It's nice when people propose entirely contradictory 'killer arguments against LVT', usually neither of them stacks up and they cancel themselves out anyway:
Sobers, in the comments to Part 44: I'll give you an example. A friend of mine bought an old run down pub in a small market town in Wales 20 years ago. The most economically efficient usage would probably have been to close it, turn it into flats, or a single dwelling, and sell it, or rent it out. So that's what she would have been taxed on. But she chose to run it, slowly turning it into a restaurant/bar, and opening a shop on part of the premises as well.
Her business now is very successful, generates more profit than the rent from a few flats would, and is undoubtedly worth more to the ambiance of the town than more flats. Everyone told her she was mad, but she had the vision to create something different, something that 'the markets' were not providing. If she had had to pay LVT based on the potential capital value, rather than income tax (which she paid virtually none to start with as the business took time to get off the ground) it would never have happened. And the area and its inhabitants would be the worse off for it.
Sobers, in the comments to Part 75: So the current idea is postcode areas, and a LVT charge based on the average of sale prices (on a square footage basis) within that area?
Not necessarily the fairest valuation system is it? By definition the most expensive (in square footage terms) properties will pay less (being above average) and the cheapest pay more (being below average)... If you want to arrive at an average value per square foot that is for the land only, each plot would need to be valued individually - taking us back to the massive valuation bureaucracy you seem to be trying to avoid.
Ho hum. Like I've said, we could scrap all taxes and replace them with a tax on land values, which would be between £30 and £60/sq yard/year for most developed land in the UK (regardless of the use to which it is put). Rates would be much higher in town centres (£hundreds) and especially in and around London (the rate in the West End would be about £1,000).
Let's assume that the rate is £30/sq yard/year in a 'small market town in Wales' and Sober's friend's pub occupies a 500 sq yard plot, her tax bill is £15,000 a year. It's her call whether she wants to build a four flats (who'd pay LVT £3,750 each); a rather grand town house (which would pay £15,000 a year LVT) or use the building as a pub. Or maybe have the pub at ground level with flats above?
Assuming a turnover of a mere £100,000 (equivalent to 50 pints of beer and 28 meals a day), her VAT bill alone will be more than £15,000 under current rules (adding together her net VAT payments to HMRC and the input tax she pays to suppliers), let alone the PAYE and income tax she has to pay. And in economic terms, she doesn't pay a penny of that £15,000 - the NPV of all these future payments (about £300,000) would depress the purchase price of the 'run down pub' accordingly, so she'd have snapped it up for a song, and would either have correspondingly lower mortgage payments or £300,000 in cash left over for the refurbishment.
From there on in, it matters whether her pub does really well (her tax bill is fixed) or is a miserable failure (in which case she might sell the pub for a similarly low price, or change her mind and turn it into flats). The only reason her tax bill would go up is if the area becomes more desirable, but if it does, then the chances are that this gentrification will benefit her trade by rather more than any theoretical tax increase.
Conversely, there'll be lots of other 500 sq yard plots in that 'small market town in Wales', which are used for a detached house; or allotments; or for selling second hand cars; or as a block of flats; or maybe there's a derelict building on it; or a tiny bungalow with a single occupant*. Either way, the tax on each plot is also £15,000 a year.
If somebody enjoys the luxury of having a huge allotment or a huge back garden in a town or village centre, and is prepared to pay for it, good luck to them. Or they might consider renting a tenth of an acre from a local farmer for £100 a year instead and growing their vegetables there instead.
Is that person being 'forced' to sell? Is 'the State' dictating the use to which each plot is put? Nope, people are paying for exclusive possession of the use value of the location they wish to occupy, is all, it is entirely up to them what they actually do on it.
Maybe one plot has a small block of badly built, run down flats; and another has a well built and well maintained small block of flats. Either way, they are occupying the same amount of space; enjoying the same benefits of the same location and excluding 'everybody else' therefrom, so there is no justification for the people in one small block of flats to pay a penny more or a penny less than the other.
And in case a £3,750 annual tax bill for somebody in a block of flats seems a bit steep, don't forget that each adult also gets a Citizen's Income of approx. that amount, so a couple would actually be paying net negative tax.
