the pitch), and a 7% LVT.

Tim Almond said...

and how long is it going to take to get the sea to rise by 80cm? As far as I recall, that's the worst case, recently determined scenario of the IPCC for 2100.

Tim Almond said...

oops - wrong thread...