Half way down one of the longest posts I have ever read:
‘Land’ receives payment for its services, but ‘land’ has no need of payment, so that payment is left on the table, so to speak. The question then is what in the world is to be done with that revenue? But we’ll get to that…
Stormlight
1 hour ago
9 comments:
The scales doth lift from my eyes a little more.
The article you linked to made me realise this truth:
We already have land value tax; it's just that it is paid to the land lord instead of the public
Is that a reasonable expression?
OP, yup, that's why I waffle on about 'privately collected taxes'*. Just because it is privately collected does not stop it being a tax.
* Which would e.g. include the extra income that taxi drivers can earn in towns where there is a restricted number of taxi driver permits. From the point of view of a passenger or those prevented from becoming a taxi driver, this has exactly the same impact as e.g. Value Added Tax on taxi fares (sketch out supply demand curves to see why).
I think I have been misunderstanding then. I have been thinking of a privately collected tax as a tax which eventually reaches the government but is collected by a private entity. VAT being the obvious one. I see now that that understanding was incorrect.
You'll have to excuse me, I'm very late to this party.
OP, damn, I can see how that misunderstanding might arise.
I meant 'privately collected' in economic terms (i.e. who gets to keep the money) and not in terms of 'who fills in the paperwork and sends off the cheque to HMRC' (in which case just about all taxes are privately collected, part from maybe Council Tax and Business Rates paid by direct debit).
Can you think of a better term for it?
the only problem is the word "need".
ACO, care to elaborate? I hate being inaccurate. :)
OP, yes absolutely. To me this is the killer argument for LVT, and it also explains why LVT does not have deadweight costs, it actually undoes a distortion rather than create one.
MW, yeah I probably shouldn't have quoted the *entire* original verbatim.
F:"[LVT] actually undoes a distortion rather than create one."
Excellent. I wish I'd thought of that. Problem is, the Home-Owner-Ists will just day:
"It's my land. I paid a fair price for it in the open market. I worked hard to pay off my mortgage. So it's gone up in value a bit? So what? That's not a distortion. That's supply and demand. You're just a communist who wants to steal what's mine because you are too lazy to work hard and buy your own."
The hard bit is explaining to people that land 'ownership' without a regular compensatory payment is a distortion in itself, which leads to lots of other knock-on distortions etc. etc.
"The hard bit is explaining to people that land 'ownership' without a regular compensatory payment is a distortion in itself, which leads to lots of other knock-on distortions etc. etc."
We need a video of some sort showing the flows of the classical revenue streams, methinks. It's always easier to explain a thing graphically. I'm rubbish at art though.
As for the emotional attachment to land, I think the only way to counter that is the emotional attachment to children. Somehow someone has to get across the fact that it's simply not like the days when the parents bought their houses. It's much, much harder.
F, a lot of people have agreed that the Achilles' Heel of Home-Owner-Ism is that parents are stealing from their children, and the more stupid parents are playing at Bank of Mum and Dad.
The other Achilles' Heel is that most people accept that banks did reckless lending and so on (which led to recession), but they fail to equate this with high houses prices. They fail to see that high house prices are what helped cause the recession, and trying to re-inflate the bubble will not help us out of it.
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