* There'd be exemptions, discounts and/or deferment option for pensioners, of course, before anybody plays the 'Poor Widow Bogey' for the zillionth time.
Nothing
3 hours ago
40 comments:
The thing that amazes me about all the Anti L-V-T-ers is that they don't seem to realise how getting rid of pretty well every other tax on labour and capital would be sucha Very Good Thing. Any scheme that gets tax off my labour and my capital (i.e. true 'capital' - not the cod capital people assume that thei house is) I will support in spades. I mean I can easily 'avoid' LVT if I like. I can live on boat!
L, agreed, but their counter-argument is that the government would try and sneak in LVT on top of other taxes.
This is, in political terms nonsense, as the only way to make an in-your-face tax like LVT fly would be to openly and demonstrably reduce other taxes at least £ for £, but it's still half-way plausible.
It occurs to me that LVT would also have some positive effects in terms of redistributing the population of the UK and getting rid of this massive concentration on people being in the South East.
Whilst at the moment it's cheaper for a software company to be based in say, the Forest of Dean than Bracknell Forest, it would become dramatically cheaper under LVT as the taxes for programming in Cinderford would be so much cheaper.
So, ta-da, you solve a load of congestion and "regional improvement" problems at a stroke.
MW. Eggsaktly. That's why Wince's 'mansions tax' is bollocks. He wants to do it to take even more bloody tax off us.
I am not anti LVT. I am not pro it - more agnostic.
But could it encourage building on what is not currently build on - e.g. allotments and should not be built on because build there increases the risk of flooding.
(Not all allotments are like this but some are presumably where buildings should be?
Joseph is absolutely right. But that brings up another thing that riles me about our opponents. Whenever we start bringing up these beneficial side-effects, of which there are quite a few, they start claiming that we think LVT is a panacea. As in "Doesn't matter what the problem is, LVT is the answer!" with the assumption that we all think that LVT would bring about Utopia. If only!
I wish that LVT/CI was a panacea. However I guess that we'll have to be satisfied with using it to solve a few of our most pressing economic problems. At least that should free up more time to worry about Curing Cancer, Finding World Peace and What To Give Uncle Ernie For Christmas.
Anon: "could [LVT] encourage building on what is not currently build on - e.g. allotments and should not be built on because build there increases the risk of flooding?"
No, why? LVT on land in flood zones would, by definition, be pennies. Before anything else, it encourages owners of derelict buildings, vacant sites in urban and suburban areas to develop them, and nowhere did I say abandon planning laws; and finally, if anything, LVT is an excellent way of financing flood defences.
D, indeed. General Franco divided problems into two kinds: those that time will solve and those that time has solved.
Similarly, as far as economic and social issues are concerned, there are those that LVT/CI will solve, and those that are simply insoluble which we just have to accept as a given.
MW First up I cannot think of a single social problem that cannot be solved. We only accept them as such because solving them will make us have to start working for that part of our living, where not solving them allows us to keep robbing others who are working. Its a bit like saying 100% voluntary employment is impossible. Or there is not enough food to go around. Or especially that jobs must be created before we can start work. Please refrain.
As an ultra-simplicity campaigner there is a much simpler way than you describe, that requires no special knowledge to understand or any burden to adopt:
Scrap valuations! Make rental value submissions voluntary with say a Location Value Covenant.
SFR Group - Location Value Covenant
Swap your economic rent for tax liability or mortgage debt. No political interference, banks remain solvent, no valuations required. Simple. What's not to like? It would be much easier for me to run a cart and horse through your idea mainly because its too complex to understand and its perceived as confiscation.
"But that's not fair" I hear them cry. Ho Hum!
RS, I have run the equivalent of the chariot race in Ben Hur through your idea (I do this for a living and it is second nature), but feel free to reciprocate if you don't like mine :-).
Seen this?
http://mises.org/daily/4854
Lola
Derek
Good point on the silver bullet thing. But everyone I've heard say this is actually seeking protection for their political class(lefties). The success of a single tax would mean that finally ALL classes would be equal and free. Not just the worker. Shock horror! We can't have that. We want to see our opponents punished. This is what LVT campaigners are seeking too if you think about it. And this is why it is a complete failure. Compulsion, confiscation.
A good Georgist knows very well that a Single Tax won't solve all problems(asteroids, genetically insane tyrants, bad luck in general)
But they do know very well that it would make all other problems so much easier to cope with.
And without a single tax, all other problems will get increasingly worse, the greater the wealth produced. The enigmatic wealth divide.
I'm constantly amazed at how many G's don't recognise this.
RS - First para - right on.
Derek,
I wish that LVT/CI was a panacea. However I guess that we'll have to be satisfied with using it to solve a few of our most pressing economic problems. At least that should free up more time to worry about Curing Cancer, Finding World Peace and What To Give Uncle Ernie For Christmas.
And this is how you progress. You start with the simple, no-brain stuff that makes people richer (like firing people who do Community Art, LVT, leaving the EU) which then gives you the time and resources to deal with the hard stuff.
We still, for instance, have not worked out a way to make government work at a level of effectiveness that is close to that of the private sector. The best we have right now is cutting it back to the minimum, but even then, we still have a military that pisses money away on job creation exercises like Eurofighter.
MW Yes we laugh at your puny chariot often. Ours is much bigger. I mentioned it above.
LVT confiscates
LVT breaks finance
LVT is politically impossible
LVT requires land valuations
LVT is very very very complex
Even your version. Did you not see how many words you needed to explain something "simple". Black and white.
LVC's remedy all the above. We've heard no coherent response to them... once the counter party has decided to understand the simple idea is better than the complex.
Its the same sort of denial we get from anyone opposed to collecting the rent for revenue in general. We seem to care more about how its collected, than actually collecting it. Hearts and minds always comes first. LVC's make that easy, big wagon. LVT makes it hard, small wagon.
Lola: Amazing. Mises didnt mention rent once!!!
I suppose as I inspired this post I'd better chuck my 2 penn'orth in!
I still don't know what it is you are trying to tax. Because you say the LVT on a run down building would be the same as that on a well maintained one, as they occupy the same land. Which indicates you wish to tax the underlying land plot value, and disregarding the value of the building completely. But you say (in a previous post) you would arrive at the land values by using Land Registry figures for property sales, which include the value of the building as well as the plot. I cannot see how you can arrive at a per square foot value for land only in urban areas that completely disregards the value of the buildings on it. Because when you buy a property you buy the land AND the building, and the proportion varies from property to property. An empty plot is location only. A run down house will have some building value + its plot value, and a well maintained house will have higher building value + its plot value. Given the complexities of house/building size/types and plot sizes in urban areas arriving at pure land only values is going to be very difficult.
I mean are you disregarding the land usage entirely? Does a supermarket, generating millions of pounds of sales, pay the same LVT as a small factory (but on a similar sized plot)generating a few hundred thousand in sales? Or are you taxing somehow taxing the planning permission value as well, which is not locational at all, but in the gift of the local authority?
I also repeat my concerns that there is not a hope in hell of the whole package you propound ever getting even proposed in Parliament. The vested interests within govt alone would stop it. The idea that civil servants would agree to govt being funded from one taxation source alone, that could not easily be raised, is nonsense. The only way LVT is making it onto the statute books is in addition to all the other taxes you suggest should be removed as a quid pro quo. Which is totally unacceptable in my view. I could just about face the whole package, but have to pay LVT on top of everything else would be the end.
LVT would work perfectly in a large country, with plentiful land and little or no planning controls, particularly when you're starting from scratch. On a small island, with 60m people on it, and very complex and strict existing planning controls, replacing the current system with LVT would be highly destabilising, both economically and socially.
S: "... you wish to tax the underlying land plot value, and disregarding the value of the building completely."
Correct.
"But you say (in a previous post) you would arrive at the land values by using Land Registry figures for property sales, which include the value of the building as well as the plot."
Correct. But this is about
a) Getting relative values correct and not absolute values.
b) As everybody gets a Citizen's Income that more than covers the notional rent on bricks and mortar, individuals only pay net tax (if at all) on the location rent,
c) It is a closer match to the current tax system which is mildly regressive (i.e. rich people pay more in cash terms, but less in % terms). If you deduct bricks and mortar first, it becomes hyper-progressive - instead of 25% of revenues coming from London, it would be more like 75% (for example).
d) Commercial premises are either in the middle of town, in which case the rate they pay is possibly 'too low', but so what, businesses don't get a CI, it all comes out in the wash.
"Does a supermarket, generating millions of pounds of sales, pay the same LVT as a small factory (but on a similar sized plot) generating a few hundred thousand in sales?"
If they are next door or near each other, in same postcode sector - which is highly unlikely - then yes.
Have you never noticed that industrial estates are normally either far out of town (where rents are lower) or in less desirable areas (near railway lines, sewage works etc)? So factory owner might well up sticks and move a bit further out of town.
"there is not a hope in hell of the whole package you propound ever getting even proposed in Parliament. The vested interests within govt alone would stop it. The idea that civil servants would agree to govt being funded from one taxation source alone, that could not easily be raised, is nonsense."
Agreed. And they have succeeded so far because of Home-Owner-Ist brainwashing.
"LVT would work perfectly in a large country, with plentiful land and little or no planning controls, particularly when you're starting from scratch. On a small island, with 60m people on it..."
Hold it right there. The UK is huge, ninety per cent of it has no people or roads or buildings on it. That's called farmland which would be exempt as such low value. The high values, which are entirely down to infrastructure and the proximity to other human activities, and where it is important to optimise efficient use of land, is in towns and villages.
The tax would work just as well in the USA or Australia, which are 99% uninhabited, and where the really high values are in the big cities. And the tax works just as well in City States like Hong Kong or Singapore.
As to planning controls, that's a separate topic. These are not actually imposed by government, they are imposed by local NIMBYs. LVT will be a good counter-weight to NIMBYism.
"... replacing the current system with LVT would be highly destabilising, both economically and socially."
No it wouldn't, that's the whole point, or else mild mannered accountants like me wouldn't propose it!
It's VAT, income tax, house price and credit bubbles, not to mention Islamism, the EU, Big Government etc which are destablising - that's what causes unemployment, recessions etc. That's what I'm trying to avoid!! You have yet to show me that there would be a significant number of people who would genuinely lose out under my proposals. And if there are, then tough - please don't ignore the massive losses and costs imposed by VAT, income tax, credit bubbles etc.
RS, I'll let that comment stand but shall otherwise ignore it.
RS MW et al - RS makes the poiny that LVT would undermine class politics. I reckon that that's 'right on'. Envy is corrosive, and the left use 'envy' tactics all the time. If you can live in a low LVT area and make shed loads you can laugh at the 'climbers' who want to live in a high LVT area and 'waste' all their hard earned on 'rent'. As long as you never ever have to bail them out.
Mark, have you considered a return to the tax credits issue?
http://markwadsworth.blogspot.com/2009/05/tax-credits-load-of-shit-part-94.html
Sobers: As an ultra-simplification campaigner allow me:
Unearned incomes
Is that simple enough or still too complex? If so let me know and I'll have another stab.
I'm treading carefully here, trying not to accuse anyone of being simple. That is not the intention. Being a simple topic that is extremely challenging though.
MW - "It's VAT, income tax, house price and credit bubbles, not to mention Islamism, the EU, Big Government etc which are destablising - that's what causes unemployment, recessions etc. - " How true. The spontaneous order of human action is destablised by the chaos of bureaucracy.
"If they are next door or near each other, in same postcode sector - which is highly unlikely - then yes."
This is where your version of LVT falls down then. Because there are plenty of examples of different types of planning consents, in otherwise identical buildings, right side by side. Take any small town High street. You'll have totally different classes of retail shops, and offices, which will all have different values depending on what you can do in them, as the profits will vary with usage. But as their square footage is pretty much the same they will all pay the same LVT. Ordinary retail will be less profitable than a pub or takeaway for example. A restaurant will have different profitabilty to an estate agent's office. But due to planning restrictions they cannot all be whatever the most profitable use is. Planners won't allow you to turn your shop into a pub if there's one next door, or a takeaway if there's already several in the street.
If the only thing you can do with a shop is the most profitable (because you're paying the same per square foot whatever) the high street will become a race to the lowest common denominator very quickly. Businesses that cannot pay the LVT will go bust, and unless the property owner can convince the local authority to grant change of use, it will stay empty. The high street will lose even more of the independent busineses that we all say we want to encourage - the quirky little shops that sell weird stuff, the old fashioned butchers, bakers etc.
"The UK is huge, ninety per cent of it has no people or roads or buildings on it. That's called farmland which would be exempt as such low value. The high values, which are entirely down to infrastructure and the proximity to other human activities, and where it is important to optimise efficient use of land, is in towns and villages."
Wrong. Because of the small nature of the UK, the high values of property are not related to closeness to urban centres. They are almost entirely down to a) planning constraints, and b) social factors that are not locational. I know plenty of housing estates that are close to amenities, the centre of towns, but are low value areas because of the nature of the inhabitants. Similarly, very high value property is often not located near any amenities at all. In the UK you pay more to avoid certain types of people as neighbours than to get proximity to amenities.
In a large country if you live in the back of beyond you are indeed away from all the amenities - roads, sewers, electricity, rail lines, commercial centres etc. Your land will have considerably less value because of that.
Here in the UK pretty much everywhere has all those amenities to hand, or can be reached by car within 30 minutes. Hence property value in the UK is more socially valued, and controlled by planning restrictions. Why are some areas of town expensive and some cheap? They all have access to the same amenities (give or take) but the values vary wildly. A house in the country can very easily be worth more than an identical one in town, yet is miles from the amenities. A house in a 'nice' area of town will be worth considerably more than one in a 'rough' area, even though they are otherwise identical, and share identical services.
So do you intent to tax that social value with LVT? Or just the pure locational value of a plot of land, x miles from the station, y miles from the motorway junction etc etc?
JT, first comment. There would be some element of levelling things out across the country (because of the CI) but where businesses located is mainly down to transport links.
JT, second comment, agreed. Let's stick to "defence" which is a lot cheaper than "attack", is my idea.
L, last two comments, yup, agreed. But I don't do this 'envy' thing (which is just as bad on the political right, they envy welfare claimants as much as socialists envy Philip Green or Premiership footballers). Between you and me, my wife & I are housing snobs, we tend to over-occupy and we like living in a nice street, but that's our choice.
JH, The flipside to Georgist thinking is that all the surplus LVT not needed for core functions of the state is dished out as Citizen's Income, which, to be fair, would be a vast improvement on our current welfare system (even if funded out of income tax).
IDS was blundering towards the Citizen's Income idea, but the civil servants over at DWP have steered him firmly away from it. If they get as far as rolling Tax Credits into the 'Universal Credit' and maybe increasing the personal allowance for income tax a bit, that'll still be a giant leap forward.
MW Jealousy is only bad when it is the BIGGEST reason for the politics. But there is a much BIGGER reason. And remember, every BIG counts:
Unearned incomes are just plain wrong. Morally, in principle.
And a distant 2nd practically. They make the system utterly unstable and inevitably collapse it. This is a universal law.
Simpletons know this immediately by intuition. Where it takes the intellect years of complex and twisted logic to show with uncertainty.
You keep saying you do not do morals. I can't help you there. But I can see it takes up enormous amounts of your time.
I often hear the cry that morals are not as valuable. Always I see that is rooted in political prejudice. Because the moral sense demands that ALL classes receive equal rights. And that would mean ones own class would have to stop robbing and begging. And we can't have that can we?
As we can see, leading on practical measures is a complete failure. It creates winners and losers. And divides the people. It makes the whole thing so complex.
I campaign for simplicity.
I do morals.
"Unearned incomes are just plain wrong. Morally, in principle."
How so? An unearned income is the income from capital. What is capital but the accumulated product of someone's labour? Are you suggesting that whatever income a person has, they must spend it all and save nothing? How exactly is one supposed to provide for ones old age if one cannot accumulate capital during ones working life and live off it in retirement?
What about someone who starts a business, which is successful, and it grows to be a large one? They still own the business, do they not own the profits that go with it? Can they not take their profits in the form of dividends? How is that 'immoral'?
What you are saying is nonsense. All businesses are effectively charging me for use of their capital that they have invested in their business. A car is made in a modern car plant in minutes. The labour cost of that production is minimal, the raw materials not much more. The price of a car represents the amount of expensive capital tied up in all the machinery used to dig iron ore out of the ground, turn it into steel, manufacture components, and finally the assembly line. And said car is miles cheaper than one made by hand from scratch (if such a thing were possible).
All human economic activity from year dot involves employing capital, and charging for the use of the capital. Its no more immoral than breathing.
Unearned income is the reward for risking your capital. (Ricardo's theory of Rent is dealt with by Georgism and LVT). What's wrong with supplying financial capital for investment, and getting paid for it? This is exactly what I have done. Plus some labour. And I can tell you I labour bloody hard to ensure my financial capital is 'safe'.
S, L, income from proper capital (machines, goodwill etc; whether owned directly or indirectly because you own shares in businesses or have cash in the bank which is on-lent to businesses) is all fine and dandy. That is income from proper 'capital' and is not 'unearned'.
'Unearned income' in this context is income from state-protected monopolies (being primarily land rents, but there are other examples).
Land is not capital for the purposes of this discussion - as Sobers can explain, the value of land is entirely dependent on [location x planning permission], and even if we agree that land is a form of capital value, it is capital value that is created by 'the nation' or 'society in general' or 'the good governance of the state' (TM Adam Smith) and NOT by the registered owner.
PPS, before somebody tries splitting hairs, buildings and improvements are not LAND, they are physical CAPITAL.
"
No, why? LVT on land in flood zones would, by definition, be pennies. Before anything else, it encourages owners of derelict buildings, vacant sites in urban and suburban areas to develop them, and nowhere did I say abandon planning laws; and finally, if anything, LVT is an excellent way of financing flood defences."
Good point but I think sometimes councils might do something stupid like say land that is worth £x is worth £100X.
Anon, yes, come valuations might go a bit awry, but unlikely.
If that land is just fields near a river, then there's no LVT on it anyway (we're exempting farm land for simplicity). If it is a town centre in danger of flooding, then the annual rental value might well be £100.
If those sites are already built on, well it's too late anyway. But the council knows it can only collect the money provided they keep the river dredged, drains unblocked etc.
If a site is undeveloped (despite being in town centre) for the simple reason that there is flood risk, well clearly the land is worthless and the 'owner' would do better to abandon it than pay £10,000s a year in tax.
Anon, just as an afterthought, let's assume that the owner of that vacant site with flood risk decides £100 is too much to pay and abandons the site - the council collects £nothing.
The only way it can get money is, is to do something about flood defences, hey presto, somebody will then be prepared to pay that £100 because all of a suddent it's a vacant site in a town centre WITHOUT a flood risk.
MW @ 11.00, my point exactly.
Ditto MW at 11am.
But beware of confusing terms. By abusing the term "capital value" you have lost the argument with Sobers, bless him. Capital has a value only from production. (Doing work) There was never any such value in producing a location.
So capital is never ever Land. You can fanny around with this excuse of that cop out. If you abuse terms you deserve all the complexity you get. Jolly good luck to you.
RS, I shall forgive your rudeness, yet again, but let me point out that from the point of view of 'society as a whole', land & location is a kind of 'capital' asset in the wider sense (i.e. it is not a current asset or a consumption good).
The point is that this value was created by and therefore belongs to 'society as a whole' and not to the person who happens to have the [legal] right to exclusive possession at any particular time (in the same way that the goodwill of a business, a kind of local monopoly or 'location value', is created by and benefits the owner of the business, the employees, the customers and the suppliers).
Sobers (yesterday at 20.36): "Ordinary retail will be less profitable than a pub or takeaway for example. A restaurant will have different profitabilty to an estate agent's office.
But due to planning restrictions they cannot all be whatever the most profitable use is. Planners won't allow you to turn your shop into a pub if there's one next door, or a takeaway if there's already several in the street."
The first part may well be true, but so what? In the absence of any planning or restrictions, it is highly unlikely that every single retail shop will convert to a take-away, because the super-profits currently made by pubs or take-aways (there are barriers to entry helpfully providers by the planners) would be competed away as soon as (say) a quarter or a third of the High Street is pubs or take-aways; and the profits made by the remaining retail outlets would go up until it levels out.
There are plenty of places in the world without these stupid restrictions, and it is quite simply not the case that they are ALL pubs or take-aways.
Therefore, assuming the council wants to maximise LVT income, and there are twenty shops in the High Street, it will abandon these anti-free market barriers to entry and rationing and just set the rate so that the twentieth-least profitable use is still viable.
If local planners and NIMBYs want to fanny about with anti-free market measures, then that is an entirely separate issue.
---------------
As to the next bit about small countries vs large countries, you are way off piste.
You'll find that the differential between the cheapest land in the UK (grouse moors in Scotland) and the most expensive (Bond Street) is much the same as the differential between the cheapest land in the USA (a semi-desert in Wyoming) and Times Square in New York - it is a factor of tens of thousands of per cent.
And as to the rest, it is irrelevant WHY values differ, it might be amenities, crappy neighbours/nice neighbours, a nice view/craooy view, a good state school/a shit state school, flood risk/no flood risk, there are a million factors - all are 'social' values to borrow your phrase - and these are all reflected in the relative MARKET VALUES of land and housing.
Further, the average value of residential land (excl. London) is surprisingly flat across the UK, I have actually done calculations using my method and (excl. London), the rate would be between £30 and £60 per sq yard, it's as simple as that.
The cheapest houses are in Burnley BB11 3... (£50,000) but the plots are tiny (80 sq yards for a terrace with back yard). OK houses in the middle are in W Yorks, (£200,000) but these have proper back gardens and the plots are 400 sq yards. In the South East, a 1950s semi is £300,000 but is also 400 sq yards and so on.
And so on.
In reply to Sobers, cont.
Finally, you say: "A house in a 'nice' area of town will be worth considerably more than one in a 'rough' area, even though they are otherwise identical, and share identical services."
Correct, true etc, that's the whole point!! That's what I'm driving at!!
What you pay for in the 'nice' area is the right to live among 'nice' people with jobs etc, you are paying for the privilege of not having to live among 'rough' people. So those houses cost more, so if you want ot live there you have to have a higher income, so the people in the 'nice' area have (by definition) much higher incomes in than those in the 'rough' areas.
That's why LVT will be no particular big deal - that's the beauty of the system!!!
The people in the 'nice' area are currently paying a lot of income tax, VAT, NIC etc. and in future will pay a lot of LVT instead; the people in the 'rough' area are currently not paying much income tax, VAT, NIC etc and in future will not be paying much LVT either.
I actually know about all this stuff, I'm not just saying it - it would, as a matter of fact, be quite easy to replace taxes with LVT in such a manner than there are only a few losers (say 10% of the population), a few outright winners (say 10% of the population) and everybody else, on Day One, breaks even (assuming no overall reduction in tax take). Where the real gains are is in future - with no income tax, LVT; and with no house price and credit bubbles, the economy will do infinitely better.
I covered all this here.
MW And I shall forgive you again for confusion rudeness with the truth. Or for asking that people lie so long as they are nice to each other.
That is when the truth hurts, but there is no way out but to admit it, the only option is to accuse the messenger of being a bad person, rude or some other ad hominem attack.
We get this denial response from Richard Murphy and many others who do not want to dig deep for political reasons. What is your reason?
Well I did try on your use of terms. You seem to like things more complex. And have gone into deeper complexity still in this response This is quite a surprise coming from a simplicity campaigner
I think you are actually a complexity campaigner, on the higher margin of simplicity?
RS, I'm not sure what's complicated about this manifesto: "All existing taxes - apart from duties on fuel, alcohol, tobacco and once legalised, drugs - will be replaced with LVT, which will be set in proportion to averaged out recent selling prices of land and buildings, and will range from £30 to £60/sq yard/year for most developed land in the UK".
That seems pretty simple to me, but there again, I do this for a living.
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